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[Congressional Bills 115th Congress]
[From the U.S. Government Publishing Office]
[S. 881 Introduced in Senate (IS)]

<DOC>

115th CONGRESS
  1st Session
                                 S. 881

 To reduce risks to the financial system by limiting banks' ability to 
engage in certain risky activities and limiting conflicts of interest, 
to reinstate certain Glass-Steagall Act protections that were repealed 
         by the Gramm-Leach-Bliley Act, and for other purposes.

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

                April 6 (legislative day, April 4), 2017

   Ms. Warren (for herself, Mr. McCain, Ms. Cantwell, and Mr. King) 
introduced the following bill; which was read twice and referred to the 
            Committee on Banking, Housing, and Urban Affairs

_______________________________________________________________________

                                 A BILL

 
 To reduce risks to the financial system by limiting banks' ability to 
engage in certain risky activities and limiting conflicts of interest, 
to reinstate certain Glass-Steagall Act protections that were repealed 
         by the Gramm-Leach-Bliley Act, and for other purposes.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``21st Century Glass-Steagall Act of 
2017''.

SEC. 2. FINDINGS AND PURPOSE.

    (a) Findings.--Congress finds that--
            (1) in response to a financial crisis and the ensuing Great 
        Depression, Congress enacted the Banking Act of 1933, known as 
        the ``Glass-Steagall Act'', to prohibit commercial banks from 
        offering investment banking and insurance services;
            (2) a series of deregulatory decisions by the Board of 
        Governors of the Federal Reserve System and the Office of the 
        Comptroller of the Currency, in addition to decisions by 
        Federal courts, permitted commercial banks to engage in an 
        increasing number of risky financial activities that had 
        previously been restricted under the Glass-Steagall Act, and 
        also vastly expanded the meaning of the ``business of banking'' 
        and ``closely related activities'' in banking law;
            (3) in 1999, Congress enacted the ``Gramm-Leach-Bliley 
        Act'', which repealed the Glass-Steagall Act separation between 
        commercial and investment banking and allowed for complex 
        cross-subsidies and interconnections between commercial and 
        investment banks;
            (4) former Kansas City Federal Reserve President Thomas 
        Hoenig observed that ``with the elimination of Glass-Steagall, 
        the largest institutions with the greatest ability to leverage 
        their balance sheets increased their risk profile by getting 
        into trading, market making, and hedge fund activities, adding 
        ever greater complexity to their balance sheets.'';
            (5) the Financial Crisis Inquiry Report issued by the 
        Financial Crisis Inquiry Commission concluded that, in the 
        years between the passage of the Gramm-Leach Bliley Act and the 
        global financial crisis, ``regulation and supervision of 
        traditional banking had been weakened significantly, allowing 
        commercial banks and thrifts to operate with fewer constraints 
        and to engage in a wider range of financial activities, 
        including activities in the shadow banking system.''. The 
        Commission also concluded that ``[t]his deregulation made the 
        financial system especially vulnerable to the financial crisis 
        and exacerbated its effects.'';
            (6) a report by the Financial Stability Oversight Council 
        pursuant to section 123 of the Dodd-Frank Wall Street Reform 
        and Consumer Protection Act (12 U.S.C. 5333) states that 
        increased complexity and diversity of financial activities at 
        financial institutions may ``shift institutions towards more 
        risk-taking, increase the level of interconnectedness among 
        financial firms, and therefore may increase systemic default 
        risk. These potential costs may be exacerbated in cases where 
        the market perceives diverse and complex financial institutions 
        as `too big to fail,' which may lead to excessive risk taking 
        and concerns about moral hazard.'';
            (7) the Senate Permanent Subcommittee on Investigations 
        report, ``Wall Street and the Financial Crisis: Anatomy of a 
        Financial Collapse'', states that repeal of the Glass-Steagall 
        Act ``made it more difficult for regulators to distinguish 
        between activities intended to benefit customers versus the 
        financial institution itself. The expanded set of financial 
        services investment banks were allowed to offer also 
        contributed to the multiple and significant conflicts of 
        interest that arose between some investment banks and their 
        clients during the financial crisis.'';
            (8) the Senate Permanent Subcommittee on Investigations 
        report, ``JPMorgan Chase Whale Trades: A Case History of 
        Derivatives Risks and Abuses'', describes how traders at 
        JPMorgan Chase made risky bets using excess deposits that were 
        partly insured by the Federal Government;
            (9) in Europe, the Vickers Independent Commission on 
        Banking (for the United Kingdom) and the Liikanen Report (for 
        the Euro area) have both found that there is no inherent reason 
        to bundle ``retail banking'' with ``investment banking'' or 
        other forms of relatively high risk securities trading, and 
        European countries are set on a path of separating various 
        activities that are currently bundled together in the business 
        of banking;
            (10) private sector actors prefer having access to 
        underpriced public sector insurance, whether explicit (for 
        insured deposits) or implicit (for ``too big to fail'' 
        financial institutions), to subsidize dangerous levels of risk-
        taking, which, from a broader social perspective, is not an 
        advantageous arrangement; and
            (11) the financial crisis, and the regulatory response to 
        the crisis, has led to more mergers between financial 
        institutions, creating greater financial sector consolidation 
        and increasing the dominance of a few large, complex financial 
        institutions that are generally considered to be ``too big to 
        fail'', and therefore are perceived by the markets as having an 
        implicit guarantee from the Federal Government to bail them out 
        in the event of their failure.
    (b) Purposes.--The purposes of this Act are--
            (1) to reduce risks to the financial system by limiting the 
        ability of banks to engage in activities other than socially 
        valuable core banking activities;
            (2) to protect taxpayers and reduce moral hazard by 
        removing explicit and implicit government guarantees for high-
        risk activities outside of the core business of banking; and
            (3) to eliminate any conflict of interest that arises from 
        banks engaging in activities from which their profits are 
        earned at the expense of their customers or clients.

SEC. 3. DEFINITIONS.

    In this Act--
            (1) the term ``bank holding company'' has the meaning given 
        the term in section 2 of the Bank Holding Company Act of 1956 
        (12 U.S.C. 1841); and
            (2) the terms ``insurance company'', ``insured depository 
        institution'', ``securities entity'', and ``swaps entity'' have 
        the meanings given those terms in section 18(s)(6)(D) of the 
        Federal Deposit Insurance Act, as added by section 4(a) of this 
        Act.

SEC. 4. SAFE AND SOUND BANKING.

    (a) Insured Depository Institutions.--Section 18(s) of the Federal 
Deposit Insurance Act (12 U.S.C. 1828(s)) is amended by adding at the 
end the following:
            ``(6) Limitations on banking affiliations.--
                    ``(A) Prohibition on affiliations with 
                nondepository entities.--An insured depository 
                institution may not--
                            ``(i) be or become an affiliate of any 
                        insurance company, securities entity, or swaps 
                        entity;
                            ``(ii) be in common ownership or control 
                        with any insurance company, securities entity, 
                        or swaps entity; or
                            ``(iii) engage in any activity that would 
                        cause the insured depository institution to 
                        qualify as an insurance company, securities 
                        entity, or swaps entity.
                    ``(B) Individuals eligible to serve on boards of 
                depository institutions.--
                            ``(i) In general.--An individual who is an 
                        officer, director, partner, or employee of any 
                        securities entity, insurance company, or swaps 
                        entity may not serve at the same time as an 
                        officer, director, employee, or other 
                        institution-affiliated party of any insured 
                        depository institution.
                            ``(ii) Exception.--Clause (i) shall not 
                        apply with respect to service by any individual 
                        which is otherwise prohibited under clause (i), 
                        if the appropriate Federal banking agency 
                        determines, by regulation with respect to a 
                        limited number of cases, that service by such 
                        an individual as an officer, director, 
                        employee, or other institution-affiliated party 
                        of an insured depository institution would not 
                        unduly influence--
                                    ``(I) the investment policies of 
                                the depository institution; or
                                    ``(II) the advice that the 
                                institution provides to customers.
                            ``(iii) Termination of service.--Subject to 
                        a determination under clause (i), any 
                        individual described in clause (i) who, as of 
                        the date of enactment of the 21st Century 
                        Glass-Steagall Act of 2017, is serving as an 
                        officer, director, employee, or other 
                        institution-affiliated party of any insured 
                        depository institution shall terminate such 
                        service as soon as is practicable after such 
                        date of enactment, and in no event, later than 
                        the end of the 60-day period beginning on that 
                        date of enactment.
                    ``(C) Termination of existing affiliations and 
                activities.--
                            ``(i) Orderly termination of existing 
                        affiliations and activities.--Any affiliation, 
                        common ownership or control, or activity of an 
                        insured depository institution with any 
                        securities entity, insurance company, swaps 
                        entity, or any other person, as of the date of 
                        enactment of the 21st Century Glass-Steagall 
                        Act of 2017, which is prohibited under 
                        subparagraph (A) shall be terminated as soon as 
                        is practicable, and in no event later than the 
                        end of the 5-year period beginning on that date 
                        of enactment.
                            ``(ii) Early termination.--The appropriate 
                        Federal banking agency, at any time after 
                        opportunity for hearing, may order termination 
                        of an affiliation, common ownership or control, 
                        or activity prohibited by clause (i) before the 
                        end of the 5-year period described in clause 
                        (i), if the agency determines that such 
                        action--
                                    ``(I) is necessary to prevent undue 
                                concentration of resources, decreased 
                                or unfair competition, conflicts of 
                                interest, or unsound banking practices; 
                                and
                                    ``(II) is in the public interest.
                            ``(iii) Extension.--Subject to a 
                        determination under clause (ii), an appropriate 
                        Federal banking agency may extend the 5-year 
                        period described in clause (i) as to any 
                        particular insured depository institution for 
                        not more than an additional 6 months at a time, 
                        if--
                                    ``(I) the agency certifies that 
                                such extension would promote the public 
                                interest and would not pose a 
                                significant threat to the stability of 
                                the banking system or financial markets 
                                in the United States; and
                                    ``(II) such extension, in the 
                                aggregate, does not exceed 1 year for 
                                any single insured depository 
                                institution.
                            ``(iv) Requirements for entities receiving 
                        an extension.--Upon receipt of an extension 
                        under clause (iii), the insured depository 
                        institution shall notify shareholders of the 
                        insured depository institution and the general 
                        public that it has failed to comply with the 
                        requirements of clause (i).
                    ``(D) Definitions.--For purposes of this paragraph, 
                the following definitions shall apply:
                            ``(i) Insurance company.--The term 
                        `insurance company' has the meaning given the 
                        term in section 2(q) of the Bank Holding 
                        Company Act of 1956 (12 U.S.C. 1841(q)).
                            ``(ii) Insured depository institution.--The 
                        term `insured depository institution'--
                                    ``(I) has the meaning given the 
                                term in section 3(c)(2); and
                                    ``(II) does not include a savings 
                                association controlled by a savings and 
                                loan holding company, as described in 
                                section 10(c)(9)(C) of the Home Owners' 
                                Loan Act (12 U.S.C. 1467a(c)(9)(C)).
                            ``(iii) Securities entity.--The term 
                        `securities entity'--
                                    ``(I) includes any entity engaged 
                                in--
                                            ``(aa) the issue, 
                                        flotation, underwriting, public 
                                        sale, or distribution of 
                                        stocks, bonds, debentures, 
                                        notes, or other securities;
                                            ``(bb) market making;
                                            ``(cc) activities of a 
                                        broker or dealer, as those 
                                        terms are defined in section 
                                        3(a) of the Securities Exchange 
                                        Act of 1934 (15 U.S.C. 78c(a));
                                            ``(dd) activities of a 
                                        futures commission merchant;
                                            ``(ee) activities of an 
                                        investment adviser or 
                                        investment company, as those 
                                        terms are defined in section 
                                        202(a) of the Investment 
                                        Advisers Act of 1940 (15 U.S.C. 
                                        80b-2(a)) and section 3(a)(1) 
                                        of the Investment Company Act 
                                        of 1940 (15 U.S.C. 80a-
                                        3(a)(1)), respectively; or
                                            ``(ff) hedge fund or 
                                        private equity investments in 
                                        the securities of either 
                                        privately or publicly held 
                                        companies; and
                                    ``(II) does not include a bank 
                                that, pursuant to its authorized trust 
                                and fiduciary activities--
                                            ``(aa) purchases and sells 
                                        investments for the account of 
                                        its customers; or
                                            ``(bb) provides financial 
                                        or investment advice to its 
                                        customers.
                            ``(iv) Swaps entity.--The term `swaps 
                        entity' means any swap dealer, security-based 
                        swap dealer, major swap participant, or major 
                        security-based swap participant, that is 
                        registered under--
                                    ``(I) the Commodity Exchange Act (7 
                                U.S.C. 1 et seq.); or
                                    ``(II) the Securities Exchange Act 
                                of 1934 (15 U.S.C. 78a et seq.).''.
    (b) Limitation on Banking Activities.--Section 21 of the Banking 
Act of 1933 (12 U.S.C. 378) is amended by adding at the end the 
following:
    ``(c) Business of Receiving Deposits.--For purposes of this 
section, the term `business of receiving deposits' includes the 
establishment and maintenance of any transaction account (as defined in 
section 19(b)(1)(C) of the Federal Reserve Act (12 U.S.C. 
461(b)(1)(C))).''.
    (c) Permitted Activities of National Banks.--The paragraph 
designated as ``Seventh'' of section 24 of the Revised Statutes (12 
U.S.C. 24) is amended to read as follows:
            ``Seventh. (A) To exercise by its board of directors or 
        duly authorized officers or agents, subject to law, all such 
        powers as are necessary to carry on the business of banking.
            ``(B) As used in this paragraph, the term `business of 
        banking' shall be limited to the following core banking 
        services:
                    ``(i) Receiving deposits.--A national banking 
                association may engage in the business of receiving 
                deposits.
                    ``(ii) Extensions of credit.--A national banking 
                association may--
                            ``(I) extend credit to individuals, 
                        businesses, not for profit organizations, and 
                        other entities;
                            ``(II) discount and negotiate promissory 
                        notes, drafts, bills of exchange, and other 
                        evidences of debt; and
                            ``(III) loan money on personal security.
                    ``(iii) Payment systems.--A national banking 
                association may participate in payment systems, defined 
                as instruments, banking procedures, and interbank funds 
                transfer systems that ensure the circulation of money.
                    ``(iv) Coin and bullion.--A national banking 
                association may buy, sell, and exchange coin and 
                bullion.
                    ``(v) Investments in securities.--
                            ``(I) In general.--A national banking 
                        association may invest in investment 
                        securities, defined as marketable obligations 
                        evidencing indebtedness of any person, 
                        copartnership, association, or corporation in 
                        the form of bonds, notes, or debentures 
                        (commonly known as `investment securities'), 
                        obligations of the Federal Government, or any 
                        State or subdivision thereof, and includes the 
                        definition of `investment securities', as may 
                        be jointly prescribed by regulation by--
                                    ``(aa) the Comptroller of the 
                                Currency;
                                    ``(bb) the Federal Deposit 
                                Insurance Corporation; and
                                    ``(cc) the Board of Governors of 
                                the Federal Reserve System.
                            ``(II) Limitations.--The business of 
                        dealing in securities and stock by the 
                        association shall be limited to--
                                    ``(aa) purchasing and selling such 
                                securities and stock without recourse, 
                                solely upon the order, and for the 
                                account of, customers, and in no case 
                                for its own account, and the 
                                association shall not underwrite any 
                                issue of securities or stock; and
                                    ``(bb) purchasing for its own 
                                account investment securities under 
                                such limitations and restrictions as 
                                the Comptroller of the Currency, the 
                                Federal Deposit Insurance Corporation, 
                                and the Board of Governors of the 
                                Federal Reserve System may jointly 
                                prescribe, by regulation.
                            ``(III) Prohibition on amount of 
                        investment.--In no event shall the total amount 
                        of the investment securities of any single 
                        obligor or maker, held by the association for 
                        its own account, exceed 10 percent of its 
                        capital stock actually paid in and unimpaired 
                        and 10 percent of its unimpaired surplus fund, 
                        except that such limitation shall not require 
                        any association to dispose of any securities 
                        lawfully held by it on August 23, 1935.
            ``(C) Prohibition against transactions involving structured 
        or synthetic products.--A national banking association may 
        not--
                    ``(i) invest in a structured or synthetic product, 
                a financial instrument in which a return is calculated 
                based on the value of, or by reference to the 
                performance of, a security, commodity, swap, other 
                asset, or an entity, or any index or basket composed of 
                securities, commodities, swaps, other assets, or 
                entities, other than customarily determined interest 
                rates; or
                    ``(ii) otherwise engage in the business of 
                receiving deposits or extending credit for transactions 
                involving structured or synthetic products.''.
    (d) Permitted Activities of Federal Savings Associations.--Section 
5(c)(1) of the Home Owners' Loan Act (12 U.S.C. 1464(c)(1)) is 
amended--
            (1) by striking subparagraph (Q); and
            (2) by redesignating subparagraphs (R) through (U) as 
        subparagraphs (Q) through (T), respectively.
    (e) Closely Related Activities.--Section 4(c) of the Bank Holding 
Company Act of 1956 (12 U.S.C. 1843(c)) is amended--
            (1) in paragraph (8), by striking ``had been determined'' 
        and all that follows through the end and inserting the 
        following: ``are so closely related to banking so as to be a 
        proper incident thereto, as provided under this paragraph or 
        any rule or regulation issued by the Board under this 
        paragraph, provided that for purposes of this paragraph, 
        closely related shall not be considered to include--
                    ``(A) serving as an investment adviser (as defined 
                in section 2(a) of the Investment Company Act of 1940 
                (15 U.S.C. 80a-2(a))) to an investment company 
                registered under that Act, including sponsoring, 
                organizing, and managing a closed-end investment 
                company;
                    ``(B) agency transactional services for customer 
                investments, except that this subparagraph may not be 
                construed as prohibiting purchases and sales of 
                investments for the account of customers conducted by a 
                bank (or subsidiary thereof) pursuant to the bank's 
                trust and fiduciary powers;
                    ``(C) investment transactions as principal, except 
                for activities specifically allowed by paragraph (14); 
                and
                    ``(D) management consulting and counseling 
                activities;'';
            (2) in paragraph (13), by striking ``or'' at the end;
            (3) by redesignating paragraph (14) as paragraph (15); and
            (4) by inserting after paragraph (13) the following:
            ``(14) purchasing, as an end user, any swap, to the extent 
        that--
                    ``(A) the purchase of any such swap occurs 
                contemporaneously with the underlying hedged item or 
                hedged transaction;
                    ``(B) there is formal documentation identifying the 
                hedging relationship with particularity at the 
                inception of the hedge; and
                    ``(C) the swap is being used to hedge against 
                exposure to--
                            ``(i) changes in the value of an individual 
                        recognized asset or liability or an identified 
                        portion thereof that is attributable to a 
                        particular risk;
                            ``(ii) changes in interest rates; or
                            ``(iii) changes in the value of currency; 
                        or''.
    (f) Prohibited Activities.--Section 4(a) of the Bank Holding 
Company Act of 1956 (12 U.S.C. 1843(a)) is amended--
            (1) in paragraph (1), by striking ``, or'' and inserting a 
        semicolon;
            (2) in paragraph (2), by striking the ``requirements of 
        this Act.'' and inserting ``requirements of this Act; or''; and
            (3) by inserting before the undesignated matter following 
        paragraph (2) the following:
            ``(3) with the exception of the activities permitted under 
        subsection (c), engage in the business of a `securities entity' 
        or a `swaps entity', as those terms are defined in section 
        18(s)(6)(D) of the Federal Deposit Insurance Act (12 U.S.C. 
        1828(s)(6)(D)), including dealing or making markets in 
        securities, repurchase agreements, exchange traded and over-
        the-counter swaps, as defined by the Commodity Futures Trading 
        Commission and the Securities and Exchange Commission, or 
        structured or synthetic products, as defined in the paragraph 
        designated as `Seventh' of section 24 of the Revised Statutes 
        (12 U.S.C. 24), or any other over-the-counter securities, 
        swaps, contracts, or any other agreement that derives its value 
        from, or takes on the form of, such securities, derivatives, or 
        contracts;
            ``(4) engage in proprietary trading, as provided by section 
        13, or any rule or regulation under that section;
            ``(5) own, sponsor, or invest in a hedge fund, or private 
        equity fund, or any other fund, as provided by section 13, or 
        any rule or regulation under that section, or any other fund 
        that exhibits the characteristics of a fund that takes on 
        proprietary trading activities or positions;
            ``(6) hold ineligible securities or derivatives;
            ``(7) engage in market-making; or
            ``(8) engage in prime brokerage activities.''.
    (g) Anti-Evasion.--
            (1) In general.--Any attempt to structure any contract, 
        investment, instrument, or product in such a manner that the 
        purpose or effect of such contract, investment, instrument, or 
        product is to evade or attempt to evade the prohibitions 
        described in section 18(s)(6) of the Federal Deposit Insurance 
        Act (12 U.S.C. 1828(s)(6)), section 21(c) of the Banking Act of 
        1933 (12 U.S.C. 378(c)), the paragraph designated as 
        ``Seventh'' of section 24 of the Revised Statutes (12 U.S.C. 
        24), section 5(c)(1) of the Home Owners' Loan Act (12 U.S.C. 
        1464(c)(1)), or section 4(a) of the Bank Holding Company Act of 
        1956 (12 U.S.C. 1843(a)), as added or amended by this section, 
        shall be considered a violation of the Federal Deposit 
        Insurance Act (12 U.S.C. 1811 et seq.), the Banking Act of 1933 
        (Public Law 73-66; 48 Stat. 162), section 24 of the Revised 
        Statutes (12 U.S.C. 24), the Home Owners' Loan Act (12 U.S.C. 
        1461 et seq.), and the Bank Holding Company Act of 1956 (12 
        U.S.C. 1841 et seq.), respectively.
            (2) Termination.--
                    (A) In general.--Notwithstanding any other 
                provision of law, if a Federal agency has reasonable 
                cause to believe that an insured depository 
                institution, securities entity, swaps entity, insurance 
                company, bank holding company, or other entity over 
                which that Federal agency has regulatory authority has 
                made an investment or engaged in an activity in a 
                manner that functions as an evasion of the prohibitions 
                described in paragraph (1) (including through an abuse 
                of any permitted activity) or otherwise violates such 
                prohibitions, the Federal agency shall--
                            (i) order, after due notice and opportunity 
                        for hearing, the entity to terminate the 
                        activity and, as relevant, dispose of the 
                        investment;
                            (ii) order, after the procedures described 
                        in clause (i), the entity to pay a penalty 
                        equal to 10 percent of the entity's net 
                        profits, averaged over the previous 3 years, 
                        into the Treasury of the United States; and
                            (iii) initiate proceedings described in 
                        section 8(e) of the Federal Deposit Insurance 
                        Act (12 U.S.C. 1818(e)) for individuals 
                        involved in evading the prohibitions described 
                        in paragraph (1).
                    (B) Construction.--Nothing in this paragraph shall 
                be construed to limit the inherent authority of any 
                Federal agency or State regulatory authority to further 
                restrict any investments or activities under otherwise 
                applicable provisions of law.
            (3) Reporting requirement.--
                    (A) In general.--Not later than 1 year after the 
                date of enactment of this Act, and every year 
                thereafter, each Federal agency having regulatory 
                authority over any entity described in paragraph (2)(A) 
                shall submit to the Committee on Banking, Housing, and 
                Urban Affairs of the Senate and the Committee on 
                Financial Services of the House of Representatives and 
                make available to the public a report, which shall 
                identify--
                            (i) the number and character of any 
                        activities that took place in the preceding 
                        year that function as an evasion of the 
                        prohibitions described in paragraph (1);
                            (ii) the names of the particular entities 
                        engaged in those activities; and
                            (iii) the actions of the Federal agency 
                        taken under paragraph (2).
    (h) Attestation.--Section 4 of the Bank Holding Company Act of 1956 
(12 U.S.C. 1843), as amended by section 4(a)(1) of this Act, is amended 
by adding at the end the following:
    ``(k) Attestation.--Executives of any bank holding company or its 
affiliate shall attest in writing, under penalty of perjury, that the 
bank holding company or affiliate is not engaged in any activity that 
is prohibited under subsection (a), except to the extent that such 
activity is permitted under subsection (c).''.

SEC. 5. REPEAL OF GRAMM-LEACH-BLILEY ACT PROVISIONS.

    (a) Termination of Financial Holding Company Designation.--
            (1) In general.--Section 4 of the Bank Holding Company Act 
        of 1956 (12 U.S.C. 1843) is amended by striking subsections 
        (k), (l), (m), (n), and (o).
            (2) Transition.--
                    (A) Orderly termination of existing affiliation.--
                In the case of a bank holding company which, pursuant 
                to the amendments made by paragraph (1), is no longer 
                authorized to control or be affiliated with any entity 
                that was permissible for a financial holding company on 
                the day before the date of enactment of this Act, any 
                affiliation, ownership or control, or activity by the 
                bank holding company that is not permitted for a bank 
                holding company shall be terminated as soon as is 
                practicable, and in no event later than the end of the 
                5-year period beginning on the date of enactment of 
                this Act.
                    (B) Early termination.--The Board of Governors of 
                the Federal Reserve System (in this section referred to 
                as the ``Board''), after opportunity for hearing, at 
                any time, may terminate an affiliation prohibited by 
                subparagraph (A) before the end of the 5-year period 
                described in subparagraph (A) if the Board determines 
                that such action--
                            (i) is necessary to prevent undue 
                        concentration of resources, decreased or unfair 
                        competition, conflicts of interest, or unsound 
                        banking practices; and
                            (ii) is in the public interest.
                    (C) Extension.--Subject to a determination under 
                subparagraph (B), the Board may extend the 5-year 
                period described in subparagraph (A), as to any 
                particular bank holding company, for not more than an 
                additional 6 months at a time, if--
                            (i) the Board certifies that such extension 
                        would promote the public interest and would not 
                        pose a significant risk to the stability of the 
                        banking system or financial markets of the 
                        United States; and
                            (ii) such extension, in the aggregate, does 
                        not exceed 1 year for any single bank holding 
                        company.
                    (D) Requirements for entities receiving an 
                extension.--Upon receipt of an extension under 
                subparagraph (C), a bank holding company shall notify 
                the shareholders of the bank holding company and the 
                general public that the bank holding company has failed 
                to comply with the requirements of subparagraph (A).
    (b) Financial Subsidiaries of National Banks Disallowed.--
            (1) In general.--Section 5136A of the Revised Statutes (12 
        U.S.C. 24a) is repealed.
            (2) Transition.--
                    (A) Orderly termination of existing affiliation.--
                In the case of a national bank which, pursuant to the 
                amendment made by paragraph (1), is no longer 
                authorized to control or be affiliated with a financial 
                subsidiary as of the date of enactment of this Act, 
                such affiliation, ownership or control, or activity 
                shall be terminated as soon as is practicable, and in 
                no event later than the end of the 5-year period 
                beginning on the date of enactment of this Act.
                    (B) Early termination.--The Comptroller of the 
                Currency (in this section referred to as the 
                ``Comptroller''), after opportunity for hearing, at any 
                time, may terminate an affiliation prohibited by 
                subparagraph (A) before the end of the 5-year period 
                described in subparagraph (A) if the Comptroller 
                determines, having due regard for the purposes of this 
                Act, that such action--
                            (i) is necessary to prevent undue 
                        concentration of resources, decreased or unfair 
                        competition, conflicts of interest, or unsound 
                        banking practices; and
                            (ii) is in the public interest.
                    (C) Extension.--Subject to a determination under 
                subparagraph (B), the Comptroller may extend the 5-year 
                period described in subparagraph (A) as to any 
                particular national bank for not more than an 
                additional 6 months at a time, if--
                            (i) the Comptroller certifies that such 
                        extension would promote the public interest and 
                        would not pose a significant risk to the 
                        stability of the banking system or financial 
                        markets of the United States; and
                            (ii) such extension, in the aggregate, does 
                        not exceed 1 year for any single national bank.
                    (D) Requirements for entities receiving an 
                extension.--Upon receipt of an extension under 
                subparagraph (C), a national bank shall notify the 
                shareholders of the national bank and the general 
                public that the national bank has failed to comply with 
                the requirements described in subparagraph (A).
            (3) Clerical amendment.--The table of sections for chapter 
        one of title LXII of the Revised Statutes is amended by 
        striking the item relating to section 5136A.
    (c) Repeal of Provision Relating to Foreign Banks Filing as 
Financial Holding Companies.--Section 8(c) of the International Banking 
Act of 1978 (12 U.S.C. 3106(c)) is amended by striking paragraph (3).

SEC. 6. REPEAL OF BANKRUPTCY PROVISIONS.

    Title 11, United States Code, is amended by repealing sections 555, 
559, 560, and 562.

SEC. 7. TECHNICAL AND CONFORMING AMENDMENTS.

    (a) Bank Holding Company Act of 1956.--The Bank Holding Company Act 
of 1956 (12 U.S.C. 1841 et seq.) is amended--
            (1) in section 2 (12 U.S.C. 1841)--
                    (A) by striking subsection (p); and
                    (B) by redesignating subsection (q) as subsection 
                (p); and
            (2) in section 5 (12 U.S.C. 1844)--
                    (A) in subsection (a), by striking the last 
                sentence;
                    (B) in subsection (c), by striking paragraphs (3), 
                (4), and (5); and
                    (C) by striking subsection (g).
    (b) Bank Holding Company Act Amendments of 1970.--Section 106(a) of 
the Bank Holding Company Act Amendments of 1970 (12 U.S.C. 1971(a)) is 
amended by striking the last sentence.
    (c) Clayton Act.--Section 7A(c) of the Clayton Act (15 U.S.C. 
18a(c)) is amended--
            (1) in paragraph (7), by striking ``, except that'' and all 
        that follows and inserting a semicolon; and
            (2) in paragraph (8), by striking ``, except that'' and all 
        that follows and inserting a semicolon.
    (d) Commodity Exchange Act.--The Commodity Exchange Act (7 U.S.C. 1 
et seq.) is amended--
            (1) in section 1a(21)(G) (7 U.S.C. 1a(21)(G)), by striking 
        ``(as defined in section 2 of the Bank Holding Company Act of 
        1956)'';
            (2) in section 2(c)(2)(B)(i)(II)(dd) (7 U.S.C. 
        2(c)(2)(B)(i)(II)(dd)), by striking ``(as defined in section 2 
        of the Bank Holding Company Act of 1956)''; and
            (3) in section 2(h)(7)(C)(i)(VIII) (7 U.S.C. 
        2(h)(7)(C)(i)(VIII)), by striking ``, as defined in section 
        4(k) of the Bank Holding Company Act of 1956''.
    (e) Community Reinvestment Act of 1977.--Section 804 of the 
Community Reinvestment Act of 1977 (12 U.S.C. 2903) is amended--
            (1) by striking subsection (c); and
            (2) by redesignating subsection (d) as subsection (c).
    (f) Dodd-Frank Wall Street Reform and Consumer Protection Act.--
Section 201(a)(11)(B) of the Dodd-Frank Wall Street Reform and Consumer 
Protection Act (12 U.S.C. 5381(a)(11)(B)) is amended by striking ``for 
purposes of section 4(k) of the Bank Holding Company Act of 1956 (12 
U.S.C. 1843(k))'' each place that term appears.
    (g) Federal Deposit Insurance Act.--The Federal Deposit Insurance 
Act (12 U.S.C. 1811 et seq.) is amended--
            (1) in section 8(b)(3) (12 U.S.C. 1818(b)(3)), by striking 
        ``section 50'' and inserting ``section 48'';
            (2) in section 18(u)(1)(B) (12 U.S.C. 1828(u)(1)(B)), by 
        striking ``or section 45 of this Act'';
            (3) by striking sections 45 and 46 (12 U.S.C. 1831v and 
        1831w); and
            (4) by redesignating sections 47 through 50 as sections 45 
        through 48, respectively.
    (h) Federal Reserve Act.--The Federal Reserve Act (12 U.S.C. 221 et 
seq.) is amended--
            (1) in the 20th undesignated paragraph of section 9 (12 
        U.S.C. 335), by striking the last sentence; and
            (2) in section 23A (12 U.S.C. 371c)--
                    (A) in subsection (b)(11), by striking 
                ``subparagraph (H) or (I) of section 4(k)(4) of the 
                Bank Holding Company Act of 1956 or'';
                    (B) by striking subsection (e); and
                    (C) by redesignating subsection (f) as subsection 
                (e).
    (i) Financial Stability Act of 2010.--The Financial Stability Act 
of 2010 (12 U.S.C. 5301 et seq.) is amended--
            (1) in section 113(c)(5) (12 U.S.C. 5323(c)(5)), by 
        striking ``(as defined in section 4(k) of the Bank Holding 
        Company Act of 1956)'';
            (2) in section 163 (12 U.S.C. 5363)--
                    (A) by striking subsection (b); and
                    (B) in subsection (a), by striking ``(a)'' and all 
                that follows through ``For purposes'' and inserting 
                ``For purposes'';
            (3) in section 167(b) (12 U.S.C. 5367(b)), by striking 
        ``under section 4(k) of the Bank Holding Company Act of 1956'' 
        each place that term appears; and
            (4) in section 171(b) (12 U.S.C. 5371(b))--
                    (A) by striking paragraph (3); and
                    (B) by redesignating paragraphs (4) through (7) as 
                paragraphs (3) through (6), respectively.
    (j) Gramm-Leach-Bliley Act.--The Gramm-Leach-Bliley Act (Public Law 
106-102; 113 Stat. 1338) is amended--
            (1) by striking section 115 (12 U.S.C. 1820a);
            (2) in section 307(f) (15 U.S.C. 6715(f)), by amending 
        paragraph (2) to read as follows:
            ``(2) Board.--The term `Board' has the meaning given the 
        term in section 2 of the Bank Holding Company Act of 1956 (12 
        U.S.C. 1841).'';
            (3) in section 505(c) (15 U.S.C. 6805(c))--
                    (A) by striking ``section 47(g)(2)(B)(iii) of the 
                Federal Deposit Insurance Act'' and inserting ``section 
                45(g)(2)(B)(iii) of the Federal Deposit Insurance 
                Act''; and
                    (B) by striking ``section 47(a)'' and inserting 
                ``section 45(a)''; and
            (4) in section 509(3)(A) (15 U.S.C. 6809(3)(A)), by 
        striking ``as described in section 4(k) of the Bank Holding 
        Company Act of 1956''.
    (k) Home Owners' Loan Act.--Section 10(c) of the Home Owners' Loan 
Act (12 U.S.C. 1467a(c)) is amended--
            (1) in paragraph (2), by striking subparagraph (H); and
            (2) in paragraph (9)(A), by striking ``permitted'' and all 
        that follows and inserting ``permitted under paragraph (1)(C) 
        or (2) of this subsection.''.
    (l) Internal Revenue Code.--Section 864(f)(4)(C)(ii) of the 
Internal Revenue Code of 1986 is amended by striking ``(within the 
meaning of section 2(p) of the Bank Holding Company Act of 1956 (12 
U.S.C. 1841(p))''.
    (m) Payment, Clearing, and Settlement Supervision Act of 2010.--
Section 803(5)(A) of the Payment, Clearing, and Settlement Supervision 
Act of 2010 (12 U.S.C. 5462(5)(A)) is amended--
            (1) in clause (viii), by adding ``and'' at the end;
            (2) in clause (ix), by striking ``; and'' and inserting a 
        period; and
            (3) by striking clause (x).
    (n) Securities Exchange Act of 1934.--The Securities Exchange Act 
of 1934 (15 U.S.C. 78a et seq.) is amended--
            (1) in section 3(a)(4)(B)(vi)(II) (15 U.S.C. 
        78c(a)(4)(B)(vi)(II)), by striking ``other than'' and all that 
        follows and inserting ``other than a registered broker or 
        dealer.''; and
            (2) in section 3C(g)(3)(A) (15 U.S.C. 78c-3(g)(3)(A))--
                    (A) in clause (vi), by adding ``and'' at the end;
                    (B) in clause (vii), by striking the semicolon and 
                inserting a period; and
                    (C) by striking clause (viii).
    (o) Title 11.--Title 11, United States Code, is amended--
            (1) in section 101--
                    (A) in paragraph (25)(E), by striking ``, measured 
                in accordance with section 562'';
                    (B) in paragraph (47)(A)(v), by striking ``, 
                measured in accordance with section 562 of this 
                title''; and
                    (C) in paragraph (53B)(A)(vi), by striking ``, 
                measured in accordance with section 562'';
            (2) in section 103(a), by striking ``555 through 557, and 
        559 through 562'' and inserting ``556, 557, and 561'';
            (3) in section 362(b)--
                    (A) in paragraph (6), by striking ``555 or'' each 
                place that term appears;
                    (B) in paragraph (7), by striking ``(as defined in 
                section 559)'' each place that term appears;
                    (C) in paragraph (17), by striking ``(as defined in 
                section 560)'' each place that term appears; and
                    (D) in paragraph (27), by striking ``(as defined in 
                section 555, 556, 559, or 560)'' each place that term 
                appears and inserting ``(as defined in section 556)'';
            (4) in section 502(g)--
                    (A) by striking ``(1)'' before ``A claim''; and
                    (B) by striking paragraph (2);
            (5) in section 553--
                    (A) in subsection (a)--
                            (i) in paragraph (2)(B)(ii), by striking 
                        ``555, 556, 559, 560, or 561'' and inserting 
                        ``556 or 561''; and
                            (ii) in paragraph (3)(C), by striking 
                        ``555, 556, 559, 560, or 561'' and inserting 
                        ``556 or 561''; and
                    (B) in subsection (b)(1), by striking ``555, 556, 
                559, 560, 561'' and inserting ``556, 561'';
            (6) in section 561(b)(1), by striking ``555, 556, 559, or 
        560'' and inserting ``556'';
            (7) in section 741(7)(A)(xi), by striking ``, measured in 
        accordance with section 562'';
            (8) in section 761(4)(J), by striking ``, measured in 
        accordance with section 562''; and
            (9) in section 901(a), by striking ``555, 556, 557, 559, 
        560, 561, 562'' and inserting ``556, 557, 561''.
                                 <all>
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