Senate Amendment 3739

8/9/2019 Senate Amendment 3739

1/1562

VI

AMENDMENT NO. 3739 Calendar No. 349

Purpose: In the nature of a substitute.

IN THE SENATE OF THE UNITED STATES111th Cong., 2d Sess.

S. 3217

To promote the financial stability of the United States byimproving accountability and transparency in the finan-cial system, to end too big to fail, to protect the

American taxpayer by ending bailouts, to protect con-sumers from abusive financial services practices, andfor other purposes.

April 29, 2010

Ordered to be printed

Proposed by Mr. REID for (Mr. DODD (for himself andMrs. LINCOLN))

Viz:

Strike all after the enacting clause and insert the fol-1

lowing:2

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.3

(a) SHORT TITLE.This Act may be cited as the4

Restoring American Financial Stability Act of 2010.5

(b) T ABLE OF CONTENTS.The table of contents for6

this Act is as follows:7

VerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00001 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217


2/1562

2

S 3217 AMDT 3739

Sec. 1. Short title; table of contents.

Sec. 2. Definitions.

Sec. 3. Severability.

Sec. 4. Effective date.

TITLE IFINANCIAL STABILITY

Sec. 101. Short title.Sec. 102. Definitions.

Subtitle AFinancial Stability Oversight Council

Sec. 111. Financial Stability Oversight Council established.

Sec. 112. Council authority.

Sec. 113. Authority to require supervision and regulation of certain nonbank fi-

nancial companies.

Sec. 114. Registration of nonbank financial companies supervised by the Board

of Governors.

Sec. 115. Enhanced supervision and prudential standards for nonbank financial

companies supervised by the Board of Governors and certain

bank holding companies.Sec. 116. Reports.

Sec. 117. Treatment of certain companies that cease to be bank holding compa-

nies.

Sec. 118. Council funding.

Sec. 119. Resolution of supervisory jurisdictional disputes among member agen-

cies.

Sec. 120. Additional standards applicable to activities or practices for financial

stability purposes.

Sec. 121. Mitigation of risks to financial stability.

Subtitle BOffice of Financial Research

Sec. 151. Definitions.Sec. 152. Office of Financial Research established.

Sec. 153. Purpose and duties of the Office.

Sec. 154. Organizational structure; responsibilities of primary programmatic

units.

Sec. 155. Funding.

Sec. 156. Transition oversight.

Subtitle CAdditional Board of Governors Authority for Certain Nonbank

Financial Companies and Bank Holding Companies

Sec. 161. Reports by and examinations of nonbank financial companies super-

vised by the Board of Governors.

Sec. 162. Enforcement.

Sec. 163. Acquisitions.

Sec. 164. Prohibition against management interlocks between certain financial

companies.

Sec. 165. Enhanced supervision and prudential standards for nonbank financial

companies supervised by the Board of Governors and certain

bank holding companies.

Sec. 166. Early remediation requirements.

Sec. 167. Affiliations.

Sec. 168. Regulations.

Sec. 169. Avoiding duplication.



3/1562

3

S 3217 AMDT 3739

Sec. 170. Safe harbor.

TITLE IIORDERLY LIQUIDATION AUTHORITY


Sec. 202. Orderly Liquidation Authority Panel.

Sec. 203. Systemic risk determination.

Sec. 204. Orderly liquidation.Sec. 205. Orderly liquidation of covered brokers and dealers.

Sec. 206. Mandatory terms and conditions for all orderly liquidation actions.

Sec. 207. Directors not liable for acquiescing in appointment of receiver.

Sec. 208. Dismissal and exclusion of other actions.

Sec. 209. Rulemaking; non-conflicting law.

Sec. 210. Powers and duties of the corporation.

Sec. 211. Miscellaneous provisions.

TITLE IIITRANSFER OF POWERS TO THE COMPTROLLER OF

THE CURRENCY, THE CORPORATION, AND THE BOARD OF GOV-

ERNORS

Sec. 300. Short title.Sec. 301. Purposes.

Sec. 302. Definition.

Subtitle ATransfer of Powers and Duties

Sec. 311. Transfer date.

Sec. 312. Powers and duties transferred.

Sec. 313. Abolishment.

Sec. 314. Amendments to the Revised Statutes.

Sec. 315. Federal information policy.

Sec. 316. Savings provisions.

Sec. 317. References in Federal law to Federal banking agencies.

Sec. 318. Funding.Sec. 319. Contracting and leasing authority.

Subtitle BTransitional Provisions

Sec. 321. Interim use of funds, personnel, and property.

Sec. 322. Transfer of employees.

Sec. 323. Property transferred.

Sec. 324. Funds transferred.

Sec. 325. Disposition of affairs.

Sec. 326. Continuation of services.

Subtitle CFederal Deposit Insurance Corporation

Sec. 331. Deposit insurance reforms.Sec. 332. Management of the Federal Deposit Insurance Corporation.

Subtitle DTermination of Federal Thrift Charter

Sec. 341. Termination of Federal savings associations.

Sec. 342. Branching.

TITLE IVREGULATION OF ADVISERS TO HEDGE FUNDS AND

OTHERS



4/1562

4

S 3217 AMDT 3739

Sec. 401. Short title.


Sec. 403. Elimination of private adviser exemption; limited exemption for for-

eign private advisers; limited intrastate exemption.

Sec. 404. Collection of systemic risk data; reports; examinations; disclosures.

Sec. 405. Disclosure provision eliminated.

Sec. 406. Clarification of rulemaking authority.Sec. 407. Exemption of venture capital fund advisers.

Sec. 408. Exemption of and record keeping by private equity fund advisers.

Sec. 409. Family offices.

Sec. 410. State and Federal responsibilities; asset threshold for Federal reg-

istration of investment advisers.

Sec. 411. Custody of client assets.

Sec. 412. Adjusting the accredited investor standard for inflation.

Sec. 413. GAO study and report on accredited investors.

Sec. 414. GAO study on self-regulatory organization for private funds.

Sec. 415. Commission study and report on short selling.

Sec. 416. Transition period.

TITLE VINSURANCE

Subtitle AOffice of National Insurance


Sec. 502. Establishment of Office of National Insurance.

Subtitle BState-based Insurance Reform



PART INONADMITTED INSURANCE

Sec. 521. Reporting, payment, and allocation of premium taxes.Sec. 522. Regulation of nonadmitted insurance by insureds home State.

Sec. 523. Participation in national producer database.

Sec. 524. Uniform standards for surplus lines eligibility.

Sec. 525. Streamlined application for commercial purchasers.

Sec. 526. GAO study of nonadmitted insurance market.


PART IIREINSURANCE

Sec. 531. Regulation of credit for reinsurance and reinsurance agreements.

Sec. 532. Regulation of reinsurer solvency.


PART IIIRULE OF CONSTRUCTION

Sec. 541. Rule of construction.

Sec. 542. Severability.

TITLE VIIMPROVEMENTS TO REGULATION OF BANK AND SAV-

INGS ASSOCIATION HOLDING COMPANIES AND DEPOSITORY IN-

STITUTIONS


Sec. 602. Definition.



5/1562

5

S 3217 AMDT 3739

Sec. 603. Moratorium and study on treatment of credit card banks, industrial

loan companies, and certain other companies under the Bank

Holding Company Act of 1956.

Sec. 604. Reports and examinations of holding companies; regulation of func-

tionally regulated subsidiaries.

Sec. 605. Assuring consistent oversight of permissible activities of depository

institution subsidiaries of holding companies.Sec. 606. Requirements for financial holding companies to remain well capital-

ized and well managed.

Sec. 607. Standards for interstate acquisitions.

Sec. 608. Enhancing existing restrictions on bank transactions with affiliates.

Sec. 609. Eliminating exceptions for transactions with financial subsidiaries.

Sec. 610. Lending limits applicable to credit exposure on derivative trans-

actions, repurchase agreements, reverse repurchase agree-

ments, and securities lending and borrowing transactions.

Sec. 611. Application of national bank lending limits to insured State banks.

Sec. 612. Restriction on conversions of troubled banks.

Sec. 613. De novo branching into States.

Sec. 614. Lending limits to insiders.

Sec. 615. Limitations on purchases of assets from insiders.Sec. 616. Regulations regarding capital levels of holding companies.

Sec. 617. Elimination of elective investment bank holding company framework.

Sec. 618. Securities holding companies.

Sec. 619. Restrictions on capital market activity by banks and bank holding

companies.

Sec. 620. Concentration limits on large financial firms.

TITLE VIIWALL STREET TRANSPARENCY AND

ACCOUNTABILITY


Subtitle ARegulation of Over-the-Counter Swaps Markets

PART IREGULATORY AUTHORITY


Sec. 712. Review of regulatory authority.

Sec. 713. Recommendations for changes to portfolio margining laws.

Sec. 714. Abusive swaps.

Sec. 715. Authority to prohibit participation in swap activities.

Sec. 716. Prohibition against Federal Government bailouts of swaps entities.

Sec. 717. New product approval CFTC-SEC process.

Sec. 718. Determining status of novel derivative products.

PART IIREGULATION OF SWAP MARKETS


Sec. 722. Jurisdiction.

Sec. 723. Clearing.

Sec. 724. Swaps; segregation and bankruptcy treatment.

Sec. 725. Derivatives clearing organizations.

Sec. 726. Rulemaking on conflict of interest.

Sec. 727. Public reporting of swap transaction data.

Sec. 728. Swap data repositories.

Sec. 729. Reporting and recordkeeping.

Sec. 730. Large swap trader reporting.



6/1562

6

S 3217 AMDT 3739

Sec. 731. Registration and regulation of swap dealers and major swap partici-

pants.

Sec. 732. Conflicts of interest.

Sec. 733. Swap execution facilities.

Sec. 734. Derivatives transaction execution facilities and exempt boards of

trade.

Sec. 735. Designated contract markets.Sec. 736. Margin.

Sec. 737. Position limits.

Sec. 738. Foreign boards of trade.

Sec. 739. Legal certainty for swaps.

Sec. 740. Multilateral clearing organizations.

Sec. 741. Enforcement.

Sec. 742. Retail commodity transactions.

Sec. 743. Other authority.

Sec. 744. Restitution remedies.

Sec. 745. Enhanced compliance by registered entities.

Sec. 746. Insider trading.

Sec. 747. Antidisruptive practices authority.

Sec. 748. Commodity whistleblower incentives and protection.Sec. 749. Conforming amendments.

Sec. 750. Study on oversight of carbon markets.

Sec. 751. Energy and Environmental Markets Advisory Committee.

Sec. 752. International harmonization.


Subtitle BRegulation of Security-Based Swap Markets

Sec. 761. Definitions under the Securities Exchange Act of 1934.

Sec. 762. Repeal of prohibition on regulation of security-based swap agree-

ments.

Sec. 763. Amendments to the Securities Exchange Act of 1934.

Sec. 764. Registration and regulation of security-based swap dealers and majorsecurity-based swap participants.

Sec. 765. Rulemaking on conflict of interest.

Sec. 766. Reporting and recordkeeping.

Sec. 767. State gaming and bucket shop laws.

Sec. 768. Amendments to the Securities Act of 1933; treatment of security-

based swaps.

Sec. 769. Definitions under the Investment Company Act of 1940.

Sec. 770. Definitions under the Investment Advisors Act of 1940.

Sec. 771. Other authority.

Sec. 772. Jurisdiction.


TITLE VIIIPAYMENT, CLEARING, AND SETTLEMENTSUPERVISION


Sec. 802. Findings and purposes.


Sec. 804. Designation of systemic importance.

Sec. 805. Standards for systemically important financial market utilities and

payment, clearing, or settlement activities.

Sec. 806. Operations of designated financial market utilities.



7/1562

7

S 3217 AMDT 3739

Sec. 807. Examination of and enforcement actions against designated financial

market utilities.

Sec. 808. Examination of and enforcement actions against financial institutions

subject to standards for designated activities.

Sec. 809. Requests for information, reports, or records.

Sec. 810. Rulemaking.

Sec. 811. Other authority.Sec. 812. Effective date.

TITLE IXINVESTOR PROTECTIONS AND IMPROVEMENTS TO

THE REGULATION OF SECURITIES

Subtitle AIncreasing Investor Protection

Sec. 911. Investor Advisory Committee established.

Sec. 912. Clarification of authority of the Commission to engage in investor

testing.

Sec. 913. Study and rulemaking regarding obligations of brokers, dealers, and

investment advisers.

Sec. 914. Office of the Investor Advocate.

Sec. 915. Streamlining of filing procedures for self-regulatory organizations.

Sec. 916. Study regarding financial literacy among investors.

Sec. 917. Study regarding mutual fund advertising.

Sec. 918. Clarification of Commission authority to require investor disclosures

before purchase of investment products and services.

Sec. 919. Study on conflicts of interest.

Sec. 919A. Study on improved investor access to information on investment ad-

visers and broker-dealers.

Sec. 919B. Study on financial planners and the use of financial designations.

Subtitle BIncreasing Regulatory Enforcement and Remedies

Sec. 921. Authority to issue rules related to mandatory predispute arbitration.

Sec. 922. Whistleblower protection.Sec. 923. Conforming amendments for whistleblower protection.

Sec. 924. Implementation and transition provisions for whistleblower protection.

Sec. 925. Collateral bars.

Sec. 926. Authority of State regulators over Regulation D offerings.

Sec. 927. Equal treatment of self-regulatory organization rules.

Sec. 928. Clarification that Section 205 of the Investment Advisers Act of 1940

does not apply to State-registered advisers.

Sec. 929. Unlawful margin lending.

Sec. 929A. Protection for employees of subsidiaries and affiliates of publicly

traded companies.

Sec. 929B. FAIR Fund amendments.

Sec. 929C. Increasing the borrowing limit on Treasury loans.

Subtitle CImprovements to the Regulation of Credit Rating Agencies

Sec. 931. Findings.

Sec. 932. Enhanced regulation, accountability, and transparency of nationally

recognized statistical rating organizations.

Sec. 933. State of mind in private actions.

Sec. 934. Referring tips to law enforcement or regulatory authorities.

Sec. 935. Consideration of information from sources other than the issuer in

rating decisions.

Sec. 936. Qualification standards for credit rating analysts.



8/1562

8

S 3217 AMDT 3739

Sec. 937. Timing of regulations.

Sec. 938. Universal ratings symbols.

Sec. 939. Government Accountability Office study and Federal agency review of

required uses of nationally recognized statistical rating organi-

zation ratings.

Sec. 939A. Securities and Exchange Commission study on strengthening credit

rating agency independence.Sec. 939B. Government Accountability Office study on alternative business

models.

Sec. 939C. Government Accountability Office study on the creation of an inde-

pendent professional analyst organization.

Subtitle DImprovements to the Asset-Backed Securitization Process

Sec. 941. Regulation of credit risk retention.

Sec. 942. Disclosures and reporting for asset-backed securities.

Sec. 943. Representations and warranties in asset-backed offerings.

Sec. 944. Exempted transactions under the Securities Act of 1933.

Sec. 945. Due diligence analysis and disclosure in asset-backed securities

issues.

Subtitle EAccountability and Executive Compensation

Sec. 951. Shareholder vote on executive compensation disclosures.

Sec. 952. Compensation committee independence.

Sec. 953. Executive compensation disclosures.

Sec. 954. Recovery of erroneously awarded compensation.

Sec. 955. Disclosure regarding employee and director hedging.

Sec. 956. Excessive compensation by holding companies of depository institu-

tions.

Sec. 957. Voting by brokers.

Subtitle FImprovements to the Management of the Securities and

Exchange Commission

Sec. 961. Report and certification of internal supervisory controls.

Sec. 962. Triennial report on personnel management.

Sec. 963. Annual financial controls audit.

Sec. 964. Report on oversight of national securities associations.

Sec. 965. Compliance examiners.

Sec. 966. Suggestion program for employees of the Commission.

Subtitle GStrengthening Corporate Governance

Sec. 971. Election of directors by majority vote in uncontested elections.

Sec. 972. Proxy access.

Sec. 973. Disclosures regarding chairman and CEO structures.

Subtitle HMunicipal Securities

Sec. 975. Regulation of municipal securities and changes to the board of the

MSRB.

Sec. 976. Government Accountability Office study of increased disclosure to in-

vestors.

Sec. 977. Government Accountability Office study on the municipal securities

markets.

Sec. 978. Study of funding for Government Accounting Standards Board.



9/1562

9

S 3217 AMDT 3739

Sec. 979. Commission Office of Municipal Securities.

Subtitle IPublic Company Accounting Oversight Board, Portfolio Margining,

and Other Matters

Sec. 981. Authority to share certain information with foreign authorities.

Sec. 982. Oversight of brokers and dealers.

Sec. 983. Portfolio margining.Sec. 984. Loan or borrowing of securities.

Sec. 985. Technical corrections to Federal securities laws.

Sec. 986. Conforming amendments relating to repeal of the Public Utility Hold-

ing Company Act of 1935.

Sec. 987. Amendment to definition of material loss and nonmaterial losses to

the Deposit Insurance Fund for purposes of Inspector General

reviews.

Sec. 988. Amendment to definition of material loss and nonmaterial losses to

the National Credit Union Share Insurance Fund for purposes

of Inspector General reviews.

Sec. 989. Government Accountability Office study on proprietary trading.

Sec. 989A. Senior investor protections.

Sec. 989B. Changes in appointment of certain Inspectors General.

Subtitle JSelf-funding of the Securities and Exchange Commission

Sec. 991. Securities and Exchange Commission self-funding.

TITLE XBUREAU OF CONSUMER FINANCIAL PROTECTION



Subtitle ABureau of Consumer Financial Protection

Sec. 1011. Establishment of the Bureau.

Sec. 1012. Executive and administrative powers.

Sec. 1013. Administration.

Sec. 1014. Consumer Advisory Board.

Sec. 1015. Coordination.

Sec. 1016. Appearances before and reports to Congress.

Sec. 1017. Funding; penalties and fines.


Subtitle BGeneral Powers of the Bureau

Sec. 1021. Purpose, objectives, and functions.

Sec. 1022. Rulemaking authority.

Sec. 1023. Review of Bureau regulations.

Sec. 1024. Supervision of nondepository covered persons.Sec. 1025. Supervision of very large banks, savings associations, and credit

unions.

Sec. 1026. Other banks, savings associations, and credit unions.

Sec. 1027. Limitations on authorities of the Bureau; preservation of authori-

ties.

Sec. 1028. Authority to restrict mandatory pre-dispute arbitration.


Subtitle CSpecific Bureau Authorities



10/1562

10

S 3217 AMDT 3739

Sec. 1031. Prohibiting unfair, deceptive, or abusive acts or practices.

Sec. 1032. Disclosures.

Sec. 1033. Consumer rights to access information.

Sec. 1034. Response to consumer complaints and inquiries.

Sec. 1035. Private education loan ombudsman.

Sec. 1036. Prohibited acts.


Subtitle DPreservation of State Law

Sec. 1041. Relation to State law.

Sec. 1042. Preservation of enforcement powers of States.

Sec. 1043. Preservation of existing contracts.

Sec. 1044. State law preemption standards for national banks and subsidiaries

clarified.

Sec. 1045. Clarification of law applicable to nondepository institution subsidi-

aries.

Sec. 1046. State law preemption standards for Federal savings associations and

subsidiaries clarified.

Sec. 1047. Visitorial standards for national banks and savings associations.


Subtitle EEnforcement Powers


Sec. 1052. Investigations and administrative discovery.

Sec. 1053. Hearings and adjudication proceedings.

Sec. 1054. Litigation authority.

Sec. 1055. Relief available.

Sec. 1056. Referrals for criminal proceedings.

Sec. 1057. Employee protection.


Subtitle FTransfer of Functions and Personnel; Transitional Provisions

Sec. 1061. Transfer of consumer financial protection functions.

Sec. 1062. Designated transfer date.

Sec. 1063. Savings provisions.

Sec. 1064. Transfer of certain personnel.

Sec. 1065. Incidental transfers.

Sec. 1066. Interim authority of the Secretary.

Sec. 1067. Transition oversight.

Subtitle GRegulatory Improvements

Sec. 1071. Collection of deposit account data.

Sec. 1072. Small business data collection.

Sec. 1073. GAO study on the effectiveness and impact of various appraisal

methods.

Sec. 1074. Prohibition on certain prepayment penalties.

Sec. 1075. Assistance for economically vulnerable individuals and families.

Sec. 1076. Remittance transfers.

Subtitle HConforming Amendments

Sec. 1081. Amendments to the Inspector General Act.

Sec. 1082. Amendments to the Privacy Act of 1974.



11/1562

11

S 3217 AMDT 3739

Sec. 1083. Amendments to the Alternative Mortgage Transaction Parity Act of

1982.

Sec. 1084. Amendments to the Electronic Fund Transfer Act.

Sec. 1085. Amendments to the Equal Credit Opportunity Act.

Sec. 1086. Amendments to the Expedited Funds Availability Act.

Sec. 1087. Amendments to the Fair Credit Billing Act.

Sec. 1088. Amendments to the Fair Credit Reporting Act and the Fair and Ac-curate Credit Transactions Act.

Sec. 1089. Amendments to the Fair Debt Collection Practices Act.

Sec. 1090. Amendments to the Federal Deposit Insurance Act.

Sec. 1091. Amendments to the Gramm-Leach-Bliley Act.

Sec. 1092. Amendments to the Home Mortgage Disclosure Act.

Sec. 1093. Amendments to the Homeowners Protection Act of 1998.

Sec. 1094. Amendments to the Home Ownership and Equity Protection Act of

1994.

Sec. 1095. Amendments to the Omnibus Appropriations Act, 2009.

Sec. 1096. Amendments to the Real Estate Settlement Procedures Act.

Sec. 1097. Amendments to the Right to Financial Privacy Act of 1978.

Sec. 1098. Amendments to the Secure and Fair Enforcement for Mortgage Li-

censing Act of 2008.Sec. 1099. Amendments to the Truth in Lending Act.

Sec. 1100. Amendments to the Truth in Savings Act.

Sec. 1101. Amendments to the Telemarketing and Consumer Fraud and Abuse

Prevention Act.

Sec. 1102. Amendments to the Paperwork Reduction Act.

Sec. 1103. Adjustments for inflation in the Truth in Lending Act.


TITLE XIFEDERAL RESERVE SYSTEM PROVISIONS

Sec. 1151. Federal Reserve Act amendments on emergency lending authority.

Sec. 1152. Reviews of special Federal Reserve credit facilities.

Sec. 1153. Public access to information.Sec. 1154. Liquidity event determination.

Sec. 1155. Emergency financial stabilization.

Sec. 1156. Additional related amendments.

Sec. 1157. Federal Reserve Act amendments on Federal reserve bank govern-

ance.

Sec. 1158. Amendments to the Federal Reserve Act relating to supervision and

regulation policy.

TITLE XIIIMPROVING ACCESS TO MAINSTREAM FINANCIAL

INSTITUTIONS


Sec. 1202. Purpose.


Sec. 1204. Expanded access to mainstream financial institutions.

Sec. 1205. Low-cost alternatives to payday loans.

Sec. 1206. Grants to establish loan-loss reserve funds.

Sec. 1207. Procedural provisions.

Sec. 1208. Authorization of appropriations.

Sec. 1209. Regulations.

Sec. 1210. Evaluation and reports to Congress.



12/1562

12

S 3217 AMDT 3739

SEC. 2. DEFINITIONS.1

As used in this Act, the following definitions shall2

apply, except as the context otherwise requires or as other-3

wise specifically provided in this Act:4

(1) AFFILIATE.The term affiliate means5

any company that controls, is controlled by, or is6

under common control with another company.7

(2) APPROPRIATE FEDERAL BANKING AGEN-8

CY.On and after the transfer date, the term ap-9

propriate Federal banking agency has the same10

meaning as in section 3(q) of the Federal Deposit11

Insurance Act (12 U.S.C. 1813(q)), as amended by12

title III.13

(3) BOARD OF GOVERNORS.The term Board14

of Governors means the Board of Governors of the15

Federal Reserve System.16

(4) BUREAU.The term Bureau means the17

Bureau of Consumer Financial Protection estab-18

lished under title X.19

(5) COMMISSION.The term Commission20

means the Securities and Exchange Commission, ex-21

cept in the context of the Commodity Futures Trad-22

ing Commission.23

(6) CORPORATION.The term Corporation24

means the Federal Deposit Insurance Corporation.25



13/1562

13

S 3217 AMDT 3739

(7) COUNCIL.The term Council means the1

Financial Stability Oversight Council established2

under title I.3

(8) CREDIT UNION.The term credit union4

means a Federal credit union, State credit union, or5

State-chartered credit union, as those terms are de-6

fined in section 101 of the Federal Credit Union Act7

(12 U.S.C. 1752).8

(9) FEDERAL BANKING AGENCY.The term9

(A) Federal banking agency means, indi-10

vidually, the Board of Governors, the Office of11

the Comptroller of the Currency, and the Cor-12

poration; and13

(B) Federal banking agencies means all14

of the agencies referred to in subparagraph (A),15

collectively.16

(10) FUNCTIONALLY REGULATED SUB-17

SIDIARY.The term functionally regulated sub-18

sidiary has the same meaning as in section 5(c)(5)19

of the Bank Holding Company Act of 1956 (1220

U.S.C. 1844(c)(5)).21

(11) PRIMARY FINANCIAL REGULATORY AGEN-22

CY.The term primary financial regulatory agen-23

cy means24



14/1562


15/1562

15

S 3217 AMDT 3739

(C) the Commodity Futures Trading Com-1

mission, with respect to any futures commission2

merchant, any commodity trading adviser, and3

any commodity pool operator registered with4

the Commodity Futures Trading Commission5

under the Commodity Exchange Act, with re-6

spect to the commodities activities of such enti-7

ty and activities that are incidental to such8

commodities activities;9

(D) the State insurance authority of the10

State in which an insurance company is domi-11

ciled, with respect to the insurance activities12

and activities that are incidental to such insur-13

ance activities of an insurance company that is14

subject to supervision by the State insurance15

authority under State insurance law; and16

(E) the Federal Housing Finance Agency,17

with respect to Federal Home Loan Banks or18

the Federal Home Loan Bank System, and19

with respect to the Federal National Mortgage20

Association or the Federal Home Loan Mort-21

gage Corporation.22

(12) PRUDENTIAL STANDARDS.The term23

prudential standards means enhanced supervision24



16/1562

16

S 3217 AMDT 3739

and regulatory standards developed by the Board of1

Governors under section 115 or 165.2

(13) SECRETARY.The term Secretary3

means the Secretary of the Treasury.4

(14) SECURITIES TERMS.The5

(A) terms broker, dealer, issuer,6

nationally recognized statistical ratings organi-7

zation, security, and securities laws have8

the same meanings as in section 3 of the Secu-9

rities Exchange Act of 1934 (15 U.S.C. 78c);10

(B) term investment adviser has the11

same meaning as in section 202 of the Invest-12

ment Advisers Act of 1940 (15 U.S.C. 80b2);13

and14

(C) term investment company has the15

same meaning as in section 3 of the Investment16

Company Act of 1940 (15 U.S.C. 80a3).17

(15) STATE.The term State means any18

State, commonwealth, territory, or possession of the19

United States, the District of Columbia, the Com-20

monwealth of Puerto Rico, the Commonwealth of the21

Northern Mariana Islands, American Samoa, Guam,22

or the United States Virgin Islands.23

(16) TRANSFER DATE.The term transfer24

date means the date established under section 311.25



17/1562

17

S 3217 AMDT 3739

(17) OTHER INCORPORATED DEFINITIONS.1

(A) FEDERAL DEPOSIT INSURANCE ACT.2

The terms affiliate, bank, bank holding3

company, control (when used with respect to4

a depository institution), deposit, depository5

institution, Federal depository institution,6

Federal savings association, foreign bank,7

including, insured branch, insured deposi-8

tory institution, national member bank,9

national nonmember bank, savings associa-10

tion, State bank, State depository institu-11

tion, State member bank, State non-12

member bank, State savings association,13

and subsidiary have the same meanings as in14

section 3 of the Federal Deposit Insurance Act15

(12 U.S.C. 1813).16

(B) HOLDING COMPANIES.The term17

(i) bank holding company has the18

same meaning as in section 2 of the Bank19

Holding Company Act of 1956 (12 U.S.C.20

1841);21

(ii) financial holding company has22

the same meaning as in section 2(p) of the23

Bank Holding Company Act of 1956 (1224

U.S.C. 1841(p)); and25



18/1562

18

S 3217 AMDT 3739

(iii) savings and loan holding com-1

pany has the same meaning as in section2

10 of the Home Owners Loan Act (123

U.S.C. 1467a(a)).4

SEC. 3. SEVERABILITY.5

If any provision of this Act, an amendment made by6

this Act, or the application of such provision or amend-7

ment to any person or circumstance is held to be unconsti-8

tutional, the remainder of this Act, the amendments made9

by this Act, and the application of the provisions of such10

to any person or circumstance shall not be affected there-11

by.12

SEC. 4. EFFECTIVE DATE.13

Except as otherwise specifically provided in this Act14

or the amendments made by this Act, this Act and such15

amendments shall take effect 1 day after the date of en-16

actment of this Act.17

TITLE IFINANCIAL STABILITY18

SEC. 101. SHORT TITLE.19

This title may be cited as the Financial Stability Act20

of 2010.21


(a) IN GENERAL.For purposes of this title, unless23

the context otherwise requires, the following definitions24

shall apply:25



19/1562


20/1562

20

S 3217 AMDT 3739

(ii) substantially engaged in, including1

through a branch in the United States, ac-2

tivities in the United States that are finan-3

cial in nature (as defined in section 4(k) of4

the Bank Holding Company Act of 1956).5

(B) U.S. NONBANK FINANCIAL COM-6

PANY.The term U.S. nonbank financial com-7

pany means a company (other than a bank8

holding company or a subsidiary thereof, or a9

Farm Credit System institution chartered and10

subject to the provisions of the Farm Credit11

Act of 1971 (12 U.S.C. 2001 et. seq.)) that12

is13

(i) incorporated or organized under14

the laws of the United States or any State;15

and16

(ii) substantially engaged in activities17

in the United States that are financial in18

nature (as defined in section 4(k) of the19

Bank Holding Company Act of 1956).20

(C) NONBANK FINANCIAL COMPANY.The21

term nonbank financial company means a22

U.S. nonbank financial company and a foreign23

nonbank financial company.24



21/1562

21

S 3217 AMDT 3739

(D) NONBANK FINANCIAL COMPANY SU-1

PERVISED BY THE BOARD OF GOVERNORS.2

The term nonbank financial company super-3

vised by the Board of Governors means a4

nonbank financial company that the Council5

has determined under section 113 shall be su-6

pervised by the Board of Governors.7

(5) OFFICE OF FINANCIAL RESEARCH.The8

term Office of Financial Research means the of-9

fice established under section 152.10

(6) SIGNIFICANT INSTITUTIONS.The terms11

significant nonbank financial company and sig-12

nificant bank holding company have the meanings13

given those terms by rule of the Board of Governors.14

(b) DEFINITIONAL CRITERIA.The Board of Gov-15

ernors shall establish, by regulation, the criteria to deter-16

mine whether a company is substantially engaged in activi-17

ties in the United States that are financial in nature (as18

defined in section 4(k) of the Bank Holding Company Act19

of 1956) for purposes of the definitions of the terms U.S.20

nonbank financial company and foreign nonbank finan-21

cial company under subsection (a)(4).22

(c) FOREIGN NONBANK FINANCIAL COMPANIES.23

For purposes of the authority of the Board of Governors24

under this title with respect to foreign nonbank financial25



22/1562

22

S 3217 AMDT 3739

companies, references in this title to company or sub-1

sidiary include only the United States activities and sub-2

sidiaries of such foreign company.3

Subtitle AFinancial Stability4

Oversight Council5

SEC. 111. FINANCIAL STABILITY OVERSIGHT COUNCIL ES-6

TABLISHED.7

(a) ESTABLISHMENT.Effective on the date of en-8

actment of this Act, there is established the Financial Sta-9

bility Oversight Council.10

(b) MEMBERSHIP.The Council shall consist of the11

following members:12

(1) VOTING MEMBERS.The voting members,13

who shall each have 1 vote on the Council shall be14

(A) the Secretary of the Treasury, who15

shall serve as Chairperson of the Council;16

(B) the Chairman of the Board of Gov-17

ernors;18

(C) the Comptroller of the Currency;19

(D) the Director of the Bureau;20

(E) the Chairman of the Commission;21

(F) the Chairperson of the Corporation;22

(G) the Chairperson of the Commodity Fu-23

tures Trading Commission;24



23/1562

23

S 3217 AMDT 3739

(H) the Director of the Federal Housing1

Finance Agency; and2

(I) an independent member appointed by3

the President, by and with the advice and con-4

sent of the Senate, having insurance expertise.5

(2) NONVOTING MEMBERS.The Director of6

the Office of Financial Research7

(A) shall serve in an advisory capacity as8

a nonvoting member of the Council; and9

(B) may not be excluded from any of the10

proceedings, meetings, discussions, or delibera-11

tions of the Council.12

(c) TERMS; VACANCY.13

(1) TERMS.The independent member of the14

Council shall serve for a term of 6 years.15

(2) VACANCY.Any vacancy on the Council16

shall be filled in the manner in which the original17

appointment was made.18

(3) ACTING OFFICIALS MAY SERVE.In the19

event of a vacancy in the office of the head of a20

member agency or department, and pending the ap-21

pointment of a successor, or during the absence or22

disability of the head of a member agency or depart-23

ment, the acting head of the member agency or de-24



24/1562


25/1562

25

S 3217 AMDT 3739

fessional committee appointed by the Council, except that,1

if an advisory, technical, or professional committee has2

one or more members who are not employees of or affili-3

ated with the United States Government, the Council shall4

publish a list of the names of the members of such com-5

mittee.6

(h) ASSISTANCE FROM FEDERAL AGENCIES.Any7

department or agency of the United States may provide8

to the Council and any special advisory, technical, or pro-9

fessional committee appointed by the Council, such serv-10

ices, funds, facilities, staff, and other support services as11

the Council may determine advisable.12

(i) COMPENSATION OF MEMBERS.13

(1) FEDERAL EMPLOYEE MEMBERS.All mem-14

bers of the Council who are officers or employees of15

the United States shall serve without compensation16

in addition to that received for their services as offi-17

cers or employees of the United States.18

(2) COMPENSATION FOR NON-FEDERAL MEM-19

BER.Section 5314 of title 5, United States Code,20

is amended by adding at the end the following:21

Independent Member of the Financial Stability22

Oversight Council (1)..23

(j) DETAIL OF GOVERNMENT EMPLOYEES.Any em-24

ployee of the Federal Government may be detailed to the25



26/1562

26

S 3217 AMDT 3739

Council without reimbursement, and such detail shall be1

without interruption or loss of civil service status or privi-2

lege. An employee of the Federal Government detailed to3

the Council shall report to and be subject to oversight by4

the Council during the assignment to the Council, and5

shall be compensated by the department or agency from6

which the employee was detailed.7

SEC. 112. COUNCIL AUTHORITY.8

(a) PURPOSES AND DUTIES OF THE COUNCIL.9

(1) IN GENERAL.The purposes of the Council10

are11

(A) to identify risks to the financial sta-12

bility of the United States that could arise from13

the material financial distress or failure of14

large, interconnected bank holding companies or15

nonbank financial companies;16

(B) to promote market discipline, by elimi-17

nating expectations on the part of shareholders,18

creditors, and counterparties of such companies19

that the Government will shield them from20

losses in the event of failure; and21

(C) to respond to emerging threats to the22

stability of the United States financial markets.23

(2) DUTIES.The Council shall, in accordance24

with this title25



27/1562

27

S 3217 AMDT 3739

(A) collect information from member agen-1

cies and other Federal and State financial regu-2

latory agencies and, if necessary to assess risks3

to the United States financial system, direct the4

Office of Financial Research to collect informa-5

tion from bank holding companies and nonbank6

financial companies;7

(B) provide direction to, and request data8

and analyses from, the Office of Financial Re-9

search to support the work of the Council;10

(C) monitor the financial services market-11

place in order to identify potential threats to12

the financial stability of the United States;13

(D) facilitate information sharing and co-14

ordination among the member agencies and15

other Federal and State agencies regarding do-16

mestic financial services policy development,17

rulemaking, examinations, reporting require-18

ments, and enforcement actions;19

(E) recommend to the member agencies20

general supervisory priorities and principles re-21

flecting the outcome of discussions among the22

member agencies;23



28/1562

28

S 3217 AMDT 3739

(F) identify gaps in regulation that could1

pose risks to the financial stability of the2

United States;3

(G) require supervision by the Board of4

Governors for nonbank financial companies that5

may pose risks to the financial stability of the6

United States in the event of their material fi-7

nancial distress or failure, pursuant to section8

113;9

(H) make recommendations to the Board10

of Governors concerning the establishment of11

heightened prudential standards for risk-based12

capital, leverage, liquidity, contingent capital,13

resolution plans and credit exposure reports,14

concentration limits, enhanced public disclo-15

sures, and overall risk management for16

nonbank financial companies and large, inter-17

connected bank holding companies supervised18

by the Board of Governors;19

(I) identify systemically important finan-20

cial market utilities and payment, clearing, and21

settlement activities (as that term is defined in22

title VIII), and require such utilities and activi-23

ties to be subject to standards established by24

the Board of Governors;25



29/1562

29

S 3217 AMDT 3739

(J) make recommendations to primary fi-1

nancial regulatory agencies to apply new or2

heightened standards and safeguards for finan-3

cial activities or practices that could create or4

increase risks of significant liquidity, credit, or5

other problems spreading among bank holding6

companies, nonbank financial companies, and7

United States financial markets;8

(K) make determinations regarding exemp-9

tions in title VII, where necessary;10

(L) provide a forum for11

(i) discussion and analysis of emerg-12

ing market developments and financial reg-13

ulatory issues; and14

(ii) resolution of jurisdictional dis-15

putes among the members of the Council;16

and17

(M) annually report to and testify before18

Congress on19

(i) the activities of the Council;20

(ii) significant financial market devel-21

opments and potential emerging threats to22

the financial stability of the United States;23



30/1562

30

S 3217 AMDT 3739

(iii) all determinations made under1

section 113 or title VIII, and the basis for2

such determinations; and3

(iv) recommendations4

(I) to enhance the integrity, effi-5

ciency, competitiveness, and stability6

of United States financial markets;7

(II) to promote market discipline;8

and9

(III) to maintain investor con-10

fidence.11

(b) AUTHORITY TO OBTAIN INFORMATION.12

(1) IN GENERAL.The Council may receive,13

and may request the submission of, any data or in-14

formation from the Office of Financial Research and15

member agencies, as necessary16

(A) to monitor the financial services mar-17

ketplace to identify potential risks to the finan-18

cial stability of the United States; or19

(B) to otherwise carry out any of the pro-20

visions of this title.21

(2) SUBMISSIONS BY THE OFFICE AND MEMBER22

AGENCIES.Notwithstanding any other provision of23

law, the Office of Financial Research and any mem-24



31/1562

31

S 3217 AMDT 3739

ber agency are authorized to submit information to1

the Council.2

(3) FINANCIAL DATA COLLECTION.3

(A) IN GENERAL.The Council, acting4

through the Office of Financial Research, may5

require the submission of periodic and other re-6

ports from any nonbank financial company or7

bank holding company for the purpose of as-8

sessing the extent to which a financial activity9

or financial market in which the nonbank finan-10

cial company or bank holding company partici-11

pates, or the nonbank financial company or12

bank holding company itself, poses a threat to13

the financial stability of the United States.14

(B) MITIGATION OF REPORT BURDEN.15

Before requiring the submission of reports from16

any nonbank financial company or bank holding17

company that is regulated by a member agency18

or any primary financial regulatory agency, the19

Council, acting through the Office of Financial20

Research, shall coordinate with such agencies21

and shall, whenever possible, rely on informa-22

tion available from the Office of Financial Re-23

search or such agencies.24



32/1562

32

S 3217 AMDT 3739

(4) BACK-UP EXAMINATION BY THE BOARD OF1

GOVERNORS.If the Council is unable to determine2

whether the financial activities of a nonbank finan-3

cial company pose a threat to the financial stability4

of the United States, based on information or re-5

ports obtained under paragraph (3), discussions with6

management, and publicly available information, the7

Council may request the Board of Governors, and8

the Board of Governors is authorized, to conduct an9

examination of the nonbank financial company for10

the sole purpose of determining whether the11

nonbank financial company should be supervised by12

the Board of Governors for purposes of this title.13

(5) CONFIDENTIALITY.14

(A) IN GENERAL.The Council, the Office15

of Financial Research, and the other member16

agencies shall maintain the confidentiality of17

any data, information, and reports submitted18

under this subsection and subtitle B.19

(B) RETENTION OF PRIVILEGE.The sub-20

mission of any nonpublicly available data or in-21

formation under this subsection and subtitle B22

shall not constitute a waiver of, or otherwise af-23

fect, any privilege arising under Federal or24

State law (including the rules of any Federal or25



33/1562

33

S 3217 AMDT 3739

State court) to which the data or information is1

otherwise subject.2

(C) FREEDOM OF INFORMATION ACT.3

Section 552 of title 5, United States Code, in-4

cluding the exceptions thereunder, shall apply5

to any data or information submitted under this6

subsection and subtitle B.7

SEC. 113. AUTHORITY TO REQUIRE SUPERVISION AND REG-8

ULATION OF CERTAIN NONBANK FINANCIAL9

COMPANIES.10

(a) U.S. NONBANK FINANCIAL COMPANIES SUPER-11

VISED BY THE BOARD OF GOVERNORS.12

(1) DETERMINATION.The Council, on a non-13

delegable basis and by a vote of not fewer than 2314

of the members then serving, including an affirma-15

tive vote by the Chairperson, may determine that a16

U.S. nonbank financial company shall be supervised17

by the Board of Governors and shall be subject to18

prudential standards, in accordance with this title, if19

the Council determines that material financial dis-20

tress at the U.S. nonbank financial company would21

pose a threat to the financial stability of the United22

States.23



34/1562

34

S 3217 AMDT 3739

(2) CONSIDERATIONS.Each determination1

under paragraph (1) shall be based on a consider-2

ation by the Council of3

(A) the degree of leverage of the company;4

(B) the amount and nature of the financial5

assets of the company;6

(C) the amount and types of the liabilities7

of the company, including the degree of reliance8

on short-term funding;9

(D) the extent and types of the off-bal-10

ance-sheet exposures of the company;11

(E) the extent and types of the trans-12

actions and relationships of the company with13

other significant nonbank financial companies14

and significant bank holding companies;15

(F) the importance of the company as a16

source of credit for households, businesses, and17

State and local governments and as a source of18

liquidity for the United States financial system;19

(G) the recommendation, if any, of a mem-20

ber of the Council;21

(H) the operation of, or ownership interest22

in, any clearing, settlement, or payment busi-23

ness of the company;24

(I) the extent to which25



35/1562


36/1562

36

S 3217 AMDT 3739

(B) the amount and nature of the United1

States financial assets of the company;2

(C) the amount and types of the liabilities3

of the company used to fund activities and op-4

erations in the United States, including the de-5

gree of reliance on short-term funding;6

(D) the extent of the United States-related7

off-balance-sheet exposure of the company;8

(E) the extent and type of the transactions9

and relationships of the company with other10

significant nonbank financial companies and11

bank holding companies;12

(F) the importance of the company as a13

source of credit for United States households,14

businesses, and State and local governments,15

and as a source of liquidity for the United16

States financial system;17

(G) the recommendation, if any, of a mem-18

ber of the Council;19

(H) the extent to which20

(i) assets are managed rather than21

owned by the company; and22

(ii) ownership of assets under man-23

agement is diffuse; and24



37/1562

37

S 3217 AMDT 3739

(I) any other factors that the Council1

deems appropriate.2

(c) REEVALUATION AND RESCISSION.The Council3

shall4

(1) not less frequently than annually, reevaluate5

each determination made under subsections (a) and6

(b) with respect to each nonbank financial company7

supervised by the Board of Governors; and8

(2) rescind any such determination, if the9

Council, by a vote of not fewer than 23 of the mem-10

bers then serving, including an affirmative vote by11

the Chairperson, determines that the nonbank finan-12

cial company no longer meets the standards under13

subsection (a) or (b), as applicable.14

(d) NOTICE AND OPPORTUNITY FOR HEARING AND15

FINAL DETERMINATION.16

(1) IN GENERAL.The Council shall provide to17

a nonbank financial company written notice of a18

proposed determination of the Council, including an19

explanation of the basis of the proposed determina-20

tion of the Council, that such nonbank financial21

company shall be supervised by the Board of Gov-22

ernors and shall be subject to prudential standards23

in accordance with this title.24



38/1562


39/1562

39

S 3217 AMDT 3739

which the company may request a hearing under1

paragraph (2).2

(e) EMERGENCY EXCEPTION.3

(1) IN GENERAL.The Council may waive or4

modify the requirements of subsection (d) with re-5

spect to a nonbank financial company, if the Council6

determines, by a vote of not fewer than 23 of the7

members then serving, including an affirmative vote8

by the Chairperson, that such waiver or modification9

is necessary or appropriate to prevent or mitigate10

threats posed by the nonbank financial company to11

the financial stability of the United States.12

(2) NOTICE.The Council shall provide notice13

of a waiver or modification under this paragraph to14

the nonbank financial company concerned as soon as15

practicable, but not later than 24 hours after the16

waiver or modification is granted.17

(3) OPPORTUNITY FOR HEARING.The Council18

shall allow a nonbank financial company to request,19

in writing, an opportunity for a written or oral hear-20

ing before the Council to contest a waiver or modi-21

fication under this paragraph, not later than 1022

days after the date of receipt of notice of the waiver23

or modification by the company. Upon receipt of a24

timely request, the Council shall fix a time (not later25



40/1562

40

S 3217 AMDT 3739

than 15 days after the date of receipt of the request)1

and place at which the nonbank financial company2

may appear, personally or through counsel, to sub-3

mit written materials (or, at the sole discretion of4

the Council, oral testimony and oral argument).5

(4) NOTICE OF FINAL DETERMINATION.Not6

later than 30 days after the date of any hearing7

under paragraph (3), the Council shall notify the8

subject nonbank financial company of the final de-9

termination of the Council under this paragraph,10

which shall contain a statement of the basis for the11

decision of the Council.12

(f) CONSULTATION.The Council shall consult with13

the primary financial regulatory agency, if any, for each14

nonbank financial company or subsidiary of a nonbank fi-15

nancial company that is being considered for supervision16

by the Board of Governors under this section before the17

Council makes any final determination with respect to18

such nonbank financial company under subsection (a), (b),19

or (c).20

(g) JUDICIAL REVIEW.If the Council makes a final21

determination under this section with respect to a22

nonbank financial company, such nonbank financial com-23

pany may, not later than 30 days after the date of receipt24

of the notice of final determination under subsection25



41/1562

41

S 3217 AMDT 3739

(d)(3) or (e)(4), bring an action in the United States dis-1

trict court for the judicial district in which the home office2

of such nonbank financial company is located, or in the3

United States District Court for the District of Columbia,4

for an order requiring that the final determination be re-5

scinded, and the court shall, upon review, dismiss such ac-6

tion or direct the final determination to be rescinded. Re-7

view of such an action shall be limited to whether the final8

determination made under this section was arbitrary and9

capricious.10

SEC. 114. REGISTRATION OF NONBANK FINANCIAL COMPA-11

NIES SUPERVISED BY THE BOARD OF GOV-12

ERNORS.13

Not later than 180 days after the date of a final14

Council determination under section 113 that a nonbank15

financial company is to be supervised by the Board of Gov-16

ernors, such company shall register with the Board of17

Governors, on forms prescribed by the Board of Gov-18

ernors, which shall include such information as the Board19

of Governors, in consultation with the Council, may deem20

necessary or appropriate to carry out this title.21



42/1562

42

S 3217 AMDT 3739

SEC. 115. ENHANCED SUPERVISION AND PRUDENTIAL1

STANDARDS FOR NONBANK FINANCIAL COM-2

PANIES SUPERVISED BY THE BOARD OF GOV-3

ERNORS AND CERTAIN BANK HOLDING COM-4

PANIES.5

(a) IN GENERAL.6

(1) PURPOSE.In order to prevent or mitigate7

risks to the financial stability of the United States8

that could arise from the material financial distress9

or failure of large, interconnected financial institu-10

tions, the Council may make recommendations to11

the Board of Governors concerning the establish-12

ment and refinement of prudential standards and re-13

porting and disclosure requirements applicable to14

nonbank financial companies supervised by the15

Board of Governors and large, interconnected bank16

holding companies, that17

(A) are more stringent than those applica-18

ble to other nonbank financial companies and19

bank holding companies that do not present20

similar risks to the financial stability of the21

United States; and22

(B) increase in stringency, based on the23

considerations identified in subsection (b)(3).24

(2) LIMITATION ON BANK HOLDING COMPA-25

NIES.Any standards recommended under sub-26



43/1562

43

S 3217 AMDT 3739

sections (b) through (f) shall not apply to any bank1

holding company with total consolidated assets of2

less than $50,000,000,000. The Council may rec-3

ommend an asset threshold greater than4

$50,000,000,000 for the applicability of any par-5

ticular standard under those subsections.6

(b) DEVELOPMENT OF PRUDENTIAL STANDARDS.7

(1) IN GENERAL.The recommendations of the8

Council under subsection (a) may include9

(A) risk-based capital requirements;10

(B) leverage limits;11

(C) liquidity requirements;12

(D) resolution plan and credit exposure re-13

port requirements;14

(E) concentration limits;15

(F) a contingent capital requirement;16

(G) enhanced public disclosures; and17

(H) overall risk management requirements.18

(2) PRUDENTIAL STANDARDS FOR FOREIGN FI-19

NANCIAL COMPANIES.In making recommendations20

concerning the standards set forth in paragraph (1)21

that would apply to foreign nonbank financial com-22

panies supervised by the Board of Governors or for-23

eign-based bank holding companies, the Council24



44/1562


45/1562

45

S 3217 AMDT 3739

(1) STUDY REQUIRED.The Council shall con-1

duct a study of the feasibility, benefits, costs, and2

structure of a contingent capital requirement for3

nonbank financial companies supervised by the4

Board of Governors and bank holding companies de-5

scribed in subsection (a), which study shall in-6

clude7

(A) an evaluation of the degree to which8

such requirement would enhance the safety and9

soundness of companies subject to the require-10

ment, promote the financial stability of the11

United States, and reduce risks to United12

States taxpayers;13

(B) an evaluation of the characteristics14

and amounts of convertible debt that should be15

required;16

(C) an analysis of potential prudential17

standards that should be used to determine18

whether the contingent capital of a company19

would be converted to equity in times of finan-20

cial stress;21

(D) an evaluation of the costs to compa-22

nies, the effects on the structure and operation23

of credit and other financial markets, and other24

economic effects of requiring contingent capital;25



46/1562

46

S 3217 AMDT 3739

(E) an evaluation of the effects of such re-1

quirement on the international competitiveness2

of companies subject to the requirement and3

the prospects for international coordination in4

establishing such requirement; and5

(F) recommendations for implementing6

regulations.7

(2) REPORT.The Council shall submit a re-8

port to Congress regarding the study required by9

paragraph (1) not later than 2 years after the date10

of enactment of this Act.11

(3) RECOMMENDATIONS.12

(A) IN GENERAL.Subsequent to submit-13

ting a report to Congress under paragraph (2),14

the Council may make recommendations to the15

Board of Governors to require any nonbank fi-16

nancial company supervised by the Board of17

Governors and any bank holding company de-18

scribed in subsection (a) to maintain a min-19

imum amount of long-term hybrid debt that is20

convertible to equity in times of financial stress.21

(B) F ACTORS TO CONSIDER.In making22

recommendations under this subsection, the23

Council shall consider24



47/1562


48/1562

48

S 3217 AMDT 3739

(2) CREDIT EXPOSURE REPORT.The Council1

may make recommendations to the Board of Gov-2

ernors concerning the advisability of requiring each3

nonbank financial company supervised by the Board4

of Governors and bank holding company described in5

subsection (a) to report periodically to the Council,6

the Board of Governors, and the Corporation on7

(A) the nature and extent to which the8

company has credit exposure to other signifi-9

cant nonbank financial companies and signifi-10

cant bank holding companies; and11

(B) the nature and extent to which other12

such significant nonbank financial companies13

and significant bank holding companies have14

credit exposure to that company.15

(e) CONCENTRATION LIMITS.In order to limit the16

risks that the failure of any individual company could pose17

to nonbank financial companies supervised by the Board18

of Governors or bank holding companies described in sub-19

section (a), the Council may make recommendations to the20

Board of Governors to prescribe standards to limit such21

risks, as set forth in section 165.22

(f) ENHANCED PUBLIC DISCLOSURES.The Council23

may make recommendations to the Board of Governors24

to require periodic public disclosures by bank holding com-25



49/1562


50/1562

50

S 3217 AMDT 3739

Office of Financial Research, shall, to the fullest ex-1

tent possible, use2

(A) reports that a bank holding company,3

nonbank financial company supervised by the4

Board of Governors, or any functionally regu-5

lated subsidiary of such company has been re-6

quired to provide to other Federal or State reg-7

ulatory agencies;8

(B) information that is otherwise required9

to be reported publicly; and10

(C) externally audited financial statements.11

(2) AVAILABILITY.Each bank holding com-12

pany described in subsection (a) and nonbank finan-13

cial company supervised by the Board of Governors,14

and any subsidiary thereof, shall provide to the15

Council, at the request of the Council, copies of all16

reports referred to in paragraph (1).17

(3) CONFIDENTIALITY.The Council shall18

maintain the confidentiality of the reports obtained19

under subsection (a) and paragraph (1)(A) of this20

subsection.21

SEC. 117. TREATMENT OF CERTAIN COMPANIES THAT22

CEASE TO BE BANK HOLDING COMPANIES.23

(a) APPLICABILITY.This section shall apply to any24

entity or a successor entity that25



51/1562

51

S 3217 AMDT 3739

(1) was a bank holding company having total1

consolidated assets equal to or greater than2

$50,000,000,000 as of January 1, 2010; and3

(2) received financial assistance under or par-4

ticipated in the Capital Purchase Program estab-5

lished under the Troubled Asset Relief Program au-6

thorized by the Emergency Economic Stabilization7

Act of 2008.8

(b) TREATMENT.If an entity described in sub-9

section (a) ceases to be a bank holding company at any10

time after January 1, 2010, then such entity shall be11

treated as a nonbank financial company supervised by the12

Board of Governors, as if the Council had made a deter-13

mination under section 113 with respect to that entity.14

(c) APPEAL.15

(1) REQUEST FOR HEARING.An entity may16

request, in writing, an opportunity for a written or17

oral hearing before the Council to appeal its treat-18

ment as a nonbank financial company supervised by19

the Board of Governors in accordance with this sec-20

tion. Upon receipt of the request, the Council shall21

fix a time (not later than 30 days after the date of22

receipt of the request) and place at which such enti-23

ty may appear, personally or through counsel, to24



52/1562

52

S 3217 AMDT 3739

submit written materials (or, at the sole discretion1

of the Council, oral testimony and oral argument).2

(2) DECISION.3

(A) PROPOSED DECISION.Not later than4

60 days after the date of a hearing under para-5

graph (1), the Council shall submit a report to,6

and may testify before, the Committee on7

Banking, Housing, and Urban Affairs of the8

Senate and the Committee on Financial Serv-9

ices of the House of Representatives on the pro-10

posed decision of the Council regarding an ap-11

peal under paragraph (1), which report shall in-12

clude a statement of the basis for the proposed13

decision of the Council.14

(B) NOTICE OF FINAL DECISION.The15

Council shall notify the subject entity of the16

final decision of the Council regarding an ap-17

peal under paragraph (1), which notice shall18

contain a statement of the basis for the final19

decision of the Council, not later than 60 days20

after the later of21

(i) the date of the submission of the22

report under subparagraph (A); or23

(ii) if the Committee on Banking,24

Housing, and Urban Affairs of the Senate25



53/1562

53

S 3217 AMDT 3739

or the Committee on Financial Services of1

the House of Representatives holds one or2

more hearings regarding such report, the3

date of the last such hearing.4

(C) CONSIDERATIONS.In making a deci-5

sion regarding an appeal under paragraph (1),6

the Council shall consider whether the company7

meets the standards under section 113(a) or8

113(b), as applicable, and the definition of the9

term nonbank financial company under sec-10

tion 102. The decision of the Council shall be11

final, subject to the review under paragraph12

(3).13

(3) REVIEW.If the Council denies an appeal14

under this subsection, the Council shall, not less fre-15

quently than annually, review and reevaluate the de-16

cision.17

SEC. 118. COUNCIL FUNDING.18

Any expenses of the Council shall be treated as ex-19

penses of, and paid by, the Office of Financial Research.20

SEC. 119. RESOLUTION OF SUPERVISORY JURISDICTIONAL21

DISPUTES AMONG MEMBER AGENCIES.22

(a) REQUEST FOR DISPUTE RESOLUTION.The23

Council shall resolve a dispute among 2 or more member24

agencies, if25



54/1562

54

S 3217 AMDT 3739

(1) a member agency has a dispute with an-1

other member agency about the respective jurisdic-2

tion over a particular bank holding company,3

nonbank financial company, or financial activity or4

product (excluding matters for which another dis-5

pute mechanism specifically has been provided under6

Federal law);7

(2) the Council determines that the disputing8

agencies cannot, after a demonstrated good faith ef-9

fort, resolve the dispute without the intervention of10

the Council; and11

(3) any of the member agencies involved in the12

dispute13

(A) provides all other disputants prior no-14

tice of the intent to request dispute resolution15

by the Council; and16

(B) requests in writing, not earlier than 1417

days after providing the notice described in sub-18

paragraph (A), that the Council resolve the dis-19

pute.20

(b) COUNCIL DECISION.The Council shall resolve21

each dispute described in subsection (a)22

(1) within a reasonable time after receiving the23

dispute resolution request;24



55/1562

55

S 3217 AMDT 3739

(2) after consideration of relevant information1

provided by each agency party to the dispute; and2

(3) by agreeing with 1 of the disputants regard-3

ing the entirety of the matter, or by determining a4

compromise position.5

(c) FORM AND BINDING EFFECT.A Council deci-6

sion under this section shall7

(1) be in writing;8

(2) include an explanation of the reasons there-9

for; and10

(3) be binding on all Federal agencies that are11

parties to the dispute.12

SEC. 120. ADDITIONAL STANDARDS APPLICABLE TO ACTIVI-13

TIES OR PRACTICES FOR FINANCIAL STA-14

BILITY PURPOSES.15

(a) IN GENERAL.The Council may issue rec-16

ommendations to the primary financial regulatory agen-17

cies to apply new or heightened standards and safeguards,18

including standards enumerated in section 115, for a fi-19

nancial activity or practice conducted by bank holding20

companies or nonbank financial companies under their re-21

spective jurisdictions, if the Council determines that the22

conduct of such activity or practice could create or in-23

crease the risk of significant liquidity, credit, or other24

problems spreading among bank holding companies and25



56/1562

56

S 3217 AMDT 3739

nonbank financial companies or the financial markets of1

the United States.2

(b) PROCEDURE FOR RECOMMENDATIONS TO REGU-3

LATORS.4

(1) NOTICE AND OPPORTUNITY FOR COM-5

MENT.The Council shall consult with the primary6

financial regulatory agencies and provide notice to7

the public and opportunity for comment for any pro-8

posed recommendation that the primary financial9

regulatory agencies apply new or heightened stand-10

ards and safeguards for a financial activity or prac-11

tice.12

(2) CRITERIA.The new or heightened stand-13

ards and safeguards for a financial activity or prac-14

tice recommended under paragraph (1)15

(A) shall take costs to long-term economic16

growth into account; and17

(B) may include prescribing the conduct of18

the activity or practice in specific ways (such as19

by limiting its scope, or applying particular cap-20

ital or risk management requirements to the21

conduct of the activity) or prohibiting the activ-22

ity or practice.23

(c) IMPLEMENTATION OF RECOMMENDED STAND-24

ARDS.25



57/1562

57

S 3217 AMDT 3739

(1) ROLE OF PRIMARY FINANCIAL REGULATORY1

AGENCY.2

(A) IN GENERAL.Each primary financial3

regulatory agency may impose, require reports4

regarding, examine for compliance with, and en-5

force standards in accordance with this section6

with respect to those entities for which it is the7

primary financial regulatory agency.8

(B) RULE OF CONSTRUCTION.The au-9

thority under this paragraph is in addition to,10

and does not limit, any other authority of a pri-11

mary financial regulatory agency. Compliance12

by an entity with actions taken by a primary fi-13

nancial regulatory agency under this section14

shall be enforceable in accordance with the stat-15

utes governing the respective jurisdiction of the16

primary financial regulatory agency over the en-17

tity, as if the agency action were taken under18

those statutes.19

(2) IMPOSITION OF STANDARDS.The primary20

financial regulatory agency shall impose the stand-21

ards recommended by the Council in accordance22

with subsection (a), or similar standards that the23

Council deems acceptable, or shall explain in writing24

to the Council, not later than 90 days after the date25



58/1562

58

S 3217 AMDT 3739

on which the Council issues the recommendation,1

why the agency has determined not to follow the rec-2

ommendation of the Council.3

(d) REPORT TO CONGRESS.The Council shall re-4

port to Congress on5

(1) any recommendations issued by the Council6

under this section;7

(2) the implementation of, or failure to imple-8

ment such recommendation on the part of a primary9

financial regulatory agency; and10

(3) in any case in which no primary financial11

regulatory agency exists for the nonbank financial12

company conducting financial activities or practices13

referred to in subsection (a), recommendations for14

legislation that would prevent such activities or prac-15

tices from threatening the stability of the financial16

system of the United States.17

(e) EFFECT OF RESCISSION OF IDENTIFICATION.18

(1) NOTICE.The Council may recommend to19

the relevant primary financial regulatory agency that20

a financial activity or practice no longer requires any21

standards or safeguards implemented under this sec-22

tion.23

(2) DETERMINATION OF PRIMARY FINANCIAL24

REGULATORY AGENCY TO CONTINUE.25



59/1562

59

S 3217 AMDT 3739

(A) IN GENERAL.Upon receipt of a rec-1

ommendation under paragraph (1), a primary2

financial regulatory agency that has imposed3

standards under this section shall determine4

whether standards that it has imposed under5

this section should remain in effect.6

(B) APPEAL PROCESS.Each primary fi-7

nancial regulatory agency that has imposed8

standards under this section shall promulgate9

regulations to establish a procedure under10

which entities under its jurisdiction may appeal11

a determination by such agency under this12

paragraph that standards imposed under this13

section should remain in effect.14

SEC. 121. MITIGATION OF RISKS TO FINANCIAL STABILITY.15

(a) MITIGATORY ACTIONS.If the Board of Gov-16

ernors determines that a bank holding company with total17

consolidated assets of $50,000,000,000 or more, or a18

nonbank financial company supervised by the Board of19

Governors, poses a grave threat to the financial stability20

of the United States, the Board of Governors, upon an21

affirmative vote of not fewer than 23 of the Council mem-22

bers then serving, shall require the subject company23

(1) to terminate one or more activities;24



60/1562

60

S 3217 AMDT 3739

(2) to impose conditions on the manner in1

which the company conducts one or more activities;2

or3

(3) if the Board of Governors determines that4

such action is inadequate to mitigate a threat to the5

financial stability of the United States in its rec-6

ommendation, to sell or otherwise transfer assets or7

off-balance-sheet items to unaffiliated entities.8

(b) NOTICE AND HEARING.9

(1) IN GENERAL.The Board of Governors, in10

consultation with the Council, shall provide to a11

company described in subsection (a) written notice12

that such company is being considered for mitiga-13

tory action pursuant to this section, including an ex-14

planation of the basis for, and description of, the15

proposed mitigatory action.16

(2) HEARING.Not later than 30 days after17

the date of receipt of notice under paragraph (1),18

the company may request, in writing, an opportunity19

for a written or oral hearing before the Board of20

Governors to contest the proposed mitigatory action.21

Upon receipt of a timely request, the Board of Gov-22

ernors shall fix a time (not later than 30 days after23

the date of receipt of the request) and place at24

which such company may appear, personally or25



61/1562

61

S 3217 AMDT 3739

through counsel, to submit written materials (or, at1

the discretion of the Board of Governors, in con-2

sultation with the Council, oral testimony and oral3

argument).4

(3) DECISION.Not later than 60 days after5

the date of a hearing under paragraph (2), or not6

later than 60 days after the provision of a notice7

under paragraph (1) if no hearing was held, the8

Board of Governors shall notify the company of the9

final decision of the Board of Governors, including10

the results of the vote of the Council, as described11

in subsection (a).12

(c) F ACTORS FOR CONSIDERATION.The Board of13

Governors and the Council shall take into consideration14

the factors set forth in subsection (a) or (b) of section15

113, as applicable, in a determination described in sub-16

section (a) and in a decision described in subsection (b).17

(d) APPLICATION TO FOREIGN FINANCIAL COMPA-18

NIES.The Board of Governors may prescribe regulations19

regarding the application of this section to foreign20

nonbank financial companies supervised by the Board of21

Governors and foreign-based bank holding companies, giv-22

ing due regard to the principle of national treatment and23

competitive equity.24



62/1562

62

S 3217 AMDT 3739

Subtitle BOffice of Financial1

Research2


For purposes of this subtitle4

(1) the terms Office and Director mean5

the Office of Financial Research established under6

this subtitle and the Director thereof, respectively;7

(2) the term financial company has the same8

meaning as in title II, and includes an insured de-9

pository institution and an insurance company;10

(3) the term Data Center means the data11

center established under section 154;12

(4) the term Research and Analysis Center13

means the research and analysis center established14

under section 154;15

(5) the term financial transaction data means16

the structure and legal description of a financial17

contract, with sufficient detail to describe the rights18

and obligations between counterparties and make19

possible an independent valuation;20

(6) the term position data21

(A) means data on financial assets or li-22

abilities held on the balance sheet of a financial23

company, where positions are created or24



63/1562

63

S 3217 AMDT 3739

changed by the execution of a financial trans-1

action; and2

(B) includes information that identifies3

counterparties, the valuation by the financial4

company of the position, and information

Documents

Senate Amendment 3739