I 

114TH CONGRESS 

2D SESSION H. R. 4647 

To establish regulatory relief for certain financial institutions, and for other 

purposes. 

IN THE HOUSE OF REPRESENTATIVES 

FEBRUARY 26, 2016 

Mr. PERLMUTTER (for himself, Mr. LYNCH, Mr. VARGAS, Mr. HECK of Washington, Mr. HINOJOSA, and Mr. WELCH) introduced the following bill; 

which was referred to the Committee on Financial Services 

A BILL 

To establish regulatory relief for certain financial 

institutions, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Traditional Banking 

5 Regulatory Relief Act of 2015’’. 

6 SEC. 2. REGULATORY RELIEF FOR TRADITIONAL BANKING 

7 ORGANIZATIONS. 

8 (a) REGULATORY CAPITAL REQUIREMENTS.— 


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1 (1) IN GENERAL.—Section 18 of the Federal 

2 Deposit Insurance Act (12 U.S.C. 1828) is amended 

3 by adding at the end the following new subsection: 

4 ‘‘(aa) TREATMENT OF TRADITIONAL BANKING OR5 GANIZATIONS.— 

6 ‘‘(1) REGULATORY CAPITAL REQUIREMENTS.— 

7 ‘‘(A) SIMPLE LEVERAGE RATIO.—The ap8 propriate Federal banking agencies shall issue 

9 regulations establishing a minimum simple le10 verage ratio at no less than 10 percent. The 

11 simple leverage ratio requirement shall be con12 sistent with regulations promulgated pursuant 

13 to section 38 (relating to prompt corrective ac14 tion). 

15 ‘‘(B) APPLICATION TO TRADITIONAL

16 BANKING ORGANIZATION.—Notwithstanding 

17 any other provision of law, a traditional bank18 ing organization that meets the minimum sim19 ple leverage ratio established under subpara20 graph (A) may elect, by notice to the appro21 priate Federal banking agencies, to maintain 

22 the minimum simple leverage ratio as its sole 

23 measure of capital adequacy. 

24 ‘‘(C) EXEMPTION FROM RISK-BASED CAP25 ITAL REQUIREMENT.—The risk-based capital 


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1 requirement in section 38(c)(1)(A) shall not 

2 apply to a traditional banking organization that 

3 makes an election under subparagraph (B) and 

4 complies with regulations issued in accordance 

5 with this paragraph. 

6 ‘‘(D) GRACE PERIOD.—A traditional bank7 ing organization that makes an election under 

8 subparagraph (B) and fails to maintain the 

9 minimum simple leverage ratio described in 

10 subparagraph (A) (as determined by the first 

11 quarterly report of condition issued after mak12 ing such an election) shall be exempt from the 

13 risk-based capital requirement in section 

14 38(c)(1)(A) for a period of 18 months begin15 ning on the date of such determination. 

16 ‘‘(2) RESERVATION OF AUTHORITY.—Notwith17 standing any other provision of this subsection, an 

18 appropriate Federal banking agency may require ad19 ditional capital adequacy measures applicable to a 

20 newly chartered traditional banking organization or 

21 for an individual traditional banking organization if 

22 such measures are required to ensure the safety and 

23 soundness of the banking organization or to prevent 

24 an unacceptable risk to the Deposit Insurance Fund. 

25 ‘‘(3) DEFINITIONS.— 


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1 ‘‘(A) TRADITIONAL BANKING ORGANIZA2 TION.—The term ‘traditional banking organiza3 tion’ means any bank holding company, savings 

4 and loan holding company, bank, or savings as5 sociation that individually, and when including 

6 its parent, subsidiaries, and all affiliates, meets 

7 the following requirements: 

8 ‘‘(i) Has zero trading assets and zero 

9 trading liabilities. 

10 ‘‘(ii) Does not engage in swaps or se11 curity-based swaps (as such terms are de12 fined in section 1a of the Commodity Ex13 change Act (7 U.S.C. 1a)), other than 

14 swaps or security-based swaps referencing 

15 interest rates or foreign exchange swaps 

16 (as such terms are defined in such sec17 tion). 

18 ‘‘(iii) Has a total gross notional expo19 sure of swaps and security-based swaps of 

20 not more than $3,000,000,000. 

21 ‘‘(B) SIMPLE LEVERAGE RATIO.— 

22 ‘‘(i) IN GENERAL.—The term ‘simple 

23 leverage ratio’ means— 

24 ‘‘(I) total equity less goodwill and 

25 deferred tax assets, divided by 


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1 ‘‘(II) total assets less goodwill 

2 and deferred tax assets, 

3 as measured by generally accepted ac4 counting principles. 

5 ‘‘(ii) MEASUREMENTS.—For purposes 

6 of measuring the simple leverage ratio cap7 ital requirements of a traditional banking 

8 organization, the appropriate Federal 

9 banking agencies may, by regulation, re10 quire— 

11 ‘‘(I) the exclusion, from total eq12 uity, of other intangible assets; or 

13 ‘‘(II) the addition, to total assets, 

14 of off-balance sheet items. 

15 ‘‘(iii) RULE OF CONSTRUCTION.—The 

16 simple leverage ratio shall not be construed 

17 to be a generally applicable leverage capital 

18 requirement for purposes of section 171 of 

19 the Dodd-Frank Wall Street Reform and 

20 Consumer Protection Act (12 U.S.C. 

21 5371).’’. 

22 (2) PHASE-IN FOR CERTAIN ORGANIZATIONS.— 

23 (A) IN GENERAL.—Notwithstanding the 

24 minimum simple leverage ratio requirement 

25 under section 18(aa)(1)(B) of the Federal DeVerDate Sep 11 2014 03:51 Feb 27, 2016 Jkt 059200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H4647.IH H4647

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1 posit Insurance Act, a traditional banking orga2 nization with a simple leverage ratio of 8 per3 cent or more may make an election under such 

4 section 18(aa)(1)(B) during the 18-month pe5 riod beginning on the date of the enactment of 

6 this Act. 

7 (B) REQUIREMENT TO MEET THE MIN8 IMUM SIMPLE LEVERAGE RATIO.—A traditional 

9 banking organization making an election pursu10 ant to subparagraph (A) shall have until the 

11 end of the 18-month period described under 

12 subparagraph (A) to meet the minimum simple 

13 leverage ratio, or the organization’s election 

14 under section 18(aa)(1)(B) of the Federal De15 posit Insurance Act shall be terminated. 

16 (C) DEFINITIONS.—For purposes of this 

17 paragraph: 

18 (i) MINIMUM SIMPLE LEVERAGE

19 RATIO.—The term ‘‘minimum simple lever20 age ratio’’ means the minimum simple le21 verage ratio established under section 

22 18(aa)(1)(A) of the Federal Deposit Insur23 ance Act. 

24 (ii) OTHER TERMS.—The terms ‘‘sim25 ple leverage ratio’’ and ‘‘traditional bankVerDate Sep 11 2014 03:51 Feb 27, 2016 Jkt 059200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H4647.IH H4647

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1 ing organization’’ have the meaning given 

2 those terms, respectively, under section 

3 18(aa)(3) of the Federal Deposit Insur4 ance Act. 

5 (b) SHORT FORM CALL REPORT.—Section 7(a) of 

6 the Federal Deposit Insurance Act (12 U.S.C. 1817(a)) 

7 is amended by adding at the end the following: 

8 ‘‘(12) SHORT FORM REPORTING.—The appro9 priate Federal banking agencies shall issue regula10 tions allowing for a reduced reporting requirement 

11 for a traditional banking organization that elects to 

12 maintain a simple leverage ratio as its sole measure 

13 of capital adequacy pursuant to section 18(aa).’’. 

14 (c) ON-SITE EXAMINATIONS.—Section 10(d) of the 

15 Federal Deposit Insurance Act (12 U.S.C. 1820(d)) is 

16 amended— 

17 (1) in paragraph (4)— 

18 (A) in the paragraph heading, by inserting 

19 ‘‘AND TRADITIONAL BANKING ORGANIZATIONS’’ 

20 after ‘‘CERTAIN SMALL INSTITUTIONS’’; 

21 (B) in subparagraph (A), by inserting ‘‘or 

22 is a traditional banking organization defined in 

23 section 18(aa)(3)’’ after ‘‘$1,000,000,000’’; 


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1 (C) by striking subparagraph (B) and re2 designating subparagraphs (C) through (E) as 

3 subparagraphs (B) through (D), respectively; 

4 (D) in subparagraph (B) (as so redesig5 nated), by striking ‘‘condition’’ and all that fol6 lows through ‘‘$200,000,000’’ and inserting 

7 ‘‘condition was found to be outstanding or 

8 good’’; 

9 (E) in subparagraph (C) (as so redesig10 nated), by striking ‘‘and’’ at the end; 

11 (F) in subparagraph (D) (as so redesig12 nated), by striking the period at the end and in13 serting ‘‘; and’’; and 

14 (G) by adding at the end the following new 

15 subparagraph: 

16 ‘‘(E) the appropriate Federal banking 

17 agency believes the 18-month period is con18 sistent with the safety and soundness of the 

19 banking organization.’’; and 

20 (2) by striking paragraph (10). 

21 (d) STRESS TESTING.—Section 165(i)(2)(A) of the 

22 Dodd-Frank Wall Street Reform and Consumer Protec23 tion Act (12 U.S.C. 5365(i)(2)(A)) is amended by insert24 ing ‘‘, unless such companies are traditional banking orgaVerDate Sep 11 2014 03:51 Feb 27, 2016 Jkt 059200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H4647.IH H4647

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1 nizations (as defined in section 18(aa)(3) of the Federal 

2 Deposit Insurance Act)’’ after ‘‘annual stress tests’’. 

3 (e) TECHNICAL AMENDMENT.—Section 18 of the 

4 Federal Deposit Insurance Act (12 U.S.C. 1828) is 

5 amended by moving subsection (y) so as to appear above 

6 subsection (z). 

Æ 


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