house financial reform hr4173

8/9/2019 House Financial Reform HR4173

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111TH CONGRESS2D SESSION H. R. 4173

IN THE SENATE OF THE UNITED STATES

JANUARY 20, 2010

Received; read twice and referred to the Committee on Banking, Housing, and

Urban Affairs

AN ACT

To provide for financial regulatory reform, to protect con-

sumers and investors, to enhance Federal understanding

of insurance issues, to regulate the over-the-counter de-

rivatives markets, and for other purposes.

Be it enacted by the Senate and House of Representa-1

tives of the United States of America in Congress assembled,2

VerDate Nov 24 2008 04:13 Jan 21, 2010 Jkt 089200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H4173.RFS H4173


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SECTION 1. SHORT TITLE.1

This Act may be cited as the Wall Street Reform2

and Consumer Protection Act of 2009.3

SEC. 2. TABLE OF CONTENTS.4

The table of contents for this Act is as follows:5

Sec. 1. Short title.

Sec. 2. Table of contents.

TITLE IFINANCIAL STABILITY IMPROVEMENT ACT

Sec. 1000. Short title; definitions.

Sec. 1000A. Restrictions on the Federal Reserve System pending audit report.

Subtitle AThe Financial Services Oversight Council

Sec. 1001. Financial Services Oversight Council established.

Sec. 1002. Resolution of disputes among Federal financial regulatory agencies.

Sec. 1003. Technical and professional advisory committees.

Sec. 1004. Financial Services Oversight Council meetings and council govern-

ance.

Sec. 1005. Council staff and funding.

Sec. 1006. Reports to the Congress.

Sec. 1007. Applicability of certain Federal laws.

Sec. 1008. Oversight by GAO.

Subtitle BPrudential Regulation of Companies and Activities for Financial

Stability Purposes

Sec. 1100. Federal Reserve Board authority that of agent acting on behalf of

Council.

Sec. 1101. Council and Board authority to obtain information.

Sec. 1102. Council prudential regulation recommendations to Federal financial

regulatory agencies; agency authority.

Sec. 1103. Subjecting financial companies to stricter prudential standards for

financial stability purposes.

Sec. 1104. Stricter prudential standards for certain financial holding companies

for financial stability purposes.

Sec. 1105. Mitigation of systemic risk.

Sec. 1106. Subjecting activities or practices to stricter prudential standards for

financial stability purposes.

Sec. 1107. Stricter regulation of activities and practices for financial stability

purposes.

Sec. 1108. Effect of rescission of identification.

Sec. 1109. Emergency financial stabilization.

Sec. 1110. Additional related amendments.

Sec. 1111. Corporation may receive warrants when paying or risking taxpayer

funds.

Sec. 1112. Examinations and enforcement actions for insurance and resolutions

purposes.

Sec. 1113. Study of the effects of size and complexity of financial institutions

on capital market efficiency and economic growth.



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Sec. 1114. Exercise of Federal Reserve authority.

Sec. 1115. Stress tests.

Sec. 1116. Contingent Capital.

Sec. 1117. Restriction on proprietary trading by designated financial holding

companies.

Sec. 1118. Rule of construction.

Sec. 1119. Antitrust savings clause.

Subtitle CImprovements to Supervision and Regulation of Federal

Depository Institutions

Sec. 1201. Definitions.

Sec. 1202. Amendments to the Home Owners Loan Act relating to transfer of

functions.

Sec. 1203. Amendments to the revised statutes.

Sec. 1204. Power and duties transferred.

Sec. 1205. Transfer date.

Sec. 1206. Expiration of term of comptroller.

Sec. 1207. Office of Thrift Supervision abolished.

Sec. 1208. Savings provisions.

Sec. 1209. Regulations and orders.

Sec. 1210. Coordination of transition activities.

Sec. 1211. Interim responsibilities of office of the comptroller of the currency

and office of thrift supervision.

Sec. 1212. Employees transferred.

Sec. 1213. Property transferred.

Sec. 1214. Funds transferred.

Sec. 1215. Disposition of affairs.

Sec. 1216. Continuation of services.

Sec. 1217. Contracting and leasing authority.

Sec. 1218. Treatment of savings and loan holding companies.

Sec. 1219. Practices of certain mutual thrift holding companies preserved.

Sec. 1220. Implementation plan and reports.Sec. 1221. Composition of board of directors of the Federal Deposit Insurance

Corporation.

Sec. 1222. Amendments to section 3.







Sec. 1229. Amendments to the Alternative Mortgage Transaction Parity Act of

1982.

Sec. 1230. Amendments to the Bank Holding Company Act of 1956.

Sec. 1231. Amendments to the Bank Protection Act of 1968.Sec. 1232. Amendments to the Bank Service Company Act.

Sec. 1233. Amendments to the Community Reinvestment Act of 1977.

Sec. 1234. Amendments to the Depository Institution Management Interlocks

Act.

Sec. 1235. Amendments to the Emergency Homeowners Relief Act.

Sec. 1236. Amendments to the Equal Credit Opportunity Act.

Sec. 1237. Amendments to the Federal Credit Union Act.

Sec. 1238. Amendments to the Federal Financial Institutions Examination

Council Act of 1978.



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Sec. 1239. Amendments to the Federal Home Loan Bank Act.

Sec. 1240. Amendments to the Federal Reserve Act.

Sec. 1241. Amendments to the Financial Institutions Reform, Recovery, and

Enforcement Act of 1989.

Sec. 1242. Amendments to the Housing Act of 1948.

Sec. 1243. Amendments to the Housing and Community Development Act of

1992 and the Federal Housing Enterprises Financial Safetyand Soundness Act of 1992.

Sec. 1244. Amendment to the Housing and Urban-Rural Recovery Act of 1983.

Sec. 1245. Amendments to the National Housing Act.

Sec. 1246. Amendments to the Right to Financial Privacy Act of 1978.

Sec. 1247. Amendments to the Balanced Budget and Emergency Deficit Con-

trol Act of 1985.

Sec. 1248. Amendments to the Crime Control Act of 1990.

Sec. 1249. Amendment to the Flood Disaster Protection Act of 1973.

Sec. 1250. Amendment to the Investment Company Act of 1940.

Sec. 1251. Amendment to the Neighborhood Reinvestment Corporation Act.

Sec. 1252. Amendments to the Securities Exchange Act of 1934.

Sec. 1253. Amendments to title 18, United States Code.

Sec. 1254. Amendments to title 31, United States Code.Sec. 1255. Requirement for Countercyclical Capital Requirements.

Sec. 1256. Transfer of authority to the Board with respect to savings and loan

holding companies.

Sec. 1257. Effective date.

Subtitle DFurther Improvements to the Regulation of Bank Holding

Companies and Depository Institutions

Sec. 1301. Treatment of industrial loan companies, savings associations, and

certain other companies under the bank holding company act.

Sec. 1302. Registration of certain companies as bank holding companies.

Sec. 1303. Reports and examinations of bank holding companies; regulation of

functionally regulated subsidiaries.Sec. 1304. Requirements for financial holding companies to remain well capital-

ized and well managed.

Sec. 1305. Standards for interstate acquisitions.

Sec. 1306. Enhancing existing restrictions on bank transactions with affiliates.

Sec. 1307. Eliminating exceptions for transactions with financial subsidiaries.

Sec. 1308. Lending limits applicable to credit exposure on derivative trans-

actions, repurchase agreements, reverse repurchase agree-

ments, and securities lending and borrowing transactions.

Sec. 1309. Restriction on conversions of troubled banks and thrifts.

Sec. 1310. Lending limits to insiders.

Sec. 1311. Limitations on purchases of assets from insiders.

Sec. 1312. Rules regarding capital levels of bank holding companies.

Sec. 1313. Enhancements to factors to be considered in certain acquisitions.Sec. 1314. Elimination of elective investment bank holding company frame-

work.

Sec. 1315. Examination fees for large bank holding companies.

Sec. 1316. Mutual national banks and Federal mutual bank holding companies

authorized.

Sec. 1317. Nationwide Deposit Cap for Interstate Acquisitions.

Sec. 1318. De novo branching into states.

Subtitle EImprovements to the Federal Deposit Insurance Fund



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Sec. 1401. Accounting for actual risk to the Deposit Insurance Fund.

Sec. 1402. Creating a risk-focused assessment base.

Sec. 1403. Elimination of procyclical assessments.

Sec. 1404. Enhanced access to information for deposit insurance purposes.

Sec. 1405. Transition reserve ratio requirements to reflect new assessment

base.

Subtitle FImprovements to the Asset-Backed Securitization Process


Sec. 1502. Credit risk retention.

Sec. 1503. Periodic and other reporting under the Securities Exchange Act of

1934 for asset-backed securities.

Sec. 1504. Representations and warranties in asset-backed offerings.

Sec. 1505. Exempted transactions under the Securities Act of 1933.

Sec. 1506. Study on the macroeconomic effects of risk retention requirements.

Subtitle GEnhanced Dissolution Authority

Sec. 1601. Short title; Purpose.

Sec. 1602. Definitions.Sec. 1603. Systemic risk determination.

Sec. 1604. Dissolution; stabilization.

Sec. 1605. Judicial review.

Sec. 1606. Directors not liable for acquiescing in appointment of receiver.

Sec. 1607. Termination and exclusion of other actions.

Sec. 1608. Rulemaking.

Sec. 1609. Powers and duties of corporation.

Sec. 1610. Clarification of prohibition regarding concealment of assets from re-

ceiver or liquidating agent.

Sec. 1611. Office of Dissolution.

Sec. 1612. Miscellaneous provisions.

Sec. 1613. Amendment to Federal Deposit Insurance Act.

Sec. 1614. Application of executive compensation limitations.

Sec. 1615. Study on the effect of safe harbor provisions in insolvency cases.

Sec. 1616. Treasury study.

Sec. 1617. Priority of claims in federal deposit insurance act.

Subtitle HAdditional Improvements for Financial Crisis Management

Sec. 1701. Additional improvements for financial crisis management.

Sec. 1702. Certain restrictions related to foreign currency swap authority.

Sec. 1703. Additional oversight of financial regulatory system.

Subtitle IMiscellaneous

Sec. 1801. Inclusion of minorities and women; Diversity in agency workforce.

Sec. 1802. Federal Housing Finance Agency advisory role in FIEC.

Subtitle JInternational Policy Coordination

Sec. 1901. International policy coordination.

Subtitle KInternational Financial Provisions

Sec. 1951. Access to United States financial market by foreign institutions.

Sec. 1952. Reducing TARP funds to offset costs.



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Subtitle LSecurities Holding Companies

Sec. 1961. Securities holding companies.

TITLE IICORPORATE AND FINANCIAL INSTITUTION

COMPENSATION FAIRNESS ACT

Sec. 2001. Short title.Sec. 2002. Shareholder vote on executive compensation disclosures.

Sec. 2003. Compensation committee independence.

Sec. 2004. Enhanced compensation structure reporting to reduce perverse in-

centives.

TITLE IIIDERIVATIVE MARKETS TRANSPARENCY AND

ACCOUNTABILITY ACT


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 ARegulation of Swap Markets


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 partici-

pants.

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.




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Subtitle BRegulation 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 partici-

pants.

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.


Subtitle CImproved 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 defi-

ciencies identified by Inspectors General.

Sec. 3304. Effective date; transition rule.

Sec. 3305. Authority of the Commodity Futures Trading Commission to define

commercial risk, operating risk, and balance sheet risk.

Sec. 3306. Conflicts of interest in clearing organizations.

Sec. 3307. Definitions of major swap participant and major security-based

swap participant.

TITLE IVCONSUMER FINANCIAL PROTECTION AGENCY ACT



Subtitle AEstablishment of the Agency

Sec. 4101. Establishment of the Consumer Financial Protection Agency.

Sec. 4102. Director.

Sec. 4103. Establishment and composition of the commission.

Sec. 4104. Consumer Financial Protection Oversight Board.

Sec. 4105. Executive and administrative powers.

Sec. 4106. Administration.

Sec. 4107. Consumer Advisory Board.

Sec. 4108. Coordination.

Sec. 4109. Reports to the Congress.

Sec. 4110. GAO small business studies.Sec. 4111. Funding; fees and assessments; penalties and fines.

Sec. 4112. Amendments relating to other administrative provisions.

Sec. 4113. Oversight by GAO.


Subtitle BGeneral Powers of the Director and Agency

Sec. 4201. Mandate and objectives.

Sec. 4202. Authorities.



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Sec. 4203. Examination and enforcement for small banks, thrifts, and credit

unions.

Sec. 4204. Simultaneous and coordinated supervisory action.

Sec. 4205. Limitations on authority of agency and director.

Sec. 4206. Collection of information; confidentiality regulations.

Sec. 4207. Monitoring; assessments of significant regulations; reports.

Sec. 4208. Authority to restrict mandatory predispute arbitration.Sec. 4209. Registration and supervision of nondepository covered persons.


Subtitle CSpecific Authorities

Sec. 4301. Prohibiting unfair, deceptive, or abusive acts or practices.

Sec. 4302. Disclosures.

Sec. 4303. Sales practices.

Sec. 4304. Pilot disclosures.

Sec. 4305. Adopting operational standards to deter unfair, deceptive, or abusive

practices.

Sec. 4306. Duties.

Sec. 4307. Consumer rights to access information.

Sec. 4308. Prohibited acts.

Sec. 4309. Treatment of remittance transfers.


Sec. 4311. No authority to require the offering of financial products or services.

Sec. 4312. Appraisal independence requirements.

Sec. 4313. Overdraft protection notice requirements.

Sec. 4314. Review, report, and program with respect to exchange facilitators.

Sec. 4315. Regulation of person-to-person lending.

Sec. 4316. Treatment of reverse mortgages.

Subtitle DPreservation of State Law

Sec. 4401. Relation to State law.

Sec. 4402. Preservation of enforcement powers of States.

Sec. 4403. Preservation of existing contracts.

Sec. 4404. State law preemption standards for national banks and subsidiaries

clarified.

Sec. 4405. Visitorial standards.

Sec. 4406. Clarification of law applicable to nondepository institution subsidi-

aries.

Sec. 4407. State law preemption standards for Federal savings associations and

subsidiaries clarified.

Sec. 4408. Visitorial standards.

Sec. 4409. Clarification of law applicable to nondepository institution subsidi-

aries.


Subtitle EEnforcement Powers


Sec. 4502. Investigations and administrative discovery.

Sec. 4503. Hearings and adjudication proceedings.

Sec. 4504. Litigation authority.

Sec. 4505. Relief available.

Sec. 4506. Referrals for criminal proceedings.

Sec. 4507. Employee protection.



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Sec. 4508. No private right of action.


Subtitle FTransfer of Functions and Personnel; Transitional Provisions

Sec. 4601. Transfer of certain functions.

Sec. 4602. Designated transfer date.

Sec. 4603. Savings provisions.Sec. 4604. Transfer of certain personnel.

Sec. 4605. Incidental transfers.

Sec. 4606. Interim authority of the Secretary.

Subtitle GRegulatory Improvements

Sec. 4701. Collection of deposit account data.

Sec. 4702. Small business data collection.

Sec. 4703. Annual financial autopsy.

Sec. 4704. Reporting of mortgage data by State.

Subtitle HConforming Amendments

Sec. 4801. Amendments to the Inspector General Act of 1978.

Sec. 4802. Amendments to the Privacy Act of 1974.

Sec. 4803. Amendments to the Alternative Mortgage Transaction Parity Act of

1982.

Sec. 4804. Amendments to the Consumer Credit Protection Act.

Sec. 4805. Amendments to the Expedited Funds Availability Act.

Sec. 4806. Amendments to the Federal Deposit Insurance Act.

Sec. 4807. Amendments to the Gramm-Leach-Bliley Act.

Sec. 4808. Amendments to the Home Mortgage Disclosure Act of 1975.

Sec. 4809. Amendments to division D of the Omnibus Appropriations Act,

2009.

Sec. 4810. Amendments to the Homeowners Protection Act of 1998.

Sec. 4811. Amendments to the Real Estate Settlement Procedures Act of 1974.Sec. 4812. Amendments to the Right to Financial Privacy Act of 1978.

Sec. 4813. Amendments to the Secure and Fair Enforcement for Mortgage Li-

censing Act of 2008.

Sec. 4814. Amendments to the Truth in Savings Act.

Sec. 4815. Amendments to the Telemarketing and Consumer Fraud Abuse and

Prevention Act.

Sec. 4816. Membership in Financial Literacy and Education Commission.


Sec. 4818. Amendments to Truth in Lending Act.

Subtitle IImprovements to the Federal Trade Commission Act

Sec. 4901. Amendments to the Federal Trade Commission Act.

Subtitle JMiscellaneous

Sec. 4951. Requirements for State-licensed loan originators.

TITLE VCAPITAL MARKETS

Subtitle APrivate Fund Investment Advisers Registration Act





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Sec. 5003. Elimination of private adviser exemption; Limited exemption for for-

eign private fund advisers; Limited intrastate exemption.

Sec. 5004. Collection of data.

Sec. 5005. Elimination of disclosure provision.

Sec. 5006. Exemption of and reporting by venture capital fund advisers.

Sec. 5007. Exemption of and reporting by certain private fund advisers.

Sec. 5008. Clarification of rulemaking authority.Sec. 5009. GAO study.

Sec. 5010. Effective date; Transition period.

Sec. 5011. Qualified client standard.

Subtitle BAccountability and Transparency in Rating Agencies Act


Sec. 6002. Enhanced regulation of nationally recognized statistical rating orga-

nizations.

Sec. 6003. Standards for private actions.

Sec. 6004. Issuer disclosure of preliminary ratings.

Sec. 6005. Change to designation.

Sec. 6006. Timeline for regulations.

Sec. 6007. Elimination of exemption from fair disclosure rule.

Sec. 6008. Advisory Board.

Sec. 6009. Removal of statutory references to credit ratings.

Sec. 6010. Review of reliance on ratings.

Sec. 6011. Publication of rating histories on the EDGAR system.

Sec. 6012. Effect of Rule 436(g).

Sec. 6013. Studies.

Subtitle CInvestor Protection Act


PART 1DISCLOSURE

Sec. 7101. Investor Advisory Committee established.

Sec. 7102. Clarification of the Commissions authority to engage in consumer

testing.

Sec. 7103. Establishment of a fiduciary duty for brokers, dealers, and invest-

ment advisers, and harmonization of regulation.

Sec. 7104. Commission study and rulemaking on disclosure to retail customers

before purchase of products or services.

Sec. 7105. Beneficial ownership and short-swing profit reporting.

Sec. 7106. Revision to recordkeeping rules.

Sec. 7107. Study on enhancing investment adviser examinations.

Sec. 7108. GAO study of financial planning.

PART 2ENFORCEMENT AND REMEDIES

Sec. 7201. Authority to restrict mandatory pre-dispute arbitration.

Sec. 7202. Comptroller General study to review securities arbitration system.

Sec. 7203. Whistleblower protection.

Sec. 7204. Conforming amendments for whistleblower protection.

Sec. 7205. Implementation and transition provisions for whistleblower protec-

tions.

Sec. 7206. Collateral bars.

Sec. 7207. Aiding and abetting authority under the Securities Act and the In-

vestment Company Act.



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Sec. 7208. Authority to impose penalties for aiding and abetting violations of

the Investment Advisers Act.

Sec. 7209. Deadline for completing examinations, inspections and enforcement

actions.

Sec. 7210. Nationwide service of subpoenas.

Sec. 7211. Authority to impose civil penalties in cease and desist proceedings.

Sec. 7212. Formerly associated persons.Sec. 7213. Sharing privileged information with other authorities.

Sec. 7214. Expanded access to grand jury information.

Sec. 7215. Aiding and abetting standard of knowledge satisfied by recklessness.

Sec. 7216. Extraterritorial jurisdiction of the antifraud provisions of the Fed-

eral securities laws.

Sec. 7217. Fidelity bonding.

Sec. 7218. Enhanced SEC authority to conduct surveillance and risk assess-

ment.

Sec. 7219. Investment company examinations.

Sec. 7220. Control person liability under the Securities Exchange Act.

Sec. 7221. Enhanced application of anti-fraud provisions.

Sec. 7222. SEC authority to issue rules on proxy access.

PART 3COMMISSION FUNDING AND ORGANIZATION

Sec. 7301. Authorization of appropriations.

Sec. 7302. Investment adviser regulation funding.

Sec. 7303. Amendments to section 31 of the Securities Exchange Act of 1934.

Sec. 7304. Commission organizational study and reform.

Sec. 7305. Capital Markets Safety Board.

Sec. 7306. Report on implementation of post-Madoff reforms.

Sec. 7307. Joint Advisory Committee.

PART 4ADDITIONAL COMMISSION REFORMS

Sec. 7401. Regulation of securities lending.

Sec. 7402. Lost and stolen securities.

Sec. 7403. Fingerprinting.

Sec. 7404. Equal treatment of self-regulatory organization rules.

Sec. 7405. Clarification that section 205 of the Investment Advisers Act of

1940 does not apply to State-registered advisers.

Sec. 7406. Conforming amendments for the repeal of the Public Utility Holding

Company Act of 1935.

Sec. 7407. Promoting transparency in financial reporting.

Sec. 7408. Unlawful margin lending.

Sec. 7409. Protecting confidentiality of materials submitted to the Commission.

Sec. 7410. Technical corrections.

Sec. 7411. Municipal securities.

Sec. 7412. Interested person definition.

Sec. 7413. Rulemaking authority to protect redeeming investors.

Sec. 7414. Study on SEC revolving door.

Sec. 7415. Study on internal control evaluation and reporting cost burdens on

smaller issuers.

Sec. 7416. Analysis of rule regarding smaller reporting companies.

Sec. 7417. Financial Reporting Forum.

Sec. 7418. Investment advisers subject to State authorities.

Sec. 7419. Custodial requirements.

Sec. 7420. Ombudsman.

Sec. 7421. Notice to missing security holders.



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Sec. 7422. Short sale reforms.

Sec. 7423. Streamlining of SEC filing procedures.

PART 5SECURITIES INVESTOR PROTECTION ACT AMENDMENTS

Sec. 7501. Increasing the minimum assessment paid by SIPC members.

Sec. 7502. Increasing the borrowing limit on treasury loans.

Sec. 7503. Increasing the cash limit of protection.Sec. 7504. SIPC as trustee in SIPA liquidation proceedings.

Sec. 7505. Insiders ineligible for SIPC advances.

Sec. 7506. Eligibility for direct payment procedure.

Sec. 7507. Increasing the fine for prohibited acts under SIPA.

Sec. 7508. Penalty for misrepresentation of SIPC membership or protection.

Sec. 7509. Futures held in a portfolio margin securities account protection.

Sec. 7510. Study and report on the feasibility of risk-based assessments for

SIPC members.

PART 6SARBANES-OXLEY ACT AMENDMENTS

Sec. 7601. Public Company Accounting Oversight Board oversight of auditors

of brokers and dealers.Sec. 7602. Foreign regulatory information sharing.

Sec. 7603. Expansion of audit information to be produced and exchanged with

foreign counterparts.

Sec. 7604. Conforming amendment related to registration.

Sec. 7605. Fair fund amendments.

Sec. 7606. Exemption for nonaccelerated filers.

Sec. 7607. Whistleblower protection against retaliation by a subsidiary of an

issuer.

Sec. 7608. Congressional access to information.

Sec. 7609. Creation of ombudsman for the PCAOB.

Sec. 7610. Auditing Oversight Board.

PART 7SENIOR INVESTMENT PROTECTION

Sec. 7701. Findings.


Sec. 7703. Grants to States for enhanced protection of seniors from being mis-

led by false designations.

Sec. 7704. Applications.

Sec. 7705. Length of participation.

Sec. 7706. Authorization of appropriations.

PART 8REGISTRATION OF MUNICIPAL FINANCIAL ADVISORS

Sec. 7801. Municipal financial adviser registration requirement.

Sec. 7802. Conforming amendments.

Sec. 7803. Effective dates.

TITLE VIFEDERAL INSURANCE OFFICE


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.



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Sec. 8005. Sense of Congress regarding simplified mortgage contract sum-

maries.

TITLE VIIMORTGAGE REFORM AND ANTI-PREDATORY LENDING

ACT

Sec. 9000. Short title; designation as enumerated consumer law.

Subtitle AResidential Mortgage Loan Origination Standards


Sec. 9002. Residential mortgage loan origination.

Sec. 9003. Prohibition on steering incentives.

Sec. 9004. Liability.

Sec. 9005. Regulations.

Sec. 9006. Study of shared appreciation mortgages.

Subtitle BMinimum Standards For Mortgages

Sec. 9101. Ability to repay.

Sec. 9102. Net tangible benefit for refinancing of residential mortgage loans.

Sec. 9103. Safe harbor and rebuttable presumption.

Sec. 9104. Liability.

Sec. 9105. Defense to foreclosure.

Sec. 9106. Additional standards and requirements.


Sec. 9108. Effect on State laws.


Sec. 9110. Amendments to civil liability provisions.

Sec. 9111. Lender rights in the context of borrower deception.

Sec. 9112. Six-month notice required before reset of hybrid adjustable rate

mortgages.

Sec. 9113. Required disclosures.

Sec. 9114. Disclosures required in monthly statements for residential mortgageloans.

Sec. 9115. Legal assistance for foreclosure-related issues.


Sec. 9117. Report by the GAO.

Sec. 9118. State Attorney General enforcement authority.

Subtitle CHigh-Cost Mortgages

Sec. 9201. Definitions relating to high-cost mortgages.

Sec. 9202. Amendments to existing requirements for certain mortgages.

Sec. 9203. Additional requirements for certain mortgages.



Subtitle DOffice of Housing Counseling


Sec. 9302. Establishment of Office of Housing Counseling.

Sec. 9303. Counseling procedures.

Sec. 9304. Grants for housing counseling assistance.

Sec. 9305. Requirements to use HUD-certified counselors under HUD pro-

grams.

Sec. 9306. Study of defaults and foreclosures.



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Sec. 9307. Default and foreclosure database.

Sec. 9308. Definitions for counseling-related programs.

Sec. 9309. Accountability and transparency for grant recipients.

Sec. 9310. Updating and simplification of mortgage information booklet.

Sec. 9311. Home inspection counseling.

Sec. 9312. Warnings to homeowners of foreclosure rescue scams.

Subtitle EMortgage Servicing

Sec. 9401. Escrow and impound accounts relating to certain consumer credit

transactions.

Sec. 9402. Disclosure notice required for consumers who waive escrow services.

Sec. 9403. Real Estate Settlement Procedures Act of 1974 amendments.

Sec. 9404. Truth in Lending Act amendments.

Sec. 9405. Escrows included in repayment analysis.

Subtitle FAppraisal Activities

Sec. 9501. Property appraisal requirements.

Sec. 9502. Unfair and deceptive practices and acts relating to certain consumer

credit transactions.Sec. 9503. Amendments relating to Appraisal Subcommittee of FIEC, Ap-

praiser Independence Monitoring, Approved Appraiser Edu-

cation, Appraisal Management Companies, Appraiser Com-

plaint Hotline, Automated Valuation Models, and Broker Price

Opinions.

Sec. 9504. Study required on improvements in appraisal process and compli-

ance programs.

Sec. 9505. Equal Credit Opportunity Act amendment.

Sec. 9506. Real Estate Settlement Procedures Act of 1974 amendment relating

to certain appraisal fees.

Subtitle GSense of Congress Regarding the Importance of Government

Sponsored Enterprises Reform

Sec. 9601. Sense of Congress regarding the importance of Government-spon-

sored enterprises reform to enhance the protection, limitation,

and regulation of the terms of residential mortgage credit.

Subtitle HReports and Data Collection

Sec. 9701. GAO study report on government efforts to combat mortgage fore-

closure rescue scams and loan modification fraud.

Sec. 9702. Reporting of mortgage data by State.

Subtitle IMultifamily Mortgage Resolution

Sec. 9801. Multifamily mortgage resolution program.

Subtitle JStudy of Effect of Drywall Presence on Foreclosures

Sec. 9901. Study of effect of drywall presence on foreclosures.

Subtitle KHome Affordable Modification Program

Sec. 9911. Home Affordable Modification Program guidelines.

Subtitle LMaking Home Affordable Program



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Sec. 9921. Public availability of information.

TITLE VIIIFORECLOSURE AVOIDANCE AND AFFORDABLE

HOUSING

Sec. 10001. Emergency mortgage relief.

Sec. 10002. Additional assistance for Neighborhood Stabilization Program.

TITLE IXNONADMITTED AND REINSURANCE REFORM ACT



Subtitle ANonadmitted Insurance

Sec. 10101. Reporting, payment, and allocation of premium taxes.

Sec. 10102. Regulation of nonadmitted insurance by insureds home state.

Sec. 10103. Participation in national producer database.

Sec. 10104. Uniform standards for surplus lines eligibility.

Sec. 10105. Streamlined application for commercial purchasers.

Sec. 10106. GAO study of nonadmitted insurance market.


Subtitle BReinsurance

Sec. 10201. Regulation of credit for reinsurance and reinsurance agreements.

Sec. 10202. Regulation of reinsurer solvency.


Subtitle CRule of Construction


Sec. 10302. Severability.

TITLE XINTEREST-BEARING TRANSACTION ACCOUNTSAUTHORIZED

Sec. 11001. Interest-bearing transaction accounts authorized.

TITLE IFINANCIAL STABILITY1

IMPROVEMENT ACT2

SEC. 1000. SHORT TITLE; DEFINITIONS.3

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

Financial Stability Improvement Act of 2009.5

(b) DEFINITIONS.For purposes of this title, the fol-6

lowing definitions shall apply:7

(1) The term Board means the Board of8

Governors of the Federal Reserve System.9



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(2) The term Council means the Financial1

Services Oversight Council established under section2

1001.3

(3) The term Federal financial regulatory4

agency means any agency that has a voting mem-5

ber of the Council as set forth in section 1001(b)(1).6

(4) The term financial company means a7

company or other entity8

(A) that is9

(i) incorporated or organized under10

the laws of the United States or any State,11

territory, or possession of the United12

States, the District of Columbia, Common-13

wealth of Puerto Rico, Commonwealth of14

Northern Mariana Islands, Guam, Amer-15

ican Samoa, or the United States Virgin16

Islands; or17

(ii) a company incorporated in or or-18

ganized in a country other than the United19

States that has significant operations in20

the United States (hereafter in this title21

referred to as a foreign financial parent)22

after through23

(I) a Federal or State branch or24

agency of a foreign bank as such25



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terms are defined in the International1

Banking Act of 1978 (12 U.S.C. 31012

et seq.); or3

(II) a United States affiliate or4

other United States operating entity;5

(B) that is, in whole or in part, directly or6

indirectly, engaged in financial activities; and7

(C) that is not a Farm Credit System in-8

stitution chartered under and subject to the9

provisions of the Farm Credit Act of 1971, as10

amended (12 U.S.C. 2001 et seq.).11

(5) FINANCIAL HOLDING COMPANY SUBJECT TO12

STRICTER STANDARDS.The term financial holding13

company subject to stricter standards means14

(A) a financial company that has been sub-15

jected to stricter prudential standards under16

subtitle B; or17

(B) in the case of a financial company de-18

scribed in subparagraph (A) that is required to19

establish an intermediate holding company20

under section 6 of the Bank Holding Company21

Act, the section 6 holding company through22

which the financial company is required to con-23

duct its financial activities.24



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(6) The term primary financial regulatory1

agency means the following:2

(A) The Comptroller of the Currency, with3

respect to any national bank, any Federal4

branch or Federal agency of a foreign bank,5

and, after the date on which the functions of6

the Office of Thrift Supervision and the Direc-7

tor of the Office of Thrift Supervision are8

transferred under subtitle C, a Federal savings9

association.10

(B) The Board, with respect to11

(i) any State member bank;12

(ii) any bank holding company and13

any subsidiary of such company (as such14

terms are defined in the Bank Holding15

Company Act), other than a subsidiary16

that is described in any other subpara-17

graph of this paragraph to the extent that18

the subsidiary is engaged in an activity de-19

scribed in such subparagraph;20

(iii) any financial holding company21

subject to stricter standards and any sub-22

sidiary (as such term is defined in the23

Bank Holding Company Act) of such com-24

pany, other than a subsidiary that is de-25



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scribed in any other subparagraph of this1

paragraph to the extent that the subsidiary2

is engaged in an activity described in such3

subparagraph;4

(iv) after the date on which the func-5

tions of the Office of Thrift Supervision6

are transferred under subtitle C, any sav-7

ings and loan holding company (as defined8

in section 10(a)(1)(D) of the Home Own-9

ers Loan Act) and any subsidiary (as such10

term is defined in the Bank Holding Com-11

pany Act of 1956) of such company, other12

than a subsidiary that is described in any13

other subparagraph of this paragraph, to14

the extent that the subsidiary is engaged15

in an activity described in such subpara-16

graph;17

(v) any organization organized and18

operated under section 25 or 25A of the19

Federal Reserve Act (12 U.S.C. 601 et20

seq. or 611 et seq.); and21

(vi) any foreign bank or company that22

is treated as a bank holding company23

under subsection (a) of section 8 of the24

International Banking Act of 1978 and25



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any subsidiary (other than a bank or other1

subsidiary that is described in any other2

subparagraph of this paragraph) of any3

such foreign bank or company.4

(C) The Federal Deposit Insurance Cor-5

poration, with respect to any State nonmember6

bank, any insured State branch of a foreign7

bank (as such terms are defined in section 3 of8

the Federal Deposit Insurance Act), and, after9

the date on which the functions of the Office of10

Thrift Supervision are transferred under sub-11

title C, any State savings association.12

(D) The National Credit Union Adminis-13

tration, with respect to any insured credit union14

under the Federal Credit Union Act (12 U.S.C.15

1751 et seq.).16

(E) The Securities and Exchange Commis-17

sion, with respect to18

(i) any broker or dealer registered19

with the Securities and Exchange Commis-20

sion under the Securities Exchange Act of21

1934 (15 U.S.C. 78a et seq.);22

(ii) any investment company reg-23

istered with the Securities and Exchange24

Commission under the Investment Com-25



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pany Act of 1940 (15 U.S.C. 80a1 et1

seq.);2

(iii) any investment adviser registered3

with the Securities and Exchange Commis-4

sion under the Investment Advisers Act of5

1940 (15 U.S.C. 80b1 et seq.) with re-6

spect to the investment advisory activities7

of such company and activities incidental8

to such advisory activities;9

(iv) any clearing agency (as defined in10

section 3(a)(23) of the Securities Ex-11

change Act of 1934);12

(v) a securities-based swap execution13

facility that is registered with the Securi-14

ties and Exchange Commission under the15

Securities Exchange Act of 1934 (1516

U.S.C. 78a et seq.);17

(vi) any exchange registered as a na-18

tional securities exchange with the Securi-19

ties and Exchange Commission under the20

Securities Exchange Act of 1934 (1521

U.S.C. 78a et seq.);22

(vii) any credit rating agency reg-23

istered with the Securities and Exchange24



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Commission under the Securities Exchange1

Act of 1934 (15 U.S.C. 78a et seq.);2

(viii) any securities information proc-3

essor registered with the Securities and4

Exchange Commission under the Securities5

Exchange Act of 1934 (15 U.S.C. 78a et6

seq.); and7

(ix) any transfer agent registered with8

the Securities and Exchange Commission9

under the Securities Exchange Act of 193410

(15 U.S.C. 78a et seq.).11

(F) The Commodity Futures Trading12

Commission, with respect to13

(i) any futures commission merchant,14

any commodity trading adviser, any retail15

foreign exchange dealer, and any com-16

modity pool operator registered with the17

Commodity Futures Trading Commission18

under the Commodity Exchange Act (719

U.S.C. 1 et seq.) with respect to the com-20

modities activities of such entity and ac-21

tivities incidental to such commodities ac-22

tivities; and23

(ii) any derivatives clearing organiza-24

tion, designated contract market, or swap25



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execution facility (as defined in the Com-1

modity Exchange Act).2

(G) The Federal Housing Finance Agency3

with respect to the Federal National Mortgage4

Association, the Federal Home Loan Mortgage5

Corporation, and the Federal home loan banks.6

(H) The State insurance authority of the7

State in which an insurance company is domi-8

ciled, with respect to the insurance activities9

and activities incidental to such insurance ac-10

tivities of an insurance company that is subject11

to supervision by the State insurance authority12

under State insurance law.13

(I) The Office of Thrift Supervision, with14

respect to any Federal savings association,15

State savings association, or savings and loan16

holding company, until the date on which the17

functions of the Office of Thrift Supervision are18

transferred under subtitle C.19

(7) TERMS DEFINED IN OTHER LAWS.20

(A) AFFILIATE.The term affiliate has21

the meaning given such term in section 2(k) of22

the Bank Holding Company Act of 1956.23

(B) STATE MEMBER BANK, STATE NON-24

MEMBER BANK.The terms State member25



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bank and State nonmember bank have the1

same meanings as in subsections (d)(2) and2

(e)(2), respectively, of section 3 of the Federal3

Deposit Insurance Act.4

SEC. 1000A. RESTRICTIONS ON THE FEDERAL RESERVE5

SYSTEM PENDING AUDIT REPORT.6

(a) IN GENERAL.Notwithstanding any other provi-7

sion of law, the Comptroller General of the United States8

shall perform an audit of all actions taken by the Board9

of Governors of the Federal Reserve System and the Fed-10

eral reserve banks during the current economic crisis pur-11

suant to the authority granted under section 13(c) of the12

Federal Reserve Act. Such audit shall be completed as ex-13

peditiously as possible, but no later than 2 years, after14

the date of the enactment of the Financial Stability Im-15

provement Act of 2009.16

(b) REPORT.17

(1) REQUIRED.Not later than the end of the18

90-day period beginning on the date the audit re-19

ferred to in subsection (a) is completed, the Comp-20

troller General of the United States shall submit a21

report to the Congress, and make such report avail-22

able to the public.23

(2) CONTENTS.The report under paragraph24

(1) shall include a detailed description of the find-25



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ings and conclusion of the Comptroller General with1

respect to the audit that is the subject of the report,2

together with such recommendations for legislative3

or administrative action as the Comptroller General4

may determine to be appropriate.5

Subtitle AThe Financial Services6

Oversight Council7

SEC. 1001. FINANCIAL SERVICES OVERSIGHT COUNCIL ES-8

TABLISHED.9

(a) ESTABLISHMENT.Immediately upon enactment10

of this title, there is established a Financial Services Over-11

sight Council.12

(b) MEMBERSHIP.The Council shall consist of the13

following:14

(1) VOTING MEMBERS.Voting members, who15

shall each have one vote on the Council, as follows:16

(A) The Secretary of the Treasury, who17

shall serve as the Chairman of the Council.18

(B) The Chairman of the Board of Gov-19

ernors of the Federal Reserve System.20

(C) The Comptroller of the Currency.21

(D) The Director of the Office of Thrift22

Supervision, until the functions of the Director23

of the Office of Thrift Supervision are trans-24

ferred pursuant to subtitle C.25



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(E) The Chairman of the Securities and1

Exchange Commission.2

(F) The Chairman of the Commodity Fu-3

tures Trading Commission.4

(G) The Chairperson of the Federal De-5

posit Insurance Corporation.6

(H) The Director of the Federal Housing7

Finance Agency.8

(I) The Chairman of the National Credit9

Union Administration.10

(J) The head of the Consumer Financial11

Protection Agency.12

(2) NONVOTING MEMBERS.Nonvoting mem-13

bers, who shall serve in an advisory capacity and14

shall not be excluded from any of the Councils pro-15

ceedings, meetings, discussions, and deliberations:16

(A) The Director of the Federal Insurance17

Office.18

(B) A State insurance commissioner, to be19

designated by a selection process determined by20

the State insurance commissioners, provided21

that the term for which a State insurance com-22

missioner may serve shall last no more than the23

2-year period beginning on the date that the24

commissioner is selected.25



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(C) A State banking supervisor, to be des-1

ignated by a selection process determined by2

the State bank supervisors, provided that the3

term for which a State banking supervisor may4

serve shall last no more than the 2-year period5

beginning on the date that the supervisor is se-6

lected.7

(D) A State securities commissioner (or an8

officer performing like functions), to be des-9

ignated by a selection process determined by10

such State securities commissioners, provided11

that the term for which a State securities com-12

missioner may serve shall last no more than the13

2-year period beginning on the date that the14

commissioner is selected.15

(c) DUTIES.The Council shall have the following16

duties:17

(1) To advise the Congress on financial domes-18

tic and international regulatory developments, in-19

cluding insurance and accounting developments, and20

make recommendations that will enhance the integ-21

rity, efficiency, competitiveness, and stability of the22

United States financial markets.23



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(2) To monitor the financial services market-1

place to identify potential threats to the stability of2

the United States financial system.3

(3) To identify potential threats to the stability4

of the United States financial system that do not5

arise out of the financial services marketplace.6

(4) To develop strategies (and conduct exercises7

in furtherance of those strategies) to prepare for po-8

tential threats identified under paragraphs (2) and9

(3). In doing so, the Council shall collaborate with10

participants in the financial sector, financial sector11

coordinating councils, and any other parties the12

Council determines to be appropriate.13

(5) To subject financial companies and financial14

activities to stricter prudential standards in order to15

promote financial stability and mitigate systemic16

risk in accordance with subtitle B.17

(6) To issue formal recommendations that a18

Council member agency adopt stricter prudential19

standards for firms it regulates to mitigate systemic20

risk in accordance with subtitle B of this title.21

(7) To monitor international regulatory develop-22

ments, including both insurance and accounting de-23

velopments, and to identify those developments that24

may conflict with the policies of the United States25



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or place United States financial services firms or1

United States financial markets at a competitive dis-2

advantage.3

(8) To facilitate information sharing and co-4

ordination among the members of the Council re-5

garding financial services policy development,6

rulemakings, examinations, reporting requirements,7

and enforcement actions.8

(9) To provide a forum for discussion and anal-9

ysis of emerging market developments and financial10

regulatory issues among its members.11

(10) At the request of an agency that is a12

Council member, to resolve a jurisdictional dispute13

between that agency and another agency that is a14

Council member in accordance with section 1002.15

(11) To review and submit comments to the Se-16

curities and Exchange Commission and any stand-17

ards setting body with respect to an existing or pro-18

posed accounting principle, standard, or procedure.19

SEC. 1002. RESOLUTION OF DISPUTES AMONG FEDERAL FI-20

NANCIAL REGULATORY AGENCIES.21

(a) REQUEST FOR DISPUTE RESOLUTION.The22

Council shall resolve a dispute among 2 or more Federal23

financial regulatory agencies if24



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(1) a Federal financial regulatory agency has a1

dispute with another Federal financial regulatory2

agency about the agencies respective jurisdiction3

over a particular financial company or financial ac-4

tivity or product (excluding matters for which a dis-5

pute mechanism specifically has been provided under6

section 4204 or title III);7

(2) the disputing agencies cannot, after a dem-8

onstrated good faith effort, resolve the dispute9

among themselves; and10

(3) any of the Federal financial regulatory11

agencies involved in the dispute12

(A) provides all other disputants prior no-13

tice of its intent to request dispute resolution14

by the Council; and15

(B) requests in writing, no earlier than 1416

days after providing the notice described in17

paragraph (A), that the Council resolve the dis-18

pute.19

(b) COUNCIL DECISION.The Council shall decide20

the dispute21

(1) within a reasonable time after receiving the22

dispute resolution request;23

(2) after consideration of relevant information24

provided by each party to the dispute; and25



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

ing the entirety of the matter or by determining a2

compromise position.3

(c) FORM AND BINDING EFFECT.A Council deci-4

sion under this section shall be in writing and include an5

explanation and shall be binding on all Federal financial6

regulatory agencies that are parties to the dispute.7

SEC. 1003. TECHNICAL AND PROFESSIONAL ADVISORY8

COMMITTEES.9

The Council is authorized to appoint10

(1) subsidiary working groups composed of11

Council members and their staff, Council staff, or a12

combination; and13

(2) such temporary special advisory, technical,14

or professional committees as may be useful in car-15

rying out its functions, which may be composed of16

Council members and their staff, other persons, or17

a combination.18

SEC. 1004. FINANCIAL SERVICES OVERSIGHT COUNCIL19

MEETINGS AND COUNCIL GOVERNANCE.20

(a) MEETINGS.The Council shall meet as fre-21

quently as the Chairman deems necessary, but not less22

than quarterly.23

(b) VOTING.Unless otherwise provided, the Council24

shall make all decisions the Council is required or author-25



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ized to make by a majority of the total voting membership1

of the Council under section 1001(b)(1).2

SEC. 1005. COUNCIL STAFF AND FUNDING.3

(a) VOTING MEMBERS OF THE COUNCIL.The Sec-4

retary of the Treasury shall and all other voting members5

of the Council may, with the approval of the Council6

(1) detail permanent staff from the Department7

of the Treasury to provide the Council (and any8

temporary special advisory, technical, or professional9

committees appointed by the Council) with profes-10

sional and expert support; and11

(2) provide such other services and facilities12

necessary for the performance of the Councils func-13

tions and fulfillment of the duties and mission of the14

Council.15

(b) OTHER DEPARTMENTS ANDAGENCIES.In addi-16

tion to the assistance prescribed in subsection (a), depart-17

ments and agencies of the United States may, with the18

approval of the Council19

(1) detail department or agency staff on a tem-20

porary basis to provide additional support to the21

Council (and any special advisory, technical, or pro-22

fessional committees appointed by the Council); and23



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(2) provide such services, and facilities as the1

other departments or agencies may determine advis-2

able.3

(c) STAFF STATUS; COUNCIL FUNDING.4

(1) STATUS.Staff detailed to the Council by5

the Secretary of the Treasury and other United6

States departments or agencies shall7

(A) report to and be subject to oversight8

by the Council during their assignment to the9

Council; and10

(B) be compensated by the department of11

agency from which the staff was detailed.12

(2) FUNDING.The administrative expense of13

the Council shall be paid by the departments and14

agencies represented by voting members of the15

Council on an equal basis.16

SEC. 1006. REPORTS TO THE CONGRESS.17

(a) IN GENERAL.Semiannually the Council shall18

submit a report to the Committee on Ways and Means,19

the Committee on Agriculture, and the Committee on Fi-20

nancial Services of the House of Representatives and the21

Committee on Finance, the Committee on Agriculture,22

and the Committee on Banking, Housing, and Urban Af-23

fairs of the Senate, and the Comptroller General of the24

United States that25



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(1) describes significant financial and regu-1

latory developments, including insurance and ac-2

counting regulations and standards, and assesses the3

impact of those developments on the stability of the4

financial system;5

(2) recommends actions that will improve finan-6

cial stability;7

(3) details the size, scale, scope, concentration,8

activities, and interconnectedness of the 50 largest9

financial institutions, by total assets, in the United10

States;11

(4) describes strategies developed by the Coun-12

cil to respond to potential threats to the stability of13

the United States financial system and the outcome14

of exercises conducted in furtherance of those strate-15

gies;16

(5) describes the nature and scope of any com-17

pany or activities identified under subtitle B and18

steps taken to address them; and19

(6) describes any dispute resolutions under-20

taken under section 1002 and the result of such res-21

olutions.22

(b) E VALUATION OFANNUAL REPORT BY GAO.23

Not later than 120 days after receiving the report required24

by subsection (a), the Comptroller General of the United25



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States shall submit an evaluation of such report to the1

Committee on Ways and Means, the Committee on Agri-2

culture, and the Committee on Financial Services of the3

House of Representatives and the Committee on Finance,4

the Committee on Agriculture, and the Committee on5

Banking, Housing, and Urban Affairs of the Senate.6

(c) STATEMENTS BY VOTING MEMBERS OF THE7

COUNCIL.At the time each report is submitted under8

subsection (a), each voting member of the Council shall9

(1) if such member believes that the Council,10

the Government, and the private sector are taking11

all reasonable steps to ensure financial stability and12

to prevent systemic risk that would negatively affect13

the economy, submit a signed statement to the Com-14

mittee on Ways and Means, the Committee on Agri-15

culture, and the Committee on Financial Services of16

the House of Representatives and the Committee on17

Finance, the Committee on Agriculture, and the18

Committee on Banking, Housing, and Urban Affairs19

of the Senate stating such belief; or20

(2) if such member does not believe that all rea-21

sonable steps described under paragraph (1) are22

being taken, submit a signed statement to the Com-23

mittee on Ways and Means, the Committee on Agri-24

culture, and the Committee on Financial Services of25



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the House of Representatives and the Committee on1

Finance, the Committee on Agriculture, and the2

Committee on Banking, Housing, and Urban Affairs3

of the Senate stating what actions such member be-4

lieves need to be taken in order to ensure that all5

reasonable steps described under paragraph (1) are6

taken.7

(d) TESTIMONY BY THE CHAIRMAN.The Chairman8

of the Council shall appear before the Committee on Fi-9

nancial Services of the House of Representatives and the10

Committee on Banking, Housing, and Urban Affairs of11

the Senate at a semi-annual hearing, after the report is12

submitted under subsection (a)13

(1) to discuss the efforts, activities, objectives,14

and plans of the Council; and15

(2) to discuss and answer questions concerning16

such report.17

(e) STUDY OF EFFECTS CONSUMER FINANCIAL PRO-18

TECTIONAGENCY REGULATIONS AND STANDARDS.19

(1) STUDY REQUIRED.The Council shall con-20

duct a study of the effects that regulations and21

standards of the Consumer Financial Protection22

Agency will have on all covered persons (as such23

term is defined in section 4002(9)), including non-24

depository institution covered persons. The Director25



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of the Consumer Financial Protection Agency shall1

take the findings of the study into account when2

issuing regulations.3

(2) V ALUE OF NONBANK PRODUCTS.The4

study shall include an evaluation and assessment of5

the appropriateness of using APR as a true meas-6

ure of the value of all nonbank products.7

(3) SUBMISSION.Not later than 240 days8

after the date of the enactment of this Act, the Di-9

rector of the Consumer Financial Protection Agency10

shall submit the study to Congress and include any11

recommendations the Director may have for changes12

in law and regulations to improve consumer protec-13

tions and maintain access to credit.14

SEC. 1007. APPLICABILITY OF CERTAIN FEDERAL LAWS.15

(a) The Federal Advisory Committee Act shall not16

apply to the Financial Services Oversight Council, or any17

special advisory, technical, or professional committees ap-18

pointed by the Council (except that, if an advisory, tech-19

nical, or professional committee has one or more members20

who are not employees of or affiliated with the United21

States government, the Council shall publish a list of the22

names of the members of such committee).23

(b) The Council shall not be deemed an agency for24

purposes of any State or Federal law.25



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SEC. 1008. OVERSIGHT BY GAO.1

(a) AUTHORITY TO AUDIT.The Comptroller Gen-2

eral of the United States may audit the activities and fi-3

nancial transactions of4

(1) the Council; and5

(2) any person or entity acting on behalf of or6

under the authority of the Council, to the extent7

such activities and financial transactions relate to8

such persons or entitys work for the Council.9

(b) ACCESS TO INFORMATION.10

(1) IN GENERAL.Notwithstanding any other11

provision of law, the Comptroller General of the12

United States shall have access, upon request and at13

such reasonable time and in such reasonable form as14

the Comptroller General may request, to15

(A) any records or other information under16

the control of or used by the Council;17

(B) any records or other information under18

the control of a person or entity acting on be-19

half of or under the authority of the Council, to20

the extent such records or other information is21

relevant to an audit under subsection (a); and22

(C) the officers, directors, employees, fi-23

nancial advisors, staff, working groups, and24

agents and representatives of the Council (as25

related to the agents or representatives activi-26



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ties on behalf of the Council) at such reasonable1

times as the Comptroller General may request.2

(2) CERTAIN INFORMATION SPECIFIED.Access3

under paragraph (1) includes access to4

(A) information provided to the Council by5

its voting and nonvoting members under section6

1101; and7

(B) the identity of each financial holding8

company subject to stricter standards.9

(3) COPIES.Comptroller General may make10

and retain copies of such books, accounts, and other11

records access to which is granted under this provi-12

sion as the Comptroller General considers appro-13

priate.14

(c) PERIODIC EVALUATIONS.The Comptroller Gen-15

eral of the United States shall periodically evaluate the16

processes and activities of the Council and the extent to17

which the Council is fulfilling its duties under this title.18

The Comptroller General shall submit to the Committee19

on Financial Services of the House of Representatives and20

the Committee on Banking, Housing, and Urban Affairs21

of the Senate a report on the results of each such evalua-22

tion.23



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Subtitle BPrudential Regulation1

of Companies and Activities for2

Financial Stability Purposes3

SEC. 1100. FEDERAL RESERVE BOARD AUTHORITY THAT OF4

AGENT ACTING ON BEHALF OF COUNCIL.5

For purposes of this subtitle, the Board of Governors6

of the Federal Reserve System shall act in the capacity7

of agent for the Council, acting on behalf of the Council.8

SEC. 1101. COUNCIL AND BOARD AUTHORITY TO OBTAIN9

INFORMATION.10

(a) IN GENERAL.The Council and the Board are11

authorized to receive, and may request the production of,12

any data or information from members of the Council, as13

necessary14

(1) to monitor the financial services market-15

place to identify potential threats to the stability of16

the United States financial system;17

(2) to identify global trends and developments18

that could pose systemic risks to the stability of the19

economy of the United States or other economies; or20

(3) to otherwise carry out any of the provisions21

of this title, including to ascertain a primary finan-22

cial regulatory agencys implementation of rec-23

ommended prudential standards under this subtitle.24



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(b) SUBMISSION BY COUNCIL MEMBERS.Notwith-1

standing any provision of law, any voting or nonvoting2

member of the Council is authorized to provide informa-3

tion to the Council, and the members of the Council shall4

maintain the confidentiality of such information.5

(c) FINANCIAL COMPANY DATA COLLECTION.6

(1) IN GENERAL.The Council or the Board7

may require the submission of periodic and other re-8

ports from any financial company solely for the pur-9

pose of assessing the extent to which a financial ac-10

tivity or financial market in which the financial com-11

pany participates, or the company itself, poses a12

threat to financial stability.13

(2) MITIGATION OF REPORT BURDEN.Before14

requiring the submission of reports from financial15

companies that are regulated by the primary finan-16

cial regulatory agencies, the Council or the Board17

shall coordinate with such agencies and shall, when-18

ever possible, rely on information already being col-19

lected by such agencies.20

(3) MITIGATION REQUIREMENTS IN CASE OF21

FOREIGN FINANCIAL PARENTS.Before requiring22

the submission of reports from a company that is a23

foreign financial parent, the Council or the Board24

shall, to the extent appropriate, coordinate with any25



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appropriate foreign regulator of such company and1

any appropriate multilateral organization and, when-2

ever possible, rely on information already being col-3

lected by such foreign regulator or multilateral orga-4

nizational with English translation.5

(d) CONSULTATION WITH AGENCIES AND ENTI-6

TIES.The Council or the Board, as appropriate, may7

consult with Federal and State agencies and other entities8

(including the Federal Insurance Office) to carry out any9

of the provisions of this subtitle.10

(e) ADDITIONAL PROVISIONS.11

(1) D ATA AND INFORMATION SHARING.The12

Chairman of the Council, in consultation with the13

other members of the Council, may14

(A) establish procedures to share data and15

information collected by the Council under this16

section with the members of the Council;17

(B) develop an electronic process for shar-18

ing all information collected by the Council with19

the Chairman of the Board on a real-time basis;20

(C) issue any regulations necessary to21

carry out this subsection; and22

(D) designate the format in which re-23

quested data and information must be sub-24

mitted to the Council, including any electronic,25



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digital, or other format that facilitates the use1

of such data by the Council in its analysis.2

(2) APPLICABLE PRIVILEGES NOT WAIVED.A3

Federal financial regulator, State financial regu-4

lator, United States financial company, foreign fi-5

nancial company operating in the United States, fi-6

nancial market utility, or other person shall not be7

compelled to waive and shall not be deemed to have8

waived any privilege otherwise applicable to any data9

or information by transferring the data or informa-10

tion to, or permitting that data or information to be11

used by12

(A) the Council;13

(B) any Federal financial regulator or14

State financial regulator, in any capacity; or15

(C) any other agency of the Federal Gov-16

ernment (as defined in section 6 of title 18,17

United States Code).18

(3) DISCLOSURE EXEMPTION.Any informa-19

tion obtained by the Council under this section shall20

be exempt from the disclosure requirements under21

section 552 of title 5, United States Code.22

(4) CONSULTATION WITH FOREIGN GOVERN-23

MENTS.Under the supervision of the President,24

and in a manner consistent with section 207 of the25



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Foreign Service Act of 1980 (22 U.S.C. 3927), the1

Chairman of the Council, in consultation with the2

other members of the Council, shall regularly consult3

with the financial regulatory entities and other ap-4

propriate organizations of foreign governments or5

international organizations on matters relating to6

systemic risk to the international financial system.7

(5) REPORT.Not later than 6 months after8

the date of the enactment of this title, the Chairman9

of the Council shall report to the Financial Services10

Committee of the House of Representatives and the11

Banking, Housing, and Urban Affairs Committee of12

the Senate the opinion of the Council as to whether13

setting up an electronic database as described in14

paragraph (1)(B) would aid the Council in carrying15

out this section.16

SEC. 1102. COUNCIL PRUDENTIAL REGULATION REC-17

OMMENDATIONS TO FEDERAL FINANCIAL18

REGULATORY AGENCIES; AGENCY AUTHOR-19

ITY.20

(a) IN GENERAL.The Council is authorized to issue21

formal recommendations, publicly or privately, that a Fed-22

eral financial regulatory agency adopt stricter prudential23

standards for firms it regulates to mitigate systemic risk.24



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(b) AGENCY AUTHORITY TO IMPLEMENT STAND-1

ARDS.2

(1) A Federal financial regulatory agency spe-3

cifically may, in response to a Council recommenda-4

tion under this section or otherwise, impose, require5

reports regarding, examine for compliance with, and6

enforce stricter prudential standards and safeguards7

for the firms it regulates to mitigate systemic risk.8

This authority is in addition to and does not limit9

any other authority of the Federal financial regu-10

latory agencies. Compliance by an entity with ac-11

tions taken by a Federal financial regulatory agency12

under this section shall be enforceable in accordance13

with the statutes governing the respective Federal fi-14

nancial regulatory agencys jurisdiction over the en-15

tity as if the agency action were taken under those16

statutes.17

(2) APPLYING STANDARDS TO FOREIGN FINAN-18

CIAL PARENTS.In applying standards under para-19

graph (1) to any foreign financial parent, or to any20

branch of, subsidiary of, or other operating entity21

related to such foreign financial parent that operates22

within the United States, the Federal financial regu-23

latory agency shall24



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(A) give due regard to the principles of na-1

tional treatment and equality of competitive op-2

portunity; and3

(B) take into account the extent to which4

the foreign financial parent is subject to com-5

parable standards on a consolidated basis in the6

home country of such foreign financial parent7

that are administered by a comparable foreign8

supervisory authority.9

(c) AGENCY NOTICE TO COUNCIL.A Federal finan-10

cial regulatory agency shall, within 60 days of receiving11

a Council recommendation under this section, notify the12

Council in writing regarding13

(1) the actions the Federal financial regulatory14

agency has taken in response to the Councils rec-15

ommendation, additional actions contemplated, and16

timetables therefore; or17

(2) the reason the Federal financial regulatory18

agency has failed to respond to the Councils re-19

quest.20

SEC. 1103. SUBJECTING FINANCIAL COMPANIES TO STRICT-21

ER PRUDENTIAL STANDARDS FOR FINANCIAL22

STABILITY PURPOSES.23

(a) IN GENERAL.The Council shall, in consultation24

with the Board and any other primary financial regulatory25



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agency that regulates the financial company or a sub-1

sidiary of such company, and, in the case of a financial2

holding company subject to stricter standards that is an3

insurance company, the Federal Insurance Office, subject4

a financial company to stricter prudential standards under5

this subtitle if the Council determines that6

(1) material financial distress at the company7

could pose a threat to financial stability or the econ-8

omy; or9

(2) the nature, scope, size, scale, concentration,10

and interconnectedness, or mix of the companys ac-11

tivities could pose a threat to financial stability or12

the economy.13

(b) CRITERIA.In making a determination under14

subsection (a), the Council shall consider the following cri-15

teria:16

(1) The extent of the companys leverage.17

(2) The extent and nature of the companys off-18

balance sheet exposures.19

(3) The extent and nature of the companys20

transactions and relationships with other financial21

companies.22

(4) The companys importance as a source of23

credit for households, businesses, and State and24



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local governments and as a source of liquidity for1

the financial system.2

(5) The companys importance as a source of3

credit for low-income, minority, or underserved com-4

munities and the impact the failure of such company5

would have on the availability of credit in such com-6

munities.7

(6) The extent to which assets are simply man-8

aged and not owned by the financial company and9

the extent to which ownership of assets under man-10

agement is diffuse.11

(7) The nature, scope, and mix of the com-12

panys activities.13

(8) The degree to which the company is already14

regulated by one or more Federal financial regu-15

latory agencies or, in the case of a foreign financial16

parent, the extent to which such foreign parent is17

subject to prudential standards on a consolidated18

basis in the home country of such financial parent19

that are administered and enforced by a comparable20

foreign supervisory authority.21

(9) The amount and nature of the companys fi-22

nancial assets.23



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(10) The amount and nature of the companys1

liabilities, including the degree of reliance on short-2

term funding.3

(11) Any other factors that the Council deems4

appropriate.5

(c) NOTIFICATION OF DECISION.The Board, in an6

executive capacity on behalf of the Council, shall imme-7

diately upon the Councils decision notify the financial8

company by order, which shall be public, that the financial9

company is subject to stricter prudential standards, as10

prescribed by the Board in accordance with section 1104.11

(d) PERIODIC REVIEW AND RESCISSION OF FIND-12

INGS.13

(1) SUBMISSION OF ASSESSMENT.The Board14

shall periodically submit a report to the Council con-15

taining an assessment of whether each company sub-16

jected to stricter prudential standards should con-17

tinue to be subject to such standards.18

(2) REVIEW AND RESCISSION.The Council19

shall20

(A) review the assessment submitted pur-21

suant to paragraph (1) and any information or22

recommendation submitted by members of the23

Council regarding whether a financial holding24



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company subject to stricter standards continues1

to merit stricter prudential standards; and2

(B) rescind the action subjecting a com-3

pany to stricter prudential standards if the4

Council determines that the company no longer5

meets the conditions for being subjected to6

stricter prudential standards in subsections (a)7

and (b).8

(e) APPEAL.9

(1) ADMINISTRATIVE.The Council and the10

Board, in an executive capacity on behalf of the11

Council, shall establish a procedure through which a12

financial company that has been subjected to stricter13

prudential standards in accordance with this section14

may appeal being subjected to stricter prudential15

standards.16

(2) JUDICIAL REVIEW.Any financial company17

which has been subjected to stricter prudential18

standards may seek judicial review by filing a peti-19

tion for such review in the United States Court of20

Appeals for the District of Columbia.21

(f) EFFECT OF COUNCIL DECISION.22

(1) APPLICATION OF FEDERAL LAWS.23

(A) APPLICATION OF BANK HOLDING COM-24

PANY ACT AND FEDERAL DEPOSIT INSURANCE25



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ACT.A financial company subject to stricter1

standards that does not own a bank (as defined2

in section 2 of the Bank Holding Company Act3

of 1956) and that is not a foreign bank or com-4

pany that is treated as a bank holding company5

under section 8 of the International Banking6

Act of 1978 shall be subject to section 4, sub-7

sections (b), (c), (d), (e), (f), and (g) of section8

5, and section 8 of the Bank Holding Company9

Act of 1956, and section 8 of the Federal De-10

posit Insurance Act in the same manner and to11

the same extent as if

house financial reform hr4173

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