69–006 

114TH CONGRESS REPORT " ! HOUSE OF REPRESENTATIVES 2d Session 114–872 

FINANCIAL PRODUCT SAFETY COMMISSION ACT OF 2015 

DECEMBER 12, 2016.—Committed to the Committee of the Whole House on the State 

of the Union and ordered to be printed 

Mr. HENSARLING, from the Committee on Financial Services, 

submitted the following 

R E P O R T 

together with 

MINORITY VIEWS 

[To accompany H.R. 1266] 

[Including cost estimate of the Congressional Budget Office] 

The Committee on Financial Services, to whom was referred the 

bill (H.R. 1266) to amend the Consumer Financial Protection Act 

of 2010 to make the Bureau of Consumer Financial Protection an 

independent Financial Product Safety Commission, and for other 

purposes, having considered the same, reports favorably thereon 

with an amendment and recommends that the bill as amended do 

pass. 

The amendment is as follows: 

Strike all after the enacting clause and insert the following: 

SECTION 1. SHORT TITLE. 

This Act may be cited as the ‘‘Financial Product Safety Commission Act of 2015’’. 

SEC. 2. MAKING THE BUREAU AN INDEPENDENT FINANCIAL PRODUCT SAFETY COMMISSION. 

(a) IN GENERAL.—The Consumer Financial Protection Act of 2010 (12 U.S.C. 5481 

et seq.) is amended— 

(1) in section 1011— 

(A) in subsection (a)— 

(i) by striking ‘‘in the Federal Reserve System,’’; 

(ii) by striking ‘‘independent bureau’’ and inserting ‘‘independent 

commission’’; 

(iii) by striking ‘‘Bureau of Consumer Financial Protection’’ and inserting ‘‘Financial Product Safety Commission (hereinafter in this section referred to as the ‘Commission’)’’; and 

(iv) by striking ‘‘Bureau’’ each place such term appears and inserting 

‘‘Commission’’; 

(B) by striking subsections (b), (c), and (d); 


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(C) by redesignating subsection (e) as subsection (i); 

(D) in subsection (i), as so redesignated— 

(i) by striking ‘‘, including in cities in which the Federal reserve 

banks, or branches of such banks, are located,’’; and 

(ii) by striking ‘‘Bureau’’ each place such term appears and inserting 

‘‘Commission’’; and 

(E) by inserting after subsection (a) the following new subsections: 

‘‘(b) AUTHORITY TO PRESCRIBE REGULATIONS.—The Commission may prescribe 

such regulations and issue such orders in accordance with this title as the Commission may determine to be necessary for carrying out this title and all other laws 

within the Commission’s jurisdiction and shall exercise any authorities granted 

under this title and all other laws within the Commission’s jurisdiction. 

‘‘(c) COMPOSITION OF THE COMMISSION.— ‘‘(1) IN GENERAL.—The Commission shall be composed of 5 members who shall 

be appointed by the President, by and with the advice and consent of the Senate, from among individuals who— 

‘‘(A) are citizens of the United States; and 

‘‘(B) have strong competencies and experiences related to consumer financial products and services. 

‘‘(2) STAGGERING.—The members of the Commission shall serve staggered 

terms, which initially shall be established by the President for terms of 1, 2, 

3, 4, and 5 years, respectively. 

‘‘(3) TERMS.— 

‘‘(A) IN GENERAL.—Each member of the Commission, including the Chair, 

shall serve for a term of 5 years. 

‘‘(B) REMOVAL.—The President may remove any member of the Commission for inefficiency, neglect of duty, or malfeasance in office. 

‘‘(C) VACANCIES.—Any member of the Commission appointed to fill a vacancy occurring before the expiration of the term to which that member’s 

predecessor was appointed (including the Chair) shall be appointed only for 

the remainder of the term. 

‘‘(D) CONTINUATION OF SERVICE.—Each member of the Commission may 

continue to serve after the expiration of the term of office to which that 

member was appointed until a successor has been appointed by the President and confirmed by the Senate, except that a member may not continue 

to serve more than 1 year after the date on which that member’s term 

would otherwise expire. 

‘‘(E) OTHER EMPLOYMENT PROHIBITED.—No member of the Commission 

shall engage in any other business, vocation, or employment. 

‘‘(d) AFFILIATION.—Not more than 3 members of the Commission shall be members of any one political party. 

‘‘(e) CHAIR OF THE COMMISSION.— 

‘‘(1) APPOINTMENT.—The Chair of the Commission shall be appointed by the 

President from among the members of the Commission. 

‘‘(2) AUTHORITY.—The Chair shall be the principal executive officer of the 

Commission, and shall exercise all of the executive and administrative functions 

of the Commission, including with respect to— 

‘‘(A) the appointment and supervision of personnel employed under the 

Commission (other than personnel employed regularly and full time in the 

immediate offices of members of the Commission other than the Chair); 

‘‘(B) the distribution of business among personnel appointed and supervised by the Chair and among administrative units of the Commission; and 

‘‘(C) the use and expenditure of funds. 

‘‘(3) LIMITATION.—In carrying out any of the Chair’s functions under the provisions of this subsection the Chair shall be governed by general policies of the 

Commission and by such regulatory decisions, findings, and determinations as 

the Commission may by law be authorized to make. 

‘‘(4) REQUESTS OR ESTIMATES RELATED TO APPROPRIATIONS.—Requests or estimates for regular, supplemental, or deficiency appropriations on behalf of the 

Commission may not be submitted by the Chair without the prior approval of 

the Commission. 

‘‘(f) NO IMPAIRMENT BY REASON OF VACANCIES.—No vacancy in the members of 

the Commission shall impair the right of the remaining members of the Commission 

to exercise all the powers of the Commission. Three members of the Commission 

shall constitute a quorum for the transaction of business, except that if there are 

only 3 members serving on the Commission because of vacancies in the Commission, 

2 members of the Commission shall constitute a quorum for the transaction of business. If there are only 2 members serving on the Commission because of vacancies 

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ginning on the date of the vacancy which caused the number of Commission members to decline to 2. 

‘‘(g) SEAL.—The Commission shall have an official seal. 

‘‘(h) COMPENSATION.— ‘‘(1) CHAIR.—The Chair shall receive compensation at the rate prescribed for 

level I of the Executive Schedule under section 5313 of title 5, United States 

Code. 

‘‘(2) OTHER MEMBERS OF THE COMMISSION.—The 4 other members of the Commission shall each receive compensation at the rate prescribed for level II of the 

Executive Schedule under section 5314 of title 5, United States Code.’’; 

(2) in section 1012(c), by striking paragraphs (2), (3), (4), and (5); and 

(3) in section 1014(b), by striking ‘‘Not fewer than 6 members shall be appointed upon the recommendation of the regional Federal Reserve Bank Presidents, on a rotating basis.’’. 

(b) COMMISSION FUNDING.—Section 7 of the Federal Reserve Act (12 U.S.C. 289) 

is amended by adding at the end the following: 

‘‘(d) TRANSFER FOR FISCAL YEAR 2016.— 

‘‘(1) IN GENERAL.—The Federal reserve banks shall transfer from the surplus 

funds of such banks to the Board of Governors of the Federal Reserve System 

for transfer to the Secretary of the Treasury for deposit in the general fund of 

the Treasury, a total amount of $75,000,000 in fiscal year 2016. 

‘‘(2) ALLOCATED BY FED.—Of the total amount required to be paid by the Federal reserve banks under paragraph (1) for fiscal year 2016, the Board of Governors of the Federal Reserve System shall determine the amount each such 

bank shall pay in such fiscal year. 

‘‘(3) REPLENISHMENT OF SURPLUS FUND PROHIBITED.—During fiscal years 2016 

through 2026, no Federal reserve bank may replenish such bank’s surplus fund 

by the amount of any transfer by such bank under paragraph (1).’’. 

SEC. 3. DEEMING OF NAME. 

Any reference in a law, regulation, document, paper, or other record of the United 

States to the Bureau of Consumer Financial Protection shall be deemed a reference 

to the Financial Product Safety Commission. 

SEC. 4. CONFORMING AMENDMENTS. 

(a) CONSUMER FINANCIAL PROTECTION ACT OF 2010.— 

(1) IN GENERAL.—Except as provided under paragraph (2), the Consumer Financial Protection Act of 2010 (12 U.S.C. 5481 et seq.) is amended— 

(A) by striking ‘‘Director of the Bureau’’ each place such term appears, 

other than where such term is used to refer to a Director other than the 

Director of the Bureau of Consumer Financial Protection, and inserting ‘‘Financial Product Safety Commission’’; 

(B) by striking ‘‘Director’’ each place such term appears and inserting ‘‘Financial Product Safety Commission’’, other than where such term is used 

to refer to a Director other than the Director of the Bureau of Consumer 

Financial Protection; and 

(C) in section 1002, by striking paragraph (10). 

(2) EXCEPTIONS.—The Consumer Financial Protection Act of 2010 (12 U.S.C. 

5481 et seq.) is amended— 

(A) in section 1013(c)(3)— 

(i) by striking ‘‘Assistant Director of the Bureau for’’ and inserting 

‘‘Head of the Office of’’; and 

(ii) in subparagraph (B), by striking ‘‘Assistant Director’’ and inserting ‘‘Head of the Office’’; 

(B) in section 1013(g)(2)— 

(i) by striking ‘‘ASSISTANT DIRECTOR’’ and inserting ‘‘HEAD OF THE OFFICE’’; and 

(ii) by striking ‘‘an assistant director’’ and inserting ‘‘a Head of the 

Office of Financial Protection for Older Americans’’; 

(C) in section 1016(a), by striking ‘‘Director of the Bureau’’ and inserting 

‘‘Chair of the Financial Product Safety Commission’’; and 

(D) in section 1066(a), by striking ‘‘Director of the Bureau is’’ and inserting ‘‘first member of the Commission is’’. 

(b) DODD-FRANK WALL STREET REFORM AND CONSUMER PROTECTION ACT.—The 

Dodd-Frank Wall Street Reform and Consumer Protection Act (12 U.S.C. 5301 et 

seq.) is amended— 

(1) in section 111(b)(1)(D), by striking ‘‘Director of the Bureau’’ and inserting 

‘‘Chair of the Financial Product Safety Commission’’; and 

(2) in section 1447, by striking ‘‘Director of the Bureau’’ each place such term 

appears and inserting ‘‘Financial Product Safety Commission’’. 


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(c) ELECTRONIC FUND TRANSFER ACT.—Section 920(a)(4)(C) of the Electronic Fund 

Transfer Act (15 U.S.C. 1693o–2(a)(4)(C)), as added by section 1075(a)(2) of the Consumer Financial Protection Act of 2010, is amended by striking ‘‘Director of the Bureau of Consumer Financial Protection’’ and inserting ‘‘Financial Product Safety 

Commission’’. 

(d) EXPEDITED FUNDS AVAILABILITY ACT.—The Expedited Funds Availability Act 

(12 U.S.C. 4001 et seq.), as amended by section 1086 of the Consumer Financial Protection Act of 2010, is amended by striking ‘‘Director of the Bureau’’ each place such 

term appears and inserting ‘‘Financial Product Safety Commission’’. 

(e) FEDERAL DEPOSIT INSURANCE ACT.—Section 2 of the Federal Deposit Insurance Act (12 U.S.C. 1812), as amended by section 336(a) of the Dodd-Frank Wall 

Street Reform and Consumer Protection Act, is amended by striking ‘‘Director of the 

Consumer Financial Protection Bureau’’ each place such term appears and inserting 

‘‘Chair of the Financial Product Safety Commission’’. 

(f) FEDERAL FINANCIAL INSTITUTIONS EXAMINATION COUNCIL ACT OF 1978.—Section 1004(a)(4) of the Federal Financial Institutions Examination Council Act of 

1978 (12 U.S.C. 3303(a)(4)), as amended by section 1091 of the Consumer Financial 

Protection Act of 2010, is amended by striking ‘‘Director of the Consumer Financial 

Protection Bureau’’ and inserting ‘‘Chair of the Financial Product Safety Commission’’. 

(g) FINANCIAL LITERACY AND EDUCATION IMPROVEMENT ACT.—Section 513 of the 

Financial Literacy and Education Improvement Act (20 U.S.C. 9702), as amended 

by section 1013(d)(5) of the Consumer Financial Protection Act of 2010, is amended 

by striking ‘‘Director’’ each place such term appears and inserting ‘‘Chair of the Financial Product Safety Commission’’. 

(h) HOME MORTGAGE DISCLOSURE ACT OF 1975.—Section 307 of the Home Mortgage Disclosure Act of 1975, as amended by section 1094(6) of the Consumer Financial Protection Act of 2010, is amended by striking ‘‘Director of the Bureau of Consumer Financial Protection’’ each place such term appears and inserting ‘‘Financial 

Product Safety Commission’’. 

(i) INTERSTATE LAND SALES FULL DISCLOSURE ACT.—The Interstate Land Sales 

Full Disclosure Act, as amended by section 1098A of the Consumer Financial Protection Act of 2010, is amended— 

(1) by amending section 1402(1) to read as follows: 

‘‘(1) ‘Chair’ means the Chair of the Financial Product Safety Commission;’’; 

and 

(2) in section 1416(a), by striking ‘‘Director of the Bureau of Consumer Financial Protection’’ and inserting ‘‘Chair’’. 

(j) REAL ESTATE SETTLEMENT PROCEDURES ACT OF 1974.—Section 5 of the Real 

Estate Settlement Procedures Act of 1974 (12 U.S.C. 2604), as amended by section 

1450 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, is 

amended— 

(1) by striking ‘‘The Director of the Bureau of Consumer Financial Protection 

(hereafter in this section referred to as the ‘Director’)’’ and inserting ‘‘The Financial Product Safety Commission’’; and 

(2) by striking ‘‘Director’’ each place such term appears and inserting ‘‘Financial Product Safety Commission’’. 

(k) S.A.F.E. MORTGAGE LICENSING ACT OF 2008.—The S.A.F.E. Mortgage Licensing Act of 2008 (12 U.S.C. 5101 et seq.), as amended by section 1100 of the Consumer Financial Protection Act of 2010, is amended— 

(1) by striking ‘‘Director’’ each place such term appears in headings and text, 

other than where such term is used in the context of the Director of the Office 

of Thrift Supervision, and inserting ‘‘Financial Product Safety Commission’’; and 

(2) in section 1503, by striking paragraph (10). 

(l) TITLE 44, UNITED STATES CODE.—Section 3513(c) of title 44, United States 

Code, as amended by section 1100D(b) of the Consumer Financial Protection Act of 

2010, is amended by striking ‘‘Director of the Bureau’’ and inserting ‘‘Financial 

Product Safety Commission’’. 

SEC. 5. EFFECTIVE DATE. 

This Act and the amendments made by this Act shall take effect on the date on 

which not less than 3 persons have been confirmed by the Senate to serve as members of the Financial Product Safety Commission. 

PURPOSE AND SUMMARY

H.R. 1266 amends the Consumer Financial Protection Act of 

2010 to remove the Consumer Financial Protection Bureau (CFPB) 

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alone agency—the Financial Product Safety Commission (FPSC)— 

that is to be governed by a five-member, bipartisan commission. 

Each member of the FPSC must have strong competencies and experiences regarding consumer financial products and services, and 

is nominated by the President and confirmed by the Senate to 

serve a staggered, five-year term. The bill provides that a Chair of 

the Commission serves as the principal executive officer of the 

FPSC; prohibits the Chair from making requests for estimates related to appropriations without prior Commission approval; and 

sets compensation for the Chair at level I of the Executive Schedule and compensation for other members at level II of the Executive Schedule. All authorities and powers of the agency remain unchanged. 

BACKGROUND AND NEED FOR LEGISLATION

Replacing the single-member leadership structure with a bipartisan, multimember commission will increase the quality and variety of information considered, while improving accuracy and output 

quality. Multimember decision-making can also temper extreme 

outlying views that might otherwise be held by a single person. 

Further, a commission comprised of commissioners serving staggered terms tends to avoid abrupt policy swings and make agency 

decisions more predictable for market participants. Unlike a multimember commission, a single director is largely unaccountable to 

the President, Congress, or even the Federal Reserve Board. 

In testimony before the committee on July 9, 2015, Mercatus 

Center Senior Scholar Todd Zywicki noted: 

The fundamental problems of the CFPB go back to this 

fundamental defect in the way in which it’s structured 

which is no budgetary appropriations, a single director 

supposedly removable only for a cause. And we’ve got decades of academic studies on bureaucracies and how bureaucracies behave when they’re not subject to Democratic 

accountability and the CFPB is basically a poster child for 

how that operates. 

So I think over time we have learned that there are two 

ways that we can structure agencies, as an executive agency like a department accountable to the president through 

the Democratic process, or a bipartisan agency. And I 

think for an entity like this, the Federal Trade Commission is exactly the model we need. The Federal Trade Commission has been around for 100 years. It’s a bipartisan 

agency, on budget and it does more or less exactly the 

same thing as the CFPB. 

And I think that FTC has proven the test of time as an 

agency that is responsive, that takes into account the impact on the economy, questions like competition and consumer choice with respect to any product. And I think that 

is not only a good idea for this agency, but really the only 

way that we’re going to get this agency back on track and 

really looking out for the American consumers rather than 

their own narrow bureaucratic empire-building. 


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In a letter of support for H.R. 1266 dated September 29, 2015, 

23 trade associations representing financial institutions, banks, 

credit unions, and businesses wrote: 

Looking ahead, the current sole director structure at the 

CFPB jeopardizes the foundation of the Bureau as an objective, neutral consumer protection agency. A commission 

would serve as a source of balance and stability for consumers and the financial services industry by encouraging 

internal debate and deliberation, ultimately leading to increased transparency. Moreover, a commission would further promote the CFPB’s ability to make bipartisan and 

reasoned judgments to ensure consumers receive the protection they deserve, which in turn would help strengthen 

the economy; and would avoid the risk of politically motivated decisions causing uncertainty and harm to consumers. 

To preserve the CFPB and prevent it from becoming a 

political football, Congress should return the CFPB to its 

originally intended structure, from a sole director to a bipartisan commission. 

HEARINGS

The Committee on Financial Services’ Subcommittee on Financial Institutions held a hearing examining matters relating to H.R. 

1266 on June 11, 2015. 

COMMITTEE CONSIDERATION

The Committee on Financial Services met in open session on 

September 30, 2015 and considered the bill. Mr. Neugebauer offered an amendment in the nature of a substitute. Amendments to 

the amendment in the nature of a substitute offered respectively by 

Mr. Delaney and Mr. Mulvaney were withdrawn. The Neugebauer 

substitute was then adopted by voice vote. The Committee ordered 

H.R. 1266 to be reported favorably to the House as amended by a 

recorded vote of 35 yeas to 24 nays (recorded vote no. FC–63) a 

quorum being present. 

COMMITTEE VOTES

Clause 3(b) of rule XIII of the Rules of the House of Representatives requires the Committee to list the record votes on the motion 

to report legislation and amendments thereto. The sole recorded 

vote was on a motion by Chairman Hensarling to report the bill favorably to the House as amended. The motion was agreed to by a 

recorded vote of 35 yeas to 24 nays (Record vote no. FC–63), a 

quorum being present. 


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COMMITTEE OVERSIGHT FINDINGS

Pursuant to clause 3(c)(1) of rule XIII of the Rules of the House 

of Representatives, the findings and recommendations of the Committee based on oversight activities under clause 2(b)(1) of rule X 

of the Rules of the House of Representatives, are incorporated in 

the descriptive portions of this report. 

PERFORMANCE GOALS AND OBJECTIVES

Pursuant to clause 3(c)(4) of rule XIII of the Rules of the House 

of Representatives, the Committee states that H.R. 1266 will increase agency accountability by replacing the CFPB with the Financial Product Safety Commission, a stand-alone, five-member, bipartisan commission. 

NEW BUDGET AUTHORITY, ENTITLEMENT AUTHORITY, AND TAX

EXPENDITURES

In compliance with clause 3(c)(2) of rule XIII of the Rules of the 

House of Representatives, the Committee adopts as its own the estimate of new budget authority, entitlement authority, or tax expenditures or revenues contained in the cost estimate prepared by 

the Director of the Congressional Budget Office pursuant to section 

402 of the Congressional Budget Act of 1974. 

COMMITTEE COST ESTIMATE

The Committee adopts as its own the cost estimate prepared by 

the Director of the Congressional Budget Office pursuant to section 

402 of the Congressional Budget Act of 1974. 

CONGRESSIONAL BUDGET OFFICE ESTIMATES

Pursuant to clause 3(c)(3) of rule XIII of the Rules of the House 

of Representatives, the following is the cost estimate provided by 

the Congressional Budget Office pursuant to section 402 of the 

Congressional Budget Act of 1974: 

U.S. CONGRESS, 

CONGRESSIONAL BUDGET OFFICE, 

Washington, DC, February 11, 2016. 

Hon. JEB HENSARLING, 

Chairman, Committee on Financial Services, 

House of Representatives, Washington, DC. 

DEAR MR. CHAIRMAN: The Congressional Budget Office has prepared the enclosed cost estimate for H.R. 1266, the Financial Product Safety Commission Act of 2015. 

If you wish further details on this estimate, we will be pleased 

to provide them. The CBO staff contact is Nathaniel Frentz. 

Sincerely, 

KEITH HALL. 

Enclosure. 

H.R. 1266—Financial Product Safety Commission Act of 2015 

Summary: H.R. 1266 would replace the Director of the Consumer 

Financial Protection Bureau (CFPB) with a commission made up of 


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a chairman and four additional members appointed by the President and confirmed by the Senate. The bill would rename the bureau as the Financial Product Safety Commission, which would 

have the same responsibilities as the CFPB has under current law. 

H.R. 1266 also would direct the Federal Reserve to transfer $75 

million from its surplus account to the Treasury. 

Based on information from the CFPB and the Federal Reserve 

System, CBO estimates that enacting H.R. 1266 would increase direct spending by $77 million and revenues by $47 million over the 

2016–2026 period. Taking those effects together, CBO estimates 

that enacting H.R. 1266 would increase the deficit by $30 million 

over the 2016–2026 period. Because the bill would affect direct 

spending and revenues, pay-as-you-go procedures apply. 

CBO estimates that enacting the legislation would not increase net direct spending or on-budget deficits by more than $5 billion 

in any of the four consecutive 10-year periods beginning in 2027. 

H.R. 1266 contains no intergovernmental or private-sector mandates as defined in the Unfunded Mandates Reform Act (UMRA) 

and would not affect the budgets of state, local, or tribal governments. 

Estimated cost to the Federal Government: The estimated budgetary impact of H.R. 1266 is shown in the following table. The costs 

of this legislation fall within budget function 370 (commerce and 

housing credit). 

By fiscal year, in millions of dollars— 

2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2016– 

2021 

2016– 

2026 

CHANGES IN DIRECT SPENDING 

Estimated Budget Authority ...... 2 7 7 7 7 8 8 8 8 8 8 38 78 

Estimated Outlays ..................... * 7 7 7 7 8 8 8 8 8 8 37 77 

CHANGES IN REVENUES 

Estimated Revenues ................. 74 ¥2 ¥2 ¥3 ¥3 ¥3 ¥3 ¥3 ¥3 ¥3 ¥3 62 47 

NET INCREASE OR DECREASE (¥) IN THE DEFICIT FROM CHANGES IN DIRECT SPENDING AND REVENUES 

Effect on Deficit ........................ ¥74 9 9 10 10 11 11 11 11 11 11 ¥25 30 

Notes: Components may not sum to totals because of rounding; * = less than $500,000. 

Basis of estimate: For this estimate, CBO assumes that the bill 

will be enacted in the spring and the new commissioners will be 

confirmed by the end of the fiscal year, and spending will follow 

historical patterns for the CFPB. The CFPB is permanently authorized to spend amounts transferred from the Federal Reserve System; because that activity is not subject to appropriation, CFPB expenditures are recorded in the budget as direct spending. Furthermore, the earnings of the Federal Reserve System are remitted to 

the Treasury and recorded in the budget as revenues; thus, any 

change to the costs of the Federal Reserve System are recorded in 

the budget as changes in revenues. 

Changes in direct spending 

H.R. 1266 would replace the director and deputy director of the 

CFPB with a five-member commission. Based on information from 

the CFPB and agencies with similar organizational structures, 

CBO estimates that the commission would eventually hire an additional 23 employees to provide legal, research, and administrative 


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support to the five commissioners and dismiss the agency director 

and deputy director. CBO estimates that additional costs for salaries, benefits, and overhead for the new positions would total about 

$7 million a year, on average, for a total cost of $77 million over 

the 2016–2026 period. In the last couple of years, the CFBP spent 

about $450 million a year to carry out all of its activities. 

Changes in revenues 

H.R. 1266 would transfer $75 million in the Federal Reserve surplus account to the Treasury and prohibit the Federal Reserve from 

replenishing those amounts until fiscal year 2027. Under current 

law, the Federal Reserve may maintain a surplus fund of no more 

than $10 billion, and in CBO’s baseline, the surplus fund equals 

$10 billion in each year. After the enactment of H.R. 1266, CBO 

estimates that the surplus fund would instead equal $9,925 million. Reducing the fund would also reduce the amount of interestearning assets that the Federal Reserve holds, which would reduce 

its interest earnings and associated remittances to the Treasury by 

about $1 million in 2016 and by $28 million over the 2016–2026 

period, CBO estimates. As a result, CBO estimates that the bill 

would increase net remittances from the Federal Reserve, and thus 

federal revenues, by about $74 million in 2016 and by $47 million 

over the 2016–2026 period. 

It is important to note that the transfer of surplus funds from 

the Federal Reserve to the Treasury has no significant effect on the 

fiscal status of the federal government. Although federal budget accounting does not recognize additions to the Federal Reserve’s surplus account as revenues, such additions have similar effects as if 

they had instead been paid to the Treasury and were counted as 

revenues. If the surplus funds are held at the Federal Reserve and 

invested in Treasury securities, then the interest generated is remitted to the Treasury. If the surplus funds are transferred to the 

Treasury instead, they reduce the public debt and in turn the interest payments owed by the Treasury. Because the Treasury’s receipt 

of interest income from the Federal Reserve would be substantially 

equivalent to the Treasury’s lower interest payments, where the 

surplus funds reside has no economic significance, and a transfer 

of those funds would have no effect on national savings, economic 

growth, or income. 

Pay-As-You-Go considerations: The Statutory Pay-As-You-Go Act 

of 2010 establishes budget-reporting and enforcement procedures 

for legislation affecting direct spending or revenues. The net 

changes in outlays and revenues that are subject to those pay-asyou-go procedures are shown in the following table. 

CBO ESTIMATE OF PAY-AS-YOU-GO EFFECTS FOR H.R. 1266, AS ORDERED REPORTED BY THE 

HOUSE COMMITTEE ON FINANCIAL SERVICES ON SEPTEMBER 30, 2015 

By fiscal year, in millions of dollars— 

2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2016– 

2021 

2016– 

2026 

NET INCREASE OR DECREASE (¥) IN THE DEFICIT 

Statutory Pay-As-You-Go 

Impact ........................ ¥74 9 9 10 10 11 11 11 11 11 11 ¥25 30 

Memorandum: 

Changes in Outlays 0 7 7 7 7 8 8 8 8 8 8 37 77 


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CBO ESTIMATE OF PAY-AS-YOU-GO EFFECTS FOR H.R. 1266, AS ORDERED REPORTED BY THE 

HOUSE COMMITTEE ON FINANCIAL SERVICES ON SEPTEMBER 30, 2015—Continued 

By fiscal year, in millions of dollars— 

2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2016– 

2021 

2016– 

2026 

Changes in Revenues ................... 74 ¥2 ¥2 ¥3 ¥3 ¥3 ¥3 ¥3 ¥3 ¥3 ¥3 62 47 

Intergovernmental and private-sector impact: H.R. 1266 contains 

no intergovernmental or private-sector mandates as defined in 

UMRA and would not affect the budgets of state, local, or tribal 

governments. 

Increase in long-term direct spending and deficits: CBO estimates that enacting the legislation would not increase net direct 

spending or on-budget deficits by more than $5 billion in any of the 

four consecutive 10-year periods beginning in 2027. 

Estimate prepared by: Federal Costs: Kim Cawley; Federal Revenues: Nathaniel Frentz; Impact on State, Local, and Tribal Governments: Melissa Merrell and Leo Lex; Impact on the Private Sector: 

Logan Smith. 

Estimate approved by: H. Samuel Papenfuss, Deputy Assistant 

Director for Budget Analysis; David Weiner, Assistant Director for 

Tax Analysis. 

FEDERAL MANDATES STATEMENT

The Committee adopts as its own the estimate of Federal mandates prepared by the Director of the Congressional Budget Office 

pursuant to section 423 of the Unfunded Mandates reform Act. 

ADVISORY COMMITTEE STATEMENT

No advisory committees within the meaning of section 5(b) of the 

Federal Advisory Committee Act were created by this legislation. 

APPLICABILITY TO LEGISLATIVE BRANCH

The Committee finds that the legislation does not relate to the 

terms and conditions of employment or access to public services or 

accommodations within the meaning of the section 102(b)(3) of the 

Congressional Accountability Act. 

EARMARK IDENTIFICATION

H.R. 1266 does not contain any congressional earmarks, limited 

tax benefits, or limited tariff benefits as defined in clause 9 of rule 

XXI. 

DUPLICATION OF FEDERAL PROGRAMS

Pursuant to section 3(g) of H. Res. 5, 114th Cong. (2015), the 

Committee states that no provision of H.R. 1266 establishes or reauthorizes a program of the Federal Government known to be duplicative of another Federal program, a program that was included 

in any report from the Government Accountability Office to Congress pursuant to section 21 of Public Law 111–139, or a program 


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related to a program identified in the most recent Catalog of Federal Domestic Assistance. 

DISCLOSURE OF DIRECTED RULEMAKING

Pursuant to section 3(i) of H. Res. 5, 114th Cong. (2015), the 

Committee states that H.R. 1266 contains no directed rulemaking. 

SECTION-BY-SECTION ANALYSIS OF THE LEGISLATION

Section 1. Short title 

This Section cites H.R. 1266 as the ‘‘Financial Product Safety 

Commission Act of 2015’’. 

Section 2. Making the bureau an independent Financial Product 

Safety Commission 

This section amends the Consumer Financial Protection Act of 

2010 by removing the CFPB from under the Federal Reserve and 

creating the Financial Product Safety Commission, a bipartisan 

commission consisting of five-members well versed in consumer finance, serving five-year staggered terms with a Chair appointed by 

the President. All members of the commission will receive compensation under the Executive Schedule, with the Chair at level I 

and the other members of the commission at level II. 

Section 3. Deeming of name 

This section establishes that any pre-existing reference relating 

to the CFPB is now a reference to the Financial Product Safety 

Commission. 

Section 4. Conforming amendments 

This section amends pre-existing laws so that they conform to 

the new terms and titles set forth in this law. 

CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

In compliance with clause 3(e) of rule XIII of the Rules of the 

House of Representatives, changes in existing law made by the bill, 

as reported, are shown as follows (existing law proposed to be omitted is enclosed in black brackets, new matter is printed in italic, 

and existing law in which no change is proposed is shown in 

roman): 

DODD-FRANK WALL STREET REFORM AND CONSUMER 

PROTECTION ACT 

* * * * * * * 

TITLE I—FINANCIAL STABILITY 

* * * * * * * 


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Subtitle A—Financial Stability Oversight 

Council 

SEC. 111. FINANCIAL STABILITY OVERSIGHT COUNCIL ESTABLISHED. 

(a) ESTABLISHMENT.—Effective on the date of enactment of this 

Act, there is established the Financial Stability Oversight Council. 

(b) MEMBERSHIP.—The Council shall consist of the following 

members: 

(1) VOTING MEMBERS.—The voting members, who shall each 

have 1 vote on the Council shall be— 

(A) the Secretary of the Treasury, who shall serve as 

Chairperson of the Council; 

(B) the Chairman of the Board of Governors; 

(C) the Comptroller of the Currency; 

(D) the øDirector of the Bureau¿ Chair of the Financial 

Product Safety Commission; 

(E) the Chairman of the Commission; 

(F) the Chairperson of the Corporation; 

(G) the Chairperson of the Commodity Futures Trading 

Commission; 

(H) the Director of the Federal Housing Finance Agency; 

(I) the Chairman of the National Credit Union Administration Board; and 

(J) an independent member appointed by the President, 

by and with the advice and consent of the Senate, having 

insurance expertise. 

(2) NONVOTING MEMBERS.—The nonvoting members, who 

shall serve in an advisory capacity as a nonvoting member of 

the Council, shall be— 

(A) the Director of the Office of Financial Research; 

(B) the Director of the Federal Insurance Office; 

(C) a State insurance commissioner, to be designated by 

a selection process determined by the State insurance commissioners; 

(D) a State banking supervisor, to be designated by a selection process determined by the State banking supervisors; and 

(E) a State securities commissioner (or an officer performing like functions), to be designated by a selection 

process determined by such State securities commissioners. 

(3) NONVOTING MEMBER PARTICIPATION.—The nonvoting 

members of the Council shall not be excluded from any of the 

proceedings, meetings, discussions, or deliberations of the 

Council, except that the Chairperson may, upon an affirmative 

vote of the member agencies, exclude the nonvoting members 

from any of the proceedings, meetings, discussions, or deliberations of the Council when necessary to safeguard and promote 

the free exchange of confidential supervisory information. 

(c) TERMS; VACANCY.— 

(1) TERMS.—The independent member of the Council shall 

serve for a term of 6 years, and each nonvoting member described in subparagraphs (C), (D), and (E) of subsection (b)(2) 

shall serve for a term of 2 years. 


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(2) VACANCY.—Any vacancy on the Council shall be filled in 

the manner in which the original appointment was made. 

(3) ACTING OFFICIALS MAY SERVE.—In the event of a vacancy 

in the office of the head of a member agency or department, 

and pending the appointment of a successor, or during the absence or disability of the head of a member agency or department, the acting head of the member agency or department 

shall serve as a member of the Council in the place of that 

agency or department head. 

(d) TECHNICAL AND PROFESSIONAL ADVISORY COMMITTEES.—The 

Council may appoint such special advisory, technical, or professional committees as may be useful in carrying out the functions 

of the Council, including an advisory committee consisting of State 

regulators, and the members of such committees may be members 

of the Council, or other persons, or both. 

(e) MEETINGS.— 

(1) TIMING.—The Council shall meet at the call of the Chairperson or a majority of the members then serving, but not less 

frequently than quarterly. 

(2) RULES FOR CONDUCTING BUSINESS.—The Council shall 

adopt such rules as may be necessary for the conduct of the 

business of the Council. Such rules shall be rules of agency organization, procedure, or practice for purposes of section 553 of 

title 5, United States Code. 

(f) VOTING.—Unless otherwise specified, the Council shall make 

all decisions that it is authorized or required to make by a majority 

vote of the voting members then serving. 

(g) NONAPPLICABILITY OF FACA.—The Federal Advisory Committee Act (5 U.S.C. App.) shall not apply to the Council, or to any 

special advisory, technical, or professional committee appointed by 

the Council, except that, if an advisory, technical, or professional 

committee has one or more members who are not employees of or 

affiliated with the United States Government, the Council shall 

publish a list of the names of the members of such committee. 

(h) ASSISTANCE FROM FEDERAL AGENCIES.—Any department or 

agency of the United States may provide to the Council and any 

special advisory, technical, or professional committee appointed by 

the Council, such services, funds, facilities, staff, and other support 

services as the Council may determine advisable. 

(i) COMPENSATION OF MEMBERS.— 

(1) FEDERAL EMPLOYEE MEMBERS.—All members of the Council who are officers or employees of the United States shall 

serve without compensation in addition to that received for 

their services as officers or employees of the United States. 

(2) COMPENSATION FOR NON-FEDERAL MEMBER.—Section 5314 

of title 5, United States Code, is amended by adding at the end 

the following:‘‘Independent Member of the Financial Stability 

Oversight Council (1).’’. 

(j) DETAIL OF GOVERNMENT EMPLOYEES.—Any employee of the 

Federal Government may be detailed to the Council without reimbursement, and such detail shall be without interruption or loss of 

civil service status or privilege. An employee of the Federal Government detailed to the Council shall report to and be subject to oversight by the Council during the assignment to the Council, and 


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shall be compensated by the department or agency from which the 

employee was detailed. 

* * * * * * * 

TITLE X—BUREAU OF CONSUMER 

FINANCIAL PROTECTION 

SEC. 1001. SHORT TITLE. 

This title may be cited as the ‘‘Consumer Financial Protection 

Act of 2010’’. 

SEC. 1002. DEFINITIONS. 

Except as otherwise provided in this title, for purposes of this 

title, the following definitions shall apply: 

(1) AFFILIATE.—The term ‘‘affiliate’’ means any person that 

controls, is controlled by, or is under common control with another person. 

(2) BUREAU.—The term ‘‘Bureau’’ means the Bureau of Consumer Financial Protection. 

(3) BUSINESS OF INSURANCE.—The term ‘‘business of insurance’’ means the writing of insurance or the reinsuring of risks 

by an insurer, including all acts necessary to such writing or 

reinsuring and the activities relating to the writing of insurance or the reinsuring of risks conducted by persons who act 

as, or are, officers, directors, agents, or employees of insurers 

or who are other persons authorized to act on behalf of such 

persons. 

(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 that is described in one or more categories 

under— 

(A) paragraph (15) and is offered or provided for use by 

consumers primarily for personal, family, or household 

purposes; or 

(B) clause (i), (iii), (ix), or (x) of paragraph (15)(A), and 

is delivered, offered, or provided in connection with a consumer financial product or service referred to in subparagraph (A). 

(6) COVERED PERSON.—The term ‘‘covered person’’ means— 

(A) any person that engages in offering or providing a 

consumer financial product or service; and 

(B) any affiliate of a person described in subparagraph 

(A) if such affiliate acts as a service provider to such person. 

(7) 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. 

(8) DEPOSIT-TAKING ACTIVITY.—The term ‘‘deposit-taking activity’’ means— 


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(A) the acceptance of deposits, maintenance of deposit 

accounts, or the provision of services related to the acceptance of deposits or the maintenance of deposit accounts; 

(B) the acceptance of funds, the provision of other services related to the acceptance of funds, or the maintenance 

of member share accounts by a credit union; or 

(C) the receipt of funds or the equivalent thereof, as the 

Bureau may determine by rule or order, received or held 

by a covered person (or an agent for a covered person) for 

the purpose of facilitating a payment or transferring funds 

or value of funds between a consumer and a third party. 

(9) DESIGNATED TRANSFER DATE.—The term ‘‘designated 

transfer date’’ means the date established under section 1062. 

ø(10) DIRECTOR.—The term ‘‘Director’’ means the Director of 

the Bureau.¿ 

(11) ELECTRONIC CONDUIT SERVICES.—The term ‘‘electronic 

conduit services’’— 

(A) means the provision, by a person, of electronic data 

transmission, routing, intermediate or transient storage, or 

connections to a telecommunications system or network; 

and 

(B) does not include a person that provides electronic 

conduit services if, when providing such services, the person— 

(i) selects or modifies the content of the electronic 

data; 

(ii) transmits, routes, stores, or provides connections 

for electronic data, including financial data, in a manner that such financial data is differentiated from 

other types of data of the same form that such person 

transmits, routes, or stores, or with respect to which, 

provides connections; or 

(iii) is a payee, payor, correspondent, or similar 

party to a payment transaction with a consumer. 

(12) ENUMERATED CONSUMER LAWS.—Except as otherwise 

specifically provided in section 1029, subtitle G or subtitle H, 

the term ‘‘enumerated consumer laws’’ means— 

(A) the Alternative Mortgage Transaction Parity Act of 

1982 (12 U.S.C. 3801 et seq.); 

(B) the Consumer Leasing Act of 1976 (15 U.S.C. 1667 

et seq.); 

(C) the Electronic Fund Transfer Act (15 U.S.C. 1693 et 

seq.), except with respect to section 920 of that Act; 

(D) the Equal Credit Opportunity Act (15 U.S.C. 1691 et 

seq.); 

(E) the Fair Credit Billing Act (15 U.S.C. 1666 et seq.); 

(F) the Fair Credit Reporting Act (15 U.S.C. 1681 et 

seq.), except with respect to sections 615(e) and 628 of that 

Act (15 U.S.C. 1681m(e), 1681w); 

(G) the Home Owners Protection Act of 1998 (12 U.S.C. 

4901 et seq.); 

(H) the Fair Debt Collection Practices Act (15 U.S.C. 

1692 et seq.); 

(I) subsections (b) through (f) of section 43 of the Federal 

Deposit Insurance Act (12 U.S.C. 1831t(c)-(f)); 


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(J) sections 502 through 509 of the Gramm-Leach-Bliley 

Act (15 U.S.C. 6802-6809) except for section 505 as it applies to section 501(b); 

(K) the Home Mortgage Disclosure Act of 1975 (12 

U.S.C. 2801 et seq.); 

(L) the Home Ownership and Equity Protection Act of 

1994 (15 U.S.C. 1601 note); 

(M) the Real Estate Settlement Procedures Act of 1974 

(12 U.S.C. 2601 et seq.); 

(N) the S.A.F.E. Mortgage Licensing Act of 2008 (12 

U.S.C. 5101 et seq.); 

(O) the Truth in Lending Act (15 U.S.C. 1601 et seq.); 

(P) the Truth in Savings Act (12 U.S.C. 4301 et seq.); 

(Q) section 626 of the Omnibus Appropriations Act, 2009 

(Public Law 111-8); and 

(R) the Interstate Land Sales Full Disclosure Act (15 

U.S.C. 1701). 

(13) FAIR LENDING.—The term ‘‘fair lending’’ means fair, equitable, and nondiscriminatory access to credit for consumers. 

(14) FEDERAL CONSUMER FINANCIAL LAW.—The term ‘‘Federal 

consumer financial law’’ means the provisions of this title, the 

enumerated consumer laws, the laws for which authorities are 

transferred under subtitles F and H, and any rule or order prescribed by the Bureau under this title, an enumerated consumer law, or pursuant to the authorities transferred under 

subtitles F and H. The term does not include the Federal 

Trade Commission Act. 

(15) FINANCIAL PRODUCT OR SERVICE.— 

(A) IN GENERAL.—The term ‘‘financial product or service’’ 

means— 

(i) extending credit and servicing loans, including 

acquiring, purchasing, selling, brokering, or other extensions of credit (other than solely extending commercial credit to a person who originates consumer 

credit transactions); 

(ii) extending or brokering leases of personal or real 

property that are the functional equivalent of purchase finance arrangements, 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 a lease 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 Bureau; 

(iii) providing real estate settlement services, except 

such services excluded under subparagraph (C), or 

performing appraisals of real estate or personal property; 

(iv) engaging in deposit-taking activities, transmitting or exchanging funds, or otherwise acting as a custodian of funds or any financial instrument for use by 

or on behalf of a consumer; 


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(v) selling, providing, or issuing stored value or payment instruments, except that, in the case of a sale of, 

or transaction to reload, stored value, only if the seller 

exercises substantial control over the terms or conditions of the stored value provided to the consumer 

where, for purposes of this clause— 

(I) a seller shall not be found to exercise substantial control over the terms or conditions of the 

stored value if the seller is not a party to the contract with the consumer for the stored value product, and another person is principally responsible 

for establishing the terms or conditions of the 

stored value; and 

(II) advertising the nonfinancial goods or services of the seller on the stored value card or device 

is not in itself an exercise of substantial control 

over the terms or conditions; 

(vi) providing check cashing, check collection, or 

check guaranty services; 

(vii) providing payments or other financial data 

processing products or services to a consumer by any 

technological means, including processing or storing financial or banking data for any payment instrument, 

or through any payments systems or network used for 

processing payments data, including payments made 

through an online banking system or mobile telecommunications network, except that a person shall 

not be deemed to be a covered person with respect to 

financial data processing solely because the person— 

(I) is a merchant, retailer, or seller of any nonfinancial good or service who engages in financial 

data processing by transmitting or storing payments data about a consumer exclusively for purpose of initiating payments instructions by the 

consumer to pay such person for the purchase of, 

or to complete a commercial transaction for, such 

nonfinancial good or service sold directly by such 

person to the consumer; or 

(II) provides access to a host server to a person 

for purposes of enabling that person to establish 

and maintain a website; 

(viii) providing financial advisory services (other 

than services relating to securities provided by a person regulated by the Commission or a person regulated by a State securities Commission, but only to the 

extent that such person acts in a regulated capacity) 

to consumers on individual financial matters or relating to proprietary financial products or services (other 

than by publishing any bona fide newspaper, news 

magazine, or business or financial publication of general and regular circulation, including publishing market data, news, or data analytics or investment information or recommendations that are not tailored to 

the individual needs of a particular consumer), including— 


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(I) providing credit counseling to any consumer; 

and 

(II) providing services to assist a consumer with 

debt management or debt settlement, modifying 

the terms of any extension of credit, or avoiding 

foreclosure; 

(ix) collecting, analyzing, maintaining, or providing 

consumer report information or other account information, including information relating to the credit history of consumers, used or expected to be used in connection with any decision regarding the offering or 

provision of a consumer financial product or service, 

except to the extent that— 

(I) a person— 

(aa) collects, analyzes, or maintains information that relates solely to the transactions 

between a consumer and such person; 

(bb) provides the information described in 

item (aa) to an affiliate of such person; or 

(cc) provides information that is used or expected to be used solely in any decision regarding the offering or provision of a product 

or service that is not a consumer financial 

product or service, including a decision for 

employment, government licensing, or a residential lease or tenancy involving a consumer; 

and 

(II) the information described in subclause 

(I)(aa) is not used by such person or affiliate in 

connection with any decision regarding the offering or provision of a consumer financial product or 

service to the consumer, other than credit described in section 1027(a)(2)(A); 

(x) collecting debt related to any consumer financial 

product or service; and 

(xi) such other financial product or service as may 

be defined by the Bureau, by regulation, for purposes 

of this title, if the Bureau finds that such financial 

product or service is— 

(I) entered into or conducted as a subterfuge or 

with a purpose to evade any Federal consumer financial law; or 

(II) permissible for a bank or for a financial 

holding company to offer or to provide under any 

provision of a Federal law or regulation applicable 

to a bank or a financial holding company, and has, 

or likely will have, a material impact on consumers. 

(B) RULE OF CONSTRUCTION.— (i) IN GENERAL.—For purposes of subparagraph 

(A)(xi)(II), and subject to clause (ii) of this subparagraph, the following activities provided to a covered 

person shall not, for purposes of this title, be considered incidental or complementary to a financial activity permissible for a financial holding company to enVerDate Sep 11 2014 02:53 Dec 22, 2016 Jkt 069006 PO 00000 Frm 00019 Fmt 6659 Sfmt 6601 E:\HR\OC\HR872.XXX HR872

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gage in under any provision of a Federal law or regulation applicable to a financial holding company: 

(I) Providing information products or services to 

a covered person for identity authentication. 

(II) Providing information products or services 

for fraud or identify theft detection, prevention, or 

investigation. 

(III) Providing document retrieval or delivery 

services. 

(IV) Providing public records information retrieval. 

(V) Providing information products or services 

for anti-money laundering activities. 

(ii) LIMITATION.—Nothing in clause (i) may be construed as modifying or limiting the authority of the 

Bureau to exercise any— 

(I) examination or enforcement powers authority 

under this title with respect to a covered person 

or service provider engaging in an activity described in subparagraph (A)(ix); or 

(II) powers authorized by this title to prescribe 

rules, issue orders, or take other actions under 

any enumerated consumer law or law for which 

the authorities are transferred under subtitle F or 

H. 

(C) EXCLUSIONS.—The term ‘‘financial product or service’’ does not include— 

(i) the business of insurance; or 

(ii) electronic conduit services. 

(16) 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. 

(17) INSURED CREDIT UNION.—The term ‘‘insured credit 

union’’ has the same meaning as in section 101 of the Federal 

Credit Union Act (12 U.S.C. 1752). 

(18) PAYMENT INSTRUMENT.—The term ‘‘payment instrument’’ means a check, draft, warrant, money order, traveler’s 

check, electronic instrument, or other instrument, payment of 

funds, or monetary value (other than currency). 

(19) PERSON.—The term ‘‘person’’ means an individual, partnership, company, corporation, association (incorporated or unincorporated), trust, estate, cooperative organization, or other 

entity. 

(20) PERSON REGULATED BY THE COMMODITY FUTURES TRADING COMMISSION.—The term ‘‘person regulated by the Commodity Futures Trading Commission’’ means any person that 

is registered, or required by statute or regulation to be registered, with the Commodity Futures Trading Commission, but 

only to the extent that the activities of such person are subject 

to the jurisdiction of the Commodity Futures Trading Commission under the Commodity Exchange Act. 

(21) PERSON REGULATED BY THE COMMISSION.—The term 

‘‘person regulated by the Commission’’ means a person who 

is— 


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(A) a broker or dealer that is required to be registered 

under the Securities Exchange Act of 1934; 

(B) an investment adviser that is registered under the 

Investment Advisers Act of 1940; 

(C) an investment company that is required to be registered under the Investment Company Act of 1940, and 

any company that has elected to be regulated as a business development company under that Act; 

(D) a national securities exchange that is required to be 

registered under the Securities Exchange Act of 1934; 

(E) a transfer agent that is required to be registered 

under the Securities Exchange Act of 1934; 

(F) a clearing corporation that is required to be registered under the Securities Exchange Act of 1934; 

(G) any self-regulatory organization that is required to 

be registered with the Commission; 

(H) any nationally recognized statistical rating organization that is required to be registered with the Commission; 

(I) any securities information processor that is required 

to be registered with the Commission; 

(J) any municipal securities dealer that is required to be 

registered with the Commission; 

(K) any other person that is required to be registered 

with the Commission under the Securities Exchange Act of 

1934; and 

(L) any employee, agent, or contractor acting on behalf 

of, registered with, or providing services to, any person described in any of subparagraphs (A) through (K), but only 

to the extent that any person described in any of subparagraphs (A) through (K), or the employee, agent, or contractor of such person, acts in a regulated capacity. 

(22) PERSON REGULATED BY A STATE INSURANCE REGULATOR.—The term ‘‘person regulated by a State insurance regulator’’ means any person that is engaged in the business of insurance and subject to regulation by any State insurance regulator, but only to the extent that such person acts in such capacity. 

(23) PERSON THAT PERFORMS INCOME TAX PREPARATION AC- TIVITIES FOR CONSUMERS.—The term ‘‘person that performs income tax preparation activities for consumers’’ means— 

(A) any tax return preparer (as defined in section 

7701(a)(36) of the Internal Revenue Code of 1986), regardless of whether compensated, but only to the extent that 

the person acts in such capacity; 

(B) any person regulated by the Secretary under section 

330 of title 31, United States Code, but only to the extent 

that the person acts in such capacity; and 

(C) any authorized IRS e-file Providers (as defined for 

purposes of section 7216 of the Internal Revenue Code of 

1986), but only to the extent that the person acts in such 

capacity. 

(24) PRUDENTIAL REGULATOR.—The term ‘‘prudential regulator’’ means— 

(A) in the case of an insured depository institution or depository institution holding company (as defined in section 


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3 of the Federal Deposit Insurance Act), or subsidiary of 

such institution or company, the appropriate Federal 

banking agency, as that term is defined in section 3 of the 

Federal Deposit Insurance Act; and 

(B) in the case of an insured credit union, the National 

Credit Union Administration. 

(25) RELATED PERSON.—The term ‘‘related person’’— 

(A) shall apply only with respect to a covered person 

that is not a bank holding company (as that term is defined in section 2 of the Bank Holding Company Act of 

1956), credit union, or depository institution; 

(B) shall be deemed to mean a covered person for all 

purposes of any provision of Federal consumer financial 

law; and 

(C) means— 

(i) any director, officer, or employee charged with 

managerial responsibility for, or controlling shareholder of, or agent for, such covered person; 

(ii) any shareholder, consultant, joint venture partner, or other person, as determined by the Bureau (by 

rule or on a case-by-case basis) who materially participates in the conduct of the affairs of such covered person; and 

(iii) any independent contractor (including any attorney, appraiser, or accountant) who knowingly or recklessly participates in any— 

(I) violation of any provision of law or regulation; or 

(II) breach of a fiduciary duty. 

(26) SERVICE PROVIDER.— 

(A) IN GENERAL.—The term ‘‘service provider’’ means any 

person that provides a material service to a covered person 

in connection with the offering or provision by such covered person of a consumer financial product or service, including a person that— 

(i) participates in designing, operating, or maintaining the consumer financial product or service; or 

(ii) processes transactions relating to the consumer 

financial product or service (other than unknowingly 

or incidentally transmitting or processing financial 

data in a manner that such data is undifferentiated 

from other types of data of the same form as the person transmits or processes). 

(B) EXCEPTIONS.—The term ‘‘service provider’’ does not 

include a person solely by virtue of such person offering or 

providing to a covered person— 

(i) a support service of a type provided to businesses 

generally or a similar ministerial service; or 

(ii) time or space for an advertisement for a consumer financial product or service through print, 

newspaper, or electronic media. 

(C) RULE OF CONSTRUCTION.—A person that is a service 

provider shall be deemed to be a covered person to the extent that such person engages in the offering or provision 

of its own consumer financial product or service. 


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(27) STATE.—The term ‘‘State’’ means any State, territory, or 

possession of the United States, the District of Columbia, the 

Commonwealth of Puerto Rico, the Commonwealth of the 

Northern Mariana Islands, Guam, American Samoa, or the 

United States Virgin Islands or any federally recognized Indian tribe, as defined by the Secretary of the Interior under 

section 104(a) of the Federally Recognized Indian Tribe List 

Act of 1994 (25 U.S.C. 479a-1(a)). 

(28) STORED VALUE.— 

(A) IN GENERAL.—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. 

(B) EXCLUSION.—Notwithstanding subparagraph (A), the 

term ‘‘stored value’’ does not include a special purpose card 

or certificate, which shall be defined for purposes of this 

paragraph as funds or monetary value represented in any 

electronic format, whether or not specially encrypted, that 

is— 

(i) issued by a merchant, retailer, or other seller of 

nonfinancial goods or services; 

(ii) redeemable only for transactions with the merchant, retailer, or seller of nonfinancial goods or services or with an affiliate of such person, which affiliate 

itself is a merchant, retailer, or seller of nonfinancial 

goods or services; 

(iii) issued in a specified amount that, except in the 

case of a card or product used solely for telephone 

services, may not be increased or reloaded; 

(iv) purchased on a prepaid basis in exchange for 

payment; and 

(v) honored upon presentation to such merchant, retailer, or seller of nonfinancial goods or services or an 

affiliate of such person, which affiliate itself is a merchant, retailer, or seller of nonfinancial goods or services, only for any nonfinancial goods or services. 

(29) TRANSMITTING OR EXCHANGING FUNDS.—The term 

‘‘transmitting or exchanging funds’’ means receiving currency, 

monetary value, or payment instruments from a consumer 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 through other businesses that facilitate third-party transfers 

within the United States or to or from the United States. 

* * * * * * * 


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Subtitle A—Bureau of Consumer Financial 

Protection 

SEC. 1011. ESTABLISHMENT OF THE BUREAU OF CONSUMER FINANCIAL PROTECTION. 

(a) BUREAU ESTABLISHED.—There is established øin the Federal 

Reserve System,¿ an øindependent bureau¿ independent commission to be known as the ‘‘øBureau of Consumer Financial Protection¿ Financial Product Safety Commission (hereinafter in this section referred to as the ‘‘Commission’’)’’, which shall regulate the offering and provision of consumer financial products or services 

under the Federal consumer financial laws. The øBureau¿ Commission shall be considered an Executive agency, as defined in section 

105 of title 5, United States Code. Except as otherwise provided expressly by law, all Federal laws dealing with public or Federal contracts, property, works, officers, employees, budgets, or funds, including the provisions of chapters 5 and 7 of title 5, shall apply to 

the exercise of the powers of the øBureau¿ Commission. 

ø(b) DIRECTOR AND DEPUTY DIRECTOR.— 

ø(1) IN GENERAL.—There is established the position of the 

Director, who shall serve as the head of the Bureau. 

ø(2) APPOINTMENT.—Subject to paragraph (3), the Director 

shall be appointed by the President, by and with the advice 

and consent of the Senate. 

ø(3) QUALIFICATION.—The President shall nominate the Director from among individuals who are citizens of the United 

States. 

ø(4) COMPENSATION.—The Director shall be compensated at 

the rate prescribed for level II of the Executive Schedule under 

section 5313 of title 5, United States Code. 

ø(5) DEPUTY DIRECTOR.—There is established the position of 

Deputy Director, who shall— 

ø(A) be appointed by the Director; and 

ø(B) serve as acting Director in the absence or unavailability of the Director. 

ø(c) TERM.— 

ø(1) IN GENERAL.—The Director shall serve for a term of 5 

years. 

ø(2) EXPIRATION OF TERM.—An individual may serve as Director after the expiration of the term for which appointed, 

until a successor has been appointed and qualified. 

ø(3) REMOVAL FOR CAUSE.—The President may remove the 

Director for inefficiency, neglect of duty, or malfeasance in office. 

ø(d) SERVICE RESTRICTION.—No Director or Deputy Director may 

hold any office, position, or employment in any Federal reserve 

bank, Federal home loan bank, covered person, or service provider 

during the period of service of such person as Director or Deputy 

Director.¿ 

(b) AUTHORITY TO PRESCRIBE REGULATIONS.—The Commission 

may prescribe such regulations and issue such orders in accordance 

with this title as the Commission may determine to be necessary for 

carrying out this title and all other laws within the Commission’s 


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jurisdiction and shall exercise any authorities granted under this 

title and all other laws within the Commission’s jurisdiction. 

(c) COMPOSITION OF THE COMMISSION.— (1) IN GENERAL.—The Commission shall be composed of 5 

members who shall be appointed by the President, by and with 

the advice and consent of the Senate, from among individuals 

who— 

(A) are citizens of the United States; and 

(B) have strong competencies and experiences related to 

consumer financial products and services. 

(2) STAGGERING.—The members of the Commission shall 

serve staggered terms, which initially shall be established by 

the President for terms of 1, 2, 3, 4, and 5 years, respectively. 

(3) TERMS.— 

(A) IN GENERAL.—Each member of the Commission, including the Chair, shall serve for a term of 5 years. 

(B) REMOVAL.—The President may remove any member 

of the Commission for inefficiency, neglect of duty, or malfeasance in office. 

(C) VACANCIES.—Any member of the Commission appointed to fill a vacancy occurring before the expiration of 

the term to which that member’s predecessor was appointed 

(including the Chair) shall be appointed only for the remainder of the term. 

(D) CONTINUATION OF SERVICE.—Each member of the 

Commission may continue to serve after the expiration of 

the term of office to which that member was appointed 

until a successor has been appointed by the President and 

confirmed by the Senate, except that a member may not 

continue to serve more than 1 year after the date on which 

that member’s term would otherwise expire. 

(E) OTHER EMPLOYMENT PROHIBITED.—No member of the 

Commission shall engage in any other business, vocation, 

or employment. 

(d) AFFILIATION.—Not more than 3 members of the Commission 

shall be members of any one political party. 

(e) CHAIR OF THE COMMISSION.— (1) APPOINTMENT.—The Chair of the Commission shall be appointed by the President from among the members of the Commission. 

(2) AUTHORITY.—The Chair shall be the principal executive 

officer of the Commission, and shall exercise all of the executive 

and administrative functions of the Commission, including 

with respect to— 

(A) the appointment and supervision of personnel employed under the Commission (other than personnel employed regularly and full time in the immediate offices of 

members of the Commission other than the Chair); 

(B) the distribution of business among personnel appointed and supervised by the Chair and among administrative units of the Commission; and 

(C) the use and expenditure of funds. 

(3) LIMITATION.—In carrying out any of the Chair’s functions 

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latory decisions, findings, and determinations as the Commission may by law be authorized to make. 

(4) REQUESTS OR ESTIMATES RELATED TO APPROPRIATIONS.— 

Requests or estimates for regular, supplemental, or deficiency 

appropriations on behalf of the Commission may not be submitted by the Chair without the prior approval of the Commission. 

(f) NO IMPAIRMENT BY REASON OF VACANCIES.—No vacancy in the 

members of the Commission shall impair the right of the remaining 

members of the Commission to exercise all the powers of the Commission. Three members of the Commission shall constitute a 

quorum for the transaction of business, except that if there are only 

3 members serving on the Commission because of vacancies in the 

Commission, 2 members of the Commission shall constitute a 

quorum for the transaction of business. If there are only 2 members 

serving on the Commission because of vacancies in the Commission, 

2 members shall constitute a quorum for the 6-month period beginning on the date of the vacancy which caused the number of Commission members to decline to 2. 

(g) SEAL.—The Commission shall have an official seal. 

(h) COMPENSATION.— 

(1) CHAIR.—The Chair shall receive compensation at the rate 

prescribed for level I of the Executive Schedule under section 

5313 of title 5, United States Code. 

(2) OTHER MEMBERS OF THE COMMISSION.—The 4 other members of the Commission shall each receive compensation at the 

rate prescribed for level II of the Executive Schedule under section 5314 of title 5, United States Code. 

ø(e)¿ (i) OFFICES.—The principal office of the øBureau¿ Commission shall be in the District of Columbia. The øDirector¿ Financial 

Product Safety Commission may establish regional offices of the 

øBureau¿ Commission ø, including in cities in which the Federal 

reserve banks, or branches of such banks, are located,¿ in order to 

carry out the responsibilities assigned to the øBureau¿ Commission 

under the Federal consumer financial laws. 

SEC. 1012. EXECUTIVE AND ADMINISTRATIVE POWERS. 

(a) POWERS OF THE BUREAU.—The Bureau is authorized to establish the general policies of the Bureau with respect to all executive 

and administrative functions, including— 

(1) the establishment of rules for conducting the general 

business of the Bureau, in a manner not inconsistent with this 

title; 

(2) to bind the Bureau and enter into contracts; 

(3) directing the establishment and maintenance of divisions 

or other offices within the Bureau, in order to carry out the responsibilities under the Federal consumer financial laws, and 

to satisfy the requirements of other applicable law; 

(4) to coordinate and oversee the operation of all administrative, enforcement, and research activities of the Bureau; 

(5) to adopt and use a seal; 

(6) to determine the character of and the necessity for the 

obligations and expenditures of the Bureau; 

(7) the appointment and supervision of personnel employed 

by the Bureau; 


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(8) the distribution of business among personnel appointed 

and supervised by the øDirector¿ Financial Product Safety 

Commission and among administrative units of the Bureau; 

(9) the use and expenditure of funds; 

(10) implementing the Federal consumer financial laws 

through rules, orders, guidance, interpretations, statements of 

policy, examinations, and enforcement actions; and 

(11) performing such other functions as may be authorized or 

required by law. 

(b) DELEGATION OF AUTHORITY.—The øDirector of the Bureau¿ 

Financial Product Safety Commission may delegate to any duly authorized employee, representative, or agent any power vested in the 

Bureau by law. 

(c) AUTONOMY OF THE BUREAU.— (1) COORDINATION WITH THE BOARD OF GOVERNORS.—Notwithstanding any other provision of law applicable to the supervision or examination of persons with respect to Federal 

consumer financial laws, the Board of Governors may delegate 

to the Bureau the authorities to examine persons subject to the 

jurisdiction of the Board of Governors for compliance with the 

Federal consumer financial laws. 

ø(2) AUTONOMY.—Notwithstanding the authorities granted to 

the Board of Governors under the Federal Reserve Act, the 

Board of Governors may not— 

ø(A) intervene in any matter or proceeding before the 

Director, including examinations or enforcement actions, 

unless otherwise specifically provided by law; 

ø(B) appoint, direct, or remove any officer or employee of 

the Bureau; or 

ø(C) merge or consolidate the Bureau, or any of the functions or responsibilities of the Bureau, with any division or 

office of the Board of Governors or the Federal reserve 

banks. 

ø(3) RULES AND ORDERS.—No rule or order of the Bureau 

shall be subject to approval or review by the Board of Governors. The Board of Governors may not delay or prevent the 

issuance of any rule or order of the Bureau. 

ø(4) RECOMMENDATIONS AND TESTIMONY.—No officer or agency of the United States shall have any authority to require the 

Director or any other officer of the Bureau to submit legislative 

recommendations, or testimony or comments on legislation, to 

any officer or agency of the United States for approval, comments, or review prior to the submission of such recommendations, testimony, or comments to the Congress, if such recommendations, testimony, or comments to the Congress include a statement indicating that the views expressed therein 

are those of the Director or such officer, and do not necessarily 

reflect the views of the Board of Governors or the President. 

ø(5) CLARIFICATION OF AUTONOMY OF THE BUREAU IN LEGAL

PROCEEDINGS.—The Bureau shall not be liable under any provision of law for any action or inaction of the Board of Governors, and the Board of Governors shall not be liable under 

any provision of law for any action or inaction of the Bureau.¿ 

SEC. 1013. ADMINISTRATION. 

(a) PERSONNEL.— 


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(1) APPOINTMENT.— (A) IN GENERAL.—The øDirector¿ Financial Product 

Safety Commission may fix the number of, and appoint 

and direct, all employees of the Bureau, in accordance with 

the applicable provisions of title 5, United States Code. 

(B) EMPLOYEES OF THE BUREAU.—The øDirector¿ Financial Product Safety Commission is authorized to employ attorneys, compliance examiners, compliance supervision analysts, economists, statisticians, and other employees as 

may be deemed necessary to conduct the business of the 

Bureau. Unless otherwise provided expressly by law, any 

individual appointed under this section shall be an employee as defined in section 2105 of title 5, United States 

Code, and subject to the provisions of such title and other 

laws generally applicable to the employees of an Executive 

agency. 

(C) WAIVER AUTHORITY.— 

(i) IN GENERAL.—In making any appointment under 

subparagraph (A), the øDirector¿ Financial Product 

Safety Commission may waive the requirements of 

chapter 33 of title 5, United States Code, and the regulations implementing such chapter, to the extent necessary to appoint employees on terms and conditions 

that are consistent with those set forth in section 11(1) 

of the Federal Reserve Act (12 U.S.C. 248(1)), while 

providing for— 

(I) fair, credible, and transparent methods of establishing qualification requirements for, recruitment for, and appointments to positions; 

(II) fair and open competition and equitable 

treatment in the consideration and selection of individuals to positions; 

(III) fair, credible, and transparent methods of 

assigning, reassigning, detailing, transferring, and 

promoting employees. 

(ii) VETERANS PREFERENCES.—In implementing this 

subparagraph, the øDirector¿ Financial Product Safety Commission shall comply with the provisions of section 2302(b)(11), regarding veterans’ preference requirements, in a manner consistent with that in which 

such provisions are applied under chapter 33 of title 

5, United States Code. The authority under this subparagraph to waive the requirements of that chapter 

33 shall expire 5 years after the date of enactment of 

this Act. 

(2) COMPENSATION.—Notwithstanding any otherwise applicable provision of title 5, United States Code, concerning compensation, including the provisions of chapter 51 and chapter 

53, the following provisions shall apply with respect to employees of the Bureau: 

(A) The rates of basic pay for all employees of the Bureau may be set and adjusted by the øDirector¿ Financial 

Product Safety Commission. (B) The øDirector¿ Financial Product Safety Commission 

shall at all times provide compensation (including benefits) 


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to each class of employees that, at a minimum, are comparable to the compensation and benefits then being provided by the Board of Governors for the corresponding 

class of employees. 

(C) All such employees shall be compensated (including 

benefits) on terms and conditions that are consistent with 

the terms and conditions set forth in section 11(l) of the 

Federal Reserve Act (12 U.S.C. 248(l)). 

(3) BUREAU PARTICIPATION IN FEDERAL RESERVE SYSTEM RETIREMENT PLAN AND FEDERAL RESERVE SYSTEM THRIFT PLAN.— 

(A) EMPLOYEE ELECTION.—Employees appointed to the 

Bureau may elect to participate in either— 

(i) both the Federal Reserve System Retirement 

Plan and the Federal Reserve System Thrift Plan, 

under the same terms on which such participation is 

offered to employees of the Board of Governors who 

participate in such plans and under the terms and 

conditions specified under section 1064(i)(1)(C); or 

(ii) the Civil Service Retirement System under chapter 83 of title 5, United States Code, or the Federal 

Employees Retirement System under chapter 84 of 

title 5, United States Code, if previously covered under 

one of those Federal employee retirement systems. 

(B) ELECTION PERIOD.—Bureau employees shall make an 

election under this paragraph not later than 1 year after 

the date of appointment by, or transfer under subtitle F to, 

the Bureau. Participation in, and benefit accruals under, 

any other retirement plan established or maintained by 

the Federal Government shall end not later than the date 

on which participation in, and benefit accruals under, the 

Federal Reserve System Retirement Plan and Federal Reserve System Thrift Plan begin. 

(C) EMPLOYER CONTRIBUTION.—The Bureau shall pay an 

employer contribution to the Federal Reserve System Retirement Plan, in the amount established as an employer 

contribution under the Federal Employees Retirement System, as established under chapter 84 of title 5, United 

States Code, for each Bureau employee who elects to participate in the Federal Reserve System Retirement Plan. 

The Bureau shall pay an employer contribution to the Federal Reserve System Thrift Plan for each Bureau employee 

who elects to participate in such plan, as required under 

the terms of such plan. 

(D) CONTROLLED GROUP STATUS.—The Bureau is the 

same employer as the Federal Reserve System (as comprised of the Board of Governors and each of the 12 Federal reserve banks prior to the date of enactment of this 

Act) for purposes of subsections (b), (c), (m), and (o) of section 414 of the Internal Revenue Code of 1986, (26 U.S.C. 

414). 

(4) LABOR-MANAGEMENT RELATIONS.—Chapter 71 of title 5, 

United States Code, shall apply to the Bureau and the employees of the Bureau. 

(5) AGENCY OMBUDSMAN.— 


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(A) ESTABLISHMENT REQUIRED.—Not later than 180 days 

after the designated transfer date, the Bureau shall appoint an ombudsman. 

(B) DUTIES OF OMBUDSMAN.—The ombudsman appointed 

in accordance with subparagraph (A) shall— 

(i) act as a liaison between the Bureau and any affected person with respect to any problem that such 

party may have in dealing with the Bureau, resulting 

from the regulatory activities of the Bureau; and 

(ii) assure that safeguards exist to encourage complainants to come forward and preserve confidentiality. 

(b) SPECIFIC FUNCTIONAL UNITS.— 

(1) RESEARCH.—The øDirector¿ Financial Product Safety 

Commission shall establish a unit whose functions shall include researching, analyzing, and reporting on— 

(A) developments in markets for consumer financial 

products or services, including market areas of alternative 

consumer financial products or services with high growth 

rates and areas of risk to consumers; 

(B) access to fair and affordable credit for traditionally 

underserved communities; 

(C) consumer awareness, understanding, and use of disclosures and communications regarding consumer financial 

products or services; 

(D) consumer awareness and understanding of costs, 

risks, and benefits of consumer financial products or services; 

(E) consumer behavior with respect to consumer financial products or services, including performance on mortgage loans; and 

(F) experiences of traditionally underserved consumers, 

including un-banked and under-banked consumers. 

(2) COMMUNITY AFFAIRS.—The øDirector¿ Financial Product 

Safety Commission shall establish a unit whose functions shall 

include providing information, guidance, and technical assistance regarding the offering and provision of consumer financial 

products or services to traditionally underserved consumers 

and communities. 

(3) COLLECTING AND TRACKING COMPLAINTS.— 

(A) IN GENERAL.—The øDirector¿ Financial Product 

Safety Commission shall establish a unit whose functions 

shall include establishing a single, toll-free telephone number, a website, and a database or utilizing an existing 

database to facilitate the centralized collection of, monitoring of, and response to consumer complaints regarding 

consumer financial products or services. The øDirector¿ Financial Product Safety Commission shall coordinate with 

the Federal Trade Commission or other Federal agencies 

to route complaints to such agencies, where appropriate. 

(B) ROUTING CALLS TO STATES.—To the extent practicable, State agencies may receive appropriate complaints 

from the systems established under subparagraph (A), if— 


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(i) the State agency system has the functional capacity to receive calls or electronic reports routed by the 

Bureau systems; 

(ii) the State agency has satisfied any conditions of 

participation in the system that the Bureau may establish, including treatment of personally identifiable 

information and sharing of information on complaint 

resolution or related compliance procedures and resources; and 

(iii) participation by the State agency includes measures necessary to provide for protection of personally 

identifiable information that conform to the standards 

for protection of the confidentiality of personally identifiable information and for data integrity and security 

that apply to the Federal agencies described in subparagraph (D). 

(C) REPORTS TO THE CONGRESS.—The øDirector¿ Financial Product Safety Commission shall present an annual 

report to Congress not later than March 31 of each year 

on the complaints received by the Bureau in the prior year 

regarding consumer financial products and services. Such 

report shall include information and analysis about complaint numbers, complaint types, and, where applicable, 

information about resolution of complaints. 

(D) DATA SHARING REQUIRED.—To facilitate preparation 

of the reports required under subparagraph (C), supervision and enforcement activities, and monitoring of the 

market for consumer financial products and services, the 

Bureau shall share consumer complaint information with 

prudential regulators, the Federal Trade Commission, 

other Federal agencies, and State agencies, subject to the 

standards applicable to Federal agencies for protection of 

the confidentiality of personally identifiable information 

and for data security and integrity. The prudential regulators, the Federal Trade Commission, and other Federal 

agencies shall share data relating to consumer complaints 

regarding consumer financial products and services with 

the Bureau, subject to the standards applicable to Federal 

agencies for protection of confidentiality of personally identifiable information and for data security and integrity. 

(c) OFFICE OF FAIR LENDING AND EQUAL OPPORTUNITY.— 

(1) ESTABLISHMENT.—The øDirector¿ Financial Product Safety Commission shall establish within the Bureau the Office of 

Fair Lending and Equal Opportunity. 

(2) FUNCTIONS.—The Office of Fair Lending and Equal Opportunity shall have such powers and duties as the øDirector¿ 

Financial Product Safety Commission may delegate to the Office, including— 

(A) providing oversight and enforcement of Federal laws 

intended to ensure the fair, equitable, and nondiscriminatory access to credit for both individuals and communities that are enforced by the Bureau, including the 

Equal Credit Opportunity Act and the Home Mortgage 

Disclosure Act; 


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(B) coordinating fair lending efforts of the Bureau with 

other Federal agencies and State regulators, as appropriate, to promote consistent, efficient, and effective enforcement of Federal fair lending laws; 

(C) working with private industry, fair lending, civil 

rights, consumer and community advocates on the promotion of fair lending compliance and education; and 

(D) providing annual reports to Congress on the efforts 

of the Bureau to fulfill its fair lending mandate. 

(3) ADMINISTRATION OF OFFICE.—There is established the position of øAssistant Director of the Bureau for¿ Head of the Office of Fair Lending and Equal Opportunity, who— 

(A) shall be appointed by the øDirector¿ Financial Product Safety Commission; and 

(B) shall carry out such duties as the øDirector¿ Financial Product Safety Commission may delegate to such øAssistant Director¿ Head of the Office. 

(d) OFFICE OF FINANCIAL EDUCATION.— 

(1) ESTABLISHMENT.—The øDirector¿ Financial Product Safety Commission shall establish an Office of Financial Education, 

which shall be responsible for developing and implementing 

initiatives intended to educate and empower consumers to 

make better informed financial decisions. 

(2) OTHER DUTIES.—The Office of Financial Education shall 

develop and implement a strategy to improve the financial literacy of consumers that includes measurable goals and objectives, in consultation with the Financial Literacy and Education Commission, consistent with the National Strategy for 

Financial Literacy, through activities including providing opportunities for consumers to access— 

(A) financial counseling, including community-based financial counseling, where practicable; 

(B) information to assist with the evaluation of credit 

products and the understanding of credit histories and 

scores; 

(C) savings, borrowing, and other services found at 

mainstream financial institutions; 

(D) activities intended to— 

(i) prepare the consumer for educational expenses 

and the submission of financial aid applications, and 

other major purchases; 

(ii) reduce debt; and 

(iii) improve the financial situation of the consumer; 

(E) assistance in developing long-term savings strategies; and 

(F) wealth building and financial services during the 

preparation process to claim earned income tax credits and 

Federal benefits. 

(3) COORDINATION.—The Office of Financial Education shall 

coordinate with other units within the Bureau in carrying out 

its functions, including— 

(A) working with the Community Affairs Office to implement the strategy to improve financial literacy of consumers; and 


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(B) working with the research unit established by the 

øDirector¿ Financial Product Safety Commission to conduct research related to consumer financial education and 

counseling. 

(4) REPORT.—Not later than 24 months after the designated 

transfer date, and annually thereafter, the øDirector¿ Financial Product Safety Commission shall submit a report on its financial literacy activities and strategy to improve financial literacy of consumers to— 

(A) the Committee on Banking, Housing, and Urban Affairs of the Senate; and 

(B) the Committee on Financial Services of the House of 

Representatives. 

(5) MEMBERSHIP IN FINANCIAL LITERACY AND EDUCATION

COMMISSION.—Section 513(c)(1) of the Financial Literacy and 

Education Improvement Act (20 U.S.C. 9702(c)(1)) is amended— 

(A) in subparagraph (B), by striking ‘‘and’’ at the end; 

(B) by redesignating subparagraph (C) as subparagraph 

(D); and 

(C) by inserting after subparagraph (B) the following 

new subparagraph: 

‘‘(C) the øDirector of the Bureau¿ Financial Product 

Safety Commission of Consumer Financial Protection; 

and’’. 

(6) CONFORMING AMENDMENT.—Section 513(d) of the Financial Literacy and Education Improvement Act (20 U.S.C. 

9702(d)) is amended by adding at the end the following: ‘‘The 

øDirector of the Bureau¿ Financial Product Safety Commission 

of Consumer Financial Protection shall serve as the Vice 

Chairman.’’. 

(7) STUDY AND REPORT ON FINANCIAL LITERACY PROGRAM.— 

(A) IN GENERAL.—The Comptroller General of the United 

States shall conduct a study to identify— 

(i) the feasibility of certification of persons providing 

the programs or performing the activities described in 

paragraph (2), including recognizing outstanding programs, and developing guidelines and resources for 

community-based practitioners, including— 

(I) a potential certification process and standards for certification; 

(II) appropriate certifying entities; 

(III) resources required for funding such a process; and 

(IV) a cost-benefit analysis of such certification; 

(ii) technological resources intended to collect, analyze, evaluate, or promote financial literacy and counseling programs; 

(iii) effective methods, tools, and strategies intended 

to educate and empower consumers about personal finance management; and 

(iv) recommendations intended to encourage the development of programs that effectively improve financial education outcomes and empower consumers to 


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make better informed financial decisions based on 

findings. 

(B) REPORT.—Not later than 1 year after the date of enactment of this Act, the Comptroller General of the United 

States shall submit a report on the results of the study 

conducted under this paragraph to the Committee on 

Banking, Housing, and Urban Affairs of the Senate and 

the Committee on Financial Services of the House of Representatives. 

(e) OFFICE OF SERVICE MEMBER AFFAIRS.— (1) IN GENERAL.—The øDirector¿ Financial Product Safety 

Commission shall establish an Office of Service Member Affairs, which shall be responsible for developing and implementing initiatives for service members and their families intended to— 

(A) educate and empower service members and their 

families to make better informed decisions regarding consumer financial products and services; 

(B) coordinate with the unit of the Bureau established 

under subsection (b)(3), in order to monitor complaints by 

service members and their families and responses to those 

complaints by the Bureau or other appropriate Federal or 

State agency; and 

(C) coordinate efforts among Federal and State agencies, 

as appropriate, regarding consumer protection measures 

relating to consumer financial products and services offered to, or used by, service members and their families. 

(2) COORDINATION.— (A) REGIONAL SERVICES.—The øDirector¿ Financial 

Product Safety Commission is authorized to assign employees of the Bureau as may be deemed necessary to conduct 

the business of the Office of Service Member Affairs, including by establishing and maintaining the functions of 

the Office in regional offices of the Bureau located near 

military bases, military treatment facilities, or other similar military facilities. 

(B) AGREEMENTS.—The øDirector¿ Financial Product 

Safety Commission is authorized to enter into memoranda 

of understanding and similar agreements with the Department of Defense, including any branch or agency as authorized by the department, in order to carry out the business of the Office of Service Member Affairs. 

(3) DEFINITION.—As used in this subsection, the term ‘‘service member’’ means any member of the United States Armed 

Forces and any member of the National Guard or Reserves. 

(f) TIMING.—The Office of Fair Lending and Equal Opportunity, 

the Office of Financial Education, and the Office of Service Member 

Affairs shall each be established not later than 1 year after the 

designated transfer date. 

(g) OFFICE OF FINANCIAL PROTECTION FOR OLDER AMERICANS.— (1) ESTABLISHMENT.—Before the end of the 180-day period 

beginning on the designated transfer date, the øDirector¿ Financial Product Safety Commission shall establish the Office of 

Financial Protection for Older Americans, the functions of 

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cial literacy of individuals who have attained the age of 62 

years or more (in this subsection, referred to as ‘‘seniors’’) on 

protection from unfair, deceptive, and abusive practices and on 

current and future financial choices, including through the dissemination of materials to seniors on such topics. 

(2) øASSISTANT DIRECTOR¿ HEAD OF THE OFFICE.—The Office 

of Financial Protection for Older Americans (in this subsection 

referred to as the ‘‘Office’’) shall be headed by øan assistant director¿ a Head of the Office of Financial Protection for Older 

Americans. (3) DUTIES.—The Office shall— 

(A) develop goals for programs that provide seniors financial literacy and counseling, including programs that— 

(i) help seniors recognize warning signs of unfair, 

deceptive, or abusive 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, deceptive, or abusive practices; 

(B) monitor certifications or designations of financial advisors who advise seniors and alert the Commission and 

State regulators of certifications or designations that are 

identified as unfair, deceptive, or abusive; 

(C) not later than 18 months after the date of the establishment of the Office, submit to Congress and the Commission any legislative and regulatory recommendations 

on the best practices for— 

(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; 

(D) 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, deceptive, and 

abusive practices; 

(ii) long-term savings; and 

(iii) planning for retirement and long-term care; 

(E) coordinate consumer protection efforts of seniors 

with other Federal agencies and State regulators, as appropriate, to promote consistent, effective, and efficient enforcement; and 

(F) 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). 


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SEC. 1014. CONSUMER ADVISORY BOARD. 

(a) ESTABLISHMENT REQUIRED.—The øDirector¿ Financial Product Safety Commission shall establish a Consumer Advisory Board 

to advise and consult with the Bureau in the exercise of its functions under the Federal consumer financial laws, and to provide information on emerging practices in the consumer financial products 

or services industry, including regional trends, concerns, and other 

relevant information. 

(b) MEMBERSHIP.—In appointing the members of the Consumer 

Advisory Board, the øDirector¿ Financial Product Safety Commission shall seek to assemble experts in consumer protection, financial services, community development, fair lending and civil rights, 

and consumer financial products or services and representatives of 

depository institutions that primarily serve underserved communities, and representatives of communities that have been significantly impacted by higher-priced mortgage loans, and seek representation of the interests of covered persons and consumers, 

without regard to party affiliation. øNot fewer than 6 members 

shall be appointed upon the recommendation of the regional Federal Reserve Bank Presidents, on a rotating basis.¿ 

(c) MEETINGS.—The Consumer Advisory Board shall meet from 

time to time at the call of the øDirector¿ Financial Product Safety 

Commission, but, at a minimum, shall meet at least twice in each 

year. 

(d) COMPENSATION AND TRAVEL EXPENSES.—Members of the Consumer Advisory Board who are not full-time employees of the 

United States shall— 

(1) be entitled to receive compensation at a rate fixed by the 

øDirector¿ Financial Product Safety Commission while attending meetings of the Consumer Advisory Board, including travel 

time; and 

(2) be allowed travel expenses, including transportation and 

subsistence, while away from their homes or regular places of 

business. 

* * * * * * * 

SEC. 1016. APPEARANCES BEFORE AND REPORTS TO CONGRESS. 

(a) APPEARANCES BEFORE CONGRESS.—The øDirector of the Bureau¿ Chair of the Financial Product Safety Commission shall appear before the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services and 

the Committee on Energy and Commerce of the House of Representatives at semi-annual hearings regarding the reports required under subsection (b). 

(b) REPORTS REQUIRED.—The Bureau shall, concurrent with each 

semi-annual hearing referred to in subsection (a), prepare and submit to the President and to the Committee on Banking, Housing, 

and Urban Affairs of the Senate and the Committee on Financial 

Services and the Committee on Energy and Commerce of the House 

of Representatives, a report, beginning with the session following 

the designated transfer date. The Bureau may also submit such report to the Committee on Commerce, Science, and Transportation 

of the Senate. 

(c) CONTENTS.—The reports required by subsection (b) shall include— 


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(1) a discussion of the significant problems faced by consumers in shopping for or obtaining consumer financial products or services; 

(2) a justification of the budget request of the previous year; 

(3) a list of the significant rules and orders adopted by the 

Bureau, as well as other significant initiatives conducted by 

the Bureau, during the preceding year and the plan of the Bureau for rules, orders, or other initiatives to be undertaken 

during the upcoming period; 

(4) an analysis of complaints about consumer financial products or services that the Bureau has received and collected in 

its central database on complaints during the preceding year; 

(5) a list, with a brief statement of the issues, of the public 

supervisory and enforcement actions to which the Bureau was 

a party during the preceding year; 

(6) the actions taken regarding rules, orders, and supervisory 

actions with respect to covered persons which are not credit 

unions or depository institutions; 

(7) an assessment of significant actions by State attorneys 

general or State regulators relating to Federal consumer financial law; 

(8) an analysis of the efforts of the Bureau to fulfill the fair 

lending mission of the Bureau; and 

(9) an analysis of the efforts of the Bureau to increase workforce and contracting diversity consistent with the procedures 

established by the Office of Minority and Women Inclusion. 

* * * * * * * 

SEC. 1017. FUNDING; PENALTIES AND FINES. 

(a) TRANSFER OF FUNDS FROM BOARD OF GOVERNORS.— (1) IN GENERAL.—Each year (or quarter of such year), beginning on the designated transfer date, and each quarter thereafter, the Board of Governors shall transfer to the Bureau from 

the combined earnings of the Federal Reserve System, the 

amount determined by the øDirector¿ Financial Product Safety 

Commission to be reasonably necessary to carry out the authorities of the Bureau under Federal consumer financial law, 

taking into account such other sums made available to the Bureau from the preceding year (or quarter of such year). 

(2) FUNDING CAP.— 

(A) IN GENERAL.—Notwithstanding paragraph (1), and in 

accordance with this paragraph, the amount that shall be 

transferred to the Bureau in each fiscal year shall not exceed a fixed percentage of the total operating expenses of 

the Federal Reserve System, as reported in the Annual Report, 2009, of the Board of Governors, equal to— 

(i) 10 percent of such expenses in fiscal year 2011; 

(ii) 11 percent of such expenses in fiscal year 2012; 

and 

(iii) 12 percent of such expenses in fiscal year 2013, 

and in each year thereafter. 

(B) ADJUSTMENT OF AMOUNT.—The dollar amount referred to in subparagraph (A)(iii) shall be adjusted annually, using the percent increase, if any, in the employment 

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ernment workers published by the Federal Government, or 

the successor index thereto, for the 12-month period ending on September 30 of the year preceding the transfer. 

(C) REVIEWABILITY.—Notwithstanding any other provision in this title, the funds derived from the Federal Reserve System pursuant to this subsection shall not be subject to review by the Committees on Appropriations of the 

House of Representatives and the Senate. 

(3) TRANSITION PERIOD.—Beginning on the date of enactment 

of this Act and until the designated transfer date, the Board 

of Governors shall transfer to the Bureau the amount estimated by the Secretary needed to carry out the authorities 

granted to the Bureau under Federal consumer financial law, 

from the date of enactment of this Act until the designated 

transfer date. 

(4) BUDGET AND FINANCIAL MANAGEMENT.— 

(A) FINANCIAL OPERATING PLANS AND FORECASTS.—The 

øDirector¿ Financial Product Safety Commission shall provide to the øDirector¿ Financial Product Safety Commission of the Office of Management and Budget copies of the 

financial operating plans and forecasts of the øDirector¿ 

Financial Product Safety Commission, as prepared by the 

øDirector¿ Financial Product Safety Commission in the ordinary course of the operations of the Bureau, and copies 

of the quarterly reports of the financial condition and results of operations of the Bureau, as prepared by the øDirector¿ Financial Product Safety Commission in the ordinary course of the operations of the Bureau. 

(B) FINANCIAL STATEMENTS.—The Bureau shall prepare 

annually a statement of— 

(i) assets and liabilities and surplus or deficit; 

(ii) income and expenses; and 

(iii) sources and application of funds. 

(C) FINANCIAL MANAGEMENT SYSTEMS.—The Bureau 

shall implement and maintain financial management systems that comply substantially with Federal financial 

management systems requirements and applicable Federal 

accounting standards. 

(D) ASSERTION OF INTERNAL CONTROLS.—The øDirector¿ 

Financial Product Safety Commission shall provide to the 

Comptroller General of the United States an assertion as 

to the effectiveness of the internal controls that apply to 

financial reporting by the Bureau, using the standards established in section 3512(c) of title 31, United States Code. 

(E) RULE OF CONSTRUCTION.—This subsection may not 

be construed as implying any obligation on the part of the 

øDirector¿ Financial Product Safety Commission to consult 

with or obtain the consent or approval of the øDirector¿ 

Financial Product Safety Commission of the Office of Management and Budget with respect to any report, plan, forecast, or other information referred to in subparagraph (A) 

or any jurisdiction or oversight over the affairs or operations of the Bureau. 

(F) FINANCIAL STATEMENTS.—The financial statements of 

the Bureau shall not be consolidated with the financial 


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statements of either the Board of Governors or the Federal 

Reserve System. 

(5) AUDIT OF THE BUREAU.— (A) IN GENERAL.—The Comptroller General shall annually audit the financial transactions of the Bureau in accordance with the United States generally accepted government auditing standards, as may be prescribed by the 

Comptroller General of the United States. The audit shall 

be conducted at the place or places where accounts of the 

Bureau are normally kept. The representatives of the Government Accountability Office shall have access to the personnel and to all books, accounts, documents, papers, 

records (including electronic records), reports, files, and all 

other papers, automated data, things, or property belonging to or under the control of or used or employed by the 

Bureau pertaining to its financial transactions and necessary to facilitate the audit, and such representatives 

shall be afforded full facilities for verifying transactions 

with the balances or securities held by depositories, fiscal 

agents, and custodians. All such books, accounts, documents, records, reports, files, papers, and property of the 

Bureau shall remain in possession and custody of the Bureau. The Comptroller General may obtain and duplicate 

any such books, accounts, documents, records, working papers, automated data and files, or other information relevant to such audit without cost to the Comptroller General, and the right of access of the Comptroller General to 

such information shall be enforceable pursuant to section 

716(c) of title 31, United States Code. 

(B) REPORT.—The Comptroller General shall submit to 

the Congress a report of each annual audit conducted 

under this subsection. The report to the Congress shall set 

forth the scope of the audit and shall include the statement of assets and liabilities and surplus or deficit, the 

statement of income and expenses, the statement of 

sources and application of funds, and such comments and 

information as may be deemed necessary to inform Congress of the financial operations and condition of the Bureau, together with such recommendations with respect 

thereto as the Comptroller General may deem advisable. A 

copy of each report shall be furnished to the President and 

to the Bureau at the time submitted to the Congress. 

(C) ASSISTANCE AND COSTS.—For the purpose of conducting an audit under this subsection, the Comptroller 

General may, in the discretion of the Comptroller General, 

employ by contract, without regard to section 3709 of the 

Revised Statutes of the United States (41 U.S.C. 5), professional services of firms and organizations of certified public accountants for temporary periods or for special purposes. Upon the request of the Comptroller General, the 

øDirector of the Bureau¿ Financial Product Safety Commission shall transfer to the Government Accountability 

Office from funds available, the amount requested by the 

Comptroller General to cover the full costs of any audit 

and report conducted by the Comptroller General. The 


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Comptroller General shall credit funds transferred to the 

account established for salaries and expenses of the Government Accountability Office, and such amount shall be 

available upon receipt and without fiscal year limitation to 

cover the full costs of the audit and report. 

(b) CONSUMER FINANCIAL PROTECTION FUND.— (1) SEPARATE FUND IN FEDERAL RESERVE ESTABLISHED.— There is established in the Federal Reserve a separate fund, to 

be known as the ‘‘Bureau of Consumer Financial Protection 

Fund’’ (referred to in this section as the ‘‘Bureau Fund’’). The 

Bureau Fund shall be maintained and established at a Federal 

reserve bank, in accordance with such requirements as the 

Board of Governors may impose. 

(2) FUND RECEIPTS.—All amounts transferred to the Bureau 

under subsection (a) shall be deposited into the Bureau Fund. 

(3) INVESTMENT AUTHORITY.— 

(A) AMOUNTS IN BUREAU FUND MAY BE INVESTED.—The 

Bureau may request the Board of Governors to direct the 

investment of the portion of the Bureau Fund that is not, 

in the judgment of the Bureau, required to meet the current needs of the Bureau. 

(B) ELIGIBLE INVESTMENTS.—Investments authorized by 

this paragraph shall be made in obligations of the United 

States or obligations that are guaranteed as to principal 

and interest by the United States, with maturities suitable 

to the needs of the Bureau Fund, as determined by the Bureau. 

(C) INTEREST AND PROCEEDS CREDITED.—The interest on, 

and the proceeds from the sale or redemption of, any obligations held in the Bureau Fund shall be credited to the 

Bureau Fund. 

(c) USE OF FUNDS.— 

(1) IN GENERAL.—Funds obtained by, transferred to, or credited to the Bureau Fund shall be immediately available to the 

Bureau and under the control of the øDirector¿ Financial 

Product Safety Commission, and shall remain available until 

expended, to pay the expenses of the Bureau in carrying out 

its duties and responsibilities. The compensation of the øDirector¿ Financial Product Safety Commission and other employees 

of the Bureau and all other expenses thereof may be paid from, 

obtained by, transferred to, or credited to the Bureau Fund 

under this section. 

(2) FUNDS THAT ARE NOT GOVERNMENT FUNDS.—Funds obtained by or transferred to the Bureau Fund shall not be construed to be Government funds or appropriated monies. 

(3) AMOUNTS NOT SUBJECT TO APPORTIONMENT.—Notwithstanding any other provision of law, amounts in the Bureau 

Fund and in the Civil Penalty Fund established under subsection (d) shall not be subject to apportionment for purposes 

of chapter 15 of title 31, United States Code, or under any 

other authority. 

(d) PENALTIES AND FINES.— (1) ESTABLISHMENT OF VICTIMS RELIEF FUND.—There is established in the Federal Reserve a separate fund, to be known 

as the ‘‘Consumer Financial Civil Penalty Fund’’ (referred to in 


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this section as the ‘‘Civil Penalty Fund’’). The Civil Penalty 

Fund shall be maintained and established at a Federal reserve 

bank, in accordance with such requirements as the Board of 

Governors may impose. If the Bureau obtains a civil penalty 

against any person in any judicial or administrative action 

under Federal consumer financial laws, the Bureau shall deposit into the Civil Penalty Fund, the amount of the penalty 

collected. 

(2) PAYMENT TO VICTIMS.—Amounts in the Civil Penalty 

Fund shall be available to the Bureau, without fiscal year limitation, for payments to the victims of activities for which civil 

penalties have been imposed under the Federal consumer financial laws. To the extent that such victims cannot be located 

or such payments are otherwise not practicable, the Bureau 

may use such funds for the purpose of consumer education and 

financial literacy programs. 

(e) AUTHORIZATION OF APPROPRIATIONS; ANNUAL REPORT.— 

(1) DETERMINATION REGARDING NEED FOR APPROPRIATED

FUNDS.— 

(A) IN GENERAL.—The øDirector¿ Financial Product 

Safety Commission is authorized to determine that sums 

available to the Bureau under this section will not be sufficient to carry out the authorities of the Bureau under Federal consumer financial law for the upcoming year. 

(B) REPORT REQUIRED.—When making a determination 

under subparagraph (A), the øDirector¿ Financial Product 

Safety Commission shall prepare a report regarding the 

funding of the Bureau, including the assets and liabilities 

of the Bureau, and the extent to which the funding needs 

of the Bureau are anticipated to exceed the level of the 

amount set forth in subsection (a)(2). The øDirector¿ Financial Product Safety Commission shall submit the report 

to the President and to the Committee on Appropriations 

of the Senate and the Committee on Appropriations of the 

House of Representatives. 

(2) AUTHORIZATION OF APPROPRIATIONS.—If the øDirector¿ 

Financial Product Safety Commission makes the determination 

and submits the report pursuant to paragraph (1), there are 

hereby authorized to be appropriated to the Bureau, for the 

purposes of carrying out the authorities granted in Federal 

consumer financial law, $200,000,000 for each of fiscal years 

2010, 2011, 2012, 2013, and 2014. 

(3) APPORTIONMENT.—Notwithstanding any other provision 

of law, the amounts in paragraph (2) shall be subject to apportionment under section 1517 of title 31, United States Code, 

and restrictions that generally apply to the use of appropriated 

funds in title 31, United States Code, and other laws. 

(4) ANNUAL REPORT.—The øDirector¿ Financial Product 

Safety Commission shall prepare and submit a report, on an 

annual basis, to the Committee on Appropriations of the Senate and the Committee on Appropriations of the House of Representatives regarding the financial operating plans and forecasts of the øDirector¿ Financial Product Safety Commission, 

the financial condition and results of operations of the Bureau, 


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and the sources and application of funds of the Bureau, including any funds appropriated in accordance with this subsection. 

* * * * * * * 

Subtitle C—Specific Bureau Authorities 

* * * * * * * 

SEC. 1035. PRIVATE EDUCATION LOAN OMBUDSMAN. 

(a) ESTABLISHMENT.—The Secretary, in consultation with the 

øDirector¿ Financial Product Safety Commission, shall designate a 

Private Education Loan Ombudsman (in this section referred to as 

the ‘‘Ombudsman’’) within the Bureau, to provide timely assistance 

to borrowers of private education loans. 

(b) PUBLIC INFORMATION.—The Secretary and the øDirector¿ Financial Product Safety Commission shall disseminate information 

about the availability and functions of the Ombudsman to borrowers and potential borrowers, as well as institutions of higher 

education, lenders, guaranty agencies, loan servicers, and other 

participants in private education student loan programs. 

(c) FUNCTIONS OF OMBUDSMAN.—The Ombudsman designated 

under this subsection shall— 

(1) in accordance with regulations of the øDirector¿ Financial Product Safety Commission, receive, review, and attempt 

to resolve informally complaints from borrowers of loans described in subsection (a), including, as appropriate, attempts to 

resolve such complaints in collaboration with the Department 

of Education and with institutions of higher education, lenders, 

guaranty agencies, loan servicers, and other participants in 

private education loan programs; 

(2) not later than 90 days after the designated transfer date, 

establish a memorandum of understanding with the student 

loan ombudsman established under section 141(f) of the Higher 

Education Act of 1965 (20 U.S.C. 1018(f)), to ensure coordination in providing assistance to and serving borrowers seeking 

to resolve complaints related to their private education or Federal student loans; 

(3) compile and analyze data on borrower complaints regarding private education loans; and 

(4) make appropriate recommendations to the øDirector¿ Financial Product Safety Commission, the Secretary, the Secretary of Education, the Committee on Banking, Housing, and 

Urban Affairs and the Committee on Health, Education, Labor, 

and Pensions of the Senate and the Committee on Financial 

Services and the Committee on Education and Labor of the 

House of Representatives. 

(d) ANNUAL REPORTS.— (1) IN GENERAL.—The Ombudsman shall prepare an annual 

report that describes the activities, and evaluates the effectiveness of the Ombudsman during the preceding year. 

(2) SUBMISSION.—The report required by paragraph (1) shall 

be submitted on the same date annually to the Secretary, the 

Secretary of Education, the Committee on Banking, Housing, 

and Urban Affairs and the Committee on Health, Education, 

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nancial Services and the Committee on Education and Labor 

of the House of Representatives. 

(e) DEFINITIONS.—For purposes of this section, the terms ‘‘private 

education loan’’ and ‘‘institution of higher education’’ have the same 

meanings as in section 140 of the Truth in Lending Act (15 U.S.C. 

1650). 

* * * * * * * 

Subtitle F—Transfer of Functions and 

Personnel; Transitional Provisions 

* * * * * * * 

SEC. 1066. INTERIM AUTHORITY OF THE SECRETARY. 

(a) IN GENERAL.—The Secretary is authorized to perform the 

functions of the Bureau under this subtitle until the øDirector of 

the Bureau is¿ first member of the Commission is confirmed by the 

Senate in accordance with section 1011. 

(b) INTERIM ADMINISTRATIVE SERVICES BY THE DEPARTMENT OF

THE TREASURY.—The Department of the Treasury may provide administrative services necessary to support the Bureau before the 

designated transfer date. 

* * * * * * * 

Subtitle G—Regulatory Improvements 

* * * * * * * 

SEC. 1079. REVIEW, REPORT, AND PROGRAM WITH RESPECT TO EXCHANGE FACILITATORS. 

(a) REVIEW.—The øDirector¿ Financial Product Safety Commission shall review all Federal laws and regulations relating to the 

protection of consumers who use exchange facilitators for transactions primarily for personal, family, or household purposes. 

(b) REPORT.—Not later than 1 year after the designated transfer 

date, the øDirector¿ Financial Product Safety Commission shall 

submit to Congress a report describing— 

(1) recommendations for legislation to ensure the appropriate 

protection of consumers who use exchange facilitators for 

transactions primarily for personal, family, or household purposes; 

(2) recommendations for updating the regulations of Federal 

departments and agencies to ensure the appropriate protection 

of such consumers; and 

(3) recommendations for regulations to ensure the appropriate protection of such consumers. 

(c) PROGRAM.—Not later than 2 years after the date of the submission of the report under subsection (b), the Bureau shall, consistent with subtitle B, propose regulations or otherwise establish 

a program to protect consumers who use 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 

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change 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 

to perform the services described in paragraph (1); or 

(3) advertises any of the services described in paragraph (1) 

or solicits 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. 

* * * * * * * 

TITLE XIV—MORTGAGE REFORM AND 

ANTI-PREDATORY LENDING ACT 

* * * * * * * 

Subtitle D—Office of Housing Counseling 

* * * * * * * 

SEC. 1447. DEFAULT AND FORECLOSURE DATABASE. 

(a) ESTABLISHMENT.—The Secretary of Housing and Urban Development and the øDirector of the Bureau¿ Financial Product 

Safety Commission, in consultation with the Federal agencies responsible for regulation of banking and financial institutions involved in residential mortgage lending and servicing, shall establish and maintain a database of information on foreclosures and defaults on mortgage loans for one- to four-unit residential properties 

and shall make such information publicly available, subject to subsection (e). 

(b) CENSUS TRACT DATA.—Information in the database may be 

collected, aggregated, and made available on a census tract basis. 

(c) REQUIREMENTS.—Information collected and made available 

through the database shall include— 

(1) the number and percentage of such mortgage loans that 

are delinquent by more than 30 days; 

(2) the number and percentage of such mortgage loans that 

are delinquent by more than 90 days; 

(3) the number and percentage of such properties that are 

real estate-owned; 

(4) number and percentage of such mortgage loans that are 

in the foreclosure process; 

(5) the number and percentage of such mortgage loans that 

have an outstanding principal obligation amount that is greater than the value of the property for which the loan was made; 

and 


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(6) such other information as the Secretary of Housing and 

Urban Development and the øDirector of the Bureau¿ Financial Product Safety Commission consider appropriate. 

(d) RULE OF CONSTRUCTION.—Nothing in this section shall be 

construed to encourage discriminatory or unsound allocation of 

credit or lending policies or practices. 

(e) PRIVACY AND CONFIDENTIALITY.—In establishing and maintaining the database described in subsection (a), the Secretary of 

Housing and Urban Development and the øDirector of the Bureau¿ 

Financial Product Safety Commission shall— 

(1) be subject to the standards applicable to Federal agencies 

for the protection of the confidentiality of personally identifiable information and for data security and integrity; 

(2) implement the necessary measures to conform to the 

standards for data integrity and security described in paragraph (1); and 

(3) collect and make available information under this section, 

in accordance with paragraphs (5) and (6) of section 1022(c) 

and the rules prescribed under such paragraphs, in order to 

protect privacy and confidentiality. 

* * * * * * * 

FEDERAL RESERVE ACT 

* * * * * * * 

DIVISION OF EARNINGS. 

SEC. 7. (a) DIVIDENDS AND SURPLUS FUNDS OF RESERVE BANKS.— 

(1) STOCKHOLDER DIVIDENDS.— (A) IN GENERAL.—After all necessary expenses of a Federal reserve bank have been paid or provided for, the 

stockholders of the bank shall be entitled to receive an annual dividend of 6 percent on paid-in capital stock. 

(B) DIVIDEND CUMULATIVE.—The entitlement to dividends under subparagraph (A) shall be cumulative. 

(2) DEPOSIT OF NET EARNINGS IN SURPLUS FUND.—That portion of net earnings of each Federal reserve bank which remains after dividend claims under paragraph (1)(A) have been 

fully met shall be deposited in the surplus fund of the bank. 

(b) TRANSFER FOR FISCAL YEAR 2000.— 

(1) IN GENERAL.—The Federal reserve banks shall transfer 

from the surplus funds of such banks to the Board of Governors of the Federal Reserve System for transfer to the Secretary of the Treasury for deposit in the general fund of the 

Treasury, a total amount of $3,752,000,000 in fiscal year 2000. 

(2) ALLOCATED BY FED.—Of the total amount required to be 

paid by the Federal reserve banks under paragraph (1) for fiscal year 2000, the Board shall determine the amount each such 

bank shall pay in such fiscal year. 

(3) REPLENISHMENT OF SURPLUS FUND PROHIBITED.—During 

fiscal year 2000, no Federal reserve bank may replenish such 

bank’s surplus fund by the amount of any transfer by such 

bank under paragraph (1). 


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(b) USE OF EARNINGS TRANSFERRED TO THE TREASURY.—The net 

earnings derived by the United States from Federal reserve banks 

shall, in the discretion of the Secretary, be used to supplement the 

gold reserve held against outstanding United States notes, or shall 

be applied to the reduction of the outstanding bonded indebtedness 

of the United States under regulations to be prescribed by the Secretary of the Treasury. Should a Federal reserve bank be dissolved 

or go into liquidation, any surplus remaining, after the payment of 

all debts, dividend requirements as hereinbefore provided, and the 

par value of the stock, shall be paid to and become the property 

of the United States and shall be similarly applied. 

(c) EXEMPTION FROM TAXATION.—Federal reserve banks, including the capital stock and surplus therein, and the income derived 

therefrom shall be exempt from Federal, State, and local taxation, 

except taxes upon real estate. 

(d) TRANSFER FOR FISCAL YEAR 2016.— 

(1) IN GENERAL.—The Federal reserve banks shall transfer 

from the surplus funds of such banks to the Board of Governors 

of the Federal Reserve System for transfer to the Secretary of 

the Treasury for deposit in the general fund of the Treasury, a 

total amount of $75,000,000 in fiscal year 2016. 

(2) ALLOCATED BY FED.—Of the total amount required to be 

paid by the Federal reserve banks under paragraph (1) for fiscal year 2016, the Board of Governors of the Federal Reserve 

System shall determine the amount each such bank shall pay 

in such fiscal year. 

(3) REPLENISHMENT OF SURPLUS FUND PROHIBITED.—During 

fiscal years 2016 through 2026, no Federal reserve bank may 

replenish such bank’s surplus fund by the amount of any transfer by such bank under paragraph (1). 

* * * * * * * 

SECTION 920 OF THE ELECTRONIC FUND TRANSFER 

ACT 

* * * * * * * 

SEC. 920. REASONABLE FEES AND RULES FOR PAYMENT CARD TRANSACTIONS. 

(a) REASONABLE INTERCHANGE TRANSACTION FEES FOR ELECTRONIC DEBIT TRANSACTIONS.— 

(1) REGULATORY AUTHORITY OVER INTERCHANGE TRANSACTION

FEES.—The Board may prescribe regulations, pursuant to section 553 of title 5, United States Code, regarding any interchange transaction fee that an issuer may receive or charge 

with respect to an electronic debit transaction, to implement 

this subsection (including related definitions), and to prevent 

circumvention or evasion of this subsection. 

(2) REASONABLE INTERCHANGE TRANSACTION FEES.—The 

amount of any interchange transaction fee that an issuer may 

receive or charge with respect to an electronic debit transaction 

shall be reasonable and proportional to the cost incurred by the 

issuer with respect to the transaction. 

(3) RULEMAKING REQUIRED.— 


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(A) IN GENERAL.—The Board shall prescribe regulations 

in final form not later than 9 months after the date of enactment of the Consumer Financial Protection Act of 2010, 

to establish standards for assessing whether the amount of 

any interchange transaction fee described in paragraph (2) 

is reasonable and proportional to the cost incurred by the 

issuer with respect to the transaction. 

(B) INFORMATION COLLECTION.—The Board may require 

any issuer (or agent of an issuer) or payment card network 

to provide the Board with such information as may be necessary to carry out the provisions of this subsection and 

the Board, in issuing rules under subparagraph (A) and on 

at least a bi-annual basis thereafter, shall disclose such 

aggregate or summary information concerning the costs incurred, and interchange transaction fees charged or received, by issuers or payment card networks in connection 

with the authorization, clearance or settlement of electronic debit transactions as the Board considers appropriate and in the public interest. 

(4) CONSIDERATIONS; CONSULTATION.—In prescribing regulations under paragraph (3)(A), the Board shall— 

(A) consider the functional similarity between— 

(i) electronic debit transactions; and 

(ii) checking transactions that are required within 

the Federal Reserve bank system to clear at par; 

(B) distinguish between— 

(i) the incremental cost incurred by an issuer for the 

role of the issuer in the authorization, clearance, or 

settlement of a particular electronic debit transaction, 

which cost shall be considered under paragraph (2); 

and 

(ii) other costs incurred by an issuer which are not 

specific to a particular electronic debit transaction, 

which costs shall not be considered under paragraph 

(2); and 

(C) consult, as appropriate, with the Comptroller of the 

Currency, the Board of Directors of the Federal Deposit Insurance Corporation, the Director of the Office of Thrift 

Supervision, the National Credit Union Administration 

Board, the Administrator of the Small Business Administration, and theøDirector of the Bureau of Consumer Financial Protection¿ Financial Product Safety Commission. 

(5) ADJUSTMENTS TO INTERCHANGE TRANSACTION FEES FOR

FRAUD PREVENTION COSTS.— 

(A) ADJUSTMENTS.—The Board may allow for an adjustment to the fee amount received or charged by an issuer 

under paragraph (2), if— 

(i) such adjustment is reasonably necessary to make 

allowance for costs incurred by the issuer in preventing fraud in relation to electronic debit transactions involving that issuer; and 

(ii) the issuer complies with the fraud-related standards established by the Board under subparagraph 

(B), which standards shall— 


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(I) be designed to ensure that any fraud-related 

adjustment of the issuer is limited to the amount 

described in clause (i) and takes into account any 

fraud-related reimbursements (including amounts 

from charge-backs) received from consumers, merchants, or payment card networks in relation to 

electronic debit transactions involving the issuer; 

and 

(II) require issuers to take effective steps to reduce the occurrence of, and costs from, fraud in 

relation to electronic debit transactions, including 

through the development and implementation of 

cost-effective fraud prevention technology. 

(B) RULEMAKING REQUIRED.— 

(i) IN GENERAL.—The Board shall prescribe regulations in final form not later than 9 months after the 

date of enactment of the Consumer Financial Protection Act of 2010, to establish standards for making adjustments under this paragraph. 

(ii) FACTORS FOR CONSIDERATION.—In issuing the 

standards and prescribing regulations under this paragraph, the Board shall consider— 

(I) the nature, type, and occurrence of fraud in 

electronic debit transactions; 

(II) the extent to which the occurrence of fraud 

depends on whether authorization in an electronic 

debit transaction is based on signature, PIN, or 

other means; 

(III) the available and economical means by 

which fraud on electronic debit transactions may 

be reduced; 

(IV) the fraud prevention and data security 

costs expended by each party involved in electronic debit transactions (including consumers, 

persons who accept debit cards as a form of payment, financial institutions, retailers and payment 

card networks); 

(V) the costs of fraudulent transactions absorbed 

by each party involved in such transactions (including consumers, persons who accept debit cards 

as a form of payment, financial institutions, retailers and payment card networks); 

(VI) the extent to which interchange transaction 

fees have in the past reduced or increased incentives for parties involved in electronic debit transactions to reduce fraud on such transactions; and 

(VII) such other factors as the Board considers 

appropriate. 

(6) EXEMPTION FOR SMALL ISSUERS.— 

(A) IN GENERAL.—This subsection shall not apply to any 

issuer that, together with its affiliates, has assets of less 

than $10,000,000,000, and the Board shall exempt such 

issuers from regulations prescribed under paragraph 

(3)(A). 


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(B) DEFINITION.—For purposes of this paragraph, the 

term ‘‘issuer’’ shall be limited to the person holding the 

asset account that is debited through an electronic debit 

transaction. 

(7) EXEMPTION FOR GOVERNMENT-ADMINISTERED PAYMENT

PROGRAMS AND RELOADABLE PREPAID CARDS.— 

(A) IN GENERAL.—This subsection shall not apply to an 

interchange transaction fee charged or received with respect to an electronic debit transaction in which a person 

uses— 

(i) a debit card or general-use prepaid card that has 

been provided to a person pursuant to a Federal, State 

or local government-administered payment program, 

in which the person may only use the debit card or 

general-use prepaid card to transfer or debit funds, 

monetary value, or other assets that have been provided pursuant to such program; or 

(ii) a plastic card, payment code, or device that is— 

(I) linked to funds, monetary value, or assets 

which are purchased or loaded on a prepaid basis; 

(II) not issued or approved for use to access or 

debit any account held by or for the benefit of the 

card holder (other than a subaccount or other 

method of recording or tracking funds purchased 

or loaded on the card on a prepaid basis); 

(III) redeemable at multiple, unaffiliated merchants or service providers, or automated teller 

machines; 

(IV) used to transfer or debit funds, monetary 

value, or other assets; and 

(V) reloadable and not marketed or labeled as a 

gift card or gift certificate. 

(B) EXCEPTION.—Notwithstanding subparagraph (A), 

after the end of the 1-year period beginning on the effective date provided in paragraph (9), this subsection shall 

apply to an interchange transaction fee charged or received with respect to an electronic debit transaction described in subparagraph (A)(i) in which a person uses a 

general-use prepaid card, or an electronic debit transaction 

described in subparagraph (A)(ii), if any of the following 

fees may be charged to a person with respect to the card: 

(i) A fee for an overdraft, including a shortage of 

funds or a transaction processed for an amount exceeding the account balance. 

(ii) A fee imposed by the issuer for the first withdrawal per month from an automated teller machine 

that is part of the issuer’s designated automated teller 

machine network. 

(C) DEFINITION.—For purposes of subparagraph (B), the 

term ‘‘designated automated teller machine network’’ 

means either— 

(i) all automated teller machines identified in the 

name of the issuer; or 


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(ii) any network of automated teller machines identified by the issuer that provides reasonable and convenient access to the issuer’s customers. 

(D) REPORTING.—Beginning 12 months after the date of 

enactment of the Consumer Financial Protection Act of 

2010, the Board shall annually provide a report to the 

Congress regarding — 

(i) the prevalence of the use of general-use prepaid 

cards in Federal, State or local government-administered payment programs; and 

(ii) the interchange transaction fees and cardholder 

fees charged with respect to the use of such generaluse prepaid cards. 

(8) REGULATORY AUTHORITY OVER NETWORK FEES.— 

(A) IN GENERAL.—The Board may prescribe regulations, 

pursuant to section 553 of title 5, United States Code, regarding any network fee. 

(B) LIMITATION.—The authority under subparagraph (A) 

to prescribe regulations shall be limited to regulations to 

ensure that— 

(i) a network fee is not used to directly or indirectly 

compensate an issuer with respect to an electronic 

debit transaction; and 

(ii) a network fee is not used to circumvent or evade 

the restrictions of this subsection and regulations prescribed under such subsection. 

(C) RULEMAKING REQUIRED.—The Board shall prescribe 

regulations in final form before the end of the 9-month period beginning on the date of the enactment of the Consumer Financial Protection Act of 2010, to carry out the 

authorities provided under subparagraph (A). 

(9) EFFECTIVE DATE.—This subsection shall take effect at the 

end of the 12-month period beginning on the date of the enactment of the Consumer Financial Protection Act of 2010. 

(b) LIMITATION ON PAYMENT CARD NETWORK RESTRICTIONS.— (1) PROHIBITIONS AGAINST EXCLUSIVITY ARRANGEMENTS.— (A) NO EXCLUSIVE NETWORK.—The Board shall, before 

the end of the 1-year period beginning on the date of the 

enactment of the Consumer Financial Protection Act of 

2010, prescribe regulations providing that an issuer or 

payment card network shall not directly or through any 

agent, processor, or licensed member of a payment card 

network, by contract, requirement, condition, penalty, or 

otherwise, restrict the number of payment card networks 

on which an electronic debit transaction may be processed 

to— 

(i) 1 such network; or 

(ii) 2 or more such networks which are owned, controlled, or otherwise operated by — 

(I) affiliated persons; or 

(II) networks affiliated with such issuer. 

(B) NO ROUTING RESTRICTIONS.—The Board shall, before 

the end of the 1-year period beginning on the date of the 

enactment of the Consumer Financial Protection Act of 

2010, prescribe regulations providing that an issuer or 


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payment card network shall not, directly or through any 

agent, processor, or licensed member of the network, by 

contract, requirement, condition, penalty, or otherwise, inhibit the ability of any person who accepts debit cards for 

payments to direct the routing of electronic debit transactions for processing over any payment card network that 

may process such transactions. 

(2) LIMITATION ON RESTRICTIONS ON OFFERING DISCOUNTS

FOR USE OF A FORM OF PAYMENT.— 

(A) IN GENERAL.—A payment card network shall not, directly or through any agent, processor, or licensed member 

of the network, by contract, requirement, condition, penalty, or otherwise, inhibit the ability of any person to provide a discount or in-kind incentive for payment by the use 

of cash, checks, debit cards, or credit cards to the extent 

that— 

(i) in the case of a discount or in-kind incentive for 

payment by the use of debit cards, the discount or inkind incentive does not differentiate on the basis of 

the issuer or the payment card network; 

(ii) in the case of a discount or in-kind incentive for 

payment by the use of credit cards, the discount or inkind incentive does not differentiate on the basis of 

the issuer or the payment card network; and 

(iii) to the extent required by Federal law and applicable State law, such discount or in-kind incentive is 

offered to all prospective buyers and disclosed clearly 

and conspicuously. 

(B) LAWFUL DISCOUNTS.—For purposes of this paragraph, the network may not penalize any person for the 

providing of a discount that is in compliance with Federal 

law and applicable State law. 

(3) LIMITATION ON RESTRICTIONS ON SETTING TRANSACTION

MINIMUMS OR MAXIMUMS.— 

(A) IN GENERAL.—A payment card network shall not, directly or through any agent, processor, or licensed member 

of the network, by contract, requirement, condition, penalty, or otherwise, inhibit the ability— 

(i) of any person to set a minimum dollar value for 

the acceptance by that person of credit cards, to the 

extent that — 

(I) such minimum dollar value does not differentiate between issuers or between payment card 

networks; and 

(II) such minimum dollar value does not exceed 

$10.00; or 

(ii) of any Federal agency or institution of higher 

education to set a maximum dollar value for the acceptance by that Federal agency or institution of higher education of credit cards, to the extent that such 

maximum dollar value does not differentiate between 

issuers or between payment card networks. 

(B) INCREASE IN MINIMUM DOLLAR AMOUNT.—The Board 

may, by regulation prescribed pursuant to section 553 of 


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title 5, United States Code, increase the amount of the dollar value listed in subparagraph (A)(i)(II). 

(4) RULE OF CONSTRUCTION:.—No provision of this subsection 

shall be construed to authorize any person— 

(A) to discriminate between debit cards within a payment card network on the basis of the issuer that issued 

the debit card; or 

(B) to discriminate between credit cards within a payment card network on the basis of the issuer that issued 

the credit card. 

(c) DEFINITIONS.—For purposes of this section, the following definitions shall apply: 

(1) AFFILIATE.—The term ‘‘affiliate’’ means any company that 

controls, is controlled by, or is under common control with another company. 

(2) DEBIT CARD.—The term ‘‘debit card’’— 

(A) means any card, or other payment code or device, 

issued or approved for use through a payment card network to debit an asset account (regardless of the purpose 

for which the account is established), whether authorization is based on signature, PIN, or other means; 

(B) includes a general-use prepaid card, as that term is 

defined in section 915(a)(2)(A); and 

(C) does not include paper checks. 

(3) CREDIT CARD.—The term ‘‘credit card’’ has the same 

meaning as in section 103 of the Truth in Lending Act. 

(4) DISCOUNT.—The term ‘‘discount’’— 

(A) means a reduction made from the price that customers are informed is the regular price; and 

(B) does not include any means of increasing the price 

that customers are informed is the regular price. 

(5) ELECTRONIC DEBIT TRANSACTION.—The term ‘‘electronic 

debit transaction’’ means a transaction in which a person uses 

a debit card. 

(6) FEDERAL AGENCY.—The term ‘‘Federal agency’’ means— 

(A) an agency (as defined in section 101 of title 31, 

United States Code); and 

(B) a Government corporation (as defined in section 103 

of title 5, United States Code). 

(7) INSTITUTION OF HIGHER EDUCATION.—The term ‘‘institution of higher education’’ has the same meaning as in 101 and 

102 of the Higher Education Act of 1965 (20 U.S.C. 1001, 

1002). 

(8) INTERCHANGE TRANSACTION FEE.—The term ‘‘interchange 

transaction fee’’ means any fee established, charged or received 

by a payment card network for the purpose of compensating an 

issuer for its involvement in an electronic debit transaction. 

(9) ISSUER.—The term ‘‘issuer’’ means any person who issues 

a debit card, or credit card, or the agent of such person with 

respect to such card. 

(10) NETWORK FEE.—The term ‘‘network fee’’ means any fee 

charged and received by a payment card network with respect 

to an electronic debit transaction, other than an interchange 

transaction fee. 


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(11) PAYMENT CARD NETWORK.—The term ‘‘payment card network’’ means an entity that directly, or through licensed members, processors, or agents, provides the proprietary services, 

infrastructure, and software that route information and data to 

conduct debit card or credit card transaction authorization, 

clearance, and settlement, and that a person uses in order to 

accept as a form of payment a brand of debit card, credit card 

or other device that may be used to carry out debit or credit 

transactions. 

(d) ENFORCEMENT.— 

(1) IN GENERAL.—Compliance with the requirements imposed 

under this section shall be enforced under section 918. 

(2) EXCEPTION.—Sections 916 and 917 shall not apply with 

respect to this section or the requirements imposed pursuant 

to this section. 

EXPEDITED FUNDS AVAILABILITY ACT 

TITLE VI—EXPEDITED FUNDS 

AVAILABILITY 

SEC. 601. SHORT TITLE. 

This title may be cited as the ‘‘Expedited Funds Availability Act’’. 

* * * * * * * 

SEC. 603. EXPEDITED FUNDS AVAILABILITY SCHEDULES. 

(a) NEXT BUSINESS DAY AVAILABILITY FOR CERTAIN DEPOSITS.— 

(1) CASH DEPOSITS; WIRE TRANSFERS.—Except as provided in 

subsection (e) and in section 604, in any case in which— 

(A) any cash is deposited in an account at a receiving depository institution staffed by individuals employed by 

such institution, or 

(B) funds are received by a depository institution by wire 

transfer for deposit in an account at such institution, 

such cash or funds shall be available for withdrawal not later 

than the business day after the business day on which such 

cash is deposited or such funds are received for deposit. 

(2) GOVERNMENT CHECKS; CERTAIN OTHER CHECKS.—Funds 

deposited in an account at a depository institution by check 

shall be available for withdrawal not later than the business 

day after the business day on which such funds are deposited 

in the case of— 

(A) a check which— 

(i) is drawn on the Treasury of the United States; 

and 

(ii) is endorsed only by the person to whom it was 

issued. 

(B) a check which— 

(i) is drawn by a State; 

(ii) is deposited in a receiving depository institution 

which is located in such State and is staffed by individuals employed by such institution; 


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(iii) is deposited with a special deposit slip which indicates it is a check drawn by a State; and 

(iv) is endorsed only by the person to whom it was 

issued; 

(C) a check which— 

(i) is drawn by a unit of general local government; 

(ii) is deposited in a receiving depository institution 

which is located in the same State as such unit of general local government and is staffed by individuals employed by such institution; 

(iii) is deposited with a special deposit slip which indicates it is a check drawn by a unit of general local 

government; and 

(iv) is endorsed only by the person to whom it was 

issued; 

(D) the first $200 deposited by check or checks on any 

one business day; 

(E) a check deposited in a branch of a depository institution and drawn on the same or another branch of the same 

depository institution if both such branches are located in 

the same State or the same check processing region; 

(F) a cashier’s check, certified check, teller’s check, or depository check which— 

(i) is deposited in a receiving depository institution 

which is staffed by individuals employed by such institution; 

(ii) is deposited with a special deposit slip which indicates it is a cashier’s check, certified check, teller’s 

check, or depository check, as the case may be; and 

(iii) is endorsed only by the person to whom it was 

issued. 

(b) PERMANENT SCHEDULE.— 

(1) AVAILABILITY OF FUNDS DEPOSITED BY LOCAL CHECKS.— Subject to paragraph (3) of this subsection, subsections (a)(2), 

(d), and (e) of this section, and section 604, not more than 1 

business day shall intervene between the business day on 

which funds are deposited in an account at a depository institution by a check drawn on a local originating depository institution and the business day on which the funds involved are 

available for withdrawal. 

(2) AVAILABILITY OF FUNDS DEPOSITED BY NONLOCAL

CHECKS.—Subject to paragraph (3) of this subsection, subsections (a)(2), (d), and (e) of this section, and section 604, not 

more than 4 business days shall intervene between the business day on which funds are deposited in an account at a depository institution by a check drawn on a nonlocal originating 

depository institution and the business day on which such 

funds are available for withdrawal. 

(3) TIME PERIOD ADJUSTMENTS FOR CASH WITHDRAWAL OF

CERTAIN CHECKS.— (A) IN GENERAL.—Except as provided in subparagraph 

(B), funds deposited in an account in a depository institution by check (other than a check described in subsection 

(a)(2)) shall be available for cash withdrawal not later 

than the business day after the business day on which 


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such funds otherwise are available under paragraph (1) or 

(2). 

(B) 5 P.M. CASH AVAILABILITY.—Not more than $400 (or 

the maximum amount allowable in the case of a withdrawal from an automated teller machine but not more 

than $400) of funds deposited by one or more checks to 

which this paragraph applies shall be available for cash 

withdrawal not later than 5 o’clock post meridian of the 

business day on which such funds are available under 

paragraph (1) or (2). If funds deposited by checks described 

in both paragraph (1) and paragraph (2) become available 

for cash withdrawal under this paragraph on the same 

business day, the limitation contained in this subparagraph shall apply to the aggregate amount of such funds. 

(C) $200 AVAILABILITY.—Any amount available for withdrawal under this paragraph shall be in addition to the 

amount available under subsection (a)(2)(D). 

(4) APPLICABILITY.—This subsection shall apply with respect 

to funds deposited by check in an account at a depository institution on or after September 1, 1990, except that the Board 

may, by regulation, make this subsection or any part of this 

subsection applicable earlier than September 1, 1990. 

(c) TEMPORARY SCHEDULE.— 

(1) AVAILABILITY OF LOCAL CHECKS.— 

(A) IN GENERAL.—Subject to subparagraph (B) of this 

paragraph, subsections (a)(2), (d), and (e) of this section, 

and section 604, not more than 2 business days shall intervene between the business day on which funds are deposited in an account at a depository institution by a check 

drawn on a local originating depository institution and the 

business day on which such funds are available for withdrawal. 

(B) TIME PERIOD ADJUSTMENT FOR CASH WITHDRAWAL OF

CERTAIN CHECKS.— 

(i) IN GENERAL.—Except as provided in clause (ii), 

funds deposited in an account in a depository institution by check drawn on a local depository institution 

that is not a participant in the same check clearinghouse association as the receiving depository institution (other than a check described in subsection (a)(2)) 

shall be available for cash withdrawal not later than 

the business day after the business day on which such 

funds otherwise are available under subparagraph (A). 

(ii) 5 P.M. CASH AVAILABILITY.—Not more than $400 

(or the maximum amount allowable in the case of a 

withdrawal from an automated teller machine but not 

more than $400) of funds deposited by one or more 

checks to which this subparagraph applies shall be 

available for cash withdrawal not later than 5 o’clock 

post meridian of the business day on which such funds 

are available under subparagraph (A). 

(iii) $200 AVAILABILITY.—Any amount available for withdrawal under this subparagraph shall be in addition to the 

amount available under subsection (a)(2)(D). 


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(2) AVAILABILITY OF NONLOCAL CHECKS.—Subject to subsections (a)(2), (d), and (e) of this section and section 604, not 

more than 6 business days shall intervene between the business day on which funds are deposited in an account at a depository institution by a check drawn on a nonlocal originating 

depository institution and the business day on which such 

funds are available for withdrawal. 

(3) APPLICABILITY.—This subsection shall apply with respect 

to funds deposited by check in an account at a depository institution after August 31, 1988, and before September 1, 1990, 

except as may be otherwise provided under subsection (b)(4). 

(d) TIME PERIOD ADJUSTMENTS.— 

(1) REDUCTION GENERALLY.—Notwithstanding any other provision of law, the Board, jointly with the øDirector of the Bureau¿ Financial Product Safety Commission of Consumer Financial Protection, shall, by regulation, reduce the time periods established under subsections (b), (c), and (e) to as short 

a time as possible and equal to the period of time achievable 

under the improved check clearing system for a receiving depository institution to reasonably expect to learn of the nonpayment of most items for each category of checks. 

(2) EXTENSION FOR CERTAIN DEPOSITS IN NONCONTIGUOUS

STATES OR TERRITORIES.—Notwithstanding any other provision 

of law, any time period established under subsection (b), (c), or 

(e) shall be extended by 1 business day in the case of any deposit which is both— 

(A) deposited in an account at a depository institution 

which is located in Alaska, Hawaii, Puerto Rico, or the Virgin Islands; and 

(B) deposited by a check drawn on an originating depository institution which is not located in the same State, 

commonwealth, or territory as the receiving depository institution. 

(e) DEPOSITS AT AN ATM.— 

(1) NONPROPRIETARY ATM.— (A) IN GENERAL.—Not more than 4 business days shall 

intervene between the business day a deposit described in 

subparagraph (B) is made at a nonproprietary automated 

teller machine (for deposit in an account at a depository 

institution) and the business day on which funds from 

such deposit are available for withdrawal. 

(B) DEPOSITS DESCRIBED IN THIS PARAGRAPH.—A deposit 

is described in this subparagraph if it is— 

(i) a cash deposit; 

(ii) a deposit made by a check described in subsection (a)(2); 

(iii) a deposit made by a check drawn on a local originating depository institution (other than a check described in subsection (a)(2)); or 

(iv) a deposit made by a check drawn on a nonlocal 

originating depository institution (other than a check 

described in subsection (a)(2)). 

(2) PROPRIETARY ATM—TEMPORARY AND PERMANENT SCHEDULES.—The provisions of subsections (a), (b), and (c) shall 

apply with respect to any funds deposited at a proprietary 


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auto- mated teller machine for deposit in an account at a depository institution. 

(3) STUDY AND REPORT ON ATM’S.—The Board shall, either directly or through the Consumer Advisory Council, establish 

and maintain a dialogue with depository institutions and their 

suppliers on the computer software and hardware available for 

use by automated teller machines, and shall, not later than 

September 1 of each of the first 3 calendar years beginning 

after the date of the enactment of this title, report to the Congress regarding such software and hardware and regarding the 

potential for improving the processing of automated teller machine deposits. 

(f) CHECK RETURN; NOTICE OF NONPAYMENT.—No provision of 

this section shall be construed as requiring that, with respect to all 

checks deposited in a receiving depository institution— 

(1) such checks be physically returned to such depository institution; or 

(2) any notice of nonpayment of any such check be given to 

such depository institution within the times set forth in subsection (a), (b), (c), or (e) or in the regulations issued under any 

such subsection. 

SEC. 604. SAFEGUARD EXCEPTIONS. 

(a) NEW ACCOUNTS.—Notwithstanding section 603, in the case of 

any account established at a depository institution by a new depositor, the following provisions shall apply with respect to any deposit 

in such account during the 30-day period (or such shorter period 

as the Board, jointly with the øDirector of the Bureau¿ Financial 

Product Safety Commission of Consumer Financial Protection, may 

establish) beginning on the date such account is established— 

(1) NEXT BUSINESS DAY AVAILABILITY OF CASH AND CERTAIN

ITEMS.—Except as provided in paragraph (3), in the case of— 

(A) any cash deposited in such account; 

(B) any funds received by such depository institution by 

wire transfer for deposit in such account; 

(C) any funds deposited in such account by cashier’s 

check, certified check, teller’s check, depository check, or 

traveler’s check; and 

(D) any funds deposited by a government check which is 

described in subparagraph (A), (B), or (C) of section 

603(a)(2), 

such cash or funds shall be available for withdrawal on the 

business day after the business day on which such cash or 

funds are deposited or, in the case of a wire transfer, on the 

business day after the business day on which such funds are 

received for deposit. 

(2) AVAILABILITY OF OTHER ITEMS.—In the case of any funds 

deposited in such account by a check (other than a check described in subparagraph (C) or (D) of paragraph (1)), the availability for withdrawal of such funds shall not be subject to the 

provisions of section 603(b), 603(c), or paragraphs (1) of section 

603(e). 

(3) LIMITATION RELATING TO CERTAIN CHECKS IN EXCESS OF

$5,000.—In the case of funds deposited in such account during 

such period by checks described in subparagraph (C) or (D) of 

paragraph (1) the aggregate amount of which exceeds $5,000— 


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(A) paragraph (1) shall apply only with respect to the first $5,000 of such aggregate amount; and 

(B) not more than 8 business days shall intervene between the business day on which any such funds are deposited and the business day on which such excess amount 

shall be available for withdrawal. 

(b) LARGE OR REDEPOSITED CHECKS; REPEATED OVERDRAFTS.— The Board, jointly with the øDirector of the Bureau¿ Financial 

Product Safety Commission of Consumer Financial Protection, may, 

by regulation, establish reasonable exceptions to any time limitation established under subsection (a)(2), (b), (c), or (e) of section 603 

for— 

(1) the amount of deposits by one or more checks that ex- ceeds the amount of $5,000 in any one day; 

(2) checks that have been returned unpaid and redeposited; 

and 

(3) deposit accounts which have been overdrawn repeatedly. 

(c) REASONABLE CAUSE EXCEPTION.— (1) IN GENERAL.—In accordance with regulations which the 

Board, jointly with the øDirector of the Bureau¿ Financial 

Product Safety Commission of Consumer Financial Protection, 

shall prescribe, subsections (a)(2), (b), (c), and (e) of section 603 

shall not apply with respect to any check deposited in an account at a depository institution if the receiving depository institution has reasonable cause to believe that the check is 

uncollectible from the originating depository institution. For 

purposes of the preceding sentence, reasonable cause to believe 

requires the existence of facts which would cause a wellgrounded belief in the mind of a reasonable person. Such reasons shall be included in the notice required under sub- section 

(f). 

(2) BASIS FOR DETERMINATION.—No determination under this 

subsection may be based on any class of checks or persons. 

(3) OVERDRAFT FEES.—If the receiving depository institution 

determines that a check deposited in an account is a check described in paragraph (1), the receiving depository institution 

shall not assess any fee for any subsequent overdraft with respect to such account, if— 

(A) the depositor was not provided with the written notice required under subsection (f) (with respect to such determination) at the time the deposit was made; 

(B) the overdraft would not have occurred but for the 

fact that the funds so deposited are not available; and 

(C) the amount of the check is collected from the originating depository institution. 

(4) COMPLIANCE.—Each agency referred to in section 610(a) 

shall monitor compliance with the requirements of this subsection in each regular examination of a depository institution 

and shall describe in each report to the Congress the extent to 

which this subsection is being complied with. For the purpose 

of this paragraph, each depository institution shall retain a 

record of each notice provided under subsection (f) as a result 

of the application of this subsection. 

(d) EMERGENCY CONDITIONS.—Subject to such regulations as the 

Board, jointly with the øDirector of the Bureau¿ Financial Product 


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Safety Commission of Consumer Financial Protection, may prescribe, subsections (a)(2), (b), (c), and (e) of section 603 shall not 

apply to funds deposited by check in any receiving depository institution in the case of— 

(1) any interruption of communication facilities; 

(2) suspension of payments by another depository institution; 

(3) any war; or 

(4) any emergency condition beyond the control of the receiving depository institution, 

if the receiving depository institution exercises such diligence as 

the circumstances require. 

(e) PREVENTION OF FRAUD LOSSES.— 

(1) IN GENERAL.—The Board, jointly with the øDirector of the 

Bureau¿ Financial Product Safety Commission of Consumer 

Financial Protection, may, by regulation or order, suspend the 

applicability of this title, or any portion thereof, to any classification of checks if the Board, jointly with the øDirector of the 

Bureau¿ Financial Product Safety Commission of Consumer 

Financial Protection, determines that— 

(A) depository institutions are experiencing an unacceptable level of losses due to check-related fraud, and 

(B) suspension of this title, or such portion of this title, 

with regard to the classification of checks involved in such 

fraud is necessary to diminish the volume of such fraud. 

(2) SUNSET PROVISION.—No regulation prescribed or order 

issued under paragraph (1) shall remain in effect for more 

than 45 days (excluding Saturdays, Sundays, legal holidays, or 

any day either House of Congress is not in session). 

(3) REPORT TO CONGRESS.— 

(A) NOTICE OF EACH SUSPENSION.—Within 10 days of 

prescribing any regulation or issuing any order under 

paragraph (1), the Board, jointly with the øDirector of the 

Bureau¿ Financial Product Safety Commission of Consumer Financial Protection, shall transmit a report of such 

action to the Committee on Banking, Finance and Urban 

Affairs of the House of Representatives and the Committee 

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

(B) CONTENTS OF REPORT.—Each report under subparagraph (A) shall contain— 

(i) the specific reason for prescribing the regulation 

or issuing the order; 

(ii) evidence considered by the Board, jointly with 

the øDirector of the Bureau¿ Financial Product Safety 

Commission of Consumer Financial Protection, in 

making the determination under paragraph (1) with 

respect to such regulation or order; and 

(iii) specific examples of the check-related fraud giving rise to such regulation or order. 

(f) NOTICE OF EXCEPTION; AVAILABILITY WITHIN REASONABLE

TIME.— 

(1) IN GENERAL.—If any exception contained in this section 

(other than subsection (a)) applies with respect to funds deposited in an account at a depository institution— 

(A) the depository institution shall provide notice in the 

manner provided in paragraph (2) of— 


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(i) the time period within which the funds shall be 

made available for withdrawal; and 

(ii) the reason the exception was invoked; and 

(B) except where other time periods are specifically provided in this title, the availability of the funds deposited 

shall be governed by the policy of the receiving depository 

institution, but shall not exceed a reasonable period of 

time as determined by the Board, jointly with the øDirector of the Bureau¿ Financial Product Safety Commission of 

Consumer Financial Protection. 

(2) TIME FOR NOTICE.—The notice required under paragraph 

(1)(A) with respect to a deposit to which an exception contained 

in this section applies shall be made by the time provided in 

the following subparagraphs: 

(A) In the case of a deposit made in person by the depositor at the receiving depository institution, the depository institution shall immediately provide such notice in 

writing to the depositor. 

(B) In the case of any other deposit (other than a deposit 

described in subparagraph (C)), the receiving depository 

institution shall mail the notice to the depositor not later 

than the close of the next business day following the business day on which the deposit is received. 

(C) In the case of a deposit to which subsection (d) or (e) 

applies, notice shall be provided by the depository institution in accordance with regulations of the Board, jointly 

with the øDirector of the Bureau¿ Financial Product Safety Commission of Consumer Financial Protection. 

(D) In the case of a deposit to which subsection (b)(1) or 

(b)(2) applies, the depository institution may, for nonconsumer accounts and other classes of accounts, as defined 

by the Board, that generally have a large number of such 

deposits, provide notice at or before the time it first determines that the subsection applies. 

(E) In the case of a deposit to which subsection (b)(3) applies, the depository institution may, subject to regulations 

of the Board, provide notice at the beginning of each time 

period it determines that the subsection applies. In addition to the requirements contained in paragraph (1)(A), the 

notice shall specify the time period for which the exception 

will apply. 

(3) SUBSEQUENT DETERMINATIONS.—If the facts upon which 

the determination of the applicability of an exception contained 

in subsection (b) or (c) to any deposit only become known to the 

receiving depository institution after the time notice is required under paragraph (2) with respect to such deposit, the 

depository institution shall mail such notice to the depositor as 

soon as practicable, but not later than the first business day 

following the day such facts become known to the depository 

institution. 

SEC. 605. DISCLOSURE OF FUNDS AVAILABILITY 

POLICIES. 

(a) NOTICE FOR NEW ACCOUNTS.—Before an account is opened at 

a depository institution, the depository institution shall provide 

written notice to the potential customer of the specific policy of 


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such depository institution with respect to when a customer may 

withdraw funds deposited into the customer’s account. 

(b) PREPRINTED DEPOSIT SLIPS.—All preprinted deposit slips that 

a depository institution furnishes to its customers shall contain a 

summary notice, as prescribed by the Board, jointly with the øDirector of the Bureau¿ Financial Product Safety Commission of Consumer Financial Protection, in regulations, that deposited items 

may not be available for immediate withdrawal. 

(c) MAILING OF NOTICE.— (1) FIRST MAILING AFTER ENACTMENT.—In the first regularly 

scheduled mailing to customers occurring after the effective 

date of this section, but not more than 60 days after such effective date, each depository institution shall send a written notice containing the specific policy of such depository institution 

with respect to when a customer may withdraw funds deposited into such customer’s account, unless the depository institution has provided a disclosure which meets the requirements 

of this section before such effective date. 

(2) SUBSEQUENT CHANGES.—A depository institution shall 

send a written notice to customers at least 30 days before implementing any change to the depository institution’s policy 

with respect to when customers may withdraw funds deposited 

into consumer accounts, except that any change which expedites the availability of such funds shall be disclosed not later 

than 30 days after implementation. 

(3) UPON REQUEST.—Upon the request of any person, a depository institution shall provide or send such person a written 

notice containing the specific policy of such depository institution with respect to when a customer may withdraw funds deposited into a customer’s account. 

(d) POSTING OF NOTICE.— (1) SPECIFIC NOTICE AT MANNED TELLER STATIONS.—Each depository institution shall post, in a conspicuous place in each 

location where deposits are accepted by individuals employed 

by such depository institution, a specific notice which describes 

the time periods applicable to the availability of funds deposited in a consumer account. 

(2) GENERAL NOTICE AT AUTOMATED TELLER MACHINES.—In 

the case of any automated teller machine at which any funds 

are received for deposit in an account at any depository institution, the Board, jointly with the øDirector of the Bureau¿ Financial Product Safety Commission of Consumer Financial 

Protection, shall prescribe, by regulations, that the owner or 

operator of such automated teller machine shall post or provide 

a general notice that funds deposited in such machine may not 

be immediately available for withdrawal. 

(e) NOTICE OF INTEREST PAYMENT POLICY.—If a depository institution described in section 606(b) begins the accrual of interest or 

dividends at a later date than the date described in section 606(a) 

with respect to all funds, including cash, deposited in an interestbearing account at such depository institution, any notice required 

to be provided under subsections (a) and (c) shall contain a written 

description of the time at which such depository institution begins 

to accrue interest or dividends on such funds. 

(f) MODEL DISCLOSURE FORMS.— 


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(1) PREPARED BY BOARD AND BUREAU.—The Board, jointly 

with the øDirector of the Bureau¿ Financial Product Safety 

Commission of Consumer Financial Protection, shall publish 

model disclosure forms and clauses for common transactions to 

facilitate compliance with the disclosure requirements of this 

section and to aid customers by utilizing readily understandable language. 

(2) USE OF FORMS TO ACHIEVE COMPLIANCE.—A depository institution shall be deemed to be in compliance with the requirements of this section if such institution— 

(A) uses any appropriate model form or clause as published by the Board, or 

(B) uses any such model form or clause and changes 

such form or clause by— 

(i) deleting any information which is not required by 

this title; or 

(ii) rearranging the format. 

(3) VOLUNTARY USE.—Nothing in this title requires the use 

of any such model form or clause prescribed by the Board, 

jointly with the øDirector of the Bureau¿ Financial Product 

Safety Commission of Consumer Financial Protection, under 

this subsection. 

(4) NOTICE AND COMMENT.—Model disclosure forms and 

clauses shall be adopted by the Board, jointly with the øDirector of the Bureau¿ Financial Product Safety Commission of 

Consumer Financial Protection, only after notice duly given in 

the Federal Register and an opportunity for public comment in 

accordance with section 553 of title 5, United States Code. 

* * * * * * * 

SEC. 609. REGULATIONS AND REPORTS BY BOARD. 

(a) IN GENERAL.—After notice and opportunity to submit comment in accordance with section 553(c) of title 5, United States 

Code, the Board, jointly with the øDirector of the Bureau¿ Financial Product Safety Commission of Consumer Financial Protection, 

shall prescribe regulations— 

(1) to carry out the provisions of this title; 

(2) to prevent the circumvention or evasion of such provisions; and 

(3) to facilitate compliance with such provisions. 

(b) REGULATIONS RELATING TO IMPROVEMENT OF CHECK PROCESSING SYSTEM.—In order to improve the check processing system, 

the Board shall consider (among other proposals) requiring, by regulation, that— 

(1) depository institutions be charged based upon notification 

that a check or similar instrument will be presented for payment; 

(2) the Federal Reserve banks and depository institutions 

provide for check truncation; 

(3) depository institutions be provided incentives to return 

items promptly to the depository institution of first deposit; 

(4) the Federal Reserve banks and depository institutions 

take such actions as are necessary to automate the process of 

returning unpaid checks, 

(5) each depository institution and Federal Reserve bank— 


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(A) place its endorsement, and other notations specified 

in regulations of the Board, on checks in the positions 

specified in such regulations; and 

(B) take such actions as are necessary to— 

(i) automate the process of reading endorsements; 

and 

(ii) eliminate unnecessary endorsements; 

(6) within one business day after an originating depository 

institution is presented a check (for more than such minimum 

amount as the Board may prescribe)— 

(A) such originating depository institution determine 

whether it will pay such check; and 

(B) if such originating depository institution determines 

that it will not pay such check, such originating depository 

institution directly notify the receiving depository institution of such determination; 

(7) regardless of where a check is cleared initially, all returned checks be eligible to be returned through the Federal 

Reserve System; 

(8) Federal Reserve banks and depository institutions participate in the development and implementation of an electronic clearinghouse process to the extent the Board determines, pursuant to the study under subsection (f), that such a 

process is feasible; and 

(9) originating depository institutions be permitted to return 

unpaid checks directly to, and obtain reimbursement for such 

checks directly from, the receiving depository institution. 

(c) REGULATORY RESPONSIBILITY OF BOARD FOR PAYMENT SYSTEM.— 

(1) RESPONSIBILITY FOR PAYMENT SYSTEM.—In order to carry 

out the provisions of this title, the Board of Governors of the 

Federal Reserve System shall have the responsibility to regulate— 

(A) any aspect of the payment system, including the receipt, payment, collection, or clearing of checks; and 

(B) any related function of the payment system with respect to checks. 

(2) REGULATIONS.—The Board shall prescribe such regulations as it may determine to be appropriate to carry out its responsibility under paragraph (1). 

(d) REPORTS.— 

(1) IMPLEMENTATION PROGRESS REPORTS.— 

(A) REQUIRED REPORTS.—The Board shall transmit a report to both Houses of the Congress not later than 18, 30, 

and 48 months after the date of the enactment of this title. 

(B) CONTENTS OF REPORT.—Each such report shall describe— 

(i) the actions taken and progress made by the 

Board to implement the schedules established in section 603, and 

(ii) the impact of this title on consumers and depository institutions. 

(2) EVALUATION OF TEMPORARY SCHEDULE REPORT.— 

(A) REPORT REQUIRED.—The Board shall transmit a report to both Houses of the Congress not later than 2 years 


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after the date of the enactment of this title regarding the 

effects the temporary schedule established under section 

603(c) have had on depository institutions and the public. 

(B) CONTENTS OF REPORT.—Such report shall also assess 

the potential impact the implementation of the schedule 

established in section 603(b) will have on depository institutions and the public, including an estimate of the risks 

to and losses of depository institutions and the benefits to 

consumers. Such report shall also contain such recommendations for legislative or administrative action as 

the Board may determine to be necessary. 

(3) COMPTROLLER GENERAL EVALUATION REPORT.—Not later 

than 6 months after section 603(b) takes effect, the Comptroller General of the United States shall transmit a report to 

the Congress evaluating the implementation and administration of this title. 

(e) CONSULTATIONS.—In prescribing regulations under subsections (a) and (b), the Board and the øDirector of the Bureau¿ 

Financial Product Safety Commission of Consumer Financial Protection, in the case of subsection (a), and the Board, in the case of 

subsection (b), shall consult with the Comptroller of the Currency, 

the Board of Directors of the Federal Deposit Insurance Corporation, and the National Credit Union Administration Board. 

(f) ELECTRONIC CLEARINGHOUSE STUDY.— (1) STUDY REQUIRED.—The Board shall study the feasibility 

of modernizing and accelerating the check payment system 

through the development of an electronic clearinghouse process 

utilizing existing telecommunications technology to avoid the 

necessity of actual presentment of the paper instrument to a 

payor institution before such institution is charged for the 

item. 

(2) CONSULTATION; FACTORS TO BE STUDIED.—In connection 

with the study required under paragraph (1), the Board shall— 

(A) consult with appropriate experts in telecommunications technology; and 

(B) consider all practical and legal impediments to the 

development of an electronic clearinghouse process. 

(3) REPORT REQUIRED.—The Board shall report its conclusions to the Congress within 9 months of the date of the enactment of this title. 

* * * * * * * 

FEDERAL DEPOSIT INSURANCE ACT 

* * * * * * * 

SEC. 2. MANAGEMENT. 

(a) BOARD OF DIRECTORS.— (1) IN GENERAL.—The management of the Corporation shall 

be vested in a Board of Directors consisting of 5 members— 

(A) 1 of whom shall be the Comptroller of the Currency; 

(B) 1 of whom shall be the øDirector of the Consumer Financial Protection Bureau¿ Chair of the Financial Product 

Safety Commission; and 


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(C) 3 of whom shall be appointed by the President, by 

and with the advice and consent of the Senate, from 

among individuals who are citizens of the United States, 

1 of whom shall have State bank supervisory experience. 

(2) POLITICAL AFFILIATION.—After February 28, 1993, not 

more than 3 of the members of the Board of Directors may be 

members of the same political party. 

(b) CHAIRPERSON AND VICE CHAIRPERSON.— (1) CHAIRPERSON.—1 of the appointed members shall be designated by the President, by and with the advice and consent 

of the Senate, to serve as Chairperson of the Board of Directors 

for a term of 5 years. 

(2) VICE CHAIRPERSON.—1 of the appointed members shall be 

designated by the President, by and with the advice and consent of the Senate, to serve as Vice Chairperson of the Board 

of Directors. 

(3) ACTING CHAIRPERSON.—In the event of a vacancy in the 

position of Chairperson of the Board of Directors or during the 

absence or disability of the Chairperson, the Vice Chairperson 

shall act as Chairperson. 

(c) TERMS.— (1) APPOINTED MEMBERS.—Each appointed member shall be 

appointed for a term of 6 years. 

(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.—The Chairperson, Vice 

Chairperson, and 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. 

(d) VACANCY.— (1) IN GENERAL.—Any vacancy on the Board of Directors 

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 the office of the Comptroller of the Currency or the office of 

øDirector of the Consumer Financial Protection Bureau¿ Chair 

of the Financial Product Safety Commission and pending the 

appointment of a successor, or during the absence or disability 

of the Comptroller of the Currency or the øDirector of the Consumer Financial Protection Bureau¿ Chair of the Financial 

Product Safety Commission, the acting Comptroller of the Currency or the acting øDirector of the Consumer Financial Protection Bureau¿ Chair of the Financial Product Safety Commission, as the case may be, shall be a member of the Board of 

Directors in the place of the Comptroller or Director. 

(e) INELIGIBILITY FOR OTHER OFFICES.— (1) POSTSERVICE RESTRICTION.— (A) IN GENERAL.—No member of the Board of Directors 

may hold any office, position, or employment in any insured depository institution or any depository institution 

holding company during— 

(i) the time such member is in office; and 


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(ii) the 2-year period beginning on the date such 

member ceases to serve on the Board of Directors. 

(B) EXCEPTION FOR MEMBERS WHO SERVE FULL TERM.— The limitation contained in subparagraph (A)(ii) shall not 

apply to any member who has ceased to serve on the 

Board of Directors after serving the full term for which 

such member was appointed. 

(2) RESTRICTION DURING SERVICE.—No member of the Board 

of Directors may— 

(A) be an officer or director of any insured depository institution, depository institution holding company, Federal 

Reserve bank, or Federal home loan bank; or 

(B) hold stock in any insured depository institution or 

depository institution holding company. 

(3) CERTIFICATION.—Upon taking office, each member of the 

Board of Directors shall certify under oath that such member 

has complied with this subsection and such certification shall 

be filed with the secretary of the Board of Directors. 

(f) STATUS OF EMPLOYEES.— 

(1) IN GENERAL.—A director, member, officer, or employee of 

the Corporation has no liability under the Securities Act of 

1933 with respect to any claim arising out of or resulting from 

any act or omission by such person within the scope of such 

person’s employment in connection with any transaction involving the disposition of assets (or any interests in any assets 

or any obligations backed by any assets) by the Corporation. 

This subsection shall not be construed to limit personal liability for criminal acts or omissions, willful or malicious misconduct, acts or omissions for private gain, or any other acts 

or omissions outside the scope of such person’s employment. 

(2) DEFINITION.—For purposes of this subsection, the term 

‘‘employee of the Corporation’’ includes any employee of the Office of the Comptroller of the Currency or of the Consumer Financial Protection Bureau who serves as a deputy or assistant 

to a member of the Board of Directors of the Corporation in 

connection with activities of the Corporation. 

(3) EFFECT ON OTHER LAW.—This subsection does not affect— 

(A) any other immunities and protections that may be 

available to such person under applicable law with respect 

to such transactions, or 

(B) any other right or remedy against the Corporation, 

against the United States under applicable law, or against 

any person other than a person described in paragraph (1) 

participating in such transactions. 

This subsection shall not be construed to limit or alter in any 

way the immunities that are available under applicable law for 

Federal officials and employees not described in this subsection. 

* * * * * * * 

FEDERAL FINANCIAL INSTITUTIONS EXAMINATION 

COUNCIL ACT OF 1978 

* * * * * * * 


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TITLE X—FEDERAL FINANCIAL INSTITUTIONS 

EXAMINATION COUNCIL 

* * * * * * * 

ESTABLISHMENT OF THE COUNCIL

SEC. 1004. (a) There is established the Financial Institutions Examination Council which shall consist of— 

(1) the Comptroller of the Currency, 

(2) the Chairman of the Board of Directors of the Federal Deposit Insurance Corporation, 

(3) a Governor of the Board of Governors of the Federal Reserve System designated by the Chairman of the Board, 

(4) the øDirector of the Consumer Financial Protection Bureau¿ Chair of the Financial Product Safety Commission, 

(5) the Chairman of the National Credit Union Administration Board, and 

(6) the Chairman of the State Liaison Committee. 

(b) The members of the Council shall select the first chairman of 

the Council. Thereafter the chairmanship shall rotate among the 

members of the Council. 

(c) The term of the Chairman of the Council shall be two years. 

(d) The members of the Council may, from time to time, designate other officers or employees of their respective agencies to 

carry out their duties on the Council. 

(e) Each member of the Council shall serve without additional 

compensation but shall be entitled to reasonable expenses incurred 

in carrying out his official duties a such a member. 

* * * * * * * 

SECTION 513 OF THE FINANCIAL LITERACY AND 

EDUCATION IMPROVEMENT ACT 

SEC. 513. ESTABLISHMENT OF FINANCIAL LITERACY AND EDUCATION 

COMMISSION 

(a) IN GENERAL.—There is established a commission to be known 

as the ‘‘Financial Literacy and Education Commission’’. 

(b) PURPOSE.—The Commission shall serve to improve the financial literacy and education of persons in the United States through 

development of a national strategy to promote financial literacy 

and education. 

(c) MEMBERSHIP.— 

(1) COMPOSITION.—The Commission shall be composed of— 

(A) the Secretary of the Treasury; 

(B) the respective head of each of the Federal banking 

agencies (as defined in section 3 of the Federal Deposit Insurance Act), the National Credit Union Administration, 

the Securities and Exchange Commission, each of the Departments of Education, Agriculture, Defense, Health and 

Human Services, Housing and Urban Development, Labor, 

and Veterans Affairs, the Federal Trade Commission, the 

General Services Administration, the Small Business Administration, the Social Security Administration, the ComVerDate Sep 11 2014 02:53 Dec 22, 2016 Jkt 069006 PO 00000 Frm 00067 Fmt 6659 Sfmt 6601 E:\HR\OC\HR872.XXX HR872

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modity Futures Trading Commission, and the Office of 

Personnel Management; 

(C) the øDirector¿ Chair of the Financial Product Safety 

Commission of the Bureau of Consumer Financial Protection; and 

(D) at the discretion of the President, not more than 5 

individuals appointed by the President from among the administrative heads of any other Federal agencies, departments, or other Federal Government entities, whom the 

President determines to be engaged in a serious effort to 

improve financial literacy and education. 

(2) ALTERNATES.—Each member of the Commission may designate an alternate if the member is unable to attend a meeting of the Commission. Such alternate shall be an individual 

who exercises significant decisionmaking authority. 

(d) CHAIRPERSON.—The Secretary of the Treasury shall serve as 

the Chairperson. The øDirector¿ Chair of the Financial Product 

Safety Commission of the Bureau of Consumer Financial Protection 

shall serve as the Vice Chairman. 

(e) MEETINGS.—The Commission shall hold, at the call of the 

Chairperson, at least 1 meeting every 4 months. All such meetings 

shall be open to the public. The Commission may hold, at the call 

of the Chairperson, such other meetings as the Chairperson sees fit 

to carry out this title. 

(f) QUORUM.—A majority of the members of the Commission shall 

constitute a quorum, but a lesser number of members may hold 

hearings. 

(g) INITIAL MEETING.—The Commission shall hold its first meeting not later than 60 days after the date of enactment of this Act. 

HOME MORTGAGE DISCLOSURE ACT OF 1975 

TITLE III—HOME MORTGAGE DISCLOSURE 

* * * * * * * 

SEC. 307. COMPLIANCE IMPROVEMENT METHODS. 

(a) IN GENERAL.— 

(1) CONSULTATION REQUIRED.—The øDirector of the Bureau 

of Consumer Financial Protection¿ Financial Product Safety 

Commission, with the assistance of the Secretary, the Director 

of the Bureau of the Census, the Board of Governors of the 

Federal Reserve System, the Federal Deposit Insurance Corporation, and such other persons as the Bureau deems appropriate, shall develop or assist in the improvement of, methods 

of matching addresses and census tracts to facilitate compliance by depository institutions in as economical a manner as 

possible with the requirements of this title. 

(2) AUTHORIZATION OF APPROPRIATIONS.—There are authorized to be appropriated, such sums as may be necessary to 

carry out this subsection. 

(3) CONTRACTING AUTHORITY.—The øDirector of the Bureau 

of Consumer Financial Protection¿ Financial Product Safety 

Commission is authorized to utilize, contract with, act through, 

or compensate any person or agency in order to carry out this 

subsection. 


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(b) RECOMMENDATIONS TO CONGRESS.—The øDirector of the Bureau of Consumer Financial Protection¿ Financial Product Safety 

Commission shall recommend to the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives, such additional legislation as the øDirector of the Bureau of Consumer Financial Protection¿ Financial Product Safety Commission deems appropriate 

to carry out the purpose of this title. 

* * * * * * * 

INTERSTATE LAND SALES FULL DISCLOSURE ACT 

* * * * * * * 

TITLE XIV—INTERSTATE LAND SALES 

* * * * * * * 

DEFINITIONS

SEC. 1402. For the purposes of this title, the term— 

ø(1) ‘‘Director’’ means the Director of the Bureau of Consumer Financial Protection;¿ 

(1) ‘‘Chair’’ means the Chair of the Financial Product Safety 

Commission; 

(2) ‘‘person’’ means an individual, or an unincorporated organization, partnership, association, corporation, trust, or estate; 

(3) ‘‘subdivision’’ means any land which is located in any 

State or in a foreign country and is divided or is proposed to 

be divided into lots, whether contiguous or not, for the purpose 

of sale or lease as part of a common promotional plan; 

(4) ‘‘common promotional plan’’ means a plan, undertaken by 

a single developer or a group of developers acting in concert, 

to offer lots for sale or lease; where such land is offered for sale 

by such a developer or group of developers acting in concert, 

and such land is contiguous or is known, designated, or advertised as a common unit or by a common name, such land shall 

be presumed, without regard to the number of lots covered by 

each individual offering, as being offered for sale or lease as 

part of a common promotional plan; 

(5) ‘‘developer’’ means any person who, directly or indirectly, 

sells or leases, or offers to sell or lease, or advertises for sale 

or lease any lots in a subdivision; 

(6) ‘‘agent’’ means any person who represents, or acts for or 

on behalf of, a developer in selling or leasing, or offering to sell 

or lease, any lot or lots in a subdivision; but shall not include 

an attorney at law whose representation or another person 

consists solely of rendering legal services; 

(7) ‘‘blanket encumbrance’’ means a trust deed, mortgage, 

judgment, or any other lien or encumbrance, including an option or contract to sell or a trust agreement, affecting a subdivision or affecting more than one lot offered within a subdivision, except that such term shall not include any lien or other 

encumbrance arising as the result of the imposition of any tax 

assessment by any public authority; 


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(8) ‘‘interstate commerce’’ means trade or commerce among 

the several states or between any foreign country and any 

state; 

(9) ‘‘State’’ includes the several States, the District of Columbia, the Commonwealth of Puerto Rico, and the territories and 

possessions of the United States; 

(10) ‘‘purchaser’’ means an actual or prospective purchaser or 

lessee of any lot in a subdivision; 

(11) ‘‘offer’’ includes any inducement, solicitation, or attempt 

to encourage a person to acquire a lot in a subdivision; and 

(12) ‘‘Bureau’’ means the Bureau of Consumer Financial Protection. 

* * * * * * * 

ADMINISTRATION

SEC. 1416. (a) The authority and responsibility for administering 

this title shall be in the øDirector of the Bureau of Consumer Financial Protection¿ Chair who may delegate any of his functions, 

duties, and powers to employees of the Bureau of Consumer Financial Protection or to boards of such employees including functions, 

duties, and powers with respect to investigating, hearing, determining, ordering, or otherwise acting as to any work, business, or 

matter under this title. The persons to whom such delegations are 

made with respect to hearing functions, duties, and powers shall be 

appointed and shall serve in the Bureau in compliance with sections 3105, 3344, 5372, and 7521 of title 5 of the United States 

Code. The Director shall by rule prescribed such rights of appeal 

from the decisions of his administrative law judges to other administrative law judges or to other officers in the Bureau, to boards of 

officers or to himself, as shall be apropriate and in accordance with 

law. 

(b) All hearings shall be public and appropriate records thereof 

shall be kept, and any order issued after such hearing shall be 

based on the record made in such hearing which shall be conducted 

in accordance with provisions of subchapter II of chapter 5, and 

chapter 7, of title 5, United States Code. 

(c) The Director shall conduct all actions with respect to rulemaking or adjudication under this title in accordance with the provisions of chapter 5 of title 5, United States Code. Notice shall be 

given of any adverse action or final disposition and such notice and 

the entry of any order shall be accompanied by a written statement 

of supporting facts and legal authority. 

* * * * * * * 

REAL ESTATE SETTLEMENT PROCEDURES ACT OF 1974 

* * * * * * * 

HOME BUYING INFORMATION BOOKLETS

SEC. 5. (a) PREPARATION AND DISTRIBUTION.—øThe Director of 

the Bureau of Consumer Financial Protection (hereafter in this section referred to as the ‘‘Director ’’)¿ The Financial Product Safety 

Commission shall prepare, at least once every 5 years, a booklet to 


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help consumers applying for federally related mortgage loans to understand the nature and costs of real estate settlement services. 

The øDirector¿ Financial Product Safety Commission shall prepare 

the booklet in various languages and cultural styles, as the øDirector¿ Financial Product Safety Commission determines to be appropriate, so that the booklet is understandable and accessible to 

homebuyers of different ethnic and cultural backgrounds. The øDirector¿ Financial Product Safety Commission shall distribute such 

booklets to all lenders that make federally related mortgage loans. 

The øDirector¿ Financial Product Safety Commission shall also distribute to such lenders lists, organized by location, of homeownership counselors certified under section 106(e) of the Housing and 

Urban Development Act of 1968 (12 U.S.C. 1701x(e)) for use in 

complying with the requirement under subsection (c) of this section. 

(b) CONTENTS.—Each booklet shall be in such form and detail as 

the øDirector¿ Financial Product Safety Commission shall prescribe and, in addition to such other information as the øDirector¿ 

Financial Product Safety Commission may provide, shall include in 

plain and understandable language the following information: 

(1) A description and explanation of the nature and purpose 

of the costs incident to a real estate settlement or a federally 

related mortgage loan. The description and explanation shall 

provide general information about the mortgage process as well 

as specific information concerning, at a minimum— 

(A) balloon payments; 

(B) prepayment penalties; 

(C) the advantages of prepayment; and 

(D) the trade-off between closing costs and the interest 

rate over the life of the loan. 

(2) An explanation and sample of the uniform settlement 

statement required by section 4. 

(3) A list and explanation of lending practices, including 

those prohibited by the Truth in Lending Act or other applicable Federal law, and of other unfair practices and unreasonable 

or unnecessary charges to be avoided by the prospective buyer 

with respect to a real estate settlement. 

(4) A list and explanation of questions a consumer obtaining 

a federally related mortgage loan should ask regarding the 

loan, including whether the consumer will have the ability to 

repay the loan, whether the consumer sufficiently shopped for 

the loan, whether the loan terms include prepayment penalties 

or balloon payments, and whether the loan will benefit the borrower. 

(5) An explanation of the right of rescission as to certain 

transactions provided by sections 125 and 129 of the Truth in 

Lending Act. 

(6) A brief explanation of the nature of a variable rate mortgage and a reference to the booklet entitled ‘‘Consumer Handbook on Adjustable Rate Mortgages’’, published by the øDirector¿ Financial Product Safety Commission, or to any suitable 

substitute of such booklet that the øDirector¿ Financial Product Safety Commission may subsequently adopt pursuant to 

such section. 


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(7) A brief explanation of the nature of a home equity line 

of credit and a reference to the pamphlet required to be provided under section 127A of the Truth in Lending Act. 

(8) Information about homeownership counseling services 

made available pursuant to section 106(a)(4) of the Housing 

and Urban Development Act of 1968 (12 U.S.C. 1701x(a)(4)), a 

recommendation that the consumer use such services, and notification that a list of certified providers of homeownership 

counseling in the area, and their contact information, is available. 

(9) An explanation of the nature and purpose of escrow accounts when used in connection with loans secured by residential real estate and the requirements under section 10 of this 

Act regarding such accounts. 

(10) An explanation of the choices available to buyers of residential real estate in selecting persons to provide necessary 

services incidental to a real estate settlement. 

(11) An explanation of a consumer’s responsibilities, liabilities, and obligations in a mortgage transaction. 

(12) An explanation of the nature and purpose of real estate 

appraisals, including the difference between an appraisal and 

a home inspection. 

(13) Notice that the Office of Housing of the Bureau of Consumer Financial Protection has made publicly available a brochure regarding loan fraud and a World Wide Web address and 

toll-free telephone number for obtaining the brochure. 

(14) An explanation of flood insurance and the availability of 

flood insurance under the National Flood Insurance Program 

or from a private insurance company, whether or not the real 

estate is located in an area having special flood hazards, and 

the following statement: ‘‘Although you may not be required to 

maintain flood insurance on all structures, you may still wish 

to do so, and your mortgage lender may still require you to do 

so to protect the collateral securing the mortgage. If you choose 

to not maintain flood insurance on a structure, and it floods, 

you are responsible for all flood losses relating to that structure.’’. 

The booklet prepared pursuant to this section shall take into consideration differences in real estate settlement procedures that may 

exist among the several States and territories of the United States 

and among separate political subdivisions within the same State 

and territory. 

(c) Each lender shall include with the booklet a good faith estimate of the amount or range of charges for specific settlement services the borrower is likely to incur in connection with the settlement as prescribed by the Bureau. Each lender shall also include 

with the booklet a reasonably complete or updated list of homeownership counselors who are certified pursuant to section 106(e) of the 

Housing and Urban Development Act of 1968 (12 U.S.C. 1701x(e)) 

and located in the area of the lender. 

(d) Each lender referred to in subsection (a) shall provide the 

booklet described in such subsection to each person from whom it 

receives or for whom it prepares a written application to borrow 

money to finance the purchase of residential real estate. The lender 

shall provide the booklet in the version that is most appropriate for 


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the person receiving it. Such booklet shall be provided by delivering 

it or placing it in the mail not later than 3 business days after the 

lender receives the application, but no booklet need be provided if 

the lender denies the application for credit before the end of the 3- 

day period. 

(e) Booklets may be printed and distributed by lenders if their 

form and content are approved by the Bureau as meeting the requirements of subsection (b) of this section. 

* * * * * * * 

S.A.F.E. MORTGAGE LICENSING ACT OF 2008 

SEC. 1. SHORT TITLE; TABLE OF CONTENTS. 

(a) SHORT TITLE.—This Act may be cited as the ‘‘Housing and 

Economic Recovery Act of 2008’’. 

DIVISION A—HOUSING FINANCE 

REFORM 

* * * * * * * 

TITLE V—S.A.F.E. MORTGAGE 

LICENSING ACT 

SEC. 1501. SHORT TITLE. 

This title may be cited as the ‘‘Secure and Fair Enforcement for 

Mortgage Licensing Act of 2008’’ or ‘‘S.A.F.E. Mortgage Licensing 

Act of 2008’’. 

SEC. 1502. PURPOSES AND METHODS FOR ESTABLISHING A MORTGAGE LICENSING SYSTEM AND REGISTRY. 

In order to increase uniformity, reduce regulatory burden, enhance consumer protection, and reduce fraud, the States, through 

the Conference of State Bank Supervisors and the American Association of Residential Mortgage Regulators, are hereby encouraged 

to establish a Nationwide Mortgage Licensing System and Registry 

for the residential mortgage industry that accomplishes all of the 

following objectives: 

(1) Provides uniform license applications and reporting requirements for State-licensed loan originators. 

(2) Provides a comprehensive licensing and supervisory database. 

(3) Aggregates and improves the flow of information to and 

between regulators. 

(4) Provides increased accountability and tracking of loan 

originators. 

(5) Streamlines the licensing process and reduces the regulatory burden. 

(6) Enhances consumer protections and supports anti-fraud 

measures. 

(7) Provides consumers with easily accessible information, offered at no charge, utilizing electronic media, including the 

Internet, regarding the employment history of, and publicly adVerDate Sep 11 2014 02:53 Dec 22, 2016 Jkt 069006 PO 00000 Frm 00073 Fmt 6659 Sfmt 6601 E:\HR\OC\HR872.XXX HR872

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judicated disciplinary and enforcement actions against, loan 

originators. 

(8) Establishes a means by which residential mortgage loan 

originators would, to the greatest extent possible, be required 

to act in the best interests of the consumer. 

(9) Facilitates responsible behavior in the subprime mortgage market place and provides comprehensive training and 

examination requirements related to subprime mortgage lending. 

(10) Facilitates the collection and disbursement of consumer 

complaints on behalf of State and Federal mortgage regulators. 

SEC. 1503. DEFINITIONS. 

For purposes of this title, the following definitions shall apply: 

(1) BUREAU.—The term ‘‘Bureau’’ means the Bureau of Consumer Financial Protection. 

(2) FEDERAL BANKING AGENCY.—The term ‘‘Federal banking 

agency’’ means the Board of Governors of the Federal Reserve 

System, the Office of the Comptroller of the Currency, the National Credit Union Administration, and the Federal Deposit 

Insurance Corporation. 

(3) DEPOSITORY INSTITUTION.—The term ‘‘depository institution’’ has the same meaning as in section 3 of the Federal Deposit Insurance Act, and includes any credit union. 

(4) LOAN ORIGINATOR.— (A) IN GENERAL.—The term ‘‘loan originator’’— 

(i) means an individual who— 

(I) takes a residential mortgage loan application; and 

(II) offers or negotiates terms of a residential 

mortgage loan for compensation or gain; 

(ii) does not include any individual who is not otherwise described in clause (i) and who performs purely 

administrative or clerical tasks on behalf of a person 

who is described in any such clause; 

(iii) does not include a person or entity that only 

performs real estate brokerage activities and is licensed or registered in accordance with applicable 

State law, unless the person or entity is compensated 

by a lender, a mortgage broker, or other loan originator or by any agent of such lender, mortgage broker, 

or other loan originator; and 

(iv) does not include a person or entity solely involved in extensions of credit relating to timeshare 

plans, as that term is defined in section 101(53D) of 

title 11, United States Code. 

(B) OTHER DEFINITIONS RELATING TO LOAN ORIGINATOR.—For purposes of this subsection, an individual ‘‘assists a consumer in obtaining or applying to obtain a residential mortgage loan’’ by, among other things, advising on 

loan terms (including rates, fees, other costs), preparing 

loan packages, or collecting information on behalf of the 

consumer with regard to a residential mortgage loan. 

(C) ADMINISTRATIVE OR CLERICAL TASKS.—The term ‘‘administrative or clerical tasks’’ means the receipt, collection, 

and distribution of information common for the processing 


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or underwriting of a loan in the mortgage industry and 

communication with a consumer to obtain information necessary for the processing or underwriting of a residential 

mortgage loan. 

(D) REAL ESTATE BROKERAGE ACTIVITY DEFINED.—The 

term ‘‘real estate brokerage activity’’ means any activity 

that involves offering or providing real estate brokerage 

services to the public, including— 

(i) acting as a real estate agent or real estate broker 

for a buyer, seller, lessor, or lessee of real property; 

(ii) bringing together parties interested in the sale, 

purchase, lease, rental, or exchange of real property; 

(iii) negotiating, on behalf of any party, any portion 

of a contract relating to the sale, purchase, lease, rental, or exchange of real property (other than in connection with providing financing with respect to any such 

transaction); 

(iv) engaging in any activity for which a person engaged in the activity is required to be registered or licensed as a real estate agent or real estate broker 

under any applicable law; and 

(v) offering to engage in any activity, or act in any 

capacity, described in clause (i), (ii), (iii), or (iv). 

(5) LOAN PROCESSOR OR UNDERWRITER.— 

(A) IN GENERAL.—The term ‘‘loan processor or underwriter’’ means an individual who performs clerical or support duties at the direction of and subject to the supervision and instruction of— 

(i) a State-licensed loan originator; or 

(ii) a registered loan originator. 

(B) CLERICAL OR SUPPORT DUTIES.—For purposes of subparagraph (A), the term ‘‘clerical or support duties’’ may 

include— 

(i) the receipt, collection, distribution, and analysis 

of information common for the processing or underwriting of a residential mortgage loan; and 

(ii) communicating with a consumer to obtain the information necessary for the processing or underwriting 

of a loan, to the extent that such communication does 

not include offering or negotiating loan rates or terms, 

or counseling consumers about residential mortgage 

loan rates or terms. 

(6) NATIONWIDE MORTGAGE LICENSING SYSTEM AND REGISTRY.—The term ‘‘Nationwide Mortgage Licensing System and 

Registry’’ means a mortgage licensing system developed and 

maintained by the Conference of State Bank Supervisors and 

the American Association of Residential Mortgage Regulators 

for the State licensing and registration of State-licensed loan 

originators and the registration of registered loan originators 

or any system established by the øDirector¿ Financial Product 

Safety Commission under section 1509. 

(7) NONTRADITIONAL MORTGAGE PRODUCT.—The term ‘‘nontraditional mortgage product’’ means any mortgage product 

other than a 30-year fixed rate mortgage. 


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(8) REGISTERED LOAN ORIGINATOR.—The term ‘‘registered 

loan originator’’ means any individual who— 

(A) meets the definition of loan originator and is an employee of— 

(i) a depository institution; 

(ii) a subsidiary that is— 

(I) owned and controlled by a depository institution; and 

(II) regulated by a Federal banking agency; or 

(iii) an institution regulated by the Farm Credit Administration; and 

(B) is registered with, and maintains a unique identifier 

through, the Nationwide Mortgage Licensing System and 

Registry. 

(9) RESIDENTIAL MORTGAGE LOAN.—The term ‘‘residential 

mortgage loan’’ means any loan primarily for personal, family, 

or household use that is secured by a mortgage, deed of trust, 

or other equivalent consensual security interest on a dwelling 

(as defined in section 103(v) of the Truth in Lending Act) or 

residential real estate upon which is constructed or intended to 

be constructed a dwelling (as so defined). 

ø(10) DIRECTOR.—The term ‘‘Director’’ means the Director of 

the Bureau of Consumer Financial Protection.¿ 

(11) STATE.—The term ‘‘State’’ means any State of the 

United States, the District of Columbia, any territory of the 

United States, Puerto Rico, Guam, American Samoa, the Trust 

Territory of the Pacific Islands, the Virgin Islands, and the 

Northern Mariana Islands. 

(12) STATE-LICENSED LOAN ORIGINATOR.—The term ‘‘State-licensed loan originator’’ means any individual who— 

(A) is a loan originator; 

(B) is not an employee of— 

(i) a depository institution; 

(ii) a subsidiary that is— 

(I) owned and controlled by a depository institution; and 

(II) regulated by a Federal banking agency; or 

(iii) an institution regulated by the Farm Credit Administration; and 

(C) is licensed by a State or by the øDirector¿ Financial 

Product Safety Commission under section 1508 and registered as a loan originator with, and maintains a unique 

identifier through, the Nationwide Mortgage Licensing 

System and Registry. 

(13) UNIQUE IDENTIFIER.— 

(A) IN GENERAL.—The term ‘‘unique identifier’’ means a 

number or other identifier that— 

(i) permanently identifies a loan originator; 

(ii) is assigned by protocols established by the Nationwide Mortgage Licensing System and Registry and 

the Bureau to facilitate electronic tracking of loan 

originators and uniform identification of, and public 

access to, the employment history of and the publicly 

adjudicated disciplinary and enforcement actions 

against loan originators; and 


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(iii) shall not be used for purposes other than those 

set forth under this title. 

(B) RESPONSIBILITY OF STATES.—To the greatest extent 

possible and to accomplish the purpose of this title, States 

shall use unique identifiers in lieu of social security numbers. 

SEC. 1504. LICENSE OR REGISTRATION REQUIRED. 

(a) IN GENERAL.—Subject to the existence of a licensing or registration regime, as the case may be, an individual may not engage 

in the business of a loan originator without first— 

(1) obtaining, and maintaining annually— 

(A) a registration as a registered loan originator; or 

(B) a license and registration as a State-licensed loan 

originator; and 

(2) obtaining a unique identifier. 

(b) LOAN PROCESSORS AND UNDERWRITERS.— 

(1) SUPERVISED LOAN PROCESSORS AND UNDERWRITERS.—A 

loan processor or underwriter who does not represent to the 

public, through advertising or other means of communicating 

or providing information (including the use of business cards, 

stationery, brochures, signs, rate lists, or other promotional 

items), that such individual can or will perform any of the activities of a loan originator shall not be required to be a Statelicensed loan originator. 

(2) INDEPENDENT CONTRACTORS.—An independent contractor 

may not engage in residential mortgage loan origination activities as a loan processor or underwriter unless such independent contractor is a State-licensed loan originator. 

SEC. 1505. STATE LICENSE AND REGISTRATION APPLICATION AND 

ISSUANCE. 

(a) BACKGROUND CHECKS.—In connection with an application to 

any State for licensing and registration as a State-licensed loan 

originator, the applicant shall, at a minimum, furnish to the Nationwide Mortgage Licensing System and Registry information concerning the applicant’s identity, including— 

(1) fingerprints for submission to the Federal Bureau of Investigation, and any governmental agency or entity authorized 

to receive such information for a State and national criminal 

history background check; and 

(2) personal history and experience, including authorization 

for the System to obtain— 

(A) an independent credit report obtained from a consumer reporting agency described in section 603(p) of the 

Fair Credit Reporting Act; and 

(B) information related to any administrative, civil or 

criminal findings by any governmental jurisdiction. 

(b) ISSUANCE OF LICENSE.—The minimum standards for licensing 

and registration as a State-licensed loan originator shall include 

the following: 

(1) The applicant has never had a loan originator license revoked in any governmental jurisdiction. 

(2) The applicant has not been convicted of, or pled guilty or 

nolo contendere to, a felony in a domestic, foreign, or military 

court— 


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(A) during the 7-year period preceding the date of the 

application for licensing and registration; or 

(B) at any time preceding such date of application, if 

such felony involved an act of fraud, dishonesty, or a 

breach of trust, or money laundering. 

(3) The applicant has demonstrated financial responsibility, 

character, and general fitness such as to command the confidence of the community and to warrant a determination that 

the loan originator will operate honestly, fairly, and efficiently 

within the purposes of this title. 

(4) The applicant has completed the pre-licensing education 

requirement described in subsection (c). 

(5) The applicant has passed a written test that meets the 

test requirement described in subsection (d). 

(6) The applicant has met either a net worth or surety bond 

requirement, or paid into a State fund, as required by the 

State pursuant to section 1508(d)(6). 

(c) PRE-LICENSING EDUCATION OF LOAN ORIGINATORS.— (1) MINIMUM EDUCATIONAL REQUIREMENTS.—In order to meet 

the pre-licensing education requirement referred to in subsection (b)(4), a person shall complete at least 20 hours of education approved in accordance with paragraph (2), which shall 

include at least— 

(A) 3 hours of Federal law and regulations; 

(B) 3 hours of ethics, which shall include instruction on 

fraud, consumer protection, and fair lending issues; and 

(C) 2 hours of training related to lending standards for 

the nontraditional mortgage product marketplace. 

(2) APPROVED EDUCATIONAL COURSES.—For purposes of paragraph (1), pre-licensing education courses shall be reviewed, 

and approved by the Nationwide Mortgage Licensing System 

and Registry. 

(3) LIMITATION AND STANDARDS.— (A) LIMITATION.—To maintain the independence of the 

approval process, the Nationwide Mortgage Licensing System and Registry shall not directly or indirectly offer prelicensure educational courses for loan originators. 

(B) STANDARDS.—In approving courses under this section, the Nationwide Mortgage Licensing System and Registry shall apply reasonable standards in the review and 

approval of courses. 

(d) TESTING OF LOAN ORIGINATORS.— 

(1) IN GENERAL.—In order to meet the written test requirement referred to in subsection (b)(5), an individual shall pass, 

in accordance with the standards established under this subsection, a qualified written test developed by the Nationwide 

Mortgage Licensing System and Registry and administered by 

an approved test provider. 

(2) QUALIFIED TEST.—A written test shall not be treated as 

a qualified written test for purposes of paragraph (1) unless 

the test adequately measures the applicant’s knowledge and 

comprehension in appropriate subject areas, including— 

(A) ethics; 

(B) Federal law and regulation pertaining to mortgage 

origination; 


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(C) State law and regulation pertaining to mortgage 

origination; 

(D) Federal and State law and regulation, including instruction on fraud, consumer protection, the nontraditional 

mortgage marketplace, and fair lending issues. 

(3) MINIMUM COMPETENCE.— 

(A) PASSING SCORE.—An individual shall not be considered to have passed a qualified written test unless the individual achieves a test score of not less than 75 percent 

correct answers to questions. 

(B) INITIAL RETESTS.—An individual may retake a test 3 

consecutive times with each consecutive taking occurring 

at least 30 days after the preceding test. 

(C) SUBSEQUENT RETESTS.—After failing 3 consecutive 

tests, an individual shall wait at least 6 months before 

taking the test again. 

(D) RETEST AFTER LAPSE OF LICENSE.—A State-licensed 

loan originator who fails to maintain a valid license for a 

period of 5 years or longer shall retake the test, not taking 

into account any time during which such individual is a 

registered loan originator. 

(e) MORTGAGE CALL REPORTS.—Each mortgage licensee shall 

submit to the Nationwide Mortgage Licensing System and Registry 

reports of condition, which shall be in such form and shall contain 

such information as the Nationwide Mortgage Licensing System 

and Registry may require. 

SEC. 1506. STANDARDS FOR STATE LICENSE RENEWAL. 

(a) IN GENERAL.—The minimum standards for license renewal 

for State-licensed loan originators shall include the following: 

(1) The loan originator continues to meet the minimum 

standards for license issuance. 

(2) The loan originator has satisfied the annual continuing 

education requirements described in subsection (b). 

(b) CONTINUING EDUCATION FOR STATE-LICENSED LOAN ORIGINATORS.— 

(1) IN GENERAL.—In order to meet the annual continuing 

education requirements referred to in subsection (a)(2), a 

State-licensed loan originator shall complete at least 8 hours of 

education approved in accordance with paragraph (2), which 

shall include at least— 

(A) 3 hours of Federal law and regulations; 

(B) 2 hours of ethics, which shall include instruction on 

fraud, consumer protection, and fair lending issues; and 

(C) 2 hours of training related to lending standards for 

the nontraditional mortgage product marketplace. 

(2) APPROVED EDUCATIONAL COURSES.—For purposes of paragraph (1), continuing education courses shall be reviewed, and 

approved by the Nationwide Mortgage Licensing System and 

Registry. 

(3) CALCULATION OF CONTINUING EDUCATION CREDITS.—A 

State-licensed loan originator— 

(A) may only receive credit for a continuing education 

course in the year in which the course is taken; and 


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(B) may not take the same approved course in the same 

or successive years to meet the annual requirements for 

continuing education. 

(4) INSTRUCTOR CREDIT.—A State-licensed loan originator 

who is approved as an instructor of an approved continuing 

education course may receive credit for the originator’s own annual continuing education requirement at the rate of 2 hours 

credit for every 1 hour taught. 

(5) LIMITATION AND STANDARDS.— (A) LIMITATION.—To maintain the independence of the 

approval process, the Nationwide Mortgage Licensing System and Registry shall not directly or indirectly offer any 

continuing education courses for loan originators. 

(B) STANDARDS.—In approving courses under this section, the Nationwide Mortgage Licensing System and Registry shall apply reasonable standards in the review and 

approval of courses. 

SEC. 1507. SYSTEM OF REGISTRATION ADMINISTRATION BY FEDERAL 

AGENCIES. 

(a) DEVELOPMENT.— (1) IN GENERAL.—The Bureau shall develop and maintain a 

system for registering employees of a depository institution, 

employees of a subsidiary that is owned and controlled by a depository institution and regulated by a Federal banking agency, or employees of an institution regulated by the Farm Credit 

Administration, as registered loan originators with the Nationwide Mortgage Licensing System and Registry. The system 

shall be implemented before the end of the 1-year period beginning on the date of enactment of the Consumer Financial Protection Act of 2010. 

(2) REGISTRATION REQUIREMENTS.—In connection with the 

registration of any loan originator under this subsection, the 

Bureau shall, at a minimum, furnish or cause to be furnished 

to the Nationwide Mortgage Licensing System and Registry information concerning the identity of the employee, including— 

(A) fingerprints for submission to the Federal Bureau of 

Investigation, and any governmental agency or entity authorized to receive such information for a State and national criminal history background check; and 

(B) personal history and experience, including authorization for the Nationwide Mortgage Licensing System and 

Registry to obtain information related to any administrative, civil or criminal findings by any governmental jurisdiction. 

(b) COORDINATION.— 

(1) UNIQUE IDENTIFIER.—The Bureau, and the Bureau of 

Consumer Financial Protection shall coordinate with the Nationwide Mortgage Licensing System and Registry to establish 

protocols for assigning a unique identifier to each registered 

loan originator that will facilitate electronic tracking and uniform identification of, and public access to, the employment 

history of and publicly adjudicated disciplinary and enforcement actions against loan originators. 

(2) NATIONWIDE MORTGAGE LICENSING SYSTEM AND REGISTRY

DEVELOPMENT.—To facilitate the transfer of information reVerDate Sep 11 2014 02:53 Dec 22, 2016 Jkt 069006 PO 00000 Frm 00080 Fmt 6659 Sfmt 6601 E:\HR\OC\HR872.XXX HR872

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quired by subsection (a)(2), the Nationwide Mortgage Licensing 

System and Registry shall coordinate with the Bureau, and the 

Bureau of Consumer Financial Protection concerning the development and operation, by such System and Registry, of the 

registration functionality and data requirements for loan originators. 

(c) CONSIDERATION OF FACTORS AND PROCEDURES.—In establishing the registration procedures under subsection (a) and the 

protocols for assigning a unique identifier to a registered loan originator, the Bureau shall make such de minimis exceptions as may 

be appropriate to paragraphs (1)(A) and (2) of section 1504(a), shall 

make reasonable efforts to utilize existing information to minimize 

the burden of registering loan originators, and shall consider methods for automating the process to the greatest extent practicable 

consistent with the purposes of this title. 

SEC. 1508. BUREAU OF CONSUMER FINANCIAL PROTECTION BACKUP 

AUTHORITY TO ESTABLISH LOAN ORIGINATOR LICENSING SYSTEM. 

(a) BACKUP LICENSING SYSTEM.—If, by the end of the 1-year period, or the 2-year period in the case of a State whose legislature 

meets only biennially, beginning on the date of the enactment of 

this title or at any time thereafter, the øDirector¿ Financial Product Safety Commission determines that a State does not have in 

place by law or regulation a system for licensing and registering 

loan originators that meets the requirements of sections 1505 and 

1506 and subsection (d) of this section, or does not participate in 

the Nationwide Mortgage Licensing System and Registry, the øDirector¿ Financial Product Safety Commission shall provide for the 

establishment and maintenance of a system for the licensing and 

registration by the øDirector¿ Financial Product Safety Commission of loan originators operating in such State as State-licensed 

loan originators. 

(b) LICENSING AND REGISTRATION REQUIREMENTS.—The system 

established by the øDirector¿ Financial Product Safety Commission 

under subsection (a) for any State shall meet the requirements of 

sections 1505 and 1506 for State-licensed loan originators. 

(c) UNIQUE IDENTIFIER.—The øDirector¿ Financial Product Safety Commission shall coordinate with the Nationwide Mortgage Licensing System and Registry to establish protocols for assigning a 

unique identifier to each loan originator licensed by the øDirector¿ 

Financial Product Safety Commission as a State-licensed loan originator that will facilitate electronic tracking and uniform identification of, and public access to, the employment history of and the 

publicly adjudicated disciplinary and enforcement actions against 

loan originators. 

(d) STATE LICENSING LAW REQUIREMENTS.—For purposes of this 

section, the law in effect in a State meets the requirements of this 

subsection if the øDirector¿ Financial Product Safety Commission 

determines the law satisfies the following minimum requirements: 

(1) A State loan originator supervisory authority is maintained to provide effective supervision and enforcement of such 

law, including the suspension, termination, or nonrenewal of a 

license for a violation of State or Federal law. 

(2) The State loan originator supervisory authority ensures 

that all State-licensed loan originators operating in the State 


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are registered with Nationwide Mortgage Licensing System 

and Registry. 

(3) The State loan originator supervisory authority is required to regularly report violations of such law, as well as enforcement actions and other relevant information, to the Nationwide Mortgage Licensing System and Registry. 

(4) The State loan originator supervisory authority has a 

process in place for challenging information contained in the 

Nationwide Mortgage Licensing System and Registry. 

(5) The State loan originator supervisory authority has established a mechanism to assess civil money penalties for individuals acting as mortgage originators in their State without 

a valid license or registration. 

(6) The State loan originator supervisory authority has established minimum net worth or surety bonding requirements 

that reflect the dollar amount of loans originated by a residential mortgage loan originator, or has established a recovery 

fund paid into by the loan originators. 

(e) TEMPORARY EXTENSION OF PERIOD.—The øDirector¿ Financial 

Product Safety Commission may extend, by not more than 24 

months, the 1-year or 2-year period, as the case may be, referred 

to in subsection (a) for the licensing of loan originators in any State 

under a State licensing law that meets the requirements of sections 

1505 and 1506 and subsection (d) if the øDirector¿ Financial Product Safety Commission determines that such State is making a 

good faith effort to establish a State licensing law that meets such 

requirements, license mortgage originators under such law, and 

register such originators with the Nationwide Mortgage Licensing 

System and Registry. 

(f) REGULATION AUTHORITY.— 

(1) IN GENERAL.—The Bureau is authorized to promulgate 

regulations setting minimum net worth or surety bond requirements for residential mortgage loan originators and minimum 

requirements for recovery funds paid into by loan originators. 

(2) CONSIDERATIONS.—In issuing regulations under paragraph (1), the Bureau shall take into account the need to provide originators adequate incentives to originate affordable and 

sustainable mortgage loans, as well as the need to ensure a 

competitive origination market that maximizes consumer access to affordable and sustainable mortgage loans. 

SEC. 1509. BACKUP AUTHORITY TO ESTABLISH A NATIONWIDE MORTGAGE LICENSING AND REGISTRY SYSTEM. 

If at any time the øDirector¿ Financial Product Safety Commission determines that the Nationwide Mortgage Licensing System 

and Registry is failing to meet the requirements and purposes of 

this title for a comprehensive licensing, supervisory, and tracking 

system for loan originators, the øDirector¿ Financial Product Safety Commission shall establish and maintain such a system to carry 

out the purposes of this title and the effective registration and regulation of loan originators. 

SEC. 1510. FEES. 

The Bureau, the Farm Credit Administration, and the Nationwide Mortgage Licensing System and Registry may charge reasonable fees to cover the costs of maintaining and providing access to 


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information from the Nationwide Mortgage Licensing System and 

Registry, to the extent that such fees are not charged to consumers 

for access to such system and registry. 

SEC. 1511. BACKGROUND CHECKS OF LOAN ORIGINATORS. 

(a) ACCESS TO RECORDS.—Notwithstanding any other provision of 

law, in providing identification and processing functions, the Attorney General shall provide access to all criminal history information 

to the appropriate State officials responsible for regulating Statelicensed loan originators to the extent criminal history background 

checks are required under the laws of the State for the licensing 

of such loan originators. 

(b) AGENT.—For the purposes of this section and in order to reduce the points of contact which the Federal Bureau of Investigation may have to maintain for purposes of subsection (a), the Conference of State Bank Supervisors or a wholly owned subsidiary 

may be used as a channeling agent of the States for requesting and 

distributing information between the Department of Justice and 

the appropriate State agencies. 

SEC. 1512. CONFIDENTIALITY OF INFORMATION. 

(a) SYSTEM CONFIDENTIALITY.—Except as otherwise provided in 

this section, any requirement under Federal or State law regarding 

the privacy or confidentiality of any information or material provided to the Nationwide Mortgage Licensing System and Registry 

or a system established by the øDirector¿ Financial Product Safety 

Commission under section 1509, and any privilege arising under 

Federal or State law (including the rules of any Federal or State 

court) with respect to such information or material, shall continue 

to apply to such information or material after the information or 

material has been disclosed to the system. Such information and 

material may be shared with all State and Federal regulatory officials with mortgage industry oversight authority without the loss 

of privilege or the loss of confidentiality protections provided by 

Federal and State laws. 

(b) NONAPPLICABILITY OF CERTAIN REQUIREMENTS.—Information 

or material that is subject to a privilege or confidentiality under 

subsection (a) shall not be subject to— 

(1) disclosure under any Federal or State law governing the 

disclosure to the public of information held by an officer or an 

agency of the Federal Government or the respective State; or 

(2) subpoena or discovery, or admission into evidence, in any 

private civil action or administrative process, unless with respect to any privilege held by the Nationwide Mortgage Licensing System and Registry or the øDirector¿ Financial Product 

Safety Commission with respect to such information or material, the person to whom such information or material pertains 

waives, in whole or in part, in the discretion of such person, 

that privilege. 

(c) COORDINATION WITH OTHER LAW.—Any State law, including 

any State open record law, relating to the disclosure of confidential 

supervisory information or any information or material described 

in subsection (a) that is inconsistent with subsection (a) shall be 

superseded by the requirements of such provision to the extent 

State law provides less confidentiality or a weaker privilege. 


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(d) PUBLIC ACCESS TO INFORMATION.—This section shall not 

apply with respect to the information or material relating to the 

employment history of, and publicly adjudicated disciplinary and 

enforcement actions against, loan originators that is included in 

Nationwide Mortgage Licensing System and Registry for access by 

the public. 

SEC. 1513. LIABILITY PROVISIONS. 

The Bureau, any State official or agency, or any organization 

serving as the administrator of the Nationwide Mortgage Licensing 

System and Registry or a system established by the øDirector¿ Financial Product Safety Commission under section 1509, or any officer or employee of any such entity, shall not be subject to any civil 

action or proceeding for monetary damages by reason of the good 

faith action or omission of any officer or employee of any such entity, while acting within the scope of office or employment, relating 

to the collection, furnishing, or dissemination of information concerning persons who are loan originators or are applying for licensing or registration as loan originators. 

SEC. 1514. ENFORCEMENT BY THE BUREAU. 

(a) SUMMONS AUTHORITY.—The øDirector¿ Financial Product 

Safety Commission may— 

(1) examine any books, papers, records, or other data of any 

loan originator operating in any State which is subject to a licensing system established by the øDirector¿ Financial Product Safety Commission under section 1508; and 

(2) summon any loan originator referred to in paragraph (1) 

or any person having possession, custody, or care of the reports 

and records relating to such loan originator, to appear before 

the øDirector¿ Financial Product Safety Commission or any 

delegate of the øDirector¿ Financial Product Safety Commission at a time and place named in the summons and to 

produce such books, papers, records, or other data, and to give 

testimony, under oath, as may be relevant or material to an investigation of such loan originator for compliance with the requirements of this title. 

(b) EXAMINATION AUTHORITY.— 

(1) IN GENERAL.—If the øDirector¿ Financial Product Safety 

Commission establishes a licensing system under section 1508 

for any State, the øDirector¿ Financial Product Safety Commission shall appoint examiners for the purposes of administering such section. 

(2) POWER TO EXAMINE.—Any examiner appointed under 

paragraph (1) shall have power, on behalf of the øDirector¿ Financial Product Safety Commission, to make any examination 

of any loan originator operating in any State which is subject 

to a licensing system established by the øDirector¿ Financial 

Product Safety Commission under section 1508 whenever the 

øDirector¿ Financial Product Safety Commission determines 

an examination of any loan originator is necessary to determine the compliance by the originator with this title. 

(3) REPORT OF EXAMINATION.—Each examiner appointed 

under paragraph (1) shall make a full and detailed report of 

examination of any loan originator examined to the øDirector¿ 

Financial Product Safety Commission. 


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(4) ADMINISTRATION OF OATHS AND AFFIRMATIONS; EVI- DENCE.—In connection with examinations of loan originators 

operating in any State which is subject to a licensing system 

established by the øDirector¿ Financial Product Safety Commission under section 1508, or with other types of investigations to determine compliance with applicable law and regulations, the øDirector¿ Financial Product Safety Commission and 

examiners appointed by the øDirector¿ Financial Product Safety Commission may administer oaths and affirmations and examine and take and preserve testimony under oath as to any 

matter in respect to the affairs of any such loan originator. 

(5) ASSESSMENTS.—The cost of conducting any examination 

of any loan originator operating in any State which is subject 

to a licensing system established by the øDirector¿ Financial 

Product Safety Commission under section 1508 shall be assessed by the øDirector¿ Financial Product Safety Commission 

against the loan originator to meet the Secretary’s expenses in 

carrying out such examination. 

(c) CEASE AND DESIST PROCEEDING.— 

(1) AUTHORITY OF SECRETARY.—If the øDirector¿ Financial 

Product Safety Commission finds, after notice and opportunity 

for hearing, that any person is violating, has violated, or is 

about to violate any provision of this title, or any regulation 

thereunder, with respect to a State which is subject to a licensing system established by the øDirector¿ Financial Product 

Safety Commission under section 1508, the øDirector¿ Financial Product Safety Commission may publish such findings and 

enter an order requiring such person, and any other person 

that is, was, or would be a cause of the violation, due to an act 

or omission the person knew or should have known would contribute to such violation, to cease and desist from committing 

or causing such violation and any future violation of the same 

provision, rule, or regulation. Such order may, in addition to 

requiring a person to cease and desist from committing or 

causing a violation, require such person to comply, or to take 

steps to effect compliance, with such provision or regulation, 

upon such terms and conditions and within such time as the 

øDirector¿ Financial Product Safety Commission may specify 

in such order. Any such order may, as the øDirector¿ Financial 

Product Safety Commission deems appropriate, require future 

compliance or steps to effect future compliance, either permanently or for such period of time as the øDirector¿ Financial 

Product Safety Commission may specify, with such provision or 

regulation with respect to any loan originator. 

(2) HEARING.—The notice instituting proceedings pursuant to 

paragraph (1) shall fix a hearing date not earlier than 30 days 

nor later than 60 days after service of the notice unless an earlier or a later date is set by the øDirector¿ Financial Product 

Safety Commission with the consent of any respondent so 

served. 

(3) TEMPORARY ORDER.—Whenever the øDirector¿ Financial 

Product Safety Commission determines that the alleged violation or threatened violation specified in the notice instituting 

proceedings pursuant to paragraph (1), or the continuation 

thereof, is likely to result in significant dissipation or converVerDate Sep 11 2014 02:53 Dec 22, 2016 Jkt 069006 PO 00000 Frm 00085 Fmt 6659 Sfmt 6601 E:\HR\OC\HR872.XXX HR872

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sion of assets, significant harm to consumers, or substantial 

harm to the public interest prior to the completion of the proceedings, the øDirector¿ Financial Product Safety Commission 

may enter a temporary order requiring the respondent to cease 

and desist from the violation or threatened violation and to 

take such action to prevent the violation or threatened violation and to prevent dissipation or conversion of assets, significant harm to consumers, or substantial harm to the public interest as the øDirector¿ Financial Product Safety Commission 

deems appropriate pending completion of such proceedings. 

Such an order shall be entered only after notice and opportunity for a hearing, unless the øDirector¿ Financial Product 

Safety Commission determines that notice and hearing prior to 

entry would be impracticable or contrary to the public interest. 

A temporary order shall become effective upon service upon the 

respondent and, unless set aside, limited, or suspended by the 

øDirector¿ Financial Product Safety Commission or a court of 

competent jurisdiction, shall remain effective and enforceable 

pending the completion of the proceedings. 

(4) REVIEW OF TEMPORARY ORDERS.— 

(A) REVIEW BY SECRETARY.—At any time after the respondent has been served with a temporary cease and desist order pursuant to paragraph (3), the respondent may 

apply to the øDirector¿ Financial Product Safety Commission to have the order set aside, limited, or suspended. If 

the respondent has been served with a temporary cease 

and desist order entered without a prior hearing before the 

øDirector¿ Financial Product Safety Commission, the respondent may, within 10 days after the date on which the 

order was served, request a hearing on such application 

and the øDirector¿ Financial Product Safety Commission 

shall hold a hearing and render a decision on such application at the earliest possible time. 

(B) JUDICIAL REVIEW.—Within— 

(i) 10 days after the date the respondent was served 

with a temporary cease and desist order entered with 

a prior hearing before the øDirector¿ Financial Product Safety Commission; or 

(ii) 10 days after the øDirector¿ Financial Product 

Safety Commission renders a decision on an application and hearing under paragraph (1), with respect to 

any temporary cease and desist order entered without 

a prior hearing before the øDirector¿ Financial Product Safety Commission, 

the respondent may apply to the United States district 

court for the district in which the respondent resides or 

has its principal place of business, or for the District of Columbia, for an order setting aside, limiting, or suspending 

the effectiveness or enforcement of the order, and the court 

shall have jurisdiction to enter such an order. A respondent served with a temporary cease and desist order entered without a prior hearing before the øDirector¿ Financial Product Safety Commission may not apply to the court 

except after hearing and decision by the øDirector¿ FinanVerDate Sep 11 2014 02:53 Dec 22, 2016 Jkt 069006 PO 00000 Frm 00086 Fmt 6659 Sfmt 6601 E:\HR\OC\HR872.XXX HR872

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cial Product Safety Commission on the respondent’s application under subparagraph (A). 

(C) NO AUTOMATIC STAY OF TEMPORARY ORDER.—The 

commencement of proceedings under subparagraph (B) 

shall not, unless specifically ordered by the court, operate 

as a stay of the Secretary’s order. 

(5) AUTHORITY OF THE SECRETARY TO PROHIBIT PERSONS

FROM SERVING AS LOAN ORIGINATORS.—In any cease and desist 

proceeding under paragraph (1), the øDirector¿ Financial 

Product Safety Commission may issue an order to prohibit, 

conditionally or unconditionally, and permanently or for such 

period of time as the øDirector¿ Financial Product Safety Commission shall determine, any person who has violated this title 

or regulations thereunder, from acting as a loan originator if 

the conduct of that person demonstrates unfitness to serve as 

a loan originator. 

(d) AUTHORITY OF THE SECRETARY TO ASSESS MONEY PEN- ALTIES.— 

(1) IN GENERAL.—The øDirector¿ Financial Product Safety 

Commission may impose a civil penalty on a loan originator 

operating in any State which is subject to a licensing system 

established by the øDirector¿ Financial Product Safety Commission under section 1508, if the øDirector¿ Financial Product Safety Commission finds, on the record after notice and opportunity for hearing, that such loan originator has violated or 

failed to comply with any requirement of this title or any regulation prescribed by the øDirector¿ Financial Product Safety 

Commission under this title or order issued under subsection 

(c). 

(2) MAXIMUM AMOUNT OF PENALTY.—The maximum amount 

of penalty for each act or omission described in paragraph (1) 

shall be $25,000. 

SEC. 1515. STATE EXAMINATION AUTHORITY. 

In addition to any authority allowed under State law a State licensing agency shall have the authority to conduct investigations 

and examinations as follows: 

(1) For the purposes of investigating violations or complaints 

arising under this title, or for the purposes of examination, the 

State licensing agency may review, investigate, or examine any 

loan originator licensed or required to be licensed under this 

title, as often as necessary in order to carry out the purposes 

of this title. 

(2) Each such loan originator shall make available upon request to the State licensing agency the books and records relating to the operations of such originator. The State licensing 

agency may have access to such books and records and interview the officers, principals, loan originators, employees, independent contractors, agents, and customers of the licensee concerning their business. 

(3) The authority of this section shall remain in effect, 

whether such a loan originator acts or claims to act under any 

licensing or registration law of such State, or claims to act 

without such authority. 

(4) No person subject to investigation or examination under 

this section may knowingly withhold, abstract, remove, mutiVerDate Sep 11 2014 02:53 Dec 22, 2016 Jkt 069006 PO 00000 Frm 00087 Fmt 6659 Sfmt 6601 E:\HR\OC\HR872.XXX HR872

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late, destroy, or secrete any books, records, computer records, 

or other information. 

SEC. 1516. REPORTS AND RECOMMENDATIONS TO CONGRESS. 

(a) ANNUAL REPORTS.—Not later than 1 year after the date of enactment of this title, and annually thereafter, the øDirector¿ Financial Product Safety Commission shall submit a report to Congress on the effectiveness of the provisions of this title, including 

legislative recommendations, if any, for strengthening consumer 

protections, enhancing examination standards, streamlining communication between all stakeholders involved in residential mortgage loan origination and processing, and establishing performance 

based bonding requirements for mortgage originators or institutions that employ such brokers. 

(b) LEGISLATIVE RECOMMENDATIONS.—Not later than 6 months 

after the date of enactment of this title, the øDirector¿ Financial 

Product Safety Commission shall make recommendations to Congress on legislative reforms to the Real Estate Settlement Procedures Act of 1974, that the øDirector¿ Financial Product Safety 

Commission deems appropriate to promote more transparent disclosures, allowing consumers to better shop and compare mortgage 

loan terms and settlement costs. 

SEC. 1517. STUDY AND REPORTS ON DEFAULTS AND FORECLOSURES. 

(a) STUDY REQUIRED.—The øDirector¿ Financial Product Safety 

Commission shall conduct an extensive study of the root causes of 

default and foreclosure of home loans, using as much empirical 

data as is available. 

(b) PRELIMINARY REPORT TO CONGRESS.—Not later than 6 

months after the date of enactment of this title, the øDirector¿ Financial Product Safety Commission shall submit to Congress a preliminary report regarding the study required by this section. 

(c) FINAL REPORT TO CONGRESS.—Not later than 12 months after 

the date of enactment of this title, the øDirector¿ Financial Product Safety Commission shall submit to Congress a final report regarding the results of the study required by this section, which 

shall include any recommended legislation relating to the study, 

and recommendations for best practices and for a process to provide targeted assistance to populations with the highest risk of potential default or foreclosure. 

* * * * * * * 

TITLE 44, UNITED STATES CODE 

* * * * * * * 

CHAPTER 35—COORDINATION OF FEDERAL 

INFORMATION POLICY 

SUBCHAPTER I—FEDERAL INFORMATION POLICY 

* * * * * * * 


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§ 3513. Director review of agency activities; reporting; agency response 

(a) In consultation with the Administrator of General Services, 

the Archivist of the United States, the Director of the National Institute of Standards and Technology, and the Director of the Office 

of Personnel Management, the Director shall periodically review selected agency information resources management activities to ascertain the efficiency and effectiveness of such activities to improve 

agency performance and the accomplishment of agency missions. 

(b) Each agency having an activity reviewed under subsection (a) 

shall, within 60 days after receipt of a report on the review, provide 

a written plan to the Director describing steps (including milestones) to— 

(1) be taken to address information resources management 

problems identified in the report; and 

(2) improve agency performance and the accomplishment of 

agency missions. 

(c) COMPARABLE TREATMENT.—Notwithstanding any other provision of law, the Director shall treat or review a rule or order prescribed or proposed by the øDirector of the Bureau¿ Financial 

Product Safety Commission of Consumer Financial Protection on 

the same terms and conditions as apply to any rule or order prescribed or proposed by the Board of Governors of the Federal Reserve System. 

* * * * * * * 


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MINORITY VIEWS 

H.R. 1266 would change the leadership structure of the Consumer Financial Protection Bureau (‘‘CFPB’’) from an effective single director to a partisan, gridlocked five member commission. The 

legislation is a direct attempt to stymie the functioning of this important, independent agency, prevent consumers from receiving the 

full scope of consumer protections envisioned by the Dodd-Frank 

Wall Street Reform and Consumer Protection Act, and is an effort 

to empower the financial industry to exert more influence over 

CFPB decision making. 

This committee has often heard complaints that agencies run by 

multi-member commissions are slow to issue rules mandated by 

Congress or take enforcement actions. Replacing the Director of the 

Bureau with a multi-member commission would increase bureaucracy and could slow the Bureau’s ability to respond quickly and effectively to stakeholder views or emerging challenges in the industry. Given the recent violations of consumer rights by the financial 

industry, including the potential opening of more than 2.5 million 

fraudulent accounts in consumers’ names by Wells Fargo, the need 

to ensure that consumer protections are enforced by an independent agency, free from partisan politics and unnecessary bureaucratic delays, should be apparent to anyone committed to enforcing the laws designed to protect the consumers of financial 

products and services. 

In addition, the CFPB’s Director already engages in a robust discussion of multiple views and incorporates these views into Bureau 

decision making under several provisions of the Dodd-Frank Act. 

Some of these requirements include mandating that the Bureau 

seek the input of affected parties, including small businesses under 

section 1100G, prudential bank regulators under section 

1022(b)(2)(B), and a consumer advisory board composed of outside 

experts under section 1014. 

Finally, despite assertions from proponents of H.R. 1266 that a 

commission structure would enhance the accountability of the Bureau, the reality is that commission governance would make the 

Bureau less accountable to Congress and all affected parties. A review by the non-partisan Government Accountability Office (GAO), 

in examining the structure of the Consumer Product Safety Commission (CPSC), found that the ‘‘superior administrative effectiveness of a single-director structure would outweigh any potential 

benefits of collegial decision-making within CPSC’s multimember 

commission.’’ GAO also found that high turnover, and divisions 

among commissioners led to delays in decision-making. Further, individuals involved in the legislative process leading to the Bureau’s 

creation—including former Chairmen Barney Frank and Chris 

Dodd, as well as Senator Elizabeth Warren and the Obama Administration, all have noted that changing the Bureau’s structure 


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would interfere with its ability to make consumer financial markets operate more efficiently and effectively. 

The CFPB has a mission that is enshrined in statute and bound 

by the relevant consumer laws. Directors of independent agencies, 

as well as courts, should be trusted and expected to uphold those 

laws. History has shown that Directors of independent agencies 

often act in non-partisan ways when they are entrusted with an 

important public service role. In its current form, the CFPB’s structure works as it should by striking a balance between the ability 

of an elected administration to influence the direction of the agency 

by choosing a Director and ensuring that, once chosen, that Director has the necessary independence to carry out the mission of the 

agency without undue political influence. 

For the foregoing reasons, the Minority opposes H.R. 1266. 

MAXINE WATERS. 

WM. LACY CLAY. 

RUBE ́ N HINOJOSA. 

KEITH ELLISON. 

AL GREEN. 

Æ 


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