[House Report 111-370]
[From the U.S. Government Publishing Office]
111th Congress Report
HOUSE OF REPRESENTATIVES
1st Session 111-370
======================================================================
PROVIDING FOR FURTHER CONSIDERATION OF THE BILL (H.R. 4173) TO PROVIDE
FOR FINANCIAL REGULATORY REFORM, TO PROTECT CONSUMERS AND INVESTORS, TO
ENHANCE FEDERAL UNDERSTANDING OF INSURANCE ISSUES, TO REGULATE THE
OVER-THE-COUNTER DERIVATIVES MARKETS, AND FOR OTHER PURPOSES
_______
December 10, 2009.--Referred to the House Calendar and ordered to be
printed
_______
Mr. Perlmutter, from the Committee on Rules, submitted the following
R E P O R T
[To accompany H. Res. 964]
The Committee on Rules, having had under consideration
House Resolution 964, by a record vote of 8-3, report the same
to the House with the recommendation that the resolution be
adopted.
SUMMARY OF PROVISIONS OF THE RESOLUTION
The resolution provides for further consideration of H.R.
4173, the ``Wall Street Reform and Consumer Protection Act of
2009,'' under a structured rule. The resolution provides that
there will be no additional general debate. The resolution
waives all points of order against provisions in the bill, as
amended (this waiver does not affect the point of order
available under clause 9 of rule XXI (regarding earmark
disclosure). The resolution provides that the bill, as amended,
shall be considered as read. The resolution makes in order only
those amendments printed in this report and the amendments en
bloc described in section 3 of the resolution. The resolution
provides that the amendments made in order may be offered only
in the order printed in this report (except as specified in
section 4), may be offered only by a Member designated in this
report, shall be considered as read, shall be debatable for the
time specified in this report equally divided and controlled by
the proponent and an opponent, shall not be subject to
amendment, and shall not be subject to a demand for division of
the question. The resolution waives all points of order against
the amendments printed in this report or amendments en bloc
except for clauses 9 and 10 of rule XXI.
The resolution provides that the chair of the Committee on
Financial Services or his designee may offer amendments en bloc
consisting of amendments printed in this report not earlier
disposed of. Amendments en bloc shall be considered as read,
shall be debatable for 20 minutes equally divided and
controlled by the chair and ranking minority member of the
Committee on Financial Services or their designees, shall not
be subject to amendment, and shall not be subject to a demand
for division of the question. The original proponent of an
amendment included in such amendments en bloc may insert a
statement in the Congressional Record immediately before the
disposition of the amendments en bloc.
The resolution provides that the Chair of the Committee of
the Whole may recognize for consideration of any amendment
printed in this report out of the order printed, but not sooner
than 30 minutes after the chair of the Committee on Financial
Services or his designee announces from the floor a request to
that effect. In the case of sundry amendments reported from the
Committee, the question of their adoption shall be put to the
House en gros and without division of the question. The
resolution provides one motion to recommit with or without
instructions.
The resolution also provides that the Chair may entertain a
motion that the Committee rise only if offered by the chair of
the Committee on Financial Services or his designee. It also
provides that the Chair may not entertain a motion to strike
out the enacting words of the bill (as described in clause 9 of
rule XVIII). The resolution provides that during consideration
of the bill, the Chair may reduce to two minutes the minimum
time for electronic voting. The resolution provides that in the
engrossment of the bill, the Clerk is authorized to make
technical and conforming changes to amendatory instructions.
EXPLANATION OF WAIVERS
Although the rule waives all points of order against the
bill, as amended, the Committee is not aware of any points of
order. The waiver is prophylactic.
COMMITTEE VOTES
The results of each record vote on an amendment or motion
to report, together with the names of those voting for and
against, are printed below:
Rules Committee record vote No. 290
Date: December 10, 2009.
Measure: H.R. 4173.
Motion by: Mr. Dreier.
Summary of motion: To make in order and provide appropriate
waivers for an amendment by Rep. Harman (CA), #23, which would
allow depositors in any institution for which the FDIC was
appointed as receiver or conservator on July 11, 2008 (IndyMAC)
to be compensated for uninsured deposits up to the new FDIC
insurance limit of $250,000. The insurance would be offset with
CFPA funds.
Results: Defeated 4-8.
Vote by Members: McGovern--Nay; Hastings--Nay; Matsui--Nay;
Arcuri--Nay; Perlmutter--Nay; Pingree--Nay; Polis--Nay;
Dreier--Yea; Diaz-Balart--Yea; Sessions--Yea; Foxx--Yea;
Slaughter--Nay.
Rules Committee record vote No. 291
Date: December 10, 2009.
Measure: H.R. 4173.
Motion by: Mr. Dreier.
Summary of motion: To make in order and provide appropriate
waivers for an amendment by Reps. Boren (OK), Capito (WV),
McMahon (NY), Miller, Gary (CA), #78, which would direct the
appropriate agency to define a category of low risk mortgages
that would be exempt from the risk retention provisions found
within the bill. The current language in the bill allows the
newly formed agency to define such a mortgage; this amendment
would require it.
Results: Defeated 4-9.
Vote by Members: McGovern--Nay; Hastings--Nay; Matsui--Nay;
Cardoza--Nay; Arcuri--Nay; Perlmutter--Nay; Pingree--Nay;
Polis--Nay; Dreier--Yea; Diaz-Balart--Yea; Sessions--Yea;
Foxx--Yea; Slaughter--Nay.
Rules Committee record vote No. 292
Date: December 10, 2009.
Measure: H.R. 4173.
Motion by: Mr. Dreier.
Summary of motion: To make in order and provide appropriate
waivers for an amendment by Rep. Garrett (NJ), #236, which
would strike new Federal Reserve authorities and
responsibilities in the bill.
Results: Defeated 4-9.
Vote by Members: McGovern--Nay; Hastings--Nay; Matsui--Nay;
Cardoza--Nay; Arcuri--Nay; Perlmutter--Nay; Pingree--Nay;
Polis--Nay; Dreier--Yea; Diaz-Balart--Yea; Sessions--Yea;
Foxx--Yea; Slaughter--Nay.
Rules Committee record vote No. 293
Date: December 10, 2009.
Measure: H.R. 4173.
Motion by: Mr. Dreier.
Summary of motion: To make in order and provide appropriate
waivers for the amendments, en bloc, each separately debatable
for 10 minutes, by Rep. McCarthy, Kevin (CA), #167, which would
restrict the CFPA from having authority over Veterans' benefits
programs or the provisions of the Servicemembers Civil Relief
Act; and by Rep. Bean, #141, which would provide that the
Comptroller of the Currency may assess the individual state
laws and/or regulations under the CFPA and if they provide a
high protective standard, and may make a determination that
such standard be the uniform national standard. If a majority
of states file petitions, CFPA is forced to consider raising
the federal standard. If an institution is not chartered
federally as a national bank or Federal savings associations
(non-bank subs and affiliates are state chartered), then it
cannot receive federal preemption. The amendment does not seek
to limit any of the new powers the State AGs receive under this
bill (Section 4402) or limit the State AG visitorial sections
beyond matching Cuomo. Makes changes to sections dealing with
the relationship between national banks/Federal savings
associations and state laws to match the true pre-2004
standard.
Results: Defeated 4-9.
Vote by Members: McGovern--Nay; Hastings--Nay; Matsui--Nay;
Cardoza--Nay; Arcuri--Nay; Perlmutter--Nay; Pingree--Nay;
Polis--Nay; Dreier--Yea; Diaz-Balart--Yea; Sessions--Yea;
Foxx--Yea; Slaughter--Nay.
Rules Committee record vote No. 294
Date: December 10, 2009.
Measure: H.R. 4173.
Motion by: Mr. Diaz-Balart.
Summary of motion: To make in order and provide appropriate
waivers for an amendment by Rep. Bachmann (MN), #192, which
would prohibit employees and former employees of organizations
that have been indicted of Federal or State election law
violations from serving on the Consumer Financial Protection
Oversight Board.
Results: Defeated 4-9.
Vote by Members: McGovern--Nay; Hastings--Nay; Matsui--Nay;
Cardoza--Nay; Arcuri--Nay; Perlmutter--Nay; Pingree--Nay;
Polis--Nay; Dreier--Yea; Diaz-Balart--Yea; Sessions--Yea;
Foxx--Yea; Slaughter--Nay.
Rules Committee record vote No. 295
Date: December 10, 2009.
Measure: H.R. 4173.
Motion by: Mr. Diaz-Balart.
Summary of motion: To make in order and provide appropriate
waivers for an amendment by Reps. Lance (NJ), McCarthy, Kevin
(CA), Paulsen (MN), #196, which would prohibit the secretary
from extending the TARP program, prohibit any unused
authorization under TARP from being used for any further
purpose that would increase the national debt, and direct any
repaid funds be used only for reducing the national debt.
Results: Defeated 3-8.
Vote by Members: Hastings--Nay; Matsui--Nay; Cardoza--Nay;
Arcuri--Nay; Perlmutter--Nay; Pingree--Nay; Polis--Nay; Diaz-
Balart--Yea; Sessions--Yea; Foxx--Yea; Slaughter--Nay.
Rules Committee record vote No. 296
Date: December 10, 2009.
Measure: H.R. 4173.
Motion by: Mr. Sessions.
Summary of motion: To make in order and provide appropriate
waivers for an amendment by Rep. Sessions (TX), #86, which
would clarify that none of the registration requirements or
other requirements on investment advisers of private funds
shall be construed as creating a private right of action.
Results: Defeated 3-8.
Vote by Members: Hastings--Nay; Matsui--Nay; Cardoza--Nay;
Arcuri--Nay; Perlmutter--Nay; Pingree--Nay; Polis--Nay; Diaz-
Balart--Yea; Sessions--Yea; Foxx--Yea; Slaughter--Nay.
Rules Committee record vote No. 297
Date: December 10, 2009.
Measure: H.R. 4173.
Motion by: Mr. Sessions.
Summary of motion: To make in order and provide appropriate
waivers for an amendment by Rep. Sessions (TX), #150, which
would make the bill ineffective if it is determined to cause
the loss of over 1 million jobs; the Comptroller General of the
United States has 30 days to determine the net job loss.
Results: Defeated 3-8.
Vote by Members: Hastings--Nay; Matsui--Nay; Cardoza--Nay;
Arcuri--Nay; Perlmutter--Nay; Pingree--Nay; Polis--Nay; Diaz-
Balart--Yea; Sessions--Yea; Foxx--Yea; Slaughter--Nay.
Rules Committee record vote No. 298
Date: December 10, 2009.
Measure: H.R. 4173.
Motion by: Mr. Sessions.
Summary of motion: To make in order and provide appropriate
waivers for an amendment by Rep. Garrett (NJ), #237, which
would require that all current and future Fed 13(3) programs be
moved on-budget.
Results: Defeated 3-8.
Vote by Members: Hastings--Nay; Matsui--Nay; Cardoza--Nay;
Arcuri--Nay; Perlmutter--Nay; Pingree--Nay; Polis--Nay; Diaz-
Balart--Yea; Sessions--Yea; Foxx--Yea; Slaughter--Nay.
Rules Committee record vote No. 299
Date: December 10, 2009.
Measure: H.R. 4173.
Motion by: Dr. Foxx.
Summary of motion: To make in order and provide appropriate
waivers for an amendment by Reps. Jenkins (KS), Paulsen (MN),
#18, which would add a new section which bans government funds
from being used for a bailout or for any other purpose, other
than a Federal agency's administrative costs.
Results: Defeated 3-8.
Vote by Members: Hastings--Nay; Matsui--Nay; Cardoza--Nay;
Arcuri--Nay; Perlmutter--Nay; Pingree--Nay; Polis--Nay; Diaz-
Balart--Yea; Sessions--Yea; Foxx--Yea; Slaughter--Nay.
Rules Committee record vote No. 300
Date; December 10, 2009.
Measure; H.R. 4173.
Motion by: Dr. Foxx.
Summary of motion: To make in order and provide appropriate
waivers for an amendment by Rep. McHenry (NC), #98, which would
clarify that nothing under Title 4 shall be construed to create
a private right of action.
Results: Defeated 3-8.
Vote by Members: Hastings--Nay; Matsui--Nay; Cardoza--Nay;
Arcuri--Nay; Perlmutter--Nay; Pingree--Nay; Polis--Nay; Diaz-
Balart--Yea; Sessions--Yea; Foxx--Yea; Slaughter--Nay.
Rules Committee record vote No. 301
Date: December 10, 2009.
Measure: H.R. 4173.
Motion by: Dr. Foxx.
Summary of motion: To make in order and provide appropriate
waivers for an amendment by Rep. Perlmutter (CO), #177, which
would strengthen the exemption for smaller banks and credit
unions allowing their consumer protection oversight to remain
with their current regulator.
Results: Defeated 4-7.
Vote by Members: Hastings--Nay; Matsui--Nay; Cardoza--Nay;
Arcuri--Nay; Perlmutter--Yea; Pingree--Nay; Polis--Nay; Diaz-
Balart--Yea; Sessions--Yea; Foxx--Yea; Slaughter--Nay.
Rules Committee record vote No. 302
Date: December 10, 2009.
Measure: H.R. 4173.
Motion by: Dr. Foxx.
Summary of motion: To make in order and provide appropriate
waivers for an amendment by Rep. Price, Tom (GA), #35, which
would strike all sections in the bill which restrict the use of
arbitration.
Results: Defeated 3-8.
Vote by Members: Hastings--Nay; Matsui--Nay; Cardoza--Nay;
Arcuri--Nay; Perlmutter--Nay; Pingree--Nay; Polis--Nay; Diaz-
Balart--Yea; Sessions--Yea; Foxx--Yea; Slaughter--Nay.
Rules Committee record vote No. 303
Date: December 10, 2009.
Measure: H.R. 4173.
Motion by: Mr. McGovern.
Summary of motion: To report the rule.
Results: Adopted 8-3.
Vote by Members: Hastings--Yea; Matsui--Yea; Cardoza--Yea;
Arcuri--Yea; Perlmutter--Yea; Pingree--Yea; Polis--Yea; Diaz-
Balart--Nay; Sessions--Nay; Foxx--Nay; Slaughter--Yea.
SUMMARY OF AMENDMENTS TO BE MADE IN ORDER
(Summaries derived from information provided by sponsors.)
1. Frank (MA): The manager's amendment to The Wall Street
Reform and Consumer Protection Act of 2009 (H.R. 4173) provides
for clarifications to Title I (the Financial Stability
Improvement Act), Title IV (the Consumer Financial Protection
Agency Act), Title V (Capital Markets), Title VI (Federal
Insurance Office), and the Mortgage Reform and Anti-Predatory
Lending Act (to be added as Title VII). Also included are
provisions to provide mortgage assistance to unemployed
homeowners and assistance for the purchase and repair of
foreclosed properties with an emphasis on increasing the supply
of affordable rental housing. It includes a provision to make
the amendment PAYGO compliant. Further, the amendment: (1)
Would add the head of the CFPA to the Financial Services
Oversight Council and clarifies that prudential standards
promulgated under the Financial Stability Improvement Act of
2009 do not supersede state or federal consumer protection
standards. (2) Would add a representative of the State
securities commissioners (or other office performing like
functions) as a non-voting representative on the Financial
Services Oversight Council. (3) Would improve various oversight
provisions in the bill, including adding GAO authority to
conduct oversight of the CFPA, among other improvements. (4)
Would clarify that the systemic risk regulator created and
empowered under the Act is the Financial Services Oversight
Council, rather than the Board of Governors of the Federal
Reserve System. Emergency voting provisions remain unchanged,
the Board retains its equal vote as a Member of the Council,
and may act at the direction of the Council. (5) Would clarify
that financial companies cannot be compelled by the systemic
risk regulator to waive any privilege (such as attorney-client
privilege) when providing data at the request of the systemic
risk regulator. The bill currently provides only that in
responding to the request the company shall not be deemed to
have waived any such privilege. (6) Would clarify 1105 of H.R.
4173 such that the limited scope of the judicial review
provision in 1105(h) is unambiguous. It would limit judicial
review to the new regulatory powers defined by 1105, which
establishes new regulatory prerogatives through mitigation of
systemic risk. (7) Would clarify the conditions under which
contingent capital will be triggered. (8) Would require HAMP-
participating servicers to disclose ``net present value'' (NPV)
analysis mortgage-related or homeowner-related inputs to the
homeowner upon denial of loan modification, requires the
Department of the Treasury to create a homeowner-accessible
website with a calculator for NPV analysis of a mortgage, and
requires the Department of the Treasury to make public its
methodology and model used for calculating NPV. (9) Would
modify changes of control in applicable financial institutions.
(10) Would extend the ability of the Federal Reserve to prevent
the merger, acquisition, or consolidation of a non-bank
financial holding company under the Bank Holding Company Act.
(11) Would eliminate the current disparity between banks and
thrifts by allowing for nationwide de novo interstate branching
for all federally insured depository institutions. (12) Would
create a mutual commercial bank charter. (13) Would reduce the
size of the haircut that FDIC may impose on secured creditors
of a firm placed into receivership that results in losses to
the taxpayer or the Fund to 10 percent. It further focuses the
haircut to secured loans with a term of 30 days or less, and
exempts from the haircut loans secured by Treasury bonds,
agency or GSE backed debt, as well as debt derived from real
property. The amendment clarifies no haircut may be imposed
unless all shareholders and other junior creditors are wiped
out. The revised amendment makes additional technical changes,
all of which are consistent with the policy aim of the original
amendment, as stated above. (14) Would direct the Department of
the Treasury to conduct a study to analyze how the resolution
authority granted in the bill is funded. (15) Would require the
CFPA Director to establish a website for consumer complaints in
conjunction with a complaint monitoring system and toll-free
number. (16) Would establish the Office of Financial Protection
for Older Adults to strengthen the protection of seniors
against financial exploitation. Facilitates the education of
seniors on protecting themselves from fraud and abuse, monitors
the designations within the senior financial advisor community
to alert regulators of misleading certifications, and improves
coordination between current elder protection agencies. (17)
Would clarify that the CFPA can charge higher assessments for
banks that have poor consumer protection records or pose
excessive risk to consumers. (18) Would use funds from the CFPA
Victims Relief Fund to pay for financial literacy programs
administered by the Treasury Department's Financial Education
and Counseling Grant Program. (19) Would establish an office
within the Consumer Financial Protection Agency (CFPA) to
advise the director on the impact of agency policies and
regulations on small, community financial institutions and help
ensure that the policies and regulations of the CFPA do not
unduly burden community financial institutions. (20) Would
clarify the rulemaking supervisory and enforcement authority of
the CFPA. (21) Would limit the CFPA's authority regarding
charitable contributions through tax-exempt organizations
recognized by the IRS. (22) Would consider as ``unfair'' for a
credit bureau to make available for purchase by lenders any
type of credit score for a consumer that is not also available
for purchase by that same consumer. (23) Would define person-
to-person lending platforms for purposes of an exception to the
securities law, make the Consumer Financial Protection Agency
the primary regulator of person to person lending, and specify
that until the CFPA has adopted disclosure requirements person
to person lending platforms would be required to continue to
provide disclosures under the Securities Acts of 1933 and 1934.
(24) Would require that the Director of the CFPA: (1) conduct a
review of Federal laws and regulations relating to the
protection of individuals that utilize exchange facilitators
(2) submit to Congress recommendations on the steps necessary
to ensure appropriate protection of such persons and (3)
establish and carry out a program, utilizing the authority of
the CFPA, to protect individuals that utilize exchange
facilitators. (25) Would direct the CFPA to promulgate a rule,
within 180 days, requiring banks to prominently place at their
branch locations information regarding the fees and charges
associated with the bank's overdraft protection program. (26)
Would retain the existing Consumer Advisory Council at the
Federal Reserve and would add additional statutory requirements
to the Council that it make an annual set of recommendations to
the Consumer Financial Protection Agency, that it make these
recommendations public, and that it meet with the CFPA Director
annually to discuss them. Would require the Consumer Advisory
Council to meet with the Fed Board of Governors annually and
the Chair of the Fed to include the Council's recommendations
for consumer protection regulations for the CFPA in his
mandated appearances before Congress. (27) Would require
private educational lenders to obtain institutional
certification prior to making a loan to students. It would
require the Consumer Financial Protection Agency and the
Department of Education to conduct a study on private education
loans and lenders and report to Congress on the compliance of
institutions and private educational lenders with these
provisions. (28) Would clarify that private funds, investment
advisors and others cannot be compelled by the systemic risk
regulator to waive and shall not be deemed to have waived any
privilege (such as attorney client privilege), by adding to
Title V the same language to that effect that was included in
Title 1. (29) Would mandate the registration of all credit
rating agencies as ``Nationally Recognized Statistical Rating
Organization.'' (30) Would lower the liability standard for
credit rating agencies from ``knowingly or recklessly'' to
``gross negligence''. (31) Would provide that a purchaser of a
security given a rating by a nationally recognized statistical
rating organization shall have the right to recover for damages
only if the credit rating was grossly negligent based on the
facts and circumstances available at the time the rating was
issued and was a substantial factor in the investor's economic
loss. (32) Would strike Section 7419 of the bill concerning
custodial requirements for investment advisers. (33) Would
require the Comptroller General to include in the study the
feasibility of providing an optional additional level of
insurance for Securities Investor Protection Corporation
protection. (34) Would double the funding for the Senior
Investment Protection grant program established in the bill,
and increase the maximum amount for grants under the program.
(35) Would include geographic disparities in access and cost of
insurance products in a study on modernization and improvement
of insurance regulation in the United States. (36) Would amend
Section 104(a) of the Helping Families Save Their Homes Act (PL
111-22) to require the Comptroller of Currency, in coordination
with the Director of Thrift Supervision, to issue its mortgage
metrics data by state. (38) Would serve as a substitute for
Section 1109 of the bill. Would cap the FDIC's guarantee
authority at $500 billion under a debt guarantee program, limit
the financial institutions that may participate, empower the
FDIC to push a defaulting borrower into bankruptcy or
receivership (whichever is applicable), repeal the FDIC's
existing systemic risk authority but restore it if the new
authority sunsets, reorder in bankruptcy the FDIC's claim on
the assets of a borrower that has issued debt guaranteed under
this section, authorize the FDIC to demand the pledge of
collateral in return for any guarantee, ensure that the
guarantee fees collected on a guarantee program shall be
actuarially sufficient to cover losses, clarify that any back-
up special assessment to cover losses on the program would be
imposed solely on participants in the program, permit the FDIC
to require warrants for assistance provided under this section
or Section 1604 (Resolution Authority) and limit the
application of executive compensation rules under Resolution
Authority to times when the FDIC has borrowed from the Treasury
under Section 1609(o). (39) Would amend Section 1255,
Requirement for Countercyclical Capital Requirement, by
striking ``may decrease'' and inserting ``decreases'' on page
204, line 14. (40) Would enhance the ability of nonbank
institutions to comply with the regulatory efforts of the
Consumer Financial Products Agency, bring needed fairness to
the regulatory processes desired by Congress, and better focus
regulatory efforts on nonbank products and practices. (41)
Would provide an exemption for any retailers and other non-
financial firms subject to the Consumer Financial Protection
Agency Act. (42) Would make a number of technical
clarifications to the amendments to the Federal Trade
Commission's rulemaking procedure for unfair or deceptive acts
or practices, to more closely conform with the Administrative
Procedure Act. (43) Would clarify that any losses on loan
guarantees for solvent institutions are paid solely by loan
guarantee program participants. (44) Would add the head of the
CFPA to the Financial Services Oversight Council and clarifies
that prudential standards promulgated under the Financial
Stability Improvement Act of 2009 do not supersede state or
federal consumer protection standards. (45) Would clarify the
authority of the Public Company Accounting Oversight Board to
inspect the auditors of broker dealers and requires rule making
thereon. (46) Would apply the current 10% deposit cap on
interstate acquisitions to thrift acquisitions. (47) Would make
technical changes to clarify that the Federal Trade Commission
(FTC) retains enforcement authority with regard to the
enumerated statutes transferred to the new Consumer Financial
Protection Agency (CFPA), to provide for CFPA consultation with
FTC in certain areas in which FTC has expertise, and to clarify
other provisions. (48) Would establish a definitive deadline
for concluding disapproval proceedings. Whereas the current
standard is that disapproval proceedings must be concluded
within 180 days after publication of the notice of a proposed
rule change in the Federal Register, the proposed revisions
would instead specify 200 days after a proper filing.
Accordingly, the SEC would not be able to hold a filing from
publication indefinitely to avoid triggering disapproval
proceedings. (49) Would clarify that the extension of credit
and collection of debt as defined in the merchants' exclusion
of Title V is not a financial product or service. (50) Would
clarify the definition of financial data processing in Title V,
and establishes that a person is not engaged in ``financial
activity'' if they are providing ``interactive computer
service'' as defined by the Communications Act of 1934. (51)
Would clarify that federal financial regulatory agencies have
broad authority to impose and enforce stricter standards with
respect to firms they regulate to mitigate systemic risk. (30
minutes)
2. Sessions (TX): Would strike provisions which create a
new private right of action against credit rating agencies; the
amendment contains enforcement of credit rating agencies to the
SEC (current practice). (10 minutes)
3. Peterson (MN), Frank (MA): The amendment provides for
position limits for physical commodities, clearing of over-the-
counter transactions, increased transparency, reporting, and
recordkeeping, and transparency of offshore trading. It also
addresses jurisdictional issues in the context of swaps by
providing for CFTC jurisdiction over swaps and SEC jurisdiction
over swaps that are primarily based on securities (or narrow
based security indexes). These two agencies are required to
consult with each other and with banking regulators before
regulating. The amendment further requires a swap to be cleared
if a clearing agency or organization will accept the swap for
clearing, and the CFTC or SEC has determined that clearing is
mandatory for such swap. Clearing is not required if one of the
counterparties is not a swap dealer or major swap participant
and can demonstrate business or risk management practices for
non-cleared swaps. Swaps that must be cleared must also be
traded on exchange or on a swap execution facility or ``SEF'',
unless there is no exchange or SEF that will list the swap. A
SEF is a facility for execution or trading of swaps such as an
electronic trade execution facility. Voice brokers are still
permitted to enter and execute swaps subject to the clearing
requirement, so long as they process the swap though a
regulated exchange or SEF. Uncleared swaps must be reported to
a swap repository or to the regulator. The amendment requires
swap dealers and major participants to maintain capital
appropriate to the risk associated with the non-cleared swaps
being held as a dealer or major participant. Dealers and major
participants must also meet margin requirements to help ensure
their own safety and soundness, and which are appropriate for
the risk associated with the non-cleared swaps they hold as a
dealer or major participant. Dealers must also segregate funds
or property associated with an uncleared swap at their
counterparties' request.
The amendment requires the CFTC to establish position
limits on swaps that perform a significant price discovery
function and require aggregate limits across markets. It
further requires the CFTC to establish position limits on
futures transactions for physically deliverable commodities
that are applicable to spot month, each month, and all months
aggregated, and to hold hearings on such position limits. The
CFTC is also authorized to provide exemptions to position
limits. The amendment also requires Foreign Boards of Trade to
meet certain standards of comparability to the requirements
applicable to U.S. boards of trade and provides legal certainty
for certain contracts traded on or through a foreign board of
trade. The amendment also clarifies CFTC jurisdiction with
respect to certain retail commodity transactions. (30 minutes)
4. Peterson (MN): Would provide that the CFTC would define
the terms ``Commercial Risk'', ``operating risk'', and
``balance sheet risk'' for purposes of the Commodity Exchange
Act (10 minutes)
5. Lynch (MA): Would provide rules toward the equitable
governance of clearing houses and swap exchange facilities. (10
minutes)
6. Murphy, Scott (NY), McMahon (NY), Kratovil (MD): Would
replace the current definition of Major Swap Participant with
the definition that was reported out of the House Agriculture
Committee. (10 minutes)
7. Frank (MA): Would create authority for the prudential
regulators, the CFTC and the SEC, to set margin in swap and
security-based swap transactions involving end users. (10
minutes)
8. Stupak (MI), Van Hollen, Chris (MD): Would require
transparency in swaps contracts by requiring all non-cleared
swaps be executed on a registered swap execution facility. (10
minutes)
9. Stupak (MI), DeLauro (CT), Larson, John (CT), Van
Hollen, Chris (MD): Would allow the Commodity Futures Trading
Commission and the Securities and Exchange Commission the
authority to ban abusive swaps, amends any proposed commercial
risk definition to disregard balance sheet risk, and maintains
any illegal swap entered into after enactment of this Act will
not be valid. (10 minutes)
10. Matsui (CA), Sutton (OH), Castor (FL): Would require
any mortgage servicer or lender participating in the Making
Home Affordable Program, to report to the Department of
Treasury on a monthly basis. The Department shall make such a
report available on their website within two weeks of receiving
such information for public viewing. The report to Treasury
shall include, but not limited to the following, with respect
to the Making Home Affordable Plan: (A) the number of loan
modification requests received; (B) number of loan modification
requests being processed; (C) the number of loan modification
requests that have been approved; (D) the number of loan
modification requests that have been denied. The amendment
gives the Secretary of Treasury authority to publicly release
any other relevant data the Secretary deems necessary. (10
minutes)
11. Paulsen (MN): Would clarify that the non-voting members
of the systemic risk council shall not be excluded from
participating in any of the Council's proceedings, meetings,
discussions, and deliberations. (10 minutes)
12. Kanjorski (PA), Frank (MA), Sarbanes (MD), Cohen (TN):
Would strike the provisions exempting public companies with
less than $75 million in market capitalization from the
requirements of the Sarbanes-Oxley Act related to the external
audit of internal controls. (10 minutes)
13. Marshall (GA): Would provide that no private right of
action may brought forward based on any provision of the
Consumer Financial Protection Agency title. (10 minutes)
14. McCarthy, Kevin (CA): Would strike section 6012
(relating to ``Effect of Rule 436(G)''). The amendment would
strike increased liability language that would be a barrier to
entry, inhibiting increased competition in the rating agency
market. (10 minutes)
15. Cohen (TN), Frank (MA): Would strike language that
would permit FINRA to regulate investment advisers that are
associated with broker dealers. (10 minutes)
16. Peters (MI): Would authorize the FDIC to make
assessments for the Systemic Dissolution Fund used to repay any
shortfalls in Troubled Asset Relief Program (TARP) to ensure
that such shortfalls do not add to the deficit or national
debt. (10 minutes)
17. Watt (NC): Would revise the exclusion for auto dealers
under the Consumer Financial Protection Agency Act by
clarifying what auto dealer activities are excepted. (10
minutes)
18. Frank (MA), Kanjorski (PA): Would aim to stem the
unintended consequences resulting from the definitional change
of NRSRO from ``Nationally Recognized Statistical Rating
Organization to ``Nationally Registered Statistical Rating
Organization.'' Section 6005 creates inconsistencies in the
securities laws as it amends the definition only in the 1933
and 1934 Acts and it has potential impact on state rules and
regulations requiring a change of state level statute. (10
minutes)
19. Conyers (MI), Turner (OH), Lofgren (CA), Marshall (GA),
Waters (CA), Cohen (TN), Miller, Brad (NC), Delahunt (MA),
Nadler (NY), Fudge (OH): Would allow bankruptcy courts to
extend repayment periods, reduce excessive interest rates and
fees, and adjust the principal balance of the mortgage to a
home's fair market value as necessary to prevent foreclosure
and revised to allow the VA, FHA, and RHS to take steps to
facilitate mortgage modifications. The amendment is
substantively identical to title I, subtitle A and sections
121-123 of subtitle B of H.R. 1106 (Helping Families Save Their
Homes Act of 2009), which passed the House on March 5, 2009.
(10 minutes)
20. Burgess (TX): Would strike the word ``orderliness''
from the list of items the Financial Services Oversight Council
must advise Congress on how to improve financial regulatory
developments. (10 minutes)
21. Burgess (TX): Would index to inflation any mitigatory
action imposed by the Financial Services Oversight Council
involving the sale, divestiture or transfer of more than $10
billion in total assets by a financial holding company subject
to stricter standards. (10 minutes)
22. Burgess (TX): Would require the Federal Reserve to
define by rule or regulation the term `significantly
undercapitalized' at a threshold the Fed determines to be
prudent for the effective monitoring, management and oversight
of the financial system. (10 minutes)
23. Burgess (TX): Would set an outer time limit of two
years to the amount of time the GAO can use to audit the
Federal Reserve. (10 minutes)
24. Burgess (TX): Would remove from the GAO study of the
SEC's ``revolving door'' the requirement to determine if
employees of the SEC who are later employed by financial
institutions ``have engaged in information sharing''. (10
minutes)
25. Herseth Sandlin (SD): Would direct the SEC to take into
account the relative risk profile of different classes of funds
when it is developing the new registration regime for private
funds. (10 minutes)
26. Garrett (NJ): Would allow rating agency firms to
deregister as Nationally Recognized Statistical Rating
Organizations (NRSRO), provided such NRSRO certifies that it
received less than $250 million during its last full fiscal
year in compensation for providing credit ratings on securities
and money market instruments issued in the U.S. (10 minutes)
27. Dent (PA): Would state a sense of Congress that
mortgage lenders should provide loan applicants with a
simplified summary of their loan contracts, including an easy-
to-read list of the basic loan terms, payment information, the
existence of prepayment penalties or balloon payments, and
escrow information. (10 minutes)
28. Moore, Dennis (KS), Garrett (NJ): Would specify only
the tax policies, licensing and other regulatory requirements
of the home state of the policyholder govern a surplus lines
transaction, as well as allows sophisticated commercial
entities direct access to the surplus lines market. The
amendment also prohibits states from voiding established,
contractual arbitration agreements between reinsurers and
primary companies. (10 minutes)
29. Wittman (VA): Would amend various banking laws to
clarify the applicability of exceptions to allow banks to
announce, advertise, publicize, and/or deal in any lottery that
benefits nonprofit tax-exempt organizations. (10 minutes)
30. Minnick (ID): Would define unfair, deceptive, or
abusive acts or practices that would be determined by the CFPA.
(10 minutes)
31. Bartlett (MD): Would provide for State loan originator
supervisory authority to review and grant exceptions on a case
by case basis to the mortgage originators lifetime ban. (10
minutes)
32. Schakowsky (IL), Titus (NV): Would provide the Director
of the Consumer Financial Protection Agency with authority to
issue regulations for reverse mortgage transactions within one
year of enactment. It would clarify the Director's authority to
consider additional consumer protections under both consumer
protection statutes and HUD regulations. (10 minutes)
33. Kilroy (OH): Would make explicit that financing for the
Systemic Dissolution Fund would come exclusively from
assessments on industry, without recourse to the American
taxpayer. (10 minutes)
34. Murphy, Scott (NY): Would repeal a prohibition on the
payment of interest on business checking accounts. (10 minutes)
35. Minnick (ID), Schock (IL), Shuler (NC), Castle (DE),
Childers (MS), Campbell (CA), Markey, Betsy (CO), Reichert
(WA), Teague (NM), Bright (AL), Boren (OK), Griffith (AL):
Would create a Consumer Financial Protection Council (CFPC) of
regulators with rule-writing authority in safety and soundness
of institutions and consumer protections regarding all
financial products. The CFPC is comprised of 12 members
including the Secretary of Treasury, Secretary of Housing and
Urban Development, the Chairman of the Federal Reserve, the
chairman of the CFTC and SEC, among other federal and state
regulators. (20 minutes)
36. Bachus (AL), Biggert (IL), Capito (WV), Hensarling
(TX), Garrett (NJ), Neugebauer (TX): Would provide an
alternative bill that establishes a new chapter of the
bankruptcy code to resolve certain non-bank financial
institutions; creates a consumer protection council comprised
of existing Federal regulators to revise and promulgate model
regulations to enhance consumer protection and improve
disclosure; strengthens anti-fraud provisions; regulates over-
the-counter derivatives markets; addresses executive
compensation; removes statutory reliance on credit ratings;
reforms the Government Sponsored Enterprises (Fannie Mae and
Freddie Mac); and creates a Federal Insurance Office. (30
minutes)
TEXT OF THE AMENDMENTS TO BE MADE IN ORDER
1. An Amendment To Be Offered by Representative Frank, Barney of
Massachusetts or His Designee, Debatable for 30 Minutes
Page 1, line 4, strike ``The'' before ``Wall Street''.
Page 13, line 6, insert ``(hereafter in this title referred
to as a `foreign financial parent') after'' after ``United
States''.
Page 13, beginning on line 14, strike ``of a company'' and
all that follows through ``United States'' on line 16.
Page 15, after line 11, insert the following new clause (and
redesignate subsequent clauses appropriately):
(iv) after the date on which the
functions of the Office of Thrift
Supervision are transferred under
subtitle C, any savings and loan
holding company (as defined in section
10(a)(1)(D) of the Home Owners' Loan
Act) and any subsidiary (as such term
is defined in the Bank Holding Company
Act of 1956) of such company, other
than a subsidiary that is described in
any other subparagraph of this
paragraph, to the extent that the
subsidiary is engaged in an activity
described in such subparagraph;
Page 15, line 25, strike ``a'' and insert ``any''.
Page 17, after line 6, insert the following new clause (and
redesignate subsequent clauses appropriately):
(v) a securities-based swap execution
facility that is registered with the
Securities and Exchange Commission
under the Securities Exchange Act of
1934 (15 U.S.C. 78a et seq.);''
Page 21, line 11, strike ``to pursuant'' and insert
``pursuant''.
Page 21, after line 21, insert the following new
subparagraph:
(J) The head of the Consumer Financial
Protection Agency.
Page 21, after line 23, insert the following (and redesignate
succeeding paragraphs accordingly):
(A) The Director of the Federal Insurance
Office.
Page 23, line 4, strike ``plans'' and insert ``strategies''.
Page 23, line 5, strike ``plans'' and insert ``strategies''.
Page 23, line 6, insert after the period the following new
sentence: ``In doing so, the Council shall collaborate with
participants in the financial sector, financial sector
coordinating councils, and any other parties the Council
determines to be appropriate.''.
Page 24, beginning on line 23, strike ``another dispute
mechanism specifically has been provided under Federal law''
and insert ``a dispute mechanism specifically has been provided
under section 4204 or title III''.
Page 28, line 24, strike ``plans'' and insert ``strategies''.
Page 29, line 2, strike ``plans'' and insert ``strategies''.
Page 32, strike line 22 and all that follows through page 33,
line 7.
Page 34, after line 22, insert the following new paragraph:
(3) Mitigation requirements in case of foreign
financial parents.--Before requiring the submission of
reports from a company that is a foreign financial
parent, the Council or the Board shall, to the extent
appropriate, coordinate with any appropriate foreign
regulator of such company and any appropriate
multilateral organization and, whenever possible, rely
on information already being collected by such foreign
regulator or multilateral organizational with English
translation.
Page 35, line 1, insert after ``entities'' the following:
``(including the Federal Insurance Office)''.
Page 37, line 12, insert ``; agency
authority'' before the period.
Page 37, strike lines 17 and 18, and insert the following:
(b) Agency Authority to Implement Standards.--
(1) In general.--A Federal financial regulatory
agency specifically
Page 37, line 19, strike ``is authorized to'' and insert
``may, in response to a Council recommendation under this
section or otherwise,''.
Page 38, after line 4, insert the following new paragraph:
(2) Applying standards to foreign financial
parents.--In applying standards under paragraph (1) to
any foreign financial parent, or to any branch of,
subsidiary of, or other operating entity related to
such foreign financial parent that operates within the
United States, the Federal financial regulatory agency
shall--
(A) give due regard to the principles of
national treatment and equality of competitive
opportunity; and
(B) take into account the extent to which the
foreign financial parent is subject to
comparable standards on a consolidated basis in
the home country of such foreign financial
parent that are administered by a comparable
foreign supervisory authority.
Page 38, line 22, after ``such company,'' insert the
following: ``and, in the case of a financial holding company
subject to stricter standards that is an insurance company, the
Federal Insurance Office,''.
Page 39, strike line 11 and all that follows through line 15
(and redesignate subsequent paragraphs accordingly).
Page 39, after line 25, insert the following new paragraphs
(and redesignate subsequent paragraphs accordingly):
(5) The company's importance as a source of credit
for low-income, minority, or underserved communities
and the impact the failure of such company would have
on the availability of credit in such communities.
(6) The extent to which assets are simply managed and
not owned by the financial company and the extent to
which ownership of assets under management is diffuse.
Page 40, line 5, insert before the period the following:
``or, in the case of a foreign financial parent, the extent to
which such foreign parent is subject to prudential standards on
a consolidated basis in the home country of such financial
parent that are administered and enforced by a comparable
foreign supervisory authority''.
Page 40, after line 5, insert the following new paragraphs
(and redesignate the subsequent paragraph accordingly):
(8) The amount and nature of the company's financial
assets.
(9) The amount and nature of the company's
liabilities, including the degree of reliance on short-
term funding.
Page 41, strike line 10 and all that follows through line 19
(and redesignate subsequent subsections accordingly).
Page 42, strike line 9 and all that follows through page 44,
line 10, and insert the following new paragraphs:
(1) Application of federal laws.--
(A) Application of bank holding company act
and federal deposit insurance act.--A financial
company subject to stricter standards that does
not own a bank (as defined in section 2 of the
Bank Holding Company Act of 1956) and that is
not a foreign bank or company that is treated
as a bank holding company under section 8 of
the International Banking Act of 1978 shall be
subject to section 4, subsections (b), (c),
(d), (e), (f), and (g) of section 5, and
section 8 of the Bank Holding Company Act of
1956, and section 8 of the Federal Deposit
Insurance Act in the same manner and to the
same extent as if such financial holding
company subject to stricter standards were a
bank holding company that has elected to be a
financial holding company (as such terms are
defined in the Bank Holding Company Act of
1956), its subsidiaries were subsidiaries of a
bank holding company, and the Board was its
appropriate Federal banking agency (as such
term is defined under the Federal Deposit
Insurance Act).
(B) Board authority.--For purposes of
administering and enforcing the provisions of
this title, the Board may take any action with
respect to a financial holding company subject
to stricter standards described in subparagraph
(A) or its subsidiaries under the authorities
described in subparagraph (A) as if such
financial holding company subject to stricter
standards were a bank holding company that has
elected to be a financial holding company (as
such terms are defined in the Bank Holding
Company Act of 1956), its subsidiaries were
subsidiaries of a bank holding company, and the
Board was its appropriate Federal banking
agency (as such term is defined under the
Federal Deposit Insurance Act).
(2) Application of activity restrictions and section
6 holding company requirements.--
(A) In general.--Except as provided in
subparagraphs (B) and (C)--
(i) a financial holding company
subject to stricter standards that
conducts activities that do not comply
with section 4 of the Bank Holding
Company Act shall be required to
establish or designate a section 6
holding company in accordance with
section 6 of the Bank Holding Company
Act of 1956 through which it conducts
activities of the company that are
determined to be financial in nature or
incidental thereto under section 4(k)
of the such Act; and
(ii) such section 6 holding company
shall be the financial holding company
subject to stricter standards for
purposes of this title.
(B) Exceptions from section 6 holding company
requirements.--
(i) General requirement for board to
consider exceptions.--Before such time
as a financial holding company subject
to stricter standards is required to
establish or designate a section 6
holding company under section 6 of the
Bank Holding Company Act, and in
consultation with the financial holding
company subject to stricter standards
and any appropriate Federal or State
financial regulators (and, in the case
of a financial holding company subject
to stricter standards that is an
insurance company, the Federal
Insurance Office)--
(I) the Board shall consider
whether to grant any of the
exemptions from the
requirements applicable to
section 6 holding companies
under section 6(a)(6)(A) of the
Bank Holding Company Act of
1956, in accordance with that
provision; and
(II) the Board, at the
request of a financial holding
company subject to stricter
standards that is predominantly
engaged in activities that are
determined to be financial in
nature or incidental thereto
under section 4(k) of the Bank
Holding Company Act, shall
consider whether to exempt the
financial holding company
subject to stricter standards
from the requirement to
establish a section 6 holding
company, taking into
consideration paragraph (2)(D),
and the extent to which the
exemption would: facilitate the
extension of credit to
individuals, households and
businesses; improve efficiency
or customer service or result
in other public benefits;
potentially threaten the safety
and soundness of the financial
holding company or any of its
subsidiaries; potentially
increase systemic risk or
threaten the stability of the
overall financial system;
potentially result in unfair
competition; and potentially
have anticompetitive effects
that would not be outweighed by
public benefits.
(ii) Board determination not to
exempt.--
(I) In general.--If the Board
determines not to exempt the
financial holding company
subject to stricter standards
from the requirement to
establish a section 6 holding
company, the financial holding
company subject to stricter
standards shall establish a
section 6 holding company
within 90 days after the
Board's determination.
(II) Extension of period.--
The Board may extend the time
by which the financial holding
company subject to stricter
standards is required to
establish a section 6 holding
company for an additional
reasonable period of time, not
to exceed 180 days.
(iii) Board determination to
exempt.--
(I) In general.--If the Board
grants the requested exemption
from the requirement to
establish a section 6 holding
company, the financial holding
company subject to stricter
standards shall at all times
remain predominantly engaged in
activities that are determined
to be financial in nature or
incidental thereto under
section 4(k) of the Bank
Holding Company Act of 1956,
and shall be the financial
holding company subject to
stricter standards for purposes
of this title.
(II) Subsequent loss of
exemption.--Upon a
determination by the Board, in
consultation with any relevant
Federal or State regulators of
the financial holding company
subject to stricter standards,
and, in the case of a financial
holding company subject to
stricter standards that is an
insurance company, the Federal
Insurance Office, that the
financial holding company
subject to stricter standards
fails to comply with this
subsection, the financial
holding company subject to
stricter standards shall lose
the exemption from the section
6 holding company requirement
and shall establish a section 6
holding company within the time
periods described in clause
(ii)(I).
(C) Activities conducted abroad.--Section 4
of the Bank Holding Company Act of 1956 shall
not apply to any activities that a foreign
financial holding company subject to stricter
standards conducts solely outside the United
States if such activities are conducted solely
by a company or other entity that is located
outside the United States.
(D) Flexible application.--In applying the
activity restrictions and ownership limitations
of section 4 of the Bank Holding Company Act of
1956 to financial holding companies subject to
stricter standards described in paragraph
(1)(A), the Board shall flexibly adapt such
requirements taking into account the usual and
customary practices in the business sector of
the financial company subject to stricter
standards so as to avoid unnecessary burden and
expense.
Page 45, line 5, insert ``, as agent of the Council,'' after
``Board''.
Page 45, beginning on line 18, strike ``heightened'' and
insert ``stricter''.
Page 45, strike lines 21 and 22 and insert the following new
clause (and redesignate subsequent clauses accordingly):
(i) risk-based capital requirements
and leverage limits, unless the Board
determines that such requirements are
not appropriate for a financial holding
company subject to stricter standards
because of such company's activities
(such as investment company activities
or assets under management) or
structure, in which case the Board
shall apply other standards that result
in appropriately stringent controls.
Page 46, line 4, insert ``and'' after the semicolon.
Page 46, line 6, strike ``; and'' and insert a period.
Page 46, strike line 7 and all that follows through line 9.
Page 46, line 12, insert ``short-term debt limits prescribed
in accordance with subsection (d) and'' after ``include''.
Page 46, line 17, after ``agencies'' insert the following:
``and the federal insurance office''.
Page 47, line 2, after the period insert the following:
``With respect to a financial holding company subject to
stricter standards that is an insurance company or any
insurance company subsidiary of such a financial holding
company subject to stricter standards, the Board shall also
consult with the Federal Insurance Office.''.
Page 47, strike line 3 and all that follows through line 5
and insert the following:
(3) Application of required standards.--In imposing
prudential standards under this section, the Board--
(A) may differentiate among financial
Page 47, line 11, strike the period and insert ``; and''.
Page 47, after line 11, insert the following new
subparagraph:
(B) shall take into consideration whether and
to what extent a financial holding company
subject to stricter standards that is not a
bank holding company or treated as a bank
holding company owns or controls a depository
institution and shall adapt the prudential
standards applied to such company as
appropriate in light of any predominant line of
business of such company, including assets
under management or other activities for which
capital requirements are not appropriate.
Page 47, beginning on line 20, strike ``financial companies''
and all that follows through ``own or control'' on line 22, and
insert ``a foreign financial parent and to''.
Page 47, beginning on line 23, strike ``that is a'' and all
that follows through ``principle'' on line 25 and insert ``that
is owned or controlled by a foreign financial parent, giving
due regard to principles''.
Page 48, beginning on line 2, strike ``such companies are
subject'' and insert ``the foreign financial parent is subject
on a consolidated basis''.
Page 50, line 22, strike ``, as such entities are'' and
insert ``as''.
Page 51, line 13, before the period insert the following:
``and, with respect to an insurance company, the Federal
Insurance Office''.
Page 54, line 14, insert before the period the following:
``except as specifically provided in this title''.
Page 54, line 19, insert before the period the following:
``except as specifically provided in this title''.
Page 55, line 14, strike ``shall'' and insert ``may.''
Page 55, line 19, strike ``The'' and insert ``Any''.
Page 56, strike line 20 and all that follows through line 25.
Page 68, line 17, insert ``The Board, in determining whether
to impose any requirement under this subparagraph that is
likely to have a significant effect on a functionally regulated
subsidiary, subsidiary depository institution, or insurance
company subsidiary of a financial holding company subject to
stricter standards, shall consult with the primary financial
regulatory agency for such subsidiary. In the case of an
insurance company subsidiary of a financial holding company
subject to stricter standards, the Board shall consult with the
Federal Insurance Office.'' after the period.
Page 76, line 9, insert ``, after consultation with the
primary financial regulatory agency for any functionally
regulated subsidiary, subsidiary depository institution, or
insurance company subsidiary that is likely to be significantly
affected by such actions. In the case of an insurance company
subsidiary of a financial holding company subject to stricter
standards, the Board shall consult with the Federal Insurance
Office'' before the period.
Page 86, line 1, after ``standards'' insert the following:
``(and, if the financial holding company subject to stricter
standards is an insurance company, the Federal Insurance
Office)''.
Page 87, after line 5, insert the following new subsections:
(j) Rule of Construction Regarding Consumer Protection
Standards.--The prudential standards imposed or recommended by
the Board or the Council under this section shall not be
construed as superseding--
(1) any consumer protection standards promulgated
under a State or Federal consumer protection law,
including the Consumer Financial Protection Agency Act
and the Federal Trade Commission Act; or
(2) any investor protection standard that protects
consumers (including public reporting requirements)
imposed under State or Federal securities laws,
including the Securities Act of 1933, the Securities
Exchange Act of 1934, the Investment Company Act of
1944, and the Investment Advisors Act of 1944.
(k) Rulemaking Authority.--The Board may prescribe such
regulations and issue such orders as the Board, in consultation
with the Council, determines to be necessary to carry out the
provisions of this subtitle.
Page 87, line 24, strike ``financial company subjected to
stricter prudential'' and insert ``financial holding company
subject to stricter''.
Page 88, line 2, insert after the period the following:
``With respect to any requirements under this section that is
likely to have a significant effect on an insurance company,
the Council shall consult with the Federal Insurance Office.''.
Page 89, line 8, insert ``stricter'' after ``modifying the''.
Page 90, line 14, insert ``holding'' after ``financial''.
Page 90, line 15, strike ``prudential''.
Page 90 line 16, strike ``financial company'' and insert
``financial holding company subject to stricter standards''.
Page 90, line 22, strike ``company subject to stricter
prudential'' and insert ``holding company subject to
stricter''.
Page 92, line 20, strike ``subsection (e)(5)'' and insert
``this section''.
Page 93, line 1, strike ``(e)(5)'' and insert ``(e)(2)''.
Page 96, line 18, insert ``, as agent of the Council,'' after
``Board''.
Page 97, line 4, insert after the period the following:
``With respect to any standard that is likely to have a
significant effect on insurance companies, the Board also shall
consult with the Federal Insurance Office.''.
Page 97, after line 16, insert the following new paragraph:
(3) Exception.--The standards recommended by the
Board and adopted by a primary financial regulatory
agency pursuant to this section shall not apply to
activities that a foreign financial parent conducts
solely outside the United States if such activities are
conducted solely by a company or other operating entity
that is located outside the United States.
Page 119, line 7, insert ``, after notice and opportunity for
comment,'' after ``may''.
Page 119, line 13, strike ``agency'' and insert ``Board''.
Page 119, line 14, strike ``agency'' and insert ``Board''.
Page 122, line 18, strike ``The authorities'' and insert the
following:
(a) Construction.--The authorities
Page 123, after line 2, insert the following new subsection:
(b) Agent Responsibilities.--For purposes of this subtitle,
the term ``agent'' means the Board acting under section 1103(c)
and coordinating with the Council in exercising authority under
sections 1104 and 1107.
Page 129, line 17, insert ``, and who shall coordinate with
the Office of Thrift Supervision pursuant to section 1211''
before the period at the end.
Page 131, after line 5, insert the following new subsection:
(f) Effective Date.--Subsection (b) shall take effect on the
date of the enactment of this Act .
Page 132, after line 15, insert the following new paragraph:
(4) Functions relating to supervision of savings and
loan holding companies.--
(A) Transfer of functions.--All functions of
the Director of the Office of Thrift
Supervision relating to the supervision and
regulation of Savings and Loan Holding
Companies are transferred to the Board.
(B) Board authority.--The Board shall succeed
to all powers, authorities, rights, and duties
that were vested in the Director of the Office
of Thrift Supervision under Federal law,
including the Home Owners' Loan Act, on the day
before the transfer date, relating to the
supervision and regulation of Savings and Loan
Holding Companies.
Page 132, after line 24, insert the following new paragraph
(and redesignate succeeding paragraphs accordingly):
(2) in paragraph (2)(E), by striking ``and'' at the
end;
Page 133, after line 2, insert the following new paragraph
(and redesignate succeeding paragraphs accordingly):
(4) after paragraph (2)(F), by inserting the
following new subparagraph:
``(G) any savings and loan holding company
and any subsidiary of a savings and loan
holding company (other than a savings
association); and'';
Page 147, line 21, insert ``and'' after the semicolon.
Page 147, line 25, strike ``; and'' and insert a period.
Page 148, strike line 1 and all that follows through line 3.
Page 162, after line 6, insert the following new paragraphs
(and redesignate succeeding paragraphs accordingly):
(1) In subsection (a)--
(A) in paragraph (1)(A), by striking
``Director'' and inserting ``Board'';
(B) in paragraph (1)(D), by striking clause
(i) and inserting: ``(i) In general.--.
``(i) In general.--Except as provided
in clause (ii), the term `savings and
loan holding company' means any company
that directly or indirectly controls a
savings association or that controls
any company that is a savings and loan
holding company, and that is either--
``(I) a fraternal beneficiary
society, as defined in section
501(c)(8) of the Internal
Revenue Code of 1986; or
``(II) a company that is,
together with all of its
affiliates on a consolidated
basis, predominantly engaged in
the business of insurance.'';
(C) in paragraph (1)(F), by striking
``Director'' and inserting ``Board'';
(D) in paragraph (1), by inserting at the end
the following new subparagraph:
``(K) Board.--The term `Board' means the
Board of Governors of the Federal Reserve
System.''.
(E) in paragraph (2)(D), by striking
``Director'' and inserting ``Board'';
(F) in paragraph (3)(A), by striking
``Director'' and inserting ``Board''; and
(G) in paragraph (4), by striking
``Director'' and inserting ``Board''.
(2) In subsection (b), by striking ``Director'' each
place it appears and inserting ``Board''.
(3) In subsection (c)--
(A) in paragraph, (2)(F)(i)--
(i) by striking ``of Governors of the
Federal Reserve System''; and
(ii) by striking ``Director'' and
inserting ``Board'';
(B) in paragraph (2)(G), by striking
``Director'' and inserting ``Board'';
(C) in paragraph (4)(A), by striking
``Director'' and inserting ``Board'';
(D) in paragraph (4)(B)--
(i) in the heading, by striking
``director'' and inserting ``Board'';
and
(ii) by striking ``the Director
shall'' and inserting ``the Board
shall'';
(E) in paragraph (4)(C)--
(i) in the heading, by striking
``director'' and inserting ``Board'';
and
(ii) by striking ``the Director may''
and inserting ``the Board may'';
(F) in paragraph (5), by striking
``Director'' and inserting ``Board'';
(G) in paragraph (6)(D)--
(i) in the heading, by striking
``director'' and inserting ``Board'';
and
(ii) by striking ``Director'' each
place it appears and inserting
``Board'';
(H) in paragraph (9)(A)(ii), by inserting ``,
but only if the conditions for engaging in
expanded financial activities set forth in
section 4(l) of the Bank Holding Company Act of
1956 have been met'' after ``1956''; and
(I) in paragraph (9)(E), by striking
``Director'' each place it appears and
inserting ``Board''.
(4) In subsection (e)--
(A) in paragraph (1)(A)--
(i) in clause (i), by striking
``Director'' and inserting ``Board'';
(ii) in clause (ii), by striking
``Director'' and inserting ``Board'';
(iii) in clause (iii), by striking
``Director'' each place it appears and
inserting ``Board''; and
(iv) in clause (iv), by striking
``Director'' each place it appears and
inserting ``Board'';
(B) in paragraph (1)(B), by striking
``Director'' each place it appears and
inserting ``Board'';
(C) in paragraph (2), by striking
``Director'' each place it appears and
inserting ``Board'';
(D) in paragraph (3), by striking
``Director'' and inserting ``Board'';
(E) in paragraph (4)(A), by striking
``Director'' and inserting ``Board''; and
(F) in paragraph (5), by striking
``Director'' each place it appears and
inserting ``Board''.
(5) In subsection (f), by striking ``Director'' each
place it appears and inserting ``Board''.
(6) In subsection (g), by striking ``Director'' each
place it appears and inserting ``Board''.
(7) In subsection (h)--
(A) in paragraph (2), by striking
``Director'' and inserting ``Board''; and
(B) in paragraph (3), by striking
``Director'' and inserting ``Board''.
(8) In subsection (i)--
(A) in paragraph (1)(A), by striking
``Director'' and inserting ``Board'';
(B) in paragraph (2)(B), by striking
``Director'' and inserting ``Board'';
(C) in paragraph (2)(F), by striking
``Director'' and inserting ``Board'';
(D) in paragraph (3)(B), by striking
``Director'' and inserting ``Board'';
(E) in paragraph (3)(F), by striking
``Director'' and inserting ``Board'';
(F) in paragraph (4), by striking
``Director'' and inserting ``Board''; and
(G) in paragraph (5), by striking
``Director'' and inserting ``Board''.
(9) In subsection (j), by striking ``Director'' each
place it appears and inserting ``Board''.
(10) In subsection (l)--
(A) in paragraph (1), by striking
``Director'' and inserting ``Board, in
consultation with the Comptroller of the
Currency,''; and
(B) in paragraph (2), by striking
``Director'' and inserting ``Board, in
consultation with the Comptroller of the
Currency,''.
Page 166, after line 18 insert the following:
(13) In subsections (p), (q), (r), and (s), by
striking ``Director'' each place it appears and
inserting ``Board''.
Page 169, strike lines 1 through 4 and insert the following:
``(7) Valuation.--
``(A) In general.--The Board shall consider
waived dividends in determining an appropriate
exchange ratio in the event of a full
conversion to stock form.
``(B) Exception.--In the case of a savings
association which has reorganized into a mutual
thrift holding company under section 10(b) of
the Home Owners' Loan Act and has issued
minority stock either from its mid-tier stock
holding company or its subsidiary stock savings
association prior to December 1, 2009, the
Board shall not consider waived dividends in
determining an appropriate exchange ratio in
the event of a full conversion to stock
form.''.
Page 204, line 14, strike ``may decrease'' and insert
``decreases''.
Page 204, beginning on line 23, strike ``, on a consolidated
basis,'' and insert ``a fraternal beneficiary society, as
defined in section 501(c)(8) of the Internal Revenue Code of
1986, or a company that is, together with all of its affiliates
on a consolidated basis,''.
Page 205, beginning on line 4, strike ``, on a consolidated
basis,'' and insert ``a fraternal beneficiary society, as
defined in section 501(c)(8) of the Internal Revenue Code of
1986, or a company that is, together with all of its affiliates
on a consolidated basis,''.
Page 205, after line 13, insert the following new section:
SEC. 1257. EFFECTIVE DATE.
Except as otherwise provided in this subtitle, the amendments
made by sections 1221 through section 1253 and 1256 and
subsections (a), (b), and (c)(1) of section 1254 shall take
effect on the transfer date.
Page 207, line 6, strike ``, on a consolidated basis,'' and
insert ``a fraternal beneficiary society, as defined in section
501(c)(8) of the Internal Revenue Code of 1986, or a company
that is, together with all of its affiliates on a consolidated
basis,''.
Page 207, strike line 9, and insert the following:
(B) in subparagraph (F)(i), by inserting
before the semicolon the following: ``,
including issuing credit cards and other credit
devices (including virtual or intangible
devices) that function as credit cards'';
(C) in subparagraph (F)(v), by inserting
before the semicolon the following: ``, other
than loans that otherwise meet the requirements
of this subparagraph and are made to businesses
that meet the criteria for a small business
concern to be eligible for business loans under
regulations established by the Small Business
Administration under part 121 of title 13, Code
of Federal Regulations''; and
(D) by striking subparagraph (H) and
inserting the following:
``(H) An industrial loan company, industrial
bank, or other similar institution which--
``(i) is an institution organized
under the laws of a State which, on
March 5, 1987, had in effect or had
under consideration in such State's
legislature a statute which required or
would require such institution to
obtain insurance under the Federal
Deposit Insurance Act;
``(ii) either--
``(I) does not accept demand
deposits that the depositor may
withdraw by check or similar
means for payment to third
parties;
``(II) has total assets of
less than $100,000,000; or
``(III) the control of which
is not acquired by any company
after August 10, 1987;
``(iii) predominantly provides
financial products and services to
current and former members of the
military and their families; and
``(iv) is controlled by a savings and
loan holding company, as defined in
section 10(a) of the Home Owners' Loan
Act.
This subparagraph shall cease to apply to any
institution which permits any overdraft
(including any intraday overdraft), or which
incurs any such overdraft in such institution's
account at a Federal Reserve bank, on behalf of
an affiliate, if such overdraft is not the
result of an inadvertent computer or accounting
error that is beyond the control of both the
institution and the affiliate, or that is
otherwise permissible for a bank controlled by
a company described in section 1843(f)(1) of
this title.''; and
Page 208, strike line 10 and all that follows through page
209, line 7, and insert the following:
``(ii) conduct all such activities
which are permissible for a financial
holding company, as determined under
section 4(k), through such section 6
holding company, other than--
``(I) internal financial
activities conducted for such
company or any affiliate,
including, but not limited to
internal treasury, investment,
and employee benefit functions,
provided that with respect to
any internal financial activity
engaged in for the company or
an affiliate and a nonaffiliate
during the year prior to date
of enactment, the company (or
an affiliate not a subsidiary
of the section 6 company) may
continue to engage in that
activity so long as the at
least two-thirds of the assets
or two-thirds of the revenues
generated from the activity are
from or attributable to the
company or an affiliate,
subject to review by the Board
to determine whether engaging
in such activity presents undue
risk to the section 6 company
or undue systemic risk; and
``(II) financial activities
involving the provision of
credit for the purchase or
lease of products or services
from an affiliate or for the
purchase or lease of products
produced by an affiliate of
such section 6 holding company
that is not a subsidiary of
such section six holding
company, in accordance with
regulations prescribed by or
orders issued by the Board,
pursuant to section 6 of this
Act.''; and
Page 209, strike line 15 and all that follows through page
210, line 14 and insert the following:
``(i) on the date of enactment of the
Financial Stability Improvement Act of
2009, a unitary savings and loan
holding company that continues to
control not fewer than one savings
association that it controlled on May
4, 1999, or that it acquired pursuant
to an application pending before the
Office of Thrift Supervision on or
before that date, and that became a
bank for purposes of the Bank Holding
Company Act as a result of the
enactment of section 1301(a)(3) of the
Financial Stability Improvement Act
2009; or''.
Page 210, line 19, strike ``1301(a)(3)(B)'' and insert
``1301(a)(4)(B)''.
Page 220, after line 25, insert the following:
``(8) Unitary savings and loan holding company
defined.--For purposes of this subsection, the term
`unitary savings and loan holding company' means a
company that was a savings and loan holding company on
May 4, 1999 (as then defined), or that became a savings
and loan holding company pursuant to an application
pending before the Office of Thrift Supervision on or
before that date, and--
``(A) that controls--
``(i) only 1 savings association; or
``(ii) more than 1 savings
association, if all, or all but 1, of
the savings association subsidiaries of
such company were initially acquired by
the company pursuant to a supervisory
transaction under section 1823(c),
1823(i), or 1823(k) of this title, or
section 408(m) of the National Housing
Act (12 U.S.C. 1730a(m));
``(B) all of the savings association
subsidiaries of such company are qualified
thrift lenders (as determined under section 10
of the Home Owners' Loan Act); and
``(C) that continues to control not fewer
than 1 savings association that it controlled
on May 4, 1999, or that it acquired pursuant to
an application pending before the Office of
Thrift Supervision on or before that date.''.
Page 220, after line 25, insert the following:
(8) Unitary savings and loan holding company
defined.--Solely for purposes of this subsection, the
term ``unitary savings and loan holding company'' means
a company that was a savings and loan holding company
on May 4, 1999 (as then defined), or that became a
savings and loan holding company pursuant to an
application pending before the Office of Thrift
Supervision on or before that date, and--
(A) that controls --
(i) only 1 savings association; or
(ii) more than 1 savings association,
if all, or all but 1, of the savings
association subsidiaries of such
company were initially acquired by the
company pursuant to a supervisory
transaction under section 1823(c),
1823(i), or 1823(k) of this title, or
section 408(m) of the National Housing
Act (12 U.S.C. 1730a(m));
(B) all of the savings association
subsidiaries of such company are qualified
thrift lenders (as determined under section 10
of the Home Owners' Loan Act); and
(C) that continues to control not fewer than
1 savings association that it controlled on May
4, 1999, or that it acquired pursuant to an
application pending before the Office of Thrift
Supervision on or before that date.
Page 222, line 18, strike ``subtitle B'' and insert ``section
1103''.
Page 223, strike line 15 and all that follows through page
224, line 11 and insert the following:
(B) A company that is required to form a
section a section 6 holding company shall
conduct all such activities which are
permissible for a financial holding company, as
determined under section 4(k), through such
section 6 holding company, other than--
(i) internal financial activities
conducted for such company or any
affiliate, including, but not limited
to internal treasury, investment, and
employee benefit functions, provided
that with respect to any internal
financial activity engaged in for the
company or an affiliate and a
nonaffiliate during the year prior to
date of enactment, the company (or an
affiliate not a subsidiary of the
section 6 company) may continue to
engage in that activity so long as the
at least \2/3\ of the assets or \2/3\
of the revenues generated from the
activity are from or attributable to
the company or an affiliate, subject to
review by the Board to determine
whether engaging in such activity
presents undue risk to the section 6
company or undue systemic risk; and
(ii) financial activities involving
the provision of credit for the
purchase or lease of products or
services from an affiliate or for the
purchase or lease of products produced
by an affiliate of such section 6
holding company that is not a
subsidiary of such section 6 holding
company, in accordance with regulations
prescribed by or orders issued by the
Board, pursuant to section 6 of this
Act.
Page 225, beginning on line 22, strike ``, as a bank holding
company''.
Page 226, line 2, strike ``subtitle B'' and insert ``section
1103''.
Page 226, strike lines 7 and 8 and insert the following:
``(ii) subject to the provisions of
this Act and other Federal law as
provided in section 1103(g) of the
Financial Stability Improvement Act of
2009; and''.
Page 227, line 5, strike ``subtitle A'' and insert ``section
1103''.
Page 228, line 6, after ``section 6(a)(2)(B)'' insert the
following: ``and financial activities involving the provision
of credit for the purchase or lease of products or services
from an affiliate or for the purchase or lease of products
produced by an affiliate of such section 6 holding company that
is not a subsidiary of such section six holding company''.
Page 236, strike lines 17-25.
Page 237, line 12, strike ``sections 4(p) and 6'' and insert
``section 1301 of the Financial Stability Improvement Act of
2009''.
Page 237, line 13, insert ``, other than a section 6 holding
company,'' after ``company''.
Page 250, beginning on line 19, strike ``after subsection (y)
(as added by section 1408)'' and insert ``at the end''.
Page 250, line 21, strike ``(z)'' and insert ``(y)''.
Page 252, line 16, insert ``holding'' after ``financial''.
Page 252, beginning on line 16, strike ``prudential''.
Page 252, line 19, strike ``greater'' and insert ``great''.
Page 253, line 23, strike ``8(c)(5)'' and insert
``18(c)(5)''.
Page 255, after line 2, insert the following new section (and
conform the table of contents accordingly):
SEC. 1316. NATIONWIDE DEPOSIT CAP FOR INTERSTATE ACQUISITIONS.
(a) Amendments to Bank Holding Company Act of 1956.--
(1) Concentration limit for bank holding companies.--
Section 3(d)(2)(A) of the Bank Holding Company Act (12
U.S.C. 1842(d)(2)(A)) is amended by striking
``paragraph (1)(A)'' and inserting ``subsection (a)''.
(2) Technical correction relating to certain savings
banks.--Section 4 of the Bank Holding Company Act is
amended by striking subsection (i) and inserting the
following new subsection:
``(i) [Repealed]''.
(b) Amendments to Federal Deposit Insurance Act.--
(1) In general.--Section 18(c) of the Federal Deposit
Insurance Act (12 U.S.C. 1828(c)) is amended--
(A) by redesignating paragraph (12) as
paragraph (13); and
(B) by inserting after paragraph (11) the
following new paragraph:
``(12) Nationwide deposit cap.--The responsible
agency may not approve an application for an interstate
merger transaction if the resulting insured depository
institution (including all insured depository
institutions which are affiliates of the resulting
insured depository institution), upon consummation of
the transaction, would control more than 10 percent of
the total amount of deposits of insured depository
institutions in the United States.''.
(2) Parallel requirement.--Subparagraph (A) of
section 44(b)(2) of the Federal Deposit Insurance Act
1831u(b)(2)(A)) is amended to read as follows:
``(A) Nationwide concentration limits.--The
responsible agency may not approve an
application for an interstate merger
transaction involving 2 or more insured
depository institutions if the resulting
insured depository institution (including all
insured depository institutions which are
affiliates of such institution), upon
consummation of the transaction would control
more than 10 percent of the total amount of
deposits of insured depository institutions in
the United States''.
(c) Amendments to Home Owners' Loan Act.--Section 10(e)(2) of
the Home Owners' Loan Act 1467a(e)(2)) is amended--
(1) by striking ``or at the end of subparagraph
(C)'';
(2) by striking the period at the end of subparagraph
(D) and inserting ``; or''; and
(3) by inserting after subparagraph (D), the
following new subparagraph:
``(E) in the case of an application involving
an interstate acquisition, if the applicant
(including all insured depository institutions
which are affiliates of the applicant)
controls, or upon consummation of the
acquisition for which such application is filed
would control, more than 10 percent of the
total amount of deposits of insured depository
institutions in the United States.''.
Page 257, line 10, strike ``assessment period'' and insert
``assessment period, minus additional deductions or adjustments
necessary to establish assessments consistent with the
definition under section 7(b)(1)(C) of the Federal Deposit
Insurance Act for custodial banks (as defined by the
Corporation based on factors including percentage of total
revenues generated by custodial businesses and the level of
assets under custody) or a bankers' bank (as referred to in
section 5136 of the Revised Statutes of the United States)''.
Page 275, line 15, insert ``if the financial company is an
insurance company or'' after ``section 1603''.
Page 277, line 11, insert ``activities'' after ``or''.
Page 277, line 22, strike the period and insert ``; and''.
Page 277, after line 22, insert the following new
subparagraph:
(C) that is not a Federal home loan bank, the
Federal National Mortgage Association, or the
Federal Home Loan Mortgage Corporation.
Page 278, beginning on line 2, strike ``includes'' and all
that follows through line 3 and insert ``means any entity
covered by a State law designed specifically to deal with the
rehabilitation, liquidation, or insolvency of an insurance
company.''.
Page 278, strike line 22 and all that follows through page
279, line 13, and insert the following new paragraph:
(1) Vote required.--
(A) In general.--At the request of the
Secretary, the Chairman of the Federal Reserve
Board, or the appropriate regulatory agency,
the Board and the appropriate regulatory agency
shall, or on their own initiative the Board and
the appropriate regulatory agency may, consider
whether to make the written recommendation
provided for in paragraph (2) with respect to a
financial company.
(B) 2/3 agreement.--Any recommendation under
subparagraph (A) shall be made upon a vote of
not less than two-thirds of the members of the
Federal Reserve Board then serving and not less
than two thirds of any members of the board or
commission then serving of the appropriate
regulatory agency, as applicable.
Page 280, beginning on line 7, strike ``financial holding
company subject to stricter standards'' and insert ``financial
company''.
Page 280, beginning on line 12, strike ``the board of
directors or commission of''.
Page 280, line 19, strike ``resolution'' and insert
``dissolution''.
Page 282, beginning on line 8, strike ``financial holding
company subject to stricter standards'' and insert ``financial
company''.
Page 282, beginning on line 20, strike ``financial holding
company subject to stricter standards'' and insert ``financial
company''.
Page 283, beginning on line 2, strike ``financial holding
company subject to stricter standards'' and insert ``financial
company''.
Page 283, beginning on line 5, strike ``financial holding
company subject to stricter standards'' and insert ``financial
company''.
Page 283, beginning on line 9, strike ``financial holding
company subject to stricter standards'' and insert ``financial
company''.
Page 283, beginning on line 15, strike ``financial holding
company subject to stricter standards'' and insert ``financial
company''.
Page 283 beginning on line 18, strike ``financial holding
company subject to stricter standards'' and insert ``financial
company''.
Page 283, line 22, strike ``RESOLUTION'' and insert
``DISSOLUTION'' (and conform the table of contents
accordingly).
Page 284, after line 7, insert the following new paragraphs:
(3) Extension of time limit.--The time limit
established in paragraph (2) may be extended by the
Secretary for up to 1 additional year if--
(A) the Corporation has not completed the
dissolution of the company within the time
provided in paragraph (2); and
(B) the Secretary certifies in writing that
continuation of the receivership is necessary--
(i) to protect the best interests of
the taxpayers of the United States; and
(ii) to protect the stability of the
financial system and the economy of the
United States.
(4) Further extension.--The time limit, as extended
in paragraph (3), may be extended for up to 1
additional year if--
(A) the conditions of paragraph (3) are met;
and
(B) the Corporation submits a report to the
Congress, no later than 60 days before the
receivership will expire under the extended
limit under paragraph (3), that describes in
detail--
(i) the basis for the determination
by the Corporation that a second
extension is necessary; and
(ii) the specific plan of the
Corporation for concluding the
receivership before the end of the
proposed additional year.
Page 284, line 8, strike ``Resolution'' and insert
``Dissolution''.
Page 284, line 10, strike ``resolved'' and insert
``dissolved''.
Page 284, line 11, strike ``resolution'' and insert
``dissolution''.
Page 284, line 18, strike ``resolution'' and insert
``dissolution''.
Page 285, line 6, strike ``resolution'' and insert
``dissolution''.
Page 285, line 11, strike ``resolution'' and insert
``dissolution''.
Page 285, line 16, strike ``1602(9)(B)(iv)'' and insert
``1602(9)(B)(v)''.
Page 285, line 18, strike ``resolution'' and insert
``dissolution''.
Page 287, beginning on line 1, strike ``Certain Insurance
Subsidiaries'' and insert ``Insurance Companies and Insurance
Company Subsidiaries''.
Page 287, strike line 4 and all that follows through line 9,
and insert ``(a), if an insurance company covered by a State
law designed specifically to deal with the rehabilitation,
liquidation or insolvency of an insurance company is a covered
financial company or a subsidiary of a covered financial
company, resolution of such insurance company, and any
subsidiary of such company, will be conducted as provided under
such State law.''.
Page 287, line 13, insert before the period the following:
``, that is not itself an insurance company''.
Page 287, line 22, strike ``resolution'' and insert
``dissolution''.
Page 288, line 2, strike ``resolution'' and insert
``dissolution''.
Page 289, line 11, strike ``Resolution'' and insert
``Dissolution''.
Page 289, line 21, insert ``in accordance with section 1604''
before the comma after ``is appointed''.
Page 299, line 11, strike ``resolution'' and insert
``dissolution''.
Page 305, line 19, strike ``resolution'' and insert
``dissolution''.
Page 327, line 2, strike ``resolving'' and insert
``dissolving''.
Page 327, line 8, strike ``resolution'' and insert
``dissolution''.
Page 370, line 15, strike ``resolution'' and insert
``dissolution''.
Page 401, line 10, strike ``$10,000,000,000'' and insert
``$50,000,000,000''.
Page 401, line 11, insert a comma after ``inflation''.
Page 411, line 10, insert ``,subject to the requirements of
section 1604(g),'' after ``Fund''.
Page 413, line 11, strike ``resolution'' and insert
``dissolution''.
Page 413, line 12, strike ``resolution'' and insert
``dissolution''.
Page 425, line 8, strike ``Resolution'' and insert
``Dissolution''.
Page 425, line 14, strike ``resolution'' and
insert ``dissolution'' (and conform the table of
contents accordingly).
Page 425, line 21, strike ``Resolution'' and insert
``Dissolution''.
Page 426, line 2, strike ``Resolution'' and insert
``Dissolution''.
Page 426, line 7, strike ``Resolution'' and insert
``Dissolution''.
Page 426, line 8, strike ``Resolution'' and insert
``Dissolution''.
Page 432, line 1, strike ``Resolution'' and insert
``Dissolution''.
Page 433, line 4, strike ``Resolution'' and insert
``Dissolution''.
Page 455, line 5, before the comma insert ``(as such terms
are defined in subsection (c) (1))''.
Page 461, strike lines 8 through 15 and insert the following:
(J) the Consumer Financial Protection Agency,
(K) the Federal Insurance Office,
Page 461, after line 19, insert the following new section:
SEC. 1802. FEDERAL HOUSING FINANCE AGENCY ADVISORY ROLE IN FIEC.
After section 1007 of the Federal Financial Institutions
Examination Council Act of 1987 (12 U.S.C. 3306) insert the
following new section:
``SEC. 1007A. FEDERAL HOUSING FINANCE AGENCY ADVISORY ROLE.
``Whenever the Council takes any actions with respect to
issues that relate to the Federal National Mortgage
Association, the Federal Home Loan Mortgage Corporation, or the
Federal home loan banks, the Federal Housing Finance Agency
shall participate in the Council's proceedings in an advisory
role.''.
Page 462, beginning on line 20, strike ``(as'' and all that
follows through line 22 and insert a comma.
Page 463, beginning on line 15, strike ``(as'' and all that
follows through line 17 and insert a comma.
Page 464, strike lines 11 and 12 and insert ``States, the''.
Page 465, after line 2, insert the following new subtitle:
Subtitle L--Securities Holding Companies
SEC. 1961. SECURITIES HOLDING COMPANIES.
(a) Supervision of a Securities Holding Company Not Having a
Bank or Savings Association Affiliate.--
(1) In general.--A securities holding company that is
required by a foreign regulator or foreign law to be
subject to comprehensive consolidated supervision and
that is not--
(A) a financial holding company subject to
stricter standards,
(B) an affiliate of an insured bank (other
than an institution described in subparagraphs
(D) or (G) of section 2(c)(2) of the Bank
Holding Company Act of 1956) or a savings
association,
(C) a foreign bank, foreign company, or
company that is described in section 8(a) of
the International Banking Act of 1978,
(D) a foreign bank that controls, directly or
indirectly, a corporation chartered under
section 25A of the Federal Reserve Act (12
U.S.C. 611 et seq.), or
(E) subject to comprehensive consolidated
supervision by a foreign regulator,
may register with the Board to become supervised,
pursuant to paragraph (2). Any securities holding
company filing such a registration shall be supervised
in accordance with this section and comply with the
rules and orders prescribed by the Board applicable to
supervised securities holding companies.
(2) Registration as a supervised securities holding
company.--A securities holding company described in
paragraph (1) shall register by filing with the Board
such information and documents concerning such
securities holding company as the Board, by regulation,
may prescribe as necessary or appropriate in
furtherance of the purposes of this section. Such
supervision shall become effective 45 days after the
date of receipt of such registration by the Board or
within such shorter time period as the Board, by rule
or order, may determine.
(b) Supervision of Securities Holding Companies.--
(1) Recordkeeping and reporting.--
(A) In general.--Every supervised securities
holding company and each affiliate of such
company shall make and keep for prescribed
periods such records, furnish copies of
records, and make such reports, as the Board
determines to be necessary or appropriate for
the Board to carry out the purposes of this
section, prevent evasions, and monitor
compliance by the company or affiliate with
applicable provisions of law.
(B) Form and contents.--Such records and
reports shall be prepared in such form and
according to such specifications (including
certification by a registered public accounting
firm), as the Board may require and shall be
provided promptly at any time upon request by
the Board. Such records and reports may
include--
(i) a balance sheet and income
statement;
(ii) an assessment of the
consolidated capital of the supervised
securities holding company;
(iii) an independent auditor's report
attesting to the supervised securities
holding company's compliance with its
internal risk management and internal
control objectives; and
(iv) reports concerning the extent to
which the company or affiliate has
complied with the provisions of this
section and any regulations prescribed
and orders issued under this section.
(2) Use of existing reports.--
(A) In general.--The Board shall, to the
fullest extent possible, accept reports in
fulfillment of the requirements under this
paragraph that the supervised securities
holding company or its affiliates have been
required to provide to another appropriate
regulatory agency or self-regulatory
organization.
(B) Availability.--A supervised securities
holding company or an affiliate of such company
shall provide to the Board, at the request of
the Board, any report referred to in
subparagraph (A), as permitted by law.
(3) Examination authority.--
(A) Focus of examination authority.--The
Board may make examinations of any supervised
securities holding company and any affiliate of
such company to carry out the purposes of this
subsection, prevent evasions thereof, and
monitor compliance by the company or affiliate
with applicable provisions of law.
(B) Deference to other examinations.--For
purposes of this subparagraph, the Board shall,
to the fullest extent possible, use the reports
of examination made by other appropriate
Federal or State regulatory authorities with
respect to any functionally regulated
subsidiary, as defined under section 5(c)(1) of
the Bank Holding Company Act of 1956 (12 U.S.C.
1844(c)(1)), or an institution described in
subparagraphs (D) or (G) of section 1841(c)(2).
(c) Capital and Risk Management.--
(1) The Board shall, by regulation or order,
prescribe capital adequacy and other risk management
standards for a supervised securities holding company
appropriate to protect the safety and soundness of the
company and address the risks posed to financial
stability by a supervised securities holding company.
Standards imposed under this subparagraph shall take
account of differences among types of business
activities and--
(A) the amount and nature of the company's
financial assets;
(B) the amount and nature of the company's
liabilities, including the degree of reliance
on short-term funding;
(C) the extent and nature of the company's
off-balance sheet exposures;
(D) the extent and nature of the company's
transactions and relationships with other
financial companies;
(E) the company's importance as a source of
credit for households, businesses, and State
and local governments and as a source of
liquidity for the financial system; and
(F) the nature, scope, and mix of the
company's activities.
(2) In imposing standards under this subsection, the
Board may differentiate among supervised securities
holding companies on an individual basis or by
category, taking into consideration the criteria
specified above.
(3) Any capital requirements imposed under this
subsection shall not take effect until the expiration
of 180 days after a supervised securities holding
company is provided notice of such requirement.
(d) Other Provisions.--
(1) Subsections (b), (c) through (s), and (u) of
section 8 of the Federal Deposit Insurance Act shall
apply to any supervised securities holding company, and
to any subsidiary (other than a bank) of a supervised
securities holding company, in the same manner as they
apply to a bank holding company. For purposes of
applying such subsections to a supervised securities
holding company or a subsidiary (other than a bank) of
a supervised securities holding company, the Board
shall be considered the appropriate Federal banking
agency for the supervised securities holding company or
subsidiary.
(2) Except as the Board may otherwise provide by
regulation or order, a supervised securities holding
company shall be subject to the provisions of the Bank
Holding Company Act of 1956 (12 U.S.C. 1841 et seq.) in
the same manner and to the same extent that bank
holding companies are subject to such provisions,
except that any such supervised securities holding
company shall not by reason of this subparagraph be
deemed a bank holding company for purposes of section 4
of the Bank Holding Company Act of 1956.
(e) Definitions.--For purposes of this section, the following
definitions shall apply:
(1) Securities holding company.--The term
``securities holding company'' means--
(A) any person other than a natural person
that owns or controls one or more brokers or
dealers as defined in section 3 of the
Securities Exchange Act; and
(B) the associated persons of the securities
holding company.
(2) Supervised securities holding company.--The term
``supervised securities holding company'' means any
securities holding company that is supervised by the
Board pursuant to this section.
(3) Other banking terms.--The terms ``affiliate'',
``bank'', ``bank holding company'', ``company'',
``control'', ``savings association'', and
``subsidiary'' have the same meanings as in section 2
of the Bank Holding Company Act of 1956.
(4) Insured bank.--The term ``insured bank'' has the
same meaning as in section 13 of the Federal Deposit
Insurance Act.
(5) Foreign bank.--The term ``foreign bank'' has the
same meaning as in section 1(b)(7) of the International
Banking Act of 1978.
(6) Associated persons.--The terms ``person
associated with a securities holding company'' and
``associated person of a securities holding company''
mean any person directly or indirectly controlling,
controlled by, or under common control with, a
securities holding company.
Page 480, line 12, strike ``2009'' and insert ``2008''.
Page 668, strike lines 4 and 5 and insert the following:
(13) Deposit-taking, money acceptance, or money
movement activity.--The term ``deposit-taking, money
acceptance, or money movement activities'' means--
Page 669, line 15, insert ``(b),'' after ``Subsections''.
Page 669, line 20, insert ``except for section 505 as it
applies to section 501(b)'' before the period.
Page 670, after line 9, insert the following:
(N) Section 626 of the Omnibus Appropriations
Act, 2009 (Public Law 111-8).
(O) The Unlawful Internet Gambling
Enforcement Act of 2006.
Page 670, line 23, after ``taking'' insert ``, money
acceptance, or money movement''.
Page 672, line 3, insert ``, except that furnishing a
consumer report to another person that it has reason to believe
intends to use the information for employment purposes,
including for security investigations, government licensing and
evaluating a consumer's residential or tenant history shall not
be considered a financial activity'' before the period at the
end.
Page 673, line 2, insert ``a person regulated as an
investment adviser by'' after ``or'' the 1st place such term
appears.
Page 675, strike line 10 and all that follows through page
676, line 9, and insert the following:
(ix) Financial data processing by any
technological means, including
providing data processing, access to or
use of databases or facilities, or
advice regarding processing or
archiving, if the data to be processed,
furnished, stored, or archived are
financial, banking, or economic, except
that it shall not be considered a
``financial activity'' with respect to
financial data processing--
(I) to the extent the person
is providing interactive
computer service, as defined in
section 230 of the
Communications Act of 1934 (47
U.S.C. 230); or
(II) if the person--
(aa) unknowingly or
incidentally transmits,
processes, or stores
financial data in a
manner that such data
is undifferentiated
from other types of
data that the person
transmits, processes,
or stores;
(bb) does not provide
to any consumer a
consumer financial
product or service in
connection with or
relating to in any
manner financial data
processing; and
(cc) does not provide
a material service to
any covered person in
connection with the
provision of a consumer
financial product or
service.
Page 678, line 10, as modified by the amendment MWB_05,
before ``data is undifferentiated'' insert ``financial''.
Page 679, line 2, insert ``and shall include any uninsured
branch or agency of a foreign bank or a commercial lending
company owned or controlled by a foreign bank'' before the
period at the end.
Page 679, beginning on line 17, strike ``covered''.
Page 681, strike line 18 and all that follows through line 20
and insert the following new subparagraph:
(C) an investment company that--
(i) is required to be registered
under the Investment Company Act of
1940; or
(ii) is excepted from the definition
of investment company under section
3(c) of such Act, or any successor
provision.
Page 682, line 21, strike ``the person'' and insert ``any
person described in any subparagraph of this paragraph''.
Page 682, line 23, insert ``, or, with respect to a person
described in subparagraph (C)(ii), any employee, agent, or
contractor acting on behalf of, or providing services to any
such person, but only to the extent that such person, or the
employee, agent, or contractor of such person acts in such
exempt capacity'' before the period at the end.
Page 686, line 19, insert `` or any federally recognized
Indian tribe as defined by the Secretary of Interior under
section 104(a) of the Federally Recognized Indian Tribe List
Act of 1994 (25 U.S.C. 479a-1(a))'' before the period.
Page 693, line 13, before the semicolon insert the following:
``, except that the Director shall not exercise any authorities
that are granted to State insurance authorities under section
505(a)(6) of the Gramm-Leach-Bliley Act''.
Page 693, line 14, insert ``, except that Director shall not
exercise any authorities that are granted to State insurance
authorities under Section 505(a)(6) of the Gramm-Leach-Bliley
Act'' before the semicolon.
Page 696, strike line 14 and all that follows through page
697, line 9, and insert the following:
(1) Appointment.--The Director may fix the number of,
and appoint and direct, all employees of the Agency.
Page 701, line 1, insert ``the Federal Trade Commission,''
after ``banking agencies,''.
Page 714, strike lines 11 through 14, and insert the
following:
(2) an analysis of the major problems consumers of
financial products and services were confronted with
during the preceding year, including a description of
the nature of such problems, and recommendations for
such administrative and legislative action as may be
appropriate to resolve such problems;
Page 715, after line 7, insert the following new paragraph
(and redesignate succeeding paragraphs accordingly):
(6) an analysis of the Agency's efforts to increase
workforce and contracting diversity consistent with
subtitle I of title I of this Act;
Page 717, beginning on line 17, strike ``and complexity of
the covered person,'' and insert ``, complexity of, risk posed
by,''.
Page 719, beginning on line 10, strike ``and complexity of
the covered person,'' and insert ``, complexity of, risk posed
by,''.
Page 720, line 16, insert ``in the each of the first 3 years
following the date of enactment of this Act'' after
``persons''.
Page 720, beginning on line 18, strike ``the 12-month period
ending on December 31, 2009'' and insert ``the calendar year
immediately preceding the designated transfer date''.
Page 720, line 24, insert ``, on a risk-adjusted basis,''
after ``that''.
Page 721, line 11, insert ``or to set assessments that would
result in higher marginal assessments on the depository
institution covered persons with assets of less than
$25,000,000,000 if based on the compliance record of or higher
risks posed by such covered persons'' before the period.
Page 721, line 18, strike ``enforcement or regulation'' and
insert ``or enforcement activities''.
Page 722, line 1, insert ``so that levels of assessments
under this subparagraph combined with levels of assessments by
an agency responsible for chartering and or supervising the
depository institution covered person shall be no more'' before
``than it paid''.
Page 725, line 6, insert ``or the CFPA Nondepository Fund, at
the discretion of the Agency'' before the period at the end.
Page 728, beginning on line 12, strike ``as a result of the''
and insert ``that are reasonably related as a general matter
to''.
Page 743, line 3, insert ``a provision of'' after ``reports
under''.
Page 743, line 4, insert ``a provision of'' after ``title,''.
Page 743, line 5, insert ``any provision of'' after ``law,''.
Page 743, line 8, insert ``under that provision of law''
after ``exclusive authority''.
Page 748, line 6, strike ``$1,500,000,000'' and insert
``$10,000,000,000''.
Page 760, strike line 19 and all that follows through page
762, line 22, and insert the following:
(a) Exclusion for Merchants, Retailers, and Sellers of
Nonfinancial Services.--
(1) In general.--Notwithstanding any provision of
this title (other than paragraph (4)) and subject to
paragraph (2), the Director and the Agency may not
exercise any rulemaking, supervisory, enforcement or
other authority, including authority to order
assessments, under this title with respect to--
(A) credit extended directly by a merchant,
retailer, or seller of nonfinancial goods or
services to a consumer, in a case in which the
good or service being provided is not itself a
consumer financial product or service,
exclusively for the purpose of enabling that
consumer to purchase such goods or services
directly from the merchant, retailer, or seller
of nonfinancial services; or
(B) collection of debt, directly by the
merchant, retailer, or seller of nonfinancial
services, arising from such credit extended.
In the application of this paragraph, the extension of
credit and the collection of debt described in
subparagraphs (A) and (B), respectively, shall not be
considered a consumer financial product or service.
(2) Exception for existing authority.--The Director
may exercise any rulemaking authority regarding an
extension of credit described in paragraph (1)(A) or
the collection of debt arising from such extension, as
may be authorized by the enumerated consumer laws or
any law or authority transferred under subtitle F or H.
(3) Rule of construction.--No provision of this title
shall be construed as modifying, limiting, or
superseding the authority of the Federal Trade
Commission or any agency other than the Agency with
respect to credit extended, or the collection of debt
arising from such extension, directly by a merchant or
retailer to a consumer exclusively for the purpose of
enabling that consumer to purchase goods or services
directly from the merchant or retailer.
(4) Exclusion not applicable to certain credit
transactions.--Paragraph (1) shall not apply to--
(A) any credit transaction, including the
collection of the debt arising from such
extension, in which the merchant, retailer, or
seller of nonfinancial services assigns, sells,
or otherwise conveys such debt owed by the
consumer to another person; or
(B) any credit transaction--
(i) in which the credit provided
significantly exceeds the market value
of the product or service provided; and
(ii) with respect to which the
Director finds that the sale of the
product or service is done as a
subterfuge so as to evade or circumvent
the provisions of this title.
Page 762, line 14, strike ``or''.
Page 762, line 22, strike the period and insert ``; or''.
Page 762, after line 22, insert the following new
subparagraph:
(C) any credit transaction involving a person
who operates a line of business that involves
the extension of retail credit or retail leases
involving motor vehicles, if--
(i) the extension of retail credit or
retail leases is provided directly to
consumers; and
(ii) the contracts governing such
extension of retail credit or retail
leases are not assigned to a third
party finance or leasing source, except
on a de minimis basis.
Page 764, after line 24, insert the following new subsection
and redesignate subsequent subsections accordingly):
(d) Persons Regulated by a State Securities Commission.--
(1) In general.--No provision of this title shall be
construed as altering, amending, or affecting the
authority of any securities commission (or any agency
or office performing like functions) of any State to
adopt rules, initiate enforcement proceedings, or take
any other action with respect to a person regulated by
any securities commission (or any agency or office
performing like functions) of any State. Except as
permitted in paragraph (2) and subsection (m), the
Director and the Agency shall have no authority to
exercise any power to enforce this title with respect
to a person regulated by any securities commission (or
any agency or office performing like functions) of any
State, but only to the extent that the person acts in
such regulated capacity.
(2) Description of activities..--Paragraph (1) shall
not apply to any person to the extent such person is
engaged in any financial activity described in any
subparagraph of section 101(19) or is otherwise subject
to any enumerated consumer law or any law or authority
transferred under subtitle F or H.
Page 765, strike line 20 and all that follows through page
766, line 3, and insert the following new paragraph:
(3) Preservation of certain authorities.--No
provision of this title shall be construed as limiting
the authority of the Director and the Agency from
exercising powers under this Act with respect to a
person, other than a person regulated by a State
insurance regulator, who provides a product or service
for or on behalf of a person regulated by a State
insurance regulator in connection with a financial
activity.
Page 766, line 13, insert ``Finance'' after ``Housing''.
Page 770, after line 4, insert the following new paragraph
(and redesignate succeeding paragraphs accordingly):
(3) Certain activities not excluded.--
(A) In general.--In no event shall paragraph
(1) apply to any activity which involves the
sale of securities or extension of credit which
is provided by a person described in paragraph
(1)(A).
(B) Definition.--For purposes of subparagraph
(A), the term ``extension of credit'' shall not
include an ordinary account receivable.
Page 772, beginning on line 15, strike ``order assessments,
over'' and all that follows through page 773, line 7, and
insert ``order assessments, over a motor vehicle dealer that is
primarily engaged in the sale and servicing of motor vehicles,
the leasing and servicing of motor vehicles, or both.''.
Page 776, after line 19, insert the following new
subsections:
(l) Exclusion for Pawnbrokers.--
(1) In general.--The Director and the Agency may not
exercise any rulemaking, supervisory, enforcement, or
other authority, including authority to order
assessments, under this title with respect to any
pawnbroker licensed by a State or political subdivision
thereof, a territory of the United States, or the
District of Columbia, but only to the extent that such
person acts in such capacity and provides either--
(A) non-recourse credit secured by a
possessory security interest in tangible goods
physically delivered by the consumer to the
pawnbroker for which the consumer does not
provide a written or electronic promise, order
or authorization to pay, or in any other manner
authorize a debit of a deposit account, prior
to or contemporaneously with the disbursement
of the original proceeds; or
(B) credit or any other financial activity
issued directly by a pawnbroker to a consumer,
in a case in which the good or service being
provided is not itself a consumer financial
product or service, exclusively for the purpose
of enabling that consumer to purchase goods or
services directly from the pawnbroker.
(2) Rule of construction.--
(A) FTC authority preserved.--Except as
provided in subparagraph (B), no provision of
this title shall be construed as modifying,
limiting, or superseding the authority of the
Federal Trade Commission with respect to the
activities described under paragraph (1).
(B) Exercise of rulemaking authority.--The
Director may exercise any rulemaking authority
regarding the activities described in paragraph
(1) only as may be authorized by the enumerated
consumer laws or any law or authority
transferred under subtitle F or H.
(m) Exclusion for Certain Consumer Reporting Agencies.--
(1) In general.--Except as permitted in paragraph
(2), the Director and the Agency may not exercise any
rulemaking, supervisory, enforcement or other
authority, including authority to order assessments,
over a person that is a consumer reporting agency, as
such term is defined in section 603(f) of the Fair
Credit Reporting Act (15 U.S.C. 1681a(f)), but only to
the extent that such consumer reporting agency
furnishes a consumer report to another person that it
has reason to believe intends to use the information
for employment purposes, including for security
investigations, government licensing and evaluating a
consumer's residential or tenant history.
(2) Description of activities.--Paragraph (1) shall
not apply to any person described in such paragraph to
the extent such person is engaged in any financial
activity described in any subparagraph of section
4002(19) or is otherwise subject to any of the
enumerated consumer laws or the authorities transferred
under subtitle F or H.
(n) Limited Authority of the Agency to Obtain Information.--
Notwithstanding subsections (a), (f), (g), (h), (i), and (k),
the Director may request or require information from any person
subject to or described in any such subsection in order to
carry out the responsibilities and functions of the Agency and
in accordance with section 4206, 4501, or 4502.
Page 781, line 22, after the period insert the following:
``This authority shall not prohibit or restrict a consumer from
entering into a voluntary arbitration agreement with a covered
person after a dispute has arisen.''.
Page 787, strike line 17 and all that follows through page
788, line 10, and insert the following new subsection:
(c) Unfair, Deceptive, or Abusive Acts or Practices
Defined.--
(1) Unfair acts or practices.--Any determination by
the Director and the Agency that an act or practice is
unfair shall be consistent with the standard set forth
under section 5 of the Federal Trade Commission Act and
with the policy statement adopted by the Federal Trade
Commission pursuant to section 5 of the Federal Trade
Commission Act and dated December 17, 1980.
(2) Deceptive acts or practices.--Any determination
by the Director and the Agency that an act or practice
is deceptive shall be consistent with the policy
statement adopted by the Federal Trade Commission
pursuant to section 5 of the Federal Trade Commission
Act and dated October 14, 1983.
(3) Abusive acts or practices.--The Director and the
Agency may determine that an act or practice is abusive
only if the Director finds that--
(A) the act or practice is reasonably likely
to result in a consumer's inability to
understand the terms and conditions of a
financial product or service or to protect
their own interests in selecting or using a
financial product or service; and
(B) the widespread use of the act or practice
is reasonably likely to contribute to
instability and greater risk in the financial
system.
Page 795, line 23, insert ``(other than by the Agency, or by
a State regulator, as may be necessary to enforce an
administrative order under this section)'' before the comma at
the end.
Page 799, line 24, after ``and'' insert ``, notwithstanding
any other provision of this title,''.
Page 815, line 11, insert ``to be effected or used primarily
for personal, family, or household purposes'' after ``funds''.
Page 845, after line 13, insert the following new paragraph
(and redesignate succeeding paragraphs accordingly):
(4) Covered employee.--The term ``covered employee''
means any individual performing tasks related to the
provision of a financial product or service to a
consumer.
Page 878, beginning on line 5, strike ``for any violation of
a regulation prescribed under section 4306 or''.
Page 880, strike line 16 through page 893, line 8 and insert
the following:
SEC. 4507. EMPLOYEE PROTECTION.
(a) No covered person shall terminate or in any other way
discriminate against, or cause to be terminated or
discriminated against, any covered employee or any authorized
representative of covered employees by reason of the fact that
such employee or representative whether at the employee's
initiative or in the ordinary course of the employee's duties
(or any person acting pursuant to a request of the employee)
has--
(1) provided information to the Agency or to any
other state, local, federal, or tribal government
entity, filed, instituted or caused to be filed or
instituted any proceeding under this title, any
enumerated consumer law, any law for which authorities
were transferred by subtitles F and H, or has testified
or is about to testify in any proceeding resulting from
the administration or enforcement of the provisions of
this title; or
(2) objected to, or refused to participate in, any
activity, policy, practice, or assigned task that the
employee (or other such person) reasonably believed to
be in violation of any law, rule, or regulation, or to
be unfair, deceptive, or abusive and likely to cause
specific and substantial injury to one or more
consumers.
(b)(1) A person who believes that he or she has been
discharged or otherwise discriminated against by any person in
violation of subsection (a) may, not later than 180 days after
the date on which such violation occurs, file (or have any
person file on his or her behalf) a complaint with the
Secretary of Labor alleging such discharge or discrimination
and identifying the person responsible for such act. Upon
receipt of such a complaint, the Secretary shall notify, in
writing, the person named in the complaint of the filing of the
complaint, of the allegations contained in the complaint, of
the substance of evidence supporting the complaint, and of the
opportunities that will be afforded to such person under
paragraph (2).
(2)(A) Not later than 60 days after the date of receipt of a
complaint filed under paragraph (1) and after affording the
complainant and the person named in the complaint an
opportunity to submit to the Secretary a written response to
the complaint and an opportunity to meet with a representative
of the Secretary to present statements from witnesses, the
Secretary shall initiate an investigation and determine whether
there is reasonable cause to believe that the complaint has
merit and notify, in writing, the complainant and the person
alleged to have committed a violation of subsection (a) of the
Secretary's findings. If the Secretary concludes that there is
reasonable cause to believe that a violation of subsection (a)
has occurred, the Secretary shall accompany the Secretary's
findings with a preliminary order providing the relief
prescribed by paragraph (3)(B). Not later than 30 days after
the date of notification of findings under this paragraph,
either the person alleged to have committed the violation or
the complainant may file objections to the findings or
preliminary order, or both, and request a hearing on the
record. The filing of such objections shall not operate to stay
any reinstatement remedy contained in the preliminary order.
Any such hearing shall be conducted expeditiously. If a hearing
is not requested in such 30-day period, the preliminary order
shall be deemed a final order that is not subject to judicial
review.
(B)(i) The Secretary shall dismiss a complaint filed under
this subsection and shall not conduct an investigation
otherwise required under subparagraph (A) unless the
complainant makes a prima facie showing that any behavior
described in paragraphs (1) through (4) of subsection (a) was a
contributing factor in the unfavorable personnel action alleged
in the complaint.
(ii) Notwithstanding a finding by the Secretary that
the complainant has made the showing required under
clause (i), no investigation otherwise required under
subparagraph (A) shall be conducted if the employer
demonstrates, by clear and convincing evidence, that
the employer would have taken the same unfavorable
personnel action in the absence of that behavior.
(iii) The Secretary may determine that a violation of
subsection (a) has occurred only if the complainant
demonstrates that any behavior described in paragraphs
(1) through (4) of subsection (a) was a contributing
factor in the unfavorable personnel action alleged in
the complaint.
(iv) Relief may not be ordered under subparagraph (A)
if the employer demonstrates by clear and convincing
evidence that the employer would have taken the same
unfavorable personnel action in the absence of that
behavior.
(3)(A) Not later than 120 days after the date of
conclusion of any hearing under paragraph (2), the
Secretary shall issue a final order providing the
relief prescribed by this paragraph or denying the
complaint. At any time before issuance of a final
order, a proceeding under this subsection may be
terminated on the basis of a settlement agreement
entered into by the Secretary, the complainant, and the
person alleged to have committed the violation.
(B) If, in response to a complaint filed under
paragraph (1), the Secretary determines that a
violation of subsection (a) has occurred, the Secretary
shall order the person who committed such violation--
(i) to take affirmative action to abate the
violation;
(ii) to reinstate the complainant to his or
her former position together with compensation
(including back pay) and restore the terms,
conditions, and privileges associated with his
or her employment; and
(iii) to provide compensatory damages to the
complainant. If such an order is issued under
this paragraph, the Secretary, at the request
of the complainant, shall assess against the
person against whom the order is issued a sum
equal to the aggregate amount of all costs and
expenses (including attorneys' and expert
witness fees) reasonably incurred, as
determined by the Secretary, by the complainant
for, or in connection with, the bringing of the
complaint upon which the order was issued.
(C) If the Secretary finds that a complaint under
paragraph (1) is frivolous or has been brought in bad
faith, the Secretary may award to the prevailing
employer a reasonable attorneys' fee, not exceeding $
1,000, to be paid by the complainant.
(4) If the Secretary has not issued a final decision within
210 days after the filing of the complaint, or within 90 days
after receiving a written determination, the complainant may
bring an action at law or equity for de novo review in the
appropriate district court of the United States with
jurisdiction, which shall have jurisdiction over such an action
without regard to the amount in controversy, and which action
shall, at the request of either party to such action, be tried
by the court with a jury. The proceedings shall be governed by
the same legal burdens of proof specified in paragraph (2)(B).
The court shall have jurisdiction to grant all relief necessary
to make the employee whole, including injunctive relief and
compensatory damages, including--
(A) reinstatement with the same seniority status that
the employee would have had, but for the discharge or
discrimination;
(B) the amount of back pay, with interest; and
(C) compensation for any special damages sustained as
a result of the discharge or discrimination, including
litigation costs, expert witness fees, and reasonable
attorney's fees.
(5)(A) Unless the complainant brings an action under
paragraph (4), any person adversely affected or aggrieved by a
final order issued under paragraph (3) may obtain review of the
order in the United States Court of Appeals for the circuit in
which the violation, with respect to which the order was
issued, allegedly occurred or the circuit in which the
complainant resided on the date of such violation. The petition
for review must be filed not later than 60 days after the date
of the issuance of the final order of the Secretary. Review
shall conform to chapter 7 of title 5, United States Code. The
commencement of proceedings under this subparagraph shall not,
unless ordered by the court, operate as a stay of the order.
(B) An order of the Secretary with respect to which
review could have been obtained under subparagraph (A)
shall not be subject to judicial review in any criminal
or other civil proceeding.
(6) Whenever any person has failed to comply with an
order issued under paragraph (3), the Secretary may
file a civil action in the United States district court
for the district in which the violation was found to
occur, or in the United States district court for the
District of Columbia, to enforce such order. In actions
brought under this paragraph, the district courts shall
have jurisdiction to grant all appropriate relief
including, but not limited to, injunctive relief and
compensatory damages.
(7)(A) A person on whose behalf an order was issued
under paragraph (3) may commence a civil action against
the person to whom such order was issued to require
compliance with such order. The appropriate United
States district court shall have jurisdiction, without
regard to the amount in controversy or the citizenship
of the parties, to enforce such order.
(B) The court, in issuing any final order
under this paragraph, may award costs of
litigation (including reasonable attorneys' and
expert witness fees) to any party whenever the
court determines such award is appropriate.
(c) Any nondiscretionary duty imposed by this section shall
be enforceable in a mandamus proceeding brought under section
1361 of title 28, United States Code.
(d)(1) Except as provided under paragraph (3), the rights and
remedies provided for in this section may not be waived by any
agreement, policy, form, or condition of employment, including
by any predispute arbitration agreement.
(2) Except as provided under paragraph (3), no predispute
arbitration agreement shall be valid or enforceable if it
requires arbitration of a dispute arising under this section.
(e) Notwithstanding paragraphs (1) and (2), an arbitration
provision in a collective bargaining agreement shall be
enforceable as to disputes arising under paragraph (a)(2) of
this section unless the Agency determines by rule that such
provision is inconsistent with the purposes of this Act.
(f) Any employer receiving covered funds shall post notice of
the rights and remedies provided under this section.
Page 881, line 1, strike ``provided information to'' and
insert ``provided, caused to be provided, or is about to
provide or cause to be provided information to the employer,''.
Page 893, line 6, strike ``(a)(2)'' and insert ``(a)(4)''.
Page 893, after line 8 insert the following new section (and
redesignate succeeding sections accordingly):
SEC. 4508. NO PRIVATE RIGHT OF ACTION.
Nothing in this title shall be construed to create a private
right of action, but this section shall not be construed or
interpreted to deny any private right of action arising under
the enumerated consumer laws or the authorities transferred
under subtitle F or H.
Page 897, beginning on line 21, strike ``Backstop''.
Page 898, line 2, strike ``4202(e)(3)'' and insert
``paragraph (2) or (3) of section 4202(e)''.
Page 898, line 8, insert ``transferred under subsection (a)''
after ``functions''.
Page 922, beginning on line 1, strike ``a Federal home loan
bank, a joint office of the Federal home loan banks,''.
Page 922, line 5, strike ``or''.
Page 922, line 6, insert ``, or the Federal Home Loan Bank
Board or any successor to such Board'' before ``shall be''.
Page 922, beginning on line 23, strike ``a Federal home loan
bank, a joint office of the Federal home loan banks,''.
Page 923, line 2, strike ``or''.
Page 923, line 3, insert ``, or the Federal Home Loan Bank
Board or any successor to such Board'' before ``shall be''.
Page 933, line 4, insert ``the Federal Home Loan Bank Board
or any successor to such Board,'' after ``Federal reserve
bank''.
Page 933, line 21, insert ``the Federal Home Loan Bank Board
or any successor to such Board,'' after ``reserve bank''.
Page 934, line 24, strike ``before the designated transfer
date'' and insert ``during the 24-month period beginning on the
date of the enactment of this title''.
Page 954, line 2, insert ``and shall not apply to the term
`Board' when used in reference to the Federal Deposit Insurance
Corporation or the National Credit Union Administration''
before the period.
Page 955, line 16, strike ``25(a)'' and insert ``25A''.
Page 957, line 3, insert ``(other than the Consumer Financial
Protection Agency)'' after ``agency''.
Page 957, line 20, insert ``(and except for any insertion of
`Federal Trade Commission' made by this subtitle)'' after
``subparagraph (B)''.
Page 958, line 2, strike ``and 129(m) (as amended by
paragraph (7))'' and insert ``129(m) (as amended by paragraph
(7)), 140A, or 149 (as amended by paragraph (8)).''.
Page 959, after line 13, insert the following:
(8) Section 149.--Section 149(b) of the Truth in
Lending Act (15 U.S.C. 1665d(b)) is amended by
inserting ``the Federal Trade Commission,'' after ``in
consultation with''.
Page 960, beginning on line 1, strike ``paragraph (7)(A)''
and insert `` paragraphs (7)(B), (8)(A), (8)(C), and (8)(D) of
this subsection (and except for any insertion of `Federal Trade
Commission' made by this subtitle)''.
Page 961, after line 21, insert the following:
(5) Section 609.--Section 609(d)(1) of the Fair
Credit Reporting Act (15 U.S.C. 1681g(d)(1)) is amended
by inserting ``the Federal Trade Commission,'' after
``in consultation with''.
Page 961, line 22, strike ``(5)'' and insert ``(6)''.
Page 961, line 22, strike ``611(e)(2)'' and insert
``611(e)''.
Page 961, line 23, strike ``15 U.S.C.1681i(e)(2)'' and insert
``15 U.S.C. 1681i(e)''.
Page 961, line 24, strike ``amended to read as follows:'' and
insert ``amended--'', and after such line insert the following:
(A) by amending paragraph (2) to read as
follows:
Page 962, line 5, strike the period following the quotation
marks and insert ``; and'' and after such line insert the
following:
(B) in the heading of paragraph (3) by
inserting ``Consumer reporting'' before
``agency''.
Page 962, strike lines 6 through 8 and insert the following:
(8) Section 615.--Section 615 of the Fair Credit
Reporting Act (15 U.S.C. 1681m) is amended--
(A) in subsection (d)(2)(B), by inserting
``the Federal Trade Commission,'' after ``in
consultation with'';
(B) in subsection (e)(1), by striking ``and
the Commission'' and inserting ``the Federal
Trade Commission, the Securities and Exchange
Commission, and the Commodities Futures Trading
Commission''; and
(C) by striking subparagraph (A) of
subsection (h)(6) and inserting the following:
Page 962, line 11, strike ``(7)'' and insert ``(8)''.
Page 963, line 2, insert ``(other than the Consumer Financial
Protection Agency)'' after ``agency''.
Page 968, after line 7, insert the following (and redesignate
succeeding subparagraphs accordingly):
(C) in paragraph (2) of subsection (c)--
(i) by inserting ``the Agency and''
before ``the Federal Trade Commission''
in the first sentence;
(ii) by inserting ``Agency and the
Federal Trade'' after ``provide the'';
and
(iii) by inserting ``Agency,'' before
``Federal Trade Commission'' in the
second sentence;
(D) in paragraph (4) of subsection (c)--
(i) by inserting ``Agency'', before
``the Federal Trade Commission''; and
(ii) inserting ``Agency, the Federal
Trade'' after ``complaint of the'';
(E) in paragraph (2) of subsection (f), by
inserting ``the Federal Trade Commission''
after ``in consultation with'';
Page 968, beginning on line 12, strike ``with respect to a
covered person described in subsection (b)'' and insert ``,
except that, with respect to sections 615(e) and 628 of this
title, the agencies identified in subsections (a) and (b) of
this section shall prescribe such regulations as necessary to
carry out the purposes of such sections with respect to
entities within their enforcement authority under such
subsections''.
Page 968, line 14, strike ``(D)'' and insert ``(G)''.
Page 973, strike lines 8 and 9 and insert the following:
(iii) in paragraph (1)(B)--
(I) by inserting ``of
Governors of the Federal
Reserve System'' after
``Board''; and
(II) by striking ``and''
after the semicolon;
Page 974, line 2, insert ``(other than the Consumer Financial
Protection Agency)'' after ``agency''.
Page 978, line 4, insert ``(other than the Consumer Financial
Protection Agency)'' after ``agency''.
Page 982, line 21, strike ``and'' and after such line insert
the following:
(iii) in paragraph (l)(B), by
inserting ``of Governors of the Federal
Reserve System'' after ``Board'';
Page 982, line 22, strike ``(iii)'' and insert ``(iv)''.
Page 983, line 7, insert ``(other than the Consumer Financial
Protection Agency)'' after ``agency''.
Page 988, after line 7, insert the following (and redesignate
succeeding subsections accordingly):
(a) Section 501.--Section 501(b) of the Gramm-Leach-Bliley
Act (15 U.S.C. 6801(b)) is amended by inserting ``(other than
the Consumer Financial Protection Agency)'' after ``title''.
(b) Section 502.--Section 502(e)(5) of the Gramm-Leach-Bliley
Act (15 U.S.C. 6802(e)(5)) is amended by inserting ``the
Consumer Financial Protection Agency,'' after ``(including''.
(c) Section 503.--Section 503(e)(1) of the Gramm-Leach-Bliley
Act (15 U.S.C. 6803(e)(1)) is amended--
(1) by inserting ``Consumer Financial Protection
Agency in consultation with the other'' before
``agencies''; and
(2) by striking ``jointly''.
Page 988, line 13, strike ``and'' at the end.
Page 988, line 15, strike the period and insert ``; and'' and
after such line insert the following:
(3) by inserting ``the Federal banking agencies, the
National Credit Union Administration, the Secretary of
the Treasury, the Federal Trade Commission, and''
before ``representatives of State insurance
authorities''.
Page 989, after line 15, insert the following:
(f) Section 507.--Subsection 507(b) of the Gramm-Leach-Bliley
Act (15 U.S.C. 6807(b)) is amended by striking ``Federal Trade
Commission'' and inserting ``Consumer Financial Protection
Agency, or in the case of a rule under section 501(b), the
Federal Trade Commission or the Securities and Exchange
Commission''.
Page 997, line 6, strike ``25(a)'' and insert ``25A''.
Page1016, strike line 7 through page 1018, line 5, and insert
the following:
SEC. 4815. AMENDMENTS TO THE TELEMARKETING AND CONSUMER FRAUD ABUSE AND
PREVENTION ACT.
(a) Section 4 of the Telemarketing and Consumer Fraud Abuse
and Prevention Act (15 U.S.C. 6102) is amended--
(1) in subsection (b)--
(A) by inserting ``and the Consumer Financial
Protection Agency with respect to a person
subject to the authority of that Agency under
the Consumer Financial Protection Agency Act''
after ``Commission'' each of the first 2 places
it appears; and
(B) by inserting ``or the Consumer Financial
Protection Agency'' after ``Commission'' the
last place it appears; and
(2) in subsection (d), by inserting ``or the Consumer
Financial Protection Agency'' after ``Commission'' each
place such term appears.
(b) Section 5 of the Telemarketing and Consumer Fraud Abuse
and Prevention Act (15 U.S.C. 6102) is amended--
(1) in subsection (b)--
(A) by inserting ``and the Consumer Financial
Protection Agency with respect to a person
subject to the authority of that Agency under
the Consumer Financial Protection Agency Act''
after ``Commission'' each of the first 2 places
it appears; and
(B) by inserting ``or the Consumer Financial
Protection Agency'' after ``Commission'' the
last place it appears; and
(2) in subsection (c), by inserting ``or the Consumer
Financial Protection Agency'' after ``Commission'' each
place such term appears.
(c) Section 6 of the Telemarketing and Consumer Fraud Abuse
and Prevention Act (15 U.S.C. 6102) is amended by redesignating
subsection (c) as subsection (d) and inserting after subsection
(b) the following:
``(c) Enforcement by the Consumer Financial Protection
Agency.--Subject to section 4202 of the Consumer Financial
Protection Agency Act of 2009, this Act shall be enforced by
the Consumer Financial Protection Agency, under subtitle E of
that Act, with respect to a person subject to the authority of
that Agency under that Act. For the purpose of the exercise by
the Consumer Financial Protection Agency of its powers under
subtitle E, a violation of any requirement imposed under this
Act shall be deemed to be a violation of a requirement imposed
under the Consumer Financial Protection Agency Act. In addition
to its powers under subtitle E of that Act, the Agency may
exercise, for the purpose of enforcing compliance with any
requirement imposed under this Act, any other authority
conferred on it by law.''.
Page 1019, line 8, strike ``and'' and after such line insert
the following:
(2) by inserting a comma after ``under this Act'';
(3) by inserting a comma after ``subsection
(a)(1))''; and
Page 1019, line 9, strike ``(2)'' and insert ``(4)''.
Page 1019, line 15, insert ``partnership, or corporation''
after ``person,''.
Page 1020, after line 20, insert the following new subtitle:
Subtitle J--Miscellaneous
SEC. 4951. REQUIREMENTS FOR STATE-LICENSED LOAN ORIGINATORS.
Paragraph (2) of section 1505 (b) of the S.A.F.E. Mortgage
Licensing Act of 2008 (12 U.S.C. 5104(b)(2)) is amended by
inserting after and below subparagraph (B), the following:
``Notwithstanding the preceding sentence, a State loan
originator supervisory authority may provide for review
of applicants and for granting exceptions, on a case-
by-case basis, to the minimum standard under
subparagraph (B), but only to the extent that any such
exception otherwise complies with the purposes of this
title.''.
Page 1021, strike lines 24 and 25 and insert the following:
``(i) in total, fewer than 15 clients
and investors in the United States in
private funds advised by the investment
adviser; and''.
Page 1022, strike lines 1 and 2 and insert the following:
``(ii) aggregate assets under
management attributable to clients and
investors in the United States in
private funds advised by the investment
adviser of''.
Page 1022, line 20, strike ``Section'' and insert the
following:
(a) Exemption.--Section
Page 1024, after line 3, insert the following:
(b) Consideration of Risk.--Section 203(c) of the Investment
Advisers Act of 1940 (15 U.S.C. 80b--3(c)) is amended by adding
at the end the following:
``(3) The Commission shall take into account the
relative risk profile of different classes of private
funds as it establishes, by rule or regulation, the
registration requirements for private funds.''.
Page 1024, line 4, strike ``SYSTEMIC RISK''.
Page 1024, beginning on line 23, strike ``, and to any other
entity that the Commission identifies as having systemic risk
responsibility'' and insert ``and to the Financial Services
Oversight Council''.
Page 1027, beginning on line 12, strike ``, and to any other
entity that the Commission identifies as having systemic risk
responsibility'' and insert ``and to the Financial Services
Oversight Council''.
Page 1027, line 17, strike ``such other entity'' and insert
``the Financial Services Oversight Council''.
Page 1028, strike line 11 and all that follows through page
1029, line 2, and insert the following:
``(8) Non-disclosure of certain proprietary
information and confidentiality of reports.--Any
proprietary information of an investment adviser
ascertained by the Commission from any report required
to be filed with the Commission pursuant to this
section 204(b) shall be subject to the same limitations
on public disclosure as any facts ascertained during an
examination as provided by section 210(b) of this
title. The Commission may not compel the private fund
to disclose such proprietary information to
counterparties and creditors. For purposes of this
section, proprietary information shall include
sensitive, non-public information regarding the
investment adviser's investment or trading strategies,
analytical or research methodologies, trading data,
computer hardware or software containing intellectual
property, and any additional information that the
Commission determines to be proprietary.
Notwithstanding any other provision of law, the
Commission shall not be compelled to disclose any
report or information contained therein required to be
filed with the Commission under this subsection.
Nothing in this paragraph shall authorize the
Commission to withhold information from the Congress or
to prevent the Commission from complying with a request
for information from any other Federal department or
agency or any self-regulatory organization requesting
the report or information for purposes within the scope
of its jurisdiction, or complying with an order of a
court of the United States in an action brought by the
United States or the Commission. For purposes of
section 552 of title 5, United States Code, this
paragraph shall be considered a statute described in
subsection (b)(3)(B) of such section.''.
Page 1030, line 12, strike ``private funds'' the second place
it appears and insert ``investment adviser acts solely as an
adviser to private funds and''.
Page 1032, line 23, insert ``, 203(m),'' after ``203(l)''.
Page 1033, line 23, insert ``to the extent necessary'' after
``regulations''.
Page 1034, line 7, insert ``in any rule or regulation'' after
``any factor used''.
Page 1034, line 11, insert ``by order,'' after ``Commission
shall,''.
Page 1034, line 15, strike ``$1,000'' and insert
``$100,000''.
Page 1034, line 16, strike ``$1,000'' and insert
``$100,000''.
Page 1038, line 2, insert ``disclosure of'' after ``with
respect to''.
Page 1041, beginning on line 13, strike ``and reliable''.
Page 1042, beginning on line 2, strike ``or its ultimate
holding company''.
Page 1059, line 2, strike ``; and'' and insert a period.
Page 1059, strike lines 3 through 8 and insert the following:
(2) Symbols.--The Commission may prescribe rules that
require nationally recognized statistical rating
organizations to establish credit rating symbols that
distinguish credit ratings for structured products from
credit ratings for other products that the Commission
determines appropriate or necessary in the public
interest and for the protection of investors, provided
such rules do not prevent public pension funds or other
State regulated entities from investing in rated
products.
Page 1059, line 9, strike ``(2)'' and insert ``(3)''.
Page 1066, line 7, insert ``certify that they'' after
``diligence services''.
Page 1067, line 10, strike ``service,'' and insert ``service
to that issuer, underwriter, or placement agent in determining
a credit rating,''.
Page 1068, line 17, strike ``this title'' and insert ``the
securities laws''.
Page 1068, line 21, strike ``or a similar''.
Page 1090, line 14, insert ``section 211 of'' after
``under''.
Page 1090, line 18, insert after the period the following:
``Nothing in this section shall require a broker or dealer or
registered representative to have a continuing duty of care or
loyalty to the customer after providing personalized investment
advice about securities.''.
Page 1092, line 1, strike ``(3)'' and insert ``(2)''.
Page 1096, line 4, insert ``AND RULEMAKING'' after ``STUDY''.
Page 1096, beginning on line 9, strike ``manner in which''
and all that follows through ``products or services'' on line
12 and insert ``provision of documents or information to retail
customers prior to the purchase of investment products or
services''.
Page 1098, line 19, strike ``in connection with'' and insert
``rules that require the provision of documents or information
to retail customers prior to''.
Page 1103, strike ``ADVISOR'' and insert ``ADVISER''.
Page 1109, line 11, insert ``law enforcement agency,'' after
the comma.
Page 1109, line 17, strike ``or'' and after such line insert
the following:
(C) to any whistleblower who gains the
information through the performance of an audit
of financial statements required under the
securities laws; or
Page 1109, line 18 strike ``(C)'' and insert ``(D)''.
Page 1116, strike lines 11 through page 1118, line 13, and
insert the following:
``(2) Confidentiality.--
``(A) In general.--Except as provided in
subparagraph (B), the Commission and any
officer or employee of the Commission shall not
disclose any information, including information
provided by a whistleblower to the Commission,
which could reasonably be expected to reveal
the identity of a whistleblower, except in
accordance with the provisions of section 552a
of title 5, United States Code, unless and
until required to be disclosed to a defendant
or respondent in connection with a public
proceeding instituted by the Commission or any
entity described in subparagraph (B). For
purposes of section 552 of title 5, United
States Code, this paragraph shall be considered
a statute described in subsection (b)(3)(B) of
such section 552.
``(B) Availability to government agencies.--
Without the loss of its status as confidential
and privileged in the hands of the Commission,
all information referred to in subparagraph (A)
may, in the discretion of the Commission, when
determined by the Commission to be necessary to
accomplish the purposes of this Act and protect
investors, be made available to--
``(i) the Attorney General of the
United States,
``(ii) an appropriate regulatory
authority,
``(iii) a self-regulatory
organization,
``(iv) State attorneys general in
connection with any criminal
investigation, and
``(v) any appropriate State
regulatory authority,
``each of which shall not disclose such
information in accordance with subparagraph
(A).''.
Page 1123, line 13, insert ``municipal financial adviser,''
after ``transfer agent,''.
Page 1123, line 22, insert ``municipal financial adviser,''
after ``transfer agent,''.
Page 1124, line 6, insert ``municipal financial adviser,''
after ``municipal securities dealer,''.
Page 1124, line 15, insert ``municipal financial adviser,''
after ``transfer agent,''.
Page 1127, beginning on line 18, strike ``head of any
division or office within the Commission or his designee'' and
insert ``Director of the Division of Enforcement of the
Commission or the Director's designee''.
Page 1127, beginning on line 24, strike ``head of any
division or office within the Commission or his designee'' and
insert ``Director of the Division of Enforcement of the
Commission or the Director's designee''.
Page 1128, beginning on line 3, strike ``head of any division
or office within the Commission or his designee'' and insert
``Director of the Division of Enforcement of the Commission or
the Director's designee''.
Page 1128, beginning on line 9, strike ``head of any division
or office within the Commission or his designee'' and insert
``Director of the Division of Enforcement of the Commission or
the Director's designee''.
Page 1128, line 24, strike ``without findings'' and insert
``, has concluded without findings,''.
Page 1129, line 3, insert ``responsible for compliance
examinations and inspections'' after ``Commission''.
Page 1129, line 7, insert a comma after ``inspection''.
Page 1129, line 8, insert a comma after ``action''.
Page 1129, line 11, insert ``responsible for compliance
examinations and inspections'' after ``Commission''.
Page 1129, strike line 16 through page 1131, line 2, and
insert the following:
(a) Securities Act of 1933.--Section 22(a) of the Securities
Act of 1933 (15 U.S.C. 77v(a)) is amended by inserting after
the second sentence the following: ``In any civil action
instituted by the Commission under this title in a United
States district court for any judicial district, subpoenas
issued to compel the attendance of witnesses or the production
of documents or tangible things (or both) at any hearing or
trial may be served at any place within the United States. Rule
45(c)(3)(A)(ii) of the Federal Rules of Civil Procedure does
not apply to a subpoena so issued.''.
(b) Securities Exchange Act of 1934.--Section 27 of the
Securities Exchange Act of 1934 (15 U.S.C. 78aa) is amended by
inserting after the third sentence the following: ``In any
civil action instituted by the Commission under this title in a
United States district court for any judicial district,
subpoenas issued to compel the attendance of witnesses or the
production of documents or tangible things (or both) at any
hearing or trial may be served at any place within the United
States. Rule 45(c)(3)(A)(ii) of the Federal Rules of Civil
Procedure does not apply to a subpoena so issued.''.
(c) Investment Company Act of 1940.--Section 44 of the
Investment Company Act of 1940 (15 U.S.C. 80a-43) is amended by
inserting after the fourth sentence the following: ``In any
civil action instituted by the Commission under this title in a
United States district court for any judicial district,
subpoenas issued to compel the attendance of witnesses or the
production of documents or tangible things (or both) at any
hearing or trial may be served at any place within the United
States. Rule 45(c)(3)(A)(ii) of the Federal Rules of Civil
Procedure does not apply to a subpoena so issued.''.
(d) Investment Advisers Act of 1940.--Section 214 of the
Investment Advisers Act of 1940 (15 U.S.C. 80b-14) is amended
by inserting after the third sentence the following: ``In any
civil action instituted by the Commission under this title in a
United States district court for any judicial district,
subpoenas issued to compel the attendance of witnesses or the
production of documents or tangible things (or both) at any
hearing or trial may be served at any place within the United
States. Rule 45(c)(3)(A)(ii) of the Federal Rules of Civil
Procedure does not apply to a subpoena so issued.''.
Page 1131, line 9, strike ``Money'' and insert ``Monetary''.
Page 1133, line 21, strike ``To Assess Money'' and insert
``to Assess Monetary''.
Page 1143, beginning on line 2, strike ``Except as provided
in subsection (f), the'' and insert ``The''.
Page 1146, beginning on line 8, strike ``The jurisdiction''
and all that follows through line 11 and insert ``With respect
to any actions or proceedings brought or instituted by the
Commission or the United States, this jurisdiction includes
violations of section 17(a) of this title, and all''.
Page 1147, beginning on line 4, strike ``The jurisdiction''
and all that follows through ``subsection (a)'' and insert
``With respect to any actions or proceedings brought or
instituted by the Commission or the United States, this
jurisdiction''.
Page 1148, beginning on line 3, strike ``The jurisdiction''
and all that follows through ``subsection (a)'' and insert
``With respect to any actions or proceedings brought or
instituted by the Commission or the United States, this
jurisdiction''.
Page 1149, line 18, strike the semicolon at the end.
Page 1158, line 7, insert ``and'' after ``with''.
Page 1190, line 13, strike ``that--'' and insert the
following: ``that is not exempt from registration under section
203 and--''.
Page 1190, beginning on line 15, strike ``by a State'' and
insert ``in the State where it maintains its principal office
and place of business''.
Page 1191, line 8, insert after the first period the
following: ``If no State in which an investment adviser
described in subparagraph (B) is registered conducts such an
examination, the investment adviser must register with the
Commission. If, pursuant to this paragraph, an investment
adviser would be required to register with 5 or more States,
then the adviser may maintain its registration with the
Commission.''.
Page 1191, strike line 10 and all that follows through page
1192, line 3, and insert the following:
(a) In General.--Not later than 180 days after the date of
the enactment of this title, the Securities and Exchange
Commission shall adopt a rule pursuant to its authority under
section 211(a) of the Investment Advisers Act of 1940 making it
unlawful under section 206(4) of that Act for an investment
adviser registered under such Act to have custody of funds or
securities of a client the value of which exceeds $10,000,000,
unless--
(1) the funds and securities are maintained with a
qualified custodian either in a separate account for
each client under the client's name, or in accounts
that contain only client funds and securities under the
name of the investment adviser as agent or trustee for
the client; and
(2) the qualified custodian does not directly or
indirectly provide investment advice with respect to
such funds or securities.
(b) Exceptions.--The rule adopted under subsection (a) shall
include such exceptions as the Commission determines in the
public interest and consistent with the protection of
investors. Any exemption granted under this subsection shall
ensure that at least once per year, a client described in
subsection (a) shall receive a report from an independent
entity with a fiduciary responsibility to the client to verify
that the assets in the client's account are in accord with
those stated on the client's account statement.
(c) No Limits on Other Actions.--Nothing in this section
shall be construed to limit other actions the Securities and
Exchange Commission may take under this Act to require the
protection of client assets.
Page 1192, line 21, strike ``maintain'' and insert ``assure
that safeguards exist to maintain''.
Page 1193, line 9, strike ``regards'' and insert ``regard''.
Page 1193, after line 10, insert the following new sections:
SEC. 7421. NOTICE TO MISSING SECURITY HOLDERS.
Section 17A of the Securities Exchange Act of 1934 (15 U.S.C.
78q-1) is amended by adding at the end the following new
subsection:
``(g) Due Diligence for the Delivery of Dividends, Interest,
and Other Valuable Property Rights.--
``(1) Revision of rules required.--The Commission
shall revise its regulations in section 240.17Ad-17 of
title 17, Code of Federal Regulations, as in effect on
December 8, 1997, to extend the application of such
section to brokers and dealers and to provide for the
following:
``(A) A requirement that the paying agent
provide a single written notification to each
missing security holder that the missing
security holder has been sent a check that has
not yet been negotiated. The written
notification may be sent along with a check or
other mailing subsequently sent to the missing
security holder but must be provided no later
than 7 months after the sending of the not yet
negotiated check.
``(B) An exclusion for paying agents from the
notification requirements when the value of the
not yet negotiated check is less than $25.
``(C) A provision clarifying that the
requirements described in subparagraph (A)
shall have no effect on State escheatment laws.
``(D) For purposes of such revised
regulations--
``(i) a security holder shall be
considered a `missing security holder'
if a check is sent to the security
holder and the check is not negotiated
before the earlier of the paying agent
sending the next regularly scheduled
check or the elapsing of 6 months after
the sending of the not yet negotiated
check; and
``(ii) the term `paying agent'
includes any issuer, transfer agent,
broker, dealer, investment adviser,
indenture trustee, custodian, or any
other person that accepts payments from
the issuer of a security and
distributes the payments to the holders
of the security.
``(2) Rulemaking.--The Commission shall adopt such
rules, regulations, and orders necessary to implement
this subsection no later than 1 year after the date of
enactment of this subsection. In proposing such rules,
the Commission shall seek to minimize disruptions to
current systems used by or on behalf of paying agents
to process payment to account holders and avoid
requiring multiple paying agents to send written
notification to a missing security holder regarding the
same not yet negotiated check.''.
SEC. 7422. SHORT SALE REFORMS.
(a) Short Sale Disclosure.--Section 13(f) of the Securities
Exchange Act of 1934 (15 U.S.C. 78m(f)) is amended by
redesignating paragraphs (2), (3), (4), and (5) as paragraphs
(3), (4), (5), and (6), respectively, and inserting after
paragraph (1) the following:
``(2)(A) Every institutional investment manager that
effects a short sale of an equity security shall also
file a report on a daily basis with the Commission in
such form as the Commission, by rule, may prescribe.
Such report shall include, as applicable, the name of
the institution, the name of the institutional
investment manager and the title, class, CUSIP number,
number of shares or principal amount, aggregate fair
market value of each security, and any additional
information requested by the Commission. For purposes
of section 552 of title 5, United States Code, this
subparagraph shall be considered a statute described in
subsection (b)(3)(B) of such section. The information
contained in reports of an institutional investment
manager filed with the Commission pursuant to this
section, shall be subject to the same non-disclosure
and confidentiality protection provided under section
204(b)(8) of the Investment Advisers Act of 1940.
``(B) The Commission shall prescribe rules providing
for the public disclosure of the name of the issuer and
the title, class, CUSIP number, aggregate amount of the
number of short sales of each security, and any
additional information determined by the Commission
following the end of the reporting period. At a
minimum, such public disclosure shall occur every
month.''.
(b) Short Selling Enforcement.--Section 9 of the Securities
Exchange Act of 1934 (15 U.S.C. 78i) is amended--
(1) by redesignating subsections (d), (e), (f), (g),
(h), and (i) as subsections (e), (f), (g), (h), (i),
and (j), respectively; and
(2) inserting after subsection (c), the following new
subsection:
``(d) Transactions Relating to Short Sales of Securities.--It
shall be unlawful for any person, directly or indirectly, by
the use of the mails or any means or instrumentality of
interstate commerce, or of any facility of any national
securities exchange, or for any member of a national securities
exchange to effect, alone or with one or more other persons, a
manipulative short sale of any security. The Commission shall
issue such other rules as are necessary or appropriate to
ensure that the appropriate enforcement options and remedies
are available for violations of this subsection in the public
interest or for the protection of investors.''.
(c) Investor Notification.--Section 15 of the Securities
Exchange Act of 1934 (15 U.S.C. 78o) is amended--
(1) by redesignating subsections (e), (f), (g), (h),
and (i) as subsections (f), (g), (h), (i), and (j),
respectively; and
(2) inserting after subsection (d) the following new
subsection:
``(e) Notices to Customers Regarding Securities Lending.--
Every registered broker or dealer shall provide notice to its
customers that they may elect not to allow their fully paid
securities to be used in connection with short sales. If a
broker or dealer uses a customer's securities in connection
with short sales, the broker or dealer shall provide notice to
its customer that the broker or dealer may receive compensation
in connection with lending the customer's securities. The
Commission, by rule, as it deems necessary or appropriate in
the public interest and for the protection of investors, may
prescribe the form, content, time, and manner of delivery of
any notice required under this paragraph.''.
SEC. 7423. STREAMLINING OF SEC FILING PROCEDURES.
(a) Approval Process.--Section 19(b)(2) of the Securities
Exchange Act of 1934 (15 U.S.C. 78s(b)(2)) is amended to read
as follows:
``(2) Filing procedures.--
``(A) In general.--Within thirty-five days of
the date of publication of notice of the filing
of a proposed rule change in accordance with
paragraph (1) of this subsection, or within
such longer period as the Commission may
designate up to ninety days of such date if it
finds such longer period to be appropriate and
publishes its reasons for so finding or as to
which the self-regulatory organization
consents, the Commission shall--
``(i) by order approve such proposed
rule change; or
``(ii) institute proceedings under
subparagraph (B) to determine whether
the proposed rule change should be
disapproved.
``(B) Proceedings.--Proceedings to determine
whether the proposed rule change should be
disapproved shall include notice of the grounds
for disapproval under consideration and
opportunity for hearing and be concluded within
200 days from the date of receipt of a proper
filing. At the conclusion of such proceedings
the Commission, by order, shall approve or
disapprove such proposed rule change. The
Commission may extend the time for conclusion
of such proceedings for up to 60 days if it
finds good cause for such extension and
publishes its reasons for so finding or for
such longer period as to which the self-
regulatory organization consents. The
Commission shall approve a proposed rule change
of a self-regulatory organization if it finds
that such proposed rule change is consistent
with the requirements of this title and the
rules and regulations thereunder applicable to
such organization. The Commission shall
disapprove a proposed rule change of a self-
regulatory organization if it does not make
such finding. The Commission shall not approve
any proposed rule change prior to the thirtieth
day after the date of publication of notice of
the filing thereof, unless the Commission finds
good cause for so doing and publishes its
reasons for so finding.''.
(b) Rules.--Not later than 12 months after the date of
enactment of this Act, the Commission shall issue rules
implementing a disapproval process for filings submitted on or
after the effective date of such rules.
Page 1196, line 5, strike ``containing''.
Page 1198, strike line 22 through page 1199, line 16.
Page 1199, line 17, strike ``(3)'' and insert ``(2)''.
Page 1199, line 21, strike ``or (2)''.
Page 1206, strike lines 15, through 23.
Page 1211 strike line 24 through page 1212, line 21, and
insert the following:
(e) Inspections by Registered Accounting Firms.--Subsection
(a) of Section 104 of such Act is amended--
(1) by striking ``(a) In General.--The Board shall''
and inserting the following:
``(a) In General.--
``(1) The Board shall''; and
(2) by adding at the end of such subsection the
following:
``(2) Inspections of audit report for brokers and
dealers.--
``(A) The Board may, by rule, conduct and
require a program of inspection in accordance
with paragraph (a)(1), on a basis to be
determined by the Board, of registered public
accounting firms that provide one or more audit
reports for a broker or dealer. The Board, in
establishing such a program, may allow for
differentiation among classes of brokers and
dealers, as appropriate.
``(B) If the Board determines to establish a
program of inspection pursuant to subparagraph
(A), the Board shall consider in establishing
any inspection schedules whether differing
schedules would be appropriate with respect to
registered public accounting firms that issue
audit reports only for one or more brokers or
dealers that do not receive, handle, or hold
customer securities or cash or are not a member
of the Securities Investor Protection
Corporation.
``(C) Any rules of the Board pursuant to this
paragraph shall be subject to prior approval by
the Commission pursuant to section 107(b)
before the rules become effective, including an
opportunity for public notice and comment.
``(D) Notwithstanding anything to the
contrary in section 102 of this Act, a public
accounting firm shall not be required to
register with the Board if the public
accounting firm is exempt from the inspection
program which may be established by the Board
under subparagraph (a)(2)(A) of this section.
``(3) Conforming amendment.--Section 17 (e)(1)(A) of
the Securities Exchange Act of 1934 (15 U.S.C. 78q(e)
(1) (A)) is amended by striking `registered public
accounting firm' and inserting `independent public
accounting firm or by a registered public accounting
firm if registration is required under the Sarbanes-
Oxley Act of 2002 as amended.'.''.
Page 1215, line 1, strike ``dealer'' and insert ``dealers''.
Page 1219, beginning on line 10, strike ``domestic'' and
insert ``domestically''.
Page 1223, lines 5, strike ``shall--'' and all that follows
through line 13 and insert ``shall prevent the Board from
responding to requests for reports from the Committee's
specified under subsection (h) about the activities or programs
of the Board, provided that any confidential information
contained therein shall be subject to the provisions of section
105(b)(5).''.
Page 1228, line 14, strike ``MISLEAD'' and insert ``MISLED''.
Page 1231, after line 15, insert the following:
(4) Application of fiduciary duty for personalized
investment advice about securities.--Nothing in this
section shall diminish in any manner nor supersede the
standard of conduct applicable to all brokers, dealers
and investment advisers providing personalized
investment advice about securities as set forth in
section 7103 of this Act.
Page 1231, line 16, strike ``(4)'' and insert ``(5)''.
Page 1231, beginning on line 19, strike ``, to the extent
practicable, conform to the'' and insert ``meet or exceed''.
Page 1232, strike lines 3 through page 1235, line 5, and
insert the following:
(6) Suitability and supervision rules for annuity
products.--A State shall have adopted rules that govern
suitability requirements in the sale of annuities which
shall meet or exceed the minimum requirements
established by the National Association of Insurance
Commissioners Suitability in Annuity Transactions Model
Regulation in effect on the date of the enactment of
this Act, or any successor thereto.
Page 1235, line 18, strike ``senior'' and insert ``seniors
who are''.
Page 1238, line 13, insert a comma after ``finding''.
Page 1242, line 7, insert ``United States Code,'' after
``title 18,''.
Page 1243, line 9, insert ``or the rules of the Municipal
Securities Rulemaking Board,'' after ``statutes,''.
Page 1243, line 17, insert ``or the rules of the Municipal
Securities Rulemaking Board,'' after ``statutes,''.
Page 1247, line 18, insert ``broker, dealer, investment
adviser, municipal securities dealer, transfer agent,
nationally recognized statistical rating organization, or''.
Page 1248, line 1, strike ``or (E)'' and insert ``(E), (G),
or (H)''.
Page 1254, line 22, strike ``or''.
Page 1254, line 24, strike the period at the end and insert
``; or'' and after such line insert the following:
(v) the independent accountant that
audits the financial statements of the
municipal securities issuer.
Page 1259, after line 24, insert the following new
subparagraph and redesignate subsequent subparagraphs
accordingly):
``(C) To monitor the extent to which
traditionally underserved communities and
consumers, minorities (as such term is defined
in 24 section 1204(c) of the Financial
Institutions Reform, Recovery, and Enforcement
Act of 1989 (12 U.S.C. 1811 note)), and low-
and moderate-income persons have access to
affordable insurance products regarding all
lines of insurance, except health insurance.''.
Page 1261, after line 6, insert the following new paragraph:
``(3) Advisory capacity on council.--The Director
shall serve in an advisory capacity on the Financial
Services Oversight Council established under the
Financial Stability Improvement Act of 2009.''.
Page 1261, line 9, after ``Secretary'' insert ``in
coordination with the Secretary of the Department of Health and
Human Services''.
Page 1261, line 14, after ``data'' insert ``, including
financial data,''.
Page 1262, beginning on line 2, strike ``is authorized to
write'' and insert ``writes''.
Page 1262, line 3, strike ``reinsure'' and insert
``reinsures''.
Page 1262, line 4, strike ``issue'' and insert ``issues''.
Page 1278, line 13, strike ``and broadened''.
Page 1279, line 1, insert ``Federal or State'' after ``any''.
Page 1279, line 3, insert ``with respect to such study''
before ``to modernize''.
Page 17 of title VII of the bill, as added by the amendment
TITLE7_02, strike lines 14 and 15 and insert the following:
``(A) permitting any yield spread premium or
other similar compensation that would, for any
mortgage loan, permit the total amount of
direct and indirect compensation from all
sources permitted to a mortgage originator to
vary based on the terms of the loan (other than
the amount of the principal);''.
Page 17 of title VII of the bill, as added by the amendment
TITLE7_02, line 25, strike ``including through principal'' and
insert ``at the option of the consumer, including through
principal or rate''.
Page 18 of title VII of the bill, as added by the amendment
TITLE7_02, line 5, after ``costs were'' insert ``limited by
agreement with the consumer and were''.
Page 33 of title VII of the bill, as added by the amendment
TITLE7_02, line 24, after ``that'' insert ``is insured by the
Federal Housing Administration or''.
Page 153 of title VII of the bill, as added by the amendment
TITLE7_02, line 11, after ``loan'' insert ``, other than a
reverse mortgage loan insured by the Federal Housing
Administration,''.
Add at the end of the bill the following:
TITLE VIII--FORECLOSURE AVOIDANCE AND AFFORDABLE HOUSING
SEC. 10001. EMERGENCY MORTGAGE RELIEF.
(a) Use of TARP Funds.--Using the authority available under
sections 101(a) and 115(a) of division A of the Emergency
Economic Stabilization Act of 2008 (12 U.S.C. 5211(a),
5225(a)), the Secretary of the Treasury shall transfer to the
Secretary of Housing and Urban Development $3,000,000,000, and
the Secretary of Housing and Urban Development shall credit
such amount to the Emergency Homeowners' Relief Fund, which
such Secretary shall establish pursuant to section 107 of the
Emergency Housing Act of 1975 (12 U.S.C. 2706), as such Act is
amended by this section, for use for emergency mortgage
assistance in accordance with title I of such Act.
(b) Reauthorization of Emergency Mortgage Relief Program.--
Title I of the Emergency Housing Act of 1975 is amended--
(1) in section 103 (12 U.S.C. 2702)--
(A) in paragraph (2)--
(i) by striking ``have indicated''
and all that follows through
``regulation of the holder'' and insert
``have certified'';
(ii) by striking ``(such as the
volume of delinquent loans in its
portfolio)''; and
(iii) by striking ``, except that
such statement'' and all that follows
through ``purposes of this title''; and
(B) in paragraph (4), by inserting ``or
medical conditions'' after ``adverse economic
conditions'';
(2) in section 104 (12 U.S.C. 2703)--
(A) in subsection (b), by striking ``, but
such assistance'' and all that follows through
the period at the end and inserting the
following: ``. The amount of assistance
provided to a homeowner under this title shall
be an amount that the Secretary determines is
reasonably necessary to supplement such amount
as the homeowner is capable of contributing
toward such mortgage payment, except that the
aggregate amount of such assistance provided
for any homeowner shall not exceed $50,000.'' ;
(B) in subsection (d), by striking ``interest
on a loan or advance''and all that follows
through the end of the subsection and inserting
the following: ``(1) the rate of interest on
any loan or advance of credit insured under
this title shall be fixed for the life of the
loan or advance of credit and shall not exceed
the rate of interest that is generally charged
for mortgages on single-family housing insured
by the Secretary of Housing and Urban
Development under title II of the National
Housing Act at the time such loan or advance of
credit is made, and (2) no interest shall be
charged on interest which is deferred on a loan
or advance of credit made under this title. In
establishing rates, terms and conditions for
loans or advances of credit made under this
title, the Secretary shall take into account a
homeowner's ability to repay such loan or
advance of credit.''; and
(C) in subsection (e), by inserting after the
period at the end of the first sentence the
following: ``Any eligible homeowner who
receives a grant or an advance of credit under
this title may repay the loan in full, without
penalty, by lump sum or by installment payments
at any time before the loan becomes due and
payable.'';
(3) in section 105 (12 U.S.C. 2704)--
(A) by striking subsection (b);
(B) in subsection (e)--
(i) by inserting ``and emergency
mortgage relief payments made under
section 106'' after ``insured under
this section''; and
(ii) by striking ``$1,500,000,000 at
any one time'' and inserting
``$3,000,000,000'';
(C) by redesignating subsections (c), (d),
and (e) as subsections (b), (c), and (d),
respectively; and
(D) by adding at the end the following new
subsection:
``(e) The Secretary shall establish underwriting guidelines
or procedures to allocate amounts made available for loans and
advances insured under this section and for emergency relief
payments made under section 106 based on the likelihood that a
mortgagor will be able to resume mortgage payments, pursuant to
the requirement under section 103(5).'';
(4) in section 107--
(A) by striking ``(a)''; and
(B) by striking subsection (b);
(5) in section 108 (12 U.S.C. 2707), by adding at the
end the following new subsection:
``(d) Coverage of Existing Programs.--The Secretary shall
allow funds to be administered by a State that has an existing
program that is determined by the Secretary to provide
substantially similar assistance to homeowners. After such
determination is made such State shall not be required to
modify such program to comply with the provisions of this
title.'';
(6) in section 109 (12 U.S.C. 2708)--
(A) in the section heading, by striking
``authorization and'';
(B) by striking subsection (a);
(C) by striking ``(b)''; and
(D) by striking ``1977'' and inserting
``2011'';
(7) by striking sections 110, 111, and 113 (12 U.S.C.
2709, 2710, 2712); and
(8) by redesignating section 112 (12 U.S.C. 2711) as
section 110.
SEC. 10002. ADDITIONAL ASSISTANCE FOR NEIGHBORHOOD STABILIZATION
PROGRAM.
Using the authority made available under sections 101(a) and
115(a) of division A of the Emergency Economic Stabilization
Act of 2008 (12 U.S.C. 5211(a), 5225(a)), the Secretary of the
Treasury shall transfer to the Secretary of Housing and Urban
Development $1,000,000,000, and the Secretary of Housing and
Urban Development shall use such amounts for assistance to
States and units of general local government for the
redevelopment of abandoned and foreclosed homes, in accordance
with the same provisions applicable under the second
undesignated paragraph under the heading ``Community Planning
and Development--Community Development Fund'' in title XII of
division A of the American Recovery and Reinvestment Act of
2009 (Public Law 111-5; 123 Stat. 217) to amounts made
available under such second undesignated paragraph, except as
follows:
(1) Notwithstanding the matter of such second
undesignated paragraph that precedes the first proviso,
amounts made available by this section shall remain
available until expended.
(2) The 3rd, 4th, 5th, 6th, 7th, and 15th provisos of
such second undesignated paragraph shall not apply to
amounts made available by this section.
(3) Amounts made available by this section shall be
allocated based on a funding formula for such amounts
established by the Secretary in accordance with section
2301(b) of the Housing and Economic Recovery Act of
2008 (42 U.S.C. 5301 note), except that--
(A) notwithstanding paragraph (2) of such
section 2301(b), the formula shall be
established not later than 30 days after the
date of the enactment of this Act;
(B) the Secretary may not establish any
minimum grant amount or size for grants to
States;
(C) the Secretary may establish a minimum
grant amount for direct allocations to units of
general local government located within a
State, which shall not exceed $1,000,000; and
(D) each State and local government receiving
grant amounts shall establish procedures to
create preferences for the development of
affordable rental housing for properties
assisted with amounts made available by this
section.
(4) Paragraph (1) of section 2301(c) of the Housing
and Economic Recovery Act of 2008 shall not apply to
amounts made available by this section.
(5) Section 2302 of the Housing and Economic Recovery
Act of 2008 shall not apply to amounts made available
by this section.
(6) The fourth proviso from the end of such second
undesignated paragraph shall be applied to amounts made
available by this section by substituting ``2013'' for
``2012''.
(7) Notwithstanding section 2301(a) of the Housing
and Economic Recovery Act of 2008, the term ``State''
means any State of the United States, the District of
Columbia, the Commonwealth of Puerto Rico, the
Commonwealth of the Northern Mariana Islands, Guam, the
Virgin Islands, American Samoa, and other territory or
possession of the United States for purposes of this
section and title III of division B of such Act, as
applied to amounts made available by this section.
(8)(A) None of the amounts made available by this
section shall be distributed to--
(i) any organization which has been convicted
for a violation under Federal law relating to
an election for Federal office; or
(ii) any organization which employs
applicable individuals.
(B) In this paragraph, the term ``applicable
individual'' means an individual who--
(i) is--
(I) employed by the organization in a
permanent or temporary capacity;
(II) contracted or retained by the
organization; or
(III) acting on behalf of, or with
the express or apparent authority of,
the organization; and
(ii) has been convicted for a violation under
Federal law relating to an election for Federal
office.
Page 204, line 14, strike ``may decrease'' and insert
``decreases''.
Page 826, after line 20, insert the following new subsection:
(c) Additional Consumer Protection Regulations in Response to
State Action.--
(1) Notice of proposed rule required.--The Agency
shall issue a notice of proposed rulemaking whenever a
majority of the States has enacted a resolution in
support of the establishment or modification of a
consumer protection regulation by the Agency.
(2) Agency considerations required for issuance of
final regulation.--Before prescribing a final
regulation based upon a notice issued pursuant to
paragraph (1), the Agency shall take into account
whether--
(A) the proposed regulation would afford
greater protection to consumers than any
existing regulation;
(B) the intended benefits of the proposed
regulation for consumers would outweigh any
increased costs or inconveniences for
consumers, and would not discriminate unfairly
against any category or class of consumers; and
(C) a Federal banking agency has advised that
the proposed regulation is likely to present an
unacceptable safety and soundness risk to
insured depository institutions.
(3) Explanation of considerations.--The Agency--
(A) shall include a discussion of the
considerations required in subsection (b) in
the Federal Register notice of a final
regulation prescribed pursuant to this section;
and
(B) whenever the Agency determines not to
prescribe a final regulation, shall publish an
explanation of such determination in the
Federal Register, and provide a copy of such
explanation to each State that enacted a
resolution in support of the proposed
regulation, the Committee on Financial Services
of the House of Representatives, and the
Committee on Banking, Housing, and Urban
Affairs of the Senate.
(4) Reservation of authority.--No provision of this
section shall be construed as limiting or restricting
the authority of the Agency to enhance consumer
protection standards established pursuant to this title
in response to its own motion or in response to a
request by any other interested person.
(5) Rule of construction.--No provision of this
section shall be construed as exempt the Agency from
complying with subchapter II of chapter 5 of title 5,
United States Code.
(6) Definition.--For purposes of this section, the
term ``consumer protection regulation'' means a
regulation that the Agency is authorized to prescribe
under this title, the enumerated consumer laws, or any
law or authority transferred under subtitle F or H.
Page 827, line 4, after ``defendant,'' strike the rest of
line 4 through line 6 and insert, ``to enforce and secure
remedies under provisions of this title or regulations issued
thereunder, or otherwise provided under other law.''.
Page 831, line 23, after ``that'' insert ``directly and
specifically''.
Page 832, beginning on line 8, strike ``National banks'' and
all that follows through ``State laws.'' on line 9.
Page 832, line 9, strike ``State laws are'' and insert
``State consumer financial laws are''.
Page 832, line 11, strike ``state'' and insert ``State
consumer financial''.
Page 832, strike lines 15 through 20, and insert the
following:
``(B) the State consumer financial law
prevents, significantly interferes with, or
materially impairs the ability of an
institution chartered as a national bank to
engage in the business of banking. Any
preemption determination under this
subparagraph may be made by a court or by
regulation or order of the Comptroller of the
Currency in accordance with applicable law, on
a case-by-case basis. Any such determination by
a court shall comply with the standards set
forth in subsection (d) of this section, with
the court making the subsection (d) finding de
novo; or
Page 832, line 21, insert ``consumer financial'' after
``State''
Page 832, strike line 23 and all that follows through page
833, line 2 and insert the following:
``(2) Savings clause.--This Act does not preempt or
alter the applicability of any State law to any
subsidiary or affiliate of a national bank (other than
an institution chartered as a national bank) that is
not a depository institution.
Page 833, strike lines 3 through 17 and insert the following:
``(3) Case-by-case determination.--
``(A) Definition.--The term `case-by-case
determination pursuant to this section' means a
determination made by the Comptroller
concerning the impact of a particular State
consumer financial law on any national bank
that is subject to that law, or the law of any
other State with substantively equivalent
terms.
``(B) Consultation.--When making case-by-case
determination pursuant to this section that a
State consumer financial law of another State
has a substantively equivalent terms as one
that the Comptroller is preempting, the
Comptroller shall first consult with the
Consumer Financial Protection Agency and shall
take such Agency's views into account when
making the determination.
``(4) Rule of construction.--This Act does not occupy
the field in any area of State law.
``(5) Standards of review.--
``(A) Preemption.--A court reviewing any
determinations made by the Comptroller
regarding preemption of a State law by this Act
shall assess the validity of such
determinations depending upon the thoroughness
evident in the agency's consideration, the
validity of the agency's reasoning, the
consistency with other valid determinations
made by the agency, and other factors which the
court finds persuasive and relevant to its
decision.
``(B) Savings clause.--Except as provided in
subparagraph (A), nothing in this section shall
affect the deference that a court may afford to
the Comptroller in making determinations
regarding the meaning or interpretation of
title LXII of the Revised Statutes of the
United States or other Federal laws.
``(6) Comptroller determination not delegable.--Any
regulation, order or determination made by the
Comptroller of the Currency under subsection (b)(1)(B)
shall be made by the Comptroller and shall not be
delegable to another officer or employee of the
Comptroller of the Currency.
Page 833, line 18, after ``regulation'' insert ``or order''.
Page 833, strike line 25 and all that follows through page
834, line 2, and insert the following: ``prevents,
significantly interferes with, or materially impairs the
ability of a national bank to engage in the business of
banking.''.
Page 834, line 5, after ``prescribe'' insert ``a'', after
``regulation'' insert ``or order''.
Page 835, after line 9, insert new subsections as follows:
``(g) Preservation of Powers Related to Charging Interest.--
No provision of this title shall be construed as altering or
otherwise affecting the authority conferred by section 5197 of
the Revised Statutes of the United States (12 U.S.C. 85) for
the charging of interest by a national bank at the rate allowed
by the laws of the State, territory or district where the bank
is located, including with respect to the meaning of `interest'
under such provision.
``(h) Transparency of Occ Preemption Determinations.--The
Comptroller of the Currency shall publish and update no less
frequently than quarterly, a list of preemption determinations
by the Comptroller of the Currency then in effect that
identifies the activities and practices covered by each
determination and the requirements and constraints determined
to be preempted.
Page 835, on lines 21 and 22 strike ``supervisory,
examination, or regulatory'' and insert ``visitorial''.
Page 836, strike lines 4 through 7 and renumber subsequent
sections accordingly.
Page 836, line 12, after ``or'' delete the rest of line 12
through line 15 and insert, ``nonpreempted State law against a
national bank, as authorized by such law, or to seek relief as
authorized by such law.''.
Page 838, line 13, after ``that'' and insert ``directly and
specifically''.
Page 838, beginning line 19, strike ``Federal savings
association'' and all that follows through ``State laws.''
Page 838, beginning on line 20, strike ``State laws are'' and
insert ``State consumer financial laws are''.
Page 838, line 22, strike ``state'' and insert ``State
consumer financial''.
Page 839, strike lines 1 through 7, and insert the following:
``(B) the State consumer financial law
prevents, significantly interferes with, or
materially impairs the ability of an
institution chartered as a Federal savings
association to engage in the business of
banking. Any preemption determination under
this subparagraph may be made by a court or by
regulation or order of the Director of the
Office of Thrift Supervision in accordance with
applicable law, on a case-by-case basis. Any
such determination by a court shall comply with
the standards set forth in subsection (d) of
this section, with the court making the
subsection (d) finding de novo; or
Page 839, line 8, insert ``consumer financial'' after
``State''.
Page 839, strike lines 10 through 14 and insert the
following:
``(2) Savings clause.--This Act does not preempt or
alter the applicability of any State law to any
subsidiary or affiliate of a Federal savings
association (other than an institution chartered as a
Federal savings association) that is not a depository
institution.
Page 839, strike line 15 and all that follows through page
840, line 4 and insert the following:
``(3) Case-by-case determination.--
``(A) Definition.--The term `case-by-case
determination pursuant to this section' means a
determination made by the Director concerning
the impact of a particular State consumer
financial law on any Federal savings
association that is subject to that law, or the
law of any other State with substantively
equivalent terms.
``(B) Consultation.--When making case-by-case
determination pursuant to this section that a
State consumer financial law of another State
has a substantively equivalent terms as one
that the Director of the Office of Thrift
Supervision is preempting, the Director shall
first consult with the Consumer Financial
Protection Agency and shall take such Agency's
views into account when making the
determination.
``(4) Rule of construction.--This Act does not occupy
the field in any area of State law.
``(5) Standards of review.--
``(A) Preemption.--A court reviewing any
determinations made by the Director regarding
preemption of a State law by this Act shall
assess the validity of such determinations
depending upon the thoroughness evident in the
agency's consideration, the validity of the
agency's reasoning, the consistency with other
valid determinations made by the agency, and
other factors which the court finds persuasive
and relevant to its decision.
``(B) Savings clause.--Except as provided in
subparagraph (A), nothing in this section shall
affect the deference that a court may afford to
the Director in making determinations regarding
the meaning or interpretation of the Home
Owners' Loan Act or other Federal laws.
``(6) Ots determination not delegable.--Any
regulation, order, or determination made by the
Director of the Office of Thrift Supervision under
subsection (b)(1)(B) shall be made by the Director and
shall not be delegable to another officer or employee
of the Director of the Office of Thrift Supervision.
Page 840, line 7, after ``regulation'' insert ``or order''.
Page 840, line 15, after ``regulation'' insert ``or order''.
Page 840, strike lines 22 through 24 and insert the
following: ``finding that the provision prevents, significantly
interferes with, or materially impairs the ability of a Federal
savings association to engage in the business of banking.''.
Page 841, after line 23, insert new subsections as follows
and renumber subsequent sections accordingly:
``(g) Preservation of Powers Related to Charging of
Interest.--No provision of this title shall be construed as
altering or otherwise affecting the authority conferred by
section 4(g) of the Home Owners' Loan Act (12 U.S.C. 1463(g))
for the charging of interest by a Federal savings association
at the rate allowed by the laws of the State, territory, or
district where the bank is located, including with respect to
the meaning of `interest' under such provision.
``(h) Transparency of Ots Preemption Determinations.--The
Director of the Office of Thrift Supervision shall publish and
update no less frequently than quarterly, a list of preemption
determinations by such Director then in effect that identifies
the activities and practices covered by each determination and
the requirements and constraints determined to be preempted.
Page 842, strike lines 13 through 16 and renumber subsequent
sections accordingly.
Page 842, line 22, after ``law,'' delete the rest of line 22
through page 843, line 2 and insert, ``or to seek relief as
authorized by such law''.
Page 30, after line 21, insert the following new subsection:
(e) Study of Effects Consumer Financial Protection Agency
Regulations and Standards.--
(1) Study required.--The Council shall conduct a
study of the effects that regulations and standards of
the Consumer Financial Protection Agency will have on
all covered persons (as such term is defined in section
4002(9)), including nondepository institution covered
persons. The Director of the Consumer Financial
Protection Agency shall take the findings of the study
into account when issuing regulations.
(2) Value of nonbank products.--The study shall
include an evaluation and assessment of the
appropriateness of using ``APR'' as a true measure of
the value of all nonbank products.
(3) Submission.--Not later than 240 days after the
date of the enactment of this Act, the Director of the
Consumer Financial Protection Agency shall submit the
study to Congress and include any recommendations the
Director may have for changes in law and regulations to
improve consumer protections and maintain access to
credit.
Page 734, strike lines 8 through 12, and insert the
following:
(A) consider the potential benefits and costs
to consumers, covered persons, and the Federal
Government, including the potential reduction
of consumers' access to consumer financial
products or services, resulting from such
regulation; and
Page 734, line 20, insert before the period the following:
``and whether such regulation will have an inconsistent effect
on nondepository institution covered persons and depository
institution covered persons''.
Page 747, after line 21, add the following new subsections:
(i) No One Size Fits All Regulation of Nonbank Products.--The
Director shall be required to issue only product specific rules
and regulations for each of the non-bank products under the
jurisdiction of the Agency.
(j) Nonbank Regulatory Appeal Rights.--
(1) Administrative.--The Agency shall establish a
procedure through which a nonbank financial company
that has been given contradictory or conflicting
supervisory determinations or directives from the
Agency and their prudential supervisors will be able to
appeal the decisions to a disinterested governing
panel.
(2) Judicial review.--Any nonbank financial company
which has been subjected to contradictory or
conflicting supervisory determinations or directives
may seek judicial review by filing a petition for such
review in the United States Court of Appeals for the
District of Columbia.
Page 731, after line 24, insert the following new subsection:
(h) Assessments for Certain Nondepository Institution Covered
Persons.--
(1) In general.--Notwithstanding any other provision
of this Act, a nondepository institution covered person
shall not be subject to assessments by the Agency if--
(A) the assets that are financial activities
of that nondepository covered person represent
less than a substantial portion of its total
assets; and
(B) the gross revenues derived from financial
activities of that nondepository covered person
are less than a substantial portion of its
gross revenues.
(2) Extensive consumer financial products or services
operations.--Paragraph (1) shall not apply to
nondepository institution covered person that the
Director determines has a level of assets or revenues
derived from financial activities, a number of
transactions in consumer financial products or
services, or a number of accounts relating to consumer
financial products or services that the Director
determines represents an extensive consumer financial
products or services operation.
Page 1068, line 7, strike ``knowingly or recklessly
violated'' and insert ``was grossly negligent in violating''.
Page 1068, beginning on line 18, strike ``knowledge and
recklessness'' and insert ``gross negligence''.
Page 1019, line 22, strike ``57a(b)'' and insert ``57a''.
Page 1019, after line 22, insert the following:
(1) in subsection (a)(1), by striking ``(h)'' and
inserting ``(f)'';
Page 1019, line 23, strike ``(1)'' and insert ``(2)''.
Page 1020, strike lines 6 through 13 and insert the
following:
(3) by striking subsection (c);
(4) in subsection (d), by striking ``(d)(1) The
Commission's'' and all that follows through the end of
paragraph (2) and by redesignating paragraph (3) of
such subsection as subsection (c);
(5) In such subsection (c) (as so redesignated), by
inserting ``prescribed'' after ``any rule'';
(6) by striking subsections (f), (i), and (j) and
redesignating subsections (e), (g), and (h) as
subsections (d), (e), and (f), respectively;
Page 1020, line 14, strike ``(4)'' and insert ``(7)''.
Page 1020, after line 14, insert the following:
(A) in paragraph (1)(A), by striking
``promulgated'' and inserting ``prescribed'';
Page 1020, line 15, strike ``(A)'' and insert ``(B)''.
Page 1020, strike lines 17 through 20 and insert the
following:
(C) in paragraph (3), by striking ``The court
shall hold unlawful'' and all that follows
through the end of the paragraph; and
(D) by striking paragraphs (4) and (5) and
inserting the following:
``(4) The procedure set forth in this subsection for judicial
review of a rule prescribed under subsection (a)(1)(B) is the
exclusive means for such review, other than in an enforcement
proceeding.''; and
(7) in subsection (e)(2) (as so redesignated), by
striking ``class or persons'' and inserting ``class of
persons''.
Page 754, after line 1, add the following new subsection at
the end of section 4203:
(h) Assistive Division for Community Financial
Institutions.--
(1) Establishment; purpose.--There is established in
the Agency an office to be known as the ``Assistive
Division for Community Financial Institutions'' to
advise the Director on the impact of Agency policies
and regulations on community financial institutions and
to help ensure that the policies and regulations of the
Agency do not unduly burden community financial
institutions.
(2) Additional duties.--The Assistive Division for
Community Financial Institutions shall also--
(A) provide assistance to and respond to
inquiries from community financial institutions
regarding policies of the Agency and the
effects of such policies on community financial
institutions;
(B) provide educational materials, training
aides, and support to community financial
institutions with respect to any new regulatory
obligations the Agency establishes during the
initial rule-making period;
(C) establish and maintain a toll-free
telephone number, to be available at least 8
hours a day and 7 days a week, at which
community financial institution may make
inquiries and receive assistance under
subparagraph (A); and
(D) perform other duties and exercise such
other powers set by the Director.
Page 949, after line 2, add the following new section (and
update the table of contents appropriately):
SEC. 4704. REPORTING OF MORTGAGE DATA BY STATE.
(a) In General.--Section 104(a) of the Helping Families Save
Their Homes Act of 2009 (division A of Public Law 111-22) is
amended--
(1) in paragraph (2), by striking ``resulting'' and
inserting ``in each State that result'';
(2) in paragraph (3), by inserting ``each State for''
after ``modifications in''; and
(3) in paragraph (4), by inserting ``in each State''
after ``total number of loans''.
(b) Conforming Amendment.--Section 104(b)(1)(A) of such Act
is amended by adding at the end the following sentence: ``Not
later than 60 days after the date of the enactment of the Wall
Street Reform and Consumer Protection Act of 2009, the
Comptroller of the Currency and the Director of the Office of
Thrift Supervision shall update such requirements to reflect
amendments made to this section by such Act.''.
In subtitle H of title VII (relating to mortgage reform)
insert ``and Data Collection'' after ``Reports''
At the end of title VII (relating to mortgage reform), add
the following new section (and update the table of contents
appropriately):
SEC. 9702. REPORTING OF MORTGAGE DATA BY STATE.
(a) In General.--Section 104(a) of the Helping Families Save
Their Homes Act of 2009 (division A of Public Law 111-22) is
amended--
(1) in paragraph (2), by striking ``resulting'' and
inserting ``in each State that result'';
(2) in paragraph (3), by inserting ``each State for''
after ``modifications in''; and
(3) in paragraph (4), by inserting ``in each State''
after ``total number of loans''.
(b) Conforming Amendment.--Section 104(b)(1)(A) of such Act
is amended by adding at the end the following sentence: ``Not
later than 60 days after the date of the enactment of the Wall
Street Reform and Consumer Protection Act of 2009, the
Comptroller of the Currency and the Director of the Office of
Thrift Supervision shall update such requirements to reflect
amendments made to this section by such Act.''.
Page 119, strike lines 12 to 13 and insert the following new
paragraph:
(1) the Board determines that a specified financial
company fails to meet prudential standards established
by the Board; or
Page 1035, line 4, strike ``Section'' and insert ``(a) In
General.--Section''.
Page 1035, strike lines 7 and 8 and insert the following:
(A) by amending paragraph (1)(A) to read as
follows:
``(A) In general.--Each credit rating agency
shall register as a nationally recognized
statistical rating organization for the
purposes of this title (in this section
referred to as the `applicant'), and shall file
with the Commission an application for
registration, in such form as the Commission
shall require, by rule or regulation issued in
accordance with subsection (n), and containing
the information described in subparagraph
(B).''.
Page 1035, line 10, strike ``and''.
Page 1035, line 12, insert ``and'' after the semicolon and
after such line insert the following:
(D) by adding at the end of paragraph (1) the
following:
``(F) Exemptions.--The registration
requirement in subparagraph (A) shall not apply
to--
``(i) a credit rating agency if the
credit rating agency--
``(I) does not engage in the
provision of credit ratings to
issuers of securities for a
fee; and
``(II) issues credit ratings
only in any bona fide
newspaper, news magazine, or
business or financial
publication of general and
regular circulation; or
``(ii) such other persons as the
Commission may designate by rules and
regulations or order when in the public
interest and for the protection of
investors.''.
Page 1067, after line 20, insert the following:
(b) Conforming Amendment.--Section 3(a)(62) of the Securities
Exchange Act of 1934 is amended by striking subparagraph (A)
and redesignating subparagraphs (B) and (C) as subparagraphs
(A) and (B), respectively.
Page 731, after line 24, insert the following:
(4) Financial education and counseling program.--
(A) In general.--To the extent such victims
cannot be located or such payments are
otherwise not practicable, 5 percent of the
Victims Relief Fund shall be transferred, up to
$10,000,000 on an annual basis, to the
Secretary of the Treasury so that the Secretary
may carry out the Financial Education and
Counseling Grant Program established under
section 1132 of the Housing and Economic
Recovery Act of 2008 (12 U.S.C. 1701).
(B) Memorandum of understanding.--Not later
than 12 months after the date of enactment of
this subtitle, the Director shall enter into a
memorandum of understanding with the Secretary
of the Treasury to coordinate the release of
Civil Penalty Fund amounts under subparagraph
(A).
(C) Assistance for individuals at financial
risk.--Section 1132 of the Housing and Economic
Recovery Act of 2008 (12 U.S.C. 1701) is
amended--
(i) in subsection (a), by striking
``prospective homebuyers'' each place
that term appears and inserting
``individuals at financial risk'';
(ii) in subsection (b)--
(I) in paragraph (1), by
striking ``prospective
homebuyers'' and inserting
``individuals at financial
risk''; and
(II) by adding at the end the
following:
``(3) Determination of financial risk.--For purposes
of this section, the Director of the Consumer Financial
Protection Agency shall establish the criteria used to
determine whether an individual is at financial risk,
and the Secretary shall use such criteria when
selecting organizations under paragraph (2).''; and
(iii) in subsection (c)(1)--
(I) in subparagraph (A), by
striking ``or'';
(II) in subparagraph (B), by
striking the period and
inserting ``; or''; and
(III) by adding at the end
the following:
``(C) a nonprofit corporation that--
``(i) is exempt from taxation under
section 501(c)(3) of the Internal
Revenue Code of 1986; and
``(ii) specializes or has expertise
in working with individuals at
financial risk.''.
Page 1278, after line 17 insert the following:
(7) Geographic disparities in access to and cost of
insurance products.
Page 35, line 25, insert ``compelled to waive and shall not
be'' after ``be''.
Page 26, line 22, strike "``Department of the Treasury'' and
insert ``Voting Members of the Council''.
Page 26, line 23, insert ``and all other voting members of
the Council may, with the approval of the Council,'' after
``shall''.
Page 27, line 10, strike ``Secretary of the Treasury'' and
insert ``Council''.
Page 33, after line 10, insert the following new section (and
conform the table of contents accordingly):
SEC. 1100. FEDERAL RESERVE BOARD AUTHORITY THAT OF AGENT ACTING ON
BEHALF OF COUNCIL.
For purposes of this subtitle, the Board of Governors of the
Federal Reserve System shall act in the capacity of agent for
the Council, acting on behalf of the Council.
Page 1028, after line 10, insert the following new paragraph
(and redesignate the subsequent paragraph):
``(8) Applicable privileges not waived.--An
investment advisor, and investment advisor to a private
fund, a private fund, foreign private fund advisor, a
foreign private fund, an advisor to a venture capital
fund, a venture capital fund, or other person shall not
be compelled to waive and shall not be deemed to have
waived any privilege otherwise applicable to any data
or information by transferring the data or information
to, or permitting that data or information to be used
by--
``(A) the Financial Services Oversight
Council; (B)
``(B) the Commission;
``(C) any Federal financial regulator or
State financial regulator, in any capacity; or
``(D) any other agency of the Federal
Government (as defined in section 6 of title
18, United States Code).''.
Page 701, after line 9, insert the following:
(D) Consumer complaint website.--The Director
shall establish an Internet website for
consumer complaints and inquiries concerning
institutions regulated by the Agency. The
website shall be interoperable with the
database established under subparagraph (A).
Page 825, after line 12, insert the following:
SEC. 4313. OVERDRAFT PROTECTION NOTICE REQUIREMENTS.
Not later than 180 days after the date of the enactment of
this Act, the Director shall promulgate a new rule that
requires banks to prominently place in each consumer branch
office information regarding the fees and charges associated
with enrollment in the bank's overdraft protection program.
Page 1230, line 15, strike ``$500,000'' and insert
``1,000,000''.
Page 1230, line 18, strike ``$100,000'' and insert
``250,000''.
Page 1236, line 13, strike ``$8,000,000'' and insert
``16,000,000''.
Page 93, line 8, insert ``pursuant to subsection (e)(5)''
after ``action''.
Page 93, beginning line 12, insert the following new
subsection:
(i) Rule of Construction.--Nothing in subsection (h) shall be
construed as limiting the authority of a Federal financial
regulatory agency to take action with respect to a financial
company subject to the jurisdiction of such agency pursuant to
applicable law other than this section.
Page 22, after line 12, insert the following new
subparagraph:
(C) A State securities commissioner (or an
officer performing like functions), to be
designated by a selection process determined by
such State securities commissioners, provided
that the term for which a State securities
commissioner may serve shall last no more than
the 2-year period beginning on the date that
the commissioner is selected.
Page 253, after line 21, insert the following new paragraph:
(3) Section 4(j) of the Bank Holding Company Act of
1956 is amended by inserting after paragraph (4) the
following new paragraph (and redesignating succeeding
paragraphs accordingly):
``(5) Financial stability.--
``(A) In general.--In every case, the Board
shall take into consideration the extent to
which the proposed acquisition, merger, or
consolidation may pose risk to the stability of
the United States financial system or the
economy of the United States, including the
resulting scope, nature, size, scale,
concentration, or interconnectedness of
activities that are financial in nature.
``(B) Standards for approval.--The Board may,
in the sole discretion of the Board, disapprove
any acquisition, merger, or consolidation of,
or by, a financial holding company subject to
stricter standards if the Board determines that
the resulting concentration of liabilities on a
consolidated basis is likely to pose a great
threat to financial stability during times of
severe economic distress.''.
Page 255, after line 2, insert the following new section:
SEC. 1316. MUTUAL NATIONAL BANKS AND FEDERAL MUTUAL BANK HOLDING
COMPANIES AUTHORIZED.
(a) In General.--Chapter one of title LXII of the Revised
Statutes of the United States (12 U.S.C. 21 et seq.) is amended
by inserting after section 5133 the following new sections:
``SEC. 5133A. MUTUAL NATIONAL BANKS.
``(a) In General.--Notwithstanding the section designated the
`Third' of section 5134, in order to provide mutual
institutions for the deposit of funds, the extension of credit,
and provision of other services, the Comptroller of the
Currency may charter mutual national banks either de novo or
through a conversion of any insured depository institution or
any State mutual bank or credit union, subject to regulations
prescribed by the Comptroller of the Currency in accordance
with this section. The powers conferred by this section are
intended to provide for the creation and maintenance of mutual
national banks as bodies corporate existing in perpetuity for
the benefit of their depositors and the communities in which
they operate.
``(b) Regulations.--
``(1) Regulations of the comptroller.--The
Comptroller of the Currency is authorized to prescribe
appropriate regulations for the organization,
incorporation, examination, operation, and regulation
of mutual national banks. Except to the extent that
such existing regulations conflict with sections 5133A
and 5133B, mutual national banks shall be subject to
the regulations of the Director of the Office of Thrift
Supervision governing corporate organization,
governance, and conversion of mutual institutions, as
in effect on the date of the enactment of the Wall
Street Reform and Consumer Protection Act of 2009,
including parts 543, 544, 546, 563b, and 563c of
chapter V of title 12, Code of Federal Regulations (as
in effect on that date), for up to 3 years beginning on
the date of the enactment of the Wall Street Reform and
Consumer Protection Act of 2009.
``(2) Applicability of capital stock requirements.--
The Comptroller of the Currency shall prescribe
regulations regarding the manner in which requirements
of this title with respect to capital stock, and
limitations imposed on national banks under this title
based on capital stock, shall apply to mutual national
banks.
``(c) Conversions.--
``(1) Conversion of a mutual depository to a mutual
national bank.--Subject to such regulations as the
Comptroller of the Currency may prescribe for the
protection of depositors' rights and for any other
purpose the Comptroller of the Currency may consider
appropriate, any mutual depository may convert to a
mutual national bank by filing with the Comptroller of
the Currency a notice of its election to convert on a
specified date that is not earlier than 30 days after
the date on which the notice is filed, and the mutual
depository shall be converted to a mutual national bank
charter on the date specified in the notice.
``(2) Conversion to stock national bank.--Subject to
such regulations as the Comptroller of the Currency may
prescribe for the protection of depositors' rights and
for any other purpose the Comptroller of the Currency
may consider appropriate, any national bank that is
organized in the mutual form under subsection (a) may
reorganize as a stock national bank.
``(3) Conversion to state banks.--Any national mutual
bank may convert to a State bank charter in accordance
with regulations prescribed by the Comptroller of the
Currency and applicable State law.
``(d) Terminating Mutuality.--If a mutual national bank
elects to terminate mutuality, it must do so by--
``(1) liquidating; or
``(2) converting to a national banking association
operating in stock form.
``(e) Status and Rights of Members.--
``(1) In general, the status of a member is primarily
that of a depositor and secondarily that of a holder of
a contingent right to participate in the equity of a
mutual national bank upon a liquidation or conversion.
``(2) Each member of a mutual national bank shall
have the following rights:
``(A) Such rights as may be agreed upon, by
contract, between the member and the mutual
national bank.
``(B) The right to vote for members of the
board of directors of the mutual national bank.
``(C) The right to attend any meeting of
members properly called by the board of
directors of a mutual national bank.
``(D) In the event the board of directors, in
its sole discretion, determines a conversion of
a mutual national bank to a national banking
association operating in stock form is in the
best interests of the community in which the
bank operates and the members approve the
conversion through a special proxy, then the
members as of a record date set by the board of
directors shall have the first right to
subscribe for and purchase stock in the
converted bank.
``(E) In the event the board of directors, in
its sole discretion, determines a liquidation
of the mutual national bank is in the best
interests of the community in which the bank
operates and the members approve the
liquidation, or if for any other reason the
bank is liquidated by operation of law, then
the members as of the date of liquidation shall
have the right to have credited to their
accounts, on a pro rata basis, any residual
assets left after the liquidation of the mutual
national bank.
``(3) In the consideration of all questions requiring
action by the members of a national mutual bank, the
bank may provide in its charter that each member shall
be permitted (i) one vote per member, or (ii) to cast
one vote for each $100, or fraction thereof, of the
withdrawal value of the member's account, but not more
than 1,000 votes per member.
``(f) Proxies.--
``(1) A member may give, in writing or
electronically, a perpetual proxy to a committee of the
board of directors of a mutual depository, provided
that the member may revoke such a proxy in writing or
electronically, with such revocation to take effect
after six business days.
``(2) Such proxies may be used to vote on any issue
requiring approval of the members, including the
conversion of a mutual depository into a mutual
national bank and the reorganization of a mutual
national bank into a Federal mutual bank holding
company, except that, without a prior finding by the
regulator of the mutual national bank that such action
is needed to avoid loss to the Federal Deposit
Insurance Corporation's deposit insurance fund or to
protect the stability of the United States financial
system, such proxies may not be used to vote in favor
of--
``(A) terminating mutuality for a mutual
national bank or a Federal mutual bank holding
company;
``(B) permitting the modification of a
Federal mutual bank holding company; or
``(C) issuing mutual capital certificates
(except when used to found a mutual national
bank or a Federal mutual bank holding company
de novo).
``(3) Proxies given by a member, in writing or
electronically, to management of, or to a committee of
the board of directors of, a mutual depository shall
not be deemed to have been revoked solely because of,
and shall continue to exist following, a conversion to
a mutual national bank and any concurrent or subsequent
reorganization to a Federal mutual bank holding
company.
``(g) Definitions.--For purposes of this section, the
following definitions shall apply:
``(1) Insured depository institution.--The term
`insured depository institution' has the same meaning
as in section 3 of the Federal Deposit Insurance Act.
``(2) Mutual national bank.--The term `mutual
national bank' means a national banking association
that operates in mutual form and is chartered by the
Comptroller of the Currency under this section.
``(3) Mutual depository.--The term `mutual
depository' means a depository institution that is
organized in non-stock form, including a Federal non-
stock depository and any form of non-stock depository
provided for under State law, the deposits of which are
insured by an instrumentality of the Federal
Government.
``(4) Mutuality.--The term `mutuality' means the
quality of being an insured depository institution
organized under a Federal or State law providing for
the organization of non-stock depository institutions,
or a holding company organized under a Federal or State
law providing for the organization of non-stock
entities that control one or more depository
institutions.
``(5) Member.--The term `member' means each tax-
liable depositor in a mutual depository's savings,
demand, or other authorized depository accounts and
each tax-liable depositor in such an account in a
depository subsidiary of a Federal mutual bank holding
company.
``(6) Tax liable depositor.--The term `tax liable
depositor' means the single person responsible for
paying any Federal taxes due on any interest paid on
any deposits held within any savings, demand, or other
authorized depository account or accounts with any
mutual depository.
``(7) Membership rights.--The term `membership
rights' means the rights of each member under this
section.
``(h) Conforming References.--Unless otherwise provided by
the Comptroller of the Currency--
``(1) any reference in any Federal law to a national
bank operating in stock form, including a reference to
the term `national banking association', `member bank',
`national bank', `national association', `bank',
`insured bank', `insured depository institution', or
`depository institution', shall be deemed to refer also
to a mutual national bank;
``(2) any reference in any Federal law to the term
`board of directors', `director', or `directors' of a
national bank operating in stock form shall be deemed
to refer also to the board of a mutual national bank;
and
``(3) any terms in Federal law that may apply only to
a national bank operating in stock form, including the
terms `stock', `shares', `shares of stock', `capital
stock', `common stock', `stock certificate', `stock
certificates', `certificates representing shares of
stock', `stock dividend', `transferable stock', `each
class of stock', `cumulate such shares', `par value',
`preferred stock' shall not apply to a mutual national
bank, unless the Comptroller of the Currency determines
that the context requires otherwise.
``SEC. 5133B. FEDERAL MUTUAL BANK HOLDING COMPANIES.
``(a) Reorganization of Mutual National Bank as a Holding
Company.--
``(1) In general.--Subject to approval under the Bank
Holding Company Act of 1956, a mutual national bank may
reorganize so as to become a Federal mutual bank
holding company by submitting a reorganization plan to
the appropriate bank holding company regulator.
``(2) Plan approval.--Upon the approval of the
reorganization plan by the appropriate bank holding
company regulator and the issuance of the appropriate
charters--
``(A) the substantial part of the mutual
national bank's assets and liabilities,
including all of the bank's insured
liabilities, shall be transferred to a national
banking association, a majority of the shares
of voting stock of which is owned, directly or
indirectly, by the mutual national bank that is
to become a Federal mutual bank holding
company; and
``(B) the mutual national bank shall become a
Federal mutual bank holding company.
``(b) Directors and Certain Account Holders' Approval of Plan
Required.--This subsection does not authorize a reorganization
unless--
``(1) a majority of the mutual national bank's board
of directors has approved the plan providing for such
reorganization; and
``(2) a majority of members has approved the plan at
a meeting held at the call of the directors under the
procedures prescribed by the bank's charter and bylaws.
``(c) Ownership of Depository Subsidiaries.--To avoid
terminating mutuality, a Federal mutual bank holding company
must own, directly or indirectly, a majority of the shares of
voting stock of each of its depository subsidiaries.
``(d) No Termination of Mutuality.--Neither a reorganization
of a mutual depository nor a modification of a Federal mutual
bank holding company shall cause a termination of mutuality.
``(e) Retention of Capital.--In connection with a transaction
described in subsection (a), a mutual national bank may,
subject to the approval of the appropriate bank holding company
regulator, retain capital at the holding company level to the
extent that the capital retained at the holding company level
exceeds the amount of capital required for the national banking
association chartered as a part of a transaction described in
subsection (a) to meet all relevant capital standards
established by the Comptroller of the Currency for national
banking associations.
``(f) Terminating Mutuality.--If a Federal mutual bank
holding company elects to terminate mutuality, it must do so by
either liquidating or converting to a bank holding company
operating in stock form.
``(g) Membership Rights.--Holders of savings, demand, or
other authorized depository accounts in a depository subsidiary
of a Federal mutual bank holding company shall have the same
membership rights with respect to the Federal mutual bank
holding company as those holders would have had if the
depository subsidiary of the Federal mutual bank holding
company had been a mutual national bank.
``(h) Regulation.--A Federal mutual bank holding company
shall be--
``(1) chartered by the appropriate bank holding
company regulator and shall be subject to such
regulations as the appropriate bank holding company
regulator shall prescribe; and
``(2) regulated under the Bank Holding Company Act of
1956 on the same terms and subject to the same
limitations as any other company that controls a bank.
``(i) Capital Improvement.--
``(1) Pledge of stock of national bank subsidiary.--
This section shall not prohibit a Federal mutual bank
holding company from pledging all or a portion of the
stock of the national banking association chartered as
part of a transaction described in subsection (a) to
raise capital for such national banking association.
``(2) Issuance of nonvoting shares.--This section
shall not prohibit a national banking association
chartered as part of a transaction described in
subsection (a) from issuing any nonvoting shares or
less than 50 percent of the voting shares of such bank
to any person other than the Federal mutual bank
holding company.
``(j) Insolvency and Liquidation.--
``(1) In general.--Notwithstanding any other
provision of law, the appropriate bank holding company
regulator may file a petition under chapter 7 of title
11, United States Code, with respect to a Federal
mutual bank holding company upon--
``(A) the default of any national bank--
``(i) the stock of which is owned by
the Federal mutual bank holding
company; and
``(ii) that was chartered in a
transaction described in subsection
(a); or
``(B) a foreclosure on a pledge by the
Federal mutual bank holding company described
in subsection (i)(1).
``(2) Distribution of net proceeds.--Except as
provided in paragraph (3), the net proceeds of any
liquidation of any Federal mutual bank holding company
under paragraph (1) shall be transferred to persons who
hold membership interests in such Federal mutual bank
holding company.
``(3) Recovery by fdic.--If the Federal Deposit
Insurance Corporation incurs a loss as a result of the
default of any insured bank subsidiary of a Federal
mutual bank holding company that is liquidated under
paragraph (1), the Federal Deposit Insurance
Corporation shall succeed to the interests of the
depositors of the bank as members in the Federal mutual
bank holding company, to the extent of the Federal
Deposit Insurance Corporation's loss.
``(k) Definitions.--
``(1) Federal mutual bank holding company.--The term
`Federal mutual bank holding company' means a holding
company that is organized in mutual form and owns,
directly or indirectly, a majority of the shares of
voting stock of one or more depository subsidiaries of
a Federal mutual bank holding company.
``(2) Depository subsidiary of a federal mutual bank
holding company.--The term `depository subsidiary of a
Federal mutual bank holding company' means a depository
institution organized in stock form that is insured by
the Federal Deposit Insurance Corporation, the majority
of the shares of voting stock of which are owned by the
Federal mutual bank holding company or its wholly owned
subsidiaries and none of the shares of stock of which
are pledged or otherwise subjected to lien except as
permitted in subsection (i).
``(3) Reorganization of a mutual depository.--The
term `reorganization of a mutual depository' means the
conversion of a mutual depository into a depository
subsidiary of a Federal mutual bank holding company.
``(4) Modification of a federal mutual bank holding
company.--The term `modification of a Federal mutual
bank holding company' means either (A) the sale of
shares of common or preferred stock in a depository
subsidiary of a Federal mutual bank holding company to
any party other than the subsidiary's parent Federal
mutual bank holding company or a wholly owned
subsidiary of that parent, or (B) the voluntary grant
of a lien on shares of common or preferred stock in a
depository subsidiary of a Federal mutual bank holding
company.
``(5) Default.--With respect to a national bank, the
term `default' means an adjudication or other official
determination by any court of competent jurisdiction,
the Comptroller of the Currency, or other public
authority pursuant to which a conservator, receiver, or
other legal custodian is appointed for the national
bank.
``(l) Conforming References.--Unless otherwise provided by
the appropriate bank holding company regulator--
``(1) any reference in any Federal law to a bank
holding company operating in stock form shall be deemed
to refer also to a Federal mutual bank holding company;
``(2) any reference in any Federal law to the term
`board of directors', `director', or `directors' of a
national bank operating in stock form shall be deemed
to refer also to the board of a Federal mutual bank
holding company; and
``(3) any terms in Federal law that may apply only to
a national bank operating in stock form, including the
terms `stock', `shares', `shares of stock', `capital
stock', `common stock', `stock certificate', `stock
certificates', `certificates representing shares of
stock', `stock dividend', `transferable stock', `each
class of stock', `cumulate such shares', `par value',
`preferred stock' shall not apply to a Federal mutual
bank holding company, unless the appropriate bank
holding company regulator determines that the context
requires otherwise.''.
(b) Limitation on Federal Regulation of State Banks.--Except
as otherwise provided in Federal law, the Comptroller of the
Currency, the Board of Governors of the Federal Reserve System,
and the Federal Deposit Insurance Corporation may not adopt or
enforce any regulation that contravenes the corporate
governance rules prescribed by State law or regulation for
State banks unless the Director, Board, or Corporation finds
that the Federal regulation is necessary to assure the safety
and soundness of the State banks.
(c) Technical Amendment.--The table of sections for chapter
one of title LXII of the Revised Statutes of the United States
(12 U.S.C. 21 et seq) is amended by inserting after the item
relating to section 5133 the following new items:
``5133A. Mutual national banks
``5133B. Federal mutual bank holding companies''
(d) Appropriate Federal Banking Agency for Federal Mutual
Bank Holding Companies.--Section 3(q)(1) of the Federal Deposit
Insurance Act (12 U.S.C. 1813(q)(2)) is amended by inserting
after subparagraph (F) the following new subparagraph:
``(G) supervisory or regulatory proceedings
arising from the authority given to the
appropriate bank holding company regulator
under section 5133B of the Revised Statutes of
the United States.''.
(e) Mutual Holding Company Conversion.--
(1) In general.--Any mutual holding company,
including any form of mutual depository holding company
provided for under State law, may convert to a Federal
mutual bank holding company by filing with the
appropriate bank holding company regulator a notice of
its election to convert on a specified date that is not
earlier than 30 days after the date on which the notice
is filed, and the mutual holding company shall be
converted to a Federal mutual holding company charter
on the date specified in the notice.
(2) Definitions.--For purposes of this subsection,
the following definitions shall apply:
(A) Federal mutual bank holding company.--The
term ``Federal mutual bank holding company''
has the same meaning as in section 5133B of the
Revised Statutes of the United States (as added
by this section); and
(B) Mutual holding company.--The term
``mutual holding company'' has the same meaning
as in section 10(o)(10)(A) of the Home Owners
Loan Act as in effect on the day before the
date of enactment of this Act.
(f) Effective Date.--This section shall take effect on the
date of enactment of this Act.
Page 255, after line 2, insert the following new section (and
conform the table of contents accordingly):
SEC. 1316. NATIONWIDE DEPOSIT CAP FOR INTERSTATE ACQUISITIONS.
(a) Amendments to the Bank Holding Company Act of 1956.--
(1) Concentration limit for bank holding companies.--
Section 3(d)(2)(A) of the Bank Holding Company Act (12
U.S.C. 1842(d)(2)(A)) is amended by striking
``paragraph (1)(A)''" and inserting ``subsection (a) of
this section''.
(2) Removal of nonbank savings association provision
in light of being defined as a bank.--Section 4 of the
Bank Holding Company Act is amended by striking
subsection (i) and insert the following new subsection:
``(i) [Repealed.]''.
(b) Amendments to the Federal Deposit Insurance Act.--
(1) In general.--Section 18(e) of the Federal Deposit
Insurance Act (12 U.S.C. I 828(c)) is amended--
(A) by redesignating paragraph (12) as
paragraph (13); and
(B) by inserting after paragraph (11), the
following new paragraph:
``(12) Nationwide deposit cap.--The responsible
agency may not approve an application for an interstate
merger transaction if the resulting insured depository
institution (including all insured depository
institutions which are affiliates of the resulting
insured depository institution), upon consummation of
the transaction, would control more than 10 percent of,
the total amount of deposits of insured depository
institutions in the United States.''.
(2) Parallel requirement.--Section 44(b)(2) of the
Federal Deposit Insurance Act (12 U.S.C. 1831u(b)(2)(A)
is amended to read as follows:
``(A) Nationwide concentration limits.--The
responsible agency may not approve an
application for an interstate merger
transaction involving two or more insured
depository institutions if the resulting
insured depository institution (including all
insured depository institutions which are
affiliates of such institution), upon
consummation of the transaction would control
more than 10 percent of the total amount of
deposits of insured depository institutions in
the United States.''.
(c) Amendments to the Home Owners' Loan Act.--Section
10(e)(2) of the Home Owners' Loan Act (12 U.S.C. 467a(e)(2)) is
amended--
(1) by striking ``or'' at the end of subparagraph
(C); and
(2) by striking the period at the end of subparagraph
(D), the following new subparagraph:
``(E) in the case of an application involving
an interstate acquisition, if the applicant
(including all insured depository institutions
which are affiliates of the applicant)
controls, or upon consummation of the
acquisition for which such application is filed
would control, more than 10 percent of the
total amount of deposits of insured depository
institutions in the United States.".''.
Page 763, beginning online 11, strike ``authority to
exercise'' and all that follows through ``this title'' and
insert ``rulemaking, supervisory, enforcement or other
authority, including the authority to order assessments, under
this title''.
Page 436, after line 11, insert the following new section:
SEC. 1615. TREASURY STUDY.
(a) Study Required.--The Secretary shall carry out a study
analyzing how the resolution authority provided under this
subtitle should be funded. Such study shall consider the
following factors:
(1) The consequences of any assessments on the
overall recovery of the economy of the United States.
(2) Any immediate or continuing consequences of
assessments on other aspects of the economy of the
United States, including job creation, public and
private investments, small business loans, and general
credit availability.
(3) The consequences of any assessments on individual
sectors of the financial services industry.
(4) The consequences of any assessments on the
financial integrity on individual firms within each
sector of the financial services industry.
(5) The appropriateness and effect of assessments on
firms that are subject to separate assessments under
existing State or Federal depositor, policyholder, or
investor protection mechanisms and the consequences of
any such assessments on these mechanisms themselves.
(6) The implications of assessments on all relevant
stakeholders, including taxpayers, depositors,
insurance policyholders, investors, counterparties, and
creditors.
(7) Evaluation of the appropriate assessment base,
including but not limited to factors such as assets and
liabilities, assets under management, policyholder
reserves, other reserves, statutory and regulatory
capital requirements, trusteed assets, and deposits and
inflationary factors.
(b) Report.--Not later than the end of the 6-month period
beginning on the date of the enactment of this subtitle, the
Secretary shall issue a report to the Congress containing all
determinations and conclusions made by the Secretary in
carrying out the study required under subsection (a).
Page 894, after line 4, add at the end of section 4601(a)(1)
the following new subparagraph:
(C) Retention of consumer advisory council.--
(i) Retention and continuation.--
Notwithstanding the transfer of
functions under subparagraph (A), the
Consumer Advisory Council established
by the Board of Governors pursuant to
section 703(b) of Public Law 90-321 (15
U.S.C. 1691b(b)) shall continue as an
entity within the Federal Reserve
System.
(ii) Additional functions.--In
addition to the functions performed by
the Consumer Advisory Council as of the
designated transfer date, the Consumer
Advisory Council shall--
(I) submit to the Director
(and make available to the
public) an annual set of
recommendations for consumer
protection regulations and meet
with the Director to discuss
the annual recommendations;
(II) meet with the Board of
Governors of the Federal
Reserve System at least once a
year and provide oral or
written representations
concerning matters within the
jurisdiction of the Board; and
(III) call for information
and make recommendations in
regard to consumer protection
regulations.
(iii) Response to recommendations.--
When the Chair of the Federal Reserve
testifies before Congress, the Chair
shall also testify about the
recommendations of the Consumer
Advisory Council under clause (ii)(II)
and its recommendations for consumer
protection regulations.
Page 216, line 21, strike ``or''.
Page 216, after line 21, insert the following new
subparagraphs:
``(II) a change of control of
an industrial bank, its section
6 holding company, or any
entity that directly or
indirectly controls the
industrial bank, in a
transaction other than a merger
described in subclause (I), by
an acquiring company that is
predominately engaged in
activities not permissible for
a financial holding company
pursuant to subsection (k),
if--
``(aa) the
transaction is approved
by the appropriate
Federal banking agency
and the Board; and
``(bb) the industrial
bank does not
thereafter establish a
domestic branch as
defined in section 3(o)
of the Federal Deposit
Insurance Act (12
U.S.C. 1813(o)),
``(III) an inadvertent
acquisition of control, as
determined by the Board, if
such inadvertent acquisition of
control is reversed or
rectified within 180 days of
its discovery, or''.
Page 216, line 22, strike ``(II)'' and insert ``(IV)''.
Page 669, line 15, insert ``(b),'' after ``Subsections''.
Page 669, line 20, insert ``except for section 505 as it
applies to section 501(b)'' before the period.
Page 670, after line 9, insert the following:
(N) Section 626 of the Omnibus Appropriations
Act, 2009 (Public Law 111-8).
(O) The Unlawful Internet Gambling
Enforcement Act of 2006.
Page 701, line 1, insert ``the Federal Trade Commission,''
after ``banking agencies,''.
Page 714, line 13, strike ``received and collected'' and
insert ``identified''.
Page 743, line 3, insert ``a provision of'' after ``reports
under''.
Page 743, line 4, insert ``a provision of'' after ``title,''.
Page 743, line 5, insert ``any provision of'' after ``law,''.
Page 743, line 8, insert ``under that provision of law''
after ``exclusive authority''.
Page 897, beginning on line 21, strike ``Backstop''.
Page 898, line 2, strike ``4202(e)(3)'' and insert
``paragraph (2) or (3) of section 4202(e)''.
Page 898, line 8, insert ``transferred under subsection (a)''
after ``functions''.
Page 954, line 2, insert ``and shall not apply to the term
`Board' when used in reference to the Federal Deposit Insurance
Corporation or the National Credit Union Administration''
before the period.
Page 957, line 3, insert ``(other than the Consumer Financial
Protection Agency)'' after ``agency''.
Page 957, line 20, insert ``(and except for any insertion of
`Federal Trade Commission' made by this subtitle)'' after
``subparagraph (B)''.
Page 958, line 2, strike ``and 129(m) (as amended by
paragraph (7))'' and insert ``129(m) (as amended by paragraph
(7)), 140A, or 149 (as amended by paragraph (8)).''.
Page 959, after line 13, insert the following:
(8) Section 149.--Section 149(b) of the Truth in
Lending Act (15 U.S.C. 1665d(b)) is amended by
inserting ``the Federal Trade Commission,'' after ``in
consultation with''.
Page 960, beginning on line 1, strike ``paragraph (7)(A)''
and insert `` paragraphs (7)(B), (8)(A), (8)(C), and (8)(D) of
this subsection (and except for any insertion of `Federal Trade
Commission' made by this subtitle)''.
Page 961, after line 21, insert the following:
(5) Section 609.--Section 609(d)(1) of the Fair
Credit Reporting Act (15 U.S.C. 1681g(d)(1)) is amended
by inserting ``the Federal Trade Commission,'' after
``in consultation with''.
Page 961, line 22, strike ``(5)'' and insert ``(6)''.
Page 961, line 22, strike ``611(e)(2)'' and insert
``611(e)''.
Page 961, line 23, strike ``15 U.S.C.1681i(e)(2)'' and insert
``15 U.S.C. 1681i(e)''.
Page 961, line 24, strike ``amended to read as follows:'' and
insert ``amended--'', and after such line insert the following:
(A) by amending paragraph (2) to read as
follows:
Page 962, line 5, strike the period following the quotation
marks and insert ``; and'' and after such line insert the
following:
(B) in the heading of paragraph (3) by
inserting ``Consumer reporting'' before
``agency''.
Page 962, strike lines 6 through 8 and insert the following:
(7) Section 615.--Section 615 of the Fair Credit
Reporting Act (15 U.S.C. 1681m) is amended--
(A) in subsection (d)(2)(B), by inserting
``the Federal Trade Commission,'' after ``in
consultation with'';
(B) in subsection (e)(1), by striking ``and
the Commission'' and inserting ``the Federal
Trade Commission, the Securities and Exchange
Commission, and the Commodities Futures Trading
Commission''; and
(C) by striking subparagraph (A) of
subsection (h)(6) and inserting the following:
Page 962, line 11, strike ``(7)'' and insert ``(8)''.
Page 963, line 2, insert ``(other than the Consumer Financial
Protection Agency)'' after ``agency''.
Page 968, after line 7 insert the following:
(C) in paragraph (2) of subsection (c)--
(i) by inserting ``the Agency and''
before ``the Federal Trade Commission''
in the first sentence;
(ii) by inserting ``Agency and the
Federal Trade'' after ``provide the'';
and
(iii) by inserting ``Agency,'' before
``Federal Trade Commission'' in the
second sentence;
(D) in paragraph (4) of subsection (c)--
(i) by inserting ``Agency'', before
``the Federal Trade Commission''; and
(ii) inserting ``Agency, the Federal
Trade'' after ``complaint of the'';
(E) in paragraph (2) of subsection (f), by
inserting ``the Federal Trade Commission''
after ``in consultation with'';
Page 968, line 8, strike ``(C)'' and insert ``(F)''.
Page 968, beginning on line 12, strike ``with respect to a
covered person described in subsection (b)'' and insert ``,
except that, with respect to sections 615(e) and 628 of this
title, the agencies identified in subsections (a) and (b) of
this section shall prescribe such regulations as necessary to
carry out the purposes of such sections with respect to
entities within their enforcement authority under such
subsections''.
Page 968, line 14, strike ``(D)'' and insert ``(G)''.
Page 973, strike lines 8 and 9 and insert the following:
(iii) in paragraph (1)(B)--
(I) by inserting ``of
Governors of the Federal
Reserve System'' after
``Board''; and
(II) by striking ``and''
after the semicolon;
Page 974, line 2, insert ``(other than the Consumer Financial
Protection Agency)'' after ``agency''.
Page 978, line 4, insert ``(other than the Consumer Financial
Protection Agency)'' after ``agency''.
Page 982, line 21, strike ``and'' and after such line insert
the following:
(iii) in paragraph (l)(B), by
inserting ``of Governors of the Federal
Reserve System'' after ``Board'';
Page 982, line 22, strike ``(iii)'' and insert ``(iv)''.
Page 983, line 7, insert ``(other than the Consumer Financial
Protection Agency)'' after ``agency''.
Page 988, after line 7, insert the following (and redesignate
succeeding subsections accordingly):
(a) Section 501.--Section 501(b) of the Gramm-Leach-Bliley
Act (15 U.S.C. 6801(b)) is amended by inserting ``(other than
the Consumer Financial Protection Agency)'' after ``title''.
(b) Section 502.--Section 502(e)(5) of the Gramm-Leach-Bliley
Act (15 U.S.C. 6802(e)(5)) is amended by inserting ``the
Consumer Financial Protection Agency,'' after ``(including''.
(c) Section 503.--Section 503(e)(1) of the Gramm-Leach-Bliley
Act (15 U.S.C. 6803(e)(1)) is amended--
(1) by inserting ``Consumer Financial Protection
Agency in consultation with the other'' before
``agencies''; and
(2) by striking ``jointly''.
Page 988, line 13, strike ``and'' at the end.
Page 988, line 15, strike the period and insert ``; and'' and
after such line insert the following:
(3) by inserting ``the Federal banking agencies, the
National Credit Union Administration, the Secretary of
the Treasury, the Federal Trade Commission, and''
before ``representatives of State insurance
authorities''.
Page 989, after line 15, insert the following:
(f) Section 507.--Subsection 507(b) of the Gramm-Leach-Bliley
Act (15 U.S.C. 6807(b)) is amended by striking ``Federal Trade
Commission'' and inserting ``Consumer Financial Protection
Agency, or in the case of a rule under section 501(b), the
Federal Trade Commission or the Securities and Exchange
Commission''.
Page 1019, line 8, strike ``and'' and after such line insert
the following:
(2) by inserting a comma after ``under this Act'';
(3) by inserting a comma after ``subsection
(a)(1))''; and
Page 1019, line 9, strike ``(2)'' and insert ``(4)''.
Page 1019, line 15, insert ``partnership, or corporation''
after ``person,''.
Page 825, after line 12, insert the following:
SEC. 4313. REVIEW, REPORT, AND PROGRAM WITH RESPECT TO EXCHANGE
FACILITATORS.
(a) Review.--The Director shall review all Federal laws and
regulations relating to the protection of persons who utilize
exchange facilitators.
(b) Report.--Not later than 180 days after the effective date
of this subtitle, the Director shall submit to Congress a
report describing--
(1) recommendations for legislation to ensure the
appropriate protection of persons who utilize exchange
facilitators;
(2) recommendations for updating the regulations of
Federal departments and agencies to ensure the
appropriate protection of such persons; and
(3) recommendations for Agency regulations to ensure
the appropriate protection of such persons.
(c) Program.--Not later than 180 days after the date of the
submission of the report under subsection (b), the Director
shall establish and carry out a program, utilizing the
authorities of the Agency, to protect persons who utilize
exchange facilitators.
(d) Exchange Facilitator Defined.--In this section, the term
``exchange facilitator'' means a person that--
(1) facilitates, for a fee, an exchange of like-kind
property by entering into an agreement with a taxpayer
by which the exchange facilitator acquires from the
taxpayer the contractual rights to sell the taxpayer's
relinquished property and transfers a replacement
property to the taxpayer as a qualified intermediary
(within the meaning of Treasury Regulations section
1.1031(k)-1(g)(4)) or enters into an agreement with the
taxpayer to take title to a property as an exchange
accommodation titleholder (within the meaning of
Revenue Procedure 2000-37) or enters into an agreement
with a taxpayer to act as a qualified trustee or
qualified escrow holder (within the meaning of Treasury
Regulations section 1.1031(k)-1(g)(3));
(2) maintains an office for the purpose of soliciting
business as an exchange facilitator; or
(3) purports to be an exchange facilitator by
advertising any of the services listed in paragraph (1)
or soliciting clients in printed publications, direct
mail, television or radio advertisements, telephone
calls, facsimile transmissions, or other electronic
communications directed to the general public for
purposes of providing any such services.
Page 255, after line 2, insert the following new section:
SEC. 1316. DE NOVO BRANCHING INTO STATES.
(a) National Banks.--Section 5155(g)(1)(A) of the Revised
Statutes (12 U.S.C. 36(g)(1)(A)) is amended to read as follows:
``(A) the law of the State where the branch
is located, or is to be located, would permit
establishment of the branch if the national
bank were a state bank chartered by such
State;''.
(b) State Insured Banks.--Section 18(d)(4)(A)(i) of the
Federal Deposit Insurance Act (12 U.S.C. 1828(d)(4)(A)(i)) is
amended to read as follows:
``(i) the law of the State where the
branch is located, or is to be located,
would permit establishment of the
branch if the bank were a State bank
chartered by such State;''.
Page 277, line 22, strike the period and insert ``; and''.
Page 277, after line 22, insert the following:
(C) is not an insured depository institution
(as defined in section 3(c) of the Federal
Deposit Insurance act), a Federal credit union
or a State-chartered credit union (as such
terms are defined in section 101 of the Federal
Credit Union Act), or a government-sponsored
enterprise (as such term is defined in section
1004(f) of the Financial Institutions Reform,
Recovery and Enforcement Act of 1989 (12 U.S.C.
1811 note)).
Page 305, beginning on line 25, strike ``(that became a
legally enforceable or perfected security interest after the
date of the enactment of this clause) other than a legally
enforceable or perfected security interest of the Federal
Government,'' and insert ``in assets of the covered financial
company arising under a qualified financial contract (as
defined under subsection (c)(8)(D)(i)) with an original term of
30 days or less (except that, for a contract for a term linked
to a calendar month, the original term must be less than one
calendar month), secured by collateral other than securities
issued by the United States Treasury, the Board of Governors of
the Federal Reserve System, any agency of the United States,
any Federal Reserve bank, or any Government Sponsored
Enterprise, that became a legally enforceable or perfected
security interest after the date of the enactment of this
clause, and that is not a security interest of the Federal
Government''.
Page 306, beginning on line 7, strike ``the amount of up to
20 percent'' and insert ``in the amount specified under clause
(v)''.
Page 306, line 13, insert after the period the following
sentence: ``This clause shall not apply with respect to debt
obligations secured by real property. This clause may only be
implemented with respect to secured creditors if, as a result
of the dissolution of the covered financial company, no funds
are available to satisfy, in whole or in part, any claims of
unsecured creditors or shareholders.''.
Page 306, after line 13, insert the following:
(v) Amount specified.--For purposes
of clause (iv), the amount specified
under this clause, in the case of a
secured creditor, is the amount of up
to 10 percent.
Page 318, after line 11, insert the following subparagraphs
(and redesignate subparagraphs (B) through (E) as subparagraphs
(J) through (M), respectively):
(B) Preferential transfers.--The Corporation
as receiver for any covered financial company
may avoid a transfer of an interest of the
covered financial company in property that--
(i) was made to or for the benefit of
a creditor;
(ii) was made for or on account of an
antecedent debt that was owed by the
covered financial company before the
transfer was made;
(iii) was made while the covered
financial company was insolvent;
(iv) was made--
(I) on or within 90 days
before the date on which the
Corporation was appointed
receiver; or
(II) between 90 days and one
year before the date that the
Corporation was appointed
receiver, if such creditor at
the time of the transfer was an
insider, as that term is
defined in section 101(31) of
title 11, United States Code;
and
(v) enables such creditor to receive
more than such creditor would receive
in the liquidation of the covered
financial company if--
(I) the transfer had not been
made; and
(II) such creditor received
payment of such debt to the
extent provided by the
provisions of this subtitle.
(C) Post-receivership transactions.--The
Corporation as receiver for any covered
financial company may avoid a transfer of
property of the receivership that occurred
after the Corporation was appointed receiver
that was not authorized under this title.
(D) Right of recovery.--To the extent that a
transfer is avoided under subparagraphs (A),
(B) or (C), the Corporation may recover, for
the benefit of the covered financial company,
the property transferred or, if a court so
orders, the value of such property from--
(i) the initial transferee of such
transfer or the entity for whose
benefit such transfer was made; or
(ii) any immediate or mediate
transferee of any such initial
transferee.
(E) Rights of transferee or obligee.--The
Corporation may not recover under subparagraph
(D)(ii)--
(i) from a transferee that takes for
value, including satisfaction or
securing of a present or antecedent
debt, in good faith, and without
knowledge of the violability of the
transfer avoided; or
(ii) any immediate or mediate good
faith transferee of such transferee.
(F) Defenses.--A transferee or obligee from
whom the Corporation seeks to recover a
transfer or avoid an obligation under
subparagraphs (A), (B) or (C) shall have the
same affirmative defenses and rights to liens
on the property transferred to the extent they
would be available to a transferee or obligee
from whom a trustee under title 11 seeks to
recover a transfer under sections 547, 548, and
549 of title 11, United States Code.
(G) Limitations on avoiding powers.--The
rights of the Corporation under subparagraphs
(A), (B) or (C) are restricted to the same
extent as the rights of a trustee in bankruptcy
under section 546(b)(1) of the Bankruptcy Code.
(H) Presumption of insolvency.--For purposes
of subparagraph (B), the covered financial
company is presumed to have been insolvent on
and during the 90 days immediately preceding
the date on which the Corporation is appointed
as receiver.
(I) Rights under this subsection.--The rights
of the Corporation as receiver for a covered
financial company under this subsection shall
be superior to any rights of a trustee or any
other party (other than any party which is a
Federal agency of a Federal Home Loan Bank)
under title 11, United States Code.
Page 31, line 24, strike ``control of the Council; and'' and
insert ``control of or used by the Council;''.
Page 32, line 5, strike the period and insert ``; and'' and
after such line insert the following:
(C) the officers, directors, employees,
financial advisors, staff, working groups, and
agents and representatives of the Council (as
related to the agent's or representative's
activities on behalf of the Council) at such
reasonable times as the Comptroller General may
request.
Page 32, after line 12, insert the following:
(3) Copies.--Comptroller General may make and retain
copies of such books, accounts, and other records
access to which is granted under this provision as the
Comptroller General considers appropriate.
Page 732, after line 10, insert the following:
SEC. 4111. OVERSIGHT BY GAO.
(a) Authority.--The Comptroller General may audit the
programs, activities, receipts, expenditures, and financial
transactions of the Agency and of any agents and
representatives of the Agency as related to the agent's or
representative's activities on behalf of or under authority of
the Agency.
(b) Access.--Notwithstanding any other provision of law, the
Comptroller General shall have access, upon request, to any
information, data, schedules, books, accounts, financial
records, reports, files, electronic communications, or other
papers, things, or property belonging to or in use by the
Agency, or any vehicles established by the Agency under this
Act, and to the directors, officers, employees, independent
public accountants, financial advisors, staff, working groups,
and agents and representatives of the Agency (as related to the
agent's or representative's activities on behalf of the Agency)
or any vehicle established by the Agency at such reasonable
time as the Comptroller General may request. The Comptroller
General may make and retain copies of such books, accounts, and
other records as the Comptroller General deems appropriate.
Page 732, line 11, strike ``4111'' and insert ``4112''.
Page 1077, line 23, strike ``1 year'' and insert ``18
months''.
Page 1079, after line 24, insert the following:
(3) Access.--
(A) In general.--For purposes of conducting
the study described in paragraph (1), the
Comptroller General shall have access, upon
request and with the consent of the Securities
and Exchange Commission, to any information,
data, schedules, books, accounts, financial
records, reports, files, electronic
communications, or other papers, things, or
property belonging to or in use by each
nationally recognized statistical rating
organization, and to the officers, directors,
employees, independent public accountants,
financial advisors, staff and agents and
representatives of the organization (as related
to the agent's or representative's activities
on behalf of the organization) at such
reasonable times as the Comptroller General may
request. The Comptroller General may make and
retain copies of books, records, accounts, and
other records as the Comptroller General deems
appropriate.
(B) Confidentiality.--The Comptroller General
may not disclose reasonably designated
proprietary, trade secret or business
confidential information obtained from the
organization except that such information shall
be disclosed by the Comptroller General--
(i) to other Federal Government
departments, agencies, and officials
for official use upon request;
(ii) to committees of Congress upon
request; and
(iii) to a court in any judicial
proceeding under court order.
Nothing in this provision shall be construed to
limit the requirements imposed by section 1905
of title 18, United States Code.
Page 1186, beginning on line 8, strike ``and the Securities
and Exchange Commission shall each'' and insert ``shall''.
Page 1186, line 17, strike ``and''.
Page 1186, line 20, strike the period and insert a semicolon
and after such line insert the following:
(3) determine how to reduce the burden of complying
with section 404(b) of the Sarbanes-Oxley Act of 2002
for companies whose market capitalization is less than
$250,000,000 for the relevant reporting period while
maintaining investor protections for such companies;
and
(4) determine whether various methods of reducing the
compliance burden or a complete exemption for such
companies (whose market capitalization is less than
$250,000,000 for the relevant reporting period) from
such compliance would encourage companies to list on
exchanges in the United States in their initial public
offerings.
Page 1186, beginning on line 21, strike ``On or before June
1, 2010'' and insert ``Not later than 9 months after the date
of the enactment of this subtitle''.
Page 1186, beginning on line 22, strike ``and the Securities
and Exchange Commission shall submit separate reports'' and
insert ``shall submit a report''.
Page 1222, line 4, strike ``and the Comptroller General shall
jointly'' and insert ``shall''.
Page 1222, line 15, strike ``180 days'' and insert ``9
months''.
Page 1222, beginning on line 16, strike ``and the Comptroller
General''.
Page 706, after line 7, insert the following new paragraph:
(3) Office of financial protection for older
americans.--
(A) Establishment.--Before the end of the
180-day period beginning on the date of the
enactment of this title, the Director shall
establish within the Agency the Office of
Financial Protection for Older Americans, whose
functions shall include activities designed to
facilitate the financial literacy of
individuals who have attained the age of 62
years or more (in this paragraph, referred to
as ``seniors'') on protection from unfair and
deceptive practices and on current and future
financial choices, including through the
dissemination of materials to seniors on such
topics.
(B) Director.--The Office of Financial
Protection for Older Americans shall be headed
by a director.
(C) Duties.--Such unit shall perform the
following duties:
(i) Develop goals for programs that
provide seniors financial literacy and
counseling, including programs that--
(I) help seniors recognize
warning signs of unfair and
deceptive practices, protect
themselves from such practices;
(II) provide one-on-one
financial counseling on issues
including long-term savings and
later-life economic security;
and
(III) provide personal
consumer credit advocacy to
respond to consumer problems
caused by unfair and deceptive
practices.
(ii) Monitor certifications or
designations of financial advisors who
advise seniors and alert the Securities
and Exchange Commission and State
regulators of certifications or
designations that are identified as
unfair or deceptive.
(iii) Not later than 18 months after
the date of the establishment of the
Office of Financial Protection for
Older Americans, submit to Congress and
the Securities and Exchange Commission
recommendations of the best practices
for any legislative and regulatory--
(I) disseminating information
regarding the legitimacy of
certifications of financial
advisers who advise seniors;
(II) methods in which a
senior can identify the
financial advisor most
appropriate for the senior's
needs; and
(III) methods in which a
senior can verify a financial
advisor's credentials.
(iv) Conduct research to identify
best practices and effective methods,
tools, technology and strategies to
educate and counsel seniors about
personal finance management with a
focus on--
(I) protecting themselves
from unfair and deceptive
practices;
(II) long-term savings; and
(III) planning for retirement
and long-term care.
(v) Coordinate consumer protection
efforts of seniors with other Federal
agencies and State regulators, as
appropriate, to promote consistent,
effective, and efficient enforcement.
(vi) Work with community
organizations, non-profit
organizations, and other entities that
are involved with educating or
assisting seniors (including the
National Education and Resource Center
on Women and Retirement Planning).
Page 760, strike line 19 and all that follows through page
762, line 22, and insert the following:
(a) Exclusion for Merchants, Retailers, and Sellers of
Nonfinancial Services.--
(1) In general.--Notwithstanding any provision of
this title (other than paragraph (4)) and subject to
paragraph (2), the Director and the Agency may not
exercise any rulemaking, supervisory, enforcement or
other authority, including authority to order
assessments, under this title with respect to--
(A) credit extended directly by a merchant,
retailer, or seller of nonfinancial goods or
services to a consumer, in a case in which the
good or service being provided is not itself a
consumer financial product or service,
exclusively for the purpose of enabling that
consumer to purchase such goods or services
directly from the merchant, retailer, or seller
of financial services; or
(B) collection of debt, directly by the
merchant, retailer, or seller of nonfinancial
services, arising from such credit extended. In
the application of this paragraph, the
extension of credit and the collection of debt
described in subparagraphs (A) and (B),
respectively, shall not be considered a
consumer financial product or service.
(2) Exceptions for existing authority.--The Director
may exercise any rulemaking authority regarding an
extension of credit described in paragraph (1)(A) or
the collection of debt arising from such extension, as
may be authorized by the enumerated consumer laws or
any law or authority transferred under subtitle F or H.
(3) Rule of construction.--No provision of this title
shall be construed as modifying, limiting, or
superseding the authority of the Federal Trade
Commission or any agency other than the Agency with
respect to credit extended, or the collection of debt
arising from such extension, directly by a merchant or
retailer to a consumer exclusively for the purpose of
enabling that consumer to purchase goods or services
directly from the merchant or retailer.
(4) Exclusion not applicable to certain credit
transactions.---Paragraph (1) shall not apply to--
(A) any credit transaction, including the
collection of the debt arising from such
extension, in which the merchant, retailer, or
seller of nonfinancial services assigns, sells,
or otherwise conveys such debt owed by the
consumer to another person; or
(B) any credit transaction--
(i) in which the credit provided
significantly exceeds the market value
of the product or service provided, and
(ii) with respect to which the
Director finds that the sale of the
product or service is done as a
subterfuge so as to evade or circumvent
the provisions of this title.
Page 675, strike line 10 and all that follows through page
676, line 9, and insert the following:
(xi) Financial data processing by any
technological means, including
providing data processing, access to or
use of databases or facilities, or
advice regarding processing or
archiving, if the data to be processed,
furnished, stored, or archived are
financial, banking, or economic, except
that it shall not be considered a
financial activity with respect to
financial data processing--
(I) to the extent the person
is providing interactive
computer service, as defined in
section 230 of the
Communications Act of 1934 (47
U.S.C. 230); or
(II) if the person--
(aa) unknowingly or
incidentally transmits,
processes, or stores
financial data in a
manner that such data
is undifferentiated
from other types of
data that the person
transmits, processes,
or stores;
(bb) does not provide
to any consumer a
consumer financial
product or service in
connection with or
relating to in any
manner financial data
processing; and
(cc) does not provide
a material service to
any covered person in
connection with the
provision of a consumer
financial product or
service.
Page 1205, line 2, insert before the period at the end the
following: ``and to provide additional levels of coverage on an
optional basis''.
Page 1205, line 22, strike ``and'' after the semicolon.
Page 1205, line 25, strike the period at the end and insert
``; and''.
Page 1205, after line 25, insert the following:
(6) examine the feasibility of SIPC providing
additional levels of coverage on an optional basis,
what those additional levels of coverage should be, and
the appropriate risked-based premium for providing
additional coverage.
Page 1018, after line 25, insert the following:
SEC. 4818. AMENDMENTS TO TRUTH IN LENDING ACT.
(a) In General.--Section 128(e) of the Truth in Lending Act
is amended--
(1) by striking paragraph (3) and inserting the
following new paragraph (3):
``(3) Institutional certification required.--(A)
Except as provided in subparagraph (B), before a
creditor may issue any funds with respect to an
extension of credit described in paragraph (1), the
creditor shall obtain from the relevant institution of
higher education such institution's certification--
``(i) of the enrollment status of the
borrower;
``(ii) of the borrower's cost of attendance
at the institution as determined by the
institution under part F of title IV of the
Higher Education Act of 1965;
``(iii) of the difference between the
borrower's cost of attendance and the
borrower's estimated financial assistance
received under title IV of the Higher Education
Act of 1965 and other assistance known to the
institution, as applicable; and
``(iv) that the institution has--
``(I) informed the borrower--
``(aa) about the availability
of, and the borrower's
potential eligibility for,
Federal financial assistance
under this title, including
disclosing the terms,
conditions, and interest rates
of Federal student loans;
``(bb) of the borrower's
ability to select a private
educational lender of the
borrower's choice;
``(cc) about the impact of a
proposed private education loan
on the borrowers' potential
eligibility for other financial
assistance, including Federal
financial assistance under the
Higher Education Act of 1965;
and
``(dd) about a borrower's
right to accept or reject a
private education loan within
the 30-day period following a
private educational lender's
approval of a borrower's
application and about a
borrower's 3-day right to
cancel altogether;
``(II) determined whether the
borrower has applied for and exhausted
the Federal financial assistance
available to the borrower under the
Higher Education Act of 1965 and
informed the borrower accordingly; and
``(III) counseled the borrower on the
borrower's financial aid options.
``(B) A creditor may issue funds with respect to an
extension of credit described in paragraph (1) without
obtaining from the relevant institution of higher
education such institution's certification if such
institution fails to provide such certification within
21 calendar days or 15 business days, whichever comes
first, of the creditor's request for such
certification.'';
(2) by redesignating paragraphs (9), (10), and (11)
as paragraphs (10), (11), and (12), respectively; and
(3) by inserting after paragraph (8) the following
new paragraph (9):
``(9) Provision of information.--On or before the
date a creditor issues any funds with respect to an
extension of credit described in paragraph (1), the
creditor shall notify the relevant institution of
higher education, in writing, of the amount of the
extension of credit and the student on whose behalf
credit is extended. The form of such written
notification shall be subject to the regulations of the
Agency.''.
(b) Regulations.--
(1) Deadline for regulations.--Not later than 365
days after the date of enactment of this Act, the
Agency shall issue regulations in final form to
implement paragraphs (3) and (9) of section 128(e) of
the Truth in Lending Act, as amended by subsection (a).
Such regulations shall become effective not later than
6 months after their date of issuance.
(2) Effective date.--The regulations in effect
pursuant to section 128(e) of the Truth in Lending Act
as of the date of the enactment of this Act shall
remain in effect until the effective date of the
regulations issued under paragraph (1).
(c) Study and Report on Private Education Loans and Private
Educational Lenders.--
(1) Report.--Not later than 2 years after the date of
enactment of this Act, the Director and the Secretary
of Education, in consultation with the Commissioners of
the Federal Trade Commission, and the Attorney General,
shall submit a report to the Committee on Financial
Services and the Committee on Education and Labor of
the House of Representatives and the Committee on
Banking, Housing, and Urban Affairs and the Committee
on Health Education, Labor, and Pensions of the Senate
on private education loans (as that term is defined in
section 140 of the Truth in Lending Act (15 U.S.C.
1650)) and private educational lenders (as that term is
defined in such section).
(2) Content.--The report required by this subsection
shall examine, at a minimum, the following:
(A) the growth and changes of the private
education loan market in the United States;
(B) factors influencing such growth and
changes;
(C) the extent to which students and parents
of students rely on private education loans to
finance postsecondary education and the private
education loan indebtedness of borrowers,
(D) the characteristics of private education
loan borrowers, including the types of
institutions of higher education they attend,
socioeconomic characteristics (including income
and education levels, racial characteristics,
geographical background, age, and gender), what
other forms of financing borrowers use to pay
for education, whether they exhaust their
federal loan options before taking out a
private loan, whether such borrowers are
dependent or independent students (as
determined under part F of title IV of the
Higher Education Act of 1965) or parents of
such students, whether such borrowers are
students enrolled in a program leading to a
certificate, license or credential other than a
degree, an associates degree, a baccalaureate
degree, or a graduate or professional degree
and, if practicable, employment and repayment
behaviors;
(E) the characteristics of private
educational lenders, including whether such
creditors are for-profit, non-profit, or
institutions of higher education;
(F) the underwriting criteria used by private
educational lenders, including the use of
cohort default rate (as such term is defined in
section 435(m) of the Higher Education Act of
1965);
(G) the terms, conditions, and pricing of
private education loans;
(H) the consumer protections available to
private education loan borrowers, including the
effectiveness of existing disclosures and
requirements and borrowers' awareness and
understanding about terms and conditions of
various financial products;
(I) whether federal regulators and the public
have access to information sufficient to
provide them with assurances that private
education loans are provided in accord with the
Nation's fair lending laws and that allows
public officials to determine lenders'
compliance with fair lending laws; and
(J) any statutory or legislative
recommendations necessary to improve consumer
protections for private education loan
borrowers and to better enable federal
regulators and the public to ascertain private
educational lender compliance with fair lending
laws.
(d) Report.-- Not later than 18 months after the issuance of
regulations under subsection (b)(1), the Consumer Financial
Protection Agency and the Secretary of Education shall jointly
submit to Congress a report on the compliance of institutions
and private educational lenders with the amendments made by
this section. The report shall include the degree to which
specific institutions utilize certifications in effectively
encouraging the exhaustion of Federal student loan eligibility
and lowering student debt.
Page 198, after line 15, insert the following new subtitle:
Subtitle K--Home Affordable Modification Program
SEC. 9911. HOME AFFORDABLE MODIFICATION PROGRAM GUIDELINES.
(a) Net Present Value Input Data.--The Secretary of the
Treasury (in this section referred to as the ``Secretary'')
shall revise the supplemental directives and other guidelines
for the Home Affordable Modification Program of the Making Home
Affordable initiative of the Secretary of the Treasury,
authorized under the Emergency Economic Stabilization Act of
2008 (Public Law 110-343), to require each mortgage servicer
participating in such program to provide each borrower under a
mortgage whose request for a mortgage modification under the
Program is denied with all borrower-related and mortgage-
related input data used in any net present value (NPV) analyses
performed in connection with the subject mortgage. Such input
data shall be provided to the borrower at the time of such
denial.
(b) Web-Based Site for NPV Calculator and Application.--
(1) NPV calculator.--In carrying out the Home
Affordable Modification Program, the Secretary shall
establish and maintain a site on the World Wide Web
that provides a calculator for net present value
analyses of a mortgage, based on the Secretary's
methodology for calculating such value, that mortgagors
can use to enter information regarding their own
mortgages and that provides a determination after
entering such information regarding a mortgage of
whether such mortgage would be accepted or rejected for
modification under the Program, using such methodology.
(2) Disclosure.-- Such Web site shall also
prominently disclose that each mortgage servicer
participating in such Program may use a method for
calculating net present value of a mortgage that is
different than the method used by such calculator.
(3) Application.-- The Secretary shall make a
reasonable effort to include on such World Wide Web
site a method for homeowners to apply for a mortgage
modification under the Home Affordable Modification
Program.
(c) Public Availability of NPV Methodology, Computer Model,
and Variables.--The Secretary shall make publicly available,
including by posting on a World Wide Web site of the
Secretary--
(1) the Secretary's methodology and computer model,
including all formulae used in such computer model,
used for calculating net present value of a mortgage
that is used by the calculator established pursuant to
subsection (b); and
(2) all variables used in such net present value
analysis.
Page 1068, after line 22, insert the following:
(c) Requirements for Liability.--Section 21D of the
Securities Exchange Act of 1934 (15 U.S.C. 78u-4) is amended--
(1) by redesignating subsections (c) through (f) as
subsections (d) through (g), respectively; and
(2) by inserting after subsection (b) the following:
``(c) Requirements for Liability.--A purchaser of a security
given a rating by a nationally recognized statistical rating
organization shall have the right to recover for damages if the
process of determining the credit rating was--
``(1) grossly negligent, based on the facts and
circumstances at the time the rating was issued; and
``(2) a substantial factor in the economic loss
suffered by the investor.
No action shall be maintained to enforce any liability created
under this subsection unless brought within 2 years after the
discovery of the facts constituting the violation and within 3
years after the initial issuance of the rating.''.
Strike section 1109 and insert the following new section:
SEC. 1109. EMERGENCY FINANCIAL STABILIZATION.
(a) In General.--Upon the written determination of the
Council that a liquidity event exists that could destabilize
the financial system (which determination shall be made upon a
vote of not less than two-thirds of the members of the Council
then serving) and with the written consent of the Secretary of
the Treasury (after certification by the President that an
emergency exists), the Corporation may create a widely-
available program designed to avoid or mitigate adverse effects
on systemic economic conditions or financial stability by
guaranteeing obligations of solvent insured depository
institutions or solvent depository institution holding
companies (including any affiliates thereof), if necessary to
prevent systemic financial instability during times of severe
economic distress, except that a guarantee of obligations under
this section may not include provision of equity in any form.
(b) Policies and Procedures.--Prior to exercising any
authority under this section, the Corporation shall establish
policies and procedures governing the issuance of guarantees.
The terms and conditions of any guarantees issued shall be
established by the Corporation with the approval of the
Secretary of the Treasury and the Financial Stability Oversight
Council. Such terms and conditions may include the Corporation
requiring collateral as a condition of any such guarantee.
(c) Cap for Guaranteed Amount.--
(1) In general.--In connection with any program
established pursuant to subsection (a) and subject to
paragraph (2), the Corporation may not have guaranteed
debt outstanding at any time of more than
$500,000,000,000 (as indexed to reflect growth in
assets of insured depository institutions and
depository institution holding companies as determined
by the Corporation).
(2) Additional debt guarantee authority.--If the
Corporation, with the concurrence of the Council and
the Secretary (in consultation with the President),
determines that the Corporation must guarantee debt in
excess of $500,000,000,000 (as indexed pursuant to
paragraph (1)) to prevent systemic financial
instability, the Corporation may transmit to the
Congress a request for authority to guarantee debt in
excess of $500,000,000,000 (as indexed pursuant to
paragraph (1)). Such request shall be considered
granted by Congress upon adoption of a joint resolution
approving such request. Such joint resolution shall be
considered in the Senate under expedited procedures.
(d) Funding.--
(1) Administrative expenses and cost of guarantees.--
A program established pursuant to this section shall
require funding only for the purposes of paying
administrative expenses and for paying a guarantee in
the event that a guaranteed loan defaults.
(2) Fees and other charges.--The Corporation shall
charge fees or other charges to all participants in
such program established pursuant to this section to
offset projected losses and administrative expenses. To
the extent that a program established pursuant to this
section has expenses or losses, the program will be
funded entirely through fees or other charges assessed
on participants in such program.
(3) Excess funds.--If at the conclusion of such
program there are any excess funds collected from the
fees associated with such program, the funds will be
deposited into the Systemic Dissolution Fund
established pursuant to section 1609(n).
(4) Authority of corporation.--For purposes of
conducting a program established pursuant to this
section, the Corporation--
(A) may borrow funds from the Secretary of
the Treasury, which shall be repaid in full
with interest through fees and charges paid by
participants in accordance with paragraph (2),
and there shall be available to the Corporation
amounts in the Treasury not otherwise
appropriated, including for the payment of
reasonable administrative expenses;
(B) may not borrow funds from the Deposit
Insurance Fund established pursuant to section
11(a)(4) of the Federal Deposit Insurance Act;
and
(C) may not borrow funds from the Systemic
Dissolution Fund established pursuant to
section 1609(n).
(5) Back-up special assessment.--To the extent that
the funds collected pursuant to paragraph (2) are
insufficient to cover any losses or expenses (including
monies borrowed pursuant to paragraph (4)) arising from
a program established pursuant to this section, the
Corporation shall impose a special assessment solely on
participants in the program.
(e) Plan for Maintenance or Increase of Lending.--In
connection with any application or request to participate in
such program authorized pursuant to this section, a solvent
entity seeking to participate in such program shall be required
to submit to the Corporation a plan detailing how the use of
such guaranteed funds will facilitate the increase or
maintenance of such solvent company's level of lending to
consumers or small businesses.
(f) Sunset of Corporation's Authority.--The Corporation's
authority under subsections (a) and (d) and the authority to
borrow funds from the Treasury under section 1609(o) shall
expire on December 31, 2013.
(g) Rule of Construction.--For purposes of this section, a
guarantee of deposits held by insured depository institutions
shall not be treated as a debt guarantee program.
(h) Definitions.--For purposes of this section, the following
definitions apply:
(1) Corporation.--The term ``Corporation'' means the
Federal Deposit Insurance Corporation.
(2) Depository institution holding company.--The term
``depository institution holding company'' has the
meaning given the term in section 3 of the Federal
Deposit Insurance Act (12 U.S.C. 1813).
(3) Insured depository institution.--The term
``insured depository institution'' has the meaning
given the term in section 3 of the Federal Deposit
Insurance Act (12 U.S.C. 1813).
(4) Solvent.--The term ``solvent'' means assets are
more than the obligations to creditors.
Page 110, after line 7, insert the following new section (and
redesignate the subsequent sections accordingly):
SEC. 1110. ADDITIONAL RELATED AMENDMENTS.
(a) Federal Deposit Insurance Act Related Amendments.--
(1) Suspension of parallel federal deposit insurance
act authority.--Effective upon the date of the
enactment of this section through December 31, 2013,
the Corporation may not exercise its authority under
section 13(c)(4)(G)(i) of the Federal Deposit Insurance
Act (12 U.S.C. 1823(c)(4)(G)(i)) to establish any
widely-available debt guarantee program for which
section 1109 would provide authority.
(2) Federal deposit insurance act authority
preserved.--Effective December 31, 2013, the
Corporation shall have the same authority pursuant to
section 13(c)(4)(G)(i) of the Federal Deposit Insurance
Act as the Corporation had prior to the date of
enactment of this Act.
(b) Effect of Default on an Fdic Guarantee.--If an insured
depository institution or depository institution holding
company participating in a program under section 1109 or any
participant in a debt guarantee program established pursuant to
section 13(c)(4)(G)(i) of the Federal Deposit Insurance Act
defaults on any obligation guaranteed by the Corporation after
the date of enactment of this Act, the Corporation may--
(1) appoint itself as receiver for the insured
depository institution that defaults;
(2) with respect to any other participating company
that is not an insured depository institution that
defaults--
(A) require consideration of whether a
determination shall be made as provided in
section 1603 to resolve the company under
subtitle G; and
(B) if the Corporation is not appointed
receiver pursuant to subtitle G within 30 days
of the date of default, require the company to
file a petition for bankruptcy under section
301 of title 11, United States Code, or file a
petition for bankruptcy against the company
under section 303 of title 11, United States
Code.
(c) Authority to File Involuntary Petition for Bankruptcy.--
Section 303 of title 11, United States Code, is amended by
adding at the end the following:
``(m) Notwithstanding subsections (a) and (b), an involuntary
case may be commenced by the Federal Deposit Insurance
Corporation against a depository institution holding company as
defined in section 3 of the Federal Deposit Insurance Act (12
U.S.C. 1813) or other company participating in a guarantee
program established by the Corporation on the ground that the
company has defaulted on a debt or obligation guaranteed by the
Corporation.''.
(d) Bankruptcy Priority for Defaults on Debt Guaranteed
Pursuant to Section 1109.--Section 507(a)(9) of title 11,
United States Code, is amended by inserting before the period
at the end the following: ``and allowed unsecured claims based
upon any debt to the Federal Deposit Insurance Corporation that
arose prior to the commencement of the case under this title,
as a result of the debtor's default on a guarantee provided by
the Corporation pursuant to section 1109 of the Financial
Stability Improvement Act of 2009 or the Federal Deposit
Insurance Act, under a program established by the Corporation
after the date of enactment of the Financial Stability
Improvement Act of 2009''.
Page 110, line 8, strike ``MUST'' and insert ``MAY''.
Page 110, strike line 10 and all that follows through line 18
and insert the following:
(a) In General.--In connection with any payment, credit
extension, or guarantee or any commitment under section 1109 or
1604, the Corporation may obtain from the insured depository
institution, depository institution holding company (including
any affiliates thereof), or covered financial company, as the
case may be--
Page 110, line 19, strike ``financial company'' and insert
``insured depository institution, depository institution
holding company (including any affiliates thereof), or covered
financial company''.
Page 111, line 3, strike ``financial company'' and insert
``insured depository institution, depository institution
holding company (including any affiliates thereof), or covered
financial company''.
Strike section 1614 and insert the following new section:
SEC. 1614. APPLICATION OF EXECUTIVE COMPENSATION LIMITATIONS.
At any time that the Corporation has borrowed from the
Treasury pursuant to section 1609(o) to resolve a covered
financial company, the Corporation shall apply the executive
compensation limits under section 111 of the Emergency Economic
Stabilization Act of 2008 to such company for so long as such
company is in receivership.
Page 436, after line 11, insert the following new section:
SEC. 1615. PRIORITY OF CLAIMS IN FEDERAL DEPOSIT INSURANCE ACT.
Section 11(d)(11)(A) of the Federal Deposit Insurance Act (12
U.S.C. 1821(d)(11)(A)) is amended--
(1) by redesignating clauses (iii) through (v) as
clauses (iv) through (vi), respectively; and
(2) by inserting after clause (ii) the following new
clause (iii):
``(iii) Any obligation of the
institution owed to the Corporation as
a result of the institution's default
on a Corporation-guaranteed debt.''.
Page 825, after line 12, insert the following new section:
SEC. 4313. REGULATION OF PERSON-TO-PERSON LENDING.
(a) Scope of Exemption From Federal Securities Regulation.--
Section 3(a) of the Securities Act of 1933 (15 U.S.C. 77c(a))
is amended by adding at the end the following new paragraph:
``(15) Person-to-person lending.--
``(A) In general.--Any consumer loan, and any
note representing a whole or fractional
interest in any such loan, funded or sold
through a person-to-person lending platform.
``(B) Definitions.-- For purposes of this
paragraph:
``(i) Consumer loan.--The term
`consumer loan' means a loan made to a
natural person, the proceeds of which
are intended primarily for personal,
family, educational, household, or
business use.
``(ii) Person-to-person lending
platform.--
``(I) In general.--The term
`person-to-person lending
platform' means an Internet
website, the primary purpose of
which is to provide a
transaction platform for the
funding or sale of individual
consumer loans, or the sale of
notes representing whole or
fractional interests in
individual consumer loans, by
matching natural persons who
wish to obtain such loans with
persons who wish to fund them,
or by matching persons who wish
to sell such loans or notes
with persons who wish to
purchase them.
``(II) Prohibition on
multiple loans in a single
transaction.--The term `person-
to-person lending platform'
does not include any platform
on which multiple loans may be
funded or sold in a single
transaction, or on which a note
representing an interest in
multiple loans or other debt
obligations may be sold.''.
(b) Regulation by the Agency.--
(1) In general.--Primary jurisdiction for the
regulation of the lending activities of person-to-
person lending and person-to-person lending platforms
is hereby vested in the Agency.
(2) Interim requirements.--Until the Director issues
and adopts disclosure requirements with respect to the
sale of consumer loans, or notes representing whole or
fractional interests therein, on person-to-person
lending platforms, a person-to-person lending platform
that registers the offer and sale of any such notes
under the Securities Act of 1933 shall, with respect to
such registered offer and sale, provide the disclosure
required under the Securities Act of 1933 to be
contained in the registration statement and prospectus
and provide such disclosure required in any periodic
reports required to be filed by such person-to-person
lender pursuant to section 13 or section 15(d) of the
Securities Exchange Act of 1934.
(3) Definitions.--For purposes of this subsection,
the terms ``consumer loan'', ``person-to-person lending
platform'', ``prospectus'', and ``registration
statement'' shall have the meaning given such term
under the Securities Act of 1933.
(c) Rulemaking.--The Director may prescribe such regulations
and issue such orders as the Director considers necessary or
appropriate to implement the provisions of this section and to
provide borrower protection, lender protection, consumer
choice, and expanded consumer access to fair and reasonable
credit choices.
(d) Effective Date.--Notwithstanding section 4310, this
section shall take effect on the date of the enactment of this
title.
Page 699, line 13, strike ``and''.
Page 699, line 17, insert ``and'' after ``services;''.
Page 699, after line 17, insert the following:
(vi) the nature, range, and size of
variations between the credit scores
sold to creditors and those sold to
consumers by consumer reporting
agencies that compile and maintain
files on consumers on a nationwide
basis (as defined in section 603(p) of
the Fair Credit Reporting Act; 15
U.S.C. 1681a(p)), and whether such
variations disadvantage consumers;
Page 788, after line 10, insert the following:
(3) Consider as unfair certain practices with regard
to the provision of credit scores.--Subject to
regulations prescribed by the Director, it shall be
considered unfair for any consumer reporting agency
that compiles and maintains files on consumers on a
nationwide basis (as defined in section 603(p) of the
Fair Credit Reporting Act; 15 U.S.C. 1681a(p)) to make
available for purchase by creditors any credit score
for a consumer that is not also available for purchase
by that consumer at the same price as other credit
scores sold to consumers by such agency.
Page 699, line 17, insert ``, and the impact of Federal
policies, including resource limits in means-tested Federal
benefit programs (as defined in section 318 of the Higher
Education Act of 1965; 20 U.S.C. 1059e), on such consumers in
influencing banking behavior'' after ``financial products or
services''.
In section 4109(f) (as modified pursuant to the rule
providing for the consideration of the bill and contained in
the amendment designated MWB_05), strike paragraph (3) and
insert the following:
(3) Exception.--Notwithstanding paragraph (1), an
attorney's activities related to assisting another
person in preventing a foreclosure shall be subject to
this title except to the extent such activities
constitute, or are incidental to, the provision of
legal services to a client of the attorney.
Page 776, after line 19, insert the following new subsection:
(l) Exclusion for Activities Relating to Charitable
Contributions.--
(1) The Director and the Agency may not exercise any
rulemaking, supervisory, enforcement, or other
authority, including authority to order assessments or
penalties, over any activities related to the
solicitation or making of voluntary contributions to or
through a tax-exempt organization as recognized by the
Internal Revenue Service, by any agent, volunteer or
representative of such organizations to the extent the
organization, agent, volunteer or representative
thereof is soliciting or providing advice, information,
education or instruction to donor(s) or potential
donor(s) relating to a contribution to or through the
organization.
(2) This exclusion shall not apply to other
activities not described in the paragraph above and are
financial activities as described in any subparagraph
of section 4002(19), or otherwise subject to any of the
enumerated consumer laws, or the authorities
transferred under subtitle F or H.
In the last section title I of the bill (as added pursuant to
the rule providing for the consideration of the bill and
contained in the amendment designated ``TARP_001''), strike
``$22,059,000,000,'' and insert ``23,625,000,000''.
----------
2. An Amendment To Be Offered by Representative Sessions, Pete of Texas
or His Designee, Debatable for 10 Minutes
Page 1068, strike lines 8 through 22.
----------
3. An Amendment To Be Offered by Representative Peterson, Collin of
Minnesota or His Designee, Debatable for 30 Minutes
Page 481, strike line 8 and all that follows through page
665, line 6, and insert the following:
TITLE III--DERIVATIVE MARKETS TRANSPARENCY AND ACCOUNTABILITY ACT
SEC. 3001. SHORT TITLE.
This title may be cited as the ``Derivative Markets
Transparency and Accountability Act of 2009''.
SEC. 3002. REVIEW OF REGULATORY AUTHORITY.
(a) Consultation.--
(1) CFTC.--Before commencing any rulemaking or
issuing an order regarding swaps, swap dealers, major
swap participants, swap repositories, persons
associated with a swap dealer or major swap
participant, eligible contract participants, or swap
execution facilities pursuant to subtitle A, the
Commodity Futures Trading Commission shall consult with
the Securities and Exchange Commission and the
Prudential Regulators.
(2) SEC.--Before commencing any rulemaking or issuing
an order regarding security-based swaps, security-based
swap dealers, major security-based swap participants,
security-based swap repositories, persons associated
with a security-based swap dealer or major security-
based swap participant, eligible contract participants
with regard to security-based swaps, or swap execution
facilities pursuant to subtitle B, the Securities and
Exchange Commission shall consult with the Commodity
Futures Trading Commission and the Prudential
Regulators.
(3) In developing and promulgating rules or orders
pursuant to this subsection, the Commodity Futures
Trading Commission and the Securities and Exchange
Commission shall consider each other's views and the
views of the Prudential Regulators.
(4) In adopting a rule or order described in
paragraph (1) or (2), the Commodity Futures Trading
Commission and the Securities and Exchange Commission
shall treat functionally or economically similar
products or entities similarly.
(5) Paragraph (4) shall not be construed to require
the Commodity Futures Trading Commission or the
Securities Exchange Commission to adopt a rule or order
that treats functionally or economically similar
products or entities identically.
(b) Limitation.--
(1) CFTC.--Nothing in this title, unless specifically
provided, shall be construed to confer jurisdiction on
the Commodity Futures Trading Commission to issue a
rule, regulation, or order providing for oversight or
regulation of--
(A) security-based swaps; or
(B) with regard to their activities or
functions concerning security-based swaps--
(i) security-based swap dealers;
(ii) major security-based swap
participants;
(iii) security-based swap
repositories;
(iv) persons associated with a
security-based swap dealer or major
security-based swap participant;
(v) eligible contract participants
with respect to security-based swaps;
or
(vi) swap execution facilities.
(2) SEC.--Nothing in this title, unless specifically
provided, shall be construed to confer jurisdiction on
the Securities and Exchange Commission to issue a rule,
regulation, or order providing for oversight or
regulation of--
(A) swaps; or
(B) with regard to their activities or
functions concerning swaps--
(i) swap dealers;
(ii) major swap participants;
(iii) swap repositories;
(iv) persons associated with a swap
dealer or major swap participant;
(v) eligible contract participants
with respect to swaps; or
(vi) swap execution facilities.
(c) Objection to Commission Regulation.--
(1) Filing of petition for review.--If either
Commission referred to in this section believes that a
final rule, regulation, or order of the other such
Commission conflicts with subsection (a)(4) or (b),
then the complaining Commission may obtain review
thereof in the United States Court of Appeals for the
District of Columbia Circuit by filing in the court,
not later than 60 days after the date of publication of
the final rule, regulation, or order, a written
petition requesting that the rule, regulation, or order
be set aside. Any such proceeding shall be expedited by
the Court of Appeals.
(2) Transmittal of petition and record.--A copy of a
petition described in paragraph (1) shall be
transmitted not later than 1 business day after filing
by the complaining Commission to the Secretary of the
responding Commission. On receipt of the petition, the
responding Commission shall file with the court a copy
of the rule, regulation, or order under review and any
documents referred to therein, and any other materials
prescribed by the court.
(3) Standard of review.--The court, giving deference
to the views of neither Commission, shall determine to
affirm or set aside a rule, regulation, or order of the
responding Commission under this subsection, based on
the determination of the court, as to whether the rule,
regulation, or order is in conflict with subsection
(a)(4) or (b), as applicable.
(4) Judicial stay.--The filing of a petition by the
complaining Commission pursuant to paragraph (1) shall
operate as a stay of the rule, regulation, or order,
until the date on which the determination of the court
is final (including any appeal of the determination).
(d) Definitions.--In this section, the terms ``Prudential
Regulators'', ``swap'', ``swap dealer'', ``major swap
participant'', ``swap repository'', ``person associated with a
swap dealer or major swap participant'', ``eligible contract
participant'', ``swap execution facility'', ``security-based
swap'', ``security-based swap dealer'', ``major security-based
swap participant'', ``security-based swap repository'', and
``person associated with a security-based swap dealer or major
security-based swap participant'' shall have the meanings
provided, respectively, in the Commodity Exchange Act,
including any modification of the meanings under section
3101(b) of this Act.
(e)(1) Notwithstanding subsections (b) and (c), the Commodity
Futures Trading Commission and the Securities Exchange
Commission shall jointly adopt rules to--
(A) define the terms ``security-based swap
agreement'' in section 3(a)(76) of the Securities
Exchange Act of 1934 and ``swap'' in section
1a(35)(A)(v) of the Commodity Exchange Act;
(B) require the maintenance of records of all
activities related to transactions defined in
subparagraph (A) that are not cleared; and
(C) make available to the Securities and Exchange
Commission information relating to transactions defined
in subparagraph (A) that are uncleared.
(2) In the event that the Commodity Futures Trading
Commission and the Securities Exchange Commission fail to
jointly prescribe rules pursuant to paragraph (1) in a timely
manner, at the request of either Commission, the Financial
Services Oversight Council shall resolve the dispute--
(A) within a reasonable time after receiving the
request;
(B) after consideration of relevant information
provided by each Commission; and
(C) by agreeing with one of the Commissions regarding
the entirety of the matter or by determining a
compromise position.
SEC. 3003. INTERNATIONAL HARMONIZATION.
(a) In order to promote effective and consistent global
regulation of contracts of sale of swaps and security-based
swaps, the Commodity Futures Trading Commission, the Securities
and Exchange Commission, and the Prudential Regulators (as
defined in section 1a(42) of the Commodity Exchange Act), as
appropriate, shall consult and coordinate with foreign
regulatory authorities on the establishment of consistent
international standards with respect to the regulation of
contracts of sale of swaps and security-based swaps, and may
agree to such information-sharing arrangements as may be deemed
to be necessary or appropriate in the public interest or for
the protection of investors, swap counterparties, and security-
based swap counterparties.
(b) In order to promote effective and consistent global
regulation of contracts of sale of a commodity for future
delivery, the Commodity Futures Trading Commission shall
consult and coordinate with foreign regulatory authorities on
the establishment of consistent international standards with
respect to the regulation of contracts of sale of a commodity
for future delivery, and may agree to such information-sharing
arrangements as may be deemed necessary or appropriate in the
public interest for the protection users of contracts of sale
of a commodity for future delivery.
SEC. 3004. PROHIBITION AGAINST GOVERNMENT ASSISTANCE.
(a) In General.--No provision of this title shall be
construed to authorize Federal assistance to support clearing
operations or liquidation of a derivatives clearing
organization described in the Commodity Exchange Act or a
clearing agency described in the Securities Exchange Act of
1934, except where explicitly authorized by an Act of Congress.
(b) Definition.--For the purposes of this section, the term
``Federal assistance'' means the use of public funds for the
purposes of--
(1) making loans to, or purchasing any debt
obligation of, a derivatives clearing organization, a
clearing agency, or a subsidiary of either;
(2) purchasing assets of a derivatives clearing
organization, a clearing agency, or a subsidiary of
either;
(3) assuming or guaranteeing the obligations of a
derivatives clearing organization, a clearing agency,
or a subsidiary of either; or
(4) acquiring any type of equity interest or security
of a derivatives clearing organization, a clearing
agency, or a subsidiary of either.
SEC. 3005. STUDIES.
(a) Study on Effects of Position Limits on Trading on
Exchanges in the United States.--
(1) Study.--The Commodity Futures Trading Commission,
in consultation with each entity that is a designated
contract market under the Commodity Exchange Act, shall
conduct a study of the effects (if any) of the position
limits imposed pursuant to the other provisions of this
titleon excessive speculation and on the movement of
transactions from exchanges in the United States to
trading venues outside the United States.
(2) Report to the congress.--Within 12 months after
the imposition of position limits pursuant to the other
provisions of this title, the Commodity Futures Trading
Commission, in consultation with each entity that is a
designated contract market under the Commodity Exchange
Act, shall submit to the Congress a report on the
matters described in paragraph (1).
(3) Within 30 legislative days after the submission
to the Congress of the report described in paragraph
(2), the Committee on Agriculture of the House of
Representatives shall hold a hearing examining the
findings of the report.
(4) In addition to the study required in paragraph
(1), the Chairman of the Commodity Futures Trading
Commission shall prepare and submit to the Congress
biennial reports on the growth or decline of the
derivatives markets in the United States and abroad,
which shall include assessments of the causes of any
such growth or decline, the effectiveness of regulatory
regimes in managing systemic risk, a comparison of the
costs of compliance at the time of the report for
market participants subject to regulation by the United
States with the costs of compliance in December 2008
for the market participants, and the quality of the
available data. In preparing the report, the Chairman
shall solicit the views of, consult with, and address
the concerns raised by, market participants,
regulators, legislators, and other interested parties.
(b) Study on Feasibility of Requiring Use of Standardized
Algorithmic Descriptions for Financial Derivatives.--
(1) In general.--The Securities and Exchange
Commission and the Commodity Futures Trading Commission
shall conduct a joint study of the feasibility of
requiring the derivatives industry to adopt
standardized computer-readable algorithmic descriptions
which may be used to describe complex and standardized
financial derivatives.
(2) Goals.--The algorithmic descriptions defined in
the study shall be designed to facilitate computerized
analysis of individual derivative contracts and to
calculate net exposures to complex derivatives. The
algorithmic descriptions shall be optimized for
simultaneous use by:
(A) commercial users and traders of
derivatives;
(B) derivative clearing houses, exchanges and
electronic trading platforms;
(C) trade repositories and regulator
investigations of market activities; and
(D) systemic risk regulators.
The study will also examine the extent to which the
algorithmic description, together with standardized and
extensible legal definitions, may serve as the binding
legal definition of derivative contracts. The study
will examine the logistics of possible implementations
of standardized algorithmic descriptions for
derivatives contracts. The study shall be limited to
electronic formats for exchange of derivative contract
descriptions and will not contemplate disclosure of
proprietary valuation models.
(3) International coordination.--In conducting the
study, the Securities and Exchange Commission and the
Commodity Futures Trading Commission shall coordinate
the study with international financial institutions and
regulators as appropriate and practical.
(4) Report.--Within 8 months after the date of the
enactment of this Act, the Securities and Exchange
Commission and the Commodity Futures Trading Commission
shall jointly submit to the Committees on Agriculture
and on Financial Services of the House of
Representatives and the Committees on Agriculture,
Nutrition, and Forestry and on Banking, Housing, and
Urban Affairs of the Senate a written report which
contains the results of the study required by
paragraphs (1) through (3).
(c) Study of Desirability and Feasibility of Establishing
Single Regulator for All Transactions Involving Financial
Derivatives.--
(1) In general.--The Secretary of the Treasury, the
Commodity Futures Trading Commission, and the
Securities and Exchange Commission shall conduct a
joint study of the desirability and feasibility of
establishing, by January 1, 2012, a single regulator
for all transactions involving financial derivatives.
(2) Report to the congress.--Not later than December
1, 2010, Secretary of the Treasury, the Commodity
Futures Trading Commission, and the Securities and
Exchange Commission shall jointly submit to the
Committees on Agriculture and on Financial Services of
the House of Representatives and the Committees on
Agriculture, Nutrition, and Forestry and on Banking,
Housing, and Urban Affairs of the Senate a written
report that contains the results of the study required
by paragraph (1).
SEC. 3006. RECOMMENDATIONS FOR CHANGES TO INSOLVENCY LAWS.
Not later than 180 days after the date of the enactment of
this Act, the Securities and Exchange Commission, the Commodity
Futures Trading Commission, and the Prudential Regulators (as
defined in section 1a of the Commodity Exchange Act, as amended
by section 3111 of this Act) shall transmit to Congress
recommendations for legislative changes to the Federal
insolvency laws--
(1) in order to enhance the legal certainty with
respect to swap participants clearing non-proprietary
swap positions with a swap clearinghouse, including--
(A) customer rights to recover margin
deposits or custodial property held at or
through an insolvent swap clearinghouse, or
clearing participant; and
(B) the enforceability of clearing rules
relating to the portability of customer swap
positions (and associated margin) upon the
insolvency of a clearing participant;
(2) to clarify and harmonize the insolvency law
framework applicable to entities that are both
commodity brokers (as defined in section 101(6) of
title 11, United States Code) and registered brokers or
dealers (as defined in section 3(a) of the Securities
Exchange Act of 1934 (15 U.S.C. 78c(a))); and
(3) to facilitate the portfolio margining of
securities and commodity futures and options positions
held through entities that are both futures commission
merchants (as defined in section 1a of the Commodity
Exchange Act) and registered brokers or dealers (as
defined in section 3 of the Securities Exchange Act of
1934 (15 U.S.C. 78c(a))).
SEC. 3007. ABUSIVE SWAPS.
The Commodity Futures Trading Commission and the Securities
and Exchange Commission may, by rule or order, jointly collect
information as may be necessary concerning the markets for any
types of swap (as defined in section 1a(35) of the Commodity
Exchange Act) or security-based swap (as defined in section
1a(38) of such Act) and jointly issue a report with respect to
any types of swaps or security-based swaps which the Commodity
Futures Trading Commission and the Securities and Exchange
Commission find are detrimental to the stability of a financial
market or of participants in a financial market.
SEC. 3008. AUTHORITY TO PROHIBIT PARTICIPATION IN SWAP ACTIVITIES.
If the Commodity Futures Trading Commission or the Securities
and Exchange Commission determines that the regulation of swaps
or security-based swaps markets in a foreign country undermines
the stability of the United States financial system, either
Commission, in consultation with the Secretary of the Treasury,
may prohibit an entity domiciled in that country from
participating in the United States in any swap or security-
based swap activities.
SEC. 3009. MEMORANDUM.
(a)(1) The Commodity Futures Trading Commission and the
Federal Energy Regulatory Commission shall, not later than 180
days after the date of the enactment of this section, negotiate
a memorandum of understanding to establish procedures for--
(A) applying their respective authorities in a manner
so as to ensure effective and efficient regulation in
the public interest,
(B) resolving conflicts concerning overlapping
jurisdiction between the two agencies, and
(C) avoiding, to the extent possible, conflicting or
duplicative regulation.
(2) Such memorandum and any subsequent amendments to the
memorandum shall be promptly submitted to the appropriate
committees of Congress.
(b) The Commodity Futures Trading Commission and the Federal
Energy Regulatory Commission shall, not later than 180 days
after the date of the enactment of this section, negotiate a
memorandum of understanding to share information that may be
requested where either Commission is conducting an
investigation into potential manipulation, fraud, or market
power abuse in markets subject to such Commission's regulation
or oversight. Shared information shall remain subject to the
same restrictions on disclosure applicable to the Commission
initially holding the information.
Subtitle A--Regulation of Swap Markets
SEC. 3101. DEFINITIONS.
(a) Amendments to Definitions in the Commodity Exchange
Act.--Section 1a of the Commodity Exchange Act (7 U.S.C. 1a) is
amended--
(1) in paragraph (12)(A)--
(A) in clause (vii)(III), by striking
``$25,000,000'' and inserting ``$50,000,000'';
and
(B) in clause (xi), by striking ``total
assets in an amount'' and inserting ``amounts
invested on a discretionary basis'';
(2) in paragraph (29)--
(A) in subparagraph (D), by striking ``and'';
(B) by redesignating subparagraph (E) as
subparagraph (G); and
(C) by inserting after subparagraph (D) the
following:
``(E) a swap execution facility registered
under section 5h;
``(F) a swap repository; and''; and
(3) by adding at the end the following:
``(35) Swap.--
``(A) In general.--Except as provided in
subparagraph (B), the term `swap' means any
agreement, contract, or transaction that--
``(i) is a put, call, cap, floor,
collar, or similar option of any kind
for the purchase or sale of, or based
on the value of, 1 or more interest or
other rates, currencies, commodities,
securities, instruments of
indebtedness, indices, quantitative
measures, or other financial or
economic interests or property of any
kind;
``(ii) provides for any purchase,
sale, payment, or delivery (other than
a dividend on an equity security) that
is dependent on the occurrence, non-
occurrence, or the extent of the
occurrence of an event or contingency
associated with a potential financial,
economic, or commercial consequence;
``(iii) provides on an executory
basis for the exchange, on a fixed or
contingent basis, of 1 or more payments
based on the value or level of 1 or
more interest or other rates,
currencies, commodities, securities,
instruments of indebtedness, indices,
quantitative measures, or other
financial or economic interests or
property of any kind, or any interest
therein or based on the value thereof,
and that transfers, as between the
parties to the transaction, in whole or
in part, the financial risk associated
with a future change in any such value
or level without also conveying a
current or future direct or indirect
ownership interest in an asset
(including any enterprise or investment
pool) or liability that incorporates
the financial risk so transferred, and
includes any agreement, contract, or
transaction commonly known as an
interest rate swap, a rate floor, rate
cap, rate collar, cross-currency rate
swap, basis swap, currency swap, total
return swap, equity index swap, equity
swap, debt index swap, debt swap,
credit spread, credit default swap,
credit swap, weather swap, energy swap,
metal swap, agricultural swap,
emissions swap, or commodity swap;
``(iv) is, or in the future becomes,
commonly known to the trade as a swap;
``(v) meets the definition of `swap
agreement' as defined in section 206A
of the Gramm-Leach-Bliley Act of which
a material term of which is based on
the price, yield, value, or volatility
of any security or any group or index
of securities, or any interest therein;
or
``(vi) is any combination or
permutation of, or option on, any
agreement, contract, or transaction
described in any of clauses (i) through
(v).
``(B) Exclusions.--The term `swap' does not
include--
``(i) any contract of sale of a
commodity for future delivery (or any
option on such a contract) or security
futures product traded on or subject to
the rules of any board of trade
designated as a contract market under
section 5 or 5f;
``(ii) any sale of a nonfinancial
commodity or security for deferred
shipment or delivery, so long as the
transaction is intended to be
physically settled;
``(iii) any put, call, straddle,
option, or privilege on any security,
certificate of deposit, or group or
index of securities, including any
interest therein or based on the value
thereof, that is subject to the
Securities Act of 1933 (15 U.S.C. 77a
et seq.) and the Securities Exchange
Act of 1934 (15 U.S.C. 78a et seq.);
``(iv) any put, call, straddle,
option, or privilege relating to
foreign currency entered into on a
national securities exchange registered
pursuant to section 6(a) of the
Securities Exchange Act of 1934 (15
U.S.C. 78f(a));
``(v) any agreement, contract, or
transaction providing for the purchase
or sale of 1 or more securities on a
fixed basis that is subject to the
Securities Act of 1933 (15 U.S.C. 77a
et seq.) and the Securities Exchange
Act of 1934 (15 U.S.C. 78a et seq);
``(vi) any agreement, contract, or
transaction providing for the purchase
or sale of 1 or more securities on a
contingent basis that is subject to the
Securities Act of 1933 (15 U.S.C. 77a
et seq) and the Securities Exchange Act
of 1934 (15 U.S.C. 78a et seq.), unless
the agreement, contract, or transaction
predicates the purchase or sale on the
occurrence of a bona fide contingency
that might reasonably be expected to
affect or be affected by the
creditworthiness of a party other than
a party to the agreement, contract, or
transaction;
``(vii) any note, bond, or evidence
of indebtedness that is a security as
defined in section 2(a)(1) of the
Securities Act of 1933 (15 U.S.C.
77b(a)(1));
``(viii) any agreement, contract, or
transaction that is--
``(I) based on a security;
and
``(II) entered into directly
or through an underwriter (as
defined in section 2(a)(11) of
the Securities Act of 1933) (15
U.S.C. 77b(a)(11)) by the
issuer of the security for the
purposes of raising capital,
unless the agreement, contract,
or transaction is entered into
to manage a risk associated
with capital-raising;
``(ix) any foreign exchange forward;
``(x) any foreign exchange swap;
``(xi) any agreement, contract, or
transaction a counterparty of which is
a Federal Reserve bank, the United
States government or an agency of the
United States government that is
expressly backed by the full faith and
credit of the United States; and
``(xii) any security-based swap.
``(C) Rule of construction regarding master
agreements.--The term `swap' shall be construed
to include a master agreement that provides for
an agreement, contract, or transaction that is
a swap pursuant to subparagraph (A), together
with all supplements to any such master
agreement, without regard to whether the master
agreement contains an agreement, contract, or
transaction that is not a swap pursuant to
subparagraph (A), except that the master
agreement shall be considered to be a swap only
with respect to each agreement, contract, or
transaction under the master agreement that is
a swap pursuant to subparagraph (A).
``(D) Foreign exchange swaps and forwards
exception.--
``(i) In general.--Notwithstanding
clauses (ix) and (x) of subparagraph
(B), foreign exchange swaps and foreign
exchange forwards shall be considered
swaps under this paragraph if the
Commission makes a determination that
either foreign exchange swaps or
foreign exchange forwards or both
should be regulated as swaps under this
Act and the Secretary concurs with such
determination.
``(ii) Scope of authority.--
``(I) The Commission and the
Secretary shall jointly
determine which of the
authorities under this Act
regarding swaps the Commission
shall exercise over foreign
exchange swaps and foreign
exchange forwards. Such
authorities shall subsequently
be exercised solely by the
Commission. The Commission and
the Secretary may jointly amend
any previously made
determination under this
subclause.
``(II) Notwithstanding clause
(i), the Commission and the
Secretary of the Treasury may
determine that either foreign
exchange swaps or foreign
exchange forwards or both
should not be regulated as
swaps under this Act if such
determination is jointly made.
``(iii) Reporting.--Notwithstanding
clauses (ix) and (x) of subparagraph
(B) and subparagraph (D)(ii), all
foreign exchange swaps and foreign
exchange forwards shall be reported to
either a swap repository, or, if there
is no swap repository that would accept
such swaps or forwards, to the
Commission pursuant to section 4r
within such time period as the
Commission may by rule or regulation
prescribe.
``(iv) Secretary.--For purposes of
this subparagraph only, the term
`Secretary' means the Secretary of the
Treasury.
``(36) Board.--The term `Board' means the Board of
Governors of the Federal Reserve System.
``(37) Security-based swap.--The term `security-based
swap' has the same meaning as in section 3(a)(68) of
the Securities and Exchange Act of 1934.
``(38) Swap dealer.--
``(A) In general.--The term `swap dealer'
means any person who--
``(i) holds itself out as a dealer in
swaps;
``(ii) makes a market in swaps;
``(iii) regularly engages in the
purchase of swaps and their resale to
customers in the ordinary course of a
business; or
``(iv) engages in any activity
causing the person to be commonly known
in the trade as a dealer or market
maker in swaps.
``(B) A person may be designated a swap
dealer for a single type or single class or
category of swap and considered not a swap
dealer for other types, classes, or categories
of swaps.
``(C) De minimus exception.--The Commission
shall make a determination to exempt from
designation as a swap dealer an entity that
engages in a de minimus amount of swap dealing
in connection with transactions with or on the
behalf of its customers.
``(39) Major swap participant.--
``(A) In general.--The term `major swap
participant' means any person who is not a swap
dealer, and--
``(i) maintains a substantial net
position in outstanding swaps,
excluding positions held primarily for
hedging, reducing or otherwise
mitigating its commercial risk,
including operating and balance sheet
risk; or
``(ii) whose outstanding swaps create
substantial net counterparty exposure
among the aggregate of its
counterparties that could expose those
counterparties to significant credit
losses.
``(B) Definition of substantial net
postion.--The Commission shall define by rule
or regulation the terms `substantial net
position', `substantial net counterparty
exposure', and `significant credit losses' at
thresholds that the Commission determines
prudent for the effective monitoring,
management and oversight of entities which are
systemically important or can significantly
impact the financial system through
counterparty credit risk. In setting the
definitions, the Commission shall consider the
person's relative position in uncleared as
opposed to cleared swaps.
``(C) A person may be designated a major swap
participant for 1 or more individual types of
swaps without being classified as a major swap
participant for all classes of swaps.
``(40) Major security-based swap participant.--The
term `major security-based swap participant' has the
same meaning as in section 3(a)(67) of the Securities
Exchange Act of 1934.
``(41) Appropriate federal banking agency.--The term
`appropriate Federal banking agency' has the same
meaning as in section 3(q) of the Federal Deposit
Insurance Act (12 U.S.C. 1813(q)).
``(42) Prudential regulator.--The term `Prudential
Regulator' means--
``(A) the Board in the case of a swap dealer,
major swap participant, security-based swap
dealer, or major security-based swap
participant that is--
``(i) a State-chartered bank that is
a member of the Federal Reserve System;
or
``(ii) a State-chartered branch or
agency of a foreign bank;
``(B) the Office of the Comptroller of the
Currency in the case of a swap dealer, major
swap participant, security-based swap dealer,
or major security-based swap participant that
is--
``(i) a national bank; or
``(ii) a federally chartered branch
or agency of a foreign bank; and
``(C) the Federal Deposit Insurance
Corporation in the case of a swap dealer, major
swap participant, security-based swap dealer,
or major security-based swap participant that
is a State-chartered bank that is not a member
of the Federal Reserve System.
``(43) Security-based swap dealer.--The term
`security-based swap dealer' has the same meaning as in
section 3(a)(71) of the Securities Exchange Act of
1934.
``(44) Foreign exchange forward.--The term `foreign
exchange forward' means a transaction that solely
involves the exchange of 2 different currencies on a
specific future date at a fixed rate agreed at the
inception of the contract.
``(45) Foreign exchange swap.--The term `foreign
exchange swap' means a transaction that solely involves
the exchange of 2 different currencies on a specific
date at a fixed rate agreed at the inception of the
contract, and a reverse exchange of the same 2
currencies at a date further in the future and at a
fixed rate agreed at the inception of the contract.
``(46) Person associated with a security-based swap
dealer or major security-based swap participant.--The
term `person associated with a security-based swap
dealer or major security-based swap participant' or
`associated person of a security-based swap dealer or
major security-based swap participant' has the same
meaning as in section 3(a)(70) of the Securities
Exchange Act of 1934.
``(47) Person associated with a swap dealer or major
swap participant.--The term `person associated with a
swap dealer or major swap participant' or `associated
person of a swap dealer or major swap participant'
means any partner, officer, director, or branch manager
of a swap dealer or major swap participant (or any
person occupying a similar status or performing similar
functions), any person directly or indirectly
controlling, controlled by, or under common control
with a swap dealer or major swap participant, or any
employee of a swap dealer or major swap participant,
except that any person associated with a swap dealer or
major swap participant whose functions are solely
clerical or ministerial shall not be included in the
meaning of the term other than for purposes of section
4s(b)(6).
``(48) Swap repository.--The term `swap repository'
means any person that collects, calculates, prepares or
maintains information or records with respect to
transactions or positions in or the terms and
conditions of swaps entered into by third parties.
``(49) Swap execution facility.--The term `swap
execution facility' means a person or entity that
facilitates the execution or trading of swaps between
two persons through any means of interstate commerce,
but which is not a designated contract market,
including any electronic trade execution or voice
brokerage facility.
``(50) Derivative.--The term `derivative' means--
``(A) a contract of sale of a commodity for
future delivery; or
``(B) a swap.''.
(b) Authority to Further Define Terms.--The Commodity Futures
Trading Commission shall adopt a rule further defining the
terms ``swap'', ``swap dealer'', ``major swap participant'',
and ``eligible contract participant'' for the purpose of
including transactions and entities that have been structured
to evade this title.
(c) Exemptions.--Section 4(c) of the Commodity Exchange Act
(7 U.S.C. 4(c)) is amended by adding at the end the following:
``The Commission shall not have the authority to grant
exemptions from the provisions of sections 3101(a), 3101(c),
3104, 3105, 3106, 3107, 3109, 3110, 3113, 3115, 3120, and 3121
of the Derivative Markets Transparency and Accountability Act
of 2009, except as expressly authorized under the provisions of
that Act. Notwithstanding the preceding sentence, the Commodity
Futures Trading Commission may exempt from any provision of the
Commodity Exchange Act, pursuant to this subsection, an
agreement, contract, or transaction that is entered into
pursuant to a tariff approved by the Federal Energy Regulatory
Commission, if the Commodity Futures Trading Commission
determines that the exemption would be consistent with the
public interest, and shall consider and not unreasonably deny
any request made by the Federal Energy Regulatory Commission
for such an exemption.''.
SEC. 3102. JURISDICTION.
(a) Exclusive Jurisdiction.--Section 2(a)(1) of the Commodity
Exchange Act (7 U.S.C. 2(a)(1)) is amended--
(1) in the 1st sentence of subparagraph (A)--
(A) by striking ``(c) through (i)'' and
inserting ``(c) and (f)'';
(B) by inserting ``swaps, or'' before
``contracts of sale'';
(C) by striking ``derivatives transaction
execution facility'' and inserting ``swap
execution facility''; and
(D) by striking ``5a'' and inserting ``5h'';
and
(2) by adding at the end the following:
``(G)(i) Nothing in this paragraph shall
limit the jurisdiction conferred on the
Securities and Exchange Commission by the
Derivative Markets Transparency and
Accountability Act of 2009 with regard to
security-based swap agreements as defined
pursuant to section 3002(e) of such Act, and
security-based swaps.
``(ii) In addition to the authority of the
Securities Exchange Commission described in
clause (i), nothing in this subparagraph shall
limit or affect any statutory authority of the
Commission with respect to an agreement,
contract, or transaction described in clause
(i).
``(H)(i) Nothing in this Act shall limit or
affect any statutory authority of the Federal
Energy Regulatory Commission with respect to an
agreement, contract, or transaction that is--
``(I) not executed, traded, or
cleared on a registered entity or
trading facility; and
``(II) entered into pursuant to a
tariff or rate schedule approved by the
Federal Energy Regulatory Commission.
``(ii) In addition to the authority of the
Federal Energy Regulatory Commission described
in clause (i), nothing in this subparagraph
shall limit or affect any statutory authority
of the Commission with respect to an agreement,
contract, or transaction described in clause
(i).''.
(b) Additions.--Section 2(c)(2)(A) of such Act (7 U.S.C.
2(c)(2)(A)) is amended--
(1) in clause (i) by striking ``or'' at the end;
(2) by redesignating clause (ii) as clause (iii); and
(3) by inserting after clause (i) the following:
``(ii) a swap; or''.
(c) Section 12(e) of such Act (7 U.S.C. 16(e)) is amended--
(1) in paragraph (1)(B), by inserting ``or (3)''
after ``paragraph (2)'';
(2) in paragraph (2), by striking subparagraphs (A)
and (B) and inserting the following:
``(A) a swap; and
``(B) an agreement, contract, or transaction
that is excluded from this Act under section
2(c) or 2(f) of this Act or title IV of the
Commodity Futures Modernization Act of 2000 or
exempted under section 4(c) of this Act
(regardless of whether any such agreement,
contract, or transaction is otherwise subject
to this Act).''; and
(3) by adding at the end the following:
``(3) A swap may not be regulated as an insurance
contract under State law.
``(4) The provisions of this Act relating to swaps
that were enacted by the Derivative Markets
Transparency and Accountability Act of 2009, including
any rule or regulation thereunder, shall not apply to
activities outside the United States unless those
activities--
``(A) have a direct and significant
connection with activities in or effect on
United States commerce; or
``(B) contravene such rules or regulations as
the Commission may prescribe as necessary or
appropriate to prevent the evasion of any
provision of this Act that was enacted by the
Derivative Markets Transparency and
Accountability Act of 2009.''.
(d) Nothing in the Derivative Markets Transparency and
Accountability Act of 2009 or the amendments to the Commodity
Exchange Act made by such Act shall limit or affect any
statutory enforcement authority of the Federal Energy
Regulatory Commission pursuant to Section 222 of the Federal
Power Act and Section 4A of the Natural Gas Act that existed
prior to the date of enactment of the Derivative Markets
Transparency and Accountability Act of 2009.
SEC. 3103. CLEARING AND EXECUTION TRANSPARENCY.
(a) Clearing and Execution Transparency Requirements.--
(1) Section 2 of the Commodity Exchange Act (7 U.S.C.
2) is amended by striking subsections (d), (e), (g),
and (h).
(2)(A) Prior to the final effective dates in this
title, a person may petition the Commodity Futures
Trading Commission to remain subject to paragraphs (3)
through (7) of section 2(h) of the Commodity Exchange
Act.
(B) The Commodity Futures Trading Commission shall
consider any petition submitted under subparagraph (A)
in a prompt manner and may allow a person to continue
operating subject to paragraphs (3) through (7) of
section 2(h) of the Commodity Exchange Act for up to
one year after the effective date of this subtitle.
(3) Section 2 of such Act (7 U.S.C. 2) is further
amended by inserting after subsection (c) the
following:
``(d) Swaps.--Nothing in this Act (other than subsections
(a)(1)(A), (a)(1)(B), (c)(2)(A)(ii), (e), (f), (j), and (k),
sections 4a, 4b, 4b-1, 4c(a), 4c(b), 4o, 4r, 4s, 4t, 5, 5b, 5c,
5h, 6(c), 6(d), 6c, 6d, 8, 8a, 9, 12(e)(2), 12(f), 13(a),
13(b), 21, and 22(a)(4) and such other provisions of this Act
as are applicable by their terms to registered entities and
Commission registrants) governs or applies to a swap.
``(e) Limitation on Participation.--It shall be unlawful for
any person, other than an eligible contract participant, to
enter into a swap unless the swap is entered into on or subject
to the rules of a board of trade designated as a contract
market under section 5.''.
(4) Section 2 of such Act (7 U.S.C. 2) is further
amended by inserting after subsection (i) the
following:
``(j) Clearing Requirement.--
``(1) In general.--
``(A) Standard for clearing.--A swap shall be
submitted for clearing if a derivatives
clearing organization that is registered under
this Act will accept the swap for clearing, and
the Commission has determined under paragraph
(2)(B)(ii) that the swap is required to be
cleared.
``(B) Open access.--The rules of a
derivatives clearing organization described in
subparagraph (A) shall--
``(i) prescribe that all swaps
submitted to the derivatives clearing
organization with the same terms and
conditions are economically equivalent
within the derivatives clearing
organization and may be offset with
each other within the derivatives
clearing organization; and
``(ii) provide for non-discriminatory
clearing of a swap executed bilaterally
or on or through the rules of an
unaffiliated designated contract market
or swap execution facility.
``(2) Commission review.--
``(A) Commission-initiated review.--
``(i) The Commission shall review
each swap, or any group, category, type
or class of swaps to make a
determination as to whether the swap or
group, category, type, or class of
swaps should be required to be cleared.
``(ii) The Commission shall provide
at least a 30-day public comment period
regarding any determination made under
clause (i).
``(B) Swap submissions.--
``(i) A derivatives clearing
organization shall submit to the
Commission each swap, or any group,
category, type or class of swaps that
it plans to accept for clearing, and
provide notice to its members (in a
manner to be determined by the
Commission) of the submission.
``(ii) The Commission shall--
``(I) make available to the
public any submission received
under clause (i);
``(II) review each submission
made under clause (i), and
determine whether the swap, or
group, category, type, or class
of swaps described in the
submission is required to be
cleared; and
``(III) provide at least a
30-day public comment period
regarding its determination as
to whether the clearing
requirement under paragraph
(1)(A) shall apply to the
submission.
``(C) Deadline.--The Commission shall make
its determination under subparagraph (B)(ii)
not later than 90 days after receiving a
submission made under subparagraph (B)(i),
unless the submitting derivatives clearing
organization agrees to an extension for the
time limitation established under this
subparagraph.
``(D) Determination.--
``(i) In reviewing a submission made
under subparagraph (B), the Commission
shall review whether the submission is
consistent with section 5b(c)(2),
``(ii) In reviewing a swap, group of
swaps, or class of swaps pursuant to
subparagraph (A) or a submission made
under subparagraph (B), the Commission
shall take into account the following
factors:
``(I) The existence of
significant outstanding
notional exposures, trading
liquidity and adequate pricing
data.
``(II) The availability of
rule framework, capacity,
operational expertise and
resources, and credit support
infrastructure to clear the
contract on terms that are
consistent with the material
terms and trading conventions
on which the contract is then
traded.
``(III) The effect on the
mitigation of systemic risk,
taking into account the size of
the market for such contract
and the resources of the
derivatives clearing
organization available to clear
the contract.
``(IV) The effect on
competition, including
appropriate fees and charges
applied to clearing.
``(V) The existence of
reasonable legal certainty in
the event of the insolvency of
the relevant derivatives
clearing organization or 1 or
more of its clearing members
with regard to the treatment of
customer and swap counterparty
positions, funds, and property.
``(iii) In making a determination
under subparagraph (B)(ii) that the
clearing requirement shall apply, the
Commission may require such terms and
conditions to the requirement as the
Commission determines to be
appropriate.
``(E) Rules.--Not later than 1 year after the
date of the enactment of the Derivative Markets
Transparency and Accountability Act of 2009,
the Commission shall adopt rules for a
derivatives clearing organization's submission
for review, pursuant to this paragraph, of a
swap, or a group, category, type or class of
swaps, that it seeks to accept for clearing.
``(3) Stay of clearing requirement.--
``(A) After a determination pursuant to
paragraph (2)(B), the Commission, on
application of a counterparty to a swap or on
its own initiative, may stay the clearing
requirement of paragraph (1) until the
Commission completes a review of the terms of
the swap (or the group, category, type or class
of swaps) and the clearing arrangement.
``(B) Deadline.--The Commission shall
complete a review undertaken pursuant to
subparagraph (A) not later than 90 days after
issuance of the stay, unless the derivatives
clearing organization that clears the swap, or
group, category, type or class of swaps, agrees
to an extension of the time limitation
established under this subparagraph.
``(C) Determination.--Upon completion of the
review undertaken pursuant to subparagraph (A),
the Commission may--
``(i) determine, unconditionally or
subject to such terms and conditions as
the Commission determines to be
appropriate, that the swap, or group,
category, type or class of swaps, must
be cleared pursuant to this subsection
if it finds that such clearing is
consistent with paragraph (2)(D); or
``(ii) determine that the clearing
requirement of paragraph (1) shall not
apply to the swap, or group, category,
type or class of swaps.
``(D) Rules.--Not later than 1 year after the
date of the enactment of the Derivative Markets
Transparency and Accountability Act of 2009,
the Commission shall adopt rules for reviewing,
pursuant to this paragraph, a derivatives
clearing organization's clearing of a swap, or
a group, category, type or class of swaps, that
it has accepted for clearing.
``(4) Prevention of evasion.--The Commission may
prescribe rules under this subsection, or issue
interpretations of the rules, as necessary to prevent
evasions of this subsection.
``(5) Required reporting.--
``(A) In general.--All swaps that are not
accepted for clearing by any derivatives
clearing organization shall be reported either
to a swap repository described in section 21
or, if there is no repository that would accept
the swap, to the Commission pursuant to section
4r within such time period as the Commission
may by rule or regulation prescribe.
Counterparties to a swap may agree which
counterparty will report the swap as required
by this paragraph.
``(B) Swap dealer designation.--With regard
to swaps where only 1 counterparty is a swap
dealer, the swap dealer shall report the swap
as required by this paragraph.
``(6) Reporting transition rules.--Rules adopted by
the Commission under this section shall provide for the
reporting of data, as follows:
``(A) Swaps entered into before the date of
the enactment of this subsection shall be
reported to a registered swap repository or the
Commission no later than 180 days after the
effective date of this subsection; and
``(B) Swaps entered into on or after such
date of enactment shall be reported to a
registered swap repository or the Commission no
later than the later of--
``(i) 90 days after such effective
date; or
``(ii) such other time after entering
into the swap as the Commission may
prescribe by rule or regulation.
``(7) Clearing transition rules.--
``(A) Swaps entered into before the date of
the enactment of this subsection are exempt
from the clearing requirements of this
subsection if reported pursuant to paragraph
(6)(A).
``(B) Swaps entered into before application
of the clearing requirement pursuant to this
subsection are exempt from the clearing
requirements of this subsection if reported
pursuant to paragraph (6)(B).
``(8) Exceptions.--
``(A) In general.--The requirements of
paragraph (1) shall not apply to a swap if one
of the counterparties to the swap--
``(i) is not a swap dealer or major
swap participant;
``(ii) is using swaps to hedge or
mitigate commercial risk, including
operating or balance sheet risk; and
``(iii) notifies the Commission, in a
manner set forth by the Commission, how
it generally meets its financial
obligations associated with entering
into non-cleared swaps.
``(B) Abuse of exception.--The Commission may
prescribe rules under this subsection, or issue
interpretations of the rules, as necessary to
prevent abuse of the exemption in subparagraph
(A) by swap dealers and major swap
participants.
``(C) Option to clear.--The application of
the clearing exception in subparagraph (A) is
solely at the discretion of the counterparty to
the swap that meets the conditions of clauses
(i) through (iii) of subparagraph (A).
``(k) Execution Transparency.--
``(1) Requirement.--A swap that is subject to the
clearing requirement of subsection (j) shall not be
traded except on or through a board of trade designated
as a contract market under section 5, or on or through
a swap execution facility registered under section 5h,
that makes the swap available for trading.
``(2) Exceptions.--The requirement of paragraph (1)
shall not apply to a swap if no designated contract
market or swap execution facility makes the swap
available for trading.
``(3) Agricultural swaps.--No person shall offer to
enter into, enter into or confirm the execution of, any
swap in an agricultural commodity (as defined by the
Commission) that is subject to paragraphs (1) and (2)
except pursuant to a rule or regulation of the
Commission allowing the swap under such terms and
conditions as the Commission shall prescribe.
``(4) Required reporting.--If the exception of
paragraph (2) applies and there is no facility that
makes the swap available to trade, the counterparties
shall comply with any recordkeeping and transaction
reporting requirements that may be prescribed by the
Commission with respect to swaps subject to the
requirements of paragraph (1).
``(5) Exchange trading.--In adopting rules and
regulations, the Commission shall endeavor to eliminate
unnecessary impediments to the trading on boards of
trade designated as contract markets under section 5 of
contracts, agreements, or transactions that would be
security-based swaps but for the trading of such
contracts, agreements or transactions on such a
designated contract market.''.
(b) Derivatives Clearing Organizations.--
(1) Subsections (a) and (b) of section 5b of such Act
(7 U.S.C. 7a-1) are amended to read as follows:
``(a) Registration Requirement.--
``(1) In general.--It shall be unlawful for any
entity, unless registered with the Commission, directly
or indirectly to make use of the mails or any means or
instrumentality of interstate commerce to perform the
functions of a derivatives clearing organization
described in section 1a(10) of this Act with respect
to--
``(A) a contract of sale of a commodity for
future delivery (or option on such a contract)
or option on a commodity, in each case unless
the contract or option is--
``(i) excluded from this Act by
section 2(a)(1)(C)(i), 2(c), or 2(f);
or
``(ii) a security futures product
cleared by a clearing agency registered
with the Securities and Exchange
Commission under the Securities
Exchange Act of 1934 (15 U.S.C. 78a et
seq.); or
``(B) a swap.
``(2) Existing banks and clearing agencies.--A bank
or a clearing agency registered with the Securities and
Exchange Commission under the Securities Exchange Act
of 1934 required to be registered as a derivatives
clearing organization under this section is deemed to
be registered under this section to the extent that the
bank cleared swaps, as defined in this Act, as a
multilateral clearing organization or the clearing
agency cleared swaps, as defined in this Act, before
the enactment of this subsection. A bank to which this
paragraph applies may, by the vote of the shareholders
owning not less than 51 percent of the voting interests
of the bank, be converted into a State corporation,
partnership, limited liability company, or other
similar legal form pursuant to a plan of conversion, if
the conversion is not in contravention of applicable
State law.
``(b) Voluntary Registration.--A person that clears
agreements, contracts, or transactions that are not required to
be cleared under this Act may register with the Commission as a
derivatives clearing organization.''.
(2) Section 5b of such Act (7 U.S.C. 7a-1) is amended
by adding at the end the following:
``(g) Rules.--Not later than 1 year after the date of the
enactment of the Derivative Markets Transparency and
Accountability Act of 2009, the Commission shall adopt rules
governing persons that are registered as derivatives clearing
organizations for swaps under this subsection.
``(h) Exemptions.--
``(1) In general.--The Commission may exempt,
conditionally or unconditionally, a derivatives
clearing organization from registration under this
section for the clearing of swaps if the Commission
finds that the derivatives clearing organization is
subject to comparable, comprehensive supervision and
regulation on a consolidated basis by a Prudential
Regulator or the appropriate governmental authorities
in the organization's home country.
``(2) A person that is required to be registered as a
derivatives clearing organization under this section,
whose principal business is clearing securities and
options on securities and which is a clearing agency
registered with the Securities Exchange Commission
under the Securities Exchange Act of 1934 (15 U.S.C.
78a et seq.), shall be unconditionally exempt from
registration under this section solely for the purpose
of clearing swaps, unless the Commission finds that the
clearing agency is not subject to comparable,
comprehensive supervision and regulation by the
Securities and Exchange Commission.
``(i) Designation of Compliance Officer.--
``(1) In general.--Each derivatives clearing
organization shall designate an individual to serve as
a compliance officer.
``(2) Duties.--The compliance officer--
``(A) shall report directly to the board or
to the senior officer of the derivatives
clearing organization; and
``(B) shall--
``(i) review compliance with the core
principles in section 5b(c)(2).
``(ii) in consultation with the board
of the derivatives clearing
organization, a body performing a
function similar to that of a board, or
the senior officer of the derivatives
clearing organization, resolve any
conflicts of interest that may arise;
``(iii) be responsible for
administering the policies and
procedures required to be established
pursuant to this section; and
``(iv) ensure compliance with this
Act and the rules and regulations
issued under this Act; and
``(C) shall establish procedures for
remediation of non-compliance issues found
during compliance office reviews, lookbacks,
internal or external audit findings, self-
reported errors, or through validated
complaints. The procedures shall establish the
handling, management response, remediation, re-
testing, and closing of non-compliant issues.
``(3) Annual reports required.--The compliance
officer shall annually prepare and sign a report on the
compliance of the derivatives clearing organization
with this Act and the policies and procedures of the
derivatives clearing organization, including the code
of ethics and conflict of interest policies of the
derivatives clearing organization, in accordance with
rules prescribed by the Commission. The compliance
report shall accompany the financial reports of the
derivatives clearing organization that are required to
be furnished to the Commission pursuant to this section
and shall include a certification that, under penalty
of law, the report is accurate and complete.''.
(3) Section 5b(c)(2) of such Act (7 U.S.C. 7a-
1(c)(2)) is amended to read as follows:
``(2) Core principles for derivatives clearing
organizations.--
``(A) In general.--To be registered and to
maintain registration as a derivatives clearing
organization, a derivatives clearing
organization shall comply with the core
principles specified in this paragraph and any
requirement that the Commission may impose by
rule or regulation pursuant to section 8a(5).
Except where the Commission determines
otherwise by rule or regulation, a derivatives
clearing organization shall have reasonable
discretion in establishing the manner in which
the organization complies with the core
principles.
``(B) Financial resources.--
``(i) The derivatives clearing
organization shall have adequate
financial, operational, and managerial
resources to discharge the
responsibilities of the organization.
``(ii) The financial resources of the
derivatives clearing organization shall
at a minimum exceed the total amount
that would--
``(I) enable the organization
to meet the financial
obligations of the organization
to the members of, and
participants in, the
organization, notwithstanding a
default by the member or
participant creating the
largest financial exposure for
the organization in extreme but
plausible market conditions;
and
``(II) enable the
organization to cover the
operating costs of the
organization for a period of 1
year, calculated on a rolling
basis.
``(C) Participant and product eligibility.--
``(i) The derivatives clearing
organization shall establish--
``(I) appropriate admission
and continuing eligibility
standards (including sufficient
financial resources and
operational capacity to meet
obligations arising from
participation in the
organization) for members of
and participants in the
organization; and
``(II) appropriate standards
for determining eligibility of
agreements, contracts, or
transactions submitted to the
organization for clearing.
``(ii) The derivatives clearing
organization shall have procedures in
place to verify that participation and
membership requirements are met on an
ongoing basis.
``(iii) The participation and
membership requirements of the
derivatives clearing organization shall
be objective, publicly disclosed, and
permit fair and open access.
``(D) Risk management.--
``(i) The derivatives clearing
organization shall have the ability to
manage the risks associated with
discharging the responsibilities of a
derivatives clearing organization
through the use of appropriate tools
and procedures.
``(ii) The derivatives clearing
organization shall measure the credit
exposures of the organization to the
members of, and participants in, the
organization at least once each
business day and shall monitor the
exposures throughout the business day.
``(iii) Through margin requirements
and other risk control mechanisms, a
derivatives clearing organization shall
limit the exposures of the organization
to potential losses from defaults by
the members of, and participants in,
the organization so that the operations
of the organization would not be
disrupted and non-defaulting members or
participants would not be exposed to
losses that they cannot anticipate or
control.
``(iv) Margin required from all
members and participants shall be
sufficient to cover potential exposures
in normal market conditions.
``(v) The models and parameters used
in setting margin requirements shall be
risk-based and reviewed regularly.
``(E) Settlement procedures.--The derivatives
clearing organization shall--
``(i) complete money settlements on a
timely basis, and not less than once
each business day;
``(ii) employ money settlement
arrangements that eliminate or strictly
limit the exposure of the organization
to settlement bank risks, such as
credit and liquidity risks from the use
of banks to effect money settlements;
``(iii) ensure money settlements are
final when effected;
``(iv) maintain an accurate record of
the flow of funds associated with each
money settlement;
``(v) have the ability to comply with
the terms and conditions of any
permitted netting or offset
arrangements with other clearing
organizations; and
``(vi) for physical settlements,
establish rules that clearly state the
obligations of the organization with
respect to physical deliveries,
including how risks from these
obligations shall be identified and
managed.
``(F) Treatment of funds.--
``(i) The derivatives clearing
organization shall have standards and
procedures designed to protect and
ensure the safety of member and
participant funds and assets.
``(ii) The derivatives clearing
organization shall hold member and
participant funds and assets in a
manner whereby risk of loss or of delay
in the access of the organization to
the assets and funds is minimized.
``(iii) Assets and funds invested by
the derivatives clearing organization
shall be held in instruments with
minimal credit, market, and liquidity
risks.
``(G) Default rules and procedures.--
``(i) The derivatives clearing
organization shall have rules and
procedures designed to allow for the
efficient, fair, and safe management of
events when members or participants
become insolvent or otherwise default
on their obligations to the
organization.
``(ii) The default procedures of the
derivatives clearing organization shall
be clearly stated, and they shall
ensure that the organization can take
timely action to contain losses and
liquidity pressures and to continue
meeting the obligations of the
organization.
``(iii) The default procedures shall
be publicly available.
``(H) Rule enforcement.--The derivatives
clearing organization shall--
``(i) maintain adequate arrangements
and resources for the effective
monitoring and enforcement of
compliance with rules of the
organization and for resolution of
disputes; and
``(ii) have the authority and ability
to discipline, limit, suspend, or
terminate the activities of a member or
participant for violations of rules of
the organization.
``(I) System safeguards.--The derivatives
clearing organization shall--
``(i) establish and maintain a
program of risk analysis and oversight
to identify and minimize sources of
operational risk through the
development of appropriate controls and
procedures, and the development of
automated systems, that are reliable,
secure, and have adequate scalable
capacity;
``(ii) establish and maintain
emergency procedures, backup
facilities, and a plan for disaster
recovery that allows for the timely
recovery and resumption of operations
and the fulfillment of the
responsibilities and obligations of the
organization; and
``(iii) periodically conduct tests to
verify that backup resources are
sufficient to ensure continued order
processing and trade matching, price
reporting, market surveillance, and
maintenance of a comprehensive and
accurate audit trail.
``(J) Reporting.--The derivatives clearing
organization shall provide to the Commission
all information necessary for the Commission to
conduct oversight of the organization.
``(K) Recordkeeping.--The derivatives
clearing organization shall maintain records of
all activities related to the business of the
organization as a derivatives clearing
organization in a form and manner acceptable to
the Commission for a period of 5 years.
``(L) Public information.--
``(i) The derivatives clearing
organization shall provide market
participants with sufficient
information to identify and evaluate
accurately the risks and costs
associated with using the services of
the organization.
``(ii) The derivatives clearing
organization shall make information
concerning the rules and operating
procedures governing the clearing and
settlement systems (including default
procedures) of the organization
available to market participants.
``(iii) The derivatives clearing
organization shall disclose publicly
and to the Commission information
concerning--
``(I) the terms and
conditions of contracts,
agreements, and transactions
cleared and settled by the
organization;
``(II) clearing and other
fees that the organization
charges the members of, and
participants in, the
organization;
``(III) the margin-setting
methodology and the size and
composition of the financial
resource package of the
organization;
``(IV) other information
relevant to participation in
the settlement and clearing
activities of the organization;
and
``(V) daily settlement
prices, volume, and open
interest for all contracts
settled or cleared by the
organization.
``(M) Information-sharing.--The derivatives
clearing organization shall--
``(i) enter into and abide by the
terms of all appropriate and applicable
domestic and international information-
sharing agreements; and
``(ii) use relevant information
obtained from the agreements in
carrying out the risk management
program of the organization.
``(N) Antitrust considerations.--The
derivatives clearing organization shall avoid--
``(i) adopting any rule or taking any
action that results in any unreasonable
restraint of trade; or
``(ii) imposing any material
anticompetitive burden.
``(O) Governance fitness standards.--
``(i) The derivatives clearing
organization shall establish governance
arrangements that are transparent in
order to fulfill public interest
requirements and to support the
objectives of the owners of, and
participants in, the organization.
``(ii) The derivatives clearing
organization shall establish and
enforce appropriate fitness standards
for the directors, members of any
disciplinary committee, and members of
the organization, and any other persons
with direct access to the settlement or
clearing activities of the
organization, including any parties
affiliated with any of the persons
described in this subparagraph.
``(P) Conflicts of interest.--The derivatives
clearing organization shall establish and
enforce rules to minimize conflicts of interest
in the decision-making process of the
organization and establish a process for
resolving the conflicts of interest.
``(Q) Composition of the boards.--The
derivatives clearing organization shall ensure
that the composition of the governing board or
committee includes market participants.
``(R) Legal risk.--The derivatives clearing
organization shall have a well founded,
transparent, and enforceable legal framework
for each aspect of its activities.''.
(4) Section 5b of such Act (7 U.S.C. 7a-1) is further
amended by adding after subsection (i), as added by
this section, the following:
``(j) Reporting.--
``(1) In general.--A derivatives clearing
organization that clears swaps shall provide to the
Commission all information determined by the Commission
to be necessary to perform the responsibilities of the
Commission under this Act. The Commission shall adopt
data collection and maintenance requirements for swaps
cleared by derivatives clearing organizations that are
comparable to the corresponding requirements for swaps
accepted by swap repositories and swaps traded on swap
execution facilities. The Commission shall share the
information, upon request, with the Board, the
Securities and Exchange Commission, the appropriate
Federal banking agencies, the Financial Services
Oversight Council, and the Department of Justice or
other persons the Commission deems appropriate,
including foreign financial supervisors (including
foreign futures authorities), foreign central banks,
and foreign ministries that comply with the provisions
of section 8.
``(2) Public information.--A derivatives clearing
organization that clears swaps shall provide to the
Commission, or its designee, such information as is
required by, and in a form and at a frequency to be
determined by, the Commission, in order to comply with
the public reporting requirements contained in section
8(j).
``(3) A derivatives clearing organization shall keep
any such books and records relating to swaps defined in
section 1a(35)(A)(v) open to inspection and examination
by the Securities and Exchange Commission.''.
(5) Section 8(e) of such Act (7 U.S.C. 12(e)) is
amended in the last sentence by inserting ``central
bank and ministries'' after ``department'' each place
it appears.
(c) Legal Certainty for Identified Banking Products.--
(1) Repeal.--Sections 402(d), 404, 407, 408(b), and
408(c)(2) of the Legal Certainty for Bank Products Act
of 2000 (7 U.S.C. 27(d), 27b, 27e, 27f(b), and
27f(c)(2)) are repealed.
(2) Legal certainty.--Section 403 of the Legal
Certainty for Bank Products Act of 2000 (7 U.S.C. 27a)
is amended to read as follows:
``SEC. 403. EXCLUSION OF IDENTIFIED BANKING PRODUCT.
``(a) Exclusion.--Except as provided in subsection (b) or
(c)--
``(1) the Commodity Exchange Act shall not apply to,
and the Commodity Futures Trading Commission shall not
exercise regulatory authority under such Act with
respect to, an identified banking product; and
``(2) the definitions of `security-based swap' in
section 3(a)(68) of the Securities Exchange Act of 1934
and `security-based swap agreement' in section 3(a)(76)
of the Securities Exchange Act of 1934 do not include
any identified banking product.
``(b) Exception.--An appropriate Federal banking agency may
except an identified banking product of a bank under its
regulatory jurisdiction from the exclusions in subsection (a)
if the agency determines, in consultation with the Commodity
Futures Trading Commission and the Securities and Exchange
Commission, that the product--
``(1) would meet the definition of swap in section
1a(35) of the Commodity Exchange Act (7 U.S.C. 1a(35))
or security-based swap in section 3(a)(68) of the
Securities and Exchange Act of 1934; and
``(2) has become known to the trade as a swap or
security-based swap, or otherwise has been structured
as an identified banking product for the purpose of
evading the provisions of the Commodity Exchange Act (7
U.S.C. 1 et seq.), the Securities Act of 1933 (15
U.S.C. 77a et seq.), or the Securities Exchange Act of
1934 (15 U.S.C. 78a et seq.).
``(c) Exception.--The exclusions in subsection (a) shall not
apply to an identified banking product that--
``(1) is a product of a bank that is not under the
regulatory jurisdiction of an appropriate Federal
banking agency;
``(2) meets the definition of swap in section 1a(35)
of the Commodity Exchange Act or security-based swap in
section 3(a)(68) of the Securities and Exchange Act of
1934; and
``(3) has become known to the trade as a swap or
security-based swap, or otherwise has been structured
as an identified banking product for the purpose of
evading the provisions of the Commodity Exchange Act (7
U.S.C. 1 et seq.), the Securities Act of 1933 (15
U.S.C. 77a et seq.), or the Securities Exchange Act of
1934 (15 U.S.C. 78a et seq.).''.
SEC. 3104. PUBLIC REPORTING OF AGGREGATE SWAP DATA.
Section 8 of the Commodity Exchange Act (7 U.S.C. 12) is
amended by adding at the end the following:
``(j) Public Reporting of Aggregate Swap Data.--
``(1) In general.--The Commission, or a person
designated by the Commission pursuant to paragraph (2),
shall make available to the public, in a manner that
does not disclose the business transactions and market
positions of any person, aggregate data on swap trading
volumes and positions from the sources set forth in
paragraph (3).
``(2) Designee of the commission.--The Commission may
designate a derivatives clearing organization or a swap
repository to carry out the public reporting described
in paragraph (1).
``(3) Sources of information.--The sources of the
information to be publicly reported as described in
paragraph (1) are--
``(A) derivatives clearing organizations
pursuant to section 5b(j)(2);
``(B) swap repositories pursuant to section
21(c)(3); and
``(C) reports received by the Commission
pursuant to section 4r.''.
SEC. 3105. SWAP REPOSITORIES.
The Commodity Exchange Act (7 U.S.C. 1 et seq.) is amended by
inserting after section 20 the following:
``SEC. 21. SWAP REPOSITORIES.
``(a) Registration Requirement.--
``(1) In general.--It shall be unlawful for any
person, unless registered with the Commission, directly
or indirectly to make use of the mails or any means or
instrumentality of interstate commerce to perform the
functions of a swap repository.
``(2) Inspection and examination.--Registered swap
repositories shall be subject to inspection and
examination by any representative of the Commission.
``(b) Standard Setting.--
``(1) Data identification.--The Commission shall
prescribe standards that specify the data elements for
each swap that shall be collected and maintained by
each registered swap repository.
``(2) Data collection and maintenance.--The
Commission shall prescribe data collection and data
maintenance standards for swap repositories.
``(3) Comparability.--The standards prescribed by the
Commission under this subsection shall be comparable to
the data standards imposed by the Commission on
derivatives clearing organizations that clear swaps.
``(c) Duties.--A swap repository shall--
``(1) accept data prescribed by the Commission for
each swap under subsection (b);
``(2) maintain the data in such form and manner and
for such period as may be required by the Commission;
``(3) provide to the Commission, or its designee,
such information as is required by, and in a form and
at a frequency to be determined by, the Commission, in
order to comply with the public reporting requirements
contained in section 8(j); and
``(4) make available, on a confidential basis
pursuant to section 8, all data obtained by the swap
repository, including individual counterparty trade and
position data, to the Commission, the appropriate
Federal banking agencies, the Financial Services
Oversight Council, the Securities and Exchange
Commission, and the Department of Justice or to other
persons the Commission deems appropriate, including
foreign financial supervisors (including foreign
futures authorities), foreign central banks, and
foreign ministries.
``(d) Rules.--Not later than 1 year after the date of the
enactment of the Derivative Markets Transparency and
Accountability Act of 2009, the Commission shall adopt rules
governing persons that are registered under this section,
including rules that specify the data elements that shall be
collected and maintained.
``(e) Exemptions.--The Commission may exempt, conditionally
or unconditionally, a swap repository from the requirements of
this section if the Commission finds that the swap repository
is subject to comparable, comprehensive supervision and
regulation on a consolidated basis by the Securities and
Exchange Commission, a Prudential Regulator or the appropriate
governmental authorities in the organization's home country.''.
SEC. 3106. REPORTING AND RECORDKEEPING.
The Commodity Exchange Act (7 U.S.C. 1 et seq.) is amended by
inserting after section 4q the following:
``SEC. 4R. REPORTING AND RECORDKEEPING FOR CERTAIN SWAPS.
``(a) In General.--Any person who enters into a swap and--
``(1) did not have the swap cleared in accordance
with section 2(j)(1); and
``(2) did not have data regarding the swap accepted
by a swap repository in accordance with rules
(including timeframes) adopted by the Commission under
section 21,
shall meet the requirements in subsection (b).
``(b) Reports.--Any person described in subsection (a)
shall--
``(1) make such reports in such form and manner and
for such period as the Commission shall prescribe by
rule or regulation regarding the swaps held by the
person; and
``(2) keep books and records pertaining to the swaps
held by the person in such form and manner and for such
period as may be required by the Commission, which
books and records shall be open to inspection by any
representative of the Commission, an appropriate
Federal banking agency, the Securities and Exchange
Commission, the Financial Services Oversight Council,
and the Department of Justice.
``(c) Identical Data.--In adopting rules under this section,
the Commission shall require persons described in subsection
(a) to report the same or a more comprehensive set of data than
the Commission requires swap repositories to collect under
section 21.''.
SEC. 3107. REGISTRATION AND REGULATION OF SWAP DEALERS AND MAJOR SWAP
PARTICIPANTS.
The Commodity Exchange Act (7 U.S.C. 1 et seq.) is amended by
inserting after section 4r (as added by section 3106) the
following:
``SEC. 4S. REGISTRATION AND REGULATION OF SWAP DEALERS AND MAJOR SWAP
PARTICIPANTS.
``(a) Registration.--
``(1) It shall be unlawful for any person to act as a
swap dealer unless the person is registered as a swap
dealer with the Commission.
``(2) It shall be unlawful for any person to act as a
major swap participant unless the person is registered
as a major swap participant with the Commission.
``(b) Requirements.--
``(1) In general.--A person shall register as a swap
dealer or major swap participant by filing a
registration application with the Commission.
``(2) Contents.--The application shall be made in
such form and manner as prescribed by the Commission,
giving any information and facts as the Commission may
deem necessary concerning the business in which the
applicant is or will be engaged. The person, when
registered as a swap dealer or major swap participant,
shall continue to report and furnish to the Commission
such information pertaining to the person's business as
the Commission may require.
``(3) Expiration.--Each registration shall expire at
such time as the Commission may by rule or regulation
prescribe.
``(4) Rules.--Except as provided in subsections (c),
(d) and (e), the Commission may prescribe rules
applicable to swap dealers and major swap participants,
including rules that limit the activities of swap
dealers and major swap participants. Except with regard
to subsection (d)(1)(A), the Commission may provide
conditional or unconditional exemptions from some or
all of the rules or requirements prescribed under this
section for swap dealers and major swap participants.
``(5) Transition.--Rules adopted under this section
shall provide for the registration of swap dealers and
major swap participants no later than 1 year after the
effective date of the Derivative Markets Transparency
and Accountability Act of 2009.
``(6) Statutory disqualification.--Except to the
extent otherwise specifically provided by rule,
regulation, or order, it shall be unlawful for a swap
dealer or a major swap participant to permit any person
associated with a swap dealer or a major swap
participant who is subject to a statutory
disqualification to effect or be involved in effecting
swaps on behalf of the swap dealer or major swap
participant, if the swap dealer or major swap
participant knew, or in the exercise of reasonable care
should have known, of the statutory disqualification.
``(c) Rules.--
``(1) In general.--Not later than 1 year after the
date of the enactment of this section, the Commission
shall adopt rules for persons that are registered as
swap dealers or major swap participants under this
section.
``(2) Exception for prudential requirements.--The
Commission shall not prescribe rules imposing
prudential requirements on swap dealers or major swap
participants for which there is a Prudential Regulator.
This provision shall not be construed as limiting the
authority of the Commission to prescribe appropriate
business conduct, reporting, and recordkeeping
requirements to protect investors.
``(d) Capital and Margin Requirements.--
``(1) In general.--
``(A) Bank swap dealers and major swap
participants.--Each registered swap dealer and
major swap participant for which there is a
Prudential Regulator shall meet such minimum
capital requirements and minimum initial and
variation margin requirements as the Prudential
Regulators shall by rule or regulation jointly
prescribe that:
``(i) help ensure the safety and
soundness of the swap dealer or major
swap participant; and
``(ii) are appropriate for the risk
associated with the non-cleared swaps
held as a swap dealer or major swap
participant.
``(B) Non-bank swap dealers and major swap
participants.--Each registered swap dealer and
major swap participant for which there is not a
Prudential Regulator shall meet such minimum
capital requirements and minimum initial and
variation margin requirements as the Commission
shall by rule or regulation prescribe that--
``(i) help ensure the safety and
soundness of the swap dealer or major
swap participant; and
``(ii) are appropriate for the risk
associated with the non-cleared swaps
held as a swap dealer or major swap
participant.
``(2) Rules.--
``(A) Bank swap dealers and major swap
participants.--No later than 1 year after the
date of the enactment of the Derivative Markets
Transparency and Accountability Act of 2009,
the Prudential Regulators, in consultation with
the Commission, shall jointly adopt rules
imposing capital and margin requirements under
this subsection for swap dealers and major swap
participants, with respect to their activities
as a swap dealer or major swap participant for
which there is a Prudential Regulator
``(B) Non-bank swap dealers and major swap
participants.--No later than 1 year after the
date of the enactment of the Derivative Markets
Transparency and Accountability Act of 2009,
the Commission shall adopt rules imposing
capital and margin requirements under this
subsection for swap dealers and major swap
participants for which there is no Prudential
Regulator.
``(3) Authority.--Nothing in this section shall limit
the authority of the Commission to set capital
requirements for a registered futures commission
merchant or introducing broker in accordance with
section 4f.
``(e) Reporting and Recordkeeping.--
``(1) In general.--Each registered swap dealer and
major swap participant--
``(A) shall make such reports as are
prescribed by the Commission by rule or
regulation regarding the transactions and
positions and financial condition of the
person;
``(B) for which--
``(i) there is a Prudential
Regulator, shall keep books and records
of all activities related to its
business as a swap dealer or major swap
participant in such form and manner and
for such period as may be prescribed by
the Commission by rule or regulation;
``(ii) there is no Prudential
Regulator, shall keep books and records
in such form and manner and for such
period as may be prescribed by the
Commission by rule or regulation;
``(C) shall keep the books and records open
to inspection and examination by any
representative of the Commissionl and
``(D) shall keep any such books and records
relating to swaps defined in section
1a(35)(A)(v) open to inspection and examination
by the Securities and Exchange Commission.
``(2) Rules.--No later than 1 year after the date of
the enactment of the Derivative Markets Transparency
and Accountability Act of 2009, the Commission shall
adopt rules governing reporting and recordkeeping for
swap dealers and major swap participants.
``(f) Daily Trading Records.--
``(1) In general.--Each registered swap dealer and
major swap participant shall maintain daily trading
records of its swaps and all related records (including
related cash or forward transactions) and recorded
communications including but not limited to electronic
mail, instant messages, and recordings of telephone
calls, for such period as may be prescribed by the
Commission by rule or regulation.
``(2) Information requirements.--The daily trading
records shall include such information as the
Commission shall prescribe by rule or regulation.
``(3) Customer records.--Each registered swap dealer
and major swap participant shall maintain daily trading
records for each customer or counterparty in such
manner and form as to be identifiable with each swap
transaction.
``(4) Audit trail.--Each registered swap dealer and
major swap participant shall maintain a complete audit
trail for conducting comprehensive and accurate trade
reconstructions.
``(5) Rules.--No later than 1 year after the date of
the enactment of the Derivative Markets Transparency
and Accountability Act of 2009, the Commission shall
adopt rules governing daily trading records for swap
dealers and major swap participants.
``(g) Business Conduct Standards.--
``(1) In general.--Each registered swap dealer and
major swap participant shall conform with business
conduct standards as may be prescribed by the
Commission by rule or regulation addressing--
``(A) fraud, manipulation, and other abusive
practices involving swaps (including swaps that
are offered but not entered into);
``(B) diligent supervision of its business as
a swap dealer;
``(C) adherence to all applicable position
limits; and
``(D) such other matters as the Commission
shall determine to be necessary or appropriate.
``(2) Business conduct requirements.--Business
conduct requirements adopted by the Commission shall--
``(A) establish the standard of care for a
swap dealer or major swap participant to verify
that any counterparty meets the eligibility
standards for an eligible contract participant;
``(B) require disclosure by the swap dealer
or major swap participant to any counterparty
to the transaction (other than a swap dealer or
major swap participant) of--
``(i) information about the material
risks and characteristics of the swap;
``(ii) for cleared swaps, upon the
request of the counterparty, the daily
mark from the appropriate derivatives
clearing organization, and for non-
cleared swaps, upon request of the
counterparty, the daily mark of the
swap dealer or major swap participant;
and
``(iii) any other material incentives
or conflicts of interest that the swap
dealer or major swap participant may
have in connection with the swap; and
``(C) establish such other standards and
requirements as the Commission may determine
are necessary or appropriate in the public
interest, for the protection of investors, or
otherwise in furtherance of the purposes of
this Act.
``(3) Rules.--The Commission shall prescribe rules
under this subsection governing business conduct
standards for swap dealers and major swap participants
no later than 1 year after the date of the enactment of
the Derivative Markets Transparency and Accountability
Act of 2009.
``(h) Documentation Standards.--
``(1) In general.--Each registered swap dealer and
major swap participant shall conform with standards, as
may be prescribed by the Commission by rule or
regulation, addressing timely and accurate
confirmation, processing, netting, documentation, and
valuation of all swaps.
``(2) Rules.--No later than 1 year after the date of
the enactment of the Derivative Markets Transparency
and Accountability Act of 2009, the Commission shall
adopt rules governing the standards described in
paragraph (1) for swap dealers and major swap
participants.
``(i) Dealer Responsibilities.--Each registered swap dealer
and major swap participant at all times shall comply with the
following requirements:
``(1) Monitoring of trading.--The swap dealer or
major swap participant shall monitor its trading in
swaps to prevent violations of applicable position
limits.
``(2) Disclosure of general information.--The swap
dealer or major swap participant shall disclose to the
Commission or to the Prudential Regulator for the swap
dealer or major swap participant, as applicable,
information concerning--
``(A) terms and conditions of its swaps;
``(B) swap trading operations, mechanisms,
and practices;
``(C) financial integrity protections
relating to swaps; and
``(D) other information relevant to its
trading in swaps.
``(3) Ability to obtain information.--The swap dealer
or major swap participant shall--
``(A) establish and enforce internal systems
and procedures to obtain any necessary
information to perform any of the functions
described in this section; and
``(B) provide the information to the
Commission or to the Prudential Regulator for
the swap dealer or major swap participant, as
applicable, upon request.
``(4) Conflicts of interest.--The swap dealer and
major swap participant shall implement conflict-of-
interest systems and procedures that--
``(A) establish structural and institutional
safeguards to assure that the activities of any
person within the firm relating to research or
analysis of the price or market for any
commodity are separated by appropriate
informational partitions within the firm from
the review, pressure, or oversight of those
whose involvement in trading or clearing
activities might potentially bias their
judgment or supervision; and
``(B) address such other issues as the
Commission determines appropriate.
``(5) Antitrust considerations.--The swap dealer or
major swap participant shall avoid--
``(A) adopting any processes or taking any
actions that result in any unreasonable
restraints of trade; or
``(B) imposing any material anticompetitive
burden on trading.''.
SEC. 3108. CONFLICTS OF INTEREST.
Section 4d of the Commodity Exchange Act (7 U.S.C. 6d) is
amended by--
(1) redesignating subsection (c) as subsection (d);
and
(2) inserting after subsection (b) the following:
``(c) Conflicts of Interest.--The Commission shall require
that futures commission merchants and introducing brokers
implement conflict-of-interest systems and procedures that--
``(1) establish structural and institutional
safeguards to assure that the activities of any person
within the firm relating to research or analysis of the
price or market for any commodity are separated by
appropriate informational partitions within the firm
from the review, pressure, or oversight of those whose
involvement in trading or clearing activities might
potentially bias their judgment or supervision; and
``(2) address such other issues as the Commission
determines appropriate.''.
SEC. 3109. SWAP EXECUTION FACILITIES.
The Commodity Exchange Act (7 U.S.C. 1 et seq.) is amended by
inserting after section 5g the following:
``SEC. 5H. SWAP EXECUTION FACILITIES.
``(a) Registration.--A person may not operate a swap
execution facility unless the facility is registered under this
section or is registered with the Commission as a designated
contract market under section 5 or a swap execution facility
under section 5.
``(b) Requirements for Trading.--
``(1) A swap execution facility that is registered
under subsection (a) may make available for trading any
swap.
``(2) Rules for trading through the facility.--Not
later than 1 year after the date of the enactment of
the Derivative Markets Transparency and Accountability
Act of 2009, the Commission shall adopt rules to allow
a swap to be traded through the facilities of a
designated contract market or a swap execution
facility. Such rules shall permit an intermediary,
acting as principal or agent, to enter into or execute
a swap, notwithstanding section 2(k), if the swap is
executed, reported, recorded, or confirmed in
accordance with the rules of the designated contract
market or swap execution facility.
``(3) Agricultural swaps.--A swap execution facility
may not list for trading or confirm the execution of
any swap in an agricultural commodity (as defined by
the Commission) except pursuant to a rule or regulation
of the Commission allowing the swap under such terms
and conditions as the Commission shall prescribe.
``(c) Trading by Contract Markets.--A board of trade that
operates a contract market shall, to the extent that the board
of trade also operates a swap execution facility and uses the
same electronic trade execution system for trading on the
contract market and the swap execution facility, identify
whether the electronic trading is taking place on the contract
market or the swap execution facility.
``(d) Core Principles for Swap Execution Facilities.--
``(1) In general.--To be registered as, and to
maintain its registration as, a swap execution
facility, the facility shall comply with the core
principles specified in this subsection and any
requirement that the Commission may impose by rule or
regulation pursuant to section 8a(5). Except where the
Commission determines otherwise by rule or regulation,
the facility shall have reasonable discretion in
establishing the manner in which it complies with these
core principles.
``(2) Compliance with rules.--The swap execution
facility shall--
``(A) monitor and enforce compliance with any
of the rules of the facility, including the
terms and conditions of the swaps traded on or
through the facility and any limitations on
access to the facility; and
``(B) establish and enforce trading and
participation rules that will deter abuses and
have the capacity to detect, investigate, and
enforce those rules, including means to--
``(i) provide market participants
with impartial access to the market;
and
``(ii) capture information that may
be used in establishing whether rule
violations have occurred.
``(3) Swaps not readily susceptible to
manipulation.--The swap execution facility shall permit
trading only in swaps that are not readily susceptible
to manipulation.
``(4) Monitoring of trading.--The swap execution
facility shall--
``(A) establish and enforce rules or terms
and conditions defining, or specifications
detailing, trading procedures to be used in
entering and executing orders traded on or
through its facilities; and
``(B) monitor trading in swaps to prevent
manipulation, price distortion, and disruptions
of the delivery or cash settlement process
through surveillance, compliance, and
disciplinary practices and procedures,
including methods for conducting real-time
monitoring of trading and comprehensive and
accurate trade reconstructions.
``(5) Ability to obtain information.--The swap
execution facility shall--
``(A) establish and enforce rules that will
allow the facility to obtain any necessary
information to perform any of the functions
described in this section;
``(B) provide the information to the
Commission upon request; and
``(C) have the capacity to carry out such
international information-sharing agreements as
the Commission may require.
``(6) Position limits or accountability.--
``(A) To reduce the potential threat of
market manipulation or congestion, especially
during trading in the delivery month, a swap
execution facility that is a trading facility
shall adopt for each of its contracts made
available for trading on the trading facility,
where necessary and appropriate, position
limitations or position accountability for
speculators who establish positions in the
contract.
``(B) For any contract of a swap execution
facility that is subject to a position
limitation established by the Commission
pursuant to section 4a(a), the swap execution
facility--
``(i) may set a position limitation
at a level that is lower than the
Commission limitation; and
``(ii) shall monitor positions
established on or through the swap
execution facility for compliance with
the limit set by the Commission and the
limit, if any, set by the swap
execution facility.
``(7) Financial integrity of transactions.--The swap
execution facility shall establish and enforce rules
and procedures for ensuring the financial integrity of
swaps entered on or through its facilities, including
the clearance and settlement of the swaps pursuant to
section 2(j)(1).
``(8) Emergency authority.--The swap execution
facility shall adopt rules to provide for the exercise
of emergency authority, in consultation or cooperation
with the Commission, where necessary and appropriate,
including the authority to liquidate or transfer open
positions in any swap or to suspend or curtail trading
in a swap.
``(9) Timely publication of trading information.--The
swap execution facility shall make public timely
information on price, trading volume, and other trading
data on swaps to the extent prescribed by the
Commission. The Commission shall evaluate the impact of
public disclosure on market liquidity in the relevant
market, and shall seek to avoid public disclosure of
information in a manner that would significantly reduce
market liquidity. The Commission shall not disclose
information related to the internal business decisions
of particular market participants.
``(10) Recordkeeping and reporting.--The swap
execution facility shall maintain records of all
activities related to the business of the facility,
including a complete audit trail, in a form and manner
acceptable to the Commission for a period of 5 years,
and report to the Commission all information determined
by the Commission to be necessary or appropriate for
the Commission to perform its responsibilities under
this Act in a form and manner acceptable to the
Commission. The swap execution facility shall keep any
such records relating to swaps defined in section
1a(35)(A)(v) open to inspection and examination by the
Securities and Exchange Commission. The Commission
shall adopt data collection and reporting requirements
for swap execution facilities that are comparable to
corresponding requirements for derivatives clearing
organizations and swap repositories.
``(11) Antitrust considerations.--The swap execution
facility shall avoid--
``(A) adopting any rules or taking any
actions that result in any unreasonable
restraints of trade; or
``(B) imposing any material anticompetitive
burden on trading on the swap execution
facility.
``(12) Conflicts of interest.--The swap execution
facility shall--
``(A) establish and enforce rules to minimize
conflicts of interest in its decision-making
process; and
``(B) establish a process for resolving the
conflicts of interest.
``(13) Financial resources.--
``(A) The swap execution facility shall have
adequate financial, operational, and managerial
resources to discharge its responsibilities.
``(B) The financial resources of the swap
execution facility shall be considered adequate
if their value exceeds the total amount that
would enable the facility to cover its
operating costs for a period of 1 year,
calculated on a rolling basis.
``(14) System safeguards.--The swap execution
facility shall--
``(A) establish and maintain a program of
risk analysis and oversight to identify and
minimize sources of operational risk, through
the development of appropriate controls and
procedures, and the development of automated
systems, that are reliable, secure, and have
adequate scalable capacity;
``(B) establish and maintain emergency
procedures, backup facilities, and a plan for
disaster recovery that allow for the timely
recovery and resumption of operations and the
fulfillment of the swap execution facility's
responsibilities and obligation; and
``(C) periodically conduct tests to verify
that backup resources are sufficient to ensure
continued order processing and trade matching,
price reporting, market surveillance, and
maintenance of a comprehensive and accurate
audit trail.
``(15) Designation of compliance officer.--
``(A) In general.--Each swap execution
facility shall designate an individual to serve
as a compliance officer.
``(B) Duties.--The compliance officer--
``(i) shall report directly to the
board or to the senior officer of the
facility;
``(ii) shall--
``(I) review compliance with
the core principles in this
subsection;
``(II) in consultation with
the board of the facility, a
body performing a function
similar to that of a board, or
the senior officer of the
facility, resolve any conflicts
of interest that may arise;
``(III) be responsible for
administering the policies and
procedures required to be
established pursuant to this
section; and
``(IV) ensure compliance with
this Act and the rules and
regulations issued under this
Act, including rules prescribed
by the Commission pursuant to
this section; and
``(iii) shall establish procedures
for remediation of non-compliance
issues found during compliance office
reviews, lookbacks, internal or
external audit findings, self-reported
errors, or through validated
complaints, and for the handling,
management response, remediation, re-
testing, and closing of non-compliant
issues.
``(C) Annual reports required.--The
compliance officer shall annually prepare and
sign a report on the compliance of the facility
with this Act and its policies and procedures,
including its code of ethics and conflict of
interest policies, in accordance with rules
prescribed by the Commission. The compliance
report shall accompany the financial reports of
the facility that are required to be furnished
to the Commission pursuant to this section and
shall include a certification that, under
penalty of law, the report is accurate and
complete.
``(e) Exemptions.--The Commission may exempt, conditionally
or unconditionally, a swap execution facility from registration
under this section if the Commission finds that the facility is
subject to comparable, comprehensive supervision and regulation
on a consolidated basis by the Securities and Exchange
Commission, a Prudential Regulator or the appropriate
governmental authorities in the organization's home country.
``(f) Rules.--No later than 1 year after the date of the
enactment of the Derivative Markets Transparency and
Accountability Act of 2009, the Commission shall prescribe
rules governing the regulation of swap execution facilities
under this section.''.
SEC. 3110. DERIVATIVES TRANSACTION EXECUTION FACILITIES AND EXEMPT
BOARDS OF TRADE.
(a) Sections 5a and 5d of the Commodity Exchange Act (7
U.S.C. 1 et seq.) are repealed.
(b)(1) Prior to the final effective dates in this title, a
person may petition the Commodity Futures Trading Commission to
remain subject to the provisions of section 5d of the Commodity
Exchange Act, as such provisions existed prior to the effective
date of this subtitle.
(2) The Commodity Futures Trading Commission shall consider
any petition submitted under paragraph (1) in a prompt manner
and may allow a person to continue operating subject to the
provisions of section 5d of the Commodity Exchange Act for up
to 1 year after the effective date of this subtitle.
SEC. 3111. DESIGNATED CONTRACT MARKETS.
(a) Section 5(d) of the Commodity Exchange Act (7 U.S.C.
7(d)) is amended by striking paragraphs (1) and (2) and
inserting the following:
``(1) In general.--To be designated as, and to
maintain the designation of a board of trade as a
contract market, the board of trade shall comply with
the core principles specified in this subsection and
any requirement that the Commission may impose by rule
or regulation pursuant to section 8a(5). Except where
the Commission determines otherwise by rule or
regulation, the board of trade shall have reasonable
discretion in establishing the manner in which it
complies with the core principles.
``(2) Compliance with rules.--
``(A) The board of trade shall monitor and
enforce compliance with the rules of the
contract market, including access requirements,
the terms and conditions of any contracts to be
traded on the contract market and the contract
market's abusive trade practice prohibitions.
``(B) The board of trade shall have the
capacity to detect, investigate, and apply
appropriate sanctions to, any person or entity
that violates the rules.
``(C) The rules shall provide the board of
trade with the ability and authority to obtain
any necessary information to perform any of the
functions described in this subsection,
including the capacity to carry out such
international information-sharing agreements as
the Commission may require.''.
(b) Section 5(d) of such Act (7 U.S.C. 7(d)) is amended by
striking paragraphs (4) and (5) and inserting the following:
``(4) Prevention of market disruption.--The board of
trade shall have the capacity and responsibility to
prevent manipulation, price distortion, and disruptions
of the delivery or cash-settlement process through
market surveillance, compliance, and enforcement
practices and procedures, including methods for
conducting real-time monitoring of trading and
comprehensive and accurate trade reconstructions.
``(5) Position limitations or accountability.--
``(A) To reduce the potential threat of
market manipulation or congestion, especially
during trading in the delivery month, the board
of trade shall adopt for each of its contracts,
where necessary and appropriate, position
limitations or position accountability for
speculators.
``(B) For any contract that is subject to a
position limitation established by the
Commission pursuant to section 4a(a), the board
of trade shall set its position limitation at a
level no higher than the Commission-established
limitation.''.
(c) Section 5(d) of such Act (7 U.S.C. 7(d)) is amended by
striking paragraph (7) and inserting the following:
``(7) Availability of general information.--The board
of trade shall make available to market authorities,
market participants, and the public accurate
information concerning--
``(A) the terms and conditions of the
contracts of the contract market; and
``(B) the rules, regulations and mechanisms
for executing transactions on or through the
facilities of the contract market, and the
rules and specifications describing the
operation of the board of trade's electronic
matching platform or other trade execution
facility.''.
(d) Section 5(d) of such Act (7 U.S.C. 7(d)) is amended by
striking paragraph (9) and inserting the following:
``(9) Execution of transactions.--
``(A) The board of trade shall provide a
competitive, open, and efficient market and
mechanism for executing transactions that
protects the price discovery process of trading
in the board of trade's centralized market.
``(B) The rules may authorize, for bona fide
business purposes--
``(i) transfer trades or office
trades;
``(ii) an exchange of--
``(I) futures in connection
with a cash commodity
transaction;
``(II) futures for cash
commodities; or
``(III) futures for swaps; or
``(iii) A futures commission
merchant, acting as principal or agent,
to enter into or confirm the execution
of a contract for the purchase or sale
of a commodity for future delivery if
the contract is reported, recorded, or
cleared in accordance with the rules of
the contract market or a derivatives
clearing organization.''.
(e) Section 5(d)(17) of such Act (7 U.S.C. 7(d)(17)) is
amended by adding at the end the following: ``The board of
trade shall keep any such records relating to swaps defined in
section 1a(35)(A)(v) open to inspection and examination by the
Securities and Exchange Commission.''.
(f) Section 5(d) of such Act (7 U.S.C. 7(d)) is amended by
adding at the end the following:
``(19) Financial resources.--The board of trade shall
have adequate financial, operational, and managerial
resources to discharge the responsibilities of a
contract market. For the financial resources of a board
of trade to be considered adequate, their value shall
exceed the total amount that would enable the contract
market to cover its operating costs for a period of 1
year, calculated on a rolling basis.
``(20) System safeguards.--The board of trade shall--
``(A) establish and maintain a program of
risk analysis and oversight to identify and
minimize sources of operational risk through
the development of appropriate controls and
procedures, and the development of automated
systems, that are reliable, secure, and give
adequate scalable capacity;
``(B) establish and maintain emergency
procedures, backup facilities, and a plan for
disaster recovery that allow for the timely
recovery and resumption of operations and the
fulfillment of the board of trade's
responsibilities and obligations; and
``(C) periodically conduct tests to verify
that back-up resources are sufficient to ensure
continued order processing and trade matching,
price reporting, market surveillance, and
maintenance of a comprehensive and accurate
audit trail.
``(21) Diversity of boards of directors.--The board
of trade, if a publicly traded company, shall endeavor
to recruit individuals to serve on the board of
directors and the other decision-making bodies (as
determined by the Commission) of the board of trade
from among, and to have the composition of the bodies
reflect, a broad and culturally diverse pool of
qualified candidates.
``(22) Disciplinary procedures.--The board of trade
shall establish and enforce disciplinary procedures
that authorize the board of trade to discipline,
suspend, or expel members or market participants that
violate the rules of the board of trade, or similar
methods for performing the same functions, including
delegation of the functions to third parties.''.
(g) Section 5 of such Act (7 U.S.C. 7) is amended by striking
subsection (b).
SEC. 3112. MARGIN.
(a) Section 8a(7)(C) of the Commodity Exchange Act (7 U.S.C.
12a(7)(C)) is amended by striking ``, excepting the setting of
levels of margin''.
(b) Section 8a(7) of such Act (7 U.S.C. 12a(7)) is amended by
redesignating subparagraphs (D) through (F) as subparagraphs
(E) through (G), respectively, and inserting after subparagraph
(C) the following:
``(D) margin requirements, provided that such
rules, regulations, or orders shall--
``(i) be limited to protecting the
financial integrity of the derivatives
clearing organization;
``(ii) be designed for risk
management purposes in order to protect
the financial integrity of
transactions; and
``(iii) not set specific margin
amounts.''.
SEC. 3113. POSITION LIMITS.
(a) Section 4a(a) of the Commodity Exchange Act (7 U.S.C.
6a(a)) is amended by--
(1) inserting ``(1)'' after ``(a)'';
(2) striking ``on electronic trading facilities with
respect to a significant price discovery contract'' in
the first sentence and inserting ``swaps that perform
or affect a significant price discovery function with
respect to registered entities'';
(3) inserting ``, including any group or class of
traders,'' in the second sentence after ``held by any
person'';
(4) striking ``on an electronic trading facility with
respect to a significant price discovery contract,'' in
the second sentence and inserting ``swaps that perform
or affect a significant price discovery function with
respect to registered entities,''; and
(5) inserting at the end the following:
``(2)(A) In accordance with the standards set forth
in paragraph (1) of this subsection and consistent with
the good faith exception cited in subsection (b)(2),
with respect to physical commodities other than
excluded commodities as defined by the Commission, the
Commission shall by rule, regulation, or order
establish limits on the amount of positions, as
appropriate, other than bona fide hedge positions, that
may be held by any person with respect to contracts of
sale for future delivery or with respect to options on
the contracts or commodities traded on or subject to
the rules of a designated contract market.
``(B)(i) For exempt commodities, the limits shall be
established within 180 days after the date of the
enactment of this paragraph.
``(ii) For agricultural commodities, the limits shall
be established within 270 days after the date of the
enactment of this paragraph.
``(C) In establishing the limits, the Commission
shall strive to ensure that trading on foreign boards
of trade in the same commodity will be subject to
comparable limits and that any limits to be imposed by
the Commission will not cause price discovery in the
commodity to shift to trading on the foreign boards of
trade.
``(3) In establishing the limits required in
paragraph (2), the Commission, as appropriate, shall
set limits--
``(A) on the number of positions that may be
held by any person for the spot month, each
other month, and the aggregate number of
positions that may be held by any person for
all months; and
``(B) to the maximum extent practicable, in
its discretion--
``(i) to diminish, eliminate, or
prevent excessive speculation as
described under this section;
``(ii) to deter and prevent market
manipulation, squeezes, and corners;
``(iii) to ensure sufficient market
liquidity for bona fide hedgers; and
``(iv) to ensure that the price
discovery function of the underlying
market is not disrupted.
``(4)(A) Not later than 150 days after the
establishment of position limits pursuant to paragraph
(2), and biannually thereafter, the Commission shall
hold 2 public hearings, 1 for agriculture commodities
and 1 for energy commodities as such terms are defined
by the Commission, in order to receive recommendations
regarding the position limits to be established in
paragraph (2).
``(B) Each public hearing held pursuant to
subparagraph (A) shall, at a minimum providing there is
sufficient interest, receive recommendations from--
``(i) 7 predominantly commercial short
hedgers of the actual physical commodity for
future delivery;
``(ii) 7 predominantly commercial long
hedgers of the actual physical commodity for
future delivery;
``(iii) 4 non-commercial participants in
markets for commodities for future delivery;
and
``(iv) each designated contract market upon
which a contract in the commodity for future
delivery is traded.
``(C) Within 60 days after each public hearing held
pursuant to subparagraph (A), the Commission shall
publish in the Federal Register its response to the
recommendations regarding position limits heard at the
hearing.
``(5) Significant price discovery function.--In
making a determination whether a swap performs or
affects a significant price discovery function with
respect to regulated markets, the Commission shall
consider, as appropriate:
``(A) Price linkage.--The extent to which the
swap uses or otherwise relies on a daily or
final settlement price, or other major price
parameter, of another contract traded on a
regulated market based upon the same underlying
commodity, to value a position, transfer or
convert a position, financially settle a
position, or close out a position;
``(B) Arbitrage.--The extent to which the
price for the swap is sufficiently related to
the price of another contract traded on a
regulated market based upon the same underlying
commodity so as to permit market participants
to effectively arbitrage between the markets by
simultaneously maintaining positions or
executing trades in the swaps on a frequent and
recurring basis;
``(C) Material price reference.--The extent
to which, on a frequent and recurring basis,
bids, offers, or transactions in a contract
traded on a regulated market are directly based
on, or are determined by referencing, the price
generated by the swap;
``(D) Material liquidity.--The extent to
which the volume of swaps being traded in the
commodity is sufficient to have a material
effect on another contract traded on a
regulated market; and
``(E) Other material factors.--Such other
material factors as the Commission specifies by
rule or regulation as relevant to determine
whether a swap serves a significant price
discovery function with respect to a regulated
market.
``(6) Economically equivalent contracts.--
``(A) Notwithstanding any other provision of
this section, the Commission shall establish
limits on the amount of positions, including
aggregate position limits, as appropriate,
other than bona fide hedge positions, that may
be held by any person with respect to swaps
that are economically equivalent to contracts
of sale for future delivery or to options on
the contracts or commodities traded on or
subject to the rules of a designated contract
market subject to paragraph (2).
``(B) In establishing limits pursuant to
subparagraph (A), the Commission shall--
``(i) develop the limits concurrently
with limits established under paragraph
(2), and the limits shall have similar
requirements as under paragraph (3)(B);
and
``(ii) establish the limits
simultaneously with limits established
under paragraph (2).
``(7) Aggregate position limits.--The Commission
shall, by rule or regulation, establish limits
(including related hedge exemption provisions) on the
aggregate number or amount of positions in contracts
based upon the same underlying commodity (as defined by
the Commission) that may be held by any person,
including any group or class of traders, for each month
across--
``(A) contracts listed by designated contract
markets;
``(B) with respect to an agreement contract,
or transaction that settles against any price
(including the daily or final settlement price)
of 1 or more contracts listed for trading on a
registered entity, contracts traded on a
foreign board of trade that provides members or
other participants located in the United States
with direct access to its electronic trading
and order matching system; and
``(C) swap contracts that perform or affect a
significant price discovery function with
respect to regulated entities.
``(8) Exemptions.--The Commission, by rule,
regulation, or order, may exempt, conditionally or
unconditionally, any person or class of persons, any
swap or class of swaps, any contract of sale of a
commodity for future delivery or class of such
contracts, any option or class of options, or any
transaction or class of transactions from any
requirement it may establish under this section with
respect to position limits.''.
(b) Section 4a(b) of such Act (7 U.S.C. 6a(b)) is amended--
(1) in paragraph (1), by striking ``or derivatives
transaction execution facility or facilities or
electronic trading facility'' and inserting ``or swap
execution facility or facilities''; and
(2) in paragraph (2), by striking ``or derivatives
transaction execution facility or facilities or
electronic trading facility'' and inserting ``or swap
execution facility''.
(c) Section 4a(c) of such Act is amended--
(1) by inserting ``(1)'' after ``(c)''; and
(2) by adding after and below the end the following:
``(2) For the purposes of implementation of
subsection (a)(2) for contracts of sale for future
delivery or options on the contracts or commodities,
the Commission shall define what constitutes a bona
fide hedging transaction or position as a transaction
or position that--
``(A)(i) represents a substitute for
transactions made or to be made or positions
taken or to be taken at a later time in a
physical marketing channel;
``(ii) is economically appropriate to the
reduction of risks in the conduct and
management of a commercial enterprise; and
``(iii) arises from the potential change in
the value of--
``(I) assets that a person owns,
produces, manufactures, processes, or
merchandises or anticipates owning,
producing, manufacturing, processing,
or merchandising;
``(II) liabilities that a person owns
or anticipates incurring; or
``(III) services that a person
provides, purchases, or anticipates
providing or purchasing; or
``(B) reduces risks attendant to a position
resulting from a swap that--
``(i) was executed opposite a
counterparty for which the transaction
would qualify as a bona fide hedging
transaction pursuant to subparagraph
(A); or
``(ii) meets the requirements of
subparagraph (A).''.
(d) This section shall become effective on the date of its
enactment.
SEC. 3114. ENHANCED AUTHORITY OVER REGISTERED ENTITIES.
(a) Section 5c(a) of the Commodity Exchange Act (7 U.S.C. 7a-
2(a)) is amended--
(1) in paragraph (1), by striking ``5a(d) and
5b(c)(2)'' and inserting ``5b(c)(2) and 5h(e)''; and
(2) in paragraph (2), by striking ``shall not'' and
inserting ``may''.
(b) Section 5c(b) of such Act (7 U.S.C. 7a-2(b)) is amended
in each of paragraphs (1), (2), and (3) by inserting ``or swap
execution facility'' after ``contract market'' each place it
appears.
(c) Section 5c(c)(1) of such Act (7 U.S.C. 7a-2(c)(1)) is
amended--
(1) by inserting ``(A)'' after ``In general.--''; and
(2) by adding at the end the following:
``(B) The new rule or rule amendment shall become
effective, pursuant to the registered entity's
certification and notice of such certification to its
members (in a manner to be determined by the
Commission), 10 business days after the Commission's
receipt of the certification (or such shorter period
determined by the Commission by rule or regulation)
unless the Commission notifies the registered entity
within such time that it is staying the certification
because there exist novel or complex issues that
require additional time to analyze, an inadequate
explanation by the submitting registered entity, or a
potential inconsistency with this Act (including
regulations under this Act).
``(C)(i) A notification by the Commission pursuant to
subparagraph (B) shall stay the certification of the
new contract or instrument or clearing of the new
contract or instrument, new rule or new amendment for
up to an additional 90 days from the date of the
notification.
``(ii) The Commission shall provide at least a 30-day
public comment period, within the 90-day period in
which the stay is in effect described in clause (i),
whenever it reviews a rule or rule amendment pursuant
to a notification by the Commission under this
paragraph.''.
(d) Section 5c(d) of such Act (7 U.S.C. 7a-2(d)) is repealed.
SEC. 3115. FOREIGN BOARDS OF TRADE.
(a) In General.--Section 4 of the Commodity Exchange Act (7
U.S.C. 6) is amended by adding at the end the following:
``(e) Foreign Boards of Trade.--
``(1) In general.--The Commission may not permit a
foreign board of trade to provide to the members of the
foreign board of trade or other participants located in
the United States direct access to the electronic
trading and order-matching system of the foreign board
of trade with respect to an agreement, contract, or
transaction that settles against any price (including
the daily or final settlement price) of 1 or more
contracts listed for trading on a registered entity,
unless the Commission determines that--
``(A) the foreign board of trade makes public
daily trading information regarding the
agreement, contract, or transaction that is
comparable to the daily trading information
published by the registered entity for the 1 or
more contracts against which the agreement,
contract, or transaction traded on the foreign
board of trade settles; and
``(B) the foreign board of trade (or the
foreign futures authority that oversees the
foreign board of trade)--
``(i) adopts position limits
(including related hedge exemption
provisions) for the agreement,
contract, or transaction that are
comparable, taking into consideration
the relative sizes of the respective
markets, to the position limits
(including related hedge exemption
provisions) adopted by the registered
entity for the 1 or more contracts
against which the agreement, contract,
or transaction traded on the foreign
board of trade settles;
``(ii) has the authority to require
or direct market participants to limit,
reduce, or liquidate any position the
foreign board of trade (or the foreign
futures authority that oversees the
foreign board of trade) determines to
be necessary to prevent or reduce the
threat of price manipulation, excessive
speculation as described in section 4a,
price distortion, or disruption of
delivery or the cash settlement
process;
``(iii) agrees to promptly notify the
Commission, with regard to the
agreement, contract, or transaction
that settles against any price
(including the daily or final
settlement price) of 1 or more
contracts listed for trading on a
registered entity, of any change
regarding--
``(I) the information that
the foreign board of trade will
make publicly available;
``(II) the position limits
that the foreign board of trade
or foreign futures authority
will adopt and enforce;
``(III) the position
reductions required to prevent
manipulation, excessive
speculation as described in
section 4a, price distortion,
or disruption of delivery or
the cash settlement process;
and
``(IV) any other area of
interest expressed by the
Commission to the foreign board
of trade or foreign futures
authority;
``(iv) provides information to the
Commission regarding large trader
positions in the agreement, contract,
or transaction that is comparable to
the large trader position information
collected by the Commission for the 1
or more contracts against which the
agreement, contract, or transaction
traded on the foreign board of trade
settles; and
``(v) provides the Commission with
information necessary to publish
reports on aggregate trader positions
for the agreement, contract, or
transaction traded on the foreign board
of trade that are comparable to the
reports on aggregate trader positions
for the 1 or more contracts against
which the agreement, contract, or
transaction traded on the foreign board
of trade settles.
``(2) Existing foreign boards of trade.--Paragraph
(1) shall not be effective with respect to any foreign
board of trade to which the Commission has granted
direct access permission before the date of the
enactment of this subsection until the date that is 180
days after such date of enactment.
``(3) Persons located in the united states.--''.
(b) Liability of Registered Persons Trading on a Foreign
Board of Trade.--
(1) Section 4(a) of such Act (7. U.S.C. 6(a)) is
amended by inserting ``or by subsection (f)'' after
``Unless exempted by the Commission pursuant to
subsection (c)''; and
(2) Section 4 of such Act (7 U.S.C 6) is further
amended by adding at the end the following:
``(f)(1) A person registered with the Commission, or exempt
from registration by the Commission, under this Act may not be
found to have violated subsection (a) with respect to a
transaction in, or in connection with, a contract of sale of a
commodity for future delivery if the person--
``(A) has reason to believe that the transaction and
the contract is made on or subject to the rules of a
foreign board of trade that is--
``(i) legally organized under the laws of a
foreign country;
``(ii) authorized to act as a board of trade
by a foreign futures authority; and
``(iii) subject to regulation by the foreign
futures authority; and
``(B) has not been determined by the Commission to be
operating in violation of subsection (a).
``(2) Nothing in this subsection shall be construed as
implying or creating any presumption that a board of trade,
exchange, or market is located outside the United States, or
its territories or possessions, for purposes of subsection
(a).''.
(c) Contract Enforcement for Foreign Futures Contracts.--
Section 22(a) of such Act (7 U.S.C. 25(a)) is amended by adding
at the end the following:
``(5) Contract enforcement for foreign futures
contracts.--A contract of sale of a commodity for
future delivery traded or executed on or through the
facilities of a board of trade, exchange, or market
located outside the United States for purposes of
section 4(a) shall not be void, voidable, or
unenforceable, and a party to such a contract shall not
be entitled to rescind or recover any payment made with
respect to the contract, based on the failure of the
foreign board of trade to comply with any provision of
this Act.''.
SEC. 3116. LEGAL CERTAINTY FOR SWAPS.
Section 22(a)(4) of the Commodity Exchange Act (7 U.S.C.
25(a)(4)) is amended to read as follows:
``(4) Contract enforcement between eligible
counterparties.--
``(A) A hybrid instrument sold to any
investor shall not be void, voidable, or
unenforceable, and a party to such a hybrid
instrument shall not be entitled to rescind, or
recover any payment made with respect to, such
a hybrid instrument under this section or any
other provision of Federal or State law, based
solely on the failure of the hybrid instrument
to comply with the terms or conditions of
section 2(f) or regulations of the Commission;
and
``(B) An agreement, contract, or transaction
between eligible contract participants or
persons reasonably believed to be eligible
contract participants shall not be void,
voidable, or unenforceable, and a party thereto
shall not be entitled to rescind, or recover
any payment made with respect to, such an
agreement, contract, or transaction under this
section or any other provision of Federal or
State law, based solely on the failure of the
agreement, contract, or transaction to meet the
definition of a swap set forth in section 1a,
be traded in the manner set forth in section
2(k)(1), or be cleared pursuant to 2(j)(1) or
regulations of the Commission pursuant
thereto.''.
SEC. 3117. FDICIA AMENDMENTS.
Sections 408 and 409 of the Federal Deposit Insurance
Corporation Improvement Act of 1991 (12 U.S.C. 4421 and 4422)
are repealed.
SEC. 3118. ENFORCEMENT AUTHORITY.
(a) The Commodity Exchange Act (7 U.S.C. 1 et seq.) is
amended by inserting after section 4b the following:
``SEC. 4B-1. ENFORCEMENT AUTHORITY.
``(a) CFTC.--Except as provided in subsection (b), the
Commission shall have exclusive authority to enforce the
provisions of subtitle A of the Derivative Markets Transparency
and Accountability Act of 2009 with respect to any person.
``(b) Prudential Regulators.--The Prudential Regulators shall
have exclusive authority to enforce the provisions of section
4s(d) and other prudential requirements of this Act with
respect to banks, and branches or agencies of foreign banks
that are swap dealers or major swap participants.
``(c) Referral.--(1) If the Prudential Regulator for a swap
dealer or major swap participant has cause to believe that the
swap dealer or major swap participant may have engaged in
conduct that constitutes a violation of the nonprudential
requirements of section 4s or rules adopted by the Commission
thereunder, that Prudential Regulator may recommend in writing
to the Commission that the Commission initiate an enforcement
proceeding as authorized under this Act. The recommendation
shall be accompanied by a written explanation of the concerns
giving rise to the recommendation.
``(2) If the Commission has cause to believe that a swap
dealer or major swap participant that has a Prudential
Regulator may have engaged in conduct that constitutes a
violation of the prudential requirements of section 4s or rules
adopted thereunder, the Commission may recommend in writing to
the Prudential Regulator that the Prudential Regulator initiate
an enforcement proceeding as authorized under this Act. The
recommendation shall be accompanied by a written explanation of
the concerns given rise to the recommendation.''.
(b)(1) Section 4c(a) of such Act (7 U.S.C. 6c(a)) is amended
by adding at the end the following:
``(3) Disruptive practices.--It shall be unlawful for
any person to engage in any trading or practice on or
subject to the rules of a registered entity that--
``(A) violates bids and offers (intentionally
bidding at a price higher than the lowest
offer, or offering at a price lower than the
highest bid);
``(B) is, is of the character of, or is
commonly known to the trade as `marking the
close' (bidding or offering during or near the
market's closing period with the intent to
influence the settlement price);
``(C) is, is of the character of, or is
commonly known to the trade as `spoofing'
(bidding or offering with the intent to cancel
the bid or offer before execution); or
``(D) constitutes uneconomic trading (trading
that has no legitimate economic purpose but for
the effect on price).
``(4) The Commission may make and promulgate such
rules and regulations as, in the judgment of the
Commission, are reasonably necessary to prohibit any
other trading practice that is disruptive of fair and
equitable trading.''.
(2) The amendment made by paragraph (1) shall become
effective upon enactment.
SEC. 3119. ENFORCEMENT.
(a) Section 4b(a)(2) of the Commodity Exchange Act (7 U.S.C.
6b(a)(2)) is amended by striking ``or other agreement,
contract, or transaction subject to paragraphs (1) and (2) of
section 5a(g),'' and inserting ``or swap,''.
(b) Section 4b(b) of such Act (7 U.S.C. 6b(b)) is amended by
striking ``or other agreement, contract or transaction subject
to paragraphs (1) and (2) of section 5a(g),'' and inserting
``or swap,''.
(c) Section 4c(a) of such Act (7 U.S.C. 6c(a)) is amended by
inserting ``or swap'' before ``if the transaction is used or
may be used''.
(d) Section 9(a)(2) of such Act (7 U.S.C. 13(a)(2)) is
amended by inserting ``or of any swap,'' before ``or to
corner''.
(e) Section 9(a)(4) of such Act (7 U.S.C. 13(a)(4)) is
amended by inserting ``swap repository,'' before ``or futures
association''.
(f) Section 9(e)(1) of such Act (7 U.S.C. 13(e)(1)) is
amended by inserting ``swap repository,'' before ``or
registered futures association'' and by inserting ``, or
swaps,'' before ``on the basis''.
(g) Section 8(b) of the Federal Deposit Insurance Act (12
U.S.C. 1818(b)) is amended by redesignating paragraphs (6)
through (10) as paragraphs (7) through (11), respectively, and
inserting after paragraph (5) the following:
``(6) This section shall apply to any swap dealer,
major swap participant, security-based swap dealer,
major security-based swap participant, derivatives
clearing organization, swap repository, security-based
swap repository, or swap execution facility, whether or
not it is an insured depository institution, for which
the Board, the Corporation, or the Office of the
Comptroller of the Currency is the appropriate Federal
banking agency or Prudential Regulator for purposes of
the Derivative Markets Transparency and Accountability
Act of 2009.''.
SEC. 3120. RETAIL COMMODITY TRANSACTIONS.
(a) Section 2(c) of the Commodity Exchange Act (7 U.S.C.
2(c)) is amended--
(1) in paragraph (1), by striking ``(other than
section 5a (to the extent provided in section 5a(g)),
5b, 5d, or 12(e)(2)(B))'' and inserting ``(other than
section 5b or 12(e)(2)(B))''; and
(2) in paragraph (2), by inserting after subparagraph
(C) the following:
``(D) Retail commodity transactions.--
``(i) This subparagraph shall apply
to, and the Commission shall have
jurisdiction over, any agreement,
contract, or transaction in any
commodity that is--
``(I) entered into with, or
offered to (even if not entered
into with), a person that is
not an eligible contract
participant or eligible
commercial entity; and
``(II) entered into, or
offered (even if not entered
into), on a leveraged or
margined basis, or financed by
the offeror, the counterparty,
or a person acting in concert
with the offeror or
counterparty on a similar
basis.
``(ii) Clause (i) shall not apply
to--
``(I) an agreement, contract,
or transaction described in
paragraph (1) or subparagraphs
(A), (B), or (C), including any
agreement, contract, or
transaction specifically
excluded from subparagraph (A),
(B), or (C);
``(II) any security;
``(III) a contract of sale
that--
``(aa) results in
actual delivery within
28 days or such other
longer period as the
Commission may
determine by rule or
regulation based upon
the typical commercial
practice in cash or
spot markets for the
commodity involved; or
``(bb) creates an
enforceable obligation
to deliver between a
seller and a buyer that
have the ability to
deliver and accept
delivery, respectively,
in connection with
their line of business.
``(IV) an agreement,
contract, or transaction that
is listed on a national
securities exchange registered
under section 6(a) of the
Securities Exchange Act of 1934
(15 U.S.C. 78f(a)); or
``(V) an identified banking
product, as defined in section
402(b) of the Legal Certainty
for Bank Products Act of 2000
(7 U.S.C. 27(b)).
``(iii) Sections 4(a), 4(b) and 4b
shall apply to any agreement, contract
or transaction described in clause (i),
that is not excluded from clause (i) by
clause (ii), as if the agreement,
contract, or transaction were a
contract of sale of a commodity for
future delivery.
``(iv) This subparagraph shall not be
construed to limit any jurisdiction
that the Commission may otherwise have
under any other provision of this Act
over an agreement, contract, or
transaction that is a contract of sale
of a commodity for future delivery;
``(v) This subparagraph shall not be
construed to limit any jurisdiction
that the Commission or the Securities
and Exchange Commission may otherwise
have under any other provisions of this
Act with respect to security futures
products and persons effecting
transactions in security futures
products;
``(vi) For the purposes of this
subparagraph, an agricultural producer,
packer, or handler shall be considered
an eligible commercial entity for any
agreement, contract, or transaction for
a commodity in connection with its line
of business.''.
(b) The amendments made by subsection (a) shall become
effective on the date of the enactment of this section.
SEC. 3121. LARGE SWAP TRADER REPORTING.
The Commodity Exchange Act (7 U.S.C. 1 et seq.) is amended by
inserting after section 4s (as added by section 3107 of this
Act) the following:
``SEC. 4T. LARGE SWAP TRADER REPORTING.
``(a) It shall be unlawful for any person to enter into any
swap that performs or affects a significant price discovery
function with respect to registered entities if--
``(1) the person directly or indirectly enters into
such swaps during any 1 day in an amount equal to or in
excess of such amount as shall be fixed from time to
time by the Commission; and
``(2) such person directly or indirectly has or
obtains a position in such swaps equal to or in excess
of such amount as shall be fixed from time to time by
the Commission,
unless the person files or causes to be filed with the properly
designated officer of the Commission such reports regarding any
transactions or positions described in paragraphs (1) and (2)
as the Commission may by rule or regulation require and unless,
in accordance with the rules and regulations of the Commission,
the person keeps books and records of all such swaps and any
transactions and positions in any related commodity traded on
or subject to the rules of any board of trade, and of cash or
spot transactions in, inventories of, and purchase and sale
commitments of, such a commodity.
``(b) The books and records shall show complete details
concerning all transactions and positions as the Commission may
by rule or regulation prescribe.
``(c) The books and records shall be open at all times to
inspection and examination by any representative of the
Commission.
``(d) For the purpose of this subsection, the swaps, futures
and cash or spot transactions and positions of any person shall
include the transactions and positions of any persons directly
or indirectly controlled by the person.
``(e) In making a determination whether a swap performs or
affects a significant price discovery function with respect to
regulated markets, the Commission shall consider the factors
set forth in section 4a(a)(3).''.
SEC. 3122. SEGREGATION OF ASSETS HELD AS COLLATERAL IN SWAP
TRANSACTIONS.
The Commodity Exchange Act (7 U.S.C. 1 et seq.) is further
amended by inserting after section 4t the following:
``SEC. 4U. SEGREGATION OF ASSETS HELD AS COLLATERAL IN OVER-THE-COUNTER
SWAP TRANSACTIONS.
``(a) Segregation.--At the request of a swap counterparty who
provides funds or other property to a swap dealer initial
margin or collateral to secure the obligations of the
counterparty under a swap between the counterparty and the swap
dealer that is not submitted for clearing to a derivatives
clearing organization, the swap dealer shall segregate the
funds or other property for the benefit of the counterparty,
and maintain the initial margin or collateral in an account
which is carried by an independent third-party custodian and
designated as a segregated account for the counterparty, in
accordance with such rules and regulations as the Commission or
Prudential Regulator may prescribe. If a swap counterparty is a
swap dealer or major swap participant who owns more than 20
percent of, or has more than 50 percent representation on the
board of directors of a custodian, the custodian shall not be
considered independent from the swap counterparties for
purposes of the preceding sentence. This subsection shall not
be interpreted to preclude commercial arrangements regarding
the investment of the segregated funds or other property and
the related allocation of gains and losses resulting from any
such investment.
``(b) Further Audit Reporting.--If a swap dealer does not
segregate funds pursuant to the request of a swap counterparty
in accordance with subsection (a), the swap dealer shall report
to its counterparty on a quarterly basis that its procedures
relating to margin and collateral requirements are in
compliance with the agreement of the counterparties.''.
SEC. 3123. OTHER AUTHORITY.
Unless otherwise provided by its terms, this subtitle does
not divest any appropriate Federal banking agency, the
Commission, the Securities and Exchange Commission, or other
Federal or State agency, of any authority derived from any
other applicable law.
SEC. 3124. ANTITRUST.
Nothing in the amendments made by this subtitle shall be
construed to modify, impair, or supersede the operation of any
of the antitrust laws. For purposes of this subtitle, the term
``antitrust laws'' has the same meaning given the term in
subsection (a) of the first section of the Clayton Act, except
that the term includes section 5 of the Federal Trade
Commission Act to the extent that such section 5 applies to
unfair methods of competition.
SEC. 3125. REVIEW OF PRIOR ACTIONS.
Notwithstanding any other provision of the Commodity Exchange
Act, the Commodity Futures Trading Commission shall review, as
appropriate, all regulations, rules, exemptions, exclusions,
guidance, no action letters, orders, other actions taken by or
on behalf of the Commission, and any action taken pursuant to
the Commodity Exchange Act by an exchange, self-regulatory
organization, or any other registered entity, that are
currently in effect, to ensure that such prior actions are in
compliance with the provisions of this title.
SEC. 3126. EXPEDITED PROCESS.
The Commodity Futures Trading Commission may use emergency
and expedited procedures (including any administrative or other
procedure as appropriate) to carry out this title if, in its
discretion, it deems it necessary to do so.
SEC. 3127. EFFECTIVE DATE.
(a) Unless otherwise provided, the provisions of this
subtitle shall become effective the later of 270 days after the
date of the enactment of this subtitle or, to the extent a
provision of this subtitle requires rulemaking, no less than 60
days after publication of a final rule or regulation
implementing such provision of this subtitle.
(b) Subsection (a) shall not preclude the Commodity Futures
Trading Commission from any rulemaking required or directed
under this subtitle to implement the provisions of this
subtitle.
Subtitle B--Regulation of Security-Based Swap Markets
SEC. 3201. DEFINITIONS UNDER THE SECURITIES EXCHANGE ACT OF 1934.
(a) Definitions.--Section 3(a) of the Securities Exchange Act
of 1934 (15 U.S.C. 78c(a)) is amended--
(1) in paragraph (5)(A) and (B), by inserting ``(but
not security-based swaps, other than security-based
swaps with or for persons that are not eligible
contract participants)'' after the word ``securities''
in each place it appears;
(2) in paragraph (10), by inserting ``security-based
swap,'' after ``security future,'';
(3) in paragraph (13), by adding at the end the
following: ``For security-based swaps, such terms
include the execution, termination (prior to its
scheduled maturity date), assignment, exchange, or
similar transfer or conveyance of, or extinguishing of
rights or obligations under, a security-based swap, as
the context may require.'';
(4) in paragraph (14), by adding at the end the
following: ``For security-based swaps, such terms
include the execution, termination (prior to its
scheduled maturity date), assignment, exchange, or
similar transfer or conveyance of, or extinguishing of
rights or obligations under, a security-based swap, as
the context may require.'';
(5) in paragraph (39)--
(A) by striking ``or government securities
dealer'' and adding ``government securities
dealer, security-based swap dealer or major
security-based swap participant'' in its place
in subparagraph (B)(i)(I);
(B) by adding ``security-based swap dealer,
major security-based swap participant,'' after
``government securities dealer,'' in
subparagraph (B)(i)(II);
(C) by striking ``or government securities
dealer'' and adding ``government securities
dealer, security-based swap dealer or major
security-based swap participant'' in its place
in subparagraph (C); and
(D) by adding ``security-based swap dealer,
major security-based swap participant,'' after
``government securities dealer,'' in
subparagraph (D); and
(6) by adding at the end the following:
``(65) Eligible contract participant.--The term
`eligible contract participant' has the same meaning as
in section 1a(12) of the Commodity Exchange Act (7
U.S.C. 1a(12)).
``(66) Major swap participant.--The term `major swap
participant' has the same meaning as in section 1a(39)
of the Commodity Exchange Act (7 U.S.C. 1a(39)).
``(67) Major security-based swap participant.--
``(A) In general.--The term `major security-
based swap participant' means any person who is
not a security-based swap dealer, and--
``(i) maintains a substantial net
position in outstanding security-based
swaps, excluding positions held
primarily for hedging, reducing or
otherwise mitigating its commercial
risk, including operating and balance
sheet risk; or
``(ii) whose outstanding security-
based swaps create substantial net
counterparty exposure among the
aggregate of its counterparties that
could expose those counterparties to
significant credit losses.
``(B) Definition of `substantial net
position'.--The Commission shall define by rule
or regulation the terms `substantial net
position', `substantial net counterparty
exposure', and `significant credit losses' at
thresholds that the Commission determines
prudent for the effective monitoring,
management and oversight of entities which are
systemically important or can significantly
impact the financial system through
counterparty credit risk. In setting the
definitions, the Commission shall consider the
person's relative position in uncleared as
opposed to cleared swaps.
``(C) A person may be designated a major
security-based swap participant for 1 or more
individual types of security-based swaps
without being classified as a major security-
based swap participant for all classes of
security-based swaps.
``(68) Security-based swap.--
``(A) In general.--Except as provided in
subparagraph (B), the term `security-based
swap' means any agreement, contract, or
transaction that would be a swap under section
1a(35) of the Commodity Exchange Act, and
that--
``(i) is priumarily based on an index
that is a narrow-based security index,
including any interest therein or based
on the value thereof;
``(ii) is primarily based on a single
security or loan, including any
interest therein or based on the value
thereof; or
``(iii) is primarily based on the
occurrence, non-occurrence, or extent
of the occurrence of an event relating
to a single issuer of a security or the
issuers of securities in a narrow-based
security index, provided that such
event must directly affect the
financial statements, financial
condition, or financial obligations of
the issuer.
``(B) Rule of construction regarding master
agreements.--The term `security-based swap'
shall be construed to include a master
agreement that provides for an agreement,
contract, or transaction that is a security-
based swap pursuant to subparagraph (A),
together with all supplements to any such
master agreement, without regard to whether the
master agreement contains an agreement,
contract, or transaction that is not a
security-based swap pursuant to subparagraph
(A), except that the master agreement shall be
considered to be a security-based swap only
with respect to each agreement, contract, or
transaction under the master agreement that is
a security-based swap pursuant to subparagraph
(A).
``(C) Exclusion.--The term `security-based
swap' does not include any agreement, contract,
or transaction that meets the definition of a
security-based swap only because it references,
is based upon, or settles through the transfer,
delivery, or receipt of an exempted security
under section 3(a)(12) of the Securities
Exchange Act of 1934 as in effect on the date
of enactment of the Futures Trading Act of 1982
(other than any municipal security as defined
in section 3(a)(29) as in effect on the date of
enactment of the Futures Trading Act of 1982),
unless such agreement, contract, or transaction
is of the character of, or is commonly known in
the trade as, a put, call, or other option.
``(69) Swap.--The term `swap' has the same meaning as
in section 1a(35) of the Commodity Exchange Act (7
U.S.C. 1a(35)).
``(70) Person associated with a security-based swap
dealer or major security-based swap participant.--The
term `person associated with a security-based swap
dealer or major security-based swap participant' or
`associated person of a security-based swap dealer or
major security-based swap participant' means any
partner, officer, director, or branch manager of such
security-based swap dealer or major security-based swap
participant (or any person occupying a similar status
or performing similar functions), any person directly
or indirectly controlling, controlled by, or under
common control with such security-based swap dealer or
major security-based swap participant, or any employee
of such security-based swap dealer or major security-
based swap participant, except that any person
associated with a security-based swap dealer or major
security-based swap participant whose functions are
solely clerical or ministerial shall not be included in
the meaning of such term other than for purposes of
section 15F(e)(2).
``(71) Security-based swap dealer.--
``(A) In general.--The term `security-based
swap dealer' means any person that--
``(i) holds itself out as a dealer in
security-based swaps;
``(ii) makes a market in security-
based swaps;
``(iii) regularly engages in the
purchase of security-based swaps and
their resale to customers in the
ordinary course of a business; or
``(iv) engages in any activity
causing it to be commonly known in the
trade as a dealer or market maker in
security-based swaps.
``(B) Designation by type or class.--A person
may be designated a security-based swap dealer
for a single type or single class or category
of security-based swap and considered not a
security-based swap dealer for other types,
classes, or categories of security-based swaps.
``(C) De minimus exception.--The Commission
shall make a determination to exempt from
designation as a security-based swap dealer an
entity that engages in a de minimus amount of
security-based swap dealing in connection with
transactions with or on the behalf of its
customers.
``(72) Appropriate federal banking agency.--The term
`appropriate Federal banking agency' has the same
meaning as in section 3(q) of the Federal Deposit
Insurance Act (12 U.S.C. 1813(q)).
``(73) Board.--The term `Board' means the Board of
Governors of the Federal Reserve System.
``(74) Prudential regulator.--The term `Prudential
Regulator' means--
``(A) the Board in the case of a swap dealer,
major swap participant, security-based swap
dealer or major security-based swap participant
that is--
``(i) a State-chartered bank that is
a member of the Federal Reserve System;
or
``(ii) a State-chartered branch or
agency of a foreign bank;
``(B) the Office of the Comptroller of the
Currency in the case of a swap dealer, major
swap participant, security-based swap dealer or
major security-based swap participant that is--
``(i) a national bank; or
``(ii) a federally chartered branch
or agency of a foreign bank; and
``(C) the Federal Deposit Insurance
Corporation in the case of a swap dealer, major
swap participant, security-based swap dealer or
major security-based swap participant that is a
state-chartered bank that is not a member of
the Federal Reserve System.
``(75) Swap dealer.--The term `swap dealer' has the
same meaning as in section 1a(38) of the Commodity
Exchange Act (7 U.S.C. 1a(38)).
``(76) Security-based swap agreement.--
``(A) In general.--For purposes of sections
10, 16, 20, and 21A of this Act, and section 17
of the Securities Act of 1933 (15 U.S.C. 77q),
the term `security-based swap agreement' means
a swap agreement as defined in section 206A of
the Gramm-Leach-Bliley Act (15 U.S.C. 78c note)
of which a material term is based on the price,
yield, value, or volatility of any security or
any group or index of securities, or any
interest therein.
``(B) Exclusions.--The term `security-based
swap agreement' does not include any security-
based swap.
``(76) Security-based swap repository.--The term
`security-based swap repository' means any person that
collects, calculates, prepares or maintains information
or records with respect to transactions or positions
in, or the terms and conditions of, security-based
swaps entered into by third parties.
``(77) Swap execution facility.--The term `swap
execution facility' means a person or entity that
facilitates the execution or trading of security-based
swaps between two persons through any means of
interstate commerce, but which is not a national
securities exchange, including any electronic trade
execution or voice brokerage facility.''
(b) Authority to Further Define Terms.--The Securities and
Exchange Commission may adopt a rule further defining the terms
``security-based swap'', ``security-based swap dealer'',
``major security-based swap participant'', and ``eligible
contract participant'' with regard to security-based swaps (as
such terms are defined in the amendments made by subsection
(a)) for the purpose of including transactions and entities
that have been structured to evade this title.
SEC. 3202. REPEAL OF PROHIBITION ON REGULATION OF SECURITY-BASED SWAPS.
(a) Repeal of Law.--Section 206B of the Gramm-Leach-Bliley
Act (15 U.S.C. 78c note) is repealed.
(b) Conforming Amendments to the Securities Act of 1933.--
(1) Section 2A(b) of the Securities Act of 1933 (15
U.S.C. 77b-1) is amended by striking ``(as defined in
section 206B of the Gramm-Leach-Bliley Act)'' each
place that such term appears.
(2) Section 17 of the Securities Act of 1933 (15
U.S.C. 77q) is amended--
(A) in subsection (a)--
(i) by inserting ``(including
security-based swaps)'' after
``securities''; and
(ii) by striking ``206B of the Gramm-
Leach-Bliley Act'' and inserting
``3(a)(76) of the Securities Exchange
Act of 1934''; and
(B) in subsection (d), by striking ``206B of
the Gramm-Leach-Bliley Act'' and inserting
``3(a)(76) of the Securities Exchange Act of
1934''.
(c) Conforming Amendments to the Securities Exchange Act of
1934.--The Securities Exchange Act of 1934 (15 U.S.C. 78a, et
seq.) is amended as follows:
(1) Section 3A (15 U.S.C. 78c-1) is amended by
striking ``(as defined in section 206B of the Gramm-
Leach-Bliley Act)'' each place that the term appears.
(2) Section 9(a) (15 U.S.C. 78i(a)) is amended by
striking paragraphs (2) through (5) and inserting:
``(2) To effect, alone or with one or more other persons, a
series of transactions in any security registered on a national
securities exchange or in connection with any security-based
swap or security-based swap agreement with respect to such
security creating actual or apparent active trading in such
security, or raising or depressing the price of such security,
for the purpose of inducing the purchase or sale of such
security by others.
``(3) If a dealer, broker, security-based swap dealer, major
security-based swap participant or other person selling or
offering for sale or purchasing or offering to purchase the
security, or a security-based swap or security-based swap
agreement with respect to such security, to induce the purchase
or sale of any security registered on a national securities
exchange or any security-based swap or security-based swap
agreement with respect to such security by the circulation or
dissemination in the ordinary course of business of information
to the effect that the price of any such security will or is
likely to rise or fall because of market operations of any one
or more persons conducted for the purpose of raising or
depressing the price of such security.
``(4) If a dealer, broker, security-based swap dealer, major
security-based swap participant or other person selling or
offering for sale or purchasing or offering to purchase the
security, or a security-based swap or security-based swap
agreement with respect to such security, to make, regarding any
security registered on a national securities exchange or any
security-based swap or security-based swap agreement with
respect to such security, for the purpose of inducing the
purchase or sale of such security or such security-based swap
or security-based swap agreement, any statement which was at
the time and in the light of the circumstances under which it
was made, false or misleading with respect to any material
fact, and which he knew or had reasonable ground to believe was
so false or misleading.
``(5) For a consideration, received directly or indirectly
from a dealer, broker, security-based swap dealer, major
security-based swap participant or other person selling or
offering for sale or purchasing or offering to purchase the
security, or a security-based swap or security-based swap
agreement with respect to such security, to induce the purchase
of any security registered on a national securities exchange or
any security-based swap or security-based swap agreement with
respect to such security by the circulation or dissemination of
information to the effect that the price of any such security
will or is likely to rise or fall because of the market
operations of any one or more persons conducted for the purpose
of raising or depressing the price of such security.''.
(3) Section 9(i) (15 U.S.C. 78i(i)) is amended by
striking ``(as defined in section 206B of the Gramm-
Leach-Bliley Act)'';
(4) Section 10 (15 U.S.C. 78j) is amended by striking
``(as defined in section 206B of the Gramm-Leach-Bliley
Act)'' each place that the term appears.
(5) Section 15(c)(1) is amended--
(A) in subparagraph (A), by striking ``, or
any security-based swap agreement (as defined
in section 206B of the Gramm-Leach-Bliley
Act),''; and
(B) in subparagraphs (B) and (C), by striking
``agreement (as defined in section 206B of the
Gramm-Leach-Bliley Act)'' in each place that
the term appears.
(6) Section 15(i) (15 U.S.C. 78o(i), as added by
section 303(f) of the Commodity Futures Modernization
Act of 2000 (Public Law 106-554; 114 Stat. 2763A-455)
is amended by striking ``(as defined in section 206B of
the Gramm-Leach-Bliley Act)''.
(7) Section 16 (15 U.S.C. 78p) is amended--
(A) in subsection (a)(2)(C), by striking
``(as defined in section 206(b) of the Gramm-
Leach-Bliley Act (15 U.S.C. 78c note))'';
(B) in subsection (b), by striking ``(as
defined in section 206B of the Gramm-Leach-
Bliley Act)'' in each place that the term
appears; and
(C) in subsection (g), by striking ``(as
defined in section 206B of the Gramm-Leach-
Bliley Act)'';
(8) Section 20 (15 U.S.C. 78t) is amended--
(A) in subsection (d), by striking ``(as
defined in section 206B of the Gramm-Leach-
Bliley Act)''; and
(B) in subsection (f), by striking ``(as
defined in section 206B of the Gramm-Leach-
Bliley Act)''; and
(9) Section 21A (15 U.S.C. 78u-1) is amended--
(A) in subsection (a)(1), by striking ``(as
defined in section 206B of the Gramm-Leach-
Bliley Act)''; and
(B) in subsection (g), by striking ``(as
defined in section 206B of the Gramm-Leach-
Bliley Act)''.
SEC. 3203. AMENDMENTS TO THE SECURITIES EXCHANGE ACT OF 1934.
(a) Clearing for Security-based Swaps.--The Securities
Exchange Act of 1934 (15 U.S.C. 78a, et seq.) is amended by
adding the following section after section 3A:
``SEC. 3B. CLEARING FOR SECURITY-BASED SWAPS.
``(a) In General.--
``(1) Standard for clearing.--A security-based swap
shall be submitted for clearing if a clearing agency
that is registered under this Act will accept the
security-based swap for clearing, and the Commission
has determined under paragraph (2)(B)(ii) of subsection
(b) that the security-based swap is required to be
cleared.
``(2) Open access.--The rules of a clearing agency
described in paragraph (1) shall--
``(A) prescribe that all security-based swaps
submitted to the clearing agency with the same
terms and conditions are economically
equivalent within the clearing agency and may
be offset with each other within the clearing
agency; and
``(B) provide for non-discriminatory clearing
of a security-based swap executed bilaterally
or on or through the rules of an unaffiliated
national securities exchange or swap execution
facility.
``(b) Commission Review.--
``(1) Commission-initiated review.--
``(A) The Commission shall review each
security-based swap, or any group, category,
type or class of security-based swaps to make a
determination that such security-based swap, or
group, category, type or class of security-
based swaps should be required to be cleared.
``(B) The Commission shall provide at least a
30-day public comment period regarding any
determination under subparagraph (A).
``(2) Swap submissions.--
``(A) A clearing agency shall submit to the
Commission each security-based swap, or any
group, category, type or class of security-
based swaps that it plans to accept for
clearing and provide notice to its members (in
a manner to be determined by the Commission) of
such submission.
``(B) The Commission shall--
``(i) make available to the public
any submission received under
subparagraph (A);
``(ii) review each submission made
under subparagraph (A), and determine
whether the security-based swap, or
group, category, type, or class of
security-based swaps, described in the
submission is required to be cleared;
and
``(iii) provide at least a 30-day
public comment period regarding its
determination whether the clearing
requirement under subsection (a)(1)
shall apply to the submission.
``(3) Deadline.--The Commission shall make its
determination under paragraph (2)(B) not later than 90
days after receiving a submission made under paragraph
(2)(A), unless the submitting clearing agency agrees to
an extension for the time limitation established under
this paragraph.
``(4) Determination.--
``(A) In reviewing a submission made under
paragraph (2), the Commission shall review
whether the submission is consistent with
section 5b(c)(2).
``(B) In reviewing a security-based swap,
group of security-based swaps or class of
security-based swaps pursuant to paragraph (1)
or a submission made under paragraph (2), the
Commission shall take into account the
following factors:
``(i) The existence of significant
outstanding notional exposures, trading
liquidity and adequate pricing data.
``(ii) The availability of rule
framework, capacity, operational
expertise and resources, and credit
support infrastructure to clear the
contract on terms that are consistent
with the material terms and trading
conventions on which the contract is
then traded.
``(iii) The effect on the mitigation
of systemic risk, taking into account
the size of the market for such
contract and the resources of the
clearing agency available to clear the
contract.
``(iv) The effect on competition,
including appropriate fees and charges
applied to clearing.
``(v) The existence of reasonable
legal certainty in the event of the
insolvency of the relevant clearing
agency or 1 or more of its clearing
members with regard to the treatment of
customer and security-based swap
counterparty positions, funds, and
property.
``(C) In making a determination under
paragraph (2)(B) that the clearing requirement
shall apply, the Commission may require such
terms and conditions to the requirement as the
Commission determines to be appropriate.
``(5) Rules.--Not later than 1 year after the date of
the enactment of the Derivative Markets Transparency
and Accountability Act of 2009, the Commission shall
adopt rules for a clearing agency's submission for
review, pursuant to this subsection, of a security-
based swap, or a group, category, type or class of
security-based swaps, that it seeks to accept for
clearing.
``(c) Stay of Clearing Requirement.--
``(1) After an determination pursuant to subsection
(b)(2), the Commission, on application of a
counterparty to a security-based swap or on its own
initiative, may stay the clearing requirement of
subsection (a)(1) until the Commission completes a
review of the terms of the security-based swap (or the
group, category, type or class of security-based swaps)
and the clearing arrangement.
``(2) Deadline.--The Commission shall complete a
review undertaken pursuant to paragraph (1) not later
than 90 days after issuance of the stay, unless the
clearing agency that clears the security-based swap, or
group, category, type or class of security-based swaps,
agrees to an extension of the time limitation
established under this paragraph.
``(3) Determination.--Upon completion of the review
undertaken pursuant to paragraph (1), the Commission
may--
``(A) determine, unconditionally or subject
to such terms and conditions as the Commission
determines to be appropriate, that the
security-based swap, or group, category, type
or class of security-based swaps, must be
cleared pursuant to this subsection if it finds
that such clearing is consistent with
subsection (b)(4); or
``(B) determine that the clearing requirement
of subsection (a)(1) shall not apply to the
security-based swap, or group, category, type
or class of security-based swaps.
``(4) Rules.--Not later than 1 year after the date of
the enactment of the Derivative Markets Transparency
and Accountability Act of 2009, the Commission shall
adopt rules for reviewing, pursuant to this subsection,
a clearing agency's clearing of a security-based swap,
or a group, category, type or class of security-based
swaps, that it has accepted for clearing.
``(d) Prevention of Evasion.--The Commission may prescribe
rules under this subsection, or issue interpretations of the
rules, as necessary to prevent evasions of this section.
``(e) Required Reporting.--
``(1) In general.--All security-based swaps that are
not accepted for clearing by any clearing agency shall
be reported either to a security-based swap repository
described in subsection 13(n) or, if there is no
security-based swap repository that would accept the
security-based swap, to the Commission pursuant to
section 13A within such time period as the Commission
may by rule or regulation prescribe. Counterparties to
a security-based swap may agree which counterparty will
report the security-based swap as required by this
paragraph.
``(2) Swap dealer designation.--With regard to
security-based swaps where only 1 counterparty is a
security-based swap dealer, the security-based swap
dealer shall report the security-based swap as required
by this subsection.
``(f) Reporting Transition Rules.--Rules adopted by the
Commission under this section shall provide for the reporting
of data, as follows:
``(1) Security-based swaps entered into before the
date of the enactment of this section shall be reported
to a registered security-based swap repository or the
Commission no later than 180 days after the effective
date of this section; and
``(2) Security-based swaps entered into on or after
such date of enactment shall be reported to a
registered security-based swap repository or the
Commission no later than the later of--
``(A) 90 days after such effective date; or
``(B) such other time after entering into the
security-based swap as the Commission may
prescribe by rule or regulation.
``(g) Clearing Transition Rules.--
``(1) Security-based swaps entered into before the
date of the enactment of this section are exempt from
the clearing requirements of this subsection if
reported pursuant to subsection (f)(1).
``(2) Security-based swaps entered into before
application of the clearing requirement pursuant to
this section are exempt from the clearing requirements
of this section if reported pursuant to subsection
(f)(2).
``(h) Exceptions.--
``(1) In general.--The requirements of subsection
(a)(1) shall not apply to a security-based swap if one
of the counterparties to the security-based swap--
``(A) is not a security-based swap dealer or
major security-based swap participant; and
``(B) is using security-based swaps to hedge
or mitigate commercial risk, including
operating or balance sheet risk; and
``(C) notifies the Commission, in a manner
set forth by the Commission, how it generally
meets its financial obligations associated with
entering into non-cleared security-based swaps.
``(2) Abuse of exception.--The Commission may
prescribe rules under this subsection, or issue
interpretations of the rules, as necessary to prevent
abuse of the exemption in paragraph (1) by security-
based swap dealers and major security-based swap
participants.
``(3) Option to clear.--The application of the
clearing exception in paragraph (1) is solely at the
discretion the counterparty to the swap that meets the
conditions of subparagraphs (A) through (C) of
paragraph (1).''.
(b) Clearing Agency Requirements.--Section 17A of the
Securities Exchange Act of 1934 (15 U.S.C. 78q) is amended by
adding at the end the following new subsections:
``(g) Registration Requirement.--It shall be unlawful for a
clearing agency, unless registered with the Commission,
directly or indirectly to make use of the mails or any means or
instrumentality of interstate commerce to perform the functions
of a clearing agency with respect to a swap.
``(h) Voluntary Registration.--A person that clears
agreements, contracts, or transactions that are not required to
be cleared under this Act may register with the Commission as a
clearing agency.
``(i) Existing Banks and Derivatives Clearing
Organizations.--A bank or a derivatives clearing organization
registered with the Commodity Futures Trading Commission under
the Commodity Exchange Act required to be a registered as a
clearing agency under this title, solely because it clears
security-based swaps, is deemed to be a registered clearing
agency under this title solely for the purpose of clearing
security-based swaps to the extent that the bank cleared
security-based swaps, as defined in this Act, as a multilateral
clearing organization or the derivatives clearing organization
cleared security-based swaps, as defined in this title pursuant
to an exemption from registration as a clearing agency, before
the enactment of this section. A bank or derivative clearing
organization to which this subsection applies shall continue to
comply with the requirements in section 17A(b)(3) of this
title. A bank to which this subsection applies may, by the vote
of the shareholders owning not less than 51 percent of the
voting interests of such bank, be converted into a State
corporation, partnership, limited liability company, or other
similar legal form pursuant to a plan of conversion, if the
conversion is not in contravention of applicable State law.
``(j) Reporting.--
``(1) In general.--A clearing agency that clears
security-based swaps shall provide to the Commission
all information determined by the Commission to be
necessary to perform its responsibilities under this
Act. The Commission shall adopt data collection and
maintenance requirements for security-based swaps
cleared by clearing agencies that are comparable to the
corresponding requirements for security-based swaps
accepted by security-based swap repositories and
security-based swaps traded on swap execution
facilities. Subject to section 24, the Commission shall
share such information, upon request, with the Board,
the Commodity Futures Trading Commission, the
appropriate Federal banking agencies, the Financial
Services Oversight Council, and the Department of
Justice or to other persons the Commission deems
appropriate, including foreign financial supervisors
(including foreign futures authorities), foreign
central banks, and foreign ministries.
``(2) Public information.--A clearing agency that
clears security-based swaps shall provide to the
Commission, or its designee, such information as is
required by, and in a form and at a frequency to be
determined by, the Commission, in order to comply with
the public reporting requirements contained in section
13.
``(k) Designation of Compliance Officer.--
``(1) In general.--Each clearing agency that clears
security-based swaps shall designate an individual to
serve as a compliance officer.
``(2) Duties.--The compliance officer shall--
``(A) report directly to the board or to the
senior officer of the clearing agency;
``(B) in consultation with the board of the
clearing agency, a body performing a function
similar to that of a board, or the senior
officer of the clearing agency, resolve any
conflicts of interest that may arise;
``(C) be responsible for administering the
policies and procedures required to be
established pursuant to this section;
``(D) ensure compliance with securities laws
and the rules and regulations issued
thereunder, including rules prescribed by the
Commission pursuant to this section; and
``(E) establish procedures for remediation of
non-compliance issues found during compliance
office reviews, lookbacks, internal or external
audit findings, self-reported errors, or
through validated complaints. Procedures will
establish the handling, management response,
remediation, re-testing, and closing of non-
compliant issues.
``(3) Annual reports required.--The compliance
officer shall annually prepare and sign a report on the
compliance of the clearing agency with the securities
laws and its policies and procedures, including its
code of ethics and conflict of interest policies, in
accordance with rules prescribed by the Commission.
Such compliance report shall accompany the financial
reports of the clearing agency that are required to be
furnished to the Commission pursuant to this section
and shall include a certification that, under penalty
of law, the report is accurate and complete.
``(l) Standards for Clearing Agencies Clearing Swap
Transactions.--To be registered and to maintain registration as
a clearing agency that clears swap transactions, a clearing
agency shall comply with such standards as the Commission may
establish by rule. In establishing any such standards, and in
the exercise of its oversight of such a clearing agency
pursuant to this title, the Commission may conform such
standards or oversight to reflect evolving United States and
international standards. Except where the Commission determines
otherwise by rule or regulation, a clearing agency shall have
reasonable discretion in establishing the manner in which it
complies with any such standards.
``(m) Rules.--Not later than 1 year after the date of the
enactment of the Derivative Markets Transparency and
Accountability Act of 2009, the Commission shall adopt rules
governing persons that are registered as clearing agencies for
security-based swaps under this Act.
``(n) Exemptions.--
``(1) In general.--The Commission may exempt,
conditionally or unconditionally, a clearing agency
from registration under this section for the clearing
of security-based swaps if the Commission finds that
such clearing agency is subject to comparable,
comprehensive supervision and regulation on a
consolidated basis by the Commodity Futures Trading
Commission, a Prudential Regulator, or the appropriate
governmental authorities in the organization's home
country or if necessary or appropriate in the public
interest and consistent with the purpose of this Act.
``(2) A person that is required to be registered as
clearing agency under this section, whose principal
business is clearing commodity futures and options on
commodity futures transactions and which is a
derivatives clearing organization registered with the
Commodity Futures Trading Commission under the
Commodity Exchange Act (7 U.S.C. 1, et seq.), shall be
unconditionally exempt from registration under this
section solely for the purpose of clearing security-
based swaps, unless the Commission finds that such
derivatives clearing organization is not subject to
comparable, comprehensive supervision and regulation by
the Commodity Futures Trading Commission.''.
(c) Execution of Security-based Swaps.--The Securities
Exchange Act of 1934 (15 U.S.C. 78a, et seq.) is amended by
inserting after section 5 the following:
``SEC. 5A. EXECUTION OF SECURITY-BASED SWAPS.
``(a) Execution Transparency.--
``(1) Requirement.--A security-based swap that is
subject to the clearing requirement of section 3B shall
not be traded except on or through a national
securities exchange or on or through an swap execution
facility registered under section 5h, that makes the
security-based swap available for trading.
``(2) Exceptions.--The requirement of paragraph (1)
shall not apply to a security-based swap if no national
securities exchange or swap execution facility makes
the security-based swap available for trading.
``(3) Required reporting.--If the exception of
paragraph (2) applies and there is no national
securities exchange or swap execution facility that
makes the security-based swap available to trade, the
counterparties shall comply with any recordkeeping and
transaction reporting requirements as may be prescribed
by the Commission with respect to security-based swaps
subject to the requirements of paragraph (1).
``(b) Exchange Trading.--In adopting rules and regulations,
the Commission shall endeavor to eliminate unnecessary
impediments to the trading on national securities exchanges of
contracts, agreements, or transactions that would be swaps but
for the trading of such contracts, agreements or transactions
on such a national securities exchange.''.
(d) Swap Execution Facilities.--The Securities Exchange Act
of 1934 (15 U.S.C. 78a, et seq.) is amended by adding after
section 3B (as added by subsection (a)) the following:
``SEC. 3C. SWAP EXECUTION FACILITIES.
``(a) Registration.--No person may operate a facility for the
trading of security-based swaps unless the facility is
registered as a swap execution facility under this section.
``(b) Requirements for Trading.--
``(1) In general.--A swap execution facility that is
registered under subsection (a) may list for trading
any security-based swap.
``(2) Rules for trading through the facility.--Not
later than 1 year after the date of the enactment of
the Derivative Markets Transparency and Accountability
Act of 2009, the Commission shall adopt rules to allow
a security-based swap to be traded through the
facilities of an exchange or a swap execution facility.
Such rules shall permit an intermediary, acting as
principal or agent, to enter into or execute a
security-based swap, notwithstanding section 3B(b), if
the security-based swap is reported, recorded, or
confirmed in accordance with the rules of the exchange
or swap execution facility.
``(c) Trading by Exchanges.--An exchange shall, to the extent
that the exchange also operates a swap execution facility and
uses the same electronic trade execution system for trading on
the exchange and the swap execution facility, identify whether
the electronic trading is taking place on the exchange or the
swap execution facility.
``(d) Core Principles for Swap Execution Facilities.--
``(1) In general.--To be registered as, and to
maintain its registration as, a swap execution
facility, the facility shall comply with the core
principles specified in this subsection and any
requirement that the Commission may impose by rule or
regulation pursuant to section 8a(5). Except where the
Commission determines otherwise by rule or regulation,
the facility shall have reasonable discretion in
establishing the manner in which it complies with these
core principles.
``(2) Compliance with rules.--The swap execution
facility shall--
``(A) monitor and enforce compliance with any
of the rules of the facility, including the
terms and conditions of the swaps traded on or
through the facility and any limitations on
access to the facility; and
``(B) establish and enforce trading and
participation rules that will deter abuses and
have the capacity to detect, investigate, and
enforce those rules, including means to--
``(i) provide market participants
with impartial access to the market;
and
``(ii) capture information that may
be used in establishing whether rule
violations have occurred.
``(3) Security-based swaps not readily susceptible to
manipulation.--The swap execution facility shall permit
trading only in security-based swaps that are not
readily susceptible to manipulation.
``(4) Monitoring of trading.--The swap execution
facility shall--
``(A) establish and enforce rules or terms
and conditions defining, or specifications
detailing, trading procedures to be used in
entering and executing orders traded on or
through its facilities; and
``(B) monitor trading in swaps to prevent
manipulation, price distortion, and disruptions
of the delivery or cash settlement process
through surveillance, compliance, and
disciplinary practices and procedures,
including methods for conducting real-time
monitoring of trading and comprehensive and
accurate trade reconstructions.
``(5) Ability to obtain information.--The swap
execution facility shall--
``(A) establish and enforce rules that will
allow the facility to obtain any necessary
information to perform any of the functions
described in this section;
``(B) provide the information to the
Commission upon request; and
``(C) have the capacity to carry out such
international information-sharing agreements as
the Commission may require.
``(6) Financial integrity of transactions.--The swap
execution facility shall establish and enforce rules
and procedures for ensuring the financial integrity of
security-based swaps entered on or through its
facilities, including the clearance and settlement of
the security-based swaps pursuant to section 3B.
``(7) Emergency authority.--The swap execution
facility shall adopt rules to provide for the exercise
of emergency authority, in consultation or cooperation
with the Commission, where necessary and appropriate,
including the authority to suspend or curtail trading
in a security-based swap.
``(8) Timely publication of trading information.--The
swap execution facility shall make public timely
information on price, trading volume, and other trading
data to the extent prescribed by the Commission. The
Commission shall evaluate the impact of public
disclosure on market liquidity in the relevant market,
and shall seek to avoid public disclosure of
information in a manner that would significantly reduce
market liquidity. The Commission shall not disclose
information related to the internal business decisions
of particular market participants.
``(9) Recordkeeping and reporting.--The swap
execution facility shall maintain records of all
activities related to the business of the facility,
including a complete audit trail, in a form and manner
acceptable to the Commission for a period of 5 years,
and report to the Commission all information determined
by the Commission to be necessary or appropriate for
the Commission to perform its responsibilities under
this Act in a form and manner acceptable to the
Commission. The Commission shall adopt data collection
and reporting requirements for swap execution
facilities that are comparable to corresponding
requirements for clearing agencies and security-based
swap repositories.
``(10) Conflicts of interest.--The swap execution
facility shall--
``(A) establish and enforce rules to minimize
conflicts of interest in its decision-making
process; and
``(B) establish a process for resolving the
conflicts of interest.
``(11) Financial resources.--The swap execution
facility shall have adequate financial, operational,
and managerial resources to discharge its
responsibilities. Such financial resources shall be
considered adequate if their value exceeds the total
amount that would enable the facility to cover its
operating costs for a period of one year, calculated on
a rolling basis.
``(12) System safeguards.--The swap execution
facility shall--
``(A) establish and maintain a program of
risk analysis and oversight to identify and
minimize sources of operational risk, through
the development of appropriate controls and
procedures, and the development of automated
systems, that are reliable, secure, and have
adequate scalable capacity;
``(B) establish and maintain emergency
procedures, backup facilities, and a plan for
disaster recovery that allow for the timely
recovery and resumption of operations and the
fulfillment of the swap execution facility's
responsibilities and obligation; and
``(C) periodically conduct tests to verify
that backup resources are sufficient to ensure
continued order processing and trade matching,
price reporting, market surveillance, and
maintenance of a comprehensive and accurate
audit trail.
``(13) Designation of compliance officer.--
``(A) In general.--Each swap execution
facility shall designate an individual to serve
as a compliance officer.
``(B) Duties.--The compliance officer--
``(i) shall report directly to the
board or to the senior officer of the
facility; and
``(ii) shall--
``(I) review compliance with
the core principles in section
3B(e).
``(II) in consultation with
the board of the facility, a
body performing a function
similar to that of a board, or
the senior officer of the
facility, resolve any conflicts
of interest that may arise;
``(III) be responsible for
administering the policies and
procedures required to be
established pursuant to this
section; and
``(IV) ensure compliance with
securities laws and the rules
and regulations issued
thereunder, including rules
prescribed by the Commission
pursuant to this section; and
``(iii) shall establish procedures
for remediation of non-compliance
issues found during compliance office
reviews, lookbacks, internal or
external audit findings, self-reported
errors, or through validated complaints
and to establish the handling,
management response, remediation, re-
testing, and closing of non-compliant
issues.
``(C) Annual reports required.--The
compliance officer shall annually prepare and
sign a report on the compliance of the facility
with the securities laws and its policies and
procedures, including its code of ethics and
conflict of interest policies, in accordance
with rules prescribed by the Commission. Such
compliance report shall accompany the financial
reports of the facility that are required to be
furnished to the Commission pursuant to this
section and shall include a certification that,
under penalty of law, the report is accurate
and complete.
``(e) Exemptions.--The Commission may exempt, conditionally
or unconditionally, a swap execution facility from registration
under this section if the Commission finds that such
organization is subject to comparable, comprehensive
supervision and regulation on a consolidated basis by the
Commodity Futures Trading Commission, a Prudential Regulator or
the appropriate governmental authorities in the organization's
home country or if necessary or appropriate in the public
interest and consistent with the purpose of this Act.
``(f) Rules.--Not later than 1 year after the date of the
enactment of the Derivative Markets Transparency and
Accountability Act of 2009, the Commission shall prescribe
rules governing the regulation of swap execution facilities
under this section.''.
(e) Segregation of Assets Held as Collateral in Swap
Transactions.--The Securities Exchange Act of 1934 (15 U.S.C.
78a, et seq.) is further amended by adding after section 3C (as
added by subsection (b) the following:
``SEC. 3D. SEGREGATION OF ASSETS HELD AS COLLATERAL IN SECURITY-BASED
SWAP TRANSACTIONS.
``(a) Over-the-counter Swaps.--At the request of a
counterparty to a security-based swap who provides funds or
other property to a security-based swap dealer as initial
margin or collateral to secure the obligations of the
counterparty under a security-based swap between the
counterparty and the security-based swap dealer that is not
submitted for clearing to a derivatives clearing agency, the
security-based swap dealer shall segregate the funds or other
property for the benefit of the counterparty, and maintain the
funds or other property in an account which is carried by a
third-party custodian and designated as a segregated account
for the counterparty, in accordance with such rules and
regulations as the Commission or Prudential Regulator may
prescribe. If a security-based swap counterparty is a security-
based swap dealer or major security-based swap participant who
owns more than 20 percent of, or has more than 50 percent
representation on the board of directors of a custodian, the
custodian shall not be considered independent from the
security-based swap counterparties for purposes of the
preceding sentence. This subsection shall not be interpreted to
preclude commercial arrangements regarding the investment of
the segregated funds or other property and the related
allocation of gains and losses resulting from any such
investment.
``(b) Further Audit Reporting.--If a security-based swap
dealer does not segregate funds pursuant to the request of a
security-based swap counterparty in accordance with subsection
(a), the security-based swap dealer shall report to its
counterparty on a quarterly basis that its procedures relating
to margin and collateral requirements are in compliance with
the agreement of the counterparties.''.
(f) Trading in Security-based Swaps.--Section 6 of the
Securities Exchange Act of 1934 (15 U.S.C. 78f) is amended by
adding at the end the following:
``(l) It shall be unlawful for any person to effect a
transaction in a security-based swap with or for a person that
is not an eligible contract participant unless such transaction
is effected on a national securities exchange registered
pursuant to subsection (b).''.
(g) Additions of Security-based Swaps to Certain Enforcement
Provisions.--Paragraphs (1) through (3) of section 9(b) of the
Securities Exchange Act of 1934 (15 U.S.C. 78i(b)(1)-(3)) are
amended to read as follows:
``(1) any transaction in connection with any security
whereby any party to such transaction acquires (A) any
put, call, straddle, or other option or privilege of
buying the security from or selling the security to
another without being bound to do so; (B) any security
futures product on the security; or (C) any security-
based swap involving the security or the issuer of the
security; or
``(2) any transaction in connection with any security
with relation to which he has, directly or indirectly,
any interest in any (A) such put, call, straddle,
option, or privilege; (B) such security futures
product; or (C) such security-based swap; or
``(3) any transaction in any security for the account
of any person who he has reason to believe has, and who
actually has, directly or indirectly, any interest in
any (A) such put, call, straddle, option, or privilege;
(B) such security futures product with relation to such
security; or (C) any security-based swap involving such
security or the issuer of such security.''.
(h) Rulemaking Authority to Prevent Fraud, Manipulation and
Deceptive Conduct in Security-based Swaps.--Section 9 of the
Securities Exchange Act of 1934 (15 U.S.C. 78i) is amended by
adding at the end the following:
``(i) It shall be unlawful for any person, directly or
indirectly, by the use of any means or instrumentality of
interstate commerce or of the mails, or of any facility of any
national securities exchange, to effect any transaction in, or
to induce or attempt to induce the purchase or sale of, any
security-based swap, in connection with which such person
engages in any fraudulent, deceptive, or manipulative act or
practice, makes any fictitious quotation, or engages in any
transaction, practice, or course of business which operates as
a fraud or deceit upon any person. The Commission shall, for
the purposes of this paragraph, by rules and regulations
define, and prescribe means reasonably designed to prevent,
such transactions, acts, practices, and courses of business as
are fraudulent, deceptive, or manipulative, and such quotations
as are fictitious.''.
(i) Position Limits and Position Accountability for Security-
based Swaps.--The Securities Exchange Act of 1934 is amended by
inserting after section 10A (15 U.S.C. 78j-1) the following new
section:
``SEC. 10B. POSITION LIMITS AND POSITION ACCOUNTABILITY FOR SECURITY-
BASED SWAPS AND LARGE TRADER REPORTING.
``(a) Position Limits.--As a means reasonably designed to
prevent fraud and manipulation, the Commission may, by rule or
regulation, as necessary or appropriate in the public interest
or for the protection of investors, establish limits (including
related hedge exemption provisions) on the size of positions in
any security-based swap that may be held by any person. In
establishing such limits, the Commission may require any person
to aggregate positions in--
``(1) any security-based swap and any security or
loan or group or index of securities or loans on which
such security-based swap is based, which such security-
based swap references, or to which such security-based
swap is related as described in section 3(a)(68), and
any other instrument relating to such security or loan
or group or index of securities or loans; or
``(2) any security-based swap and (A) any security or
group or index of securities, the price, yield, value,
or volatility of which, or of which any interest
therein, is the basis for a material term of such
security-based swap as described in section 3(a)(76)
and (B) any security-based swap and any other
instrument relating to the same security or group or
index of securities.
``(b) Exemptions.--The Commission, by rule, regulation, or
order, may conditionally or unconditionally exempt any person
or class of persons, any security-based swap or class of
security-based swaps, or any transaction or class of
transactions from any requirement it may establish under this
section with respect to position limits.
``(c) SRO Rules.--
``(1) In general.--As a means reasonably designed to
prevent fraud or manipulation, the Commission, by rule,
regulation, or order, as necessary or appropriate in
the public interest, for the protection of investors,
or otherwise in furtherance of the purposes of this
title, may direct a self-regulatory organization--
``(A) to adopt rules regarding the size of
positions in any security-based swap that may
be held by--
``(i) any member of such self-
regulatory organization; or
``(ii) any person for whom a member
of such self-regulatory organization
effects transactions in such security-
based swap; and
``(B) to adopt rules reasonably designed to
ensure compliance with requirements prescribed
by the Commission under subsection (c)(1)(A).
``(2) Requirement to aggregate positions.--In
establishing such limits, the self-regulatory
organization may require such member or person to
aggregate positions in--
``(A) any security-based swap and any
security or loan or group or index of
securities or loans on which such security-
based swap is based, which such security-based
swap references, or to which such security-
based swap is related as described in section
3(a)(68), and any other instrument relating to
such security or loan or group or index of
securities or loans; or
``(B)(i) any security-based swap; and
``(ii) any security-based swap and any other
instrument relating to the same security or
group or index of securities.
``(d) Large Trader Reporting.--The Commission, by rule or
regulation, may require any person that effects transactions
for such person's own account or the account of others in any
securities-based swap or uncleared security-based swap
agreement and any security or loan or group or index of
securities or loans as set forth in paragraphs (1) and (2) of
subsection (a) under this section to report such information as
the Commission may prescribe regarding any position or
positions in any security-based swap or uncleared security-
based swap agreement and any security or loan or group or index
of securities or loans and any other instrument relating to
such security or loan or group or index of securities or loans
as set forth in paragraphs (1) and (2) of subsection (a) under
this section.''.
(j) Public Reporting and Repositories for Security-based
Swaps.--Section 13 of the Securities Exchange Act of 1934 (15
U.S.C. 78m) is amended by adding at the end the following:
``(m) Public Reporting of Aggregate Security-based Swap
Data.--
``(1) In general.--The Commission, or a person
designated by the Commission pursuant to paragraph (2),
shall make available to the public, in a manner that
does not disclose the business transactions and market
positions of any person, aggregate data on security-
based swap trading volumes and positions from the
sources set forth in paragraph (3).
``(2) Designee of the commission.--The Commission may
designate a clearing agency or a security-based swap
repository to carry out the public reporting described
in paragraph (1).
``(3) Sources of information.--The sources of the
information to be publicly reported as described in
paragraph (1) are--
``(A) clearing agencies pursuant to section
3A;
``(B) security-based swap repositories
pursuant to subsection (n); and
``(C) reports received by the Commission
pursuant to section 13A.
``(n) Security-based Swap Repositories.--
``(1) Registration requirement.--
``(A) In general.--It shall be unlawful for a
security-based swap repository, unless
registered with the Commission, directly or
indirectly to make use of the mails or any
means or instrumentality of interstate commerce
to perform the functions of a security-based
swap repository.
``(B) Inspection and examination.--Registered
security-based swap repositories shall be
subject to inspection and examination by any
representatives of the Commission.
``(2) Standard setting.--
``(A) Data identification.--The Commission
shall prescribe standards that specify the data
elements for each security-based swap that
shall be collected and maintained by each
security-based swap repository.
``(B) Data collection and maintenance.--The
Commission shall prescribe data collection and
data maintenance standards for security-based
swap repositories.
``(C) Comparability.--The standards
prescribed by the Commission under this
subsection shall be comparable to the data
standards imposed by the Commission on clearing
agencies that clear security-based swaps.
``(3) Duties.--A security-based swap repository
shall--
``(A) accept data prescribed by the
Commission for each security-based swap under
this paragraph (2);
``(B) maintain such data in such form and
manner and for such period as may be required
by the Commission;
``(C) provide to the Commission, or its
designee, such information as is required by,
and in a form and at a frequency to be
determined by, the Commission, in order to
comply with the public reporting requirements
contained in subsection (m); and
``(D) make available, on a confidential
basis, all data obtained by the security-based
swap repository, including individual
counterparty trade and position data, to the
Commission, the appropriate Federal banking
agencies, the Commodity Futures Trading
Commission, the Financial Services Oversight
Council, and the Department of Justice or to
other persons the Commission deems appropriate,
including foreign financial supervisors
(including foreign futures authorities),
foreign central banks, and foreign ministries.
``(4) Rules.--Not later than 1 year after the date of
the enactment of the Derivative Markets Transparency
and Accountability Act of 2009, the Commission shall
adopt rules governing persons that are registered under
this section, including rules that specify the data
elements that shall be collected and maintained.
``(5) Exemptions.--The Commission may exempt,
conditionally or unconditionally, a security-based swap
repository from the requirements of this section if the
Commission finds that such security-based swap
repository is subject to comparable, comprehensive
supervision or regulation on a consolidated basis by
the Commodity Futures Trading Commission, a Prudential
Regulator or the appropriate governmental authorities
in the organization's home country or if necessary or
appropriate in the public interest and consistent with
the purpose of this Act.''.
SEC. 3204. REGISTRATION AND REGULATION OF SWAP DEALERS AND MAJOR SWAP
PARTICIPANTS.
The Securities Exchange Act of 1934 (15 U.S.C. 78a, et seq.)
is amended by inserting after section 15E (15 U.S.C. 78o-7) the
following:
``SEC. 15F. REGISTRATION AND REGULATION OF SECURITY-BASED SWAP DEALERS
AND MAJOR SECURITY-BASED SWAP PARTICIPANTS.
``(a) Registration.--
``(1) It shall be unlawful for any person to act as a
security-based swap dealer unless such person is
registered as a security-based swap dealer with the
Commission.
``(2) It shall be unlawful for any person to act as a
major security-based swap participant unless such
person is registered as a major security-based swap
participant with the Commission.
``(b) Requirements.--
``(1) In general.--A person shall register as a
security-based swap dealer or major security-based swap
participant by filing a registration application with
the Commission.
``(2) Contents.--The application shall be made in
such form and manner as prescribed by the Commission,
giving any information and facts as the Commission may
deem necessary concerning the business in which the
applicant is or will be engaged. Such person, when
registered as a security-based swap dealer or major
security-based swap participant, shall continue to
report and furnish to the Commission such information
pertaining to such person's business as the Commission
may require.
``(3) Expiration.--Each registration shall expire at
such time as the Commission may by rule or regulation
prescribe.
``(4) Rules.--Except as provided in subsections (c)
and (d), the Commission may prescribe rules applicable
to security-based swap dealers and major security-based
swap participants, including rules that limit the
activities of security-based swap dealers and major
security-based swap participants. Except as provided in
subsection (d)(1)(A), the Commission may provide
conditional or unconditional exemptions from some or
all of the rules or requirements prescribed under this
section for security-based swap dealers and major
security-based swap participants.
``(5) Transition.--Rules adopted under this section
shall provide for the registration of security-based
swap dealers and major security-based swap participants
no later than 1 year after the effective date of the
Derivative Markets Transparency and Accountability Act
of 2009.
``(c) Rules.--
``(1) In general.--Not later than 1 year after the
date of the enactment of the Derivative Markets
Transparency and Accountability Act of 2009, the
Commission shall adopt rules for persons that are
registered as security-based swap dealers or major
security-based swap participants under this Act.
``(2) Exception for prudential requirements.--The
Commission shall not prescribe rules imposing
prudential requirements on security-based swap dealers
or major security-based swap participants for which
there is a Prudential Regulator. This provision shall
not be construed as limiting the authority of the
Commission to prescribe appropriate business conduct,
reporting, and recordkeeping requirements to protect
investors.
``(d) Capital and Margin Requirements.--
``(1) In general.--
``(A) Bank security-based swap dealers and
major security-based swap participants.--Each
registered security-based swap dealer and major
security-based swap participant for which there
is a Prudential Regulator shall meet such
minimum capital requirements and minimum
initial and variation margin requirements as
the Prudential Regulators shall by rule or
regulation jointly prescribe that--
``(i) help ensure the safety and
soundness of the security-based swap
dealer or major security-based swap
participant; and
``(ii) are appropriate for the risk
associated with the non-cleared swaps
held as a swap dealer or major swap
participant.
``(B) Non-bank security-based swap dealers
and major security-based swap participants.--
Each registered security-based swap dealer and
major security-based swap participant for which
there is not a Prudential Regulator shall meet
such minimum capital requirements and minimum
initial and variation margin requirements as
the Commission shall by rule or regulation
prescribe that--
``(i) help ensure the safety and
soundness of the security-based swap
dealer or major security-based swap
participant; and
``(ii) are appropriate for the risk
associated with the non-cleared swaps
held as the swap dealer or major swap
participant.
``(2) Rules.--
``(A) Bank security-based swap dealers and
major security-based swap participants.--Not
later than 1 year after the date of the
enactment of the Derivative Markets
Transparency and Accountability Act of 2009,
the Prudential Regulators, in consultation with
the Commission, shall jointly adopt rules
imposing capital and margin requirements under
this subsection for security-based swap dealers
and major security-based swap participants,
with respect to their activities as a security-
based swap dealer or major security-based swap
participant for which there is a Prudential
Regulator.
``(B) Non-bank security-based swap dealers
and major security-based swap participants.--
Not later than 1 year after the date of the
enactment of the Derivative Markets
Transparency and Accountability Act of 2009,
the Commission shall adopt rules imposing
capital and margin requirements under this
subsection for security-based swap dealers and
major security-based swap participants for
which there is no Prudential Regulator.
``(3) Authority.--Nothing in this section shall limit
the authority of the Commission to set capital
requirements for a broker or dealer registered in
accordance with section 15 of this Act.
``(e) Reporting and Recordkeeping.--
``(1) In general.--Each registered security-based
swap dealer and major security-based swap participant--
``(A) shall make such reports as are
prescribed by the Commission by rule or
regulation regarding the transactions and
positions and financial condition of such
person;
``(B) for which--
``(i) there is a Prudential Regulator
shall keep books and records of all
activities related to its business as a
security-based swap dealer or major
security-based swap participant in such
form and manner and for such period as
may be prescribed by the Commission by
rule or regulation;
``(ii) there is no Prudential
Regulator shall keep books and records
in such form and manner and for such
period as may be prescribed by the
Commission by rule or regulation; and
``(C) shall keep such books and records open
to inspection and examination by any
representative of the Commission.
``(2) Rules.--Not later than 1 year after the date of
enactment of the Derivative Markets Transparency and
Accountability Act of 2009, the Commission shall adopt
rules governing reporting and recordkeeping for
security-based swap dealers and major security-based
swap participants.
``(f) Daily Trading Records.--
``(1) In general.--Each registered security-based
swap dealer and major security-based swap participant
shall maintain daily trading records of its security-
based swaps and all related records (including related
transactions) and recorded communications including but
not limited to electronic mail, instant messages, and
recordings of telephone calls, for such period as may
be prescribed by the Commission by rule or regulation.
``(2) Information requirements.--The daily trading
records shall include such information as the
Commission shall prescribe by rule or regulation.
``(3) Customer records.--Each registered security-
based swap dealer or major security-based swap
participant shall maintain daily trading records for
each customer or counterparty in such manner and form
as to be identifiable with each security-based swap
transaction.
``(4) Audit trail.--Each registered security-based
swap dealer or major security-based swap participant
shall maintain a complete audit trail for conducting
comprehensive and accurate trade reconstructions.
``(5) Rules.--Not later than 1 year after the date of
the enactment of the Derivative Markets Transparency
and Accountability Act of 2009, the Commission shall
adopt rules governing daily trading records for
security-based swap dealers and major security-based
swap participants.
``(g) Business Conduct Standards.--
``(1) In general.--Each registered security-based
swap dealer and major security-based swap participant
shall conform with business conduct standards as may be
prescribed by the Commission by rule or regulation
addressing--
``(A) fraud, manipulation, and other abusive
practices involving security-based swaps
(including security-based swaps that are
offered but not entered into);
``(B) diligent supervision of its business as
a security-based swap dealer;
``(C) adherence to all applicable position
limits; and
``(D) such other matters as the Commission
shall determine to be necessary or appropriate.
``(2) Business conduct requirements.--Business
conduct requirements adopted by the Commission shall--
``(A) establish the standard of care for a
security-based swap dealer or major security-
based swap participant to verify that any
security-based swap counterparty meets the
eligibility standards for an eligible contract
participant;
``(B) require disclosure by the security-
based swap dealer or major security-based swap
participant to any counterparty to the
security-based swap (other than a security-
based swap dealer or major security-based swap
participant) of:
``(i) information about the material
risks and characteristics of the
security-based swap;
``(ii) for cleared security-based
swaps, upon the request of the
counterparty, the daily mark from the
appropriate clearing agency, and for
non-cleared security-based swaps, upon
request of the counterparty, the daily
mark of the security-based swap dealer
or major security-based swap
participant; and
``(iii) any other material incentives
or conflicts of interest that the
security-based swap dealer or major
security-based swap participant may
have in connection with the security-
based swap; and
``(C) establish such other standards and
requirements as the Commission may determine
are necessary or appropriate in the public
interest, for the protection of investors, or
otherwise in furtherance of the purposes of
this title.
``(3) Rules.--The Commission shall prescribe rules
under this subsection governing business conduct
standards for security-based swap dealers and major
security-based swap participants not later than 1 year
after the date of enactment of the Derivative Markets
Transparency and Accountability Act of 2009.
``(h) Documentation Standards.--
``(1) In general.--Each registered security-based
swap dealer and major security-based swap participant
shall conform with standards, as may be prescribed by
the Commission by rule or regulation, addressing timely
and accurate confirmation, processing, netting,
documentation, and valuation of all security-based
swaps.
``(2) Rules.--Not later than 1 year after the date of
enactment of the Derivative Markets Transparency and
Accountability Act of 2009, the Commission and the
appropriate Federal banking agencies, shall adopt rules
governing the standards described in paragraph (1) for
security-based swap dealers and major security-based
swap participants.
``(i) Dealer Responsibilities.--Each registered security-
based swap dealer and major security-based swap participant at
all times shall comply with the following requirements:
``(1) Monitoring of trading.--The security-based swap
dealer or major security-based swap participant shall
monitor its trading in security-based swaps to prevent
violations of applicable position limits.
``(2) Disclosure of general information.--The
security-based swap dealer or major security-based swap
participant shall disclose to the Commission or to the
Prudential Regulator for such security-based swap
dealer or major security-based swap participant, as
applicable, information concerning--
``(A) terms and conditions of its security-
based swaps;
``(B) security-based swap trading operations,
mechanisms, and practices;
``(C) financial integrity protections
relating to security-based swaps; and
``(D) other information relevant to its
trading in security-based swaps.
``(3) Ability to obtain information.--The security-
based swap dealer or major swap security-based
participant shall--
``(A) establish and enforce internal systems
and procedures to obtain any necessary
information to perform any of the functions
described in this section; and
``(B) provide the information to the
Commission or to the Prudential Regulator for
such security-based swap dealer or major
security-based swap participant, as applicable,
upon request.
``(4) Conflicts of interest.--The security-based swap
dealer and major security-based swap participant shall
implement conflict-of-interest systems and procedures
that--
``(A) establish structural and institutional
safeguards to assure that the activities of any
person within the firm relating to research or
analysis of the price or market for any
security are separated by appropriate
informational partitions within the firm from
the review, pressure, or oversight of those
whose involvement in trading or clearing
activities might potentially bias their
judgment or supervision; and
``(B) address such other issues as the
Commission determines appropriate.
``(j) Statutory Disqualification.--Except to the extent
otherwise specifically provided by rule, regulation, or order
of the Commission, it shall be unlawful for a security-based
swap dealer or a major security-based swap participant to
permit any person associated with a security-based swap dealer
or a major security-based swap participant who is subject to a
statutory disqualification to effect or be involved in
effecting security-based swaps on behalf of such security-based
swap dealer or major security-based swap participant, if such
security-based swap dealer or major security-based swap
participant knew, or in the exercise of reasonable care should
have known, of such statutory disqualification.
``(k) Enforcement and Administrative Proceeding Authority.--
``(1) Primary enforcement authority.--
``(A) SEC.--Except as provided in
subparagraph (B), the Commission shall have
exclusive authority to enforce the amendments
made by subtitle B of the Derivative Markets
Transparency and Accountability Act of 2009
with respect to any person.
``(B) Prudential regulators.--The Prudential
Regulators shall have exclusive authority to
enforce the provisions of section 15F(d) and
other prudential requirements of this Act with
respect to banks, and branches or agencies of
foreign banks that are security-based swap
dealers or major security-based swap
participants.
``(C) Referral.--
``(i) Violations of nonprudential
requirements.--If the Prudential
Regulator for a security-based swap
dealer or major security-based swap
participant has cause to believe that
such security-based swap dealer or
major security-based swap participant
may have engaged in conduct that
constitutes a violation of the
nonprudential requirements of section
15F or rules adopted by the Commission
thereunder, that Prudential Regulator
may recommend in writing to the
Commission that the Commission initiate
an enforcement proceeding as authorized
under this Act. The recommendation
shall be accompanied by a written
explanation of the concerns giving rise
to the recommendation.
``(ii) Violations of prudential
requirements.--If the Commission has
cause to believe that a securities-
based swap dealer or major securities-
based swap participant that has a
Prudential Regulator may have engaged
in conduct that constitute a violation
of the prudential requirements of
section 15F(e) or rules adopted
thereunder, the Commission may
recommend in writing to the Prudential
Regulator that the Prudential Regulator
initiate an enforcement proceeding as
authorized under this Act. The
recommendation shall be accompanied by
a written explanation of the concerns
giving rise to the recommendation.
``(2) Censure, denial, suspension; notice and
hearing.--The Commission, by order, shall censure,
place limitations on the activities, functions, or
operations of, or revoke the registration of any
security-based swap dealer or major security-based swap
participant that has registered with the Commission
pursuant to subsection (b) if it finds, on the record
after notice and opportunity for hearing, that such
censure, placing of limitations, or revocation is in
the public interest and that such security-based swap
dealer or major security-based swap participant, or any
person associated with such security-based swap dealer
or major security-based swap participant effecting or
involved in effecting transactions in security-based
swaps on behalf of such security-based swap dealer or
major security-based swap participant, whether prior or
subsequent to becoming so associated--
``(A) has committed or omitted any act, or is
subject to an order or finding, enumerated in
subparagraph (A), (D), or (E) of paragraph (4)
of section 15(b);
``(B) has been convicted of any offense
specified in subparagraph (B) of such paragraph
(4) within 10 years of the commencement of the
proceedings under this subsection;
``(C) is enjoined from any action, conduct,
or practice specified in subparagraph (C) of
such paragraph (4);
``(D) is subject to an order or a final order
specified in subparagraph (F) or (H),
respectively, of such paragraph (4); or
``(E) has been found by a foreign financial
regulatory authority to have committed or
omitted any act, or violated any foreign
statute or regulation, enumerated in
subparagraph (G) of such paragraph (4).
``(3) Associated persons.--With respect to any person
who is associated, who is seeking to become associated,
or, at the time of the alleged misconduct, who was
associated or was seeking to become associated with a
security-based swap dealer or major security-based swap
participant for the purpose of effecting or being
involved in effecting security-based swaps on behalf of
such security-based swap dealer or major security-based
swap participant, the Commission, by order, shall
censure, place limitations on the activities or
functions of such person, or suspend for a period not
exceeding 12 months, or bar such person from being
associated with a security-based swap dealer or major
security-based swap participant, if the Commission
finds, on the record after notice and opportunity for a
hearing, that such censure, placing of limitations,
suspension, or bar is in the public interest and that
such person--
``(A) has committed or omitted any act, or is
subject to an order or finding, enumerated in
subparagraph (A), (D), or (E) of paragraph (4)
of section 15(b);
``(B) has been convicted of any offense
specified in subparagraph (B) of such paragraph
(4) within 10 years of the commencement of the
proceedings under this subsection;
``(C) is enjoined from any action, conduct,
or practice specified in subparagraph (C) of
such paragraph (4);
``(D) is subject to an order or a final order
specified in subparagraph (F) or (H),
respectively, of such paragraph (4); or
``(E) has been found by a foreign financial
regulatory authority to have committed or
omitted any act, or violated any foreign
statute or regulation, enumerated in
subparagraph (G) of such paragraph (4).
``(4) Unlawful conduct.--It shall be unlawful--
``(A) for any person as to whom an order
under paragraph (3) is in effect, without the
consent of the Commission, willfully to become,
or to be, associated with a security-based swap
dealer or major security-based swap participant
in contravention of such order; or
``(B) for any security-based swap dealer or
major security-based swap participant to permit
such a person, without the consent of the
Commission, to become or remain a person
associated with the security-based swap dealer
or major security-based swap participant in
contravention of such order, if such security-
based swap dealer or major security-based swap
participant knew, or in the exercise of
reasonable care should have known, of such
order.''.
SEC. 3205. REPORTING AND RECORDKEEPING.
(a) The Securities Exchange Act of 1934 (15 U.S.C. 78a, et
seq.) is amended by inserting after section 13 the following
section:
``SEC. 13A. REPORTING AND RECORDKEEPING FOR CERTAIN SECURITY-BASED
SWAPS.
``(a) In General.--Any person who enters into a security-
based swap and--
``(1) did not clear the security-based swap in
accordance with section 3A; and
``(2) did not have data regarding the security-based
swap accepted by a security-based swap repository in
accordance with rules adopted by the Commission under
section 13(n),
shall meet the requirements in subsection (b).
``(b) Reports.--Any person described in subsection (a)
shall--
``(1) make such reports in such form and manner and
for such period as the Commission shall prescribe by
rule or regulation regarding the security-based swaps
held by the person; and
``(2) keep books and records pertaining to the
security-based swaps held by the person in such form
and manner and for such period as may be required by
the Commission, which books and records shall be open
to inspection by any representative of the Commission,
an appropriate Federal banking agency, the Commodity
Futures Trading Commission, the Financial Services
Oversight Council, and the Department of Justice.
``(c) Identical Data.--In adopting rules under this section,
the Commission shall require persons described in subsection
(a) to report the same or more comprehensive data than the
Commission requires security-based swap repositories to collect
under subsection (n).''.
(b) Beneficial Ownership Reporting.--
(1) Section 13(d)(1) of the Securities Exchange Act
of 1934 (15 U.S.C. 78m(d)(1)) is amended by inserting
``or otherwise becomes or is deemed to become a
beneficial owner of any of the foregoing upon the
purchase or sale of a security-based swap or other
derivative instrument that the Commission may define by
rule, and'' after ``Alaska Native Claims Settlement
Act,''; and
(2) Section 13(g)(1) of the Securities Exchange Act
of 1934 (15 U.S.C. 78m(g)(1)) is amended by inserting
``or otherwise becomes or is deemed to become a
beneficial owner of any security of a class described
in subsection (d)(1) upon the purchase or sale of a
security-based swap or other derivative instrument that
the Commission may define by rule'' after ``subsection
(d)(1) of this section''.
(c) Reports by Institutional Investment Managers.--Section
13(f)(1) of the Securities Exchange Act of 1934 (15 U.S.C.
78m(f)(1)) is amended by inserting ``or otherwise becomes or is
deemed to become a beneficial owner of any security of a class
described in subsection (d)(1) upon the purchase or sale of a
security-based swap or other derivative instrument that the
Commission may define by rule,'' after ``subsection (d)(1) of
this section''.
(d) Administrative Proceeding Authority.--Section 15(b)(4) of
the Securities Exchange Act of 1934 (15 U.S.C. 78o(b)(4)) is
amended--
(1) in subparagraph (C), by adding ``security-based
swap dealer, major security-based swap participant,''
after ``government securities dealer,''; and
(2) in subparagraph (F), by adding ``, or security-
based swap dealer, or a major security-based swap
participant'' after ``or dealer''.
(e) Derivatives Beneficial Ownership.--Section 13 of the
Securities Exchange Act of 1934 (15 U.S.C. 78m) is amended by
adding at the end the following:
``(o) Beneficial Ownership.--For purposes of this section and
section 16, a person shall be deemed to acquire beneficial
ownership of an equity security based on the purchase or sale
of a security-based swap or other derivative instrument only to
the extent that the Commission, by rule, determines after
consultation with the Prudential Regulators and the Secretary
of the Treasury, that the purchase or sale of the security-
based swap or other derivative instrument, or class of
security-based swaps or other derivative instruments, provides
incidents of ownership comparable to direct ownership of the
equity security, and that it is necessary to achieve the
purposes of this section that the purchase or sale of the
security-based swaps or instrument, or class of security-based
swap or instruments, be deemed the acquisition of beneficial
ownership of the equity security.''.
SEC. 3206. STATE GAMING AND BUCKET SHOP LAWS.
Section 28(a) of the Securities Exchange Act of 1934 (15
U.S.C. 78bb(a)) is amended to read as follows:
``(a) Except as provided in subsection (f), the rights and
remedies provided by this title shall be in addition to any and
all other rights and remedies that may exist at law or in
equity; but no person permitted to maintain a suit for damages
under the provisions of this title shall recover, through
satisfaction of judgment in one or more actions, a total amount
in excess of his actual damages on account of the act
complained of. Except as otherwise specifically provided in
this title, nothing in this title shall affect the jurisdiction
of the securities commission (or any agency or officer
performing like functions) of any State over any security or
any person insofar as it does not conflict with the provisions
of this title or the rules and regulations thereunder. No State
law which prohibits or regulates the making or promoting of
wagering or gaming contracts, or the operation of `bucket
shops' or other similar or related activities, shall invalidate
(1) any put, call, straddle, option, privilege, or other
security subject to this title (except any security that has a
pari-mutuel payout or otherwise is determined by the
Commission, acting by rule, regulation, or order, to be
appropriately subject to such laws), or apply to any activity
which is incidental or related to the offer, purchase, sale,
exercise, settlement, or closeout of any such security, (2) any
security-based swap between eligible contract participants, or
(3) any security-based swap effected on a national securities
exchange registered pursuant to section 6(b). No provision of
State law regarding the offer, sale, or distribution of
securities shall apply to any transaction in a security-based
swap or a security futures product, except that this sentence
shall not be construed as limiting any State antifraud law of
general applicability. A security-based swap may not be
regulated as an insurance contract under State law.''.
SEC. 3207. AMENDMENTS TO THE SECURITIES ACT OF 1933; TREATMENT OF
SECURITY-BASED SWAPS.
(a) Definitions.--Section 2(a) of the Securities Act of 1933
(15 U.S.C. 77b(a)) is amended--
(1) in paragraph (1), by inserting ``security-based
swap,'' after ``security future,'';
(2) in paragraph (3) by adding at the end the
following: ``Any offer or sale of a security-based swap
by or on behalf of the issuer of the securities upon
which such security-based swap is based or is
referenced, an affiliate of the issuer, or an
underwriter, shall constitute a contract for sale of,
sale of, offer for sale, or offer to sell such
securities.''; and
(3) by adding at the end the following:
``(17) The terms `swap' and `security-based swap'
have the same meanings as provided in sections 1a(35)
of the Commodity Exchange Act (7 U.S.C. 1a(35)) and
section 3(a)(68) of the Securities Exchange Act of
1934.
``(18) The terms `purchase' or `sale' of a security-
based swap shall be deemed to mean the execution,
termination (prior to its scheduled maturity date),
assignment, exchange, or similar transfer or conveyance
of, or extinguishing of rights or obligations under, a
security-based swap, as the context may require.''.
(b) Exemption From Registration.--Section 3(a) of the
Securities Act of 1933 is amended by adding at the end the
following:
``(15) Any security-based swap, as defined in section
2(a)(17) that is not otherwise a security as defined in
section 2(a)(1) and that satisfies such conditions as
established by rule or regulation by the Commission
consistent with the provisions of the Derivative
Markets Transparency and Accountability Act of 2009.
The Commission shall promulgate rules implementing this
exemption.''.
(c) Registration of Security-based Swaps.--Section 5 of the
Securities Act of 1933 (15 U.S.C. 77e) is amended by adding at
the end the following:
``(d) Notwithstanding the provisions of section 3 or section
4, unless a registration statement meeting the requirements of
subsection (a) of section 10 is in effect as to a security-
based swap, it shall be unlawful for any person, directly or
indirectly, to make use of any means or instruments of
transportation or communication in interstate commerce or of
the mails to offer to sell, offer to buy or purchase or sell a
security-based swap to any person who is not an eligible
contract participant as defined in section 1a(12) of the
Commodity Exchange Act (7 U.S.C. 1a(12)).''.
SEC. 3208. OTHER AUTHORITY.
Unless otherwise provided by its terms, this subtitle does
not divest any appropriate Federal banking agency, the
Commission, the Commodity Futures Trading Commission, or other
Federal or State agency, of any authority derived from any
other applicable law.
SEC. 3209. JURISDICTION.
(a) Section 36 of the Securities Exchange Act of 1934 (15
U.S.C. 78mm) is amended by adding at the end the following new
subsection:
``(c) Derivatives.--The Commission shall not grant exemptions
from the security-based swap provisions of the Derivative
Markets Transparency and Accountability Act of 2009, except as
expressly authorized under the provisions of that Act.''.
(b) Section 30 of the Securities Exchange Act of 1934 is
amended by adding at the end the following:
``(c) No provision of this Act that was added by the
Derivative Markets Transparency and Accountability Act of 2009
or any rule or regulation thereunder shall apply to any person
insofar as such person transacts a business in security-based
swaps without the jurisdiction of the United States unless he
transacts such business in contravention of such rules and
regulations as the Commission may prescribe as necessary or
appropriate to prevent the evasion of any provision of this Act
that was added by the Derivative Markets Transparency and
Accountability Act of 2009. This subsection shall not be
construed to limit the jurisdiction of the Commission under any
provision of this Act as in effect prior to enactment of the
Derivative Markets Transparency and Accountability Act of
2009.''.
SEC. 3210. EFFECTIVE DATE.
(a) Unless otherwise provided, the provisions of this
subtitle shall become effective the later of 270 days after the
date of the enactment of this subtitle or, to the extent a
provision of this subtitle requires rulemaking, no less than 60
days after publication of a final rule or regulation
implementing such provision of this subtitle.
(b) Subsection (a) shall not preclude the Securities Exchange
Commission from any rulemaking required to implement the
provisions of this subtitle.
Subtitle C--Improved Financial and Commodity Markets Oversight and
Accountability
SEC. 3301. ELEVATION OF CERTAIN INSPECTORS GENERAL TO APPOINTMENT
PURSUANT TO SECTION 3 OF THE INSPECTOR GENERAL ACT
OF 1978.
(a) Inclusion in Certain Definitions.--Section 12 of the
Inspector General Act of 1978 (5 U.S.C. App.) is amended--
(1) in paragraph (1), by striking ``or the Federal
Cochairpersons of the Commissions established under
section 15301 of title 40, United States Code;'' and
inserting ``the Federal Cochairpersons of the
Commissions established under section 15301 of title
40, United States Code; the Chairman of the Board of
Governors of the Federal Reserve System; the Chairman
of the Commodity Futures Trading Commission; the
Chairman of the National Credit Union Administration;
the Director of the Pension Benefit Guaranty
Corporation; the Chairman of the Securities and
Exchange Commission; or the Director of the Consumer
Financial Protection Agency;''; and
(2) in paragraph (2), by striking ``or the
Commissions established under section 15301 of title
40, United States Code,'' and inserting ``the
Commissions established under section 15301 of title
40, United States Code, the Board of Governors of the
Federal Reserve System, the Commodity Futures Trading
Commission, the National Credit Union Administration,
the Pension Benefit Guaranty Corporation, the
Securities and Exchange Commission, or the Director of
the Consumer Financial Protection Agency,''.
(b) Exclusion From Definition of Designated Federal Entity.--
Section 8G(a)(2) of the Inspector General Act of 1978 (5 U.S.C.
App.) is amended--
(1) by striking ``the Board of Governors of the
Federal Reserve System,'';
(2) by striking ``the Commodity Futures Trading
Commission,'';
(3) by striking ``the National Credit Union
Administration,''; and
(4) by striking ``the Pension Benefit Guaranty
Corporation, the Securities and Exchange Commission,''.
SEC. 3302. CONTINUATION OF PROVISIONS RELATING TO PERSONNEL.
(a) In General.--The Inspector General Act of 1978 (5 U.S.C.
App.) is amended by inserting after section 8L the following:
``SEC. 8M. SPECIAL PROVISIONS CONCERNING CERTAIN ESTABLISHMENTS.
``(a) Definition.--For purposes of this section, the term
`covered establishment' means the Board of Governors of the
Federal Reserve System, the Commodity Futures Trading
Commission, the National Credit Union Administration, the
Pension Benefit Guaranty Corporation, and the Securities and
Exchange Commission.
``(b) Provisions Relating to All Covered Establishments.--
``(1) Provisions relating to inspectors general.--In
the case of the Inspector General of a covered
establishment, subsections (b) and (c) of section 4 of
the Inspector General Reform Act of 2008 (Public Law
110-409) shall apply in the same manner as if such
covered establishment were a designated Federal entity
under section 8G. An Inspector General who is subject
to the preceding sentence shall not be subject to
section 3(e).
``(2) Provisions relating to other personnel.--
Notwithstanding paragraphs (7) and (8) of section 6(a),
the Inspector General of a covered establishment may
select, appoint, and employ such officers and employees
as may be necessary for carrying out the functions,
powers, and duties of the Office of Inspector General
of such establishment and to obtain the temporary or
intermittent services of experts or consultants or an
organization of experts or consultants, subject to the
applicable laws and regulations that govern such
selections, appointments, and employment, and the
obtaining of such services, within such establishment.
``(c) Provision Relating to the Board of Governors of the
Federal Reserve System.--The provisions of subsection (a) of
section 8D (other than the provisions of subparagraphs (A),
(B), (C), and (E) of paragraph (1) of such subsection (a))
shall apply to the Inspector General of the Board of Governors
of the Federal Reserve System and the Chairman of the Board of
Governors of the Federal Reserve System in the same manner as
such provisions apply to the Inspector General of the
Department of the Treasury and the Secretary of the Treasury,
respectively.''.
(b) Conforming Amendment.--Paragraph (3) of section 8G(g) of
the Inspector General Act of 1978 (5 U.S.C. App.) is repealed.
SEC. 3303. CORRECTIVE RESPONSES BY HEADS OF CERTAIN ESTABLISHMENTS TO
DEFICIENCIES IDENTIFIED BY INSPECTORS GENERAL.
The Chairman of the Board of Governors of the Federal Reserve
System, the Chairman of the Commodity Futures Trading
Commission, the Chairman of the National Credit Union
Administration, the Director of the Pension Benefit Guaranty
Corporation, and the Chairman of the Securities and Exchange
Commission shall each--
(1) take action to address deficiencies identified by
a report or investigation of the Inspector General of
the establishment concerned; or
(2) certify to both Houses of Congress that no action
is necessary or appropriate in connection with a
deficiency described in paragraph (1).
SEC. 3304. EFFECTIVE DATE; TRANSITION RULE.
(a) Effective Date.--This subtitle and the amendments made by
this subtitle shall take effect 30 days after the date of the
enactment of this subtitle.
(b) Transition Rule.--An individual serving as Inspector
General of the Board of Governors of the Federal Reserve
System, the Commodity Futures Trading Commission, the National
Credit Union Administration, the Pension Benefit Guaranty
Corporation, or the Securities and Exchange Commission on the
effective date of this subtitle pursuant to an appointment made
under section 8G of the Inspector General Act of 1978 (5 U.S.C.
App.)--
(1) may continue so serving until the President makes
an appointment under section 3(a) of such Act with
respect to the Board of Governors of the Federal
Reserve System, the Commodity Futures Trading
Commission, the National Credit Union Administration,
the Pension Benefit Guaranty Corporation, or the
Securities and Exchange Commission, as the case may be,
consistent with the amendments made by section 301; and
(2) shall, while serving under paragraph (1), remain
subject to the provisions of section 8G of such Act
which, immediately before the effective date of this
subtitle, applied with respect to the Inspector General
of the Board of Governors of the Federal Reserve
System, the Commodity Futures Trading Commission, the
National Credit Union Administration, the Pension
Benefit Guaranty Corporation, or the Securities and
Exchange Commission, as the case may be, and suffer no
reduction in pay.
Page 694, beginning on line 19, strike ``a designated Federal
entity'' and insert ``an establishment''.
In the table of contents, strike the items relating to title
III, subtitles A, B, and C of title III, and sections 3001
through 3304 and insert the following:
TITLE III--DERIVATIVE MARKETS TRANSPARENCY AND ACCOUNTABILITY ACT
Sec. 3001. Short title.
Sec. 3002. Review of regulatory authority.
Sec. 3003. International harmonization.
Sec. 3004. Prohibition against government assistance.
Sec. 3005. Studies.
Sec. 3006. Recommendations for changes to insolvency laws.
Sec. 3007. Abusive swaps.
Sec. 3008. Authority to prohibit participation in swap activities.
Sec. 3009. Memorandum.
Subtitle A--Regulation of Swap Markets
Sec. 3101. Definitions.
Sec. 3102. Jurisdiction.
Sec. 3103. Clearing and execution transparency.
Sec. 3104. Public reporting of aggregate swap data.
Sec. 3105. Swap repositories.
Sec. 3106. Reporting and recordkeeping.
Sec. 3107. Registration and regulation of swap dealers and major swap
participants.
Sec. 3108. Conflicts of interest.
Sec. 3109. Swap execution facilities.
Sec. 3110. Derivatives transaction execution facilities and exempt
boards of trade.
Sec. 3111. Designated contract markets.
Sec. 3112. Margin.
Sec. 3113. Position limits.
Sec. 3114. Enhanced authority over registered entities.
Sec. 3115. Foreign boards of trade.
Sec. 3116. Legal certainty for swaps.
Sec. 3117. FDICIA amendments.
Sec. 3118. Enforcement authority.
Sec. 3119. Enforcement.
Sec. 3120. Retail commodity transactions.
Sec. 3121. Large swap trader reporting.
Sec. 3122. Segregation of assets held as collateral in swap
transactions.
Sec. 3123. Other authority.
Sec. 3124. Antitrust.
Sec. 3125. Review of prior actions.
Sec. 3126. Expedited process.
Sec. 3127. Effective date.
Subtitle B--Regulation of Security-Based Swap Markets
Sec. 3201. Definitions under the Securities Exchange Act of 1934.
Sec. 3202. Repeal of prohibition on regulation of security-based swaps.
Sec. 3203. Amendments to the Securities Exchange Act of 1934.
Sec. 3204. Registration and regulation of swap dealers and major swap
participants.
Sec. 3205. Reporting and recordkeeping.
Sec. 3206. State gaming and bucket shop laws.
Sec. 3207. Amendments to the Securities Act of 1933; treatment of
security-based swaps.
Sec. 3208. Other authority.
Sec. 3209. Jurisdiction.
Sec. 3210. Effective date.
Subtitle C--Improved Financial and Commodity Markets Oversight and
Accountability
Sec. 3301. Elevation of certain Inspectors General to appointment
pursuant to section 3 of the Inspector General Act of 1978.
Sec. 3302. Continuation of provisions relating to personnel.
Sec. 3303. Corrective responses by heads of certain establishments to
deficiencies identified by Inspectors General.
Sec. 3304. Effective date; transition rule.
____________________________________________________
4. An Amendment To Be Offered by Representative Peterson, Collin of
Minnesota or His Designee, Debatable for 10 Minutes
At the end of title III, insert the following new section:
SEC. ____. AUTHORITY OF THE COMMODITY FUTURES TRADING COMMISSION TO
DEFINE ``COMMERCIAL RISK'', ``OPERATING RISK'', AND
``BALANCE SHEET RISK''.
(a) In General.--Section 1a of the Commodity Exchange Act (7
U.S.C. 1a), as amended by the preceding provisions of this Act,
is amended by adding at the end the following:
``(51) Commercial risk; operating risk; balance sheet
risk.--The terms `commercial risk', `operating risk',
and `balance sheet risk' shall have such meanings as
the Commission may prescribe.''.
(b) Effective Date.--The amendment made by subsection (a)
shall take effect as if included in subtitle A.
----------
5. An Amendment To Be Offered by Representative Lynch, Stephen of
Massachusetts or His Designee, Debatable for 10 Minutes
At the end of title III, insert the following new section:
SEC. ___. CONFLICTS OF INTEREST IN CLEARING ORGANIZATIONS.
(a) Commodity Exchange Act.--
(1) Definition of restricted owner.--Section 1a of
the Commodity Exchange Act (7 U.S.C. 1a) (as amended by
the preceding provisions of this Act) is further
amended by adding at the end the following:
``(51) Restricted owner.--The term `restricted owner'
means any swap dealer, security-based swap dealer,
major swap participant, or major security-based swap
participant, that is an identified financial holding
company as defined in Section 1000(b)(5) of the
Financial Stability Improvement Act of 2009, or a
person associated with a swap dealer or a major swap
participant that is an identified financial holding
company, or a person associated with a security-based
swap dealer or major security-based swap participant
that is an identified financial holding company.''.
(2) Conflicts of interest.--
(A) Subparagraph (P) of section 5b(c)(2) of
the Commodity Exchange Act (as added by the
preceding provisions of this Act) is amended by
adding at the end of such subparagraph the
following: ``The rules of the derivatives
clearing organization that clears swaps shall
provide that a restricted owner shall not be
permitted directly or indirectly to acquire
beneficial ownership of interests in the
organization or in persons with a controlling
interest in the organization, to the extent
that such an acquisition would result in
restricted owners being entitled to vote, cause
the voting of, or cause the withholding of
votes of, more than 20 percent of the votes
entitled to be cast on any matter by the
holders of the ownership interests. The rules
of the derivatives clearing organization shall
provide that a majority of the directors of the
organization shall not be associated with a
restricted owner. This subparagraph shall not
be construed to require divestiture of any
interest of a restricted owner in an
established and operational derivatives
clearing organization acquired prior to January
1, 2010, provided that acquisitions by such
restricted owner after such date shall be
subject to this subparagraph. The Commission
may determine whether any acquisition by a
restricted owner during any interim period
prior to the date of the enactment of this Act
has been made for the purpose of avoiding the
effect of this subparagraph.''.
(B) Section 4s(g)(1) of the Commodity
Exchange Act (as added by the preceding
provisions of this Act) is amended--
(i) by striking ``and'' at the end of
subparagraph (C); and
(ii) by redesignating subparagraph
(D) as subparagraph (E) and insert
after subparagraph (C) the following:
``(D) the prevention of self-dealing, by
limiting the extent to which such a swap dealer
or major swap participant may conduct business
with a derivatives clearing organization, a
board of trade, or an alternative swap
execution facility that clears or trades swaps
and in which such a swap dealer or major swap
participant has a material debt or equity
investment; and''.
(C) Paragraph (12) of section 5h(d) of the
Commodity Exchange Act (as added by the
preceding provisions of this Act) is amended by
adding at the end the following new
subparagraph:
``(C) The rules of the swap execution
facility shall provide that a restricted owner
shall not be permitted directly or indirectly
to acquire beneficial ownership of interests in
the facility or in persons with a controlling
interest in the facility, to the extent that
such an acquisition would result in restricted
owners being entitled to vote, cause the voting
of, or cause the withholding of votes of, more
than 20 percent of the votes entitled to be
cast on any matter by the holders of the
ownership interests. This subparagraph shall
not be construed to require divestiture of any
interest of a restricted owner in an
established and operational swap execution
facility acquired prior to January 1, 2010,
provided that acquisitions by such restricted
owner after such date shall be subject to this
subparagraph. The Commission may determine
whether any acquisition by a restricted owner
during any interim period prior to the date of
the enactment of this Act has been made for the
purpose of avoiding the effect of this
subparagraph.
``(D) The rules of the swap execution
facility shall provide that a majority of the
directors of the facility shall not be
associated with a restricted owner.''.
(D) Section 5(d) of the Commodity Exchange
Act (as amended by the preceding provisions of
this Act) is further amended by striking
paragraph (15) and inserting the following:
``(15) Conflicts of interest.--
``(A) The board of trade shall establish and
enforce rules to minimize conflicts of interest
in the decisionmaking process of the contract
market, and establish a process for resolving
any such conflicts of interest.
``(B) The rules of a board of trade that
trades swaps shall provide that a restricted
owner shall not be permitted directly or
indirectly to acquire beneficial ownership of
interests in the board of trade or in persons
with a controlling interest in the board of
trade, to the extent that such an acquisition
would result in restricted owners being
entitled to vote, cause the voting of, or cause
the withholding of votes of, more than 20
percent of the votes entitled to be cast on any
matter by the holders of the ownership
interests. This paragraph shall not be
construed to require divestiture of any
interest of a restricted owner in an
established and operational board of trade
acquired prior to January 1, 2010, provided
that acquisitions by such restricted owner
after such date shall be subject to this
paragraph. The Commission may determine whether
any acquisition by a restricted owner during
any interim period prior to the date of the
enactment of this Act has been made for the
purpose of avoiding the effect of this
paragraph.
``(C) The rules of a board of trade that
trades swaps shall provide that a majority of
the directors of the board of trade shall not
be associated with a restricted owner.''.
(b) Securities Exchange Act of 1934.--
(1) Definition of restricted owner.--Section 3(a) of
the Securities Exchange Act of 1934 (15 U.S.C. 78c(a))
(as amended by the preceding provisions of this Act) is
further amended by adding at the end the following:
``(78) Restricted owner.--The term `restricted owner'
has the same meaning as in section 1a(51) of the
Commodity Exchange Act.''.
(2) Conflicts of interest.--
(A) Paragraph (10) of section 3C(d) of the
Securities Exchange Act of 1934 (as added by
the preceding provisions of this Act) is
amended by adding after subparagraph (B) the
following:
``The rules of the swap execution facility shall provide that a
restricted owner shall not be permitted directly or indirectly
to acquire beneficial ownership of interests in the facility or
in persons with a controlling interest in the facility, to the
extent that such an acquisition would result in restricted
owners being entitled to vote, cause the voting of, or cause
the withholding of votes of, more than 20 percent of the votes
entitled to be cast on any matter by the holders of the
ownership interests. The rules of the swap execution facility
shall provide that a majority of the directors of the facility
shall not be associated with a restricted owner. This paragraph
shall not be construed to require divestiture of any interest
of a restricted owner in an established and operational swap
execution facility acquired prior to January 1, 2010, provided
that acquisitions by such restricted owner after such date
shall be subject to this paragraph. The Commission may
determine whether any acquisition by a restricted owner during
any interim period prior to the date of the enactment of this
Act has been made for the purpose of avoiding the effect of
this paragraph.''.
(B) Section 15F(g)(1) of the Securities
Exchange Act of 1934 (as added by the preceding
provisions of this Act) is amended--
(i) in subparagraph (C), strike
``and''; and
(ii) insert after subparagraph (C)
the following (and redesignate the
succeeding subparagraph accordingly):
``(D) the prevention of self-dealing by
limiting the extent to which a security-based
swap dealer or major security-based swap
participant may conduct business with a
clearing agency, an exchange, or an alternative
swap execution facility that clears or trades
security-based swaps and in which such a dealer
or participant has a material debt or equity
investment; and''.
(C) Section 6(b) of the Securities Exchange
Act of 1934 (15 U.S.C. 78f(b)) is amended by
adding at the end the following new paragraphs:
``(10) The rules of the exchange minimize conflicts
of interest in its decision-making process and
establish a process for resolving such conflicts of
interest.
``(11) The rules of an exchange that trades security-
based swaps provide that a majority of the directors of
the exchange shall not be associated with a restricted
owner.
``(12) The rules of an exchange that trades security-
based swaps provide that a restricted owner shall not
be permitted directly or indirectly to acquire
beneficial ownership of interests in the exchange or in
persons with a controlling interest in the exchange, to
the extent that such an acquisition would result in
restricted owners being entitled to vote, cause the
voting of, or cause the withholding of votes of, more
than 20 percent of the votes entitled to be cast on any
matter by the holders of the ownership interests. This
paragraph shall not be construed to require divestiture
of any interest of a restricted owner in an established
and operational exchange acquired prior to January 1,
2010, provided that acquisitions by such restricted
owner after such date shall be subject to this
paragraph. The Commission may determine whether any
acquisition by a restricted owner during any interim
period prior to the date of the enactment of this Act
has been made for the purpose of avoiding the effect of
this paragraph.''.
(D) Section 17A(b)(3) of the Securities
Exchange Act of 1934 (15 U.S.C. 78f(b)) is
amended by adding at the end the following new
subparagraphs:
``(J) The rules of a clearing agency that
clears security-based swaps shall provide that
a restricted owner shall not be permitted
directly or indirectly to acquire beneficial
ownership of interests in the agency or in
persons with a controlling interest in the
agency, to the extent that such an acquisition
would result in restricted owners being
entitled to vote, cause the voting of, or cause
the withholding of votes of, more than 20
percent of the votes entitled to be cast on any
matter by the holders of the ownership
interests. This subparagraph shall not be
construed to require divestiture of any
interest of a restricted owner in an
established and operational clearing agency
acquired prior to January 1, 2010, provided
that acquisitions by such restricted owner
after such date shall be subject to this
subparagraph. The Commission may determine
whether any acquisition by a restricted owner
during any interim period prior to the date of
the enactment of this Act has been made for the
purpose of avoiding the effect of this
subparagraph.
``(K) The rules of the clearing agency shall
provide that a majority of the directors of the
agency shall not be associated with a
restricted owner.''.
----------
6. An Amendment To Be Offered by Representative Murphy, Scott of New
York or His Designee, Debatable for 10 Minutes
At the end of title III, insert the following new section:
SEC. ____. DEFINITIONS OF MAJOR SWAP PARTICIPANT AND MAJOR SECURITY-
BASED SWAP PARTICIPANT.
(a) Major Swap Participant.--Section 1a(39) of the Commodity
Exchange Act (7 U.S.C. 1a), as added by the preceding
provisions of this Act, is amended to read as follows:
``(39) Major swap participant.--
``(A) In general.--The term `major swap
participant' means any person who is not a swap
dealer, and--
``(i) maintains a substantial net
position in outstanding swaps,
excluding positions held primarily for
hedging, reducing or otherwise
mitigating its commercial risk; or
``(ii) whose outstanding swaps create
substantial net counterparty exposure
that could have serious adverse effects
on the financial stability of the
United States banking system or
financial markets.
``(B) Definition of substantial net
position.--The Commission shall define by rule
or regulation the term `substantial net
position' at a threshold that the Commission
determines prudent for the effective
monitoring, management, and oversight of
entities which are systemically important or
can significantly impact the financial system.
In setting the definitions, the Commission
shall consider the person's relative position
in uncleared as opposed to cleared swaps.
``(C) A person may be designated a major swap
participant for 1 or more individual types of
swaps without being classified as a major swap
participant for all classes of swaps.''.
(b) Major Security-based Swap Participant.--Section 3(a)(67)
of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a)), as
added by the preceding provisions of this Act, is amended to
read as follows:
``(67) Major security-based swap participant.--
``(A) In general.--The term `major security-
based swap participant' means any person who is
not a security-based swap dealer, and--
``(i) maintains a substantial net
position in outstanding security-based
swaps, excluding positions held
primarily for hedging, reducing or
otherwise mitigating its commercial
risk; or
``(ii) whose outstanding security-
based swaps create substantial net
counterparty exposure that could have
serious adverse effects on the
financial stability of the United
States banking system or financial
markets.
``(B) Definition of substantial net
position.--The Commission shall define by rule
or regulation the term `substantial net
position' at a threshold that the Commission
determines prudent for the effective
monitoring, management, and oversight of
entities which are systemically important or
can significantly impact the financial system.
In setting the definitions, the Commission
shall consider the person's relative position
in uncleared as opposed to cleared security-
based swaps.
``(C) A person may be designated a major
security-based swap participant for 1 or more
individual types of security-based swaps
without being classified as a major security-
based swap participant for all classes of
security-based swaps.''.
(c) Effective Dates.--
(1) Major swap participant.--The amendment made by
subsection (a)(1) shall take effect as if included in
subtitle A.
(2) Major security-based swap participant.--The
amendment made by subsection (a)(2) shall take effect
as if included in subtitle B.
----------
7. An Amendment To Be Offered by Representative Frank, Barney of
Massachusetts or His Designee, Debatable for 10 Minutes
At the end of title III, add the following new section:
SEC. ____. AUTHORITY TO SET MARGIN OR COLLATERAL REQUIREMENT FOR SWAPS
AND SECURITY-BASED SWAPS INVOLVING END USERS.
(a) In General.--Subject to subsection (b):
(1) Prudential regulators.--A Prudential Regulator
may impose a margin or collateral requirement with
respect to a swap or security-based swap a counterparty
to which is an end user which is a bank or bank holding
company subject to regulation by the Prudential
Regulator.
(2) Commodity futures trading commission.--The
Commodity Futures Trading Commission may impose a
margin or collateral requirement with respect to a swap
a counterparty to which is an end user (other than an
end user described in paragraph (1)), and the other
counterparty to which is a swap dealer or major swap
participant for which there is no Prudential Regulator.
(3) Securities and exchange commission.--The
Securities and Exchange Commission may impose a margin
or collateral requirement with respect to a security-
based swap a counterparty to which is an end user
(other than an end user described in paragraph (1)),
and the other counterparty to which is a security-based
swap dealer or major security-based swap participant
for which there is no Prudential Regulator.
(b) Requirements.--Any margin or collateral requirement
imposed under subsection (a) with respect to a transaction
shall be commensurate with the risk involved in the
transaction, and allow for the use of non-cash collateral.
(c) Limitation on Applicability.--This section shall not
apply to a swap or security-based swap entered into before the
end of the 90-day period that begins with the effective date of
this section.
(d) Definitions.--In this section:
(1) End user.--The term ``end user'' means a person
who is not a swap dealer, security-based swap dealer,
major swap participant, or major security-based swap
participant.
(2) Other terms.--The other terms shall have the
meanings given the terms in section 1a of the Commodity
Exchange Act.
(e) Effective Date.--
(1) Prudential regulators.--Subsection (a)(1) shall
take effect--
(A) with respect to swaps, as if included in
subtitle A; and
(B) with respect to security-based swaps, as
if included in subtitle B.
(2) Commodity futures trading commission.--Subsection
(a)(2) shall take effect as if included in subtitle A.
(3) Securities and exchange commission.--Subsection
(a)(3) shall take effect as if included in subtitle B.
----------
8. An Amendment To Be Offered by Representative Stupak, Bart of
Michigan or His Designee, Debatable for 10 Minutes
At the end of title III, insert the following new section:
SEC. ____. ADDITIONAL RULES REGARDING EXECUTION AND CLEARING OF SWAPS
AND SECURITY-BASED SWAPS.
(a) Swaps.--Section 2(j)(7) of the Commodity Exchange Act (7
U.S.C. 2), as added by the preceding provisions of this Act, is
amended--
(1) in subparagraph (A), by striking ``and where both
counterparties are either swap dealers or major swap
participants, such counterparties'' and inserting ``,
the parties''; and
(2) by redesignating subparagraph (C) as subparagraph
(D) and inserting after subparagraph (B) the following:
``(C) Certain swaps not required to be
cleared.--
``(i) In general.--A swap that
qualifies for the exception of
paragraph (8)(A)(i) shall not be
executed, except on or through a swap
execution facility registered with the
Commission.
``(ii) Additional exceptions.--Clause
(i) shall not apply to a swap if no
swap execution facility makes the swap
available to trade or execute.
``(iii) Rule of interpretation.--This
subparagraph shall not be interpreted
to require any swap to be cleared.''.
(b) Security-based Swaps.--Section 5A(a) of the Securities
Exchange Act of 1934, as added by the preceding provisions of
this Act, is amended--
(1) in paragraph (1), by striking ``section 3B and
where both counterparties are either swap dealers or
major swap participants, such counterparties'' and
inserting ``section 3B(a)(1), the parties''; and
(2) by redesignating paragraph (3) as paragraph (4)
and inserting after paragraph (2) the following:
``(3) Certain security-based swaps not required to be
cleared.--
``(A) In general.--A security-based swap that
qualifies for the exception of section
3B(h)(1)(A) shall not be executed except on a
swap execution facility registered with the
Commission.
``(B) Additional exceptions.--Subparagraph
(A) shall not apply to a security-based swap if
no swap execution facility makes the security-
based swap available to trade or execute.
``(C) Rule of interpretation.--This paragraph
shall not be interpreted to require any
security-based swap to be cleared.''.
(c) Effective Date.--
(1) Swaps.--The amendments made by subsection (a)
shall take effect as if included in subtitle A.
(2) Security-based swaps.--The amendments made by
subsection (b) shall take effect as if included in
subtitle B.
----------
9. An Amendment To Be Offered by Representative Stupak, Bart of
Michigan or His Designee, Debatable for 10 Minutes
At the end of title III, insert the following new sections:
SEC. ____. AUTHORITY TO BAN ABUSIVE SWAPS.
The Commodity Futures Trading Commission and the Securities
and Exchange Commission may jointly, by rule or order, prohibit
transactions in any swap (as defined in section 1a(35) of the
Commodity Exchange Act) or security-based swap (as defined in
section 1a(38) of such Act) which the Commodity Futures Trading
Commission and the Securities Exchange Commission find would be
detrimental to the stability of a financial market or of
participants in a financial market.
SEC. ____. ELIMINATION OF CONSIDERATION OF BALANCE SHEET RISK IN
DETERMINING THE COMMERICAL RISK OF BONA FIDE
HEDGING END USERS.
(a) Section 1a(39)(A)(i) of the Commodity Exchange Act (7
U.S.C. 1a), as added by the preceding provisions of this Act,
is amended by striking ``and balance sheet''.
(b) Section 2(j)(8)(A)(ii) of the Commodity Exchange Act (7
U.S.C. 2), as added by the preceding provisions of this Act, is
amended by striking ``or balance sheet''.
(c) Section 3(a)(67)(A)(i) of the Securities Exchange Act of
1934 (15 U.S.C. 78c(a)), as added by the preceding provisions
of this Act, is amended by striking ``and balance sheet''.
(d) Section 3B(h)(1)(B) of the Securities Exchange Act of
1934, as added by the preceding provisions of this Act, is
amended by striking ``and balance sheet''.
(e)(1) The amendments made by subsections (a) and (b) shall
take effect as if included in subtitle A.
(2) The amendments made by subsections (c) and (d) shall take
effect as if included in subtitle B.
SEC. ____. LEGAL CERTAINTY OF CERTAIN SWAP CONTRACTS.
(a) In General.--Section 22(a) of the Commodity Exchange Act
(7 U.S.C. 25(a)), as amended by the preceding provisions of
this Act, is amended--
(1) in paragraph (4)(A), by inserting ``, and entered
into before the effective date of this paragraph,''
after ``investor'';
(2) in paragraph (4)(B), by inserting ``, and entered
into before the effective date of this paragraph,''
after ``between eligible contract participants''; and
(3) in paragraph (5), by inserting ``, and entered
into before the effective date of this paragraph,''
after ``United States''.
(b) Effective Date.--The amendments made by this section
shall take effect as if included in subtitle A.
----------
10. An Amendment To Be Offered by Representative Matsui, Doris of
California or Her Designee, Debatable for 10 Minutes
Page 465, after line 2, insert the following new subtitle:
Subtitle L--Making Home Affordable Program
SEC. 9911. PUBLIC AVAILABILITY OF INFORMATION.
(a) Revisions to Program Guidelines.--The Secretary of the
Treasury (in this section referred to as the ``Secretary'')
shall revise the guidelines for the Home Affordable
Modification Program of the Making Home Affordable initiative
of the Secretary of the Treasury, authorized under the
Emergency Economic Stabilization Act of 2008 (Public Law 110-
343), to provide that the data being collected by the Secretary
from each mortgage servicer and lender participating in the
Program is made public in accordance with subsection (b).
(b) Public Availability.--Data shall be made available
according to the following guidelines:
(1) Not more than 14 days after each monthly deadline
for submission of data by mortgage servicers and
lenders participating in the Program, reports shall be
made publicly available by means of a World Wide Web
site of the Secretary, and by submitting a report to
the Congress, that shall include the following
information:
(A) The number of requests for mortgage
modifications under the Program that the
servicer or lender has received.
(B) The number of requests for mortgage
modifications under the Program that the
servicer or lender has processed.
(C) The number of requests for mortgage
modifications under the Program that the
servicer or lender has approved.
(D) The number of requests for mortgage
modifications under the Program that the
servicer or lender has denied.
(2) Not more than 60 days after each monthly deadline
for submission of data by mortgage servicers and
lenders participating in the Program, the Secretary
shall make data tables available to the public at the
individual record level. The Secretary shall issue
regulations prescribing--
(A) the procedures for disclosing such data
to the public; and
(B) such deletions as the Secretary may
determine to be appropriate to protect any
privacy interest of any mortgage modification
applicant, including the deletion or alteration
of the applicant's name and identification
number.
----------
11. An Amendment To Be Offered by Representative Paulsen, Erik of
Minnesota or His Designee, Debatable for 10 Minutes
Page 21, line 23, insert ``and shall not be excluded from
any of the Council's proceedings, meetings, discussions and
deliberations'' after ``advisory capacity'':
----------
12. An Amendment To Be Offered by Representative Kanjorski, Paul of
Pennsylvania or His Designee, Debatable for 10 Minutes
Page 11, in the item relating to section 7606, strike
``Exemption for nonaccelerated filers'' and insert ``Study on
methods to reduce the burden of compliance on small
companies''.
Page 1221, line 19, strike ``EXEMPTION FOR NONACCELERATED
FILERS'' and insert `` STUDY ON METHODS TO REDUCE THE BURDEN OF
COMPLIANCE ON SMALL COMPANIES''.
Page 1221, strike lines 20 through 25.
Page 1222, strike lines 1 through 2.
Page 1222, on line 3, strike ``(b) Study.--'' and adjust the
indentation appropriately.
----------
13. An Amendment To Be Offered by Representative Marshall, Jim of
Georgia or His Designee, Debatable for 10 Minutes
Page 893, after line 8, insert the following new section
(and redesignate the subsequent sections and conform the table
of contents in section 2 accordingly):
SEC. 4508. NO PRIVATE RIGHT OF ACTION.
Nothing in this title shall be construed to create a
private right of action, but this section shall not be
construed or interpreted to deny any private right of action
arising under the enumerated consumer laws or the authorities
transferred under subtitle F or H.
----------
14. An Amendment To Be Offered by Representative McCarthy, Kevin of
California or His Designee, Debatable for 10 Minutes
Strike section 6012 (relating to ``Effect of Rule
436(G)'').
----------
15. An Amendment To Be Offered by Representative Cohen, Steve of
Tennessee or His Designee, Debatable for 10 Minutes
Page 1126, line 6, strike ``subsections'' and insert
``subsection''.
Page 1126, strike lines 15 through 25.
----------
16. An Amendment To Be Offered by Representative Peters, Gary of
Michigan or His Designee, Debatable for 10 Minutes
Page 402, after line 18, insert the following subparagraph:
(E) Additional Authorized
Assessments.--The Corporation is
authorized to conduct risk-based
assessments on financial companies in
such amount and manner and subject to
terms and conditions that the
Corporation determines, with the
concurrence of the Secretary of the
Treasury and the Federal Reserve Board,
are necessary to pay any shortfall in
the Troubled Asset Relief Program
established by the Emergency Economic
Stabilization Act of 2008 that would
add to the deficit or national debt, as
identified by the Director of the
Office of Management and Budget, in
consultation with the Director of the
Congressional Budget Office pursuant to
section 134 of such Act (12 U.S.C.
Sec. 5239).
----------
17. An Amendment To Be Offered by Representative Watt, Melvin of North
Carolina or His Designee, Debatable for 10 Minutes
Page 772, strike line 12 and all that follows through page
773, line 22, and insert the following:
(1) In general.--The Director and the Agency may not
exercise any rulemaking, supervisory, enforcement, or
any other authority, including authority to order
assessments, over a motor vehicle dealer that is
primarily engaged in the sale and servicing of motor
vehicles, the leasing and servicing of motor vehicles,
or both.
(2) Certain activities excepted.--Paragraph (1) shall
not apply to--
(A) any motor vehicle dealer to the extent
that such motor vehicle dealer engages in any
financial activity other than extending credit
or leasing exclusively for the purpose of
enabling a consumer to purchase, lease, rent,
repair, refurbish, maintain, or service a motor
vehicle from that motor vehicle dealer; or
(B) any credit transaction involving a person
who operates a line of business that involves
the extension of retail credit or retail leases
involving motor vehicles, and in which--
(i) the extension of retail credit or
retail leases is provided directly to
consumers; and
(ii) the contracts governing such
extensions of retail credit or retail
leases are not assigned to a third
party finance or leasing source, except
on a de minimis basis.
----------
18. An Amendment To Be Offered by Representative Frank, Barney of
Massachusetts or His Designee, Debatable for 10 Minutes
Strike section 6005 and redesignate the subsequent sections
in subtitle B of title V and conform the table of contents in
section 2 accordingly.
----------
19. An Amendment To Be Offered by Representative Conyers Jr., John of
Michigan or His Designee, Debatable for 10 Minutes
At the end of the bill, insert the following (and make such
technical and conforming changes as may be appropriate):
TITLE VII--PREVENTION OF MORTGAGE FORECLOSURES
Subtitle A--Modification of Residential Mortgages
SEC. 9001. DEFINITION.
Section 101 of title 11, United States Code, is amended by
inserting after paragraph (43) the following (and make such
technical and conforming changes as may be appropriate):
``(43A) The term `qualified loan modification' means
a loan modification agreement made in accordance with
the guidelines of the Obama Administration's Homeowner
Affordability and Stability Plan as implemented March
4, 2009, that--
``(A) reduces the debtor's payment (including
principal and interest, and payments for real
estate taxes, hazard insurance, mortgage
insurance premium, homeowners' association
dues, ground rent, and special assessments) on
a loan secured by a senior security interest in
the principal residence of the debtor, to a
percentage of the debtor's income in accordance
with such guidelines, without any period of
negative amortization or under which the
aggregate amount of the regular periodic
payments would not fully amortize the
outstanding principal amount of such loan;
``(B) requires no fees or charges to be paid
by the debtor in order to obtain such
modification; and
``(C) permits the debtor to continue to make
payments under the modification agreement
notwithstanding the filing of a case under this
title, as if such case had not been filed.''.
SEC. 9002. ELIGIBILITY FOR RELIEF.
Section 109 of title 11, United States Code, is amended--
(1) by adding at the end of subsection (e) the
following: ``For purposes of this subsection, the
computation of debts shall not include the secured or
unsecured portions of--
``(1) debts secured by the debtor's principal
residence if the value of such residence as of the date
of the order for relief under chapter 13 is less than
the applicable maximum amount of noncontingent,
liquidated, secured debts specified in this subsection;
or
``(2) debts secured or formerly secured by what was
the debtor's principal residence that was sold in
foreclosure or that the debtor surrendered to the
creditor if the value of such real property as of the
date of the order for relief under chapter 13 was less
than the applicable maximum amount of noncontingent,
liquidated, secured debts specified in this
subsection.'', and
(2) by adding at the end of subsection (h) the
following:
``(5) Notwithstanding the 180-day period specified in
paragraph (1), with respect to a debtor in a case under
chapter 13 who submits to the court a certification
that the debtor has received notice that the holder of
a claim secured by the debtor's principal residence may
commence a foreclosure on the debtor's principal
residence, the requirements of paragraph (1) shall be
considered to be satisfied if the debtor satisfies such
requirements not later than the expiration of the 30-
day period beginning on the date of the filing of the
petition.''.
SEC. 9003. PROHIBITING CLAIMS ARISING FROM VIOLATIONS OF THE TRUTH IN
LENDING ACT.
Section 502(b) of title 11, United States Code, is amended--
(1) in paragraph (8) by striking ``or'' at the end,
(2) in paragraph (9) by striking the period at the
end and inserting ``; or'', and
(3) by adding at the end the following:
``(10) the claim for a loan secured by a security
interest in the debtor's principal residence is subject
to a remedy for rescission under the Truth in Lending
Act notwithstanding the prior entry of a foreclosure
judgment, except that nothing in this paragraph shall
be construed to modify, impair, or supersede any other
right of the debtor.''.
SEC. 9004. AUTHORITY TO MODIFY CERTAIN MORTGAGES.
Section 1322 of title 11, United States Code, is amended--
(1) in subsection (b)--
(A) by redesignating paragraph (11) as
paragraph (12),
(B) in paragraph (10) by striking ``and'' at
the end, and
(C) by inserting after paragraph (10) the
following:
``(11) notwithstanding paragraph (2), with respect to
a claim for a loan originated before the effective date
of this paragraph and secured by a security interest in
the debtor's principal residence that is the subject of
a notice that a foreclosure may be commenced with
respect to such loan, modify the rights of the holder
of such claim (and the rights of the holder of any
claim secured by a subordinate security interest in
such residence)--
``(A) by providing for payment of the amount
of the allowed secured claim as determined
under section 506(a)(1);
``(B) if any applicable rate of interest is
adjustable under the terms of such loan by
prohibiting, reducing, or delaying adjustments
to such rate of interest applicable on and
after the date of filing of the plan;
``(C) by modifying the terms and conditions
of such loan--
``(i) to extend the repayment period
for a period that is no longer than the
longer of 40 years (reduced by the
period for which such loan has been
outstanding) or the remaining term of
such loan, beginning on the date of the
order for relief under this chapter;
and
``(ii) to provide for the payment of
interest accruing after the date of the
order for relief under this chapter at
a fixed annual rate equal to the
currently applicable average prime
offer rate as of the date of the order
for relief under this chapter,
corresponding to the repayment term
determined under the preceding
paragraph, as published by the Federal
Financial Institutions Examination
Council in its table entitled `Average
Prime Offer Rates--Fixed', plus a
reasonable premium for risk; and
``(D) by providing for payments of such
modified loan directly to the holder of the
claim or, at the discretion of the court,
through the trustee during the term of the
plan; and'', and
(2) by adding at the end the following:
``(g) A claim may be reduced under subsection (b)(11)(A) only
on the condition that if the debtor sells the principal
residence securing such claim, before completing all payments
under the plan (or, if applicable, before receiving a discharge
under section 1328(b)) and receives net proceeds from the sale
of such residence, then the debtor agrees to pay to such holder
not later than 15 days after receiving such proceeds--
``(1) if such residence is sold in the 1st year
occurring after the effective date of the plan, 90
percent of the amount of the difference between the
sales price and the amount of such claim as originally
determined under subsection (b)(11) (plus costs of sale
and improvements), but not to exceed the unpaid amount
of the allowed secured claim determined as if such
claim had not been reduced under such subsection;
``(2) if such residence is sold in the 2d year
occurring after the effective date of the plan, 70
percent of the amount of the difference between the
sales price and the amount of such claim as originally
determined under subsection (b)(11) (plus costs of sale
and improvements), but not to exceed the unpaid amount
of the allowed secured claim determined as if such
claim had not been reduced under such subsection;
``(3) if such residence is sold in the 3d year
occurring after the effective date of the plan, 50
percent of the amount of the difference between the
sales price and the amount of such claim as originally
determined under subsection (b)(11) (plus costs of sale
and improvements), but not to exceed the unpaid amount
of the allowed secured claim determined as if such
claim had not been reduced under such subsection;
``(4) if such residence is sold in the 4th year
occurring after the effective date of the plan, 30
percent of the amount of the difference between the
sales price and the amount of such claim as originally
determined under subsection (b)(11) (plus costs of sale
and improvements), but not to exceed the unpaid amount
of the allowed secured claim determined as if such
claim had not been reduced under such subsection; and
``(5) if such residence is sold in the 5th year
occurring after the effective date of the plan, 10
percent of the amount of the difference between the
sales price and the amount of such claim as originally
determined under subsection (b)(11) (plus costs of sale
and improvements), but not to exceed the unpaid amount
of the allowed secured claim determined as if such
claim had not been reduced under such subsection.
``(h) With respect to a claim of the kind described in
subsection (b)(11), the plan may not contain a modification
under the authority of subsection (b)(11)--
``(1) in a case commenced under this chapter after
the expiration of the 30-day period beginning on the
effective date of this subsection, unless--
``(A) the debtor certifies that the debtor--
``(i) not less than 30 days before
the commencement of the case, contacted
the holder of such claim (or the entity
collecting payments on behalf of such
holder) regarding modification of the
loan that is the subject of such claim;
``(ii) provided the holder of the
claim (or the entity collecting
payments on behalf of such holder) a
written statement of the debtor's
current income, expenses, and debt
substantially conforming with the
schedules required under section 521(a)
or such other form as is promulgated by
the Judicial Conference of the United
States for such purpose; and
``(iii) considered any qualified loan
modification offered to the debtor by
the holder of the claim (or the entity
collecting payments on behalf of such
holder); or
``(B) a foreclosure sale is scheduled to
occur on a date in the 30-day period beginning
on the date the case is commenced;
``(2) in any other case pending under this chapter,
unless the debtor certifies that the debtor attempted
to contact the holder of such claim (or the entity
collecting payments on behalf of such holder) regarding
modification of the loan that is the subject of such
claim, before--
``(A) filing a plan under section 1321 that
contains a modification under the authority of
subsection (b)(11); or
``(B) modifying a plan under section 1323 or
1329 to contain a modification under the
authority of subsection (b)(11).
``(i) In determining the holder's allowed secured claim under
section 506(a)(1) for purposes of subsection (b)(11)(A), the
value of the debtor's principal residence shall be the fair
market value of such residence on the date such value is
determined and, if the issue of value is contested, the court
shall determine such value in accordance with the appraisal
rules used by the Federal Housing Administration.''.
SEC. 9005. COMBATING EXCESSIVE FEES.
Section 1322(c) of title 11, United States Code, is amended--
(1) in paragraph (1) by striking ``and'' at the end,
(2) in paragraph (2) by striking the period at the
end and inserting a semicolon, and
(3) by adding at the end the following:
``(3) the debtor, the debtor's property, and property
of the estate are not liable for a fee, cost, or charge
that is incurred while the case is pending and arises
from a debt that is secured by the debtor's principal
residence except to the extent that--
``(A) the holder of the claim for such debt
files with the court and serves on the trustee,
the debtor, and the debtor's attorney (annually
or, in order to permit filing consistent with
clause (ii), at such more frequent periodicity
as the court determines necessary) notice of
such fee, cost, or charge before the earlier
of--
``(i) 1 year after such fee, cost, or
charge is incurred; or
``(ii) 60 days before the closing of
the case; and
``(B) such fee, cost, or charge--
``(i) is lawful under applicable
nonbankruptcy law, reasonable, and
provided for in the applicable security
agreement; and
``(ii) is secured by property the
value of which is greater than the
amount of such claim, including such
fee, cost, or charge;
``(4) the failure of a party to give notice described
in paragraph (3) shall be deemed a waiver of any claim
for fees, costs, or charges described in paragraph (3)
for all purposes, and any attempt to collect such fees,
costs, or charges shall constitute a violation of
section 524(a)(2) or, if the violation occurs before
the date of discharge, of section 362(a); and
``(5) a plan may provide for the waiver of any
prepayment penalty on a claim secured by the debtor's
principal residence.''.
SEC. 9006. CONFIRMATION OF PLAN.
(a) Section 1325(a) of title 11, United States Code, is
amended--
(1) in the matter preceding paragraph (1) strike
``subsection (b)'' and insert ``subsections (b) and
(d)''.
(2) in paragraph (5)--
(A) by inserting ``except as otherwise
provided in section 1322(b)(11),'' after
``(5)'', and
(B) in subparagraph (B)(iii)(I) by inserting
``(including payments of a claim modified under
section 1322(b)(11))'' after ``payments'' the
1st place it appears,
(3) in paragraph (8) by striking ``and'' at the end,
(4) in paragraph (9) by striking the period at the
end and inserting a semicolon, and
(5) by inserting after paragraph (9) the following:
``(10) notwithstanding subclause (I) of paragraph
(5)(B)(i), whenever the plan modifies a claim in
accordance with section 1322(b)(11), the holder of a
claim whose rights are modified pursuant to section
1322(b)(11) shall retain the lien until the later of--
``(A) the payment of such holder's allowed
secured claim; or
``(B) completion of all payments under the
plan (or, if applicable, receipt of a discharge
under section 1328(b)); and
``(11) whenever the plan modifies a claim in
accordance with section 1322(b)(11), the court finds
that such modification is in good faith (Lack of good
faith exists if the debtor has no need for relief under
this paragraph because the debtor can pay all of his or
her debts and any future payment increases on such
debts without difficulty for the foreseeable future,
including the positive amortization of mortgage debt.
In determining whether a reduction of the principal
amount of the loan resulting from a modification made
under the authority of section 1322(b)(11) is made in
good faith, the court shall consider whether the holder
of such claim (or the entity collecting payments on
behalf of such holder) has offered to the debtor a
qualified loan modification that would enable the
debtor to pay such debts and such loan without reducing
such principal amount.) and does not find that the
debtor has been convicted of obtaining by actual fraud
the extension, renewal, or refinancing of credit that
gives rise to a modified claim.''.
(b) Section 1325 of title 11, United States Code, is amended
by adding at the end the following (and make such technical and
conforming changes as may be appropriate):
``(d) Notwithstanding section 1322(b)(11)(C)(ii), the court,
on request of the debtor or the holder of a claim secured by a
senior security interest in the debtor's principal residence,
may confirm a plan proposing a reduction in the interest rate
on the loan secured by such security interest and that does not
reduce the principal, provided the total monthly mortgage
payment is reduced to a percentage of the debtor's income in
accordance with the guidelines of the Obama Administration's
Homeowner Affordability and Stability Plan as implemented March
4, 2009, if, taking into account the debtor's financial
situation, after allowance of expenses that would be permitted
for a debtor under this chapter subject to paragraph (3) of
subsection (b), regardless of whether the debtor is otherwise
subject to such paragraph, and taking into account additional
debts and fees that are to be paid in this chapter and
thereafter, the debtor would be able to prevent foreclosure and
pay a fully amortizing 30-year loan at such reduced interest
rate without such reduction in principal.''.
SEC. 9007. DISCHARGE.
Section 1328(a) of title 11, United States Code, is amended--
(1) by inserting ``(other than payments to holders of
claims whose rights are modified under section
1322(b)(11))'' after ``paid'', and
(2) in paragraph (1) by inserting ``or, to the extent
of the unpaid portion of an allowed secured claim,
provided for in section 1322(b)(11)'' after
``1322(b)(5)''.
SEC. 9008. STANDING TRUSTEE FEES.
(a) Amendment to Title 28.--Section 586(e)(1)(B)(i) of title
28, United States Code, is amended--
(1) by inserting ``(I) except as provided in
subparagraph (II)'' after ``(i)'',
(2) by striking ``or'' at the end and inserting
``and'', and
(3) by adding at the end the following:
``(II) 4 percent with respect to
payments received under section
1322(b)(11) of title 11 by the
individual as a result of the operation
of section 1322(b)(11)(D) of title 11,
unless the bankruptcy court waives all
fees with respect to such payments
based on a determination that such
individual has income less than 150
percent of the official poverty line
(as defined by the Office of Management
and Budget, and revised annually in
accordance with section 673(2) of the
Omnibus Budget Reconciliation Act of
1981) applicable to a family of the
size involved and payment of such fees
would render the debtor's plan
infeasible.''.
(b) Conforming Provision.--The amendments made by this
section shall apply to any trustee to whom the provisions of
section 302(d)(3) of the Bankruptcy Judges, United States
Trustees, and Family Farmer Bankruptcy Act of 1986 (Public Law
99-554; 100 Stat. 3121) apply.
SEC. 9009. EFFECTIVE DATE; APPLICATION OF AMENDMENTS.
(a) Effective Date.--Except as provided in subsection (b),
this subtitle and the amendments made by this subtitle shall
take effect on the date of the enactment of this Act.
(b) Application of Amendments.--
(1) In general.--Except as provided in paragraph (2),
the amendments made by this subtitle shall apply with
respect to cases commenced under title 11 of the United
States Code before, on, or after the date of the
enactment of this Act.
(2) Limitation.--Paragraph (1) shall not apply with
respect to cases closed under title 11 of the United
States Code as of the date of the enactment of this Act
that are neither pending on appeal in, nor appealable
to, any court of the United States.
SEC. 9010. GAO STUDY.
The Comptroller General shall carry out a study, and submit
to the Committee on the Judiciary of the House of
Representatives and the Committee on the Judiciary of the
Senate, not later than 2 years after the date of the enactment
of this Act a report containing--
(1) the results of such study of--
(A) the number of debtors who filed, during
the 1-year period beginning on the date of the
enactment of this Act, cases under chapter 13
of title 11 of the United States Code for the
purpose of restructuring their principal
residence mortgages,
(B) the number of mortgages restructured
under the amendments made by this subtitle that
subsequently resulted in default and
foreclosure,
(C) a comparison between the effectiveness of
mortgages restructured under non-judicial
voluntary mortgage modification programs and
mortgages restructured under the amendments
made by this subtitle,
(D) the number of cases presented to the
bankruptcy courts where mortgages were
restructured under the amendments made by this
subtitle that were appealed,
(E) the number of cases presented to the
bankruptcy courts where mortgages were
restructured under the amendments made by this
subtitle that were overturned on appeal, and
(F) the number of bankruptcy judges
disciplined as a result of actions taken to
restructure mortgages under the amendments made
by this subtitle, and
(2) a recommendation as to whether such amendments
should be amended to include a sunset clause.
SEC. 9011. REPORT TO CONGRESS.
Not later than 18 months after the date of the enactment of
this Act, the Comptroller General, in consultation with the
Federal Housing Administration, shall submit to the Congress, a
report containing--
(1) a comprehensive review of the effects of the
amendments made by this subtitle on bankruptcy courts,
(2) a survey of whether the program should limit the
types of homeowners eligible for the program, and
(3) a recommendation on whether such amendments
should remain in effect.
Subtitle B--Related Mortgage Modification Provisions
SEC. 9021. ADJUSTMENTS AS A RESULT OF MODIFICATION IN BANKRUPTCY OF
HOUSING LOANS GUARANTEED BY THE DEPARTMENT OF
VETERANS AFFAIRS.
(a) In General.--Section 3732 of title 38, United States
Code, is amended--
(1) in subsection (a)--
(A) by redesignating paragraph (2) as
subparagraph (A) of paragraph (2), and
(2) by inserting after subparagraph (A) the following
new subparagraph:
``(B) In the event that a housing loan
guaranteed under this chapter is modified under
the authority provided under section 1322(b) of
title 11, United States Code, the Secretary may
pay the holder of the obligation the unpaid
balance of the obligation due as of the date of
the filing of the petition under title 11,
United States Code, plus accrued interest, but
only upon the assignment, transfer, and
delivery to the Secretary (in a form and manner
satisfactory to the Secretary) of all rights,
interest, claims, evidence, and records with
respect to the housing loan.''.
(b) Maturity of Housing Loans.--Paragraph (1) of section (d)
of section 3703 of title 38, United States Code, is amended by
inserting ``at the time of origination'' after ``loan''.
(c) Implementation.--The Secretary of Veterans Affairs may
implement the amendments made by this section through notice,
procedure notice, or administrative notice.
SEC. 9022. PAYMENT OF FHA MORTGAGE INSURANCE BENEFITS.
(a) In General.--Subsection (a) of section 204 of the
National Housing Act (12 U.S.C. 1710(a)) is amended--
(1) in paragraph (1), by adding at the end the
following new subparagraph:
``(E) Modification of mortgage in
bankruptcy.--
``(i) Authority.--If an order is
entered under the authority provided
under section 1322(b) of title 11,
United States Code, that (a) determines
the amount of an allowed secured claim
under a mortgage in accordance with
section 506(a)(1) of title 11, United
States Code, and the amount of such
allowed secured claim is less than the
amount due under the mortgage as of the
date of the filing of the petition
under title 11, United States Code, or
(b) reduces the interest to be paid
under a mortgage in accordance with
section 1325 of such title, the
Secretary may pay insurance benefits
for the mortgage as follows:
``(I) Full payment and
assignment.--The Secretary may
pay the insurance benefits for
the mortgage, but only upon the
assignment, transfer, and
delivery to the Secretary of
all rights, interest, claims,
evidence, and records with
respect to the mortgage
specified in clauses (i)
through (iv) of paragraph
(1)(A). The insurance benefits
shall be paid in the amount
equal to the original principal
obligation of the mortgage
(with such additions and
deductions as the Secretary
determines are appropriate)
which was unpaid upon the date
of the filing of by the
mortgagor of the petition under
title 11 of the United States
Code. Nothing in this Act may
be construed to prevent the
Secretary from providing
insurance under this title for
a mortgage that has previously
been assigned to the Secretary
under this subclause. The
decision of whether to utilize
the authority under this
subclause for payment and
assignment shall be at the
election of the mortgagee,
subject to such terms and
conditions as the Secretary may
establish.
``(II) Assignment of
unsecured claim.--The Secretary
may make a partial payment of
the insurance benefits for any
unsecured claim under the
mortgage, but only upon the
assignment to the Secretary of
any unsecured claim of the
mortgagee against the mortgagor
or others arising out of such
order. Such assignment shall be
deemed valid irrespective of
whether such claim has been or
will be discharged under title
11 of the United States Code.
The insurance benefits shall be
paid in the amount specified in
subclause (I) of this clause,
as such amount is reduced by
the amount of the allowed
secured claim. Such allowed
secured claim shall continue to
be insured under section 203.
``(III) Interest payments.--
The Secretary may make periodic
payments, or a one-time
payment, of insurance benefits
for interest payments that are
reduced pursuant to such order,
as determined by the Secretary,
but only upon assignment to the
Secretary of all rights and
interest related to such
payments.
``(ii) Delivery of evidence of entry
of order.--Notwithstanding any other
provision of this paragraph, no
insurance benefits may be paid pursuant
to this subparagraph for a mortgage
before delivery to the Secretary of
evidence of the entry of the order
issued pursuant to title 11, United
States Code, in a form satisfactory to
the Secretary.'';
(2) in paragraph (5), in the matter preceding
subparagraph (A), by inserting after ``section 520,
and'' the following: ``, except as provided in
paragraph (1)(E),''; and
(3) by adding at the end the following new paragraph:
``(10) Loan modification program.--
``(A) Authority.--The Secretary may carry out
a program solely to encourage loan
modifications for eligible delinquent mortgages
through the payment of insurance benefits and
assignment of the mortgage to the Secretary and
the subsequent modification of the terms of the
mortgage according to a loan modification
approved by the mortgagee.
``(B) Payment of benefits and assignment.--
Under the program under this paragraph, the
Secretary may pay insurance benefits for a
mortgage, in the amount determined in
accordance with paragraph (5)(A), without
reduction for any amounts modified, but only
upon the assignment, transfer, and delivery to
the Secretary of all rights, interest, claims,
evidence, and records with respect to the
mortgage specified in clauses (i) through (iv)
of paragraph (1)(A).
``(C) Disposition.--After modification of a
mortgage pursuant to this paragraph, the
Secretary may provide insurance under this
title for the mortgage. The Secretary may
subsequently--
``(i) re-assign the mortgage to the
mortgagee under terms and conditions as
are agreed to by the mortgagee and the
Secretary;
``(ii) act as a Government National
Mortgage Association issuer, or
contract with an entity for such
purpose, in order to pool the mortgage
into a Government National Mortgage
Association security; or
``(iii) re-sell the mortgage in
accordance with any program that has
been established for purchase by the
Federal Government of mortgages insured
under this title, and the Secretary may
coordinate standards for interest rate
reductions available for loan
modification with interest rates
established for such purchase.
``(D) Loan servicing.--In carrying out the
program under this section, the Secretary may
require the existing servicer of a mortgage
assigned to the Secretary under the program to
continue servicing the mortgage as an agent of
the Secretary during the period that the
Secretary acquires and holds the mortgage for
the purpose of modifying the terms of the
mortgage. If the mortgage is resold pursuant to
subparagraph (C)(iii), the Secretary may
provide for the existing servicer to continue
to service the mortgage or may engage another
entity to service the mortgage.''.
(b) Amendment to Partial Claim Authority.--Paragraph (1) of
section 230(b) of the National Housing Act (12 U.S.C.
1715u(b)(1)) is amended by striking ``12 of the monthly
mortgage payments'' and inserting ``30 percent of the unpaid
principal balance of the mortgage''.
(c) Implementation.--The Secretary of Housing and Urban
Development may implement the amendments made by this section
through notice or mortgagee letter.
SEC. 9023. ADJUSTMENTS AS RESULT OF MODIFICATION OF RURAL SINGLE FAMILY
HOUSING LOANS IN BANKRUPTCY.
(a) Guaranteed Rural Housing Loans.--Subsection (h) of
section 502 of the Housing Act of 1949 (42 U.S.C. 1472(h)) is
amended--
(1) in paragraph (7)--
(A) in subparagraph (A), by inserting before
the period at the end the following: ``, unless
the maturity date of the loan is modified in a
bankruptcy proceeding or at the discretion of
the Secretary''; and
(B) in subparagraph (B), by inserting before
the semicolon the following: ``, unless such
rate is modified in a bankruptcy proceeding'';
(2) by redesignating paragraphs (13) and (14) as
paragraphs (14) and (15), respectively; and
(3) by inserting after paragraph (12) the following
new paragraph:
``(13) Payment of guarantee.--In addition to all
other authorities to pay a guarantee claim, the
Secretary may also pay the guaranteed portion of any
losses incurred by the holder of a note or the servicer
resulting from a modification of a note by a bankruptcy
proceeding.''.
(b) Insured Rural Housing Loans.--Subsection (j) of section
517 of the Housing Act of 1949 (42 U.S.C. 1487(j)) is amended--
(1) by redesignating paragraphs (2) through (7) as
paragraphs (3) through (8), respectively; and
(2) by inserting after paragraph (1) the following
new paragraph:
``(2) to pay for losses incurred by holders or
servicers in the event of a modification pursuant to a
bankruptcy proceeding;''.
(c) Implementation.--The Secretary of Agriculture may
implement the amendments made by this section through notice,
procedure notice, or administrative notice.
----------
20. An Amendment To Be Offered by Representative Burgess, Michael of
Texas or His Designee, Debatable for 10 Minutes
Page 22, beginning on line 19, strike ``orderliness''.
----------
21. An Amendment To Be Offered by Representative Burgess, Michael of
Texas or His Designee, Debatable for 10 Minutes
Page 92, line 16, insert the following: ``The
aforementioned amounts shall be indexed to inflation.''
----------
22. An Amendment To Be Offered by Representative Burgess, Michael of
Texas or His Designee, Debatable for 10 Minutes
Page 58, line 4, insert after the period the following new
sentence: ``The Board shall define by rule or regulation the
term `significantly undercapitalized' at a threshold the Board
determines to be prudent for the effective monitoring
management and oversight of the financial system.''.
----------
23. An Amendment To Be Offered by Representative Burgess, Michael of
Texas or His Designee, Debatable for 10 Minutes
Page 20, line 1, insert after ``possible'' the following:
``, but no later than two (2) years,''.
----------
24. An Amendment To Be Offered by Representative Burgess, Michael of
Texas or His Designee, Debatable for 10 Minutes
Page 1185, beginning on line 10, strike ``have engaged in
information sharing or''.
----------
25. An Amendment To Be Offered by Representative Herseth Sandlin,
Stephanie of South Dakota or Her Designee, Debatable for 10 Minutes
Page 1022, line 20, strike ``Section'' and insert the
following:
(a) Exemption.--Section
Page 1024, line 3, strike the period at the end and insert
``; and''.
Page 1024, after line 3, insert the following:
(b) Consideration of Risk.--Section 203(c) of the Investment
Advisers Act of 1940 (15 U.S.C. 80b--3(c)) is amended by adding
at the end the following:
``(3) The Commission shall take into account the
relative risk profile of different classes of private
funds as it establishes, by rule or regulation, the
registration requirements for private funds.''.
----------
26. An Amendment To Be Offered by Representative Garrett, Scott of New
Jersey or His Designee, Debatable for 10 Minutes
Page 1041, beginning on line 15, strike paragraph (5) and
insert the following:
(5) in subsection (e), by striking paragraph (1) and
inserting the following new paragraph (1):
``(1) Voluntary withdrawal.--A nationally recognized
statistical rating organization may, upon such terms
and conditions as the Commission may establish as
necessary in the public interest or for the protection
of investors, withdraw from registration by furnishing
a written notice of withdrawal to the Commission,
provided that such nationally recognized statistical
rating organization certifies that it received less
than $250,000,000 during its last full fiscal year in
net revenue for providing credit ratings on securities
and money market instruments issued in the United
States.'';
----------
27. An Amendment To Be Offered by Representative Dent, Charles of
Pennsylvania or His Designee, Debatable for 10 Minutes
At the end of the bill, insert the following new section:
SEC. __. SENSE OF CONGRESS REGARDING SIMPLIFIED MORTGAGE CONTRACT
SUMMARIES.
It is the sense of Congress that mortgage lenders should
provide loan applicants with a simplified summary of their loan
contracts, including an easy-to-read list of the basic loan
terms, payment information, the existence of prepayment
penalties or balloon payments, and escrow information.
----------
28. An Amendment To Be Offered by Representative Moore, Dennis of
Kansas or His Designee Debatable for 10 Minutes
Add at the end the following new title (and update the table
of contents accordingly):
TITLE VIII--NONADMITTED AND REINSURANCE REFORM ACT
SECTION 10001. SHORT TITLE.
This title may be cited as the ``Nonadmitted and Reinsurance
Reform Act of 2009''.
SEC. 10002. EFFECTIVE DATE.
Except as otherwise specifically provided in this title, this
title shall take effect upon the expiration of the 12-month
period beginning on the date of the enactment of this Act.
Subtitle A--Nonadmitted Insurance.
SEC. 10101. REPORTING, PAYMENT, AND ALLOCATION OF PREMIUM TAXES.
(a) Home State's Exclusive Authority.-- No State other than
the home State of an insured may require any premium tax
payment for nonadmitted insurance.
(b) Allocation of Nonadmitted Premium Taxes.--
(1) In general.--The States may enter into a compact
or otherwise establish procedures to allocate among the
States the premium taxes paid to an insured's home
State described in subsection (a).
(2) Effective date.--Except as expressly otherwise
provided in such compact or other procedures, any such
compact or other procedures--
(A) if adopted on or before the expiration of
the 330-day period that begins on the date of
the enactment of this Act, shall apply to any
premium taxes that, on or after such date of
enactment, are required to be paid to any State
that is subject to such compact or procedures;
and
(B) if adopted after the expiration of such
330-day period, shall apply to any premium
taxes that, on or after January 1 of the first
calendar year that begins after the expiration
of such 330-day period, are required to be paid
to any State that is subject to such compact or
procedures.
(3) Report.--Upon the expiration of the 330-day
period referred to in paragraph (2), the NAIC may
submit a report to the Committee on Financial Services
and Committee on the Judiciary of the House of
Representatives and the Committee on Banking, Housing,
and Urban Affairs of the Senate identifying and
describing any compact or other procedures for
allocation among the States of premium taxes that have
been adopted during such period by any States.
(4) Nationwide system.--The Congress intends that
each State adopt nationwide uniform requirements,
forms, and procedures, such as an interstate compact,
that provides for the reporting, payment, collection,
and allocation of premium taxes for nonadmitted
insurance consistent with this section.
(c) Allocation Based on Tax Allocation Report.-- To
facilitate the payment of premium taxes among the States, an
insured's home State may require surplus lines brokers and
insureds who have independently procured insurance to annually
file tax allocation reports with the insured's home State
detailing the portion of the nonadmitted insurance policy
premium or premiums attributable to properties, risks or
exposures located in each State. The filing of a nonadmitted
insurance tax allocation report and the payment of tax may be
made by a person authorized by the insured to act as its agent.
SEC. 10102. REGULATION OF NONADMITTED INSURANCE BY INSURED'S HOME
STATE.
(a) Home State Authority.--Except as otherwise provided in
this section, the placement of nonadmitted insurance shall be
subject to the statutory and regulatory requirements solely of
the insured's home State.
(b) Broker Licensing.--No State other than an insured's home
State may require a surplus lines broker to be licensed in
order to sell, solicit, or negotiate nonadmitted insurance with
respect to such insured.
(c) Enforcement Provision.--With respect to section 10101 and
subsections (a) and (b) of this section, any law, regulation,
provision, or action of any State that applies or purports to
apply to nonadmitted insurance sold to, solicited by, or
negotiated with an insured whose home State is another State
shall be preempted with respect to such application.
(d) Workers' Compensation Exception.--This section may not be
construed to preempt any State law, rule, or regulation that
restricts the placement of workers' compensation insurance or
excess insurance for self-funded workers' compensation plans
with a nonadmitted insurer.
SEC. 10103. PARTICIPATION IN NATIONAL PRODUCER DATABASE.
After the expiration of the 2-year period beginning on the
date of the enactment of this Act, a State may not collect any
fees relating to licensing of an individual or entity as a
surplus lines broker in the State unless the State has in
effect at such time laws or regulations that provide for
participation by the State in the national insurance producer
database of the NAIC, or any other equivalent uniform national
database, for the licensure of surplus lines brokers and the
renewal of such licenses.
SEC. 10104. UNIFORM STANDARDS FOR SURPLUS LINES ELIGIBILITY.
A State may not--
(1) impose eligibility requirements on, or otherwise
establish eligibility criteria for, nonadmitted
insurers domiciled in a United States jurisdiction,
except in conformance with such requirements and
criteria in sections 5A(2) and 5C(2)(a) of the Non-
Admitted Insurance Model Act, unless the State has
adopted nationwide uniform requirements, forms, and
procedures developed in accordance with section
10101(b) of this title that include alternative
nationwide uniform eligibility requirements; and
(2) prohibit a surplus lines broker from placing
nonadmitted insurance with, or procuring nonadmitted
insurance from, a nonadmitted insurer domiciled outside
the United States that is listed on the Quarterly
Listing of Alien Insurers maintained by the
International Insurers Department of the NAIC.
SEC. 10105. STREAMLINED APPLICATION FOR COMMERCIAL PURCHASERS.
A surplus lines broker seeking to procure or place
nonadmitted insurance in a State for an exempt commercial
purchaser shall not be required to satisfy any State
requirement to make a due diligence search to determine whether
the full amount or type of insurance sought by such exempt
commercial purchaser can be obtained from admitted insurers
if--
(1) the broker procuring or placing the surplus lines
insurance has disclosed to the exempt commercial
purchaser that such insurance may or may not be
available from the admitted market that may provide
greater protection with more regulatory oversight; and
(2) the exempt commercial purchaser has subsequently
requested in writing the broker to procure or place
such insurance from a nonadmitted insurer.
SEC. 10106. GAO STUDY OF NONADMITTED INSURANCE MARKET.
(a) In General.--The Comptroller General of the United States
shall conduct a study of the nonadmitted insurance market to
determine the effect of the enactment of this subtitle on the
size and market share of the nonadmitted insurance market for
providing coverage typically provided by the admitted insurance
market.
(b) Contents.--The study shall determine and analyze--
(1) the change in the size and market share of the
nonadmitted insurance market and in the number of
insurance companies and insurance holding companies
providing such business in the 18-month period that
begins upon the effective date of this Act;
(2) the extent to which insurance coverage typically
provided by the admitted insurance market has shifted
to the nonadmitted insurance market;
(3) the consequences of any change in the size and
market share of the nonadmitted insurance market,
including differences in the price and availability of
coverage available in both the admitted and nonadmitted
insurance markets;
(4) the extent to which insurance companies and
insurance holding companies that provide both admitted
and nonadmitted insurance have experienced shifts in
the volume of business between admitted and nonadmitted
insurance; and
(5) the extent to which there has been a change in
the number of individuals who have nonadmitted
insurance policies, the type of coverage provided under
such policies, and whether such coverage is available
in the admitted insurance market.
(c) Consultation With NAIC.--In conducting the study under
this section, the Comptroller General shall consult with the
NAIC.
(d) Report.--The Comptroller General shall complete the study
under this section and submit a report to the Committee on
Financial Services of the House of Representatives and the
Committee on Banking, Housing, and Urban Affairs of the Senate
regarding the findings of the study not later than 30 months
after the effective date of this Act.
SEC. 10107. DEFINITIONS.
For purposes of this subtitle, the following definitions
shall apply:
(1) Admitted insurer.--The term ``admitted insurer''
means, with respect to a State, an insurer licensed to
engage in the business of insurance in such State.
(2) Affiliate.--The term ``affiliate'' means, with
respect to an insured, any entity that controls, is
controlled by, or is under common control with the
insured.
(3) Affiliated group.--The term ``affiliated group''
means any group of entities that are all affiliated.
(4) Control.--An entity has ``control'' over another
entity if--
(A) the entity directly or indirectly or
acting through one or more other persons owns,
controls or has the power to vote 25 percent or
more of any class of voting securities of the
other entity; or
(B) the entity controls in any manner the
election of a majority of the directors or
trustees of the other entity.
(5) Exempt commercial purchaser.--The term ``exempt
commercial purchaser'' means any person purchasing
commercial insurance that, at the time of placement,
meets the following requirements:
(A) The person employs or retains a qualified
risk manager to negotiate insurance coverage.
(B) The person has paid aggregate nationwide
commercial property and casualty insurance
premiums in excess of $100,000 in the
immediately preceding 12 months.
(C)(i) The person meets at least one of the
following criteria:
(I) The person possesses a net worth
in excess of $20,000,000, as such
amount is adjusted pursuant to clause
(ii).
(II) The person generates annual
revenues in excess of $50,000,000, as
such amount is adjusted pursuant to
clause (ii).
(III) The person employs more than
500 full time or full time equivalent
employees per individual insured or is
a member of an affiliated group
employing more than 1,000 employees in
the aggregate.
(IV) The person is a not-for-profit
organization or public entity
generating annual budgeted expenditures
of at least $30,000,000, as such amount
is adjusted pursuant to clause (ii).
(V) The person is a municipality with
a population in excess of 50,000
persons.
(ii) Effective on the fifth January 1
occurring after the date of the enactment of
this Act and each fifth January 1 occurring
thereafter, the amounts in subclauses (I),
(II), and (IV) of clause (i) shall be adjusted
to reflect the percentage change for such five-
year period in the Consumer Price Index for All
Urban Consumers published by the Bureau of
Labor Statistics of the Department of Labor.
(6) Home state.--
(A) In general.--Except as provided in
subparagraph (B), the term ``home State''
means, with respect to an insured--
(i) the State in which an insured
maintains its principal place of
business or, in the case of an
individual, the individual's principal
residence; or
(ii) if 100 percent of the insured
risk is located out of the State
referred to in subparagraph (A), the
State to which the greatest percentage
of the insured's taxable premium for
that insurance contract is allocated.
(B) Affiliated groups.--If more than one
insured from an affiliated group are named
insureds on a single nonadmitted insurance
contract, the term ``home State'' means the
home State, as determined pursuant to
subparagraph (A), of the member of the
affiliated group that has the largest
percentage of premium attributed to it under
such insurance contract.
(7) Independently procured insurance.--The term
``independently procured insurance'' means insurance
procured directly by an insured from a nonadmitted
insurer.
(8) NAIC.--The term ``NAIC'' means the National
Association of Insurance Commissioners or any successor
entity.
(9) Nonadmitted insurance.--The term ``nonadmitted
insurance'' means any property and casualty insurance
permitted to be placed directly or through a surplus
lines broker with a nonadmitted insurer eligible to
accept such insurance.
(10) Non-admitted insurance model act.--The term
``Non-Admitted Insurance Model Act'' means the
provisions of the Non-Admitted Insurance Model Act, as
adopted by the NAIC on August 3, 1994, and amended on
September 30, 1996, December 6, 1997, October 2, 1999,
and June 8, 2002.
(11) Nonadmitted insurer.--The term ``nonadmitted
insurer'' means, with respect to a State, an insurer
not licensed to engage in the business of insurance in
such State.
(12) Qualified risk manager.--The term ``qualified
risk manager'' means, with respect to a policyholder of
commercial insurance, a person who meets all of the
following requirements:
(A) The person is an employee of, or third
party consultant retained by, the commercial
policyholder.
(B) The person provides skilled services in
loss prevention, loss reduction, or risk and
insurance coverage analysis, and purchase of
insurance.
(C) The person--
(i)(I) has a bachelor's degree or
higher from an accredited college or
university in risk management, business
administration, finance, economics, or
any other field determined by a State
insurance commissioner or other State
regulatory official or entity to
demonstrate minimum competence in risk
management; and
(II)(aa) has three years of
experience in risk financing, claims
administration, loss prevention, risk
and insurance analysis, or purchasing
commercial lines of insurance; or
(bb) has one of the following
designations:
(AA) a designation as a
Chartered Property and Casualty
Underwriter (in this
subparagraph referred to as
``CPCU'') issued by the
American Institute for CPCU/
Insurance Institute of America;
(BB) a designation as an
Associate in Risk Management
(ARM) issued by the American
Institute for CPCU/Insurance
Institute of America;
(CC) a designation as
Certified Risk Manager (CRM)
issued by the National Alliance
for Insurance Education &
Research;
(DD) a designation as a RIMS
Fellow (RF) issued by the
Global Risk Management
Institute; or
(EE) any other designation,
certification, or license
determined by a State insurance
commissioner or other State
insurance regulatory official
or entity to demonstrate
minimum competency in risk
management;
(ii)(I) has at least seven years of
experience in risk financing, claims
administration, loss prevention, risk
and insurance coverage analysis, or
purchasing commercial lines of
insurance; and
(II) has any one of the designations
specified in subitems (AA) through (EE)
of clause (i)(II)(bb);
(iii) has at least 10 years of
experience in risk financing, claims
administration, loss prevention, risk
and insurance coverage analysis, or
purchasing commercial lines of
insurance; or
(iv) has a graduate degree from an
accredited college or university in
risk management, business
administration, finance, economics, or
any other field determined by a State
insurance commissioner or other State
regulatory official or entity to
demonstrate minimum competence in risk
management.
(13) Premium tax.--The term ``premium tax'' means,
with respect to surplus lines or independently procured
insurance coverage, any tax, fee, assessment, or other
charge imposed by a government entity directly or
indirectly based on any payment made as consideration
for an insurance contract for such insurance, including
premium deposits, assessments, registration fees, and
any other compensation given in consideration for a
contract of insurance.
(14) Surplus lines broker.--The term ``surplus lines
broker'' means an individual, firm, or corporation
which is licensed in a State to sell, solicit, or
negotiate insurance on properties, risks, or exposures
located or to be performed in a State with nonadmitted
insurers.
(15) State.--The term ``State'' includes any State of
the United States, the District of Columbia, the
Commonwealth of Puerto Rico, Guam, the Northern Mariana
Islands, the Virgin Islands, and American Samoa.
Subtitle B--Reinsurance.
SEC. 10201. REGULATION OF CREDIT FOR REINSURANCE AND REINSURANCE
AGREEMENTS.
(a) Credit for Reinsurance.--If the State of domicile of a
ceding insurer is an NAIC-accredited State, or has financial
solvency requirements substantially similar to the requirements
necessary for NAIC accreditation, and recognizes credit for
reinsurance for the insurer's ceded risk, then no other State
may deny such credit for reinsurance.
(b) Additional Preemption of Extraterritorial Application of
State Law.--In addition to the application of subsection (a),
all laws, regulations, provisions, or other actions of a State
that is not the domiciliary State of the ceding insurer, except
those with respect to taxes and assessments on insurance
companies or insurance income, are preempted to the extent that
they--
(1) restrict or eliminate the rights of the ceding
insurer or the assuming insurer to resolve disputes
pursuant to contractual arbitration to the extent such
contractual provision is not inconsistent with the
provisions of title 9, United States Code;
(2) require that a certain State's law shall govern
the reinsurance contract, disputes arising from the
reinsurance contract, or requirements of the
reinsurance contract;
(3) attempt to enforce a reinsurance contract on
terms different than those set forth in the reinsurance
contract, to the extent that the terms are not
inconsistent with this subtitle; or
(4) otherwise apply the laws of the State to
reinsurance agreements of ceding insurers not domiciled
in that State.
SEC. 10202. REGULATION OF REINSURER SOLVENCY.
(a) Domiciliary State Regulation.--If the State of domicile
of a reinsurer is an NAIC-accredited State or has financial
solvency requirements substantially similar to the requirements
necessary for NAIC accreditation, such State shall be solely
responsible for regulating the financial solvency of the
reinsurer.
(b) Nondomiciliary States.--
(1) Limitation on financial information
requirements.--If the State of domicile of a reinsurer
is an NAIC-accredited State or has financial solvency
requirements substantially similar to the requirements
necessary for NAIC accreditation, no other State may
require the reinsurer to provide any additional
financial information other than the information the
reinsurer is required to file with its domiciliary
State.
(2) Receipt of information.--No provision of this
section shall be construed as preventing or prohibiting
a State that is not the State of domicile of a
reinsurer from receiving a copy of any financial
statement filed with its domiciliary State.
SEC. 10203. DEFINITIONS.
For purposes of this subtitle, the following definitions
shall apply:
(1) Ceding insurer.--The term ``ceding insurer''
means an insurer that purchases reinsurance.
(2) Domiciliary state.--The terms ``State of
domicile'' and ``domiciliary State'' means, with
respect to an insurer or reinsurer, the State in which
the insurer or reinsurer is incorporated or entered
through, and licensed.
(3) Reinsurance.--The term ``reinsurance'' means the
assumption by an insurer of all or part of a risk
undertaken originally by another insurer.
(4) Reinsurer.--
(A) In general.--The term ``reinsurer'' means
an insurer to the extent that the insurer--
(i) is principally engaged in the
business of reinsurance;
(ii) does not conduct significant
amounts of direct insurance as a
percentage of its net premiums; and
(iii) is not engaged in an ongoing
basis in the business of soliciting
direct insurance.
(B) Determination.--A determination of
whether an insurer is a reinsurer shall be made
under the laws of the State of domicile in
accordance with this paragraph.
(5) State.--The term ``State'' includes any State of
the United States, the District of Columbia, the
Commonwealth of Puerto Rico, Guam, the Northern Mariana
Islands, the Virgin Islands, and American Samoa.
Subtitle C--Rule of Construction.
SEC. 10301. RULE OF CONSTRUCTION.
Nothing in this title or amendments to this title shall be
construed to modify, impair, or supersede the application of
the antitrust laws. Any implied or actual conflict between this
title and any amendments to this title and the antitrust laws
shall be resolved in favor of the operation of the antitrust
laws.
SEC. 10302. SEVERABILITY.
If any section or subsection of this title, or any
application of such provision to any person or circumstance, is
held to be unconstitutional, the remainder of this title, and
the application of the provision to any other person or
circumstance, shall not be affected.
----------
29. An Amendment To Be Offered by Representative Wittman, Robert of
Virginia or His Designee, Debatable for 10 Minutes
Add at the end the following new title (and update the table
of contents accordingly):
TITLE VII--BANK LOTTERY PROVISIONS CLARIFICATION ACT
SECTION 9001. SHORT TITLE.
This Act may be cited as the ``Bank Lottery Provisions
Clarification Act of 2009''.
SEC. 9002. AMENDMENTS CLARIFYING APPLICATION OF VARIOUS BANKING LAWS.
(a) Revised Statutes.--Subsection (d) of section 5136B of the
Revised Statutes of the United States (12 U.S.C. 25a(d)) is
amended to read as follows:
``(d) Exceptions.--No provision of this section shall be
construed as prohibiting a national bank from--
``(1) accepting deposits or cashing or otherwise
handling checks or other negotiable instruments, or
performing other lawful banking services for a State
operating a lottery, or for an officer or employee of
that State who is charged with the administration of
the lottery; or
``(2) announcing, advertising, publicizing, or
dealing in any lottery where the money or credit
obtained in connection with such lottery primarily
benefits 1 or more charitable organizations exempt from
taxation under section 501(c)(3) of the Internal
Revenue Code of 1986.''.
(b) Federal Reserve Act.--Subsection (d) of section 9A of the
Federal Reserve Act (12 U.S.C. 339(d)) is amended to read as
follows:
``(d) Exceptions.--No provision of this section shall be
construed as prohibiting a State member bank from--
``(1) accepting deposits or cashing or otherwise
handling checks or other negotiable instruments, or
performing other lawful banking services for a State
operating a lottery, or for an officer or employee of
that State who is charged with the administration of
the lottery; or
``(2) announcing, advertising, publicizing, or
dealing in any lottery where the money or credit
obtained in connection with such lottery primarily
benefits 1 or more charitable organizations exempt from
taxation under section 501(c)(3) of the Internal
Revenue Code of 1986.''.
(c) Federal Deposit Insurance Act.--Subsection (d) of section
20 of the Federal Deposit Insurance Act (12 U.S.C. 1829a(d)) is
amended to read as follows:
``(d) Exceptions.--No provision of this section shall be
construed as prohibiting a State nonmember insured bank from--
``(1) accepting deposits or cashing or otherwise
handling checks or other negotiable instruments, or
performing other lawful banking services for a State
operating a lottery, or for an officer or employee of
that State who is charged with the administration of
the lottery; or
``(2) announcing, advertising, publicizing, or
dealing in any lottery where the money or credit
obtained in connection with such lottery primarily
benefits 1 or more charitable organizations exempt from
taxation under section 501(c)(3) of the Internal
Revenue Code of 1986.''.
(d) Home Owners' Loan Act.--Paragraph (4) of section 4(e) of
the Home Owners' Loan Act ( U.S.C. 1463(e)(4)) is amended to
read as follows:
``(4) Exceptions.--No provision of this subsection
shall be construed as prohibiting any savings
association from--
``(A) accepting deposits or cashing or
otherwise handling checks or other negotiable
instruments, or performing other lawful banking
services for a State operating a lottery, or
for an officer or employee of that State who is
charged with the administration of the lottery;
or
``(B) announcing, advertising, publicizing,
or dealing in any lottery where the money or
credit obtained in connection with such lottery
primarily benefits 1 or more charitable
organizations exempt from taxation under
section 501(c)(3) of the Internal Revenue Code
of 1986.''.
----------
30. An Amendment To Be Offered by Representative Minnick, Walt of Idaho
or His Designee, Debatable for 10 Minutes
Page 787, strike line 17 and all that follows through page
788, line 10 and insert the following:
``(c) Unfair, Deceptive, or Abusive Acts or Practices
Define.--
(1) Unfair acts or practices.--Any determination by
the Director and the Agency that an act or practice is
unfair must be consistent with the standard set forth
under section 5 of the Federal Trade Commission Act and
with the December 17, 1980, policy statement adopted by
the Federal Trade Commission pursuant to section 5 of
the Federal Trade Commission act.
(2) Deceptive acts or practices.--Any determination
by the Director and the Agency that an act or practice
is deceptive must be consistent with the October 14,
1983, policy statement adopted by the Federal Trade
Commission pursuant to section 5 of the Federal Trade
Commission Act.
(3) Abusive acts or practices.--The Director and the
Agency may determine that an act or practice is abusive
only if the Director finds that--
(i) the act or practice is reasonably likely to
result in a consumer's inability to understand the
terms and conditions of a financial product or service
or to protect their own interests in selecting or using
a financial product or service; and
(ii) the widespread use of the act or practice is
reasonably likely to contribute to instability and
greater risk in the financial system.
----------
31. An Amendment To Be Offered by Representative Bartlett, Roscoe of
Maryland or His Designee, Debatable for 10 Minutes
Page 825, after line 12, insert the following new section:
SEC. 4313. REQUIREMENTS FOR STATE-LICENSED LOAN ORIGINATORS.
Paragraph (2) of section 1505(b) of the S.A.F.E. Mortgage
Licensing Act of 2008 (12 U.S.C. 5104(b)(2)) is amended by
inserting after and below subparagraph (B), the following:
``Notwithstanding the preceding sentence, a State loan
originator supervisory authority may provide for review
of applicants and for granting exceptions, on a case-
by-case basis, to the minimum standard under
subparagraph (B), but only to the extent that any such
exception otherwise complies with the purposes of this
title.''.
----------
32. An Amendment To Be Offered by Representative Schakowsky, Janice of
Illinois or Her Designee, Debatable for 10 Minutes
Page 825, after line 12, insert the following new section:
SEC. 4413. TREATMENT OF REVERSE MORTGAGES.
(a) In General.--The Director shall examine the practices of
covered persons in connection with any reverse mortgage
transaction (as defined in section 103(bb) of the Truth in
Lending Act (15 U.S.C. 1602)) and shall prescribe regulations
identifying any acts or practices as unlawful, unfair,
deceptive, or abusive in connection with a reverse mortgage
transaction or the offering of a reverse mortgage.
(b) Regulations.--In prescribing regulations under subsection
(a), the Director shall ensure that such regulations shall--
(1) include requirements for--
(A) the purpose of preventing unlawful,
unfair, deceptive or abusive acts and practices
in connection with a reverse mortgage
transaction; and
(B) the purpose of providing timely,
appropriate, and effective disclosure to
consumers in connection with a reverse mortgage
transaction that are consistent with
requirements prescribed by the Director in
connection with other consumer mortgage
products or services under this title;
(2) with respect to the requirements under paragraph
(1), be consistent with requirements prescribed by the
Director in connection with other consumer mortgage
products or services under this title; and
(3) provide for an integrated disclosure standard and
model disclosures for reverse mortgage transactions,
consistent with section 4302(d), that combines the
relevant disclosures required under the Truth in
Lending Act (15 U.S.C. 1601 et seq.) and the Real
Estate Settlement Procedures Act, with the disclosures
required to be provided to consumers for Home Equity
Conversion Mortgages under section 255 of the National
Housing Act.
(c) Consultation.--In connection with the issuance of any
regulations under this section, the Director shall consult with
the Federal banking agencies, State bank supervisors, the
Federal Trade Commission, and the Department of Housing and
Urban Development, as appropriate, to ensure that any proposed
regulation--
(1) imposes substantially similar requirements on all
covered persons; and
(2) is consistent with prudential, consumer
protection, civil rights, market or systemic objectives
administered by such agencies or supervisors.
(d) Deadline for Rulemaking.--The Director shall commence the
rulemaking required under subsection (a) not later than 12
months after the date of the enactment of this Act.
----------
33. An Amendment To Be Offered by Representative Kilroy, Mary Jo of
Ohio or Her Designee, Debatable for 10 Minutes
Page 289, line 10, insert ``only'' after ``Fund''.
----------
34. An Amendment To Be Offered by Representative Murphy, Scott of New
York or His Designee, Debatable for 10 Minutes
Page 176, strike lines 12 through 14 (and redesignate
remaining paragraphs accordingly).
Add at the end of the bill the following:
TITLE VII--INTEREST-BEARING TRANSACTION ACCOUNTS AUTHORIZED
SEC. 9001. INTEREST-BEARING TRANSACTION ACCOUNTS AUTHORIZED.
(a) Repeal of Prohibition on Payment of Interest on Demand
Deposits.--
(1) Federal reserve act.--Section 19(i) of the
Federal Reserve Act (12 U.S.C. 371a) is amended to read
as follows:
``(i) [Repealed]''.
(2) Home owners' loan act.--The first sentence of
section 5(b)(1)(B) of the Home Owners' Loan Act (12
U.S.C. 1464(b)(1)(B)) is amended by striking ``savings
association may not--'' and all that follows through
``(ii) permit any'' and inserting ``savings association
may not permit any''.
(3) Federal deposit insurance act.--Section 18(g) of
the Federal Deposit Insurance Act (12 U.S.C. 1828(g))
is amended to read as follows:
``(g) [Repealed]''.
(b) Effective Date.--The amendments made by subsection (a)
shall take effect at the end of the 1-year period beginning on
the date of the enactment of this Act.
----------
35. An Amendment To Be Offered by Representative Minnick, Walt of Idaho
or His Designee, Debatable for 20 Minutes
Strike title IV and insert the following:
TITLE IV--CONSUMER FINANCIAL PROTECTION ACT
SECTION 4001. SHORT TITLE.
This title may be cited as the ``Consumer Financial
Protection Act of 2009''.
SEC. 4002. CONSUMER FINANCIAL PROTECTION COUNCIL.
(a) Establishment.--There is hereby established the Consumer
Financial Protection Council (hereinafter in this title
referred to as the ``Council'') as an independent establishment
of the executive branch, which shall consist of--
(1) the Chairman of the Board of Governors of the
Federal Reserve System;
(2) the Comptroller of the Currency;
(3) the Chairperson of the Board of Directors of the
Federal Deposit Insurance Corporation;
(4) the Director of the Office of Thrift Supervision;
(5) the Administrator of the National Credit Union
Administration;
(6) the Secretary of the Department of Housing and
Urban Development;
(7) the Secretary of the Treasury;
(8) the Chairman of the Securities and Exchange
Commission;
(9) the Chairman of the Commodities Futures Trading
Commission;
(10) the Chairman of the Federal Trade Commission;
and
(11) one individual selected by the State Advisory
Committee established under section 4005.
(b) Staffing.--The Secretary of the Treasury shall provide
appropriate staffing for the Council.
SEC. 4003. CONSUMER FINANCIAL PROTECTION SUBCOMMITTEE.
(a) Establishment.--There is hereby established within the
Council the Consumer Financial Protection Subcommittee
(hereinafter in this title referred to as the ``CFPS''), which
shall consist of the members of the Council.
(b) Purpose.--The purpose of the CFPS is to ensure that all
providers of a financial product or service to consumers are
subject to meaningful and uniform consumer protection
requirements, and that functionally equivalent products are
subject to equivalent consumer protection standards.
(c) Chairmanship.--
(1) Initial chairman.--The Chairman of the Federal
Trade Commission shall serve as the Chairman of the
CFPS for the 2-year period beginning on the date of the
enactment of this title.
(2) Subsequent selection.--After the 2-year period
described under paragraph (1), the President shall
appoint the Chairman of the CFPS from among the members
of the CFPS. The term of the Chairmanship shall be 2
years.
(d) Voting.--Decisions of the CFPS shall be made by a
majority vote of the members of the CFPS.
(e) Duties.--The CFPS shall review existing consumer
protection regulations and issue new or revised regulations
where needed to prevent unfair or deceptive practices.
(f) Procedures for Proposing and Issuing Regulations.--
(1) Proposal.--Any member of the CFPS may propose
that the CFPS consider the need for the modification of
an existing regulation or for the issuing of a new
regulation with respect to a particular consumer
financial product or service. After such proposal is
made, the CFPS shall develop an analysis of the
proposal and prepare a report that either--
(A) recommends that no action be taken; or
(B) recommends the modification of existing
regulations or the issuing of new regulations.
(2) Publication.--With respect to a report prepared
under paragraph (1)--
(A) if the CFPS recommends that no action be
taken, the CFPS shall make a copy of the report
publicly available; and
(B) if the CFPS recommends the modification
of existing regulations or the issuing of new
regulations, the CFPS shall publish such report
in the Federal Register and solicit public
comments on such recommendation, pursuant to
the Administrative Procedure Act.
(3) Modification or acceptance.--With respect to each
recommendation described under paragraph (2)(B) for the
modification of existing regulations or the issuing of
new regulations, after the CFPS has considered the
public comments on such recommendation, the CFPS shall
vote on whether such recommendations should be
withdrawn, modified, or published as a final
regulation.
(4) Regulations issued by cfps control.--
Notwithstanding any other provision of law, to the
extent that any other regulation conflicts with a
regulation issued by the CFPS under this subsection,
such other regulation shall have no force or effect to
the extent of such conflict.
(5) Proposals by state advisory committee.--
(A) In general.--Any proposal made under
paragraph (1) by the member of the CFPS
selected by the State Advisory Committee shall
be accompanied by a certification from such
member stating that more than half of the
States support such proposal.
(B) Method of determination.--For purposes of
this paragraph, the State Advisory Committee
shall determine the method for determining if a
State supports a proposal.
(6) Report on approval or opposition.--Each member of
the CFPS shall issue an annual report to the Congress
containing a detailed explanation, for each proposal
made under paragraph (1), why such member supported or
opposed such proposal.
(7) Procedures to be applied to all rulemakings.--The
procedures under this subsection shall be used by the
CFPS when issuing any regulation under the authority of
this title.
(g) Consumer Financial Products or Services Expressly
Permitted by State or Federal Law.--
(1) Voting requirements.--Any votes taken by the CFPS
to prevent the offering of any consumer financial
product or service that is expressly permitted by State
or Federal law shall only be agreed to by a two-thirds
vote.
(2) Recommendations to the congress.--If the CFPS
determines a need to prevent the offering of any
consumer financial product or service expressly
permitted by State or Federal law, the CFPS shall issue
a report to the Congress containing such determination
and including--
(A) a description of the specific financial
product or service that the CFPS is
recommending the Congress should prevent from
being offered;
(B) an estimate of the amount of credit
provided by and the number of consumers using
any such financial product or service;
(C) a list of any States which have expressly
permitted any such financial product or
service;
(D) the identities of persons known by the
CFPS to be offering any such financial product
or service;
(E) an analysis of whether there are ample
other alternative reasonably priced financial
products or services available to meet
consumers' credit needs, and a description of
such alternative financial products or
services; and
(F) the basis and reasoning on which the CFPS
has based its recommendation.
(3) Definition.--For purposes of this subsection, the
term ``prevent the offering of any consumer financial
product or service'' shall mean taking any action that
could reasonably result in the direct or indirect
prohibition of, or materially interfere with the
ability of any person to offer, any consumer financial
product or service.
SEC. 4004. FINANCIAL INSTITUTIONS EXAMINATION COUNCIL.
Section 1004(a) of the Federal Financial Institutions
Examination Council Act of 1978 (12 U.S.C. 3303(a)) is amended
by inserting after ``established'' the following: ``as a
subcommittee within the Consumer Financial Protection
Council''.
SEC. 4005. STATE ADVISORY COMMITTEE.
There is hereby established within the Council the State
Advisory Committee, which shall consist of one representative
from each of the following:
(1) The Conference of State Bank Supervisors.
(2) The American Council of State Savings
Supervisors.
(3) The National Association of State Credit Union
Supervisors.
SEC. 4006. EQUALITY OF CONSUMER PROTECTION ENFORCEMENT
RESPONSIBILITIES.
With respect to each consumer protection agency, the
enforcement of the provisions of the consumer protection laws
under such agency's jurisdiction shall be of equal importance
to such agency as the enforcement of the provisions of other
laws under such agency's jurisdiction.
SEC. 4007. DIRECTOR OF THE CONSUMER FINANCIAL PROTECTION DIVISION.
(a) Establishment.--There is hereby established within each
consumer protection agency a position of Director of the
Consumer Financial Protection Division.
(b) Compensation.--With respect to a consumer protection
agency, the Director of the Consumer Financial Protection
Division shall be compensated in an amount no less than the
amount of compensation provided to the head of other
subdivisions of such agency of a comparable size.
(c) Direct Reporting.--Each Director of the Consumer
Financial Protection Division established under subsection (a)
shall report directly to the head of the agency within which
such Director is located.
(d) Annual Report to the Congress.--Each consumer protection
agency shall issue an annual report to the Congress detailing
the activities of the Director of the Consumer Financial
Protection Division and how such activities advanced the
agency's consumer protection functions.
SEC. 4008. PROHIBITING UNFAIR OR DECEPTIVE ACTS OR PRACTICES.
(a) In General.--Each consumer protection agency may prevent
a person from committing or engaging in an unfair or deceptive
act or practice in connection with any transaction with a
consumer for a consumer financial product or service under such
agency's jurisdiction.
(b) Rulemaking.--Each consumer protection agency may
prescribe regulations identifying as unlawful, unfair, or
deceptive acts or practices in connection with any transaction
with a consumer for a consumer financial product or service
under such agency's jurisdiction.
(c) Referral to CFPS.--With respect to each regulation issued
pursuant to subsection (b), the consumer protection agency
issuing such regulation shall propose such regulation to the
CFPS under section 4003(f), unless the CFPS already has a
substantially similar proposal under consideration.
(d) Unfairness.--
(1) In general.--A consumer protection agency shall
have no authority under this section to declare an act
or practice in connection with a transaction with a
consumer for a consumer financial product or service to
be unlawful on the grounds that such act or practice is
unfair unless such agency has a reasonable basis to
conclude that the act or practice causes or is likely
to cause substantial injury to consumers which is not
reasonably avoidable by consumers and such substantial
injury is not outweighed by countervailing benefits to
consumers or to competition.
(2) Existing published guidelines as factor.--In
determining whether an act or practice is unfair, a
consumer protection agency shall consider established
public policies and regulations, interpretations,
guidance, and staff commentaries issued by the consumer
protection agencies under the consumer protection laws
they enforce.
(e) Definitions.--For purposes of this section, the terms
``unfair'' and ``deceptive'' shall have the meanings given such
terms under the Federal Trade Commission Act (15 U.S.C. 41 et
seq.).
SEC. 4009. ADOPTING OPERATIONAL STANDARDS TO DETER UNFAIR OR DECEPTIVE
PRACTICES.
(a) Authority To Prescribe Standards.--The consumer
protection agencies shall prescribe standards applicable to
covered persons to deter and detect unfair or deceptive acts or
practices in the provision of consumer financial products or
services under such agency's jurisdiction, including standards
for--
(1) background checks for principals, officers,
directors, or key personnel of the covered person;
(2) registration, licensing, or certification;
(3) bond or other appropriate financial requirements
to provide reasonable assurance of the ability of the
covered person to perform its obligations to consumers;
(4) creating and maintaining records of transactions
or accounts; and
(5) procedures and operations of the covered person
relating to the provision of, or maintenance of
accounts for, consumer financial products or services.
(b) CFPS Authority to Issue Regulations.--The CFPS may issue
regulations establishing minimum standards under this section
for any class of covered persons.
(c) Exception for Enforcement of Gramm-Leach-Bliley Privacy
Laws Against Insurers.--Neither the consumer protection
agencies nor the CFPS shall have authority to issue or enforce
regulations with respect to authorities that are granted to
State insurance regulators under section 505(a)(6) of the
Gramm-Leach-Bliley Act.
SEC. 4010. PRESUMPTION OF ABILITY TO REPAY.
(a) Prohibition on Residential Mortgage Loans That Won't
Reasonably Be Repaid.--
(1) In general.--No creditor shall make a residential
mortgage loan unless it has a reasonable basis for
determining that the consumer can repay the loan.
(2) Basis for determination.--A determination under
this subsection of a consumer's ability to repay a
residential mortgage loan shall include consideration
of the consumer's credit history, current income,
expected income the consumer is reasonably assured of
receiving, current obligations, debt-to-income ratio,
employment status, and other financial resources other
than the consumer's equity in the dwelling or real
property that secures repayment of the loan.
(b) Exemption for Certain Model Terms and Conditions.--
Subsection (a) shall not apply to residential mortgage loans
containing the model terms and conditions contained in
regulations issued by the Council under subsection (c).
(c) Procedure for Adopting Model Terms and Conditions.--
(1) In general.--Not later than 1 years after the
date of the enactment of this title, the Council shall
issue regulations containing model terms and conditions
for residential mortgage loans, for purposes of
subsection (b).
(2) Voting.--The Council may only issue a regulation
under paragraph (1)--
(A) by a majority vote of the Council's
members; and
(B) in a vote where each member of the
Council casts a vote.
(3) Revision of model terms and conditions.--The
Council shall update regulations issued under this
subsection from time to time as appropriate.
(4) Rulemaking procedures.--In issuing any regulation
under this subsection, the Council shall, to the extent
practicable, follow the procedures set forth under
section 4003(f) for the consideration of proposals by
the CFPS.
(d) Enforcement.--The prohibition under subsection (a) shall
be enforced by each member of the Council with jurisdiction
over the provision of residential mortgage loans.
SEC. 4011. EXAMINATIONS BY CONSUMER PROTECTION AGENCIES.
(a) In General.--Each consumer protection agency shall carry
out regular examinations of covered persons regulated by such
agency.
(b) Scope of Examinations.--Examinations carried out pursuant
to subsection (a) shall be comparable to those examinations
carried out by the Federal banking agencies of insured
depository institutions.
SEC. 4012. CONSUMER RIGHTS TO ACCESS INFORMATION.
(a) In General.--Subject to regulations prescribed by the
consumer protection agencies, a covered person shall make
available to a consumer, in an electronic form usable by the
consumer, information in the control or possession of the
covered person concerning the consumer financial product or
service that the consumer obtained from such covered person
including information relating to any transaction, series of
transactions, or to the account, including charges and usage
data.
(b) Exceptions.--A covered person shall not be required by
this section to make available to the consumer--
(1) any confidential commercial information,
including an algorithm used to derive credit scores or
other risk scores or predictors;
(2) any information collected by the covered person
for the purpose of preventing fraud or money
laundering, or detecting, or making any report
regarding other unlawful or potentially unlawful
conduct;
(3) any information required to be kept confidential
by any other law; or
(4) any information that the covered person cannot
retrieve in the ordinary course of its business with
respect to that information.
(c) No Duty To Maintain Records.--No provision of this
section shall be construed as imposing any duty on a covered
person to maintain or keep any information about a consumer.
(d) Standardized Formats for Data.--The consumer protection
agencies, by regulation, shall prescribe standards applicable
to covered persons to promote the development and use of
standardized formats for information, including through the use
of machine readable files, to be made available to consumers
under this section.
SEC. 4013. PROHIBITED ACTS.
It shall be unlawful for any person to--
(1) advertise, market, offer, sell, enforce, or
attempt to enforce, any term, agreement, change in
terms, fee or charge in connection with a consumer
financial product or service that is not in conformity
with this title and applicable regulation prescribed or
order issued by the consumer protection agencies, the
CFPS, or the Council;
(2) fail or refuse to permit access to or copying of
records, or fail or refuse to establish or maintain
records, or fail or refuse to make reports or provide
information to a consumer protection agency, the CFPS,
or the Council, as required by this title, a consumer
protection law or any regulation prescribed or order
issued by a consumer protection agency, the CFPS, or
the Council under this title or pursuant to any such
authority; or
(3) knowingly or recklessly provide substantial
assistance to another person in violation of the
provisions of section 4008, or any regulation
prescribed or order issued under such section, and any
such person shall be deemed to be in violation of that
section to the same extent as the person to whom such
assistance is provided.
SEC. 4014. STATE ATTORNEYS GENERAL RIGHT TO SUE.
No provision of this title shall be construed to limit the
applicability or the effect of the decision of the Supreme
Court in Cuomo v. Clearing House Assn., L.L.C., 557 U.S. ___
(2009).
SEC. 4015. ENFORCEMENT.
(a) Definitions.--For purposes of this section, the following
definitions shall apply:
(1) Civil investigative demand and demand.--The terms
``civil investigative demand'' and ``demand'' mean any
demand issued by a consumer protection agency.
(2) Consumer protection agency.--The term ``consumer
protection agency'' means--
(A) the appropriate Federal banking agency
(as such term is defined in section 3(q) of the
Federal Deposit Insurance Act), with respect to
entities regulated by the appropriate Federal
banking agencies;
(B) the National Credit Union Administration,
with respect to a credit union;
(C) the Securities and Exchange Commission,
with respect to an entity regulated by such
Commission;
(D) the Commodity Futures Trading Commission,
with respect to an entity regulated by such
Commission; and
(E) the Federal Trade Commission, with
respect to any entity not regulated by the
appropriate Federal banking agencies, the
National Credit Union Administration, the
Securities and Exchange Commission, or the
Commodity Futures Trading Commission.
(3) Consumer protection agency investigation.--The
term ``consumer protection agency investigation'' means
any inquiry conducted by a consumer protection agency
investigator for the purpose of ascertaining whether
any person is or has been engaged in any conduct that
violates this title, any consumer protection law, or
any regulation prescribed or order issued by the
consumer protection agencies, the CFPS, or the Council
under this title.
(4) Consumer protection agency investigator.--The
term ``consumer protection agency investigator'' means
any attorney or investigator employed by a consumer
protection agency who is charged with the duty of
enforcing or carrying into effect any provisions of
this title, any consumer protection law, or any
regulation prescribed or order issued under this title
or pursuant to any such authority by the consumer
protection agency, the CFPS, or the Council.
(5) Custodian.--The term ``custodian'' means the
custodian or any deputy custodian designated by a
consumer protection agency.
(6) Documentary material.--The term ``documentary
material'' includes the original or any copy of any
book, record, report, memorandum, paper, communication,
tabulation, chart, or other document.
(7) Violation.--The term ``violation'' means any act
or omission that, if proved, would constitute a
violation of any provision of this title, any consumer
protection law, or of any regulation prescribed or
order issued by a consumer protection agency, the CFPS,
of the Council under this title or pursuant to any such
authority.
(b) Investigations and Administrative Discovery.--
(1) Subpoenas.--
(A) In general.--A consumer protection agency
or a consumer protection agency investigator
may issue subpoenas for the attendance and
testimony of witnesses and the production of
relevant papers, books, documents, or other
material in connection with hearings under this
title.
(B) Failure to obey.--In case of contumacy or
refusal to obey a subpoena issued pursuant to
this paragraph and served upon any person, the
district court of the United States for any
district in which such person is found,
resides, or transacts business, upon
application by a consumer protection agency or
a consumer protection agency investigator and
after notice to such person, shall have
jurisdiction to issue an order requiring such
person to appear and give testimony or to
appear and produce documents or other material,
or both.
(C) Contempt.--Any failure to obey an order
of the court under this subsection may be
punished by the court as a contempt thereof.
(2) Demands.--
(A) In general.--Whenever a consumer
protection agency has reason to believe that
any person may be in possession, custody, or
control of any documentary material or tangible
things, or may have any information, relevant
to a violation, a consumer protection agency
may, before the institution of any proceedings
under this title or under any consumer
protection law, issue in writing, and cause to
be served upon such person, a civil
investigative demand requiring such person to--
(i) produce such documentary material
for inspection and copying or
reproduction;
(ii) submit such tangible things;
(iii) file written reports or answers
to questions;
(iv) give oral testimony concerning
documentary material or other
information; or
(v) furnish any combination of such
material, answers, or testimony.
(B) Requirements.--Each civil investigative
demand shall state the nature of the conduct
constituting the alleged violation which is
under investigation and the provision of law
applicable to such violation.
(C) Production of documents.--Each civil
investigative demand for the production of
documentary material shall--
(i) describe each class of
documentary material to be produced
under the demand with such definiteness
and certainty as to permit such
material to be fairly identified;
(ii) prescribe a return date or dates
which will provide a reasonable period
of time within which the material so
demanded may be assembled and made
available for inspection and copying or
reproduction; and
(iii) identify the custodian to whom
such material shall be made available.
(D) Production of things.--Each civil
investigative demand for the submission of
tangible things shall--
(i) describe each class of tangible
things to be submitted under the demand
with such definiteness and certainty as
to permit such things to be fairly
identified;
(ii) prescribe a return date or dates
which will provide a reasonable period
of time within which the things so
demanded may be assembled and
submitted; and
(iii) identify the custodian to whom
such things shall be submitted.
(E) Demand for written reports or answers.--
Each civil investigative demand for written
reports or answers to questions shall--
(i) propound with definiteness and
certainty the reports to be produced or
the questions to be answered;
(ii) prescribe a date or dates at
which time written reports or answers
to questions shall be submitted; and
(iii) identify the custodian to whom
such reports or answers shall be
submitted.
(F) Oral testimony.--Each civil investigative
demand for the giving of oral testimony shall--
(i) prescribe a date, time, and place
at which oral testimony shall be
commenced; and
(ii) identify a consumer protection
agency investigator who shall conduct
the investigation and the custodian to
whom the transcript of such
investigation shall be submitted.
(G) Service.--
(i) Any civil investigative demand
may be served by any consumer
protection agency investigator at any
place within the territorial
jurisdiction of any court of the United
States.
(ii) Any such demand or any
enforcement petition filed under this
section may be served upon any person
who is not found within the territorial
jurisdiction of any court of the United
States, in such manner as the Federal
Rules of Civil Procedure prescribe for
service in a foreign nation.
(iii) To the extent that the courts
of the United States have authority to
assert jurisdiction over such person
consistent with due process, the United
States District Court for the District
of Columbia shall have the same
jurisdiction to take any action
respecting compliance with this section
by such person that such district court
would have if such person were
personally within the jurisdiction of
such district court.
(H) Method of service.--Service of any civil
investigative demand or any enforcement
petition filed under this section may be made
upon a person, including any legal entity, by--
(i) delivering a duly executed copy
of such demand or petition to the
individual or to any partner, executive
officer, managing agent, or general
agent of such person, or to any agent
of such person authorized by
appointment or by law to receive
service of process on behalf of such
person;
(ii) delivering a duly executed copy
of such demand or petition to the
principal office or place of business
of the person to be served; or
(iii) depositing a duly executed copy
in the United States mails, by
registered or certified mail, return
receipt requested, duly addressed to
such person at its principal office or
place of business.
(I) Proof of service.--
(i) A verified return by the
individual serving any civil
investigative demand or any enforcement
petition filed under this section
setting forth the manner of such
service shall be proof of such service.
(ii) In the case of service by
registered or certified mail, such
return shall be accompanied by the
return post office receipt of delivery
of such demand or enforcement petition.
(J) Production of documentary material.--The
production of documentary material in response
to a civil investigative demand shall be made
under a sworn certificate, in such form as the
demand designates, by the person, if a natural
person, to whom the demand is directed or, if
not a natural person, by any person having
knowledge of the facts and circumstances
relating to such production, to the effect that
all of the documentary material required by the
demand and in the possession, custody, or
control of the person to whom the demand is
directed has been produced and made available
to the custodian.
(K) Submission of tangible things.--The
submission of tangible things in response to a
civil investigative demand shall be made under
a sworn certificate, in such form as the demand
designates, by the person to whom the demand is
directed or, if not a natural person, by any
person having knowledge of the facts and
circumstances relating to such production, to
the effect that all of the tangible things
required by the demand and in the possession,
custody, or control of the person to whom the
demand is directed have been submitted to the
custodian.
(L) Separate answers.--Each reporting
requirement or question in a civil
investigative demand shall be answered
separately and fully in writing under oath,
unless it is objected to, in which event the
reasons for the objection shall be stated in
lieu of an answer, and it shall be submitted
under a sworn certificate, in such form as the
demand designates, by the person, if a natural
person, to whom the demand is directed or, if
not a natural person, by any person responsible
for answering each reporting requirement or
question, to the effect that all information
required by the demand and in the possession,
custody, control, or knowledge of the person to
whom the demand is directed has been submitted.
(M) Testimony.--
(i) Procedure.--
(I) Oath and recordation.--
Any consumer protection agency
investigator before whom oral
testimony is to be taken shall
put the witness on oath or
affirmation and shall
personally, or by any
individual acting under his
direction and in his presence,
record the testimony of the
witness.
(II) Transcriptions.--The
testimony shall be taken
stenographically and
transcribed.
(III) Copy to custodian.--
After the testimony is fully
transcribed, the consumer
protection agency investigator
before whom the testimony is
taken shall promptly transmit a
copy of the transcript of the
testimony to the custodian.
(ii) Parties present.--Any consumer
protection agency investigator before
whom oral testimony is to be taken
shall exclude from the place where the
testimony is to be taken all other
persons except the person giving the
testimony, his or her attorney, the
officer before whom the testimony is to
be taken, and any stenographer taking
such testimony.
(iii) Location.--The oral testimony
of any person taken pursuant to a civil
investigative demand shall be taken in
the judicial district of the United
States in which such person resides, is
found, or transacts business, or in
such other place as may be agreed upon
by the consumer protection agency
investigator before whom the oral
testimony of such person is to be taken
and such person.
(iv) Attorney representation.--
(I) In general.--Any person
compelled to appear under a
civil investigative demand for
oral testimony pursuant to this
section may be accompanied,
represented, and advised by an
attorney.
(II) Confidential advice.--
The attorney may advise the
person summoned, in confidence,
either upon the request of such
person or upon the initiative
of the attorney, with respect
to any question asked of such
person.
(III) Objections.--The person
summoned or the attorney may
object on the record to any
question, in whole or in part,
and shall briefly state for the
record the reason for the
objection.
(IV) Refusal to answer.--An
objection may properly be made,
received, and entered upon the
record when it is claimed that
the person summoned is entitled
to refuse to answer the
question on grounds of any
constitutional or other legal
right or privilege, including
the privilege against self-
incrimination, but such person
shall not otherwise object to
or refuse to answer any
question, and shall not
otherwise interrupt the oral
examination, directly or
through such person's attorney.
(V) Petition for order.--If
such person refuses to answer
any question, a consumer
protection agency may petition
the district court of the
United States pursuant to this
section for an order compelling
such person to answer such
question.
(VI) Basis for compelling
testimony.--If such person
refuses to answer any question
on grounds of the privilege
against self-incrimination, the
testimony of such person may be
compelled in accordance with
the provisions of section 6004
of title 18, United States
Code.
(v) Transcripts.--
(I) Right to examine.--After
the testimony of any witness is
fully transcribed, the consumer
protection agency investigator
shall afford the witness (who
may be accompanied by an
attorney) a reasonable
opportunity to examine the
transcript.
(II) Reading the
transcript.--The transcript
shall be read to or by the
witness, unless such
examination and reading are
waived by the witness.
(III) Request for changes.--
Any changes in form or
substance which the witness
desires to make shall be
entered and identified upon the
transcript by the consumer
protection agency investigator
with a statement of the reasons
given by the witness for making
such changes.
(IV) Signature.--The
transcript shall be signed by
the witness, unless the witness
in writing waives the signing,
is ill, cannot be found, or
refuses to sign.
(V) Consumer protection
agency action in lieu of
signature.--If the transcript
is not signed by the witness
during the 30-day period
following the date upon which
the witness is first afforded a
reasonable opportunity to
examine it, the consumer
protection agency investigator
shall sign the transcript and
state on the record the fact of
the waiver, illness, absence of
the witness, or the refusal to
sign, together with any reasons
given for the failure to sign.
(vi) Certification by investigator.--
The consumer protection agency
investigator shall certify on the
transcript that the witness was duly
sworn by the investigator and that the
transcript is a true record of the
testimony given by the witness, and the
consumer protection agency investigator
shall promptly deliver the transcript
or send it by registered or certified
mail to the custodian.
(vii) Copy of transcript.--The
consumer protection agency investigator
shall furnish a copy of the transcript
(upon payment of reasonable charges for
the transcript) to the witness only,
except that the consumer protection
agency may for good cause limit such
witness to inspection of the official
transcript of his testimony.
(viii) Witness fees.--Any witness
appearing for the taking of oral
testimony pursuant to a civil
investigative demand shall be entitled
to the same fees and mileage which are
paid to witnesses in the district
courts of the United States.
(3) Confidential treatment of demand material.--
(A) In general.--Materials received as a
result of a civil investigative demand shall be
subject to requirements and procedures
regarding confidentiality, in accordance with
regulations established by the consumer
protection agency.
(B) Disclosure to congress.--No regulation
established by a consumer protection agency
regarding the confidentiality of materials
submitted to, or otherwise obtained by, the
consumer protection agency shall be intended to
prevent disclosure to either House of Congress
or to an appropriate committee of the Congress,
except that the consumer protection agency may
prescribe regulations allowing prior notice to
any party that owns or otherwise provided the
material to the consumer protection agency and
has designated such material as confidential.
(4) Petition for enforcement.--
(A) In general.--Whenever any person fails to
comply with any civil investigative demand duly
served upon such person under this section, or
whenever satisfactory copying or reproduction
of material requested pursuant to the demand
cannot be accomplished and such person refuses
to surrender such material, the consumer
protection agency, through such officers or
attorneys as it may designate, may file, in the
district court of the United States for any
judicial district in which such person resides,
is found, or transacts business, and serve upon
such person, a petition for an order of such
court for the enforcement of this section.
(B) Service of process.--All process of any
court to which application may be made as
provided in this subsection may be served in
any judicial district.
(5) Petition for order modifying or setting aside
demand.--
(A) In general.--Not later than 20 days after
the service of any civil investigative demand
upon any person under subsection (b), or at any
time before the return date specified in the
demand, whichever period is shorter, or within
such period exceeding 20 days after service or
in excess of such return date as may be
prescribed in writing, subsequent to service,
by any consumer protection agency investigator
named in the demand, such person may file with
the consumer protection agency a petition for
an order by the consumer protection agency
modifying or setting aside the demand.
(B) Compliance during pendency.--The time
permitted for compliance with the demand in
whole or in part, as deemed proper and ordered
by the consumer protection agency, shall not
run during the pendency of such petition at the
consumer protection agency, except that such
person shall comply with any portions of the
demand not sought to be modified or set aside.
(C) Specific grounds.--Such petition shall
specify each ground upon which the petitioner
relies in seeking such relief, and may be based
upon any failure of the demand to comply with
the provisions of this section, or upon any
constitutional or other legal right or
privilege of such person.
(6) Custodial control.--At any time during which any
custodian is in custody or control of any documentary
material, tangible things, reports, answers to
questions, or transcripts of oral testimony given by
any person in compliance with any civil investigative
demand, such person may file, in the district court of
the United States for the judicial district within
which the office of such custodian is situated, and
serve upon such custodian, a petition for an order of
such court requiring the performance by such custodian
of any duty imposed upon such custodian by this section
or regulation prescribed by the consumer protection
agency.
(7) Jurisdiction of court.--
(A) In general.--Whenever any petition is
filed in any district court of the United
States under this section, such court shall
have jurisdiction to hear and determine the
matter so presented, and to enter such order or
orders as may be required to carry into effect
the provisions of this section.
(B) Appeal.--Any final order so entered shall
be subject to appeal pursuant to section 1291
of title 28, United States Code.
(c) Hearings and Adjudication Proceedings.--
(1) In general.--A consumer protection agency may
conduct hearings and adjudication proceedings with
respect to any person in the manner prescribed by
chapter 5 of title 5, United States Code in order to
ensure or enforce compliance with--
(A) the provisions of this title, including
any regulations prescribed by the consumer
protection agency under this title; and
(B) any other Federal law that the consumer
protection agency is authorized to enforce,
including a consumer protection law, and any
regulations or order prescribed thereunder,
unless such Federal law specifically limits the
consumer protection agency from conducting a
hearing or adjudication proceeding and only to
the extent of such limitation.
(2) Special rules for cease-and-desist proceedings.--
(A) Issuance.--
(i) Notice of charges.--If, in the
opinion of a consumer protection
agency, any covered person is engaging
or has engaged in an activity that
violates a law, regulation, or any
condition imposed in writing on the
person by the consumer protection
agency, the consumer protection agency
may issue and serve upon the person a
notice of charges with respect to such
violation.
(ii) Contents of notice.--The notice
shall contain a statement of the facts
constituting any alleged violation and
shall fix a time and place at which a
hearing will be held to determine
whether an order to cease-and-desist
there from should issue against the
person.
(iii) Time of hearing.--A hearing
under this subsection shall be fixed
for a date not earlier than 30 days nor
later than 60 days after service of
such notice unless an earlier or a
later date is set by the consumer
protection agency at the request of any
party so served.
(iv) Nonappearance deemed to be
consent to order.--Unless the party or
parties so served shall appear at the
hearing personally or by a duly
authorized representative, they shall
be deemed to have consented to the
issuance of the cease-and-desist order.
(v) Issuance of order.--In the event
of such consent, or if upon the record
made at any such hearing, the consumer
protection agency shall find that any
violation specified in the notice of
charges has been established, the
consumer protection agency may issue
and serve upon the person an order to
cease-and-desist from any such
violation or practice.
(vi) Includes requirement for
corrective action.--Such order may, by
provisions which may be mandatory or
otherwise, require the person to cease-
and-desist from the same, and, further,
to take affirmative action to correct
the conditions resulting from any such
violation.
(B) Effectiveness of order.--A cease-and-
desist order shall take effect at the end of
the 30-day period beginning on the date of the
service of such order upon the covered person
concerned (except in the case of a cease-and-
desist order issued upon consent, which shall
take effect at the time specified therein), and
shall remain effective and enforceable as
provided therein, except to such extent as it
is stayed, modified, terminated, or set aside
by action of the consumer protection agency or
a reviewing court.
(C) Decision and appeal.--
(i) Place of and procedures for
hearing.--Any hearing provided for in
this subsection shall be held in the
Federal judicial district or in the
territory in which the residence or
home office of the person is located
unless the person consents to another
place, and shall be conducted in
accordance with the provisions of
chapter 5 of title 5 of the United
States Code.
(ii) Time limit for decision.--After
such hearing, and within 90 days after
the consumer protection agency has
notified the parties that the case has
been submitted to it for final
decision, the consumer protection
agency shall--
(I) render its decision
(which shall include findings
of fact upon which its decision
is predicated) and shall issue;
and
(II) serve upon each party to
the proceeding an order or
orders consistent with the
provisions of this section.
Judicial review of any such
order shall be exclusively as
provided in this subsection.
(iii) Modification of order
generally.--Unless a petition for
review is timely filed in a court of
appeals of the United States, as
hereinafter provided in subparagraph
(D), and thereafter until the record in
the proceeding has been filed as so
provided, the consumer protection
agency may at any time, upon such
notice and in such manner as it shall
deem proper, modify, terminate, or set
aside any such order.
(iv) Modification of order after
filing record on appeal.--Upon such
filing of the record, the consumer
protection agency may modify,
terminate, or set aside any such order
with permission of the court.
(D) Appeal to court of appeals.--
(i) In general.--Any party to any
proceeding under this subsection may
obtain a review of any order served
pursuant to this subsection (other than
an order issued with the consent of the
person concerned) by the filing in the
court of appeals of the United States
for the circuit in which the principal
office of the covered person is
located, or in the United States Court
of Appeals for the District of Columbia
Circuit, within 30 days after the date
of service of such order, a written
petition praying that the order of the
consumer protection agency be modified,
terminated, or set aside.
(ii) Transmittal of copy to the
consumer protection agency.--A copy of
such petition shall be forthwith
transmitted by the clerk of the court
to the consumer protection agency, and
thereupon the consumer protection
agency shall file in the court the
record in the proceeding, as provided
in section 2112 of title 28, United
States Code.
(iii) Jurisdiction of court.--Upon
the filing of such petition, such court
shall have jurisdiction, which upon the
filing of the record shall except as
otherwise provided be exclusive, to
affirm, modify, terminate, or set
aside, in whole or in part, the order
of the consumer protection agency.
(iv) Scope of review.--Review of such
proceedings shall be had as provided in
chapter 7 of title 5, United States
Code.
(v) Finality.--The judgment and
decree of the court shall be final,
except that the same shall be subject
to review by the Supreme Court upon
certiorari, as provided in section 1254
of title 28, United States Code.
(E) No stay.--The commencement of proceedings
for judicial review under subparagraph (D)
shall not, unless specifically ordered by the
court, operate as a stay of any order issued by
the agency.
(3) Special rules for temporary cease-and-desist
proceedings.--
(A) Issuance.--
(i) In general.--Whenever the
consumer protection agency determines
that the violation specified in the
notice of charges served upon a person
pursuant to paragraph (2), or the
continuation thereof, is likely to
cause the person to be insolvent or
otherwise prejudice the interests of
consumers before the completion of the
proceedings conducted pursuant to
paragraph (2), the consumer protection
agency may issue a temporary order
requiring the covered person to cease-
and-desist from any such violation or
practice and to take affirmative action
to prevent or remedy such insolvency or
other condition pending completion of
such proceedings.
(ii) Other requirements.--Any
temporary order issued under this
paragraph may include any requirement
authorized under this section.
(iii) Effect date of order.--Any
temporary order issued under this
paragraph shall take effect upon
service upon the person and, unless set
aside, limited, or suspended by a court
in proceedings authorized by
subparagraph (B), shall remain
effective and enforceable pending the
completion of the administrative
proceedings pursuant to such notice and
until such time as the consumer
protection agency shall dismiss the
charges specified in such notice, or if
a cease-and-desist order is issued
against the person, until the effective
date of such order.
(B) Appeal.--Within 10 days after the person
concerned has been served with a temporary
cease-and-desist order, the person may apply to
the United States district court for the
judicial district in which the home office of
the covered person is located, or the United
States District Court for the District of
Columbia, for an injunction setting aside,
limiting, or suspending the enforcement,
operation, or effectiveness of such order
pending the completion of the administrative
proceedings pursuant to the notice of charges
served upon the person under paragraph (2), and
such court shall have jurisdiction to issue
such injunction.
(C) Incomplete or inaccurate records.--
(i) Temporary order.--If a notice of
charges served under paragraph (2)
specifies, on the basis of particular
facts and circumstances, that a
person's books and records are so
incomplete or inaccurate that the
consumer protection agency is unable to
determine the financial condition of
that person or the details or purpose
of any transaction or transactions that
may have a material effect on the
financial condition of that person, the
consumer protection agency may issue a
temporary order requiring--
(I) the cessation of any
activity or practice which gave
rise, whether in whole or in
part, to the incomplete or
inaccurate state of the books
or records; or
(II) affirmative action to
restore such books or records
to a complete and accurate
state, until the completion of
the proceedings under
paragraph(2)(A).
(ii) Effective period.--Any temporary
order issued under clause (i)--
(I) shall take effect upon
service; and
(II) unless set aside,
limited, or suspended by a
court in proceedings under
subparagraph (B), shall remain
in effect and enforceable until
the earlier of--
(aa) the completion
of the proceeding
initiated under
paragraph (2) in
connection with the
notice of charges; or
(bb) the date the
consumer protection
agency determines, by
examination or
otherwise, that the
person's books and
records are accurate
and reflect the
financial condition of
the person.
(4) Special rules for enforcement of orders.--
(A) In general.--The consumer protection
agency may in its discretion apply to the
United States district court within the
jurisdiction of which the principal office of
the covered person is located, for the
enforcement of any effective and outstanding
notice or order issued under this section, and
such court shall have jurisdiction and power to
order and require compliance herewith.
(B) Exception.--Except as otherwise provided
in this subsection, no court shall have
jurisdiction to affect by injunction or
otherwise the issuance or enforcement of any
notice or order or to review, modify, suspend,
terminate, or set aside any such notice or
order.
(5) Regulations.--The consumer protection agencies
shall prescribe regulations establishing such
procedures as may be necessary to carry out this
section.
(d) Litigation Authority.--
(1) In general.--If any person violates a provision
of this title, any consumer protection law or any
regulation prescribed or order issued by a consumer
protection agency, the CFPS, or the Council under this
title or pursuant to any such authority, a consumer
protection agency may commence a civil action against
such person to impose a civil penalty or to seek all
appropriate legal or equitable relief including a
permanent or temporary injunction as permitted by law.
(2) Representation.--A consumer protection agency may
act in its own name and through its own attorneys in
enforcing any provision of this title, regulations
under this title, or any other law or regulation, or in
any action, suit, or proceeding to which the consumer
protection agency is a party.
(3) Compromise of actions.--A consumer protection
agency may compromise or settle any action if such
compromise is approved by the court.
(4) Notice to the attorney general.--When commencing
a civil action under this title, any consumer
protection law or any regulation thereunder, a consumer
protection agency shall notify the Attorney General.
(5) Forum.--Any civil action brought under this title
may be brought in a United States district court or in
any court of competent jurisdiction of a State in a
district in which the defendant is located or resides
or is doing business, and such court shall have
jurisdiction to enjoin such person and to require
compliance with this title, any consumer protection law
or any regulation prescribed or order issued by a
consumer protection agency, the CFPS, or the Council
under this title or pursuant to any such authority.
(6) Time for bringing action.--
(A) In general.--Except as otherwise
permitted by law, no action may be brought
under this title more than 3 years after the
violation to which an action relates.
(B) Limitations under other federal laws.--
(i) For purposes of this subsection,
an action arising under this title
shall not include claims arising solely
under consumer protection laws.
(ii) In any action arising solely
under a consumer protection law, a
consumer protection agency may
commence, defend, or intervene in the
action in accordance with the
requirements of that law, as
applicable.
(e) Relief Available.--
(1) Administrative proceedings or court actions.--
(A) Jurisdiction.--The court (or consumer
protection agency, as the case may be) in an
action or adjudication proceeding brought under
this title or any consumer protection law shall
have jurisdiction to grant any appropriate
legal or equitable relief with respect to a
violation of this title or any consumer
protection law, including a violation of a
regulation prescribed or order issued under
this title or any consumer protection law.
(B) Relief.--Such relief may include--
(i) rescission or reformation of
contracts;
(ii) refund of moneys or return of
real property;
(iii) restitution;
(iv) compensation for unjust
enrichment;
(v) payment of damages;
(vi) public notification regarding
the violation, including the costs of
notification;
(vii) limits on the activities or
functions of the person; and
(viii) civil money penalties, as set
forth more fully in paragraph (4).
(C) No exemplary or punitive damages.--
Nothing in this paragraph shall be construed as
authorizing the imposition of exemplary or
punitive damages.
(2) Recovery of costs.--In any action brought by a
consumer protection agency to enforce any provision of
this title, any consumer protection law, or any
regulation prescribed or order issued by a consumer
protection agency, the CFPS, or the Council under this
title or pursuant to any such authority, a consumer
protection agency may recover its costs in connection
with prosecuting such action if the consumer protection
agency is the prevailing party in the action.
(3) Civil money penalty in court and administrative
actions.--
(A) Any person that violates any provision of
this title, any consumer protection law, or any
regulation prescribed or order issued by a
consumer protection agency, the CFPS, or the
Council under this title shall forfeit and pay
a civil penalty pursuant to this paragraph
determined as follows:
(i) First tier.--For any violation of
a final order or condition imposed in
writing by a consumer protection
agency, a civil penalty shall not
exceed $5,000 for each day during which
such violation continues.
(ii) Second tier.--Notwithstanding
clause (i), for any person that
knowingly violates this title, any
consumer protection law, or any
regulation prescribed or order issued
by a consumer protection agency, the
CFPS, or the Council under this title,
a civil penalty shall not exceed
$1,000,000 for each day during which
such violation continues.
(B) Mitigating factors.--In determining the
amount of any penalty assessed under
subparagraph (A), the consumer protection
agency or the court shall take into account the
appropriateness of the penalty with respect
to--
(i) the size of financial resources
and good faith of the person charged;
(ii) the gravity of the violation;
(iii) the severity of the risks to or
losses of the consumer, which may take
into account the number of products or
services sold or provided;
(iv) the history of previous
violations; and
(v) such other matters as justice may
require.
(C) Authority to modify or remit penalty.--
The consumer protection agency may compromise,
modify, or remit any penalty which may be
assessed or had already been assessed under
subparagraph (A). The amount of such penalty,
when finally determined, shall be exclusive of
any sums owed by the person to the United
States in connection with the costs of the
proceeding, and may be deducted from any sums
owing by the United States to the person
charged.
(D) Notice and hearing.--No civil penalty may
be assessed with respect to a violation of this
title, any consumer protection law, or any
regulation prescribed or order issued by a
consumer protection agency, the CFPS, or the
Council, unless--
(i) the consumer protection agency
gives notice and an opportunity for a
hearing to the person accused of the
violation; or
(ii) the appropriate court has
ordered such assessment and entered
judgment in favor of the consumer
protection agency.
(f) Referrals for Criminal Proceedings.--Whenever a consumer
protection agency obtains evidence that any person, either
domestic or foreign, has engaged in conduct that may constitute
a violation of Federal criminal law, the consumer protection
agency shall have the power to transmit such evidence to the
Attorney General, who may institute criminal proceedings under
appropriate law. Nothing in this section affects any other
authority of the consumer protection agency to disclose
information.
(g) Employee Protection.--
(1) In general.--No person shall terminate or in any
other way discriminate against, or cause to be
terminated or discriminated against, any employee or
any authorized representative of employees by reason of
the fact that such employee or representative has
provided information to a consumer protection agency,
the CFPS, or the Council, filed, instituted or caused
to be filed or instituted any proceeding under this
title, any consumer protection law, or has testified or
is about to testify in any proceeding resulting from
the administration or enforcement of the provisions of
this title.
(2) Consumer protection agency review of
termination.--
(A) Application for review.--Any employee or
representative of employees who believes that
he has been terminated or otherwise
discriminated against by any person in
violation of paragraph (1) may, within 45 days
after such alleged violated occurs, apply to a
consumer protection agency for review of such
termination or alleged discrimination.
(B) Copy to respondent.--A copy of the
application shall be sent to the person who is
alleged to have terminated or otherwise
discriminated against an employee, and such
person shall be the respondent.
(C) Investigation.--Upon receipt of such
application, the consumer protection agency
shall cause such investigation to be made as
the consumer protection agency deems
appropriate.
(D) Hearing.--Any investigation under this
paragraph shall provide an opportunity for a
public hearing at the request of any party to
such review to enable the parties to present
information relating to such alleged violation.
(E) Notice of time and place for hearing.--
The parties shall be given written notice of
the time and place of the hearing at least 5
days prior to the hearing.
(F) Procedure.--Any hearing under this
paragraph shall be of record and shall be
subject to section 554 of title 5, United
States Code.
(G) Determination.--
(i) In general.--Upon receiving the
report of such investigation, the
consumer protection agency shall make
findings of fact.
(ii) Issuance of decision.--If the
consumer protection agency finds that
there is sufficient evidence in the
record to conclude that such a
violation did occur, the consumer
protection agency shall issue a
decision, incorporating an order
therein and the consumer protection
agency's findings, requiring the party
committing such violation to take such
affirmative action to abate the
violation as the consumer protection
agency deems appropriate, including
reinstating or rehiring the employee or
representative of employees to the
former position with compensation.
(iii) Denial of application.--If the
consumer protection agency finds
insufficient evidence to support the
allegations made in the application,
the consumer protection agency shall
deny the application.
(H) Judicial review.--An order issued by the
consumer protection agency under this paragraph
(2) shall be subject to judicial review in the
same manner as orders and decisions are subject
to judicial review under this title or any
consumer protection law.
(3) Costs and expenses.--Whenever an order is issued
under this subsection to abate such violation, at the
request of the applicant a sum equal to the aggregate
amount of all costs and expenses (including attorney's
fees) determined by the consumer protection agency to
have been reasonably incurred by the applicant for, or
in connection with, the application and prosecution of
such proceedings shall be assessed against the person
committing such violation.
(4) Exception.--This subsection shall not apply to
any employee who acting without discretion from the
employer of such employee (or the employer's agent)
deliberately violates any requirement of this title or
any consumer protection law.
(h) Exclusion for Persons Regulated by a State Insurance
Regulator.--
(1) In general.--No provision of this title shall be
construed as altering, amending, or affecting the
authority of any State insurance regulator to adopt
rules, initiate enforcement proceedings, or take any
other action with respect to a person regulated by any
State insurance regulator. Except as provided in
paragraphs (2) and (3), the Council and the CFPS shall
have no authority to exercise any power to enforce this
title with respect to a person regulated by any State
insurance regulator.
(2) Description of activities.--Paragraph (1) shall
not apply to any person described in such paragraph to
the extent such person is engaged in any financial
activity described in any subparagraph of section
4018(15) or is otherwise subject to any of the
enumerated consumer laws or the authorities transferred
under section 4018(6).
(3) Preservation of certain authorities.--Nothing in
this title shall be construed as limiting the authority
of the Council or the CFPS from exercising powers under
this Act with respect to a person, other than a person
regulated by a State insurance regulator, who provides
a product or service for or on behalf of a person
regulated by a State insurance regulator in connection
with a financial activity.
SEC. 4016. COLLECTION OF DEPOSIT ACCOUNT DATA.
(a) Purpose.--The purpose of this section is to promote
awareness and understanding of the access of individuals and
communities to financial services, and to identify business and
community development needs and opportunities.
(b) In General.--
(1) Records required.--For each branch, automated
teller machine at which deposits are accepted, and
other deposit taking service facility with respect to
any financial institution, the financial institution
shall maintain records of the number and dollar amounts
of deposit accounts of customers.
(2) Geo-coded addresses of depositors.--The
customers' addresses maintained pursuant to paragraph
(1) shall be geo-coded so that data shall be collected
regarding the census tracts of the residence or
business location of the customers.
(3) Identification of depositor type.--In maintaining
records on any deposit account under this section, the
financial institution shall also record whether the
deposit account is for a residential or commercial
customer.
(4) Public availability.--
(A) In general.--The following information
shall be publicly available on an annual
basis--
(i) the address and census tracts of
each branch, automated teller machine
at which deposits are accepted, and
other deposit taking service facility
with respect to any financial
institution;
(ii) the type of deposit account
including whether the account was a
checking or savings account; and
(iii) data on the number and dollar
amounts of the accounts, presented by
census tract location of the
residential and commercial customers.
(B) Protection of identity.--In the publicly
available data, any personally identifiable
data element shall be removed so as to protect
the identities of the commercial and
residential customers.
(c) Availability of Information.--
(1) Submission to agencies.--The data required to be
compiled and maintained under this section by any
financial institution shall be submitted annually to
the a Federal banking agency, in accordance with rules
prescribed by the Federal banking agencies.
(2) Availability of information.--Information
compiled and maintained under this section shall be
retained for not less than 3 years after the date of
preparation and shall be made available to the public,
upon request, in the form required under rules
prescribed by the Federal banking agencies.
(d) Federal Banking Agency Use.--The Federal banking
agencies--
(1) shall assess the distribution of residential and
commercial accounts at such financial institution
across income and minority level of census tracts; and
(2) may use the data for any other purpose as
permitted by law.
(e) Regulations and Guidance.--
(1) In general.--The Federal banking agencies shall
prescribe such regulations and issue guidance as may be
necessary to carry out, enforce, and compile data
pursuant to this section.
(2) Data compilation regulations.--The Federal
banking agencies shall prescribe regulations regarding
the provision of data compiled under this section to
such agencies to carry out the purposes of this section
and shall issue guidance to financial institutions
regarding measures to facilitate compliance with the
this section and the requirements of regulations
prescribed under this section.
(f) Definitions.--For purposes of this section, and
notwithstanding section 4018, the following definitions shall
apply:
(1) Credit union.--The term ``credit union'' means a
Federal credit union or a State-chartered credit union
(as such terms are defined in section 101 of the
Federal Credit Union Act).
(2) Deposit account.--The term ``deposit account''
includes any checking account, savings account, credit
union share account, and other type of account as
defined by the consumer protection agencies.
(3) Federal banking agency.--The term ``Federal
banking agency'' means the Board of Governors of the
Federal Reserve System, the head of the agency
responsible for chartering and regulating national
banks, the Director of the Office of Thrift
Supervision, the Federal Deposit Insurance Corporation,
and the National Credit Union Administration; and the
term ``Federal banking agencies'' means all of those
agencies.
(4) Financial institution.--The term ``financial
institution''--
(A) has the meaning given to the term
``insured depository institution'' in section
3(c)(2) of the Federal Deposit Insurance Act;
and
(B) includes any credit union.
SEC. 4017. CONFIDENTIALITY.
The Council, the Financial Institutions Examination Council,
the CFPS, and the consumer protection agencies shall each issue
regulations regarding the confidential treatment of information
obtained from persons in connection with the exercise of such
entity's authorities under this title. Such regulations shall,
to the extent practicable, mirror the provisions provided for
the confidential treatment of financial records under the Right
to Financial Privacy Act of 1978 (12 U.S.C. 3401).
SEC. 4018. DEFINITIONS.
For purposes of this title:
(1) Affiliate.--The term ``affiliate'' means any
person that controls, is controlled by, or is under
common control with another person.
(2) Board of governors.--The term ``Board of
Governors'' means the Board of Governors of the Federal
Reserve System.
(3) CFPS.--The term ``CFPS'' means the Consumer
Financial Protection Subcommittee established under
section 4003.
(4) Consumer.--The term ``consumer'' means an
individual or an agent, trustee, or representative
acting on behalf of an individual.
(5) Consumer financial product or service.--The term
``consumer financial product or service'' means any
financial product or service to be used by a consumer
primarily for personal, family, or household purposes.
(6) Consumer protection laws.--The term ``consumer
protection laws'' means each of the following:
(A) The Alternative Mortgage Transaction
Parity Act (12 U.S.C. 3801 et seq.).
(B) The Electronic Funds Transfer Act (15
U.S.C. 1693 et seq.)
(C) The Equal Credit Opportunity Act (15
U.S.C. 1691 et seq.).
(D) The Fair Credit Reporting Act (15 U.S.C.
1681 et seq.), except with respect to sections
615(e), 624, and 628.
(E) The Fair Debt Collection Practices Act
(15 U.S.C. 1692 et seq.).
(F) Subsections (c), (d), (e), and (f) of
section 43 of the Federal Deposit Insurance Act
(12 U.S.C. 1831t).
(G) Sections 502, 503, 504, 505, 506, 507,
508, and 509 of the Gramm-Leach-Bliley Act (15
U.S.C. 6802 et seq.).
(H) The Home Mortgage Disclosure Act (12
U.S.C. 2801 et seq.).
(I) The Real Estate Settlement Procedures Act
(12 U.S.C. 2601 et seq.).
(J) The Secure and Fair Enforcement for
Mortgage Licensing Act (12 U.S.C. 5101 et
seq.).
(K) The Truth in Lending Act (15 U.S.C. 1601
et seq.).
(L) The Truth in Savings Act (12 U.S.C. 4301
et seq.).
(7) Consumer protection agency.--Except as provided
in section 4015, the term ``consumer protection
agency'' means--
(A) the Federal Reserve System;
(B) the Office of the Comptroller of the
Currency;
(C) the Office of Thrift Supervision;
(D) the Federal Deposit Insurance
Corporation;
(E) the Federal Trade Commission;
(F) the National Credit Union Administration;
(G) the Department of the Treasury;
(H) the Department of Housing and Urban
Development;
(I) the Securities and Exchange Commission;
and
(J) the Commodity Futures Trading Commission.
(8) Council.--The term ``council'' means the Consumer
Financial Protection Council established under section
2.
(9) Covered person.--
(A) In general.--The term ``covered person''
means--
(i) any person who engages directly
or indirectly in a financial activity,
in connection with the provision of a
consumer financial product or service;
or
(ii) any person who, in connection
with the provision of a consumer
financial product or service, provides
a material service to, or processes a
transaction on behalf of, a person
described in subparagraph (A).
(B) Exception.--The term ``covered person''
does not include a person regulated by a State
insurance regulator.
(10) Credit.--The term ``credit'' means the right
granted by a person to a consumer to defer payment of a
debt, incur debt and defer its payment, or purchase
property or services and defer payment for such
purchase.
(11) Credit union.--The term ``credit union'' means a
Federal credit union, State credit union, or State-
chartered credit union as defined in section 101 of the
Federal Credit Union Act (12 U.S.C. 1752).
(12) Deposit.--The term ``deposit''--
(A) has the same meaning as in section 3(l)
of the Federal Deposit Insurance Act; and
(B) includes a share in a member account (as
defined in section 101(5) of the Federal Credit
Union Act) at a credit union.
(13) Deposit-taking activity.--The term ``deposit-
taking activity'' means--
(A) the acceptance of deposits, the provision
of other services related to the acceptance of
deposits, or the maintenance of deposit
accounts;
(B) the acceptance of money, the provision of
other services related to the acceptance of
money, or the maintenance of members' share
accounts by a credit union; or
(C) the receipt of money or its equivalent,
as a consumer protection agency may determine
by regulation or order, received or held by the
covered person (or an agent for the person) for
the purpose of facilitating a payment or
transferring funds or value of funds by a
consumer to a third party.
For the purposes of this title, the consumer protection
agencies may determine that the term ``deposit-taking
activity'' includes the receipt of money or its
equivalent in connection with the sale or issuance of
any payment instrument or stored value product or
service.
(14) Federal banking agency.--The term ``Federal
banking agency'' means the Board of Governors, the
Comptroller of the Currency, the Director of the Office
of Thrift Supervision, the Federal Deposit Insurance
Corporation, or the National Credit Union
Administration and the term ``Federal banking
agencies'' means all of those agencies.
(15) Financial activity.--The term ``financial
activity'' means any of the following activities:
(A) Deposit-taking activities.
(B) Extending credit and servicing loans,
including--
(i) acquiring, brokering, or
servicing loans or other extensions of
credit;
(ii) engaging in any other activity
usual in connection with extending
credit or servicing loans, including
performing appraisals of real estate
and personal property and selling or
servicing credit insurance or mortgage
insurance.
(C) Check-guaranty services, including--
(i) authorizing a subscribing
merchant to accept personal checks
tendered by the merchant's customers in
payment for goods and services; and
(ii) purchasing from a subscribing
merchant validly authorized checks that
are subsequently dishonored.
(D) Collecting, analyzing, maintaining, and
providing consumer report information or other
account information by covered persons,
including information relating to the credit
history of consumers and providing the
information to a credit grantor who is
considering a consumer application for credit
or who has extended credit to the borrower.
(E) Collection of debt related to any
consumer financial product or service.
(F) Providing real estate settlement
services, including providing title insurance.
(G) Leasing personal or real property or
acting as agent, broker, or adviser in leasing
such property if--
(i) the lease is on a non-operating
basis;
(ii) the initial term of the lease is
at least 90 days; and
(iii) in the case of leases involving
real property, at the inception of the
initial lease, the transaction is
intended to result in ownership of the
leased property to be transferred to
the lessee, subject to standards
prescribed by the consumer protection
agencies.
(H) Acting as an investment adviser to any
person (not subject to regulation by or
required to register with the Commodity Futures
Trading Commission or the Securities and
Exchange Commission).
(I) Acting as financial adviser to any
person, including--
(i) providing financial and other
related advisory services;
(ii) providing educational courses,
and instructional materials to
consumers on individual financial
management matters; or
(iii) providing credit counseling,
tax-planning or tax-preparation
services to any person.
(J) Financial data processing, including
providing data processing and data transmission
services, facilities (including data processing
and data transmission hardware, software,
documentation, or operating personnel),
databases, advice, and access to such services,
facilities, or databases by any technological
means, if--
(i) the data to be processed or
furnished are financial, banking, or
economic; and
(ii) the hardware provided in
connection therewith is offered only in
conjunction with software designed and
marketed for the processing and
transmission of financial, banking, or
economic data, and where the general
purpose hardware does not constitute
more than 30 percent of the cost of any
packaged offering.
(K) Money transmitting.
(L) Sale or issuance of stored value.
(M) Acting as a money services business.
(N) Acting as a custodian of money or any
financial instrument.
(O) Any other activity that the consumer
protection agencies define, by regulation, as a
financial activity for the purposes of this
title.
(P) Except that the term ``financial
activity'' shall not include the business of
insurance.
(16) Financial product or service.--The term
``financial product or service'' means any product or
service that, directly or indirectly, results from or
is related to engaging in 1 or more financial
activities.
(17) Foreign exchange.--The term ``foreign exchange''
means the exchange, for compensation, of currency of
the United States or of a foreign government for
currency of another government.
(18) Insured depository institution.--The term
``insured depository institution'' has the same meaning
as in section 3 of the Federal Deposit Insurance Act.
(19) Money services business.--The term ``money
services business'' means a covered person that--
(A) receives currency, monetary value, or
payment instruments for the purpose of
exchanging or transmitting the same by any
means, including transmission by wire,
facsimile, electronic transfer, courier, the
Internet, or through bill payment services, or
other businesses that facilitate third-party
transfers within the United States or to or
from the United States; or
(B) issues payment instruments or stored
value.
(20) Money transmitting.--The term ``money
transmitting'' means the receipt by a covered person of
currency, monetary value, or payment instruments for
the purpose of transmitting the same to any third-party
by any means, including transmission by wire,
facsimile, electronic transfer, courier, the Internet,
or through bill payment services.
(21) Payment instrument.--The term ``payment
instrument'' means a check, draft, warrant, money
order, traveler's check, electronic instrument, or
other instrument, payment of money, or monetary value
(other than currency).
(22) Person.--The term ``person'' means an
individual, partnership, company, corporation,
association (incorporated or unincorporated), trust,
estate, cooperative organization, or other entity.
(23) Person regulated by a state insurance
regulator.--The term ``person regulated by a State
insurance regulator'' means any person who is--
(A) engaged in the business of insurance; and
(B) subject to regulation by any State
insurance regulator, but only to the extent
that such person acts in such capacity.
(24) Person regulated by the commodity futures
trading commission.--The term ``person regulated by the
Commodity Futures Trading Commission'' means any
futures commission merchant, commodity trading adviser,
commodity pool operator, or introducing broker that is
subject to the jurisdiction of the Commodity Futures
Trading Commission under the Commodity Exchange Act,
but only to the extent that the person acts in such
capacity.
(25) Person regulated by the securities and exchange
commission.--The term ``person regulated by the
Securities and Exchange Commission'' means--
(A) a broker or dealer that is required to be
registered under the Securities Exchange Act of
1934;
(B) an investment adviser that is required to
be registered under the Investment Advisers Act
of 1940; or
(C) an investment company that is required to
be registered under the Investment Company Act
of 1940--
but only to the extent that the person acts in a
registered capacity.
(26) Provision of a consumer financial product or
service.--The term ``provision of (or providing) a
consumer financial product or service'' means the
advertisement, marketing, solicitation, sale,
disclosure, delivery, or account maintenance or
servicing of a consumer financial product or service.
(27) Residential mortgage loan.--The term
``residential mortgage loan'' shall have the meaning
given such term in section 1503(8) of the Secure and
Fair Enforcement for Mortgage Licensing Act of 2008.
(28) Secretary.--The term ``Secretary'' means the
Secretary of the Treasury.
(29) State.--The term ``State'' means any State,
territory, or possession of the United States, the
District of Columbia, Commonwealth of Puerto Rico,
Commonwealth of the Northern Mariana Islands, Guam,
American Samoa, or the United States Virgin Islands.
(30) Stored value.--The term ``stored value'' means
funds or monetary value represented in any electronic
format, whether or not specially encrypted, and stored
or capable of storage on electronic media in such a way
as to be retrievable and transferred electronically,
and includes a prepaid debit card or product, or any
other similar product, regardless of whether the amount
of the funds or monetary value may be increased or
reloaded.
SEC. 4019. AUTHORIZATION OF APPROPRIATIONS.
There is hereby authorized to be appropriated such sums as
may be necessary to carry out this title.
----------
36. An Amendment To Be Offered by Representative Bachus, Spencer of
Alabama or His Designee, Debatable for 30 Minutes
Strike all after the enacting clause and insert the
following:
SEC. 1. SHORT TITLE.
This Act may be cited as the ``Consumer and Taxpayer
Protection Act of 2009''.
SEC. 2. TABLE OF CONTENTS.
The table of contents for this Act is as follows:
Sec. 1. Short title.
Sec. 2. Table of contents.
TITLE I--NO MORE BAILOUTS ACT
Sec. 1001. Short title.
Sec. 1002. Amendments to title 28 of the United States Code.
Sec. 1003. Amendments to title 11 of the United States Code.
Sec. 1004. Effective date; application of amendments.
Sec. 1005. Reforms of section 13 emergency powers.
Sec. 1006. Establishment of Market Stability and Capital Adequacy Board.
Sec. 1007. Functions of Board.
Sec. 1008. Powers of Board.
Sec. 1009. Responsibilities of Federal functional regulators.
Sec. 1010. Staff of Board.
Sec. 1011. Compensation and travel expenses.
TITLE II--FINANCIAL INSTITUTIONS CONSUMER PROTECTION AND EXAMINATION
COUNCIL
Sec. 2001. Short title.
Sec. 2002. Definitions.
Sec. 2003. Financial Institutions Consumer Protection and Examination
Council.
Sec. 2004. Office of consumer protection.
Sec. 2005. State enforcement authority.
Sec. 2006. Unfair or deceptive acts or practices authority transferred.
Sec. 2007. Equality of consumer protection functions; Consumer
protection divisions.
Sec. 2008. Prohibition on charter conversions while under regulatory
sanction.
TITLE III--ANTI-FRAUD PROVISIONS
Sec. 3001. Authority to impose civil penalties in cease and desist
proceedings.
Sec. 3002. Formerly associated persons.
Sec. 3003. Collateral bars.
Sec. 3004. Unlawful margin lending.
Sec. 3005. Nationwide service of process.
Sec. 3006. Reauthorization of the Financial Crimes Enforcement Network.
Sec. 3007. Fair fund improvements.
TITLE IV--OVER-THE-COUNTER DERIVATIVES MARKETS
Sec. 4001. Short title.
Subtitle A--Amendments to the Commodity Exchange Act
Sec. 4100. Definitions.
Sec. 4101. Swap repositories.
Sec. 4102. Margin for swaps between swaps dealers and major swap
participants.
Sec. 4103. Segregation of assets held as collateral in swap
transactions.
Subtitle B--Amendments to the Securities Exchange Act of 1934
Sec. 4201. Definitions.
Sec. 4202. Swap repositories.
Sec. 4203. Margin requirements.
Sec. 4204. Segregation of assets held as collateral in swap
transactions.
Subtitle C--Common Provisions
Sec. 4301. Report to the congress.
Sec. 4302. Capital requirements.
Sec. 4303. Centralized clearing.
Sec. 4304. Definitions.
TITLE V--CORPORATE AND FINANCIAL INSTITUTION COMPENSATION FAIRNESS
Sec. 5001. Short title.
Sec. 5002. Shareholder vote on executive compensation.
Sec. 5003. Compensation committee independence.
TITLE VI--CREDIT RATING AGENCIES
Sec. 6001. Changes to designation.
Sec. 6002. Removal of statutory references to credit ratings.
Sec. 6003. Review of reliance on ratings.
TITLE VII--GOVERNMENT-SPONSORED ENTERPRISES REFORM
Sec. 7001. Short title.
Sec. 7002. Definitions.
Sec. 7003. Termination of current conservatorship.
Sec. 7004. Limitation of enterprise authority upon emergence from
conservatorship.
Sec. 7005. Requirement to periodically renew charter until wind down and
dissolution.
Sec. 7006. Required wind down of operations and dissolution of
enterprise.
TITLE VIII--FEDERAL INSURANCE OFFICE
Sec. 8001. Short title.
Sec. 8002. Federal Insurance Office established.
Sec. 8003. Report on global reinsurance market.
Sec. 8004. Study on modernization and improvement of insurance
regulation in the United States.
TITLE I--NO MORE BAILOUTS ACT
SEC. 1001. SHORT TITLE.
This title may be cited as the ``No More Bailouts Act of
2009''.
SEC. 1002. AMENDMENTS TO TITLE 28 OF THE UNITED STATES CODE.
Title 28 of the United States Code is amended--
(1) in section 1408 by striking ``section 1410'' and
inserting ``sections 1409A and 1410'',
(2) by inserting after section 1409 the following:
``Sec. 1409A. Venue of cases involving non-bank financial institutions
``A case under chapter 14 may be commenced in the district
court of the United States for the district--
``(1) in which the debtor has its principal place of
business in the United States, principal assets in the
United States, or in which there is pending a case
under title 11 concerning the debtor's affiliate or
subsidiary, if a Federal Reserve Bank is located in
that district;
``(2) if venue does not exist under paragraph (1), in
which there is a Federal Reserve Bank and in a Federal
Reserve district in which the debtor has its principal
place of business in the United States, principal
assets in the United States, or in which there is
pending a case under title 11 concerning the debtor's
affiliate or subsidiary; or
``(3) if venue does not exist under paragraph (1) or
(2), in which there is a Federal Reserve Bank and in a
Federal circuit adjacent to the Federal circuit in
which the debtor has its principal place of business or
principal assets in the United States.'', and
(3) by amending the table of sections of chapter 87
of such title to insert after the item relating to
section 1408 the following:
``1409A. Venue of cases involving non-bank financial institutions.''.
SEC. 1003. AMENDMENTS TO TITLE 11 OF THE UNITED STATES CODE.
(a) Definitions.--Section 101 of title 11, United States
Code, is amended--
(1) by inserting after paragraph (26) the following:
``(26A) The term `functional regulator' means the
Federal regulatory agency with the primary Federal
regulatory authority over the debtor, such as an agency
listed in section 509 of the Gramm-Leach-Bliley Act.'',
(2) by redesignating paragraphs (38A) and (38B) as
paragraphs (38B) and (38C), respectively,
(3) by inserting after paragraph (38) the following:
``(38A) the term `Market Stability and Capital
Adequacy Board' means the entity established in section
1006 of the No More Bailouts Act of 2009.'', and
(4) by inserting after paragraph (40) the following:
``(40A) The term `non-bank financial institution'
means an institution the business of which is engaging
in financial activities that is not an insured
depository institution.''.
(b) Applicability of Chapters.--Section 103 of title 11,
United States Code, is amended--
(1) in subsection (a) by striking ``13'' and
inserting ``13, and 14'',
(2) by redesignating subsection (k) as subsection
(l), and
(3) by inserting after subsection (j) the following:
``(k) Chapter 14 applies only in a case under such
chapter.''.
(c) Who May Be a Debtor.--Section 109 of title 11, United
States Code, is amended--
(1) in subsection (b)--
(A) in paragraph (2) by striking ``or'' at
the end,
(B) in paragraph (3) by striking the period
at the end and insert and inserting ``; or'',
and
(C) by adding at the end the following:
``(4) a non-bank financial institution that has not
been a debtor under chapter 14 of this title.'',
(2) in subsection (d) by striking ``or commodity
broker'' and inserting ``, commodity broker, or a non-
bank financial institution'', and
(3) by adding at the end the following:
``(i) Only a non-bank financial institution may be a debtor
under chapter 14 of this title.''.
(d) Involuntary Cases.--Section 303 of title 11, the United
States Code, is amended--
(1) in subsection (a) by striking ``or 11'' and
inserting ``, 11, or 14'', and
(2) in subsection (b) by striking ``or 11'' and
inserting ``, 11, or 14''.
(e) Obtaining Credit.--Section 364 of title 11, United States
Code, is amended by adding at the end the following:
``(g) Notwithstanding any other provision of this section,
the trustee may not, and the court may not authorize the
trustee to, obtain credit, if the source of that credit either
directly or indirectly is the United States.''.
(f) Chapter 14.--Title 11, United States Code, is amended--
(1) by inserting the following after chapter 13:
``CHAPTER 14--ADJUSTMENT TO THE DEBTS OF A NON-BANK FINANCIAL
INSTITUTION
``1401. Inapplicability of other sections.
``1402. Applicability of chapter 11 to cases under this chapter.
``1403. Prepetition consultation.
``1404. Appointment of trustee.
``1405. Right to be heard.
``1406. Right to communicate.
``1407. Exemption with respect to certain contracts or agreements.
``1408. Conversion or dismissal.
``Sec. 1401. Inapplicability of other sections
``Except as provided in section 1407, sections 362(b)(6),
362(b)(7), 362(b)(17), 546(e), 546(f), 546(g), 555, 556, 559,
560, and 561 do not apply in a case under this chapter.
``Sec. 1402. Applicability of chapter 11 to cases under this chapter
``With the exception of sections 1104(d), 1109, 1112(a),
1115, and 1116, subchapters I, II, and III of chapter 11 apply
in a case under this chapter.
``Sec. 1403. Prepetition consultation
``(a) Subject to subsection (b)--
``(1) a non-bank financial institution may not be a
debtor under this chapter unless that institution has,
at least 10 days prior to the date of the filing of the
petition by such institution, taken part in the
consultation described in subsection (c); and
``(2) a creditor may not commence an involuntary case
under this chapter unless, at least 10 days prior to
the date of the filing of the petition by such
creditor, the creditor notifies the non-bank financial
institution, the functional regulator, and the Market
Stability and Capital Adequacy Board of its intent to
file a petition and requests a consultation as
described in subsection (c).
``(b) If the non-bank financial institution, the functional
regulator, and the Market Stability and Capital Adequacy Board,
in consultation with any agency charged with administering a
nonbankruptcy insolvency regime for any component of the
debtor, certify that the immediate filing of a petition under
section 301 or 303 is necessary, or that an immediate filing
would be in the interests of justice, a petition may be filed
notwithstanding subsection (a).
``(c) The non-bank financial institution, the functional
regulator, the Market Stability and Capital Adequacy Board, and
any agency charged with administering a nonbankruptcy
insolvency regime for any component of the debtor shall engage
in prepetition consultation in order to attempt to avoid the
need for the non-bank financial institution's liquidation or
reorganization in bankruptcy, to make any liquidation or
reorganization of the non-bank financial institution under this
title more orderly, or to aid in the nonbankruptcy resolution
of any of the non-bank financial institution's components under
its nonbankruptcy insolvency regime. Such consultation shall
specifically include the attempt to negotiate forbearance of
claims between the non-bank financial institution and its
creditors if such forbearance would likely help to avoid the
commencement of a case under this title, would make any
liquidation or reorganization under this title more orderly, or
would aid in the nonbankruptcy resolution of any of the non-
bank financial institution's components under its nonbankruptcy
insolvency regime. Additionally, the consultation shall
consider whether, if a petition is filed under section 301 or
303, the debtor should file a motion for an exemption
authorized by section 1407.
``(d) The court may allow the consultation process to
continue for 30 days after the petition, upon motion by the
debtor or a creditor. Any post-petition consultation
proceedings authorized should be facilitated by the court's
mediation services, under seal, and exclude ex parte
communications.
``(e) The Market Stability and Capital Adequacy Board and the
functional regulator shall publish and transmit to Congress a
report documenting the course of any consultation. Such report
shall be published and transmitted to Congress within 30 days
of the conclusion of the consultation.
``(f) Nothing in this section shall be interpreted to set
aside any of the limitations on the use of Federal funds set
forth in the No More Bailouts Act of 2009 or the amendments
made by such Act.
``Sec. 1404. Appointment of trustee
``In applying section 1104 to a case under this chapter, if
the court orders the appointment of a trustee or an examiner,
if the trustee or an examiner dies or resigns during the case
or is removed under section 324, or if a trustee fails to
qualify under section 322, the functional regulator, in
consultation with the Market Stability and Capital Adequacy
Board, shall submit a list of five disinterested persons that
are qualified and willing to serve as trustees in the case and
the United States trustee shall appoint, subject to the court's
approval, one of such persons to serve as trustee in the case.
``Sec. 1405. Right to be heard
``(a) The functional regulator, the Market Stability and
Capital Adequacy Board, the Federal Reserve, the Department of
the Treasury, the Securities and Exchange Commission, and any
domestic or foreign agency charged with administering a
nonbankruptcy insolvency regime for any component of the debtor
may raise and may appear and be heard on any issue in a case
under this chapter, but may not appeal from any judgment,
order, or decree entered in the case.
``(b) A party in interest, including the debtor, the trustee,
a creditors' committee, an equity security holders' committee,
a creditor, an equity security holder, or any indenture trustee
may raise, and may appear and be heard on, any issue in a case
under this chapter.
``Sec. 1406. Right to communicate
``The court is entitled to communicate directly with, or to
request information or assistance directly from, the functional
regulator, the Market Stability and Capital Adequacy Board, the
Board of Governors of the Federal Reserve System, the
Department of the Treasury, or any agency charged with
administering a nonbankruptcy insolvency regime for any
component of the debtor, subject to the rights of a party in
interest to notice and participation.
``Sec. 1407. Exemption with respect to certain contracts or agreements
``(a) Subject to subsection (b)--
``(1) upon motion of the debtor, consented to by the
Market Stability and Capital Adequacy Board--
``(A) the debtor and the estate shall be
exempt from the operation of sections
362(b)(6), 362(b)(7), 362(b)(17), 546(e),
546(f), 546(g), 555, 556, 559, 560, and 561;
``(B) if the Market Stability and Capital
Adequacy Board consents to the filing of such
motion by the debtor, the Board shall inform
the court of its reasons for consenting; and
``(C) the debtor may limit its motion, or the
board may limit its consent, to exempt the
debtor and the estate from the operation of
section 362(b)(6), 362(b)(7), 362(b)(17),
546(e), 546(f), 546(g), 555, 556, 559, 560, or
561, or any combination thereof; and
``(2) if the Market Stability and Capital Adequacy
Board does not consent to the filing of a motion by the
debtor under paragraph (1), the debtor may file a
motion to exempt the debtor and the estate from the
operation of sections 362(b)(6), 362(b)(7), 362(b)(17),
546(e), 546(f), 546(g), 555, 556, 559, 560, and 561, or
any combination thereof.
``(b) The court shall commence a hearing on a motion under
subsection (a) not later than 5 days after the filing of the
motion to determine whether to maintain, terminate, annul,
modify, or condition the exemption under subsection (a)(1) or,
in the case of a motion under subsection (a)(2), grant the
exemption. The court shall request the filing or briefs by the
functional regulator and the Market Stability and Capital
Adequacy Board. The court shall decide the motion not later
than 5 days after commencing such hearing unless--
``(1) the parties in interest consent to a extension
for a specific period of time; or
``(2) except with respect to an exemption from the
operation of section 559, the court sua sponte extends
for 5 additional days the period for decision if such
extension would be in the interests of justice or is
required by compelling circumstances.
``(c) The court shall maintain, terminate, annul, modify, or
condition the exemption under subsection (a)(1), or, in the
case of a motion under subsection (a)(2), grant the exemption
only upon showing of good cause. In determining whether good
cause has been shown, the court shall balance the interests of
both debtor and creditors while attempting to preserve the
debtor's assets for repayment and reorganization of the debtors
obligations, or to provide for a more orderly liquidation.
``(d) For purposes of timing under section 562 of this title,
if a motion is filed under subsection (a)(1) or if a motion is
granted under subsection (a)(2), the date or dates of
liquidation, termination, or acceleration shall be measured
from the earlier of--
``(1) the actual date or dates of liquidation,
termination, or acceleration; or
``(2) the date on which a forward contract merchant,
stockbroker, financial institution, securities clearing
agency, repo participant, financial participant, master
netting agreement participant, or swap participant
files a notice with the court that it would have
liquidated, terminated, or accelerated a contract or
agreement covered by section 562 of this title had a
stay under this section not been in place.
``Sec. 1408. Conversion or dismissal
``In applying section 1112 to a case under this chapter, the
debtor may convert a case under this chapter to a case under
chapter 7 of this title if the debtor may be a debtor under
such chapter unless the debtor is not a debtor in
possession.'', and
(2) by amending the table of chapters of such title
by adding at the end the following:
``14. Adjustment to the Debts of a Non-Bank Financial 1401''.
Institution.
SEC. 1004. EFFECTIVE DATE; APPLICATION OF AMENDMENTS.
(a) Effective Date.--Except as provided in subsection (b),
this title and the amendments made by this title shall take
effect on the date of the enactment of this title.
(b) Application of Amendments.--The amendments made by this
title shall apply only with respect to cases commenced under
title 11 of the United States Code on or after the date of the
enactment of this title.
SEC. 1005. REFORMS OF SECTION 13 EMERGENCY POWERS.
(a) Restrictions on Emergency Powers.--The third undesignated
paragraph of section 13 of the Federal Reserve Act is amended--
(1) by striking ``In unusual and exigent'' and
inserting the following:
``(3) Emergency authority.--
``(A) In general.--In unusual and exigent'';
and
(2) by adding at the end the following new
subparagraph:
``(B) Requirement for broad availability of
discounts.--Subject to the limitations provided
under subparagraph (A), any authorization made
pursuant to the authority provided under
subparagraph (A) shall require discounts to be
made broadly available to individuals,
partnerships, and corporations within the
market sector for which such authorization is
being made.
``(C) Transparency and oversight.--
``(i) Secretary of the treasury
approval required; notice to the
congress.--No authorization may be made
pursuant to the authority provided
under subparagraph (A) unless--
``(I) such authorization is
first approved by the Secretary
of the Treasury; and
``(II) the Secretary of the
Treasury issues a notice to the
Congress detailing what
authorization the Secretary has
approved.
``(ii) Programs moved on-budget after
90 days.--On and after the date that is
90 days after the date on which any
authorization is made pursuant to the
authority provided under subparagraph
(A), all receipts and disbursements
resulting from such authorization shall
be counted as new budget authority,
outlays, receipts, or deficit or
surplus for purposes of--
``(I) the budget of the
United States Government as
submitted by the President;
``(II) the congressional
budget; and
``(III) the Balanced Budget
and Emergency Deficit Control
Act of 1985.
``(D) Joint resolution of disapproval.--
``(i) In general.--With respect to an
authorization made pursuant to the
authority provided under subparagraph
(A), if, during the 90-day period
beginning on the date the Congress
receives a notice described under
subparagraph (C)(i)(II) with respect to
such authorization, there is enacted
into law a joint resolution
disapproving such authorization, any
action taken under such authorization
must be discontinued and unwound not
later than the end of the 180-day
period beginning on the date that such
authorization was made.
``(ii) Contents of joint
resolution.--For the purpose of this
paragraph, the term `joint resolution'
means only a joint resolution--
``(I) that is introduced not
later than 3 calendar days
after the date on which the
notice referred to in clause
(i) is received by the
Congress;
``(II) which does not have a
preamble;
``(III) the title of which is
as follows: `Joint resolution
relating to the disapproval of
authorization under the
emergency powers of the Federal
Reserve Act'; and
``(IV) the matter after the
resolving clause of which is as
follows: `That Congress
disapproves the authorization
contained in the notice
submitted to the Congress by
the Secretary of the Treasury
on the date of _______ relating
to _______.' (The blank spaces
being appropriately filled
in.).
``(E) Fast track consideration in house of
representatives.--
``(i) Reconvening.--Upon receipt of a
notice referred to in subparagraph
(D)(i), the Speaker, if the House would
otherwise be adjourned, shall notify
the Members of the House that, pursuant
to this section, the House shall
convene not later than the second
calendar day after receipt of such
report.
``(ii) Reporting and discharge.--Any
committee of the House of
Representatives to which a joint
resolution is referred shall report it
to the House not later than 5 calendar
days after the date of receipt of the
notice referred to in subparagraph
(D)(i). If a committee fails to report
the joint resolution within that
period, the committee shall be
discharged from further consideration
of the joint resolution and the joint
resolution shall be referred to the
appropriate calendar.
``(iii) Proceeding to
consideration.--After each committee
authorized to consider a joint
resolution reports it to the House or
has been discharged from its
consideration, it shall be in order,
not later than the sixth day after
Congress receives the notice referred
to in subparagraph (D)(i), to move to
proceed to consider the joint
resolution in the House. All points of
order against the motion are waived.
Such a motion shall not be in order
after the House has disposed of a
motion to proceed on the joint
resolution. The previous question shall
be considered as ordered on the motion
to its adoption without intervening
motion. The motion shall not be
debatable. A motion to reconsider the
vote by which the motion is disposed of
shall not be in order.
``(iv) Consideration.--The joint
resolution shall be considered as read.
All points of order against the joint
resolution and against its
consideration are waived. The previous
question shall be considered as ordered
on the joint resolution to its passage
without intervening motion except two
hours of debate equally divided and
controlled by the proponent and an
opponent. A motion to reconsider the
vote on passage of the joint resolution
shall not be in order.
``(F) Fast track consideration in senate.--
``(i) Reconvening.--Upon receipt of a
notice referred to in subparagraph
(D)(i), if the Senate has adjourned or
recessed for more than 2 days, the
majority leader of the Senate, after
consultation with the minority leader
of the Senate, shall notify the Members
of the Senate that, pursuant to this
section, the Senate shall convene not
later than the second calendar day
after receipt of such message.
``(ii) Placement on calendar.--Upon
introduction in the Senate, the joint
resolution shall be placed immediately
on the calendar.
``(iii) Floor consideration.--
``(I) In general.--
Notwithstanding Rule XXII of
the Standing Rules of the
Senate, it is in order at any
time during the period
beginning on the 4th day after
the date on which Congress
receives a notice referred to
in subparagraph (D)(i) and
ending on the 6th day after the
date on which Congress receives
a notice referred to in
subparagraph (D)(i) (even
though a previous motion to the
same effect has been disagreed
to) to move to proceed to the
consideration of the joint
resolution, and all points of
order against the joint
resolution (and against
consideration of the joint
resolution) are waived. The
motion to proceed is not
debatable. The motion is not
subject to a motion to
postpone. A motion to
reconsider the vote by which
the motion is agreed to or
disagreed to shall not be in
order. If a motion to proceed
to the consideration of the
resolution is agreed to, the
joint resolution shall remain
the unfinished business until
disposed of.
``(II) Debate.--Debate on the
joint resolution, and on all
debatable motions and appeals
in connection therewith, shall
be limited to not more than 10
hours, which shall be divided
equally between the majority
and minority leaders or their
designees. A motion further to
limit debate is in order and
not debatable. An amendment to,
or a motion to postpone, or a
motion to proceed to the
consideration of other
business, or a motion to
recommit the joint resolution
is not in order.
``(III) Vote on passage.--The
vote on passage shall occur
immediately following the
conclusion of the debate on a
joint resolution, and a single
quorum call at the conclusion
of the debate if requested in
accordance with the rules of
the Senate.
``(IV) Rulings of the chair
on procedure.--Appeals from the
decisions of the Chair relating
to the application of the rules
of the Senate, as the case may
be, to the procedure relating
to a joint resolution shall be
decided without debate.
``(G) Rules relating to senate and house of
representatives.--
``(i) Coordination with action by
other house.--If, before the passage by
one House of a joint resolution of that
House, that House receives from the
other House a joint resolution, then
the following procedures shall apply:
``(I) The joint resolution of
the other House shall not be
referred to a committee.
``(II) With respect to a
joint resolution of the House
receiving the resolution--
``(aa) the procedure
in that House shall be
the same as if no joint
resolution had been
received from the other
House; but
``(bb) the vote on
passage shall be on the
joint resolution of the
other House.
``(ii) Treatment of joint resolution
of other house.--If one House fails to
introduce or consider a joint
resolution under this section, the
joint resolution of the other House
shall be entitled to expedited floor
procedures under this section.
``(iii) Treatment of companion
measures.--If, following passage of the
joint resolution in the Senate, the
Senate then receives the companion
measure from the House of
Representatives, the companion measure
shall not be debatable.
``(iv) Vetoes.--If the President
vetoes the joint resolution, debate on
a veto message in the Senate under this
section shall be 1 hour equally divided
between the majority and minority
leaders or their designees.
``(v) Rules of house of
representatives and senate.--This
subparagraph and subparagraphs (D),
(E), and (F) are enacted by Congress--
``(I) as an exercise of the
rulemaking power of the Senate
and House of Representatives,
respectively, and as such it is
deemed a part of the rules of
each House, respectively, but
applicable only with respect to
the procedure to be followed in
that House in the case of a
joint resolution, and it
supersedes other rules only to
the extent that it is
inconsistent with such rules;
and
``(II) with full recognition
of the constitutional right of
either House to change the
rules (so far as relating to
the procedure of that House) at
any time, in the same manner,
and to the same extent as in
the case of any other rule of
that House.''.
(b) Current Programs Moved On-Budget.--Not later than 90 days
after the date of the enactment of this title, all receipts and
disbursements resulting from any authorization made before the
date of the enactment of this title pursuant to the authority
granted by the third undesignated paragraph of section 13 of
the Federal Reserve Act shall be counted as new budget
authority, outlays, receipts, or deficit or surplus for
purposes of--
(1) the budget of the United States Government as
submitted by the President;
(2) the congressional budget; and
(3) the Balanced Budget and Emergency Deficit Control
Act of 1985.
SEC. 1006. ESTABLISHMENT OF MARKET STABILITY AND CAPITAL ADEQUACY
BOARD.
(a) In General.--There is hereby established the Market
Stability and Capital Adequacy Board (hereafter in this title
referred to as the ``Board'') as an independent establishment
in the Executive Branch.
(b) Constitution of Board.--Subject to paragraph (4), the
Board shall have 12 members as follows:
(1) Public members.--The following shall be members
of the Board--
(A) The Secretary of the Treasury.
(B) The Chairman of the Board of Governors of
the Federal Reserve System.
(C) The Chairman of the Securities and
Exchange Commission.
(D) The Chairperson of the Federal Deposit
Insurance Corporation.
(E) The Chairman of the Commodity Futures
Trading Commission.
(F) The Comptroller of the Currency.
(G) The Director of the Office of Thrift
Supervision.
(2) Private members.--The Board shall also have 5
members appointed by the President, by and with the
advice and consent of the Senate, who shall be
appointed from among individuals who--
(A) are specially qualified to serve on the
Board by virtue of their education, training,
and experience; and
(B) are not officers or employees of the
Federal Government, including the Board of
Governors of the Federal Reserve System.
(3) Chairperson.--The Secretary of the Treasury shall
serve as the Chairperson of the Board.
(4) Director of fhfa as interim member.--Until such
time as the charters of the Federal National Mortgage
Association and the Federal Home Loan Mortgage
Corporation are both repealed pursuant to section
7006(d), the Board shall consist of 13 members with the
Director of the Federal Housing Finance Agency serving
as a public member under paragraph (1).
(c) Appointments.--
(1) Term.--
(A) In general.--Each appointed member shall
be appointed for a term of 5 years.
(B) Staggered terms.--Of the members of the
Board first appointed under subsection (b)(2),
as designated by the President at the time of
appointment--
(i) 1 shall be appointed for a term
of 5 years;
(ii) 1 shall be appointed for a term
of 4 years;
(iii) 1 shall be appointed for a term
of 3 years;
(iv) 1 shall be appointed for a term
of 2 years; and
(v) 1 shall be appointed for a term
of 1 year.
(2) Interim appointments.--Any member appointed to
fill a vacancy occurring before the expiration of the
term for which such member's predecessor was appointed
shall be appointed only for the remainder of such term.
(3) Continuation of service.--Each appointed member
may continue to serve after the expiration of the term
of office to which such member was appointed until a
successor has been appointed and qualified.
(4) Reappointment to a 2nd term.--Each member
appointed to a term on the Board under subsection
(b)(2), including an interim appointment under
paragraph (2), may be reappointed by the President to
serve 1 additional term.
(d) Vacancy.--
(1) In general.--Any vacancy on the Board shall be
filled in the manner in which the original appointment
was made.
(2) Acting officials may serve.--In the event of a
vacancy in any position listed in subsection (b)(1) and
pending the appointment of a successor, or during the
absence or disability of the individual serving in such
position, any acting official in such position shall be
a member of the Board while such vacancy, absence or
disability continues and the acting official continues
acting in such position.
(e) Ineligibility for Other Offices.--
(1) Postservice restriction.--No member of the Board
may hold any office, position, or employment in any
financial institution or affiliate of a financial
institution during--
(A) the time such member is in office; and
(B) the 2-year period beginning on the date
such member ceases to serve on the Board.
(2) Certification.--Upon taking office, each member
of the Board shall certify under oath that such member
has complied with this subsection and such
certification shall be filed with the secretary of the
Board.
(f) Qualifications; Initial Meeting.--
(1) Political party affiliation.--Not more than 3
members of the Board appointed under subsection (b)(2)
shall be from the same political party.
(2) Qualifications generally.--It is the sense of the
Congress that individuals appointed to the Commission
should be prominent United States citizens, with
national recognition and significant depth of
experience commensurate with the duties of the Board.
(3) Specific appointment qualifications for certain
appointed members.--
(A) State bank.--Of the members appointed to
the Board under subsection (b)(2), at least 1
shall be appointed from among individuals who
have had experience as a State bank supervisor
or senior management executive with a State
depository institution.
(B) Insurance commissioner.--Of the members
appointed to the Board under subsection (b)(2),
at least 1 shall be appointed from among
individuals who have served as a State
insurance commissioner or supervisor.
(4) Initial meeting.--The Board shall meet and begin
the operations of the Board as soon as practicable but
not later than the end of the 180-day period beginning
the date of the enactment of this title.
(g) Quorum.--Four of the members of the Board designated
under subsection (b)(1) and 3 members of the Board appointed
under (b)(2) shall constitute a quorum.
(h) Quarterly Meetings.--The Board shall meet upon the call
of the chairperson or a majority of the members at least once
in each calendar quarter
SEC. 1007. FUNCTIONS OF BOARD.
(a) Principal Functions.--The principal functions of the
Board shall be to--
(1) monitor the interactions of various sectors of
the financial system; and
(2) identify risks that could endanger the stability
and soundness of the system.
(b) Specific Review Functions Included.--In carrying out the
functions described in subsection (a), the Board shall--
(1) review financial industry data collected from the
appropriate functional regulators;
(2) review insurance industry data, in coordination
with State insurance supervisors, for all lines of
insurance other than health insurance;
(3) monitor government policies and initiatives;
(4) review risk management practices within financial
regulatory agencies;
(5) review capital standards set by the appropriate
functional regulators and make recommendations to
ensure capital and leverage ratios match risks
regulated entities are taking on;
(6) review transparency and regulatory understanding
of risk exposures in the over-the-counter derivatives
markets and make recommendations regarding the
appropriate clearing of trades in those markets through
central counterparties;
(7) make recommendations regarding any government or
industry policies and practices that are exacerbating
systemic risk; and
(8) take such other actions and make such other
recommendations as the Board, in the discretion of the
Board, determines to be appropriate.
(c) Reports to Federal Functional Regulators and the
Congress.--The Board shall periodically make a report to the
Congress and the functional regulators on the findings,
conclusions, and recommendations of the Board in a manner and
within a time frame that allows the Congress and such
regulators to act to contain risks posed by specific firms,
industry practices, activities and interactions of entities
under different regulatory regimes, or government policies.
(d) Testimony to Congress.--Not later than February 20 and
July 20 of each year, the Chairperson of the Board shall
testify to the Congress at semiannual hearings before the
Committee on Banking, Housing, and Urban Affairs of the Senate
and the Committee on Financial Services of the House of
Representatives, about the state of systemic risk in the
financial services industry and proposals or recommendations by
the Board to address any undue risk.
(e) Rule of Construction.--No provision of this title shall
be construed as giving the Board any enforcement authority over
any financial institution.
SEC. 1008. POWERS OF BOARD.
(a) Contracting.--The Board may, to such extent and in such
amounts as are provided in appropriation Acts, enter into
contracts to enable the Board to discharge its duties under
this title.
(b) Information From Federal Agencies.--
(1) In general.--The Board may secure directly from
any executive department, agency, or independent
establishment, or any other instrumentality of the
United States information and recommendations for the
purposes of this title.
(2) Delivery of requested information.--Each
executive department, agency, or independent
establishment, or any other instrumentality of the
United States shall, to the extent authorized by law,
furnish any information and recommendations requested
under paragraph (1) directly to the Board, upon request
made by the chairperson or any member designated by a
majority of the Commission.
(3) Receipt, handling, storage, and dissemination.--
Information shall only be received, handled, stored,
and disseminated by members of the Board and its staff
consistent with all applicable statutes, regulations,
and Executive orders.
(c) Assistance From Federal Agencies.--
(1) General services administration.--The
Administrator of General Services shall provide to the
Board on a reimbursable basis administrative support
and other services for the performance of the
Commission's functions.
(2) Other departments and agencies.--In addition to
the assistance prescribed in paragraph (1), departments
and agencies of the United States may provide to the
Commission such services, funds, facilities, staff, and
other support services as they may determine advisable
and as may be authorized by law, including agencies
represented on the Board under section 1006(b)(1).
SEC. 1009. RESPONSIBILITIES OF FEDERAL FUNCTIONAL REGULATORS.
(a) Federal Functional Regulator Defined.--For purposes of
this title, the term ``Federal functional regulator'' has the
same meaning as in section 509(2) of the Gramm-Leach-Bliley
Act, except that such term includes the Commodity Futures
Trading Commission.
(b) Assessments and Reviews.--In order to address current
regulatory gaps, each Federal functional regulator shall,
before each quarterly meeting of the Board--
(1) assess the effects on macroeconomic stability of
the activities of financial institutions that are
subject to the jurisdiction of such agency;
(2) review how such financial institutions interact
with entities outside the jurisdiction of such agency;
and
(3) report the results of such assessment and review
to the Board, together with such recommendations for
administrative action as the agency determines to be
appropriate.
SEC. 1010. STAFF OF BOARD.
(a) Appointment and Compensation.--The chairperson, in
accordance with rules agreed upon by the Board and title 5,
United States Code, may appoint and fix the compensation of a
staff director and such other personnel as may be necessary to
enable the Board to carry out its functions.
(b) Detailees.--Any Federal Government employee may be
detailed to the Board and such detailee shall retain the
rights, status, and privileges of his or her regular employment
without interruption.
(c) Consultant Services.--The Board may procure the services
of experts and consultants in accordance with section 3109 of
title 5, United States Code, but at rates not to exceed the
daily rate paid a person occupying a position at level IV of
the Executive Schedule under section 5315 of title 5, United
States Code.
SEC. 1011. COMPENSATION AND TRAVEL EXPENSES.
(a) Compensation.--Each member of the Board appointed under
section 1006(b)(2) may be compensated at not to exceed the
daily equivalent of the annual rate of basic pay in effect for
a position at level IV of the Executive Schedule under section
5315 of title 5, United States Code, for each day during which
that member is engaged in the actual performance of the duties
of the Board.
(b) Travel Expenses.--While away from their homes or regular
places of business in the performance of services for the
Board, members of the Board shall be allowed travel expenses,
including per diem in lieu of subsistence, in the same manner
as persons employed intermittently in the Government service
are allowed expenses under section 5703(b) of title 5, United
States Code.
TITLE II--FINANCIAL INSTITUTIONS CONSUMER PROTECTION AND EXAMINATION
COUNCIL
SEC. 2001. SHORT TITLE.
This title may be cited as the ``Financial Institutions
Consumer Protection and Examination Council Act of 2009''.
SEC. 2002. DEFINITIONS.
(a) Renaming Council.--The Federal Financial Institutions
Examination Council Act of 1978 (12 U.S.C. 3301 et seq.) is
amended by striking ``Financial Institutions Examination
Council'' each place it appears, except for in section 1001 of
such Act, and inserting ``Financial Institutions Consumer
Protection and Examination Council''.
(b) Definitions Relating to Consumer Protection.--Section
1003 of such Act (12 U.S.C. 3302) is amended--
(1) in paragraph (2), by striking ``and''; and
(2) by adding at the end the following new
paragraphs:
``(4) the term `enumerated consumer laws' means--
``(A) the Alternative Mortgage Transaction
Parity Act (12 U.S.C. 3801 et seq.);
``(B) the Community Reinvestment Act;
``(C) the Consumer Leasing Act;
``(D) the Electronic Funds Transfer Act (15
U.S.C. 1693 et seq.);
``(E) the Equal Credit Opportunity Act (15
U.S.C. 1691 et seq.);
``(F) the Fair Credit Billing Act;
``(G) the Fair Credit Reporting Act (15
U.S.C. 1681 et seq.);
``(H) the Fair Debt Collection Practices Act
(15 U.S.C. 1692 et seq.);
``(I) subsections (c), (d), (e), and (f) of
section 43 of the Federal Deposit Insurance Act
(12 U.S.C. 1831t);
``(J) sections 502, 503, 504, 505, 506, 507,
508, and 509 of the Gramm-Leach-Bliley Act (15
U.S.C. 6802 et seq.);
``(K) the Home Mortgage Disclosure Act (12
U.S.C. 2801 et seq.);
``(L) the Real Estate Settlement Procedures
Act (12 U.S.C. 2601 et seq.);
``(M) the Secure and Fair Enforcement for
Mortgage Licensing Act (12 U.S.C. 5101 et
seq.);
``(N) the Truth in Lending Act (15 U.S.C.
1601 et seq.);
``(O) the Truth in Savings Act (12 U.S.C.
4301 et seq.); and
``(5) the term `expanded Board' means----
``(A) the members of the Council described
under section 1004(a);
``(B) the Secretary of Housing and Urban
Development;
``(C) the Chairman of the Securities and
Exchange Commission;
``(D) the Chairman of the Commodities Futures
Trading Commission;
``(E) the Chairman of the Federal Trade
Commission;
``(F) the Director of the Federal Housing
Finance Agency;
``(G) the Director of the Pension Benefit
Guarantee Corporation;
``(H) the Secretary of the Treasury;
``(I) the Secretary of Defense; and
``(J) the Secretary of Veterans' Affairs.''.
(c) Definitions Related to the State Liaison Committee.--
Section 1007 of such Act (12 U.S.C. 3306) is amended by
inserting after ``financial institutions'' the following: ``and
one representative of the National Association of Insurance
Commissioners''.
SEC. 2003. FINANCIAL INSTITUTIONS CONSUMER PROTECTION AND EXAMINATION
COUNCIL.
(a) Consumer Protection Duties.--Section 1006 of the Federal
Financial Institutions Examination Council Act of 1978 (12
U.S.C. 3305) is amended by adding at the end the following new
subsection:
``(h) Consumer Protection Regulations.--
``(1) In general.--The Council shall study the need
for revised or new regulations for the protection of
consumers under the enumerated consumer laws and shall
vote on suggested model regulations that the Council
determines necessary for the protection of consumers
under the enumerated consumer laws.
``(2) Regulations issued by council members.--Not
later than the end of the 1-month period beginning on
the date a suggested model regulation is agreed to by
the Council by a majority vote of the members of the
Council, the members of the Council, other than the
Chairman of the State Liaison Committee, shall jointly
issue regulations based on such suggested model
regulation, where applicable.
``(3) Expanded board required.--For purposes of any
action taken pursuant to this subsection and any
reference to the members of the Council under this
subsection, the Council shall consist of the expanded
Board.
``(4) No council enforcement power.--No provision of
this subsection shall be construed as conferring any
enforcement authority to the Council.
``(5) Requirements for regulations proposed by the
chairman of the state liaison committee.--
``(A) In general.--The Chairman of the State
Liaison Committee may not propose any suggested
model regulation for the Council to vote on
under this subsection unless such proposed
suggested model regulation is accompanied by a
certification from the Chairman of the State
Liaison Committee stating that more than half
of the States support such proposal.
``(B) Method of determination.--For purposes
of this paragraph, the Chairman of the State
Liaison Committee shall determine the method
for determining if a State supports a
proposal.''.
(b) Additional Staff.--Section 1008 of such Act (12 U.S.C.
3307) is amended by adding at the end the following new
subsection:
``(d) Consumer Protection Staff.--
``(1) In general.--At the request of the Council, any
member of the expanded Board, other than the Chairman
of the State Liaison Committee, may detail, on a
reimbursable basis, any of the personnel of that
member's department or agency to the Council to assist
it in carrying out the Council's duties under
subsection (h).
``(2) Expanded board required.--When making any
request under this subsection, the Council shall
consist of the expanded Board.''.
SEC. 2004. OFFICE OF CONSUMER PROTECTION.
The Federal Financial Institutions Examination Council Act of
1978 (12 U.S.C. 3301 et seq.) is amended by adding at the end
the following new section:
``SEC. 1012. OFFICE OF CONSUMER PROTECTION.
``(a) Office of Consumer Protection.--There is hereby
established within the Council an Office of Consumer Protection
(hereinafter in this section referred to as the `Office').
``(b) Consumer Complaint Hotline and Website.--The Office
shall establish a toll-free hotline and a website for consumers
to contact regarding inquiries or complaints related to
consumer protection. Such hotline and website shall then refer
such inquiries or complaints to the appropriate Council member,
which will then respond to the inquiry or complaint.
``(c) Disclosure Review.--Not less often than once every 7
years, the Office shall undertake a comprehensive review of the
rules and regulations regarding disclosures made by entities
under the jurisdiction of the members of the Council to
consumers. In making such review the Office shall perform a
cost and benefit analysis of each such disclosure and determine
if the policy of the members of the Council towards such
disclosure should remain the same or be revised.
``(d) Consumer Testing Requirement.--Before prescribing any
regulation pursuant to section 1006(h), the Council shall have
the Office carry out consumer testing with respect to such
proposed model regulation.
``(e) Periodic Review of Regulations.--
``(1) Review.--Not less than once every 7 years, the
Office shall undertake a comprehensive review of all
regulations issued by the members of the Council
pursuant to section 1006(h)(2). In making such review,
the Office shall perform a cost and benefit analysis of
each regulation and determine if such regulation should
remain the same or if such regulation should be
revised.
``(2) Report.--After performing a review required by
paragraph (1), the Office shall issue a report to the
Congress describing the review process, any
determinations made by the Office, and any revisions to
regulations that the Office determined were needed.''.
SEC. 2005. STATE ENFORCEMENT AUTHORITY.
(a) Enforcement of Council Regulations.--The Federal
Financial Institutions Examination Council Act of 1978 (12
U.S.C. 3301 et seq.), as amended by section 2004, is further
amended by adding at the end the following new section:
``SEC. 1013. STATE ENFORCEMENT AUTHORITY.
``The chief law enforcement officer of a State, or an
official or agency designated by a State, shall have the
authority to enforce any regulations issued by the members of
the Council pursuant to section 1006(h)(2) against entities
regulated by such State.''.
(b) Enforcement of State Consumer Protection Laws Against
National Banks and Thrifts.--Notwithstanding any other
provision of law, other than section 5240 of the Revised
Statutes and the comparable limitation on visitorial authority
applicable to federal savings associations, the chief law
enforcement officer of a State, or an official or agency
designated by a State, shall have the right to enforce such
State's non-preempted consumer protection laws against national
banks.
SEC. 2006. UNFAIR OR DECEPTIVE ACTS OR PRACTICES AUTHORITY TRANSFERRED.
Section 18(f)(1) of the Federal Trade Commission Act (15
U.S.C. 57a(f)(1)) is amended--
(1) by striking ``(with respect to banks) and the
Federal Home Loan Bank Board (with respect to savings
and loan institutions described in paragraph (3))'' and
inserting the following: ``(with respect to entities
described in paragraph (2)(B)), the Comptroller of the
Currency (with respect to entities described in
paragraph (2)(A)), the Board of Directors of the
Federal Deposit Insurance Corporation (with respect to
entities described under paragraph (2)(C)), the
Director of the Office of Thrift Supervision (with
respect to savings associations or any savings and loan
institutions described in paragraph (3)),'';
(2) by striking ``each such Board'' and inserting
``each such entity''; and
(3) by striking ``any such Board'' and inserting
``any such entity''.
SEC. 2007. EQUALITY OF CONSUMER PROTECTION FUNCTIONS; CONSUMER
PROTECTION DIVISIONS.
(a) Equality of Consumer Protection Functions.--With respect
to each regulatory agency, the functions of such agency related
to consumer protection shall be of equal importance to such
agency as the other functions of such agency.
(b) Consumer Protection Divisions.--
(1) In general.--There is hereby established within
each regulatory agency a consumer protection division.
(2) Report.--The head of each consumer protection
division established under paragraph (1) shall submit
an annual report to the Congress detailing the
performance of the regulatory agency in which such
division is located in enforcing the consumer
protection laws.
(c) Regulatory Agency Defined.--For purposes of this section,
the term ``regulatory agency'' means the Office of the
Comptroller of the Currency, the Board of Governors of the
Federal Reserve System, the Federal Deposit Insurance
Corporation, the Office of Thrift Supervision, the National
Credit Union Administration, the Federal Trade Commission, and
the Department of Housing and Urban Development.
SEC. 2008. PROHIBITION ON CHARTER CONVERSIONS WHILE UNDER REGULATORY
SANCTION.
With respect to an entity for which there is an appropriate
Federal banking agency, as such term is defined under section
3(q) of the Federal Deposit Insurance Act (12 U.S.C. 1813(q)),
such agency shall issue regulations prohibiting such an entity
from converting the type of such entity's charter during any
time in which such entity is under a regulatory sanction by
such agency.
TITLE III--ANTI-FRAUD PROVISIONS
SEC. 3001. AUTHORITY TO IMPOSE CIVIL PENALTIES IN CEASE AND DESIST
PROCEEDINGS.
(a) Under the Securities Act of 1933.--Section 8A of the
Securities Act of 1933 (15 U.S.C. 77h-1) is amended by adding
at the end the following new subsection:
``(g) Authority To Impose Money Penalties.--
``(1) Grounds for imposing.--In any cease-and-desist
proceeding under subsection (a), the Commission may
impose a civil penalty on a person if it finds, on the
record after notice and opportunity for hearing, that--
``(A) such person--
``(i) is violating or has violated
any provision of this title, or any
rule or regulation thereunder; or
``(ii) is or was a cause of the
violation of any provision of this
title, or any rule or regulation
thereunder; and
``(B) such penalty is in the public interest.
``(2) Maximum amount of penalty.--
``(A) First tier.--The maximum amount of
penalty for each act or omission described in
paragraph (1) shall be $6,500 for a natural
person or $65,000 for any other person.
``(B) Second tier.--Notwithstanding paragraph
(A), the maximum amount of penalty for each
such act or omission shall be $65,000 for a
natural person or $325,000 for any other person
if the act or omission described in paragraph
(1) involved fraud, deceit, manipulation, or
deliberate or reckless disregard of a
regulatory requirement.
``(C) Third tier.--Notwithstanding paragraphs
(A) and (B), the maximum amount of penalty for
each such act or omission shall be $130,000 for
a natural person or $650,000 for any other
person if--
``(i) the act or omission described
in paragraph (1) involved fraud,
deceit, manipulation, or deliberate or
reckless disregard of a regulatory
requirement; and
``(ii) such act or omission directly
or indirectly resulted in substantial
losses or created a significant risk of
substantial losses to other persons or
resulted in substantial pecuniary gain
to the person who committed the act or
omission.
``(3) Evidence concerning ability to pay.--In any
proceeding in which the Commission may impose a penalty
under this section, a respondent may present evidence
of the respondent's ability to pay such penalty. The
Commission may, in its discretion, consider such
evidence in determining whether such penalty is in the
public interest. Such evidence may relate to the extent
of such person's ability to continue in business and
the collectability of a penalty, taking into account
any other claims of the United States or third parties
upon such person's assets and the amount of such
person's assets.''.
(b) Under the Securities Exchange Act of 1934.--Subsection
(a) of section 21B of the Securities Exchange Act of 1934 (15
U.S.C. 78u-2(a)) is amended--
(1) by striking ``(a) Commission Authority To Assess
Money Penalties.--In any proceeding'' and inserting the
following:
``(a) Commission Authority To Assess Money Penalties.--
``(1) In general.--In any proceeding'';
(2) by redesignating paragraphs (1) through (4) of
such subsection as subparagraphs (A) through (D),
respectively and moving such redesignated subparagraphs
and the matter following such subparagraphs 2 ems to
the right; and
(3) by adding at the end of such subsection the
following new paragraph:
``(2) Cease-and-desist proceedings.--In any
proceeding instituted pursuant to section 21C of this
title against any person, the Commission may impose a
civil penalty if it finds, on the record after notice
and opportunity for hearing, that such person--
``(A) is violating or has violated any
provision of this title, or any rule or
regulation thereunder; or
``(B) is or was a cause of the violation of
any provision of this title, or any rule or
regulation thereunder.''.
(c) Under the Investment Company Act of 1940.--Paragraph (1)
of section 9(d) of the Investment Company Act of 1940 (15
U.S.C. 80a-9(d)(1)) is amended--
(1) by striking ``(1) Authority of commission.--In
any proceeding'' and inserting the following:
``(1) Authority of commission.--
``(A) In general.--In any proceeding'';
(2) by redesignating subparagraphs (A) through (C) of
such paragraph as clauses (i) through (iii),
respectively and by moving such redesignated clauses
and the matter following such subparagraphs 2 ems to
the right; and
(3) by adding at the end of such paragraph the
following new subparagraph:
``(B) Cease-and-desist proceedings.--In any
proceeding instituted pursuant to subsection
(f) against any person, the Commission may
impose a civil penalty if it finds, on the
record after notice and opportunity for
hearing, that such person--
``(i) is violating or has violated
any provision of this title, or any
rule or regulation thereunder; or
``(ii) is or was a cause of the
violation of any provision of this
title, or any rule or regulation
thereunder.''.
(d) Under the Investment Advisers Act of 1940.--Paragraph (1)
of section 203(i) of the Investment Advisers Act of 1940 (15
U.S.C. 80b-3(i)(1)) is amended--
(1) by striking ``(1) Authority of commission.--In
any proceeding'' and inserting the following:
``(1) Authority of commission.--
``(A) In general.--In any proceeding'';
(2) by redesignating subparagraphs (A) through (D) of
such paragraph as clauses (i) through (iv),
respectively and moving such redesignated clauses and
the matter following such subparagraphs 2 ems to the
right; and
(3) by adding at the end of such paragraph the
following new subparagraph:
``(B) Cease-and-desist proceedings.--In any
proceeding instituted pursuant to subsection
(k) against any person, the Commission may
impose a civil penalty if it finds, on the
record after notice and opportunity for
hearing, that such person--
``(i) is violating or has violated
any provision of this title, or any
rule or regulation thereunder; or
``(ii) is or was a cause of the
violation of any provision of this
title, or any rule or regulation
thereunder.''.
SEC. 3002. FORMERLY ASSOCIATED PERSONS.
(a) Member or Employee of the Municipal Securities Rulemaking
Board.--Section 15B(c)(8) of the Securities Exchange Act of
1934 (15 U.S.C. 78o-4(c)(8)) is amended by striking ``any
member or employee'' and inserting ``any person who is, or at
the time of the alleged misconduct was, a member or employee''.
(b) Person Associated With a Government Securities Broker or
Dealer.--Section 15C of the Securities Exchange Act of 1934 (15
U.S.C. 78o-5) is amended--
(1) in subsection (c)(1)(C), by striking ``or seeking
to become associated,'' and inserting ``seeking to
become associated, or, at the time of the alleged
misconduct, associated or seeking to become
associated'';
(2) in subsection (c)(2)(A), by inserting ``, seeking
to become associated, or, at the time of the alleged
misconduct, associated or seeking to become
associated'' after ``any person associated''; and
(3) in subsection (c)(2)(B), by inserting ``, seeking
to become associated, or, at the time of the alleged
misconduct, associated or seeking to become
associated'' after ``any person associated''.
(c) Person Associated With a Member of a National Securities
Exchange or Registered Securities Association.--Section
21(a)(1) of the Securities Exchange Act of 1934 (15 U.S.C.
78u(a)(1)) is amended by inserting ``, or, as to any act or
practice, or omission to act, while associated with a member,
formerly associated'' after ``member or a person associated''.
(d) Participant of a Registered Clearing Agency.--Section
21(a)(1) of the Securities Exchange Act of 1934 (15 U.S.C.
78u(a)(1)) is amended by inserting ``or, as to any act or
practice, or omission to act, while a participant, was a
participant,'' after ``in which such person is a
participant,''.
(e) Officer or Director of a Self-regulatory Organization.--
Section 19(h)(4) of the Securities Exchange Act of 1934 (15
U.S.C. 78s(h)(4)) is amended--
(1) by striking ``any officer or director'' and
inserting ``any person who is, or at the time of the
alleged misconduct was, an officer or director''; and
(2) by striking ``such officer or director'' and
inserting ``such person''.
(f) Officer or Director of an Investment Company.--Section
36(a) of the Investment Company Act of 1940 (15 U.S.C. 80a-
35(a)) is amended--
(1) by striking ``a person serving or acting'' and
inserting ``a person who is, or at the time of the
alleged misconduct was, serving or acting''; and
(2) by striking ``such person so serves or acts'' and
inserting ``such person so serves or acts, or at the
time of the alleged misconduct, so served or acted''.
(g) Person Associated With a Public Accounting Firm.--
(1) Sarbanes-oxley act of 2002 amendment.--Section
2(a)(9) of the Sarbanes-Oxley Act of 2002 (15 U.S.C.
7201(9)) is amended by adding at the end the following
new subparagraph:
``(C) Investigative and enforcement
authority.--For purposes of the provisions of
sections 3(c), 101(c), 105, and 107(c) and
Board or Commission rules thereunder, except to
the extent specifically excepted by such rules,
the terms defined in subparagraph (A) shall
include any person associated, seeking to
become associated, or formerly associated with
a public accounting firm, except--
``(i) the authority to conduct an
investigation of such person under
section 105(b) shall apply only with
respect to any act or practice, or
omission to act, while such person was
associated or seeking to become
associated with a registered public
accounting firm; and
``(ii) the authority to commence a
proceeding under section 105(c)(1), or
impose disciplinary sanctions under
section 105(c)(4), against such person
shall apply only on--
``(I) the basis of conduct
occurring while such person was
associated or seeking to become
associated with a registered
public accounting firm; or
``(II) non-cooperation as
described in section 105(b)(3)
with respect to a demand in a
Board investigation for
testimony, documents, or other
information relating to a
period when such person was
associated or seeking to become
associated with a registered
public accounting firm.''.
(2) Securities exchange act of 1934 amendment.--
Section 21(a)(1) of the Securities Exchange Act of 1934
(15 U.S.C. 78u(a)(1)) is amended by striking ``or a
person associated with such a firm'' and inserting ``,
a person associated with such a firm, or, as to any
act, practice, or omission to act while associated with
such firm, a person formerly associated with such a
firm''.
(h) Supervisory Personnel of an Audit Firm.--Section
105(c)(6) of the Sarbanes-Oxley Act of 2002 (15 U.S.C.
7215(c)(6)) is amended--
(1) in subparagraph (A), by striking ``the
supervisory personnel'' and inserting ``any person who
is, or at the time of the alleged failure reasonably to
supervise was, a supervisory person''; and
(2) in subparagraph (B)--
(A) by striking ``No associated person'' and
inserting ``No current or former supervisory
person''; and
(B) by striking ``any other person'' and
inserting ``any associated person''.
(i) Member of the Public Company Accounting Oversight
Board.--Section 107(d)(3) of the Sarbanes-Oxley Act of 2002 (15
U.S.C. 7217(d)(3)) is amended by striking ``any member'' and
inserting ``any person who is, or at the time of the alleged
misconduct was, a member''.
SEC. 3003. COLLATERAL BARS.
(a) Section 15(b)(6)(A) of the Securities Exchange Act of
1934.--Section 15(b)(6)(A) of the Securities Exchange Act of
1934 (15 U.S.C. 78o(b)(6)(A)) is amended by striking ``12
months, or bar such person from being associated with a broker
or dealer,'' and inserting ``12 months, or bar any such person
from being associated with a broker, dealer, investment
adviser, municipal securities dealer, or transfer agent,''.
(b) Section 15B(c)(4) of the Securities Exchange Act of
1934.--Section 15B(c)(4) of the Securities Exchange Act of 1934
(15 U.S.C. 78o-4(c)(4)) is amended by striking ``twelve months
or bar any such person from being associated with a municipal
securities dealer,'' and inserting ``twelve months or bar any
such person from being associated with a broker, dealer,
investment adviser, municipal securities dealer, or transfer
agent,''.
(c) Section 17A(c)(4)(C) of the Securities Exchange Act of
1934.--Section 17A(c)(4)(C) of the Securities Exchange Act of
1934 (15 U.S.C. 78q-1(c)(4)(C)) is amended by striking ``twelve
months or bar any such person from being associated with the
transfer agent,'' and inserting ``twelve months or bar any such
person from being associated with any transfer agent, broker,
dealer, investment adviser, or municipal securities dealer,''.
(d) Section 203(f) of the Investment Advisers Act of 1940.--
Section 203(f) of the Investment Advisers Act of 1940 (15
U.S.C. 80b-3(f)) is amended by striking ``twelve months or bar
any such person from being associated with an investment
adviser,'' and inserting ``twelve months or bar any such person
from being associated with an investment adviser, broker,
dealer, municipal securities dealer, or transfer agent,''.
SEC. 3004. UNLAWFUL MARGIN LENDING.
Section 7(c)(1)(A) of the Securities Exchange Act of 1934 (15
U.S.C. 78g(c)(1)(A)) is amended by striking ``; and'' and
inserting ``; or''.
SEC. 3005. NATIONWIDE SERVICE OF PROCESS.
(a) Securities Act of 1933.--Section 22(a) of the Securities
Act of 1933 (15 U.S.C. 77v(a)) is amended by inserting after
the second sentence the following: ``In any civil action
instituted by the Commission under this title in a United
States district court for any judicial district, subpoenas
issued to compel the attendance of witnesses or the production
of documents or tangible things (or both) at any hearing or
trial may be served at any place within the United States. Rule
45(c)(3)(A)(ii) of the Federal Rules of Civil Procedure does
not apply to a subpoena so issued.''.
(b) Securities Exchange Act of 1934.--Section 27 of the
Securities Exchange Act of 1934 (15 U.S.C. 78aa) is amended by
inserting after the third sentence the following: ``In any
civil action instituted by the Commission under this title in a
United States district court for any judicial district,
subpoenas issued to compel the attendance of witnesses or the
production of documents or tangible things (or both) at any
hearing or trial may be served at any place within the United
States. Rule 45(c)(3)(A)(ii) of the Federal Rules of Civil
Procedure does not apply to a subpoena so issued.''.
(c) Investment Company Act of 1940.--Section 44 of the
Investment Company Act of 1940 (15 U.S.C. 80a-43) is amended by
inserting after the fourth sentence the following: ``In any
civil action instituted by the Commission under this title in a
United States district court for any judicial district,
subpoenas issued to compel the attendance of witnesses or the
production of documents or tangible things (or both) at any
hearing or trial may be served at any place within the United
States. Rule 45(c)(3)(A)(ii) of the Federal Rules of Civil
Procedure does not apply to a subpoena so issued.''.
(d) Investment Advisers Act of 1940.--Section 214 of the
Investment Advisers Act of 1940 (15 U.S.C. 80b-14) is amended
by inserting after the third sentence the following: ``In any
civil action instituted by the Commission under this title in a
United States district court for any judicial district,
subpoenas issued to compel the attendance of witnesses or the
production of documents or tangible things (or both) at any
hearing or trial may be served at any place within the United
States. Rule 45(c)(3)(A)(ii) of the Federal Rules of Civil
Procedure does not apply to a subpoena so issued.''.
SEC. 3006. REAUTHORIZATION OF THE FINANCIAL CRIMES ENFORCEMENT NETWORK.
(a) Findings.--
(1) The Congress finds as follows:
(A) The work of the Financial Crimes
Enforcement Network (hereinafter in this
section referred to as ``FinCEN'') is essential
to safeguard the United States financial system
and its international affiliates from the
abuses of financial crime, including terrorist
financing, weapons of mass destruction
proliferation, and money laundering.
(B) All avenues of financial intermediation
are vulnerable to abuse by illicit actors, and
FinCEN exercises the authorities of the Bank
Secrecy Act over a broad range of financial
institutions.
(2) The Congress further finds and recognizes the
recent establishment by FinCEN of an International
Programs Division to expand and enhance global
financial intelligence sharing initiatives aimed at
combating transnational crime threats facing United
States financial markets, and takes note of FinCEN's
efforts to collaborate with foreign financial
intelligence unit partners on analytical projects to
identify and address emerging threats and
vulnerabilities.
(3) The Congress further finds and recognizes the
role of FinCEN in discovering and investigating
widespread fraud in the mortgage market and elsewhere
in the financial services industry. Alongside an
effective licensing and registration system for all
mortgage originators, a vigilant FinCEN is critical to
the recovery of our housing markets and consumer
confidence in both the home buying process and the
financial services industry as a whole.
(b) Reauthorization.--Section 310(d)(1) of title 31, United
States Code, is amended by striking ``such sums as may be
necessary for fiscal years 2002, 2003, 2004, and 2005'' and
inserting ``not more than $105,500,000 for fiscal year 2010,
and such sums as may be necessary for fiscal years 2011, 2012,
2013, and 2014''.
(c) Additional Financial Fraud Authorization of
Appropriations.--In addition to such other amounts otherwise
made available or appropriated to FinCEN, there are authorized
to be appropriated to FinCEN $15,000,000 to be used
specifically for efforts to detect financial fraud. Such sums
are authorized to remain available until expended.
SEC. 3007. FAIR FUND IMPROVEMENTS.
(a) Amendment.--Subsection (a) of section 308 of the
Sarbanes-Oxley Act of 2002 (15 U.S.C. 7246(a)) is amended to
read as follows:
``(a) Civil Penalties To Be Used for the Relief of Victims.--
If in any judicial or administrative action brought by the
Commission under the securities laws (as such term is defined
in section 3(a)(47) of the Securities Exchange Act of 1934 (15
U.S.C. 78c(a)(47)), the Commission obtains a civil penalty
against any person for a violation of such laws, the amount of
such civil penalty shall, on the motion or at the direction of
the Commission, be added to and become part of a disgorgement
fund or other fund established for the benefit of the victims
of such violation.''.
(b) Conforming Amendments.--Section 308 of such Act is
amended--
(1) in subsection (b)--
(A) by striking ``for a disgorgement fund
described in subsection (a)'' and inserting
``for a disgorgement fund or other fund
described in subsection (a)''; and
(B) by striking ``in the disgorgement fund''
and inserting ``in such fund''; and
(2) by striking subsection (e).
TITLE IV--OVER-THE-COUNTER DERIVATIVES MARKETS
SECTION 4001. SHORT TITLE.
This title may be cited as the ``Over-the-Counter Derivatives
Markets Act of 2009''.
Subtitle A--Amendments to the Commodity Exchange Act
SEC. 4100. DEFINITIONS.
Section 1a of the Commodity Exchange Act (7 U.S.C. 1a) is
amended by adding at the end the following:
``(35) Swap.--
``(A) In general.--Except as provided in
subparagraph (B), the term `swap' means any
agreement, contract, or transaction that--
``(i) is a put, call, cap, floor,
collar, or similar option of any kind
for the purchase or sale of, or based
on the value of, one or more interest
or other rates, currencies,
commodities, securities, instruments of
indebtedness, indices, quantitative
measures, or other financial or
economic interests or property of any
kind;
``(ii) provides for any purchase,
sale, payment, or delivery (other than
a dividend on an equity security) that
is dependent on the occurrence, non-
occurrence, or the extent of the
occurrence of an event or contingency
associated with a potential financial,
economic, or commercial consequence;
``(iii) provides on an executory
basis for the exchange, on a fixed or
contingent basis, of one or more
payments based on the value or level of
one or more interest or other rates,
currencies, commodities, securities,
instruments of indebtedness, indices,
quantitative measures, or other
financial or economic interests or
property of any kind, or any interest
therein or based on the value thereof,
and that transfers, as between the
parties to the transaction, in whole or
in part, the financial risk associated
with a future change in any such value
or level without also conveying a
current or future direct or indirect
ownership interest in an asset
(including any enterprise or investment
pool) or liability that incorporates
the financial risk so transferred,
including any agreement, contract, or
transaction commonly known as an
interest rate swap, a rate floor, rate
cap, rate collar, cross-currency rate
swap, basis swap, currency swap, total
return swap, equity index swap, equity
swap, debt index swap, debt swap,
credit spread, credit default swap,
credit swap, weather swap, energy swap,
metal swap, agricultural swap,
emissions swap, or commodity swap;
``(iv) is an agreement, contract, or
transaction that is, or in the future
becomes, commonly known to the trade as
a swap; or
``(v) is any combination or
permutation of, or option on, any
agreement, contract, or transaction
described in any of clauses (i) through
(iv).
``(B) Exclusions.--The term `swap' does not
include:
``(i) any contract of sale of a
commodity for future delivery or
security futures product traded on or
subject to the rules of any board of
trade designated as a contract market
under section 5 or 5f;
``(ii) any sale of a nonfinancial
commodity for deferred shipment or
delivery, so long as such transaction
is physically settled;
``(iii) any put, call, straddle,
option, or privilege on any security,
certificate of deposit, or group or
index of securities, including any
interest therein or based on the value
thereof, that is subject to the
Securities Act of 1933 (15 U.S.C. 77a
et seq.) and the Securities Exchange
Act of 1934 (15 U.S.C. 78a et seq.);
``(iv) any put, call, straddle,
option, or privilege relating to
foreign currency entered into on a
national securities exchange registered
pursuant to section 6(a) of the
Securities Exchange Act of 1934 (15
U.S.C. 78f(a));
``(v) any agreement, contract, or
transaction providing for the purchase
or sale of one or more securities on a
fixed basis that is subject to the
Securities Act of 1933 (15 U.S.C. 77a
et seq.) and the Securities Exchange
Act of 1934 (15 U.S.C. 78a et seq.);
``(vi) any agreement, contract, or
transaction providing for the purchase
or sale of one or more securities on a
contingent basis that is subject to the
Securities Act of 1933 (15 U.S.C. 77a
et seq.) and the Securities Exchange
Act of 1934 (15 U.S.C. 78a et seq.),
unless such agreement, contract, or
transaction predicates such purchase or
sale on the occurrence of a bona fide
contingency that might reasonably be
expected to affect or be affected by
the creditworthiness of a party other
than a party to the agreement,
contract, or transaction;
``(vii) any note, bond, or evidence
of indebtedness that is a security as
defined in section 2(a)(1) of the
Securities Act of 1933 (15 U.S.C.
77b(a)(1));
``(viii) any agreement, contract, or
transaction that is--
``(I) based on a security;
and
``(II) entered into directly
or through an underwriter (as
defined in section 2(a)(11) of
the Securities Act of 1933) (15
U.S.C. 77b(a)(11)) by the
issuer of such security for the
purposes of raising capital,
unless such agreement,
contract, or transaction is
entered into to manage a risk
associated with capital
raising;
``(ix) any foreign exchange swap;
``(x) any foreign exchange forward;
``(xi) any agreement, contract, or
transaction a counterparty of which is
a Federal Reserve bank or the United
States Government, or an agency of the
United States Government that is
expressly backed by the full faith and
credit of the United States; and
``(xii) any security-based swap,
other than a security-based swap as
described in paragraph (36](C).
``(C) Rule of construction regarding master
agreements.--The term `swap' shall be construed
to include a master agreement that provides for
an agreement, contract, or transaction that is
a swap pursuant to subparagraph (A), together
with all supplements to any such master
agreement, without regard to whether the master
agreement contains an agreement, contract, or
transaction that is not a swap pursuant to
subparagraph (A), except that the master
agreement shall be considered to be a swap only
with respect to each agreement, contract, or
transaction under the master agreement that is
a swap pursuant to subparagraph (A).
``(36) Security-based swap.--
``(A) In general.--Except as provided in
subparagraph (B), the term `security-based
swap' means any agreement, contract, or
transaction that would be a swap under
paragraph (35) (without regard to paragraph
(35)(B)(xii)), and that--
``(i) is based on an index that is a
narrow-based security index, including
any interest therein or based on the
value thereof;
``(ii) is based on a single security
or loan, including any interest therein
or based on the value thereof; or
``(iii) is based on the occurrence,
non-occurrence, or extent of the
occurrence of an event relating to a
single issuer of a security or the
issuers of securities in a narrow-based
security index, provided that such
event must directly affect the
financial statements, financial
condition, or financial obligations of
the issuer.
``(B) Exclusion.--The term `security-based
swap' does not include any agreement, contract,
or transaction that meets the definition of
security-based swap only because it references
or is based upon a government security.
``(C) Mixed swap.--The term `security-based
swap' includes any agreement, contract, or
transaction that is as described in
subparagraph (A) and also is based on the value
of one or more interest or other rates,
currencies, commodities, instruments of
indebtedness, indices, quantitative measures,
other financial or economic interest or
property of any kind (other than a single
security or a narrow-based security index), or
the occurrence, non-occurrence, or the extent
of the occurrence of an event or contingency
associated with a potential financial,
economic, or commercial consequence (other than
an event described in subparagraph (A)(iii)).
``(D) Rule of construction regarding master
agreements.--The term `security-based swap'
shall be construed to include a master
agreement that provides for an agreement,
contract, or transaction that is a security-
based swap pursuant to subparagraph (A),
together with all supplements to any such
master agreement, without regard to whether the
master agreement contains an agreement,
contract, or transaction that is not a
security-based swap pursuant to subparagraph
(A), except that the master agreement shall be
considered to be a security-based swap only
with respect to each agreement, contract, or
transaction under the master agreement that is
a security-based swap pursuant to subparagraph
(A).
``(37) Swap dealer.--
``(A) In general.--The term `swap dealer'
means any person engaged in the business of
buying and selling swaps for such person's own
account, through a broker or otherwise, that is
regulated by a Prudential Regulator.
``(B) Exception.--The term `swap dealer' does
not include a person that buys or sells swaps
for such person's own account, either
individually or in a fiduciary capacity, but
not as a part of a regular business.
``(38) Security-based swap dealer.--
``(A) In general.--The term `security-based
swap dealer' means any person engaged in the
business of buying and selling security-based
swaps for such person's own account, through a
broker or otherwise, that is regulated by a
Prudential Regulator.
``(B) Exception.--The term `security-based
swap dealer' does not include a person that
buys or sells security-based swaps for such
person's own account, either individually or in
a fiduciary capacity, but not as a part of a
regular business.
``(39) Major swap participant.--
``(A) In general.--The term `major swap
participant' means any person who is not a swap
dealer, who maintains a substantial net
position in outstanding swaps, excluding
positions held primarily for hedging (including
balance sheet hedging) or risk management
purposes, and who is regulated by a Prudential
Regulator. A person may be designated as a
major swap participant for 1 or more individual
types of swaps.
``(B) Definition of `substantial net
position'.-- The Commission and the Securities
and Exchange Commission shall jointly define by
rule or regulation the term `substantial net
position' at a threshold that the regulators
determine prudent for the effective monitoring,
management and oversight of the financial
system.
``(40) Major security-based swap participant.--
``(A) In general.--The term `major security-
based swap participant' means any person who is
not a security-based swap dealer, who maintains
a substantial net position in outstanding
security-based swaps, excluding positions held
primarily for commercial hedging (including
balance sheet hedging) or financial risk
management purposes, and who is regulated by a
Prudential Regulator. A person may be
designated as a major security-based swap
participant for 1 or more individual types of
security-based swaps.
``(B) Definition of `substantial net
position'.--The Commission and the Securities
and Exchange Commission shall jointly define by
rule or regulation the term `substantial net
position' at a threshold that the regulators
determine prudent for the effective monitoring,
management and oversight of the financial
system.
``(41) Appropriate federal banking agency.--The term
`appropriate Federal banking agency' has the same
meaning as in section 3(q) of the Federal Deposit
Insurance Act (12 U.S.C. 1813(q)).
``(42) Board.--The term `Board' means the Board of
Governors of the Federal Reserve System.
``(43) Prudential regulator.--The term `Prudential
Regulator' means--
``(A) the Board, in the case of a swap
dealer, major swap participant, security-based
swap dealer or major security-based swap
participant that is--
``(i) a State-chartered bank that is
a member of the Federal Reserve System;
``(ii) a State-chartered branch or
agency of a foreign bank; or
``(iii) a bank holding company (as
defined in section 2 of the Bank
Holding Company Act of 1956);
``(B) the Office of the Comptroller of the
Currency, in the case of a swap dealer, major
swap participant, security-based swap dealer or
major security-based swap participant that is--
``(i) a national bank; or
``(ii) a federally chartered branch
or agency of a foreign bank;
``(C) the Federal Deposit Insurance
Corporation, in the case of a swap dealer,
major swap participant, security-based swap
dealer or major security-based swap participant
that is a State-chartered bank that is not a
member of the Federal Reserve System; or
``(D) the Office of Thrift Supervision, in
the case of a savings association (as defined
in section 2 of the Home Owners' Loan Act) or a
savings and loan holding company (as defined in
section 10 of such Act).
``(44) Swap repository.--The term `swap repository'
means an entity that collects and maintains the records
of the terms and conditions of swaps or security-based
swaps entered into by third parties.''.
SEC. 4101. SWAP REPOSITORIES.
(a) Swap Repositories.--The Commodity Exchange Act (7 U.S.C.
1 et seq.) is amended by inserting after section 20 the
following:
``SEC. 21. SWAP REPOSITORIES.
``(a) Required Reporting.--
``(1) In general.--
``(A) In general.--
``(A) In general.--Any swap that is not
accepted for clearing by a derivatives clearing
organization shall be reported to either a swap
repository registered pursuant to subsection
(b) or, if there is no repository that would
accept the swap, to the Commission in
accordance with section 4r within such time
period as the Commission may by rule prescribe.
``(B) Authority of swap dealer to report.--
Counterparties to a swap may agree as to which
counterparty will report such swap as required
by subparagraph (A). In any swap where only one
counterparty is a swap dealer, the swap dealer
shall report the swap.
``(2) Transition rules.--Rules adopted by the
Commission under this section shall provide for the
reporting of data, as follows:
``(A) Swaps that were entered into before the
date of enactment of the Over-the-Counter
Derivatives Markets Act of 2009 shall be
reported to a registered swap repository or the
Commission no later than 270 days after the
effective date of such Act.
``(B) Swaps that were entered into on or
after the date of enactment of the Over-the-
Counter Derivatives Markets Act of 2009 shall
be reported to a registered swap repository or
the Commission no later than the later of--
``(i) 180 days after the effective
date of such Act; or
``(ii) such other time after entering
into the swap as the Commission may
prescribe by rule or regulation.
``(b) Swap Repositories.--
``(1) Registration requirement.--
``(A) In general.--It shall be unlawful for a
swap repository, unless registered with the
Commission, directly or indirectly to make use
of the mails or any means or instrumentality of
interstate commerce to perform the functions of
a swap repository.
``(B) Inspection and examination.--Registered
swap repositories shall be subject to
inspection and examination by any
representatives of the Commission.
``(2) Standard setting.--
``(A) Data identification.--The Commission
shall prescribe standards that specify the data
elements for each swap that shall be collected
and maintained by each swap repository.
``(B) Data collection and maintenance.--The
Commission shall prescribe data collection and
data maintenance standards for swap
repositories.
``(C) Comparability.--The standards
prescribed by the Commission under this
subsection shall be comparable to the data
standards imposed by the Commission on
derivatives clearing organizations that clear
swaps.
``(3) Duties.--A swap repository shall--
``(A) accept data prescribed by the
Commission for each swap under paragraph (2);
``(B) maintain such data in such form and
manner and for such period as may be required
by the Commission;
``(C) provide to the Commission, or its
designee, such information as is required by,
and in a form and at a frequency to be
determined by, the Commission, in order to
comply with the public reporting requirements
contained in section 8(j); and
``(D) make available, on a confidential
basis, all data obtained by the swap
repository, including individual counterparty
trade and position data, to the Commission, the
appropriate Federal banking agencies, the
Commodity Futures Trading Commission, the
Financial Services Oversight Council, and the
Department of Justice or to other persons the
Commission deems appropriate, including foreign
financial supervisors (including foreign
futures authorities), foreign central banks,
and foreign ministries.
``(4) Required registration for swap repositories.--
Any person that is required to be registered as a swap
repository under this subsection shall register with
the Commission, regardless of whether that person also
is registered with the Securities and Exchange
Commission as a security-based swap repository.
``(5) Harmonization of rules.--Not later than 270
days after the date of enactment of the Over-the-
Counter Derivatives Markets Act of 2009, the Commission
and the Securities and Exchange Commission shall
jointly adopt uniform rules governing persons that are
registered under this section and persons that are
registered as security-based swap repositories under
the Securities Exchange Act of 1934 (15 U.S.C. 78a et
seq.), including uniform rules that specify the data
elements that shall be collected and maintained by each
repository.
``(6) Exemptions.--The Commission may exempt,
conditionally or unconditionally, a swap repository
from the requirements of this section if the Commission
finds that such swap repository is subject to
comparable, comprehensive supervision or regulation on
a consolidated basis by the Securities and Exchange
Commission, a Prudential Regulator or the appropriate
governmental authorities in the organization's home
country, or as necessary or appropriate in the public
interest and consistent with the purposes of this
Act.''.
(b) Reporting and Recordkeeping.--The Commodity Exchange Act
(7 U.S.C. 1 et seq.) is amended by inserting after section 4q
the following:
``SEC. 4R. REPORTING AND RECORDKEEPING FOR CERTAIN SWAPS.
``(a) In General.--Any person who enters into a swap that is
not accepted for clearing by a derivatives clearing
organization and is not reported to a swap repository
registered pursuant to section 21 shall meet the requirements
in subsection (b).
``(b) Reports.--Any person described in subsection (a)
shall--
``(1) make such reports in such form and manner and
for such period as the Commission shall prescribe by
rule or regulation regarding the swaps held by the
person; and
``(2) keep books and records pertaining to the
security-based swaps held by the person in such form
and manner and for such period as may be required by
the Commission, which books and records shall be open
to inspection by any representative of the Commission,
an appropriate Federal banking agency, the Securities
and Exchange Commission, the Financial Services
Oversight Council, and the Department of Justice.
``(c) Identical Data.--In adopting rules under this section,
the Commission shall require persons described in subsection
(a) to report the same or more comprehensive data than the
Commission requires repositories to collect.''.
(c) Public Reporting of Aggregate Swap Data.--Section 8 of
such Act (7 U.S.C. 12) is amended by adding at the end the
following:
``(j) Public Reporting of Aggregate Swap Data.--
``(1) In general.--The Commission, or a person
designated by the Commission pursuant to paragraph (2),
shall make available to the public, in a manner that
does not disclose the business transactions and market
positions of any person, aggregate data on swap trading
volumes and positions from the sources set forth in
paragraph (3).
``(2) Designee of the commission.--The Commission may
designate a derivatives clearing organization or a swap
repository to carry out the public reporting described
in paragraph (1).
``(3) Sources of information.--The sources of the
information to be publicly reported as described in
paragraph (1) are--
``(A) derivatives clearing organizations;
``(B) swap repositories pursuant to section
21(c)(3); and
``(C) reports received by the Commission
pursuant to section 4r.''.
SEC. 4102. MARGIN FOR SWAPS BETWEEN SWAPS DEALERS AND MAJOR SWAP
PARTICIPANTS.
The Commodity Exchange Act (7 U.S.C. 1 et seq.) is amended
by inserting after section 4r (as added by section 4101(b) of
this title) the following:
``SEC. 4S. MARGIN FOR SWAPS BETWEEN CERTAIN SWAPS DEALERS AND CERTAIN
MAJOR SWAP PARTICIPANTS.
``Each Prudential Regulator shall impose both initial and
variation margin requirements on all swaps between swap dealers
and major swap participants subject to regulation by the
Regulator, that are not cleared by a derivatives clearing
organization.''.
SEC. 4103. SEGREGATION OF ASSETS HELD AS COLLATERAL IN SWAP
TRANSACTIONS.
The Commodity Exchange Act (7 U.S.C. 1 et seq.) is amended by
inserting after section 4s (as added by section 4102 of this
title) the following:
``SEC. 4T. SEGREGATION OF ASSETS HELD AS COLLATERAL IN SWAP
TRANSACTIONS.
``(a) Cleared Swaps.--A swap dealer, futures commission
merchant, or derivatives clearing organization by or through
which funds or other property are held as margin or collateral
to secure the obligations of a counterparty under a swap to be
cleared by or through a derivatives clearing organization shall
segregate, maintain, and use the funds or other property for
the benefit of the counterparty, in accordance with such rules
and relations as the Commission or Prudential Regulator shall
prescribe. Any such funds or other property shall be treated as
customer property under this Act.
``(b) Over-the-counter Swaps.--At the request of a swap
counterparty who provides funds or other property to a swap
dealer as margin or collateral to secure the obligations of the
counterparty under a swap entered into using the mails or any
other means or instrumentalities of interstate commerce between
the counterparty and the swap dealer that is not submitted for
clearing to a derivatives clearing organization, the swap
dealer shall segregate the funds or other property for the
benefit of the counterparty, and maintain the funds or other
property in an account which is carried by a third-party
custodian and designated as a segregated account for the
counterparty, in accordance with such rules and regulations as
the Commission or Prudential Regulator may prescribe. Any such
funds and property may, with the agreement of the customer, be
commingled with the funds and property of other swap
counterparties and customers and shall be eligible for
treatment as customer property under this Act. This subsection
shall not be interpreted to preclude commercial arrangements
regarding the investment of the segregated funds or other
property and the related allocation of gains and losses
resulting from any such investment or regarding the allocation
of the costs of segregation.
``(c) Mark-to-market Margin.--Nothing in this section shall
be construed to obligate any person to segregate variation or
mark-to-market margin.''.
Subtitle B--Amendments to the Securities Exchange Act of 1934
SEC. 4201. DEFINITIONS.
Section 3(a) of the Securities Exchange Act of 1934 (15
U.S.C. 78c(a)) is amended by adding at the end the following:
``(65) Appropriate federal banking agency.--The term
`appropriate Federal banking agency' has the same
meaning as in section 3(q) of the Federal Deposit
Insurance Act (12 U.S.C. 1813(q)).
``(66) Major swap participant.--The term `major swap
participant' has the same meaning as in section 1a(40)
of the Commodity Exchange Act (7 U.S.C. 1a(40)).
``(67) Major security-based swap participant.--The
term `major security-based swap participant' has the
same meaning as in section 1a(41) of the Commodity
Exchange Act (7 U.S.C. 1a(41)).
``(68) Prudential regulator.--The term `Prudential
Regulator' has the same meaning as in section 1a(43) of
the Commodity Exchange Act (7 U.S.C. 1a(43)).
``(69) Swap.--The term `swap' has the same meaning as
in section 1a(35) of the Commodity Exchange Act (7
U.S.C. 1a(35)).
``(70) Swap dealer.--The term `swap dealer' has the
same meaning as in section 1a(39) of the Commodity
Exchange Act (7 U.S.C. 1a(39)).
``(71) Security-based swap.--The term `security-based
swap' has the same meaning as in section 1a(38) of the
Commodity Exchange Act (7 U.S.C. 1a(38)).
``(72) Security-based swap dealer.--The term
`security-based swap dealer' has the same meaning as in
section 1a(44) of the Commodity Exchange Act (7 U.S.C.
1a(44)).''.
SEC. 4202. SWAP REPOSITORIES.
(a) In General.--The Securities Exchange Act of 1934 (15
U.S.C. 78a, et seq.) is amended by adding the following section
after section 3A:
``SEC. 3B. SWAP REPOSITORIES.
``(a) Required Reporting.--
``(1) In general.--
``(A) In general.--Any security-based swap
that is not accepted for clearing by any
clearing agency shall be reported to either a
security-based swap repository registered
pursuant to subsection (b) or, if there is no
repository that would accept the security-based
swap, to the Commission in accordance with
section 13A within such time period as the
Commission may by rule prescribe.
``(B) Authority of swap dealer to report.--
Counterparties to a security-based swap may
agree as to which counterparty will report such
swap as required by subparagraph (A). In any
security-based swap where only one counterparty
is a swap dealer, the swap dealer shall report
the swap.
``(2) Transition rules.--Rules adopted by the
Commission under this section shall provide for the
reporting of data, as follows:
``(A) Security-based swaps that were entered
into before the date of enactment of the Over-
the-Counter Derivatives Markets Act of 2009
shall be reported to a registered security-
based swap repository or the Commission no
later than 270 days after the effective date of
such Act.
``(B) Security-based swaps that were entered
into on or after the date of enactment of the
Over-the-Counter Derivatives Markets Act of
2009 shall be reported to a registered
security-based swap repository or the
Commission no later than the later of--
``(i) 180 days after the effective
date of such Act; or
``(ii) such other time after entering
into the swap as the Commission may
prescribe by rule or regulation.
``(b) Security-based Swap Repositories.--
``(1) Registration requirement.--
``(A) In general.--It shall be unlawful for a
security-based swap repository, unless
registered with the Commission, directly or
indirectly to make use of the mails or any
means or instrumentality of interstate commerce
to perform the functions of a security-based
swap repository.
``(B) Inspection and examination.--Registered
security-based swap repositories shall be
subject to inspection and examination by any
representatives of the Commission.
``(2) Standard setting.--
``(A) Data identification.--The Commission
shall prescribe standards that specify the data
elements for each security-based swap that
shall be collected and maintained by each
security-based swap repository.
``(B) Data collection and maintenance.--The
Commission shall prescribe data collection and
data maintenance standards for security-based
swap repositories.
``(C) Comparability.--The standards
prescribed by the Commission under this
subsection shall be comparable to the data
standards imposed by the Commission on clearing
agencies that clear security-based swaps.
``(3) Duties.--A security-based swap repository
shall--
``(A) accept data prescribed by the
Commission for each security-based swap under
this paragraph (2);
``(B) maintain such data in such form and
manner and for such period as may be required
by the Commission;
``(C) provide to the Commission, or its
designee, such information as is required by,
and in a form and at a frequency to be
determined by, the Commission, in order to
comply with the public reporting requirements
contained in section 13(m); and
``(D) make available, on a confidential
basis, all data obtained by the security-based
swap repository, including individual
counterparty trade and position data, to the
Commission, the appropriate Federal banking
agencies, the Commodity Futures Trading
Commission, the Financial Services Oversight
Council, and the Department of Justice or to
other persons the Commission deems appropriate,
including foreign financial supervisors
(including foreign futures authorities),
foreign central banks, and foreign ministries.
``(4) Required registration for security-based swap
repositories.--Any person that is required to be
registered as a securities-based swap repository under
this subsection shall register with the Commission,
regardless of whether that person also is registered
with the Commodity Futures Trading Commission as a swap
repository.
``(5) Harmonization of rules.--Not later than 270
days after the date of enactment of the Over-the-
Counter Derivatives Markets Act of 2009, the Commission
and the Commodity Futures Trading Commission shall
jointly adopt uniform rules governing persons that are
registered under this section and persons that are
registered as swap repositories under the Commodity
Exchange Act (7 U.S.C. 1, et seq.), including uniform
rules that specify the data elements that shall be
collected and maintained by each repository.
``(6) Exemptions.--The Commission may exempt,
conditionally or unconditionally, a security-based swap
repository from the requirements of this section if the
Commission finds that such security-based swap
repository is subject to comparable, comprehensive
supervision or regulation on a consolidated basis by
the Commodity Futures Trading Commission, a Prudential
Regulator or the appropriate governmental authorities
in the organization's home country, or as necessary or
appropriate in the public interest and consistent with
the purposes of this Act.''.
(b) Reporting and Recordkeeping.--The Securities Exchange Act
of 1934 (15 U.S.C. 78a, et seq.) is amended by inserting after
section 13 the following section:
``SEC. 13A. REPORTING AND RECORDKEEPING FOR CERTAIN SECURITY-BASED
SWAPS.
``(a) In General.--Any person who enters into a security-
based swap that is not accepted for clearing by any clearing
agency and is not reported to a security-based swap repository
registered pursuant to section 3B(b) shall meet the
requirements in subsection (b).
``(b) Reports.--Any person described in subsection (a)
shall--
``(1) make such reports in such form and manner and
for such period as the Commission shall prescribe by
rule or regulation regarding the security-based swaps
held by the person; and
``(2) keep books and records pertaining to the
security-based swaps held by the person in such form
and manner and for such period as may be required by
the Commission, which books and records shall be open
to inspection by any representative of the Commission,
an appropriate Federal banking agency, the Commodity
Futures Trading Commission, the Financial Services
Oversight Council, and the Department of Justice.
``(c) Identical Data.--In adopting rules under this section,
the Commission shall require persons described in subsection
(a) to report the same or more comprehensive data than the
Commission requires security-based swap repositories to
collect.''.
(c) Public Reporting and Repositories for Security-based Swap
Agreements.--Section 13 of the Securities Exchange Act of 1934
(15 U.S.C. 78m) is amended by adding at the end the following:
``(m) Public Reporting of Aggregate Security-based Swap
Data.--
``(1) In general.--The Commission, or a person
designated by the Commission pursuant to paragraph (2),
shall make available to the public, in a manner that
does not disclose the business transactions and market
positions of any person, aggregate data on security-
based swap trading volumes and positions from the
sources set forth in paragraph (3).
``(2) Designee of the commission.--The Commission may
designate a clearing agency or a security-based swap
repository to carry out the public reporting described
in paragraph (1).
``(3) Sources of information.--The sources of the
information to be publicly reported as described in
paragraph (1) are--
``(A) clearing agencies;
``(B) security-based swap repositories
registered pursuant to section 3B(b); and
``(C) reports received by the Commission
pursuant to section 13A.''.
SEC. 4203. MARGIN REQUIREMENTS.
The Securities Exchange Act of 1934 (15 U.S.C. 78a, et seq.)
is amended by adding the following section after section 3B:
``SEC. 3C. MARGIN REQUIREMENTS FOR SECURITY-BASED SWAP DEALERS AND
MAJOR SECURITY-BASED SWAP PARTICIPANTS.
``Each Prudential Regulator shall impose both initial and
variation margin requirements on all security-based swaps
between security-based swap dealers and major security-based
swap participants subject to regulation by the Regulator, that
are not cleared by a clearing agency.''.
SEC. 4204. SEGREGATION OF ASSETS HELD AS COLLATERAL IN SWAP
TRANSACTIONS.
The Securities Exchange Act of 1934 (15 U.S.C. 78a, et seq.)
is further amended by adding after section 3C (as added by
section 4203) the following:
``SEC. 3D. SEGREGATION OF ASSETS HELD AS COLLATERAL IN SWAP
TRANSACTIONS.
``(a) Cleared Swaps.--A security-based swap dealer or
clearing agency by or through which funds or other property are
held as margin or collateral to secure the obligations of a
counterparty under a security-based swap to be cleared by or
through a derivatives clearing agency shall segregate,
maintain, and use the funds or other property for the benefit
of the counterparty, in accordance with such rules and
regulations as the Commission or Prudential Regulator shall
prescribe. Any such funds or other property shall be treated as
customer property under this Act.
``(b) Over-the-counter Swaps.--At the request of a
counterparty to a security-based swap who provides funds or
other property to a swap dealer as margin or collateral to
secure the obligations of the counterparty under a security-
based swap entered into using the mails or any other means or
instrumentalities of interstate commerce between the
counterparty and the swap dealer that is not submitted for
clearing to a derivatives clearing agency, the swap dealer
shall segregate the funds or other property for the benefit of
the counterparty, and maintain the funds or other property in
an account which is carried by a third-party custodian and
designated as a segregated account for the counterparty, in
accordance with such rules and regulations as the Commission or
Prudential Regulator may prescribe. This subsection shall not
be interpreted to preclude commercial arrangements regarding
the investment of the segregated funds or other property and
the related allocation of gains and losses resulting from any
such investment or regarding the allocation of the costs of
segregation.
``(c) Mark-to-market Margin.--Nothing in this section shall
be construed to obligate any person to segregate variation or
mark-to-market margin.''.
Subtitle C--Common Provisions
SEC. 4301. REPORT TO THE CONGRESS.
Within 1 year after the date of the enactment of this title,
and not less frequently than annually thereafter, the Commodity
Futures Trading Commission, the Securities and Exchange
Commission, and the Prudential Regulators shall review data
from swap repositories, security-based swap repositories,
derivative clearing organizations, and clearing agencies, and
if the Commodity Futures Trading Commission, the Securities and
Exchange Commission, and the Prudential Regulators jointly find
that the activities of swaps dealers, securities-based swaps
dealers, major swap participants, or major security-based swap
participants not subject to regulation by the Commodity Futures
Trading Commission, the Securities and Exchange Commission, or
a Prudential Regulator, in relation to swaps or security-based
swaps that are not submitted to a derivatives clearing
organization or clearing agency for clearing, have become so
substantial or imprudent as to potentially threaten the
stability of financial markets or the economy, the Commodity
Futures Trading Commission, the Securities and Exchange
Commission, and the Prudential Regulators shall jointly submit
to the Congress a report on the situation, including
recommendations as to whether the activities should be subject
to further regulation.
SEC. 4302. CAPITAL REQUIREMENTS.
Each Prudential Regulator shall take into account the swaps
and security-based swaps activities of the entities subject to
regulation by the Regulator in establishing capital
requirements for the entities.
SEC. 4303. CENTRALIZED CLEARING.
(a) In General.--The Board, in consultation and coordination
with the Securities and Exchange Commission and the Commodity
Futures Trading Commission, shall implement policies and
procedures designed to increase the use of central
counterparties for clearing of over-the-counter swaps
transactions by swap dealers, security-based swap dealers,
major swap participants, and major security-based swap
participants, with the goal of significantly reducing the risk
profile of the market in which the transactions occur.
(b) Firm Targets.--
(1) In general.--Pursuant to subsection (a), the
Board shall establish the following firm goals for swap
dealers, security-based swap dealers, major swap
participants, and major security-based swap
participants, with respect to the clearing of certain
swaps:
(A) Interest rate swaps.--In the case of
interest rate swaps, each swap dealer,
security-based swap dealer, major swap
participant, and major security-based swap
participant shall commit to a goal, beginning
December 2009, of submitting for clearing to a
derivatives clearing organization or clearing
agency--
(i) 90 percent of new eligible trades
(calculated on a notional basis);
(ii) 70 percent of new eligible
trades (calculated on a weighted
average notional basis); and
(iii) 60 percent of historical
eligible trades (calculated on a
weighted average notional basis).
(B) Credit default swaps.--In the case of
credit default swaps, each swap dealer,
security-based swap dealer, major swap
participant, and major security-based swap
participant shall commit to a goal, beginning
December 2009, of submitting for clearing to a
derivatives clearing organization or clearing
agency--
(i) 95 percent of new eligible trades
(calculated on a notional basis); and
(ii) 80 percent of all eligible
trades (calculated on a weighted
average notional basis).
(2) Definitions.--In paragraph (1):
(A) Eligible trade.--The term ``eligible
trade'' means a trade on an eligible product
between counterparties each of whom--
(i) is a swap dealer, security-based
swap dealer, major swap participant, or
major security-based swap participant;
and
(ii) has a clearing relationship in
place with 1 or more common derivative
clearing organizations or clearing
agencies) for the eligible product.
(B) Eligible product.--The term ``eligible
product'' means a product eligible for clearing
by a derivative clearing organization or
clearing agency.
(c) Other Contracts and Counterparties.--The Board, in
consultation with the Securities and Exchange Commission and
the Commodity Futures Trading Commission, shall actively engage
central counterparties and regulators globally to--
(1) broaden the set of derivative products eligible
for clearing by swap dealers, security-based swap
dealers, major swap participants, and major security-
based swap participants, taking into account risk,
liquidity, default management and other processes; and
(2) expand the set of counterparties eligible to
clear at each eligible central counterparty taking into
account appropriate counterparty risk management
considerations, including the development of buy-side
clearing.
SEC. 4304. DEFINITIONS.
The terms used in this subtitle shall have the meanings given
the terms in section 1a of the Commodity Exchange Act.
TITLE V--CORPORATE AND FINANCIAL INSTITUTION COMPENSATION FAIRNESS
SEC. 5001. SHORT TITLE.
This title may be cited as the ``Corporate and Financial
Institution Compensation Fairness Act of 2009''.
SEC. 5002. SHAREHOLDER VOTE ON EXECUTIVE COMPENSATION.
(a) Amendment to the Securities Exchange Act of 1934.--
Section 14 of the Securities Exchange Act of 1934 (15 U.S.C.
78n) is amended by adding at the end the following new
subsection:
``(i) Triennial Advisory Shareholder Vote on Executive
Compensation.--
``(1) In general.--A proxy or consent or
authorization for an annual meeting of the shareholders
(or a special meeting in lieu of the annual meeting)
occurring on or after the date that is 6 months after
the date on which final rules are issued under
paragraph (4), shall provide for a separate shareholder
advisory vote, at least once every three years, to
approve the registrant's executive compensation
policies and practices as set forth pursuant to the
Commission's disclosure rules. The shareholder vote
shall be advisory in nature and shall not be binding on
the issuer or its board of directors and shall not be
construed as overruling a decision by such board, nor
to create or imply any additional fiduciary duty by
such board, nor shall such vote be construed to
restrict or limit the ability of shareholders to make
proposals for inclusion in proxy materials related to
executive compensation for meetings of shareholders at
which such an advisory vote on executive compensation
is not to be conducted.
``(2) Opt out.--If not less than \2/3\ of votes cast
at a meeting of shareholders on a proposal to opt out
of the triennial shareholder advisory vote on executive
compensation required under paragraph (1) are cast in
favor of such a proposal, then such shareholder
advisory vote required under such paragraph shall not
be required to take place for a period of 5 years
following the vote approving such proposal.
``(3) Shareholder approval of golden parachute
compensation.--
``(A) Disclosure.--In any proxy or consent
solicitation material for an annual meeting of
the shareholders (or a special meeting in lieu
of the annual meeting) occurring on or after
the date that is 6 months after the date on
which final rules are issued under paragraph
(4), that concerns an acquisition, merger,
consolidations, or proposed sale or other
disposition of all or substantially all the
assets of an issuer, the person making such
solicitation shall disclose in the proxy or
consent solicitation material, in a clear and
simple tabular form in accordance with
regulations to be promulgated by the
Commission, any agreements or understandings
that such person has with the named executive
officers (as such term is defined in the rules
promulgated by the Commission) of such issuer
(or of the acquiring issuer, if such issuer is
not the acquiring issuer) concerning any type
of compensation (whether present, deferred, or
contingent) that is based on or otherwise
relates to the acquisition, merger,
consolidation, sale, or other dispositions of
all or substantially all of the assets of the
issuer, and the aggregate total of all such
compensation that may (and the conditions upon
which it may) be paid or become payable to or
on behalf of such named executive officer.
``(B) Shareholder approval.--Any proxy or
consent or authorization relating to the proxy
or consent solicitation material containing the
disclosure required by subparagraph (A) shall
provide for a separate shareholder vote to
approve such agreements or understandings and
compensation as disclosed. A vote by the
shareholders shall not be binding on the
corporation or the board of directors of the
issuer or the person making the solicitation
and shall not be construed as overruling a
decision by such board, nor to create or imply
any additional fiduciary duty by such board.''
``(4) Rulemaking.--Not later than 1 year after the
date of the enactment of the Corporate and Financial
Institution Compensation Fairness Act of 2009, the
Commission shall issue rules and regulations to
implement this subsection.''.
(b) Study and Report.--The Securities and Exchange Commission
shall conduct a study and review of the results of shareholder
advisory votes on executive compensation held pursuant to this
section and the effects of such votes. Not later than 5 years
after the date of enactment of this title, the Securities and
Exchange Commission shall submit a report to the Congress on
the results of the study and review required by this
subsection.
SEC. 5003. COMPENSATION COMMITTEE INDEPENDENCE.
(a) Standards Relating to Compensation Committees.--The
Securities Exchange Act of 1934 (15 U.S.C. 78f) is amended by
inserting after section 10A the following new section:
``SEC. 10B. STANDARDS RELATING TO COMPENSATION COMMITTEES.
``(a) Commission Rules.--
``(1) In general.--Effective not later than 270 days
after the date of enactment of the Corporate and
Financial Institution Compensation Fairness Act of
2009, the Commission shall, by rule, direct the
national securities exchanges and national securities
associations to prohibit the listing of any security of
an issuer that is not in compliance with the
requirements of any portion of subsections (b) through
(f).
``(2) Opportunity to cure defects.--The rules of the
Commission under paragraph (1) shall provide for
appropriate procedures for an issuer to have an
opportunity to cure any defects that would be the basis
for a prohibition under paragraph (1) before the
imposition of such prohibition.
``(3) Exemption authority.--The Commission may exempt
certain categories of issuers from the requirements of
subsections (b) through (f), where appropriate in view
of the purpose of this section. In determining
appropriate exemptions, the Commission shall take into
account, among other considerations, the potential
impact on smaller reporting issuers.
``(4) No federal preemption.--If the law of the State
under which an issuer is incorporated provides for a
procedure for the board of directors to establish an
independent compensation committee, then such State law
shall be controlling and nothing in this section shall
preempt such State law.
``(b) Independence of Compensation Committees.--
``(1) In general.--Each member of the compensation
committee of the board of directors of the issuer shall
be a member of the board of directors of the issuer,
and shall otherwise be independent.
``(2) Criteria.--The Commission shall, by rule,
establish the criteria for determining whether a
director is independent for purposes of this
subsection. Such rules shall require that a member of a
compensation committee of an issuer may not, other than
in his or her capacity as a member of the compensation
committee, the board of directors, or any other board
committee--
``(A) accept any consulting, advisory, or
other compensatory fee from the issuer; or
``(B) be an affiliated person of the issuer
or any subsidiary thereof.
``(3) Exemptive authority.--The Commission may exempt
from the requirements of paragraph (2) a particular
relationship with respect to compensation committee
members, where appropriate in view of the purpose of
this section.
``(4) Definition.--As used in this section, the term
`compensation committee' means--
``(A) a committee (or equivalent body)
established by and amongst the board of
directors of an issuer for the purpose of
determining and approving the compensation
arrangements for the executive officers of the
issuer; and
``(B) if no such committee exists with
respect to an issuer, the independent members
of the entire board of directors.
``(c) Independence Standards for Compensation Consultants and
Other Committee Advisors.--The charter of the compensation
committee of the board of directors of an issuer shall set
forth that any outside compensation consultant formally engaged
or retained by the compensation committee shall meet standards
for independence to be promulgated by the Commission.
``(d) Compensation Committee Authority Relating to
Compensation Consultants.--
``(1) In general.--The compensation committee of each
issuer, in its capacity as a committee of the board of
directors, shall have the authority, in its sole
discretion, to retain and obtain the advice of a
compensation consultant meeting the standards for
independence promulgated pursuant to subsection (c),
and the compensation committee shall be directly
responsible for the appointment, compensation, and
oversight of the work of such independent compensation
consultant. This provision shall not be construed to
require the compensation committee to implement or act
consistently with the advice or recommendations of the
compensation consultant, and shall not otherwise affect
the compensation committee's ability or obligation to
exercise its own judgment in fulfillment of its duties.
``(2) Disclosure.--In any proxy or consent
solicitation material for an annual meeting of the
shareholders (or a special meeting in lieu of the
annual meeting) occurring on or after the date that is
1 year after the date of enactment of the Corporate and
Financial Institution Compensation Fairness Act of
2009, each issuer shall disclose in the proxy or
consent material, in accordance with regulations to be
promulgated by the Commission whether the compensation
committee of the issuer retained and obtained the
advice of a compensation consultant meeting the
standards for independence promulgated pursuant to
subsection (c).
``(e) Authority To Engage Independent Counsel and Other
Advisors.--The compensation committee of each issuer, in its
capacity as a committee of the board of directors, shall have
the authority, in its sole discretion, to retain and obtain the
advice of independent counsel and other advisers meeting the
standards for independence promulgated pursuant to subsection
(c), and the compensation committee shall be directly
responsible for the appointment, compensation, and oversight of
the work of such independent counsel and other advisers. This
provision shall not be construed to require the compensation
committee to implement or act consistently with the advice or
recommendations of such independent counsel and other advisers,
and shall not otherwise affect the compensation committee's
ability or obligation to exercise its own judgment in
fulfillment of its duties.
``(f) Funding.--Each issuer shall provide for appropriate
funding, as determined by the compensation committee, in its
capacity as a committee of the board of directors, for payment
of compensation--
``(1) to any compensation consultant to the
compensation committee that meets the standards for
independence promulgated pursuant to subsection (c);
and
``(2) to any independent counsel or other adviser to
the compensation committee.''.
(b) Study and Review Required.--
(1) In general.--The Securities Exchange Commission
shall conduct a study and review of the use of
compensation consultants meeting the standards for
independence promulgated pursuant to section 10B(c) of
the Security Exchange Act of 1934 (as added by
subsection (a)), and the effects of such use.
(2) Report to congress.--Not later than 3 years after
the date of enactment of this title, the Commission
shall submit a report to the Congress on the results of
the study and review required by this paragraph.
TITLE VI--CREDIT RATING AGENCIES
SEC. 6001. CHANGES TO DESIGNATION.
The Securities Act of 1933 and the Securities Exchange Act of
1934 are each amended by striking ``nationally recognized
statistical rating'' each place it appears and inserting
``nationally registered statistical rating''.
SEC. 6002. REMOVAL OF STATUTORY REFERENCES TO CREDIT RATINGS.
(a) Federal Deposit Insurance Act.--The Federal Deposit
Insurance Act (12 U.S.C. 1811 et seq.) is amended--
(1) in section 28(d)--
(A) in the subsection heading, by striking
``not of investment grade'';
(B) in paragraph (1), by striking ``not of
investment grade'' and inserting ``that does
not meet standards of credit-worthiness as
established by the Corporation'';
(C) in paragraph (2), by striking ``not of
investment grade'';
(D) by striking paragraph (3) and
redesignating paragraph (4) as paragraph (3);
and
(E) in paragraph (3) (as so redesignated)--
(i) by striking subparagraph (A) and
redesignating subparagraphs (B) and (C)
as subparagraphs (A) and (B),
respectively; and
(ii) in subparagraph (B) (as so
redesignated), by striking ``not of
investment grade'' and inserting ``that
does not meet standards of credit-
worthiness as established by the
Corporation'';
(2) in section 28(e)--
(A) in the subsection heading, by striking
``not of investment grade'';
(B) in paragraph (1), by striking ``not of
investment grade'' and inserting ``that does
not meet standards of credit-worthiness as
established by the Corporation''; and
(C) in paragraphs (2) and (3), by striking
``not of investment grade'' each place that it
appears and inserting ``that does not meet
standards of credit-worthiness established by
the Corporation''; and
(3) in section 7(b)(1)(E)(i), by striking ``credit
rating entities, and other private economic'' and
inserting ``private economic, credit,''.
(b) Federal Housing Enterprises Financial Safety and
Soundness Act of 1992.--Section 1319 of the Federal Housing
Enterprises Financial Safety and Soundness Act of 1992 (12
U.S.C. 4519) is amended--
(1) in the section heading, by striking ``by rating
organization''; and
(2) by striking ``that is a nationally recognized
statistical rating organization, as such term is
defined in section 3(a) of the Securities Exchange Act
of 1934,''.
(c) Investment Company Act of 1940.--Section
6(a)(5)(A)(iv)(I) of the Investment Company Act of 1940 (15
U.S.C. 80a-6(a)(5)(A)(iv)(I)) is amended by striking ``is rated
investment grade by not less than 1 nationally recognized
statistical rating organization'' and inserting ``meets such
standards of credit-worthiness that the Commission shall
adopt''.
(d) Revised Statutes.--Section 5136A of title LXII of the
Revised Statutes of the United States (12 U.S.C. 24a) is
amended--
(1) in subsection (a)(2)(E), by striking ``any
applicable rating'' and inserting ``standards of credit
worthiness established by the Comptroller of the
Currency'';
(2) in the heading for subsection (a)(3) by striking
``rating or comparable requirement'' and inserting
``requirement'';
(3) in subsection (a)(3), by amending subparagraph
(A) to read as follows:
``(A) In general.--A national bank meets the
requirements of this paragraph if the bank is
one of the 100 largest insured banks and has
not fewer than 1 issue of outstanding debt that
meets standards of credit-worthiness or other
criteria as the Secretary of the Treasury and
the Board of Governors of the Federal Reserve
System may jointly establish.'';
(4) in the heading for subsection (f), by striking
``maintain public rating or'' and inserting ``meet
standards of credit-worthiness''; and
(5) in subsection (f)(1), by striking ``any
applicable rating'' and inserting ``standards of
credit-worthiness established by the Comptroller of the
Currency''.
(e) Securities Exchange Act of 1934.--Section 3(a) Securities
Exchange Act of 1934 (15 U.S.C. 78a(3)(a)) is amended--
(1) in paragraph (41), by striking ``is rated in one
of the two highest rating categories by at least one
nationally recognized statistical rating organization''
and inserting ``meets standards of credit-worthiness as
defined by the Commission''; and
(2) in paragraph (53)(A), by striking ``is rated in 1
of the 4 highest rating categories by at least 1
nationally recognized statistical rating organization''
and inserting ``meets standards of credit-worthiness as
defined by the Commission''.
(f) World Bank Discussions.--Section 3(a)(6) of the amendment
in the nature of a substitute to the text of H.R. 4645, as
ordered reported from the Committee on Banking, Finance and
Urban Affairs on September 22, 1988, as enacted into law by
section 555 of Public Law 100-461, (22 U.S.C. 286hh(a)(6)), is
amended by striking ``rating'' and inserting ``worthiness''.
(g) Effective Date.--The amendments made by this section
shall take effect after the end of the 6-month period beginning
on the date of the enactment of this title.
SEC. 6003. REVIEW OF RELIANCE ON RATINGS.
(a) Agency Review.--
(1) Review.--Not later than 1 year after the date of
the enactment of this title, each Federal agency listed
in paragraph (4) shall, to the extent applicable,
review--
(A) any regulation issued by such agency that
requires the use of an assessment of the
credit-worthiness of a security or money market
instrument; and
(B) any references to or requirements in such
regulations regarding credit ratings.
(2) Modifications required.--Each such agency shall
modify any such regulations identified by the review
conducted under paragraph (1) to remove any reference
to or requirement of reliance on credit ratings and to
substitute in such regulations such standard of credit-
worthiness as each respective agency shall determine as
appropriate for such regulations. In making such
determination, such agencies shall seek to establish,
to the extent feasible, uniform standards of credit-
worthiness for use by each such agency, taking into
account the entities regulated by each such agency and
the purposes for which such entities would rely on such
standards of credit-worthiness.
(3) Report.--Upon conclusion of the review required
under paragraph (1), each Federal agency listed in
paragraph (4) shall transmit a report to the Congress
containing a description of any modification of any
regulation such agency made pursuant to paragraph (2).
(4) Applicable agencies.--The agencies required to
conduct the review and report required by this
subsection are--
(A) the Securities and Exchange Commission;
(B) the Federal Deposit Insurance
Corporation;
(C) the Office of Thrift Supervision;
(D) the Office of the Comptroller of the
Currency;
(E) the Board of Governors of the Federal
Reserve;
(F) the National Credit Union Administration;
and
(G) the Federal Housing Finance Agency.
(b) GAO Review of Other Agencies.--
(1) Review.--The Comptroller General of the United
States shall conduct a comprehensive review of the use
of credit ratings by Federal agencies other than those
listed in subsection (a)(4), including an analysis of
the provisions of law or regulation applicable to each
such agency that refer to and require the use of credit
ratings by the agency, and the policies and practices
of each agency with respect to credit ratings.
(2) Report.--Not later than 1 year after the date of
the enactment of this title, the Comptroller General
shall transmit to the Congress a report on the findings
of the study conducted pursuant to paragraph (1),
including recommendations for any legislation or
rulemaking necessary or appropriate in order for such
agencies to reduce their reliance on credit ratings.
TITLE VII--GOVERNMENT-SPONSORED ENTERPRISES REFORM
SEC. 7001. SHORT TITLE.
This title may be cited as the ``Government-Sponsored
Enterprises Free Market Reform Act of 2009''.
SEC. 7002. DEFINITIONS.
For purposes of this title, the following definitions shall
apply:
(1) Charter.--The term ``charter'' means--
(A) with respect to the Federal National
Mortgage Association, the Federal National
Mortgage Association Charter Act (12 U.S.C.
1716 et seq.); and
(B) with respect to the Federal Home Loan
Mortgage Corporation, the Federal Home Loan
Mortgage Corporation Act (12 U.S.C. 1451 et
seq.).
(2) Director.--The term ``Director'' means the
Director of the Federal Housing Finance Agency.
(3) Enterprise.--The term ``enterprise'' means--
(A) the Federal National Mortgage
Association; and
(B) the Federal Home Loan Mortgage
Corporation.
(4) Guarantee.--The term ``guarantee'' means, with
respect to an enterprise, the credit support of the
enterprise that is provided by the Federal Government
through its charter as a Government-sponsored
enterprise.
SEC. 7003. TERMINATION OF CURRENT CONSERVATORSHIP.
(a) In General.--Upon the expiration of the period referred
to in subsection (b), the Director of the Federal Housing
Finance Agency shall determine, with respect to each
enterprise, if the enterprise is financially viable at that
time and--
(1) if the Director determines that the enterprise is
financially viable, immediately take all actions
necessary to terminate the conservatorship for each of
the enterprises; or
(2) if the Director determines that the enterprise is
not financially viable, immediately appoint the Federal
Housing Finance Agency as receiver under section 1367
of the Federal Housing Enterprises Financial Safety and
Soundness Act of 1992 and carry out such receivership
under the authority of such section.
(b) Timing.--The period referred to in this subsection is,
with respect to an enterprise--
(1) except as provided in paragraph (2), the 24-month
period beginning upon the date of the enactment of this
title; or
(2) if the Director determines before the expiration
of the period referred to in paragraph (1) that the
financial markets would be adversely affected without
the extension of such period under this paragraph with
respect to that enterprise, the 30-month period
beginning upon the date of the enactment of this title.
(c) Financial Viability.--The Director may not determine that
an enterprise is financially viable for purposes of subsection
(a) if the Director determines that any of the conditions for
receivership set forth in paragraph (3) or (4) of section
1367(a) of the Federal Housing Enterprises Financial Safety and
Soundness Act of 1992 (12 U.S.C. 4617(a)) exists at the time
with respect to the enterprise.
SEC. 7004. LIMITATION OF ENTERPRISE AUTHORITY UPON EMERGENCE FROM
CONSERVATORSHIP.
(a) Revised Authority.--Upon the expiration of the period
referred to in section 7003(b), if the Director makes the
determination under section 7003(a)(1), the following
provisions shall take effect:
(1) Portfolio limitations.--Subtitle B of title XIII
of the Housing and Community Development Act of 1992
(12 U.S.C. 4611 et seq.) is amended by adding at the
end the following new section:
``SEC. 1369E. RESTRICTION ON MORTGAGE ASSETS OF ENTERPRISES.
``(a) Restriction.--No enterprise shall own, as of any
applicable date in this subsection or thereafter, mortgage
assets in excess of--
``(1) upon the expiration of the period referred to
in section 7003(b) of the Government-Sponsored
Enterprises Free Market Reform Act of 2009,
$850,000,000,000; or
``(2) on December 31 of each year thereafter, 80.0
percent of the aggregate amount of mortgage assets of
the enterprise as of December 31 of the immediately
preceding calendar year;
except that in no event shall an enterprise be required under
this section to own less than $250,000,000,000 in mortgage
assets.
``(b) Definition of Mortgage Assets.--For purposes of this
section, the term `mortgage assets' means, with respect to an
enterprise, assets of such enterprise consisting of mortgages,
mortgage loans, mortgage-related securities, participation
certificates, mortgage-backed commercial paper, obligations of
real estate mortgage investment conduits and similar assets, in
each case to the extent such assets would appear on the balance
sheet of such enterprise in accordance with generally accepted
accounting principles in effect in the United States as of
September 7, 2008 (as set forth in the opinions and
pronouncements of the Accounting Principles Board and the
American Institute of Certified Public Accountants and
statements and pronouncements of the Financial Accounting
Standards Board from time to time; and without giving any
effect to any change that may be made after September 7, 2008,
in respect of Statement of Financial Accounting Standards No.
140 or any similar accounting standard).''.
(2) Increase in minimum capital requirement.--Section
1362 of the Federal Housing Enterprises Financial
Safety and Soundness Act of 1992 (12 U.S.C. 4612), as
amended by section 1111 of the Housing and Economic
Recovery Act of 2008 (Public Law 110-289), is amended--
(A) in subsection (a), by striking ``For
purposes of this subtitle, the minimum capital
level for each enterprise shall be'' and
inserting ``The minimum capital level
established under subsection (g) for each
enterprise may not be lower than'';
(B) in subsection (c)--
(i) by striking ``subsections (a)
and'' and inserting ``subsection'';
(ii) by striking ``regulated
entities'' the first place such term
appears and inserting ``Federal Home
Loan Banks'';
(iii) by striking ``for the
enterprises,'';
(iv) by striking ``, or for both the
enterprises and the banks,'';
(v) by striking ``the level specified
in subsection (a) for the enterprises
or''; and
(vi) by striking ``the regulated
entities operate'' and inserting ``such
banks operate'';
(C) in subsection (d)(1)--
(i) by striking ``subsections (a)
and'' and inserting ``subsection''; and
(ii) by striking ``regulated entity''
each place such term appears and
inserting ``Federal home loan bank'';
(D) in subsection (e), by striking
``regulated entity'' each place such term
appears and inserting ``Federal home loan
bank'';
(E) in subsection (f)--
(i) by striking ``the amount of core
capital maintained by the
enterprises,''; and
(ii) by striking ``regulated
entities'' and inserting ``banks''; and
(F) by adding at the end the following new
subsection:
``(g) Establishment of Revised Minimum Capital Levels.--
``(1) In general.--The Director shall cause the
enterprises to achieve and maintain adequate capital by
establishing minimum levels of capital for the
enterprises and by using such other methods as the
Director deems appropriate.
``(2) Authority.--The Director shall have the
authority to establish such minimum level of capital
for an enterprise in excess of the level specified
under subsection (a) as the Director, in the Director's
discretion, deems to be necessary or appropriate in
light of the particular circumstances of the
enterprise.
``(h) Failure To Maintain Revised Minimum Capital Levels.--
``(1) Unsafe and unsound practice or condition.--
Failure of an enterprise to maintain capital at or
above its minimum level as established pursuant to
subsection (c) of this section may be deemed by the
Director, in his discretion, to constitute an unsafe
and unsound practice or condition within the meaning of
this title.
``(2) Directive to achieve capital level.--
``(A) Authority.--In addition to, or in lieu
of, any other action authorized by law,
including paragraph (1), the Director may issue
a directive to an enterprise that fails to
maintain capital at or above its required level
as established pursuant to subsection (c) of
this section.
``(B) Plan.--Such directive may require the
enterprise to submit and adhere to a plan
acceptable to the Director describing the means
and timing by which the enterprise shall
achieve its required capital level.
``(C) Enforcement.--Any such directive issued
pursuant to this paragraph, including plans
submitted pursuant thereto, shall be
enforceable under the provisions of subtitle C
of this title to the same extent as an
effective and outstanding order issued pursuant
to subtitle C of this title which has become
final.
``(3) Adherence to plan.--
``(A) Consideration.--The Director may
consider such enterprise's progress in adhering
to any plan required under this subsection
whenever such enterprise seeks the requisite
approval of the Director for any proposal which
would divert earnings, diminish capital, or
otherwise impede such enterprise's progress in
achieving its minimum capital level.
``(B) Denial.--The Director may deny such
approval where it determines that such proposal
would adversely affect the ability of the
enterprise to comply with such plan.''.
(3) Repeal of increases to conforming loan limits.--
(A) Repeal of temporary increases.--
(i) Economic stimulus act of 2008.--
Section 201 of the Economic Stimulus
Act of 2008 (Public Law 110-185) is
hereby repealed.
(ii) American recovery and
reinvestment act of 2009.--Section 1203
of division A of the American Recovery
and Reinvestment Act of 2009 (Public
Law 111-5; 123 Stat. 225) is hereby
repealed.
(B) Repeal of general limit and permanent
high-cost area increase.--Paragraph (2) of
section 302(b) of the Federal National Mortgage
Association Charter Act (12 U.S.C. 1717(b)(2))
and paragraph (2) of section 305(a) of the
Federal Home Loan Mortgage Corporation Act (12
U.S.C. 1454(a)(2)) are each amended to read as
such sections were in effect immediately before
the enactment of the Housing and Economic
Recovery Act of 2008 (Public Law 110-289).
(C) Repeal of new housing price index.--
Section 1322 of the Federal Housing Enterprises
Financial Safety and Soundness Act of 1992, as
added by section 1124(d) of the Housing and
Economic Recovery Act of 2008 (Public Law 110-
289), is hereby repealed.
(D) Repeal.--Section 1124 of the Housing and
Economic Recovery Act of 2008 (Public Law 110-
289) is hereby repealed.
(E) Establishment of conforming loan limit.--
For the year in which the expiration of the
period referred to in section 7003(b) of this
section occurs, the limitations governing the
maximum original principal obligation of
conventional mortgages that may be purchased by
the Federal National Mortgage Association and
the Federal Home Loan Mortgage Corporation,
referred to in section 302(b)(2) of the Federal
National Mortgage Association Charter Act (12
U.S.C. 1717(b)(2)) and section 305(a)(2) of the
Federal Home Loan Mortgage Corporation Act (12
U.S.C. 1454(a)(2)), respectively, shall be
considered to be--
(i) $417,000 for a mortgage secured
by a single-family residence,
(ii) $533,850 for a mortgage secured
by a 2-family residence,
(iii) $645,300 for a mortgage secured
by a 3-family residence, and
(iv) $801,950 for a mortgage secured
by a 4-family residence,
and such limits shall be adjusted effective
each January 1 thereafter in accordance with
such sections 302(b)(2) and 305(a)(2).
(F) Prohibition of purchase of mortgages
exceeding median area home price.--
(i) Fannie mae.--Section 302(b)(2) of
the Federal National Mortgage
Association Charter Act (12 U.S.C.
1717(b)(2)) is amended by adding at the
end the following new sentence:
``Notwithstanding any other provision
of this title, the corporation may not
purchase any mortgage for a property
having a principal obligation that
exceeds the median home price, for
properties of the same size, for the
area in which such property subject to
the mortgage is located.''.
(ii) Freddie mac.--Section 305(a)(2)
of the Federal Home Loan Mortgage
Corporation Act (12 U.S.C. 1454(a)(2))
is amended by adding at the end the
following new sentence:
``Notwithstanding any other provision
of this title, the Corporation may not
purchase any mortgage for a property
having a principal obligation that
exceeds the median home price, for
properties of the same size, for the
area in which such property subject to
the mortgage is located.''.
(4) Requirement to pay state and local taxes.--
(A) Fannie mae.--Paragraph (2) of section
309(c) of the Federal National Mortgage
Association Charter Act (12 U.S.C. 1723a(c)(2))
is amended--
(i) by striking ``shall be exempt
from'' and inserting ``shall be subject
to''; and
(ii) by striking ``except that any''
and inserting ``and any''.
(B) Freddie mac.--Section 303(e) of the
Federal Home Loan Mortgage Corporation Act (12
U.S.C. 1452(e)) is amended--
(i) by striking ``shall be exempt
from'' and inserting ``shall be subject
to''; and
(ii) by striking ``except that any''
and inserting ``and any''.
(5) Repeals relating to registration of securities.--
(A) Fannie mae.--
(i) Mortgage-backed securities.--
Section 304(d) of the Federal National
Mortgage Association Charter Act (12
U.S.C. 1719(d)) is amended by striking
the fourth sentence.
(ii) Subordinate obligations.--
Section 304(e) of the Federal National
Mortgage Association Charter Act (12
U.S.C. 1719(e)) is amended by striking
the fourth sentence.
(B) Freddie mac.--Section 306 of the Federal
Home Loan Mortgage Corporation Act (12 U.S.C.
1455) is amended by striking subsection (g).
(6) Recoupment of costs for federal guarantee.--
(A) Assessments.--The Director of the Federal
Housing Finance Agency shall establish and
collect from each enterprise assessments in the
amount determined under subparagraph (B). In
determining the method and timing for making
such assessments, the Director shall take into
consideration the determinations and
conclusions of the study under subsection (b)
of this section.
(B) Determination of costs of guarantee.--
Assessments under subparagraph (A) with respect
to an enterprise shall be in such amount as the
Director determines necessary to recoup to the
Federal Government the full value of the
benefit the enterprise receives from the
guarantee provided by the Federal Government
for the obligations and financial viability of
the enterprise, based upon the dollar value of
such benefit in the market to such enterprise
when not operating under conservatorship or
receivership. To determine such amount, the
Director shall establish a risk-based pricing
mechanism as the Director considers
appropriate, taking into consideration the
determinations and conclusions of the study
under subsection (b) of this section.
(C) Treatment of recouped amounts.--The
Director shall cover into the general fund of
the Treasury any amounts received from
assessments made under this paragraph.
(b) GAO Study Regarding Recoupment of Costs for Federal
Government Guarantee.--The Comptroller General of the United
States shall conduct a study to determine a risk-based pricing
mechanism to accurately determine the value of the benefit the
enterprises receive from the guarantee provided by the Federal
Government for the obligations and financial viability of the
enterprises. Such study shall establish a dollar value of such
benefit in the market to each enterprise when not operating
under conservatorship or receivership, shall analyze various
methods of the Federal Government assessing a charge for such
value received (including methods involving an annual fee or a
fee for each mortgage purchased or securitized), and shall make
a recommendation of the best such method for assessing such
charge. Not later than 12 months after the date of the
enactment of this title, the Comptroller General shall submit
to the Congress a report setting forth the determinations and
conclusions of such study.
SEC. 7005. REQUIREMENT TO PERIODICALLY RENEW CHARTER UNTIL WIND DOWN
AND DISSOLUTION.
(a) Required Renewal; Wind Down and Dissolution Upon Non-
Renewal.--Upon the expiration of the 3-year period that begins
upon the expiration of the period referred to in section
7003(b), unless the charter of an enterprise is renewed
pursuant to subsection (b) of this section, section 7006
(relating to wind down of operations and dissolution of
enterprise) shall apply to the enterprise.
(b) Renewal Procedure.--
(1) Application; timing.--The Director shall provide
for each enterprise to apply to the Director, before
the expiration of the 3-year period under subsection
(a), for renewal of the charter of the enterprise.
(2) Standard.--The Director shall approve the
application of an enterprise for the renewal of the
charter of the enterprise if--
(A) the application includes a certification
by the enterprise that the enterprise is
financially sound and is complying with all
provisions of, and amendments made by, section
7004 of this title applicable to such
enterprise; and
(B) the Director verifies that the
certification made pursuant to subparagraph (A)
is accurate.
(c) Option To Reapply.--Nothing in this section may be
construed to require an enterprise to apply under this section
for renewal of the charter of the enterprise.
SEC. 7006. REQUIRED WIND DOWN OF OPERATIONS AND DISSOLUTION OF
ENTERPRISE.
(a) Applicability.--This section shall apply to an
enterprise--
(1) upon the expiration of the 3-year period referred
to in such section 7005(a), to the extent provided in
such section; and
(2) if this section has not previously applied to the
enterprise, upon the expiration of the 6-year period
that begins upon the expiration of the period referred
to in section 7003(b).
(b) Wind Down.--Upon the applicability of this section to an
enterprise, the Director and the Secretary of the Treasury
shall jointly take such action, and may prescribe such
regulations and procedures, as may be necessary to wind down
the operations of an enterprise as an entity chartered by the
United States Government over the duration of the 10-year
period beginning upon the applicability of this section to the
enterprise (pursuant to subsection (a)) in an orderly manner
consistent with this title and the ongoing obligations of the
enterprise.
(c) Division of Assets and Liabilities; Authority To
Establish Holding Corporation and Dissolution Trust Fund.--The
action and procedures required under subsection (b)--
(1) shall include the establishment and execution of
plans to provide for an equitable division and
distribution of assets and liabilities of the
enterprise, including any liability of the enterprise
to the United States Government or a Federal reserve
bank that may continue after the end of the period
described in subsection (b); and
(2) may provide for establishment of--
(A) a holding corporation organized under the
laws of any State of the United States or the
District of Columbia for the purposes of the
reorganization and restructuring of the
enterprise; and
(B) one or more trusts to which to transfer--
(i) remaining debt obligations of the
enterprise, for the benefit of holders
of such remaining obligations; or
(ii) remaining mortgages held for the
purpose of backing mortgage-backed
securities, for the benefit of holders
of such remaining securities.
(d) Repeal of Charter.--Effective upon the expiration of the
10-year period referred to in subsection (b) for an enterprise,
the charter for the enterprise is repealed, except that the
provisions of such charter in effect immediately before such
repeal shall continue to apply with respect to the rights and
obligations of any holders of outstanding debt obligations and
mortgage-backed securities of the enterprise.
TITLE VIII--FEDERAL INSURANCE OFFICE
SEC. 8001. SHORT TITLE.
This title may be cited as the ``Federal Insurance Office Act
of 2009''.
SEC. 8002. FEDERAL INSURANCE OFFICE ESTABLISHED.
(a) Establishment of Office.--Subchapter I of chapter 3 of
title 31, United States Code, is amended--
(1) by transferring and inserting section 312 after
section 313;
(2) by redesignating sections 313 and 312 (as so
transferred) as sections 312 and 315, respectively; and
(3) by inserting after section 312 (as so
redesignated) the following new sections:
``SEC. 313. FEDERAL INSURANCE OFFICE.
``(a) Establishment of Office.--There is established the
Federal Insurance Office as an office in the Department of the
Treasury.
``(b) Leadership.--The Office shall be headed by a Director,
who shall be appointed by the Secretary of the Treasury. The
position of such Director shall be a career reserved position
in the Senior Executive Service.
``(c) Functions.--
``(1) Authority pursuant to direction of secretary.--
The Office shall have the authority, pursuant to the
direction of the Secretary, as follows:
``(A) To monitor the insurance industry to
gain expertise.
``(B) To identify issues or gaps in the
regulation of insurers that could contribute to
a systemic crisis in the insurance industry or
the United States financial system.
``(C) To recommend for review by the Market
Stability and Capital Adequacy Board any
activities or practices by insurers or their
affiliates that may be exacerbating systemic
risk.
``(D) To assist the Secretary in
administering the Terrorism Insurance Program
established in the Department of the Treasury
under the Terrorism Risk Insurance Act of 2002
(15 U.S.C. 6701 note).
``(E) To coordinate Federal efforts and
develop Federal policy on prudential aspects of
international insurance matters, including
representing the United States as appropriate
in the International Association of Insurance
Supervisors or any successor organization and
assisting the Secretary in negotiating covered
agreements.
``(F) To determine, in accordance with
subsection (f), whether State insurance
measures are preempted by covered agreements.
``(G) To consult with the States regarding
insurance matters of national importance and
prudential insurance matters of international
importance.
``(H) To perform such other related duties
and authorities as may be assigned to it by the
Secretary.
``(2) Advisory functions.--The Office shall advise
the Secretary on major domestic and prudential
international insurance policy issues.
``(d) Scope.--The authority of the Office shall extend to all
lines of insurance except health insurance, as determined by
the Secretary based on section 2791 of the Public Health
Service Act (42 U.S.C. 300gg-91).
``(e) Gathering of Information.--
``(1) General.--In carrying out its functions under
subsection (c), the Office may request, receive, and
collect data and information on and from the insurance
industry and insurers, enter into information-sharing
agreements, analyze and disseminate data and
information, and issue reports regarding all lines of
insurance except health insurance.
``(2) Collection of information from insurers and
affiliates.--Except as provided in paragraph (3) and
subject to paragraph (4), the Office may require an
insurer, or affiliate of an insurer, to submit such
data or information that the Office may reasonably
require in carrying out its functions under subsection
(c). Notwithstanding subsection (p) and for the
purposes of this paragraph only, the term `insurer'
means any entity that is authorized to write insurance
or reinsure risks and issue contracts or policies in
one or more States.
``(3) Exception for small insurers.--Paragraph (2)
shall not apply with respect to any insurer or
affiliate thereof that meets a minimum size threshold
that may be established by the Office by order or rule.
Such threshold shall be appropriate to the particular
request and need for the data or information.
``(4) Advance coordination.--Before collecting any
data or information under paragraph (2) from an
insurer, or affiliate of an insurer, the Office shall
coordinate with each relevant Federal agency and State
insurance regulator (or other relevant Federal or State
regulatory agency, if any, in the case of an affiliate
of an insurer) and any publicly available sources to
determine if the information to be collected is
available from, or may be obtained in a timely manner
by, such Federal agency or State insurance regulator,
individually or collectively, other regulatory agency,
or publicly available sources. If the Director
determines that such data or information is available,
or may be obtained in a timely manner, from such an
agency, regulator, regulatory agency, or source, the
Director shall obtain the data or information from such
agency, regulator, regulatory agency, or source. If the
Director determines that such data or information is
not so available, the Director may collect such data or
information from an insurer (or affiliate) only if the
Director complies with the requirements of subchapter I
of chapter 35 of title 44, United States Code (relating
to Federal information policy; commonly known as the
Paperwork Reduction Act) in collecting such data or
information. Notwithstanding any other provision of
law, each such relevant Federal agency and State
insurance regulator or other Federal or State
regulatory agency is authorized to provide to the
Office such data or information.
``(5) Confidentiality.--
``(A) The submission of any non-publicly
available data and information to the Office
under this subsection shall not constitute a
waiver of, or otherwise affect, any privilege
arising under Federal or State law (including
the rules of any Federal or State Court) to
which the data or information is otherwise
subject.
``(B) Any requirement under Federal or State
law to the extent otherwise applicable, or any
requirement pursuant to a written agreement in
effect between the original source of any non-
publicly available data or information and the
source of such data or information to the
Office, regarding the privacy or
confidentiality of any data or information in
the possession of the source to the Office,
shall continue to apply to such data or
information after the data or information has
been provided pursuant to this subsection to
the Office.
``(C) Any data or information obtained by the
Office may be made available to State insurance
regulators individually or collectively through
an information sharing agreement that shall
comply with applicable Federal law and that
shall not constitute a waiver of, or otherwise
affect, any privilege under Federal or State
law (including the rules of any Federal or
State Court) to which the data or information
is otherwise subject.
``(D) Section 552 of title 5, United States
Code, shall apply to any data or information
submitted by an insurer or affiliate of an
insurer.
``(f) Preemption of State Insurance Measures.--
``(1) Standard.--A State insurance measure shall be
preempted pursuant to this section or section 314 if,
and only to the extent that the Director determines, in
accordance with this subsection, that the measure--
``(A) directly results in less favorable
treatment of a non-United States insurer
domiciled in a foreign jurisdiction that is
subject to a covered agreement than a United
States insurer domiciled, licensed, admitted,
or otherwise authorized in that State; and
``(B) is inconsistent with a covered
agreement that is entered into on a date after
the date of the enactment of this Act.
``(2) Determination.--
``(A) Notice of potential inconsistency.--
Before making any determination of
inconsistency, the Director shall--
``(i) notify and consult with the
appropriate State regarding any
potential inconsistency or preemption;
``(ii) notify and consult with the
United States Trade Representative
regarding any potential inconsistency
or preemption;
``(iii) cause to be published in the
Federal Register notice of the issue
regarding the potential inconsistency
or preemption, including a description
of each State insurance measure at
issue and any applicable covered
agreement;
``(iv) provide interested parties a
reasonable opportunity to submit
written comments to the Office;
``(v) consider the effect of
preemption on--
``(I) the protection of
policyholders and policy
claimants;
``(II) the maintenance of the
safety, soundness, integrity,
and financial responsibility of
any entity involved in the
business of insurance or
insurance operations;
``(III) ensuring the
integrity and stability of the
United States financial system;
and
``(IV) the creation of a gap
or void in financial or market
conduct regulation of any
entity involved in the business
of insurance or insurance
operations in the United
States; and
``(vi) consider any comments
received.
The Director shall provide the notifications
required under clauses (i), (ii), and (iii)
contemporaneously.
``(B) Scope of review.--For purposes of this
section, the Director's determination of State
insurance measures shall be limited to the
subject matter of the prudential measures
applicable to the business of insurance
contained within the covered agreement
involved.
``(C) Notice of determination of
inconsistency.--Upon making any determination
of inconsistency, the Director shall--
``(i) notify the appropriate State of
the determination and the extent of the
inconsistency;
``(ii) establish a reasonable period
of time, which shall not be shorter
than 90 days, before the determination
shall become effective; and
``(iii) notify the Committee on
Financial Services of the House of
Representatives and the Committee on
Banking, Housing, and Urban Affairs of
the Senate of the inconsistency.
``(3) Notice of effectiveness.--Upon the conclusion
of the period referred to in paragraph (2)(C)(ii), if
the basis for the determination of inconsistency still
exists, the determination shall become effective and
the Director shall--
``(A) cause to be published notice in the
Federal Register that the preemption has become
effective, as well as the effective date; and
``(B) notify the appropriate State.
``(4) Limitation.--No State may enforce a State
insurance measure to the extent that it has been
preempted under this subsection.
``(g) Applicability of Administrative Procedure Act.--
Determinations of inconsistency pursuant to subsection (f)(2)
shall be subject to the applicable provisions of subchapter II
of chapter 5 of title 5, United States Code (relating to
administrative procedure), and chapter 7 of such title
(relating to judicial review), except that in any action for
judicial review of a determination of inconsistency, the court
shall determine the matter de novo.
``(h) Regulations, Policies, and Procedures.--The Secretary
may issue orders, regulations, policies and procedures to
implement this section.
``(i) Consultation.--The Director shall consult with State
insurance regulators, individually and collectively, to the
extent the Director determines appropriate, in carrying out the
functions of the Office.
``(j) Savings Provisions.--Nothing in this section shall--
``(1) preempt any State insurance measure that
governs any insurer's rates, premiums, underwriting or
sales practices, or State coverage requirements for
insurance, or to the application of the antitrust laws
of any State to the business of insurance;
``(2) preempt any State insurance measure governing
the capital or solvency of an insurer, except to the
extent that such State insurance measure directly
results in less favorable treatment of a non-United
States insurer than a United States insurer;
``(3) be construed to alter, amend, or limit the
responsibility of any department or agency of the
Federal Government to issue regulations under the Truth
in Lending Act (15 U.S.C. 1601 et seq.) or any other
Federal law regulating the provision of consumer
financial products or services;
``(4) preempt any State insurance measure because of
inconsistency with any agreement that is not a covered
agreement (as such term in defined in subsection (p));
or
``(5) affect the preemption of any State insurance
measure otherwise inconsistent with and preempted by
Federal law.
``(k) Retention of Existing State Regulatory Authority.--
Nothing in this section or section 314 shall be construed to
establish a general supervisory or regulatory authority of the
Office or the Department of the Treasury over the business of
insurance.
``(l) Retention of Authority of Federal Financial Regulatory
Agencies.--Nothing in this section or section 314 shall be
construed to limit the authority of any Federal financial
regulatory agency, including the authority to develop and
coordinate policy, negotiate, and enter into agreements with
foreign governments, authorities, regulators, and multi-
national regulatory committees and to preempt State measures to
affect uniformity with international regulatory agreements.
``(m) Retention of Authority of United States Trade
Representative.--Nothing in this section or section 314 shall
be construed to affect the authority of the Office of the
United States Trade Representative pursuant to section 141 of
the Trade Act of 1974 (19 U.S.C. 2171) or any other provision
of law, including authority over the development and
coordination of United States international trade policy and
the administration of the United States trade agreements
program.
``(n) Reports to Congress.--
``(1) Annual report.--Beginning September 30, 2011,
the Director shall submit a report on or before
September 30 of each calendar year to the President and
to the Committees on Financial Services and Ways and
Means of the House of Representatives and the
Committees on Banking, Housing, and Urban Affairs and
Finance of the Senate on the insurance industry, any
actions taken by the office pursuant to subsection (f)
(regarding preemption of inconsistent State insurance
measures).
``(2) Other reports.--The Director shall submit to
the President and the Committees referred to in
paragraph (1) any other information or reports as
deemed relevant by the Director or as requested by the
Chairman or Ranking Member of any of such Committees.
``(o) Use of Existing Resources.--To carry out this section,
the Office may employ personnel, facilities, and other
Department of the Treasury resources available to the Secretary
and the Secretary shall dedicate specific personnel to the
Office.
``(p) Definitions.--For purposes of this section and section
314, the following definitions shall apply:
``(1) Affiliate.--The term `affiliate' means, with
respect to an insurer, any person that controls, is
controlled by, or is under common control with the
insurer.
``(2) Covered agreement.--The term `covered
agreement' means a written bilateral or multilateral
recognition agreement that--
``(A) is entered into between the United
States and one or more foreign governments,
authorities, or regulatory entities; and
``(B) provides for recognition of prudential
measures with respect to the business of
insurance or reinsurance that achieves a level
of protection for insurance or reinsurance
consumers that is substantially equivalent to
the level of protection achieved under State
insurance or reinsurance regulation.
``(3) Determination of inconsistency.--The term
`determination of inconsistency' means a determination
that a State insurance measure is preempted under
subsection (f).
``(4) Federal financial regulatory agency.--The term
`Federal financial regulatory agency' means the
Department of the Treasury, the Board of Governors of
the Federal Reserve System, the Office of the
Comptroller of the Currency, the Office of Thrift
Supervision, the Securities and Exchange Commission,
the Commodity Futures Trading Commission, the Federal
Deposit Insurance Corporation, the Federal Housing
Finance Agency, or the National Credit Union
Administration.
``(5) Insurer.--The term `insurer' means any person
engaged in the business of insurance, including
reinsurance.
``(6) Non-united states insurer.--The term `non-
United States insurer' means an insurer that is
organized under the laws of a jurisdiction other than a
State, but does not include any United States branch of
such an insurer.
``(7) Office.--The term `Office' means the Federal
Insurance Office established by this section.
``(8) Secretary.--The term `Secretary' means the
Secretary of the Treasury.
``(9) State.--The term `State' means any State,
commonwealth, territory, or possession of the United
States, the District of Columbia, the Commonwealth of
Puerto Rico, the Commonwealth of the Northern Mariana
Islands, American Samoa, Guam, or the United States
Virgin Islands.
``(10) State insurance measure.--The term `State
insurance measure' means any State law, regulation,
administrative ruling, bulletin, guideline, or practice
relating to or affecting prudential measures applicable
to insurance or reinsurance.
``(11) State insurance regulator.--The term `State
insurance regulator' means any State regulatory
authority responsible for the supervision of insurers.
``(12) United states insurer.--The term `United
States insurer' means--
``(A) an insurer that is organized under the
laws of a State; or
``(B) a United States branch of a non-United
States insurer.
``(q) Authorization of Appropriations.--There are authorized
to be appropriated for the Office such sums as may be necessary
for each fiscal year.
``SEC. 314. COVERED AGREEMENTS.
``(a) Authority.--The Secretary and the United States Trade
Representative are authorized, jointly, to negotiate and enter
into covered agreements on behalf of the United States.
``(b) Requirements for Consultation With Congress.--
``(1) In general.--Before initiating negotiations to
enter into a covered agreement under subsection (a),
during such negotiations, and before entering into any
such agreement, the Secretary and the United States
Trade Representative shall jointly consult with the
Committee on Financial Services and the Committee on
Ways and Means of the House of Representatives and the
Committee on Banking, Housing, and Urban Affairs and
the Committee on Finance of the Senate.
``(2) Scope.--The consultation described in paragraph
(1) shall include consultation with respect to--
``(A) the nature of the agreement;
``(B) how and to what extent the agreement
will achieve the applicable purposes, policies,
priorities, and objectives of section 313 and
this section; and
``(C) the implementation of the agreement,
including the general effect of the agreement
on existing State laws.
``(c) Submission and Layover Provisions.--A covered agreement
under subsection (a) may enter into force with respect to the
United States only if--
``(1) the Secretary and the United States Trade
Representative jointly submit to the congressional
committees specified in subsection (b)(1), on a day on
which both Houses of Congress are in session, a copy of
the final legal text of the agreement; and
``(2) a period of 90 calendar days beginning on the
date on which the copy of the final legal text of the
agreement is submitted to the congressional committees
under paragraph (1) has expired.''.
(b) Duties of Secretary.--Section 321(a) of title 31, United
States Code, is amended--
(1) in paragraph (7), by striking ``and'' at the end;
(2) in paragraph (8)(C), by striking the period at
the end and inserting ``; and''; and
(3) by adding at the end the following new paragraph:
``(9) advise the President on major domestic and
international prudential policy issues in connection
with all lines of insurance except health insurance.''.
(c) Clerical Amendment.--The table of sections for subchapter
I of chapter 3 of title 31, United States Code, is amended by
striking the item relating to section 312 and inserting the
following new items:
``Sec. 312. Terrorism and Financial Intelligence.
``Sec. 313. Federal Insurance Office.
``Sec. 314. Covered agreements.
``Sec. 315. Continuing in office.''.
SEC. 8003. REPORT ON GLOBAL REINSURANCE MARKET.
Not later than September 30, 2011, the Director of the
Federal Insurance Office appointed under section 313(b) of
title 31, United States Code (as amended by section 8002(a)(3)
of this title) shall submit to the Committee on Financial
Services of the House of Representatives and the Committee on
Banking, Housing, and Urban Affairs of the Senate a report
describing the breadth and scope of the global reinsurance
market and the critical role such market plays in supporting
insurance in the United States.
SEC. 8004. STUDY ON MODERNIZATION AND IMPROVEMENT OF INSURANCE
REGULATION IN THE UNITED STATES.
(a) Study.--The Director of the Federal Insurance Office
appointed under section 313(b) of title 31, United States Code
(as amended by section 8002(a)(3) of this title) shall conduct
a study on how to modernize and improve the system of insurance
regulation in the United States. Such study shall include
consideration of the following:
(1) Effective systemic risk regulation with respect
to insurance.
(2) Strong capital standards and an appropriate match
between capital allocation and liabilities for all
risk.
(3) Meaningful and consistent consumer protection for
insurance products and practices.
(4) Increased national uniformity through either a
Federal charter or effective action by the States.
(5) Improved and broadened regulation of insurance
companies and affiliates on a consolidated basis,
including affiliates outside of the traditional
insurance business.
(6) International coordination.
(b) Report.--Not later than one year after the date of the
enactment of this Act, the Director shall submit to the
Committee on Financial Services of the House of Representatives
and the Committee on Banking, Housing, and Urban Affairs of the
Senate a report containing--
(1) the results of the study conducted under
subsection (a); and
(2) any legislative, administrative, or regulatory
recommendations that the Director considers appropriate
to modernize and improve the system of insurance
regulation in the United States.
(c) Consultation.--In carrying out subsections (a) and (b),
the Director shall consult with State insurance commissioners,
consumer organizations, representatives of the insurance
industry, policyholders, and other persons, as the Director
considers appropriate.