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[House Report 111-517]
[From the U.S. Government Publishing Office]

111th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 2d Session                                                     111-517
_______________________________________________________________________

                                     

 
       DODD-FRANK WALL STREET REFORM AND CONSUMER PROTECTION ACT

                               ----------                              

                           CONFERENCE REPORT

                              to accompany

                               H.R. 4173

                 June 29, 2010.--Ordered to be printed

                     DODD-FRANK WALL STREET REFORM
                      AND CONSUMER PROTECTION ACT

111th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 2d Session                                                     111-517
_______________________________________________________________________

                                     

       DODD-FRANK WALL STREET REFORM AND CONSUMER PROTECTION ACT

                               __________

                           CONFERENCE REPORT

                              to accompany

                               H.R. 4173

                 June 29, 2010.--Ordered to be printed

111th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 2d Session                                                     111-517

======================================================================

       DODD-FRANK WALL STREET REFORM AND CONSUMER PROTECTION ACT

                                _______
                                

                 June 29, 2010.--Ordered to be printed

                                _______
                                

  Mr. Frank, from the Committee of Conference, submitted the following

                           CONFERENCE REPORT

                        [To accompany H.R. 4173]

        The committee of conference on the disagreeing votes of 
the two Houses on the amendments of the Senate to the bill 
(H.R. 4173), to provide for financial regulatory reform, to 
protect consumers and investors, to enhance Federal 
understanding of insurance issues, to regulate the over-the-
counter derivatives markets, and for other purposes, having 
met, after full and free conference, have agreed to recommend 
and do recommend to their respective Houses as follows:
        That the House recede from its disagreement to the 
amendment of the Senate to the text of the bill and agree to 
the same with an amendment as follows:
        In lieu of the matter proposed to be inserted by the 
Senate amendment, insert the following:

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Dodd-Frank 
Wall Street Reform and Consumer Protection Act''.
    (b) Table of Contents.--The table of contents for this Act 
is as follows:

Sec. 1. Short title; table of contents.
Sec. 2. Definitions.
Sec. 3. Severability.
Sec. 4. Effective date.
Sec. 5. Budgetary effects.
Sec. 6. Antitrust savings clause.

                      TITLE I--FINANCIAL STABILITY

Sec. 101. Short title.
Sec. 102. Definitions.

            Subtitle A--Financial Stability Oversight Council

Sec. 111. Financial Stability Oversight Council established.
Sec. 112. Council authority.
Sec. 113. Authority to require supervision and regulation of certain 
          nonbank financial companies.
Sec. 114. Registration of nonbank financial companies supervised by the 
          Board of Governors.
Sec. 115. Enhanced supervision and prudential standards for nonbank 
          financial companies supervised by the Board of Governors and 
          certain bank holding companies.
Sec. 116. Reports.
Sec. 117. Treatment of certain companies that cease to be bank holding 
          companies.
Sec. 118. Council funding.
Sec. 119. Resolution of supervisory jurisdictional disputes among member 
          agencies.
Sec. 120. Additional standards applicable to activities or practices for 
          financial stability purposes.
Sec. 121. Mitigation of risks to financial stability.
Sec. 122. GAO Audit of Council.
Sec. 123. Study of the effects of size and complexity of financial 
          institutions on capital market efficiency and economic growth.

                Subtitle B--Office of Financial Research

Sec. 151. Definitions.
Sec. 152. Office of Financial Research established.
Sec. 153. Purpose and duties of the Office.
Sec. 154. Organizational structure; responsibilities of primary 
          programmatic units.
Sec. 155. Funding.
Sec. 156. Transition oversight.

Subtitle C--Additional Board of Governors Authority for Certain Nonbank 
             Financial Companies and Bank Holding Companies

Sec. 161. Reports by and examinations of nonbank financial companies by 
          the Board of Governors.
Sec. 162. Enforcement.
Sec. 163. Acquisitions.
Sec. 164. Prohibition against management interlocks between certain 
          financial companies.
Sec. 165. Enhanced supervision and prudential standards for nonbank 
          financial companies supervised by the Board of Governors and 
          certain bank holding companies.
Sec. 166. Early remediation requirements.
Sec. 167. Affiliations.
Sec. 168. Regulations.
Sec. 169. Avoiding duplication.
Sec. 170. Safe harbor.
Sec. 171. Leverage and risk-based capital requirements.
Sec. 172. Examination and enforcement actions for insurance and orderly 
          liquidation purposes.
Sec. 173. Access to United States financial market by foreign 
          institutions.
Sec. 174. Studies and reports on holding company capital requirements.
Sec. 175. International policy coordination.
Sec. 176. Rule of construction.

                 TITLE II--ORDERLY LIQUIDATION AUTHORITY

Sec. 201. Definitions.
Sec. 202. Judicial review.
Sec. 203. Systemic risk determination.
Sec. 204. Orderly liquidation of covered financial companies.
Sec. 205. Orderly liquidation of covered brokers and dealers.
Sec. 206. Mandatory terms and conditions for all orderly liquidation 
          actions.
Sec. 207. Directors not liable for acquiescing in appointment of 
          receiver.
Sec. 208. Dismissal and exclusion of other actions.
Sec. 209. Rulemaking; non-conflicting law.
Sec. 210. Powers and duties of the Corporation.
Sec. 211. Miscellaneous provisions.
Sec. 212. Prohibition of circumvention and prevention of conflicts of 
          interest.
Sec. 213. Ban on certain activities by senior executives and directors.
Sec. 214. Prohibition on taxpayer funding.
Sec. 215. Study on secured creditor haircuts.
Sec. 216. Study on bankruptcy process for financial and nonbank 
          financial institutions.
Sec. 217. Study on international coordination relating to bankruptcy 
          process for nonbank financial institutions.

 TITLE III--TRANSFER OF POWERS TO THE COMPTROLLER OF THE CURRENCY, THE 
                 CORPORATION, AND THE BOARD OF GOVERNORS

Sec. 300. Short title.
Sec. 301. Purposes.
Sec. 302. Definition.

                Subtitle A--Transfer of Powers and Duties

Sec. 311. Transfer date.
Sec. 312. Powers and duties transferred.
Sec. 313. Abolishment.
Sec. 314. Amendments to the Revised Statutes.
Sec. 315. Federal information policy.
Sec. 316. Savings provisions.
Sec. 317. References in Federal law to Federal banking agencies.
Sec. 318. Funding.
Sec. 319. Contracting and leasing authority.

                   Subtitle B--Transitional Provisions

Sec. 321. Interim use of funds, personnel, and property of the Office of 
          Thrift Supervision.
Sec. 322. Transfer of employees.
Sec. 323. Property transferred.
Sec. 324. Funds transferred.
Sec. 325. Disposition of affairs.
Sec. 326. Continuation of services.
Sec. 327. Implementation plan and reports.

            Subtitle C--Federal Deposit Insurance Corporation

Sec. 331. Deposit insurance reforms.
Sec. 332. Elimination of procyclical assessments.
Sec. 333. Enhanced access to information for deposit insurance purposes.
Sec. 334. Transition reserve ratio requirements to reflect new 
          assessment base.
Sec. 335. Permanent increase in deposit and share insurance.
Sec. 336. Management of the Federal Deposit Insurance Corporation.

                        Subtitle D--Other Matters

Sec. 341. Branching.
Sec. 342. Office of Minority and Women Inclusion.
Sec. 343. Insurance of transaction accounts.

             Subtitle E--Technical and Conforming Amendments

Sec. 351. Effective date.
Sec. 352. Balanced Budget and Emergency Deficit Control Act of 1985.
Sec. 353. Bank Enterprise Act of 1991.
Sec. 354. Bank Holding Company Act of 1956.
Sec. 355. Bank Holding Company Act Amendments of 1970.
Sec. 356. Bank Protection Act of 1968.
Sec. 357. Bank Service Company Act.
Sec. 358. Community Reinvestment Act of 1977.
Sec. 359. Crime Control Act of 1990.
Sec. 360. Depository Institution Management Interlocks Act.
Sec. 361. Emergency Homeowners' Relief Act.
Sec. 362. Federal Credit Union Act.
Sec. 363. Federal Deposit Insurance Act.
Sec. 364. Federal Home Loan Bank Act.
Sec. 365. Federal Housing Enterprises Financial Safety and Soundness Act 
          of 1992.
Sec. 366. Federal Reserve Act.
Sec. 367. Financial Institutions Reform, Recovery, and Enforcement Act 
          of 1989.
Sec. 368. Flood Disaster Protection Act of 1973.
Sec. 369. Home Owners' Loan Act.
Sec. 370. Housing Act of 1948.
Sec. 371. Housing and Community Development Act of 1992.
Sec. 372. Housing and Urban-Rural Recovery Act of 1983.
Sec. 373. National Housing Act.
Sec. 374. Neighborhood Reinvestment Corporation Act.
Sec. 375. Public Law 93-100.
Sec. 376. Securities Exchange Act of 1934.
Sec. 377. Title 18, United States Code.
Sec. 378. Title 31, United States Code.

       TITLE IV--REGULATION OF ADVISERS TO HEDGE FUNDS AND OTHERS

Sec. 401. Short title.
Sec. 402. Definitions.
Sec. 403. Elimination of private adviser exemption; limited exemption 
          for foreign private advisers; limited intrastate exemption.
Sec. 404. Collection of systemic risk data; reports; examinations; 
          disclosures.
Sec. 405. Disclosure provision amendment.
Sec. 406. Clarification of rulemaking authority.
Sec. 407. Exemption of venture capital fund advisers.
Sec. 408. Exemption of and record keeping by private equity fund 
          advisers.
Sec. 409. Family offices.
Sec. 410. State and Federal responsibilities; asset threshold for 
          Federal registration of investment advisers.
Sec. 411. Custody of client assets.
Sec. 412. Adjusting the accredited investor standard.
Sec. 413. GAO study and report on accredited investors.
Sec. 414. GAO study on self-regulatory organization for private funds.
Sec. 415. Commission study and report on short selling.
Sec. 416. Transition period.

                           TITLE V--INSURANCE

                Subtitle A--Office of National Insurance

Sec. 501. Short title.
Sec. 502. Federal Insurance Office.

                Subtitle B--State-Based Insurance Reform

Sec. 511. Short title.
Sec. 512. Effective date.

                      PART I--Nonadmitted Insurance

Sec. 521. Reporting, payment, and allocation of premium taxes.
Sec. 522. Regulation of nonadmitted insurance by insured's home State.
Sec. 523. Participation in national producer database.
Sec. 524. Uniform standards for surplus lines eligibility.
Sec. 525. Streamlined application for commercial purchasers.
Sec. 526. GAO study of nonadmitted insurance market.
Sec. 527. Definitions.

                          PART II--Reinsurance

Sec. 531. Regulation of credit for reinsurance and reinsurance 
          agreements.
Sec. 532. Regulation of reinsurer solvency.
Sec. 533. Definitions.

                     PART III--Rule of Construction

Sec. 541. Rule of construction.
Sec. 542. Severability.

  TITLE VI--IMPROVEMENTS TO REGULATION OF BANK AND SAVINGS ASSOCIATION 
              HOLDING COMPANIES AND DEPOSITORY INSTITUTIONS

Sec. 601. Short title.
Sec. 602. Definition.
Sec. 603. Moratorium and study on treatment of credit card banks, 
          industrial loan companies, and certain other companies under 
          the Bank Holding Company Act of 1956.
Sec. 604. Reports and examinations of holding companies; regulation of 
          functionally regulated subsidiaries.
Sec. 605. Assuring consistent oversight of permissible activities of 
          depository institution subsidiaries of holding companies.
Sec. 606. Requirements for financial holding companies to remain well 
          capitalized and well managed.
Sec. 607. Standards for interstate acquisitions.
Sec. 608. Enhancing existing restrictions on bank transactions with 
          affiliates.
Sec. 609. Eliminating exceptions for transactions with financial 
          subsidiaries.
Sec. 610. Lending limits applicable to credit exposure on derivative 
          transactions, repurchase agreements, reverse repurchase 
          agreements, and securities lending and borrowing transactions.
Sec. 611. Consistent treatment of derivative transactions in lending 
          limits.
Sec. 612. Restriction on conversions of troubled banks.
Sec. 613. De novo branching into States.
Sec. 614. Lending limits to insiders.
Sec. 615. Limitations on purchases of assets from insiders.
Sec. 616. Regulations regarding capital levels.
Sec. 617. Elimination of elective investment bank holding company 
          framework.
Sec. 618. Securities holding companies.
Sec. 619. Prohibitions on proprietary trading and certain relationships 
          with hedge funds and private equity funds.
Sec. 620. Study of bank investment activities.
Sec. 621. Conflicts of interest.
Sec. 622. Concentration limits on large financial firms.
Sec. 623. Interstate merger transactions.
Sec. 624. Qualified thrift lenders.
Sec. 625. Treatment of dividends by certain mutual holding companies.
Sec. 626. Intermediate holding companies.
Sec. 627. Interest-bearing transaction accounts authorized.
Sec. 628. Credit card bank small business lending.

         TITLE VII--WALL STREET TRANSPARENCY AND ACCOUNTABILITY

Sec. 701. Short title.

        Subtitle A--Regulation of Over-the-Counter Swaps Markets

                      PART I--Regulatory Authority

Sec. 711. Definitions.
Sec. 712. Review of regulatory authority.
Sec. 713. Portfolio margining conforming changes.
Sec. 714. Abusive swaps.
Sec. 715. Authority to prohibit participation in swap activities.
Sec. 716. Prohibition against Federal Government bailouts of swaps 
          entities.
Sec. 717. New product approval CFTC--SEC process.
Sec. 718. Determining status of novel derivative products.
Sec. 719. Studies.
Sec. 720. Memorandum.

                   PART II--Regulation of Swap Markets

Sec. 721. Definitions.
Sec. 722. Jurisdiction.
Sec. 723. Clearing.
Sec. 724. Swaps; segregation and bankruptcy treatment.
Sec. 725. Derivatives clearing organizations.
Sec. 726. Rulemaking on conflict of interest.
Sec. 727. Public reporting of swap transaction data.
Sec. 728. Swap data repositories.
Sec. 729. Reporting and recordkeeping.
Sec. 730. Large swap trader reporting.
Sec. 731. Registration and regulation of swap dealers and major swap 
          participants.
Sec. 732. Conflicts of interest.
Sec. 733. Swap execution facilities.
Sec. 734. Derivatives transaction execution facilities and exempt boards 
          of trade.
Sec. 735. Designated contract markets.
Sec. 736. Margin.
Sec. 737. Position limits.
Sec. 738. Foreign boards of trade.
Sec. 739. Legal certainty for swaps.
Sec. 740. Multilateral clearing organizations.
Sec. 741. Enforcement.
Sec. 742. Retail commodity transactions.
Sec. 743. Other authority.
Sec. 744. Restitution remedies.
Sec. 745. Enhanced compliance by registered entities.
Sec. 746. Insider trading.
Sec. 747. Antidisruptive practices authority.
Sec. 748. Commodity whistleblower incentives and protection.
Sec. 749. Conforming amendments.
Sec. 750. Study on oversight of carbon markets.
Sec. 751. Energy and environmental markets advisory committee.
Sec. 752. International harmonization.
Sec. 753. Anti-manipulation authority.
Sec. 754. Effective date.

          Subtitle B--Regulation of Security-Based Swap Markets

Sec. 761. Definitions under the Securities Exchange Act of 1934.
Sec. 762. Repeal of prohibition on regulation of security-based swap 
          agreements.
Sec. 763. Amendments to the Securities Exchange Act of 1934.
Sec. 764. Registration and regulation of security-based swap dealers and 
          major security-based swap participants.
Sec. 765. Rulemaking on conflict of interest.
Sec. 766. Reporting and recordkeeping.
Sec. 767. State gaming and bucket shop laws.
Sec. 768. Amendments to the Securities Act of 1933; treatment of 
          security-based swaps.
Sec. 769. Definitions under the Investment Company Act of 1940.
Sec. 770. Definitions under the Investment Advisers Act of 1940.
Sec. 771. Other authority.
Sec. 772. Jurisdiction.
Sec. 773. Civil penalties.
Sec. 774. Effective date.

        TITLE VIII--PAYMENT, CLEARING, AND SETTLEMENT SUPERVISION

Sec. 801. Short title.
Sec. 802. Findings and purposes.
Sec. 803. Definitions.
Sec. 804. Designation of systemic importance.
Sec. 805. Standards for systemically important financial market 
          utilities and payment, clearing, or settlement activities.
Sec. 806. Operations of designated financial market utilities.
Sec. 807. Examination of and enforcement actions against designated 
          financial market utilities.
Sec. 808. Examination of and enforcement actions against financial 
          institutions subject to standards for designated activities.
Sec. 809. Requests for information, reports, or records.
Sec. 810. Rulemaking.
Sec. 811. Other authority.
Sec. 812. Consultation.
Sec. 813. Common framework for designated clearing entity risk 
          management.
Sec. 814. Effective date.

  TITLE IX--INVESTOR PROTECTIONS AND IMPROVEMENTS TO THE REGULATION OF 
                               SECURITIES

Sec. 901. Short title.

               Subtitle A--Increasing Investor Protection

Sec. 911. Investor Advisory Committee established.
Sec. 912. Clarification of authority of the Commission to engage in 
          investor testing.
Sec. 913. Study and rulemaking regarding obligations of brokers, 
          dealers, and investment advisers.
Sec. 914. Study on enhancing investment adviser examinations.
Sec. 915. Office of the Investor Advocate.
Sec. 916. Streamlining of filing procedures for self-regulatory 
          organizations.
Sec. 917. Study regarding financial literacy among investors.
Sec. 918. Study regarding mutual fund advertising.
Sec. 919. Clarification of Commission authority to require investor 
          disclosures before purchase of investment products and 
          services.
Sec. 919A. Study on conflicts of interest.
Sec. 919B. Study on improved investor access to information on 
          investment advisers and broker-dealers.
Sec. 919C. Study on financial planners and the use of financial 
          designations.
Sec. 919D. Ombudsman.

       Subtitle B--Increasing Regulatory Enforcement and Remedies

Sec. 921. Authority to restrict mandatory pre-dispute arbitration.
Sec. 922. Whistleblower protection.
Sec. 923. Conforming amendments for whistleblower protection.
Sec. 924. Implementation and transition provisions for whistleblower 
          protection.
Sec. 925. Collateral bars.
Sec. 926. Disqualifying felons and other ``bad actors'' from Regulation 
          D offerings.
Sec. 927. Equal treatment of self-regulatory organization rules.
Sec. 928. Clarification that section 205 of the Investment Advisers Act 
          of 1940 does not apply to State-registered advisers.
Sec. 929. Unlawful margin lending.
Sec. 929A. Protection for employees of subsidiaries and affiliates of 
          publicly traded companies.
Sec. 929B. Fair Fund amendments.
Sec. 929C. Increasing the borrowing limit on Treasury loans.
Sec. 929D. Lost and stolen securities.
Sec. 929E. Nationwide service of subpoenas.
Sec. 929F. Formerly associated persons.
Sec. 929G. Streamlined hiring authority for market specialists.
Sec. 929H. SIPC Reforms.
Sec. 929I. Protecting confidentiality of materials submitted to the 
          Commission.
Sec. 929J. Expansion of audit information to be produced and exchanged.
Sec. 929K. Sharing privileged information with other authorities.
Sec. 929L. Enhanced application of antifraud provisions.
Sec. 929M. Aiding and abetting authority under the Securities Act and 
          the Investment Company Act.
Sec. 929N. Authority to impose penalties for aiding and abetting 
          violations of the Investment Advisers Act.
Sec. 929O. Aiding and abetting standard of knowledge satisfied by 
          recklessness.
Sec. 929P. Strengthening enforcement by the Commission.
Sec. 929Q. Revision to recordkeeping rule.
Sec. 929R. Beneficial ownership and short-swing profit reporting.
Sec. 929S. Fingerprinting.
Sec. 929T. Equal treatment of self-regulatory organization rules.
Sec. 929U. Deadline for completing examinations, inspections and 
          enforcement actions.
Sec. 929V. Security Investor Protection Act amendments.
Sec. 929W. Notice to missing security holders.
Sec. 929X. Short sale reforms.
Sec. 929Y. Study on extraterritorial private rights of action.
Sec. 929Z. GAO study on securities litigation.

  Subtitle C--Improvements to the Regulation of Credit Rating Agencies

Sec. 931. Findings.
Sec. 932. Enhanced regulation, accountability, and transparency of 
          nationally recognized statistical rating organizations.
Sec. 933. State of mind in private actions.
Sec. 934. Referring tips to law enforcement or regulatory authorities.
Sec. 935. Consideration of information from sources other than the 
          issuer in rating decisions.
Sec. 936. Qualification standards for credit rating analysts.
Sec. 937. Timing of regulations.
Sec. 938. Universal ratings symbols.
Sec. 939. Removal of statutory references to credit ratings.
Sec. 939A. Review of reliance on ratings.
Sec. 939B. Elimination of exemption from fair disclosure rule.
Sec. 939C. Securities and Exchange Commission study on strengthening 
          credit rating agency independence.
Sec. 939D. Government Accountability Office study on alternative 
          business models.
Sec. 939E. Government Accountability Office study on the creation of an 
          independent professional analyst organization.
Sec. 939F. Study and rulemaking on assigned credit ratings.
Sec. 939G. Effect of Rule 436(g).
Sec. 939H. Sense of Congress.

   Subtitle D--Improvements to the Asset-Backed Securitization Process

Sec. 941. Regulation of credit risk retention.
Sec. 942. Disclosures and reporting for asset-backed securities.
Sec. 943. Representations and warranties in asset-backed offerings.
Sec. 944. Exempted transactions under the Securities Act of 1933.
Sec. 945. Due diligence analysis and disclosure in asset-backed 
          securities issues.
Sec. 946. Study on the macroeconomic effects of risk retention 
          requirements.

          Subtitle E--Accountability and Executive Compensation

Sec. 951. Shareholder vote on executive compensation disclosures.
Sec. 952. Compensation committee independence.
Sec. 953. Executive compensation disclosures.
Sec. 954. Recovery of erroneously awarded compensation.
Sec. 955. Disclosure regarding employee and director hedging.
Sec. 956. Enhanced compensation structure reporting.
Sec. 957. Voting by brokers.

    Subtitle F--Improvements to the Management of the Securities and 
                           Exchange Commission

Sec. 961. Report and certification of internal supervisory controls.
Sec. 962. Triennial report on personnel management.
Sec. 963. Annual financial controls audit.
Sec. 964. Report on oversight of national securities associations.
Sec. 965. Compliance examiners.
Sec. 966. Suggestion program for employees of the Commission.
Sec. 967. Commission organizational study and reform.
Sec. 968. Study on SEC revolving door.

             Subtitle G--Strengthening Corporate Governance

Sec. 971. Proxy access.
Sec. 972. Disclosures regarding chairman and CEO structures.

                    Subtitle H--Municipal Securities

Sec. 975. Regulation of municipal securities and changes to the board of 
          the MSRB.
Sec. 976. Government Accountability Office study of increased disclosure 
          to investors.
Sec. 977. Government Accountability Office study on the municipal 
          securities markets.
Sec. 978. Funding for Governmental Accounting Standards Board.
Sec. 979. Commission Office of Municipal Securities.

    Subtitle I--Public Company Accounting Oversight Board, Portfolio 
                      Margining, and Other Matters

Sec. 981. Authority to share certain information with foreign 
          authorities.
Sec. 982. Oversight of brokers and dealers.
Sec. 983. Portfolio margining.
Sec. 984. Loan or borrowing of securities.
Sec. 985. Technical corrections to Federal securities laws.
Sec. 986. Conforming amendments relating to repeal of the Public Utility 
          Holding Company Act of 1935.
Sec. 987. Amendment to definition of material loss and nonmaterial 
          losses to the Deposit Insurance Fund for purposes of Inspector 
          General reviews.
Sec. 988. Amendment to definition of material loss and nonmaterial 
          losses to the National Credit Union Share Insurance Fund for 
          purposes of Inspector General reviews.
Sec. 989. Government Accountability Office study on proprietary trading.
Sec. 989A. Senior investor protections.
Sec. 989B. Designated Federal entity inspectors general independence.
Sec. 989C. Strengthening Inspector General accountability.
Sec. 989D. Removal of Inspectors General of designated Federal entities.
Sec. 989E. Additional oversight of financial regulatory system.
Sec. 989F. GAO study of person to person lending.
Sec. 989G. Exemption for nonaccelerated filers.
Sec. 989H. Corrective responses by heads of certain establishments to 
          deficiencies identified by Inspectors General.
Sec. 989I. GAO study regarding exemption for smaller issuers.
Sec. 989J. Further promoting the adoption of the NAIC Model Regulations 
          that enhance protection of seniors and other consumers.

      Subtitle J--Securities and Exchange Commission Match Funding

Sec. 991. Securities and Exchange Commission match funding.

            TITLE X--BUREAU OF CONSUMER FINANCIAL PROTECTION

Sec. 1001. Short title.
Sec. 1002. Definitions.

           Subtitle A--Bureau of Consumer Financial Protection

Sec. 1011. Establishment of the Bureau of Consumer Financial Protection.
Sec. 1012. Executive and administrative powers.
Sec. 1013. Administration.
Sec. 1014. Consumer Advisory Board.
Sec. 1015. Coordination.
Sec. 1016. Appearances before and reports to Congress.
Sec. 1017. Funding; penalties and fines.
Sec. 1018. Effective date.

                Subtitle B--General Powers of the Bureau

Sec. 1021. Purpose, objectives, and functions.
Sec. 1022. Rulemaking authority.
Sec. 1023. Review of Bureau regulations.
Sec. 1024. Supervision of nondepository covered persons.
Sec. 1025. Supervision of very large banks, savings associations, and 
          credit unions.
Sec. 1026. Other banks, savings associations, and credit unions.
Sec. 1027. Limitations on authorities of the Bureau; preservation of 
          authorities.
Sec. 1028. Authority to restrict mandatory pre-dispute arbitration.
Sec. 1029. Exclusion for auto dealers.
Sec. 1029A. Effective date.

                 Subtitle C--Specific Bureau Authorities

Sec. 1031. Prohibiting unfair, deceptive, or abusive acts or practices.
Sec. 1032. Disclosures.
Sec. 1033. Consumer rights to access information.
Sec. 1034. Response to consumer complaints and inquiries.
Sec. 1035. Private education loan ombudsman.
Sec. 1036. Prohibited acts.
Sec. 1037. Effective date.

                  Subtitle D--Preservation of State Law

Sec. 1041. Relation to State law.
Sec. 1042. Preservation of enforcement powers of States.
Sec. 1043. Preservation of existing contracts.
Sec. 1044. State law preemption standards for national banks and 
          subsidiaries clarified.
Sec. 1045. Clarification of law applicable to nondepository institution 
          subsidiaries.
Sec. 1046. State law preemption standards for Federal savings 
          associations and subsidiaries clarified.
Sec. 1047. Visitorial standards for national banks and savings 
          associations.
Sec. 1048. Effective date.

                     Subtitle E--Enforcement Powers

Sec. 1051. Definitions.
Sec. 1052. Investigations and administrative discovery.
Sec. 1053. Hearings and adjudication proceedings.
Sec. 1054. Litigation authority.
Sec. 1055. Relief available.
Sec. 1056. Referrals for criminal proceedings.
Sec. 1057. Employee protection.
Sec. 1058. Effective date.

Subtitle F--Transfer of Functions and Personnel; Transitional Provisions

Sec. 1061. Transfer of consumer financial protection functions.
Sec. 1062. Designated transfer date.
Sec. 1063. Savings provisions.
Sec. 1064. Transfer of certain personnel.
Sec. 1065. Incidental transfers.
Sec. 1066. Interim authority of the Secretary.
Sec. 1067. Transition oversight.

                   Subtitle G--Regulatory Improvements

Sec. 1071. Small business data collection.
Sec. 1072. Assistance for economically vulnerable individuals and 
          families.
Sec. 1073. Remittance transfers.
Sec. 1074. Department of the Treasury study on ending the 
          conservatorship of Fannie Mae, Freddie Mac, and reforming the 
          housing finance system.
Sec. 1075. Reasonable fees and rules for payment card transactions.
Sec. 1076. Reverse mortgage study and regulations.
Sec. 1077. Report on private education loans and private educational 
          lenders.
Sec. 1078. Study and report on credit scores.
Sec. 1079. Review, report, and program with respect to exchange 
          facilitators.
Sec. 1079A. Financial fraud provisions.

                    Subtitle H--Conforming Amendments

Sec. 1081. Amendments to the Inspector General Act.
Sec. 1082. Amendments to the Privacy Act of 1974.
Sec. 1083. Amendments to the Alternative Mortgage Transaction Parity Act 
          of 1982.
Sec. 1084. Amendments to the Electronic Fund Transfer Act.
Sec. 1085. Amendments to the Equal Credit Opportunity Act.
Sec. 1086. Amendments to the Expedited Funds Availability Act.
Sec. 1087. Amendments to the Fair Credit Billing Act.
Sec. 1088. Amendments to the Fair Credit Reporting Act and the Fair and 
          Accurate Credit Transactions Act of 2003.
Sec. 1089. Amendments to the Fair Debt Collection Practices Act.
Sec. 1090. Amendments to the Federal Deposit Insurance Act.
Sec. 1091. Amendment to Federal Financial Institutions Examination 
          Council Act of 1978.
Sec. 1092. Amendments to the Federal Trade Commission Act.
Sec. 1093. Amendments to the Gramm-Leach-Bliley Act.
Sec. 1094. Amendments to the Home Mortgage Disclosure Act of 1975.
Sec. 1095. Amendments to the Homeowners Protection Act of 1998.
Sec. 1096. Amendments to the Home Ownership and Equity Protection Act of 
          1994.
Sec. 1097. Amendments to the Omnibus Appropriations Act, 2009.
Sec. 1098. Amendments to the Real Estate Settlement Procedures Act of 
          1974.
Sec. 1098A. Amendments to the Interstate Land Sales Full Disclosure Act.
Sec. 1099. Amendments to the Right to Financial Privacy Act of 1978.
Sec. 1100. Amendments to the Secure and Fair Enforcement for Mortgage 
          Licensing Act of 2008.
Sec. 1100A. Amendments to the Truth in Lending Act.
Sec. 1100B. Amendments to the Truth in Savings Act.
Sec. 1100C. Amendments to the Telemarketing and Consumer Fraud and Abuse 
          Prevention Act.
Sec. 1100D. Amendments to the Paperwork Reduction Act.
Sec. 1100E. Adjustments for inflation in the Truth in Lending Act.
Sec. 1100F. Use of consumer reports.
Sec. 1100G. Small business fairness and regulatory transparency.
Sec. 1100H. Effective date.

               TITLE XI--FEDERAL RESERVE SYSTEM PROVISIONS

Sec. 1101. Federal Reserve Act amendments on emergency lending 
          authority.
Sec. 1102. Reviews of special Federal reserve credit facilities.
Sec. 1103. Public access to information.
Sec. 1104. Liquidity event determination.
Sec. 1105. Emergency financial stabilization.
Sec. 1106. Additional related amendments.
Sec. 1107. Federal Reserve Act amendments on Federal reserve bank 
          governance.
Sec. 1108. Federal Reserve Act amendments on supervision and regulation 
          policy.
Sec. 1109. GAO audit of the Federal Reserve facilities; publication of 
          Board actions.

    TITLE XII--IMPROVING ACCESS TO MAINSTREAM FINANCIAL INSTITUTIONS

Sec. 1201. Short title.
Sec. 1202. Purpose.
Sec. 1203. Definitions.
Sec. 1204. Expanded access to mainstream financial institutions.
Sec. 1205. Low-cost alternatives to payday loans.
Sec. 1206. Grants to establish loan-loss reserve funds.
Sec. 1207. Procedural provisions.
Sec. 1208. Authorization of appropriations.
Sec. 1209. Regulations.
Sec. 1210. Evaluation and reports to Congress.

                       TITLE XIII--PAY IT BACK ACT

Sec. 1301. Short title.
Sec. 1302. Amendment to reduce TARP authorization.
Sec. 1303. Report.
Sec. 1304. Amendments to Housing and Economic Recovery Act of 2008.
Sec. 1305. Federal Housing Finance Agency report.
Sec. 1306. Repayment of unobligated ARRA funds.

        TITLE XIV--MORTGAGE REFORM AND ANTI-PREDATORY LENDING ACT

Sec. 1400. Short title; designation as enumerated consumer law.

       Subtitle A--Residential Mortgage Loan Origination Standards

Sec. 1401. Definitions.
Sec. 1402. Residential mortgage loan origination.
Sec. 1403. Prohibition on steering incentives.
Sec. 1404. Liability.
Sec. 1405. Regulations.
Sec. 1406. Study of shared appreciation mortgages.

               Subtitle B--Minimum Standards For Mortgages

Sec. 1411. Ability to repay.
Sec. 1412. Safe harbor and rebuttable presumption.
Sec. 1413. Defense to foreclosure.
Sec. 1414. Additional standards and requirements.
Sec. 1415. Rule of construction.
Sec. 1416. Amendments to civil liability provisions.
Sec. 1417. Lender rights in the context of borrower deception.
Sec. 1418. Six-month notice required before reset of hybrid adjustable 
          rate mortgages.
Sec. 1419. Required disclosures.
Sec. 1420. Disclosures required in monthly statements for residential 
          mortgage loans.
Sec. 1421. Report by the GAO.
Sec. 1422. State attorney general enforcement authority.

                     Subtitle C--High-Cost Mortgages

Sec. 1431. Definitions relating to high-cost mortgages.
Sec. 1432. Amendments to existing requirements for certain mortgages.
Sec. 1433. Additional requirements for certain mortgages.

                Subtitle D--Office of Housing Counseling

Sec. 1441. Short title.
Sec. 1442. Establishment of Office of Housing Counseling.
Sec. 1443. Counseling procedures.
Sec. 1444. Grants for housing counseling assistance.
Sec. 1445. Requirements to use HUD-certified counselors under HUD 
          programs.
Sec. 1446. Study of defaults and foreclosures.
Sec. 1447. Default and foreclosure database.
Sec. 1448. Definitions for counseling-related programs.
Sec. 1449. Accountability and transparency for grant recipients.
Sec. 1450. Updating and simplification of mortgage information booklet.
Sec. 1451. Home inspection counseling.
Sec. 1452. Warnings to homeowners of foreclosure rescue scams.

                     Subtitle E--Mortgage Servicing

Sec. 1461. Escrow and impound accounts relating to certain consumer 
          credit transactions.
Sec. 1462. Disclosure notice required for consumers who waive escrow 
          services.
Sec. 1463. Real Estate Settlement Procedures Act of 1974 amendments.
Sec. 1464. Truth in Lending Act amendments.
Sec. 1465. Escrows included in repayment analysis.

                    Subtitle F--Appraisal Activities

Sec. 1471. Property appraisal requirements.
Sec. 1472. Appraisal independence requirements.
Sec. 1473. Amendments relating to Appraisal Subcommittee of FFIEC, 
          Appraiser Independence Monitoring, Approved Appraiser 
          Education, Appraisal Management Companies, Appraiser Complaint 
          Hotline, Automated Valuation Models, and Broker Price 
          Opinions.
Sec. 1474. Equal Credit Opportunity Act amendment.
Sec. 1475. Real Estate Settlement Procedures Act of 1974 amendment 
          relating to certain appraisal fees.
Sec. 1476. GAO study on the effectiveness and impact of various 
          appraisal methods, valuation models and distributions 
          channels, and on the Home Valuation Code of conduct and the 
          Appraisal Subcommittee.

            Subtitle G--Mortgage Resolution and Modification

Sec. 1481. Multifamily mortgage resolution program.
Sec. 1482. Home Affordable Modification Program guidelines.
Sec. 1483. Public availability of information of Making Home Affordable 
          Program.
Sec. 1484. Protecting tenants at foreclosure extension and 
          clarification.

                  Subtitle H--Miscellaneous Provisions

Sec. 1491. Sense of Congress regarding the importance of government-
          sponsored enterprises reform to enhance the protection, 
          limitation, and regulation of the terms of residential 
          mortgage credit.
Sec. 1492. GAO study report on government efforts to combat mortgage 
          foreclosure rescue scams and loan modification fraud.
Sec. 1493. Reporting of mortgage data by State.
Sec. 1494. Study of effect of drywall presence on foreclosures.
Sec. 1495. Definition.
Sec. 1496. Emergency mortgage relief.
Sec. 1497. Additional assistance for Neighborhood Stabilization Program.
Sec. 1498. Legal assistance for foreclosure-related issues.

                   TITLE XV--MISCELLANEOUS PROVISIONS

Sec. 1501. Restrictions on use of United States funds for foreign 
          governments; protection of American taxpayers.
Sec. 1502. Conflict minerals.
Sec. 1503. Reporting requirements regarding coal or other mine safety.
Sec. 1504. Disclosure of payments by resource extraction issuers.
Sec. 1505. Study by the Comptroller General.
Sec. 1506. Study on core deposits and brokered deposits.

                    TITLE XVI--SECTION 1256 CONTRACTS

Sec. 1601. Certain swaps, etc., not treated as section 1256 contracts.

SEC. 2. DEFINITIONS.

    As used in this Act, the following definitions shall apply, 
except as the context otherwise requires or as otherwise 
specifically provided in this Act:
            (1) Affiliate.--The term ``affiliate'' has the same 
        meaning as in section 3 of the Federal Deposit 
        Insurance Act (12 U.S.C. 1813).
            (2) Appropriate federal banking agency.--On and 
        after the transfer date, the term ``appropriate Federal 
        banking agency'' has the same meaning as in section 
        3(q) of the Federal Deposit Insurance Act (12 U.S.C. 
        1813(q)), as amended by title III.
            (3) Board of governors.--The term ``Board of 
        Governors'' means the Board of Governors of the Federal 
        Reserve System.
            (4) Bureau.--The term ``Bureau'' means the Bureau 
        of Consumer Financial Protection established under 
        title X.
            (5) Commission.--The term ``Commission'' means the 
        Securities and Exchange Commission, except in the 
        context of the Commodity Futures Trading Commission.
            (6) Commodity futures terms.--The terms ``futures 
        commission merchant'', ``swap'', ``swap dealer'', 
        ``swap execution facility'', ``derivatives clearing 
        organization'', ``board of trade'', ``commodity trading 
        advisor'', ``commodity pool'', and ``commodity pool 
        operator'' have the same meanings as given the terms in 
        section 1a of the Commodity Exchange Act (7 U.S.C. 1 et 
        seq.).
            (7) Corporation.--The term ``Corporation'' means 
        the Federal Deposit Insurance Corporation.
            (8) Council.--The term ``Council'' means the 
        Financial Stability Oversight Council established under 
        title I.
            (9) Credit union.--The term ``credit union'' means 
        a Federal credit union, State credit union, or State-
        chartered credit union, as those terms are defined in 
        section 101 of the Federal Credit Union Act (12 U.S.C. 
        1752).
            (10) Federal banking agency.--The term--
                    (A) ``Federal banking agency'' means, 
                individually, the Board of Governors, the 
                Office of the Comptroller of the Currency, and 
                the Corporation; and
                    (B) ``Federal banking agencies'' means all 
                of the agencies referred to in subparagraph 
                (A), collectively.
            (11) Functionally regulated subsidiary.--The term 
        ``functionally regulated subsidiary'' has the same 
        meaning as in section 5(c)(5) of the Bank Holding 
        Company Act of 1956 (12 U.S.C. 1844(c)(5)).
            (12) Primary financial regulatory agency.--The term 
        ``primary financial regulatory agency'' means--
                    (A) the appropriate Federal banking agency, 
                with respect to institutions described in 
                section 3(q) of the Federal Deposit Insurance 
                Act, except to the extent that an institution 
                is or the activities of an institution are 
                otherwise described in subparagraph (B), (C), 
                (D), or (E);
                    (B) the Securities and Exchange Commission, 
                with respect to--
                            (i) any broker or dealer that is 
                        registered with the Commission under 
                        the Securities Exchange Act of 1934, 
                        with respect to the activities of the 
                        broker or dealer that require the 
                        broker or dealer to be registered under 
                        that Act;
                            (ii) any investment company that is 
                        registered with the Commission under 
                        the Investment Company Act of 1940, 
                        with respect to the activities of the 
                        investment company that require the 
                        investment company to be registered 
                        under that Act;
                            (iii) any investment adviser that 
                        is registered with the Commission under 
                        the Investment Advisers Act of 1940, 
                        with respect to the investment advisory 
                        activities of such company and 
                        activities that are incidental to such 
                        advisory activities;
                            (iv) any clearing agency registered 
                        with the Commission under the 
                        Securities Exchange Act of 1934, with 
                        respect to the activities of the 
                        clearing agency that require the agency 
                        to be registered under such Act;
                            (v) any nationally recognized 
                        statistical rating organization 
                        registered with the Commission under 
                        the Securities Exchange Act of 1934;
                            (vi) any transfer agent registered 
                        with the Commission under the 
                        Securities Exchange Act of 1934;
                            (vii) any exchange registered as a 
                        national securities exchange with the 
                        Commission under the Securities 
                        Exchange Act of 1934;
                            (viii) any national securities 
                        association registered with the 
                        Commission under the Securities 
                        Exchange Act of 1934;
                            (ix) any securities information 
                        processor registered with the 
                        Commission under the Securities 
                        Exchange Act of 1934;
                            (x) the Municipal Securities 
                        Rulemaking Board established under the 
                        Securities Exchange Act of 1934;
                            (xi) the Public Company Accounting 
                        Oversight Board established under the 
                        Sarbanes-Oxley Act of 2002 (15 U.S.C. 
                        7211 et seq.);
                            (xii) the Securities Investor 
                        Protection Corporation established 
                        under the Securities Investor 
                        Protection Act of 1970 (15 U.S.C. 78aaa 
                        et seq.); and
                            (xiii) any security-based swap 
                        execution facility, security-based swap 
                        data repository, security-based swap 
                        dealer or major security-based swap 
                        participant registered with the 
                        Commission under the Securities 
                        Exchange Act of 1934, with respect to 
                        the security-based swap activities of 
                        the person that require such person to 
                        be registered under such Act;
                    (C) the Commodity Futures Trading 
                Commission, with respect to--
                            (i) any futures commission merchant 
                        registered with the Commodity Futures 
                        Trading Commission under the Commodity 
                        Exchange Act (7 U.S.C. 1 et seq.), with 
                        respect to the activities of the 
                        futures commission merchant that 
                        require the futures commission merchant 
                        to be registered under that Act;
                            (ii) any commodity pool operator 
                        registered with the Commodity Futures 
                        Trading Commission under the Commodity 
                        Exchange Act (7 U.S.C. 1 et seq.), with 
                        respect to the activities of the 
                        commodity pool operator that require 
                        the commodity pool operator to be 
                        registered under that Act, or a 
                        commodity pool, as defined in that Act;
                            (iii) any commodity trading advisor 
                        or introducing broker registered with 
                        the Commodity Futures Trading 
                        Commission under the Commodity Exchange 
                        Act (7 U.S.C. 1 et seq.), with respect 
                        to the activities of the commodity 
                        trading advisor or introducing broker 
                        that require the commodity trading 
                        adviser or introducing broker to be 
                        registered under that Act;
                            (iv) any derivatives clearing 
                        organization registered with the 
                        Commodity Futures Trading Commission 
                        under the Commodity Exchange Act (7 
                        U.S.C. 1 et seq.), with respect to the 
                        activities of the derivatives clearing 
                        organization that require the 
                        derivatives clearing organization to be 
                        registered under that Act;
                            (v) any board of trade designated 
                        as a contract market by the Commodity 
                        Futures Trading Commission under the 
                        Commodity Exchange Act (7 U.S.C. 1 et 
                        seq.);
                            (vi) any futures association 
                        registered with the Commodity Futures 
                        Trading Commission under the Commodity 
                        Exchange Act (7 U.S.C. 1 et seq.);
                            (vii) any retail foreign exchange 
                        dealer registered with the Commodity 
                        Futures Trading Commission under the 
                        Commodity Exchange Act (7 U.S.C. 1 et 
                        seq.), with respect to the activities 
                        of the retail foreign exchange dealer 
                        that require the retail foreign 
                        exchange dealer to be registered under 
                        that Act;
                            (viii) any swap execution facility, 
                        swap data repository, swap dealer, or 
                        major swap participant registered with 
                        the Commodity Futures Trading 
                        Commission under the Commodity Exchange 
                        Act (7 U.S.C. 1 et seq.) with respect 
                        to the swap activities of the person 
                        that require such person to be 
                        registered under that Act; and
                            (ix) any registered entity under 
                        the Commodity Exchange Act (7 U.S.C. 1 
                        et seq.), with respect to the 
                        activities of the registered entity 
                        that require the registered entity to 
                        be registered under that Act;
                    (D) the State insurance authority of the 
                State in which an insurance company is 
                domiciled, with respect to the insurance 
                activities and activities that are incidental 
                to such insurance activities of an insurance 
                company that is subject to supervision by the 
                State insurance authority under State insurance 
                law; and
                    (E) the Federal Housing Finance Agency, 
                with respect to Federal Home Loan Banks or the 
                Federal Home Loan Bank System, and with respect 
                to the Federal National Mortgage Association or 
                the Federal Home Loan Mortgage Corporation.
            (13) Prudential standards.--The term ``prudential 
        standards'' means enhanced supervision and regulatory 
        standards developed by the Board of Governors under 
        section 165.
            (14) Secretary.--The term ``Secretary'' means the 
        Secretary of the Treasury.
            (15) Securities terms.--The--
                    (A) terms ``broker'', ``dealer'', 
                ``issuer'', ``nationally recognized statistical 
                rating organization'', ``security'', and 
                ``securities laws'' have the same meanings as 
                in section 3 of the Securities Exchange Act of 
                1934 (15 U.S.C. 78c);
                    (B) term ``investment adviser'' has the 
                same meaning as in section 202 of the 
                Investment Advisers Act of 1940 (15 U.S.C. 80b-
                2); and
                    (C) term ``investment company'' has the 
                same meaning as in section 3 of the Investment 
                Company Act of 1940 (15 U.S.C. 80a-3).
            (16) State.--The term ``State'' means any State, 
        commonwealth, territory, or possession of the United 
        States, the District of Columbia, the Commonwealth of 
        Puerto Rico, the Commonwealth of the Northern Mariana 
        Islands, American Samoa, Guam, or the United States 
        Virgin Islands.
            (17) Transfer date.--The term ``transfer date'' 
        means the date established under section 311.
            (18) Other incorporated definitions.--
                    (A) Federal deposit insurance act.--The 
                terms ``bank'', ``bank holding company'', 
                ``control'', ``deposit'', ``depository 
                institution'', ``Federal depository 
                institution'', ``Federal savings association'', 
                ``foreign bank'', ``including'', ``insured 
                branch'', ``insured depository institution'', 
                ``national member bank'', ``national nonmember 
                bank'', ``savings association'', ``State 
                bank'', ``State depository institution'', 
                ``State member bank'', ``State nonmember 
                bank'', ``State savings association'', and 
                ``subsidiary'' have the same meanings as in 
                section 3 of the Federal Deposit Insurance Act 
                (12 U.S.C. 1813).
                    (B) Holding companies.--The term--
                            (i) ``bank holding company'' has 
                        the same meaning as in section 2 of the 
                        Bank Holding Company Act of 1956 (12 
                        U.S.C. 1841);
                            (ii) ``financial holding company'' 
                        has the same meaning as in section 2(p) 
                        of the Bank Holding Company Act of 1956 
                        (12 U.S.C. 1841(p)); and
                            (iii) ``savings and loan holding 
                        company'' has the same meaning as in 
                        section 10 of the Home Owners' Loan Act 
                        (12 U.S.C. 1467a(a)).

SEC. 3. SEVERABILITY.

    If any provision of this Act, an amendment made by this 
Act, or the application of such provision or amendment to any 
person or circumstance is held to be unconstitutional, the 
remainder of this Act, the amendments made by this Act, and the 
application of the provisions of such to any person or 
circumstance shall not be affected thereby.

SEC. 4. EFFECTIVE DATE.

    Except as otherwise specifically provided in this Act or 
the amendments made by this Act, this Act and such amendments 
shall take effect 1 day after the date of enactment of this 
Act.

SEC. 5. BUDGETARY EFFECTS.

    The budgetary effects of this Act, for the purpose of 
complying with the Statutory Pay-As-You-Go-Act of 2010, shall 
be determined by reference to the latest statement titled 
``Budgetary Effects of PAYGO Legislation'' for this Act, 
jointly submitted for printing in the Congressional Record by 
the Chairmen of the House and Senate Budget Committees, 
provided that such statement has been submitted prior to the 
vote on passage in the House acting first on this conference 
report or amendment between the Houses.

SEC. 6. ANTITRUST SAVINGS CLAUSE.

    Nothing in this Act, or any amendment made by this Act, 
shall be construed to modify, impair, or supersede the 
operation of any of the antitrust laws, unless otherwise 
specified. For purposes of this section, the term ``antitrust 
laws'' has the same meaning as in subsection (a) of the first 
section of the Clayton Act, except that such term includes 
section 5 of the Federal Trade Commission Act, to the extent 
that such section 5 applies to unfair methods of competition.

                      TITLE I--FINANCIAL STABILITY

SEC. 101. SHORT TITLE.

    This title may be cited as the ``Financial Stability Act of 
2010''.

SEC. 102. DEFINITIONS.

    (a) In General.--For purposes of this title, unless the 
context otherwise requires, the following definitions shall 
apply:
            (1) Bank holding company.--The term ``bank holding 
        company'' has the same meaning as in section 2 of the 
        Bank Holding Company Act of 1956 (12 U.S.C. 1841). A 
        foreign bank or company that is treated as a bank 
        holding company for purposes of the Bank Holding 
        Company Act of 1956, pursuant to section 8(a) of the 
        International Banking Act of 1978 (12 U.S.C. 3106(a)), 
        shall be treated as a bank holding company for purposes 
        of this title.
            (2) Chairperson.--The term ``Chairperson'' means 
        the Chairperson of the Council.
            (3) Member agency.--The term ``member agency'' 
        means an agency represented by a voting member of the 
        Council.
            (4) Nonbank financial company definitions.--
                    (A) Foreign nonbank financial company.--The 
                term ``foreign nonbank financial company'' 
                means a company (other than a company that is, 
                or is treated in the United States as, a bank 
                holding company) that is--
                            (i) incorporated or organized in a 
                        country other than the United States; 
                        and
                            (ii) predominantly engaged in, 
                        including through a branch in the 
                        United States, financial activities, as 
                        defined in paragraph (6).
                    (B) U.S. nonbank financial company.--The 
                term ``U.S. nonbank financial company'' means a 
                company (other than a bank holding company, a 
                Farm Credit System institution chartered and 
                subject to the provisions of the Farm Credit 
                Act of 1971 (12 U.S.C. 2001 et seq.), or a 
                national securities exchange (or parent 
                thereof), clearing agency (or parent thereof, 
                unless the parent is a bank holding company), 
                security-based swap execution facility, or 
                security-based swap data repository registered 
                with the Commission, or a board of trade 
                designated as a contract market (or parent 
                thereof), or a derivatives clearing 
                organization (or parent thereof, unless the 
                parent is a bank holding company), swap 
                execution facility or a swap data repository 
                registered with the Commodity Futures Trading 
                Commission), that is--
                            (i) incorporated or organized under 
                        the laws of the United States or any 
                        State; and
                            (ii) predominantly engaged in 
                        financial activities, as defined in 
                        paragraph (6).
                    (C) Nonbank financial company.--The term 
                ``nonbank financial company'' means a U.S. 
                nonbank financial company and a foreign nonbank 
                financial company.
                    (D) Nonbank financial company supervised by 
                the board of governors.--The term ``nonbank 
                financial company supervised by the Board of 
                Governors'' means a nonbank financial company 
                that the Council has determined under section 
                113 shall be supervised by the Board of 
                Governors.
            (5) Office of financial research.--The term 
        ``Office of Financial Research'' means the office 
        established under section 152.
            (6) Predominantly engaged.--A company is 
        ``predominantly engaged in financial activities'' if--
                    (A) the annual gross revenues derived by 
                the company and all of its subsidiaries from 
                activities that are financial in nature (as 
                defined in section 4(k) of the Bank Holding 
                Company Act of 1956) and, if applicable, from 
                the ownership or control of one or more insured 
                depository institutions, represents 85 percent 
                or more of the consolidated annual gross 
                revenues of the company; or
                    (B) the consolidated assets of the company 
                and all of its subsidiaries related to 
                activities that are financial in nature (as 
                defined in section 4(k) of the Bank Holding 
                Company Act of 1956) and, if applicable, 
                related to the ownership or control of one or 
                more insured depository institutions, 
                represents 85 percent or more of the 
                consolidated assets of the company.
            (7) Significant institutions.--The terms 
        ``significant nonbank financial company'' and 
        ``significant bank holding company'' have the meanings 
        given those terms by rule of the Board of Governors, 
        but in no instance shall the term ``significant nonbank 
        financial company'' include those entities that are 
        excluded under paragraph (4)(B).
    (b) Definitional Criteria.--The Board of Governors shall 
establish, by regulation, the requirements for determining if a 
company is predominantly engaged in financial activities, as 
defined in subsection (a)(6).
    (c) Foreign Nonbank Financial Companies.--For purposes of 
the application of subtitles A and C (other than section 
113(b)) with respect to a foreign nonbank financial company, 
references in this title to ``company'' or ``subsidiary'' 
include only the United States activities and subsidiaries of 
such foreign company, except as otherwise provided.

           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 Director of the Bureau;
                    (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.
            (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 shall be compensated by the department or 
agency from which the employee was detailed.

SEC. 112. COUNCIL AUTHORITY.

    (a) Purposes and Duties of the Council.--
            (1) In general.--The purposes of the Council are--
                    (A) to identify risks to the financial 
                stability of the United States that could arise 
                from the material financial distress or 
                failure, or ongoing activities, of large, 
                interconnected bank holding companies or 
                nonbank financial companies, or that could 
                arise outside the financial services 
                marketplace;
                    (B) to promote market discipline, by 
                eliminating expectations on the part of 
                shareholders, creditors, and counterparties of 
                such companies that the Government will shield 
                them from losses in the event of failure; and
                    (C) to respond to emerging threats to the 
                stability of the United States financial 
                system.
            (2) Duties.--The Council shall, in accordance with 
        this title--
                    (A) collect information from member 
                agencies, other Federal and State financial 
                regulatory agencies, the Federal Insurance 
                Office and, if necessary to assess risks to the 
                United States financial system, direct the 
                Office of Financial Research to collect 
                information from bank holding companies and 
                nonbank financial companies;
                    (B) provide direction to, and request data 
                and analyses from, the Office of Financial 
                Research to support the work of the Council;
                    (C) monitor the financial services 
                marketplace in order to identify potential 
                threats to the financial stability of the 
                United States;
                    (D) monitor domestic and international 
                financial regulatory proposals and 
                developments, including insurance and 
                accounting issues, and to advise Congress and 
                make recommendations in such areas that will 
                enhance the integrity, efficiency, 
                competitiveness, and stability of the U.S. 
                financial markets;
                    (E) facilitate information sharing and 
                coordination among the member agencies and 
                other Federal and State agencies regarding 
                domestic financial services policy development, 
                rulemaking, examinations, reporting 
                requirements, and enforcement actions;
                    (F) recommend to the member agencies 
                general supervisory priorities and principles 
                reflecting the outcome of discussions among the 
                member agencies;
                    (G) identify gaps in regulation that could 
                pose risks to the financial stability of the 
                United States;
                    (H) require supervision by the Board of 
                Governors for nonbank financial companies that 
                may pose risks to the financial stability of 
                the United States in the event of their 
                material financial distress or failure, or 
                because of their activities pursuant to section 
                113;
                    (I) make recommendations to the Board of 
                Governors concerning the establishment of 
                heightened prudential standards for risk-based 
                capital, leverage, liquidity, contingent 
                capital, resolution plans and credit exposure 
                reports, concentration limits, enhanced public 
                disclosures, and overall risk management for 
                nonbank financial companies and large, 
                interconnected bank holding companies 
                supervised by the Board of Governors;
                    (J) identify systemically important 
                financial market utilities and payment, 
                clearing, and settlement activities (as that 
                term is defined in title VIII);
                    (K) make recommendations to primary 
                financial regulatory agencies to apply new or 
                heightened standards and safeguards for 
                financial activities or practices that could 
                create or increase risks of significant 
                liquidity, credit, or other problems spreading 
                among bank holding companies, nonbank financial 
                companies, and United States financial markets;
                    (L) review and, as appropriate, may submit 
                comments to the Commission and any standard-
                setting body with respect to an existing or 
                proposed accounting principle, standard, or 
                procedure;
                    (M) provide a forum for--
                            (i) discussion and analysis of 
                        emerging market developments and 
                        financial regulatory issues; and
                            (ii) resolution of jurisdictional 
                        disputes among the members of the 
                        Council; and
                    (N) annually report to and testify before 
                Congress on--
                            (i) the activities of the Council;
                            (ii) significant financial market 
                        and regulatory developments, including 
                        insurance and accounting regulations 
                        and standards, along with an assessment 
                        of those developments on the stability 
                        of the financial system;
                            (iii) potential emerging threats to 
                        the financial stability of the United 
                        States;
                            (iv) all determinations made under 
                        section 113 or title VIII, and the 
                        basis for such determinations;
                            (v) all recommendations made under 
                        section 119 and the result of such 
                        recommendations; and
                            (vi) recommendations--
                                    (I) to enhance the 
                                integrity, efficiency, 
                                competitiveness, and stability 
                                of United States financial 
                                markets;
                                    (II) to promote market 
                                discipline; and
                                    (III) to maintain investor 
                                confidence.
    (b) Statements by Voting Members of the Council.--At the 
time at which each report is submitted under subsection (a), 
each voting member of the Council shall--
            (1) if such member believes that the Council, the 
        Government, and the private sector are taking all 
        reasonable steps to ensure financial stability and to 
        mitigate systemic risk that would negatively affect the 
        economy, submit a signed statement to Congress stating 
        such belief; or
            (2) if such member does not believe that all 
        reasonable steps described under paragraph (1) are 
        being taken, submit a signed statement to Congress 
        stating what actions such member believes need to be 
        taken in order to ensure that all reasonable steps 
        described under paragraph (1) are taken.
    (c) Testimony by the Chairperson.--The Chairperson shall 
appear before the Committee on Financial Services of the House 
of Representatives and the Committee on Banking, Housing, and 
Urban Affairs of the Senate at an annual hearing, after the 
report is submitted under subsection (a)--
            (1) to discuss the efforts, activities, objectives, 
        and plans of the Council; and
            (2) to discuss and answer questions concerning such 
        report.
    (d) Authority To Obtain Information.--
            (1) In general.--The Council may receive, and may 
        request the submission of, any data or information from 
        the Office of Financial Research, member agencies, and 
        the Federal Insurance Office, as necessary--
                    (A) to monitor the financial services 
                marketplace to identify potential risks to the 
                financial stability of the United States; or
                    (B) to otherwise carry out any of the 
                provisions of this title.
            (2) Submissions by the office and member 
        agencies.--Notwithstanding any other provision of law, 
        the Office of Financial Research, any member agency, 
        and the Federal Insurance Office, are authorized to 
        submit information to the Council.
            (3) Financial data collection.--
                    (A) In general.--The Council, acting 
                through the Office of Financial Research, may 
                require the submission of periodic and other 
                reports from any nonbank financial company or 
                bank holding company for the purpose of 
                assessing the extent to which a financial 
                activity or financial market in which the 
                nonbank financial company or bank holding 
                company participates, or the nonbank financial 
                company or bank holding company itself, poses a 
                threat to the financial stability of the United 
                States.
                    (B) Mitigation of report burden.--Before 
                requiring the submission of reports from any 
                nonbank financial company or bank holding 
                company that is regulated by a member agency or 
                any primary financial regulatory agency, the 
                Council, acting through the Office of Financial 
                Research, shall coordinate with such agencies 
                and shall, whenever possible, rely on 
                information available from the Office of 
                Financial Research or such agencies.
                    (C) Mitigation in case of foreign financial 
                companies.--Before requiring the submission of 
                reports from a company that is a foreign 
                nonbank financial company or foreign-based bank 
                holding company, the Council shall, acting 
                through the Office of Financial Research, to 
                the extent appropriate, consult with the 
                appropriate foreign regulator of such company 
                and, whenever possible, rely on information 
                already being collected by such foreign 
                regulator, with English translation.
            (4) Back-up examination by the board of 
        governors.--If the Council is unable to determine 
        whether the financial activities of a U.S. nonbank 
        financial company pose a threat to the financial 
        stability of the United States, based on information or 
        reports obtained under paragraphs (1) and (3), 
        discussions with management, and publicly available 
        information, the Council may request the Board of 
        Governors, and the Board of Governors is authorized, to 
        conduct an examination of the U.S. nonbank financial 
        company for the sole purpose of determining whether the 
        nonbank financial company should be supervised by the 
        Board of Governors for purposes of this title.
            (5) Confidentiality.--
                    (A) In general.--The Council, the Office of 
                Financial Research, and the other member 
                agencies shall maintain the confidentiality of 
                any data, information, and reports submitted 
                under this title.
                    (B) Retention of privilege.--The submission 
                of any nonpublicly available data or 
                information under this subsection and subtitle 
                B shall not constitute a waiver of, or 
                otherwise affect, any privilege arising under 
                Federal or State law (including the rules of 
                any Federal or State court) to which the data 
                or information is otherwise subject.
                    (C) Freedom of information act.--Section 
                552 of title 5, United States Code, including 
                the exceptions thereunder, shall apply to any 
                data or information submitted under this 
                subsection and subtitle B.

SEC. 113. AUTHORITY TO REQUIRE SUPERVISION AND REGULATION OF CERTAIN 
                    NONBANK FINANCIAL COMPANIES.

    (a) U.S. Nonbank Financial Companies Supervised by the 
Board of Governors.--
            (1) Determination.--The Council, on a nondelegable 
        basis and by a vote of not fewer than \2/3\ of the 
        voting members then serving, including an affirmative 
        vote by the Chairperson, may determine that a U.S. 
        nonbank financial company shall be supervised by the 
        Board of Governors and shall be subject to prudential 
        standards, in accordance with this title, if the 
        Council determines that material financial distress at 
        the U.S. nonbank financial company, or the nature, 
        scope, size, scale, concentration, interconnectedness, 
        or mix of the activities of the U.S. nonbank financial 
        company, could pose a threat to the financial stability 
        of the United States.
            (2) Considerations.--In making a determination 
        under paragraph (1), the Council shall consider--
                    (A) the extent of the leverage of the 
                company;
                    (B) the extent and nature of the off-
                balance-sheet exposures of the company;
                    (C) the extent and nature of the 
                transactions and relationships of the company 
                with other significant nonbank financial 
                companies and significant bank holding 
                companies;
                    (D) the importance of the company as a 
                source of credit for households, businesses, 
                and State and local governments and as a source 
                of liquidity for the United States financial 
                system;
                    (E) the importance of the company as a 
                source of credit for low-income, minority, or 
                underserved communities, and the impact that 
                the failure of such company would have on the 
                availability of credit in such communities;
                    (F) the extent to which assets are managed 
                rather than owned by the company, and the 
                extent to which ownership of assets under 
                management is diffuse;
                    (G) the nature, scope, size, scale, 
                concentration, interconnectedness, and mix of 
                the activities of the company;
                    (H) the degree to which the company is 
                already regulated by 1 or more primary 
                financial regulatory agencies;
                    (I) the amount and nature of the financial 
                assets of the company;
                    (J) the amount and types of the liabilities 
                of the company, including the degree of 
                reliance on short-term funding; and
                    (K) any other risk-related factors that the 
                Council deems appropriate.
    (b) Foreign Nonbank Financial Companies Supervised by the 
Board of Governors.--
            (1) Determination.--The Council, on a nondelegable 
        basis and by a vote of not fewer than \2/3\ of the 
        voting members then serving, including an affirmative 
        vote by the Chairperson, may determine that a foreign 
        nonbank financial company shall be supervised by the 
        Board of Governors and shall be subject to prudential 
        standards, in accordance with this title, if the 
        Council determines that material financial distress at 
        the foreign nonbank financial company, or the nature, 
        scope, size, scale, concentration, interconnectedness, 
        or mix of the activities of the foreign nonbank 
        financial company, could pose a threat to the financial 
        stability of the United States.
            (2) Considerations.--In making a determination 
        under paragraph (1), the Council shall consider--
                    (A) the extent of the leverage of the 
                company;
                    (B) the extent and nature of the United 
                States related off-balance-sheet exposures of 
                the company;
                    (C) the extent and nature of the 
                transactions and relationships of the company 
                with other significant nonbank financial 
                companies and significant bank holding 
                companies;
                    (D) the importance of the company as a 
                source of credit for United States households, 
                businesses, and State and local governments and 
                as a source of liquidity for the United States 
                financial system;
                    (E) the importance of the company as a 
                source of credit for low-income, minority, or 
                underserved communities in the United States, 
                and the impact that the failure of such company 
                would have on the availability of credit in 
                such communities;
                    (F) the extent to which assets are managed 
                rather than owned by the company and the extent 
                to which ownership of assets under management 
                is diffuse;
                    (G) the nature, scope, size, scale, 
                concentration, interconnectedness, and mix of 
                the activities of the company;
                    (H) the extent to which the company is 
                subject to prudential standards on a 
                consolidated basis in its home country that are 
                administered and enforced by a comparable 
                foreign supervisory authority;
                    (I) the amount and nature of the United 
                States financial assets of the company;
                    (J) the amount and nature of the 
                liabilities of the company used to fund 
                activities and operations in the United States, 
                including the degree of reliance on short-term 
                funding; and
                    (K) any other risk-related factors that the 
                Council deems appropriate.
    (c) Antievasion.--
            (1) Determinations.--In order to avoid evasion of 
        this title, the Council, on its own initiative or at 
        the request of the Board of Governors, may determine, 
        on a nondelegable basis and by a vote of not fewer than 
        \2/3\ of the voting members then serving, including an 
        affirmative vote by the Chairperson, that--
                    (A) material financial distress related to, 
                or the nature, scope, size, scale, 
                concentration, interconnectedness, or mix of, 
                the financial activities conducted directly or 
                indirectly by a company incorporated or 
                organized under the laws of the United States 
                or any State or the financial activities in the 
                United States of a company incorporated or 
                organized in a country other than the United 
                States would pose a threat to the financial 
                stability of the United States, based on 
                consideration of the factors in subsection 
                (a)(2) or (b)(2), as applicable;
                    (B) the company is organized or operates in 
                such a manner as to evade the application of 
                this title; and
                    (C) such financial activities of the 
                company shall be supervised by the Board of 
                Governors and subject to prudential standards 
                in accordance with this title, consistent with 
                paragraph (3).
            (2) Report.--Upon making a determination under 
        paragraph (1), the Council shall submit a report to the 
        appropriate committees of Congress detailing the 
        reasons for making such determination.
            (3) Consolidated supervision of only financial 
        activities; establishment of an intermediate holding 
        company.--
                    (A) Establishment of an intermediate 
                holding company.--Upon a determination under 
                paragraph (1), the company that is the subject 
                of the determination may establish an 
                intermediate holding company in which the 
                financial activities of such company and its 
                subsidiaries shall be conducted (other than the 
                activities described in section 167(b)(2)) in 
                compliance with any regulations or guidance 
                provided by the Board of Governors. Such 
                intermediate holding company shall be subject 
                to the supervision of the Board of Governors 
                and to prudential standards under this title as 
                if the intermediate holding company were a 
                nonbank financial company supervised by the 
                Board of Governors.
                    (B) Action of the board of governors.--To 
                facilitate the supervision of the financial 
                activities subject to the determination in 
                paragraph (1), the Board of Governors may 
                require a company to establish an intermediate 
                holding company, as provided for in section 
                167, which would be subject to the supervision 
                of the Board of Governors and to prudential 
                standards under this title, as if the 
                intermediate holding company were a nonbank 
                financial company supervised by the Board of 
                Governors.
            (4) Notice and opportunity for hearing and final 
        determination; judicial review.--Subsections (d) 
        through (h) shall apply to determinations made by the 
        Council pursuant to paragraph (1) in the same manner as 
        such subsections apply to nonbank financial companies.
            (5) Covered financial activities.--For purposes of 
        this subsection, the term ``financial activities''--
                    (A) means activities that are financial in 
                nature (as defined in section 4(k) of the Bank 
                Holding Company Act of 1956);
                    (B) includes the ownership or control of 
                one or more insured depository institutions; 
                and
                    (C) does not include internal financial 
                activities conducted for the company or any 
                affiliate thereof, including internal treasury, 
                investment, and employee benefit functions.
            (6) Only financial activities subject to prudential 
        supervision.--Nonfinancial activities of the company 
        shall not be subject to supervision by the Board of 
        Governors and prudential standards of the Board. For 
        purposes of this Act, the financial activities that are 
        the subject of the determination in paragraph (1) shall 
        be subject to the same requirements as a nonbank 
        financial company supervised by the Board of Governors. 
        Nothing in this paragraph shall prohibit or limit the 
        authority of the Board of Governors to apply prudential 
        standards under this title to the financial activities 
        that are subject to the determination in paragraph (1).
    (d) Reevaluation and Rescission.--The Council shall--
            (1) not less frequently than annually, reevaluate 
        each determination made under subsections (a) and (b) 
        with respect to such nonbank financial company 
        supervised by the Board of Governors; and
            (2) rescind any such determination, if the Council, 
        by a vote of not fewer than \2/3\ of the voting members 
        then serving, including an affirmative vote by the 
        Chairperson, determines that the nonbank financial 
        company no longer meets the standards under subsection 
        (a) or (b), as applicable.
    (e) Notice and Opportunity for Hearing and Final 
Determination.--
            (1) In general.--The Council shall provide to a 
        nonbank financial company written notice of a proposed 
        determination of the Council, including an explanation 
        of the basis of the proposed determination of the 
        Council, that a nonbank financial company shall be 
        supervised by the Board of Governors and shall be 
        subject to prudential standards in accordance with this 
        title.
            (2) Hearing.--Not later than 30 days after the date 
        of receipt of any notice of a proposed determination 
        under paragraph (1), the nonbank financial company may 
        request, in writing, an opportunity for a written or 
        oral hearing before the Council to contest the proposed 
        determination. Upon receipt of a timely request, the 
        Council shall fix a time (not later than 30 days after 
        the date of receipt of the request) and place at which 
        such company may appear, personally or through counsel, 
        to submit written materials (or, at the sole discretion 
        of the Council, oral testimony and oral argument).
            (3) Final determination.--Not later than 60 days 
        after the date of a hearing under paragraph (2), the 
        Council shall notify the nonbank financial company of 
        the final determination of the Council, which shall 
        contain a statement of the basis for the decision of 
        the Council.
            (4) No hearing requested.--If a nonbank financial 
        company does not make a timely request for a hearing, 
        the Council shall notify the nonbank financial company, 
        in writing, of the final determination of the Council 
        under subsection (a) or (b), as applicable, not later 
        than 10 days after the date by which the company may 
        request a hearing under paragraph (2).
    (f) Emergency Exception.--
            (1) In general.--The Council may waive or modify 
        the requirements of subsection (e) with respect to a 
        nonbank financial company, if the Council determines, 
        by a vote of not fewer than \2/3\ of the voting members 
        then serving, including an affirmative vote by the 
        Chairperson, that such waiver or modification is 
        necessary or appropriate to prevent or mitigate threats 
        posed by the nonbank financial company to the financial 
        stability of the United States.
            (2) Notice.--The Council shall provide notice of a 
        waiver or modification under this subsection to the 
        nonbank financial company concerned as soon as 
        practicable, but not later than 24 hours after the 
        waiver or modification is granted.
            (3) International coordination.--In making a 
        determination under paragraph (1), the Council shall 
        consult with the appropriate home country supervisor, 
        if any, of the foreign nonbank financial company that 
        is being considered for such a determination.
            (4) Opportunity for hearing.--The Council shall 
        allow a nonbank financial company to request, in 
        writing, an opportunity for a written or oral hearing 
        before the Council to contest a waiver or modification 
        under this subsection, not later than 10 days after the 
        date of receipt of notice of the waiver or modification 
        by the company. Upon receipt of a timely request, the 
        Council shall fix a time (not later than 15 days after 
        the date of receipt of the request) and place at which 
        the nonbank financial company may appear, personally or 
        through counsel, to submit written materials (or, at 
        the sole discretion of the Council, oral testimony and 
        oral argument).
            (5) Notice of final determination.--Not later than 
        30 days after the date of any hearing under paragraph 
        (4), the Council shall notify the subject nonbank 
        financial company of the final determination of the 
        Council under this subsection, which shall contain a 
        statement of the basis for the decision of the Council.
    (g) Consultation.--The Council shall consult with the 
primary financial regulatory agency, if any, for each nonbank 
financial company or subsidiary of a nonbank financial company 
that is being considered for supervision by the Board of 
Governors under this section before the Council makes any final 
determination with respect to such nonbank financial company 
under subsection (a), (b), or (c).
    (h) Judicial Review.--If the Council makes a final 
determination under this section with respect to a nonbank 
financial company, such nonbank financial company may, not 
later than 30 days after the date of receipt of the notice of 
final determination under subsection (d)(2), (e)(3), or (f)(5), 
bring an action in the United States district court for the 
judicial district in which the home office of such nonbank 
financial company is located, or in the United States District 
Court for the District of Columbia, for an order requiring that 
the final determination be rescinded, and the court shall, upon 
review, dismiss such action or direct the final determination 
to be rescinded. Review of such an action shall be limited to 
whether the final determination made under this section was 
arbitrary and capricious.
    (i) International Coordination.--In exercising its duties 
under this title with respect to foreign nonbank financial 
companies, foreign-based bank holding companies, and cross-
border activities and markets, the Council shall consult with 
appropriate foreign regulatory authorities, to the extent 
appropriate.

SEC. 114. REGISTRATION OF NONBANK FINANCIAL COMPANIES SUPERVISED BY THE 
                    BOARD OF GOVERNORS.

    Not later than 180 days after the date of a final Council 
determination under section 113 that a nonbank financial 
company is to be supervised by the Board of Governors, such 
company shall register with the Board of Governors, on forms 
prescribed by the Board of Governors, which shall include such 
information as the Board of Governors, in consultation with the 
Council, may deem necessary or appropriate to carry out this 
title.

SEC. 115. ENHANCED SUPERVISION AND PRUDENTIAL STANDARDS FOR NONBANK 
                    FINANCIAL COMPANIES SUPERVISED BY THE BOARD OF 
                    GOVERNORS AND CERTAIN BANK HOLDING COMPANIES.

    (a) In General.--
            (1) Purpose.--In order to prevent or mitigate risks 
        to the financial stability of the United States that 
        could arise from the material financial distress, 
        failure, or ongoing activities of large, interconnected 
        financial institutions, the Council may make 
        recommendations to the Board of Governors concerning 
        the establishment and refinement of prudential 
        standards and reporting and disclosure requirements 
        applicable to nonbank financial companies supervised by 
        the Board of Governors and large, interconnected bank 
        holding companies, that--
                    (A) are more stringent than those 
                applicable to other nonbank financial companies 
                and bank holding companies that do not present 
                similar risks to the financial stability of the 
                United States; and
                    (B) increase in stringency, based on the 
                considerations identified in subsection (b)(3).
            (2) Recommended application of required 
        standards.--In making recommendations under this 
        section, the Council may--
                    (A) differentiate among companies that are 
                subject to heightened standards on an 
                individual basis or by category, taking into 
                consideration their capital structure, 
                riskiness, complexity, financial activities 
                (including the financial activities of their 
                subsidiaries), size, and any other risk-related 
                factors that the Council deems appropriate; or
                    (B) recommend an asset threshold that is 
                higher than $50,000,000,000 for the application 
                of any standard described in subsections (c) 
                through (g).
    (b) Development of Prudential Standards.--
            (1) In general.--The recommendations of the Council 
        under subsection (a) may include--
                    (A) risk-based capital requirements;
                    (B) leverage limits;
                    (C) liquidity requirements;
                    (D) resolution plan and credit exposure 
                report requirements;
                    (E) concentration limits;
                    (F) a contingent capital requirement;
                    (G) enhanced public disclosures;
                    (H) short-term debt limits; and
                    (I) overall risk management requirements.
            (2) Prudential standards for foreign financial 
        companies.--In making recommendations concerning the 
        standards set forth in paragraph (1) that would apply 
        to foreign nonbank financial companies supervised by 
        the Board of Governors or foreign-based bank holding 
        companies, the Council shall--
                    (A) give due regard to the principle of 
                national treatment and equality of competitive 
                opportunity; and
                    (B) take into account the extent to which 
                the foreign nonbank financial company or 
                foreign-based bank holding company is subject 
                on a consolidated basis to home country 
                standards that are comparable to those applied 
                to financial companies in the United States.
            (3) Considerations.--In making recommendations 
        concerning prudential standards under paragraph (1), 
        the Council shall--
                    (A) take into account differences among 
                nonbank financial companies supervised by the 
                Board of Governors and bank holding companies 
                described in subsection (a), based on--
                            (i) the factors described in 
                        subsections (a) and (b) of section 113;
                            (ii) whether the company owns an 
                        insured depository institution;
                            (iii) nonfinancial activities and 
                        affiliations of the company; and
                            (iv) any other factors that the 
                        Council determines appropriate;
                    (B) to the extent possible, ensure that 
                small changes in the factors listed in 
                subsections (a) and (b) of section 113 would 
                not result in sharp, discontinuous changes in 
                the prudential standards established under 
                section 165; and
                    (C) adapt its recommendations as 
                appropriate in light of any predominant line of 
                business of such company, including assets 
                under management or other activities for which 
                particular standards may not be appropriate.
    (c) Contingent Capital.--
            (1) Study required.--The Council shall conduct a 
        study of the feasibility, benefits, costs, and 
        structure of a contingent capital requirement for 
        nonbank financial companies supervised by the Board of 
        Governors and bank holding companies described in 
        subsection (a), which study shall include--
                    (A) an evaluation of the degree to which 
                such requirement would enhance the safety and 
                soundness of companies subject to the 
                requirement, promote the financial stability of 
                the United States, and reduce risks to United 
                States taxpayers;
                    (B) an evaluation of the characteristics 
                and amounts of contingent capital that should 
                be required;
                    (C) an analysis of potential prudential 
                standards that should be used to determine 
                whether the contingent capital of a company 
                would be converted to equity in times of 
                financial stress;
                    (D) an evaluation of the costs to 
                companies, the effects on the structure and 
                operation of credit and other financial 
                markets, and other economic effects of 
                requiring contingent capital;
                    (E) an evaluation of the effects of such 
                requirement on the international 
                competitiveness of companies subject to the 
                requirement and the prospects for international 
                coordination in establishing such requirement; 
                and
                    (F) recommendations for implementing 
                regulations.
            (2) Report.--The Council shall submit a report to 
        Congress regarding the study required by paragraph (1) 
        not later than 2 years after the date of enactment of 
        this Act.
            (3) Recommendations.--
                    (A) In general.--Subsequent to submitting a 
                report to Congress under paragraph (2), the 
                Council may make recommendations to the Board 
                of Governors to require any nonbank financial 
                company supervised by the Board of Governors 
                and any bank holding company described in 
                subsection (a) to maintain a minimum amount of 
                contingent capital that is convertible to 
                equity in times of financial stress.
                    (B) Factors to consider.--In making 
                recommendations under this subsection, the 
                Council shall consider--
                            (i) an appropriate transition 
                        period for implementation of a 
                        conversion under this subsection;
                            (ii) the factors described in 
                        subsection (b)(3);
                            (iii) capital requirements 
                        applicable to a nonbank financial 
                        company supervised by the Board of 
                        Governors or a bank holding company 
                        described in subsection (a), and 
                        subsidiaries thereof;
                            (iv) results of the study required 
                        by paragraph (1); and
                            (v) any other factor that the 
                        Council deems appropriate.
    (d) Resolution Plan and Credit Exposure Reports.--
            (1) Resolution plan.--The Council may make 
        recommendations to the Board of Governors concerning 
        the requirement that each nonbank financial company 
        supervised by the Board of Governors and each bank 
        holding company described in subsection (a) report 
        periodically to the Council, the Board of Governors, 
        and the Corporation, the plan of such company for rapid 
        and orderly resolution in the event of material 
        financial distress or failure.
            (2) Credit exposure report.--The Council may make 
        recommendations to the Board of Governors concerning 
        the advisability of requiring each nonbank financial 
        company supervised by the Board of Governors and bank 
        holding company described in subsection (a) to report 
        periodically to the Council, the Board of Governors, 
        and the Corporation on--
                    (A) the nature and extent to which the 
                company has credit exposure to other 
                significant nonbank financial companies and 
                significant bank holding companies; and
                    (B) the nature and extent to which other 
                such significant nonbank financial companies 
                and significant bank holding companies have 
                credit exposure to that company.
    (e) Concentration Limits.--In order to limit the risks that 
the failure of any individual company could pose to nonbank 
financial companies supervised by the Board of Governors or 
bank holding companies described in subsection (a), the Council 
may make recommendations to the Board of Governors to prescribe 
standards to limit such risks, as set forth in section 165.
    (f) Enhanced Public Disclosures.--The Council may make 
recommendations to the Board of Governors to require periodic 
public disclosures by bank holding companies described in 
subsection (a) and by nonbank financial companies supervised by 
the Board of Governors, in order to support market evaluation 
of the risk profile, capital adequacy, and risk management 
capabilities thereof.
    (g) Short-term Debt Limits.--The Council may make 
recommendations to the Board of Governors to require short-term 
debt limits to mitigate the risks that an over-accumulation of 
such debt could pose to bank holding companies described in 
subsection (a), nonbank financial companies supervised by the 
Board of Governors, or the financial system.

SEC. 116. REPORTS.

    (a) In General.--Subject to subsection (b), the Council, 
acting through the Office of Financial Research, may require a 
bank holding company with total consolidated assets of 
$50,000,000,000 or greater or a nonbank financial company 
supervised by the Board of Governors, and any subsidiary 
thereof, to submit certified reports to keep the Council 
informed as to--
            (1) the financial condition of the company;
            (2) systems for monitoring and controlling 
        financial, operating, and other risks;
            (3) transactions with any subsidiary that is a 
        depository institution; and
            (4) the extent to which the activities and 
        operations of the company and any subsidiary thereof, 
        could, under adverse circumstances, have the potential 
        to disrupt financial markets or affect the overall 
        financial stability of the United States.
    (b) Use of Existing Reports.--
            (1) In general.--For purposes of compliance with 
        subsection (a), the Council, acting through the Office 
        of Financial Research, shall, to the fullest extent 
        possible, use--
                    (A) reports that a bank holding company, 
                nonbank financial company supervised by the 
                Board of Governors, or any functionally 
                regulated subsidiary of such company has been 
                required to provide to other Federal or State 
                regulatory agencies or to a relevant foreign 
                supervisory authority;
                    (B) information that is otherwise required 
                to be reported publicly; and
                    (C) externally audited financial 
                statements.
            (2) Availability.--Each bank holding company 
        described in subsection (a) and nonbank financial 
        company supervised by the Board of Governors, and any 
        subsidiary thereof, shall provide to the Council, at 
        the request of the Council, copies of all reports 
        referred to in paragraph (1).
            (3) Confidentiality.--The Council shall maintain 
        the confidentiality of the reports obtained under 
        subsection (a) and paragraph (1)(A) of this subsection.

SEC. 117. TREATMENT OF CERTAIN COMPANIES THAT CEASE TO BE BANK HOLDING 
                    COMPANIES.

    (a) Applicability.--This section shall apply to--
            (1) any entity that--
                    (A) was a bank holding company having total 
                consolidated assets equal to or greater than 
                $50,000,000,000 as of January 1, 2010; and
                    (B) received financial assistance under or 
                participated in the Capital Purchase Program 
                established under the Troubled Asset Relief 
                Program authorized by the Emergency Economic 
                Stabilization Act of 2008; and
            (2) any successor entity (as defined by the Board 
        of Governors, in consultation with the Council) to an 
        entity described in paragraph (1).
    (b) Treatment.--If an entity described in subsection (a) 
ceases to be a bank holding company at any time after January 
1, 2010, then such entity shall be treated as a nonbank 
financial company supervised by the Board of Governors, as if 
the Council had made a determination under section 113 with 
respect to that entity.
    (c) Appeal.--
            (1) Request for hearing.--An entity may request, in 
        writing, an opportunity for a written or oral hearing 
        before the Council to appeal its treatment as a nonbank 
        financial company supervised by the Board of Governors 
        in accordance with this section. Upon receipt of the 
        request, the Council shall fix a time (not later than 
        30 days after the date of receipt of the request) and 
        place at which such entity may appear, personally or 
        through counsel, to submit written materials (or, at 
        the sole discretion of the Council, oral testimony and 
        oral argument).
            (2) Decision.--
                    (A) Proposed decision.--A Council decision 
                to grant an appeal under this subsection shall 
                be made by a vote of not fewer than \2/3\ of 
                the voting members then serving, including an 
                affirmative vote by the Chairperson. Not later 
                than 60 days after the date of a hearing under 
                paragraph (1), the Council shall submit a 
                report to, and may testify before, the 
                Committee on Banking, Housing, and Urban 
                Affairs of the Senate and the Committee on 
                Financial Services of the House of 
                Representatives on the proposed decision of the 
                Council regarding an appeal under paragraph 
                (1), which report shall include a statement of 
                the basis for the proposed decision of the 
                Council.
                    (B) Notice of final decision.--The Council 
                shall notify the subject entity of the final 
                decision of the Council regarding an appeal 
                under paragraph (1), which notice shall contain 
                a statement of the basis for the final decision 
                of the Council, not later than 60 days after 
                the later of--
                            (i) the date of the submission of 
                        the report under subparagraph (A); or
                            (ii) if, not later than 1 year 
                        after the date of submission of the 
                        report under subparagraph (A), the 
                        Committee on Banking, Housing, and 
                        Urban Affairs of the Senate or the 
                        Committee on Financial Services of the 
                        House of Representatives holds one or 
                        more hearings regarding such report, 
                        the date of the last such hearing.
                    (C) Considerations.--In making a decision 
                regarding an appeal under paragraph (1), the 
                Council shall consider whether the company 
                meets the standards under section 113(a) or 
                113(b), as applicable, and the definition of 
                the term ``nonbank financial company'' under 
                section 102. The decision of the Council shall 
                be final, subject to the review under paragraph 
                (3).
            (3) Review.--If the Council denies an appeal under 
        this subsection, the Council shall, not less frequently 
        than annually, review and reevaluate the decision.

SEC. 118. COUNCIL FUNDING.

    Any expenses of the Council shall be treated as expenses 
of, and paid by, the Office of Financial Research.

SEC. 119. RESOLUTION OF SUPERVISORY JURISDICTIONAL DISPUTES AMONG 
                    MEMBER AGENCIES.

    (a) Request for Council Recommendation.--The Council shall 
seek to resolve a dispute among 2 or more member agencies, if--
            (1) a member agency has a dispute with another 
        member agency about the respective jurisdiction over a 
        particular bank holding company, nonbank financial 
        company, or financial activity or product (excluding 
        matters for which another dispute mechanism 
        specifically has been provided under title X);
            (2) the Council determines that the disputing 
        agencies cannot, after a demonstrated good faith 
        effort, resolve the dispute without the intervention of 
        the Council; and
            (3) any of the member agencies involved in the 
        dispute--
                    (A) provides all other disputants prior 
                notice of the intent to request dispute 
                resolution by the Council; and
                    (B) requests in writing, not earlier than 
                14 days after providing the notice described in 
                subparagraph (A), that the Council seek to 
                resolve the dispute.
    (b) Council Recommendation.--The Council shall seek to 
resolve each dispute described in subsection (a)--
            (1) within a reasonable time after receiving the 
        dispute resolution request;
            (2) after consideration of relevant information 
        provided by each agency party to the dispute; and
            (3) by agreeing with 1 of the disputants regarding 
        the entirety of the matter, or by determining a 
        compromise position.
    (c) Form of Recommendation.--Any Council recommendation 
under this section shall--
            (1) be in writing;
            (2) include an explanation of the reasons therefor; 
        and
            (3) be approved by the affirmative vote of \2/3\ of 
        the voting members of the Council then serving.
    (d) Nonbinding Effect.--Any recommendation made by the 
Council under subsection (c) shall not be binding on the 
Federal agencies that are parties to the dispute.

SEC. 120. ADDITIONAL STANDARDS APPLICABLE TO ACTIVITIES OR PRACTICES 
                    FOR FINANCIAL STABILITY PURPOSES.

    (a) In General.--The Council may provide for more stringent 
regulation of a financial activity by issuing recommendations 
to the primary financial regulatory agencies to apply new or 
heightened standards and safeguards, including standards 
enumerated in section 115, for a financial activity or practice 
conducted by bank holding companies or nonbank financial 
companies under their respective jurisdictions, if the Council 
determines that the conduct, scope, nature, size, scale, 
concentration, or interconnectedness of such activity or 
practice could create or increase the risk of significant 
liquidity, credit, or other problems spreading among bank 
holding companies and nonbank financial companies, financial 
markets of the United States, or low-income, minority, or 
underserved communities.
    (b) Procedure for Recommendations to Regulators.--
            (1) Notice and opportunity for comment.--The 
        Council shall consult with the primary financial 
        regulatory agencies and provide notice to the public 
        and opportunity for comment for any proposed 
        recommendation that the primary financial regulatory 
        agencies apply new or heightened standards and 
        safeguards for a financial activity or practice.
            (2) Criteria.--The new or heightened standards and 
        safeguards for a financial activity or practice 
        recommended under paragraph (1)--
                    (A) shall take costs to long-term economic 
                growth into account; and
                    (B) may include prescribing the conduct of 
                the activity or practice in specific ways (such 
                as by limiting its scope, or applying 
                particular capital or risk management 
                requirements to the conduct of the activity) or 
                prohibiting the activity or practice.
    (c) Implementation of Recommended Standards.--
            (1) Role of primary financial regulatory agency.--
                    (A) In general.--Each primary financial 
                regulatory agency may impose, require reports 
                regarding, examine for compliance with, and 
                enforce standards in accordance with this 
                section with respect to those entities for 
                which it is the primary financial regulatory 
                agency.
                    (B) Rule of construction.--The authority 
                under this paragraph is in addition to, and 
                does not limit, any other authority of a 
                primary financial regulatory agency. Compliance 
                by an entity with actions taken by a primary 
                financial regulatory agency under this section 
                shall be enforceable in accordance with the 
                statutes governing the respective jurisdiction 
                of the primary financial regulatory agency over 
                the entity, as if the agency action were taken 
                under those statutes.
            (2) Imposition of standards.--The primary financial 
        regulatory agency shall impose the standards 
        recommended by the Council in accordance with 
        subsection (a), or similar standards that the Council 
        deems acceptable, or shall explain in writing to the 
        Council, not later than 90 days after the date on which 
        the Council issues the recommendation, why the agency 
        has determined not to follow the recommendation of the 
        Council.
    (d) Report to Congress.--The Council shall report to 
Congress on--
            (1) any recommendations issued by the Council under 
        this section;
            (2) the implementation of, or failure to implement, 
        such recommendation on the part of a primary financial 
        regulatory agency; and
            (3) in any case in which no primary financial 
        regulatory agency exists for the nonbank financial 
        company conducting financial activities or practices 
        referred to in subsection (a), recommendations for 
        legislation that would prevent such activities or 
        practices from threatening the stability of the 
        financial system of the United States.
    (e) Effect of Rescission of Identification.--
            (1) Notice.--The Council may recommend to the 
        relevant primary financial regulatory agency that a 
        financial activity or practice no longer requires any 
        standards or safeguards implemented under this section.
            (2) Determination of primary financial regulatory 
        agency to continue.--
                    (A) In general.--Upon receipt of a 
                recommendation under paragraph (1), a primary 
                financial regulatory agency that has imposed 
                standards under this section shall determine 
                whether such standards should remain in effect.
                    (B) Appeal process.--Each primary financial 
                regulatory agency that has imposed standards 
                under this section shall promulgate regulations 
                to establish a procedure under which entities 
                under its jurisdiction may appeal a 
                determination by such agency under this 
                paragraph that standards imposed under this 
                section should remain in effect.

SEC. 121. MITIGATION OF RISKS TO FINANCIAL STABILITY.

    (a) Mitigatory Actions.--If the Board of Governors 
determines that a bank holding company with total consolidated 
assets of $50,000,000,000 or more, or a nonbank financial 
company supervised by the Board of Governors, poses a grave 
threat to the financial stability of the United States, the 
Board of Governors, upon an affirmative vote of not fewer than 
\2/3\ of the voting members of the Council then serving, 
shall--
            (1) limit the ability of the company to merge with, 
        acquire, consolidate with, or otherwise become 
        affiliated with another company;
            (2) restrict the ability of the company to offer a 
        financial product or products;
            (3) require the company to terminate one or more 
        activities;
            (4) impose conditions on the manner in which the 
        company conducts 1 or more activities; or
            (5) if the Board of Governors determines that the 
        actions described in paragraphs (1) through (4) are 
        inadequate to mitigate a threat to the financial 
        stability of the United States in its recommendation, 
        require the company to sell or otherwise transfer 
        assets or off-balance-sheet items to unaffiliated 
        entities.
    (b) Notice and Hearing.--
            (1) In general.--The Board of Governors, in 
        consultation with the Council, shall provide to a 
        company described in subsection (a) written notice that 
        such company is being considered for mitigatory action 
        pursuant to this section, including an explanation of 
        the basis for, and description of, the proposed 
        mitigatory action.
            (2) Hearing.--Not later than 30 days after the date 
        of receipt of notice under paragraph (1), the company 
        may request, in writing, an opportunity for a written 
        or oral hearing before the Board of Governors to 
        contest the proposed mitigatory action. Upon receipt of 
        a timely request, the Board of Governors shall fix a 
        time (not later than 30 days after the date of receipt 
        of the request) and place at which such company may 
        appear, personally or through counsel, to submit 
        written materials (or, at the discretion of the Board 
        of Governors, in consultation with the Council, oral 
        testimony and oral argument).
            (3) Decision.--Not later than 60 days after the 
        date of a hearing under paragraph (2), or not later 
        than 60 days after the provision of a notice under 
        paragraph (1) if no hearing was held, the Board of 
        Governors shall notify the company of the final 
        decision of the Board of Governors, including the 
        results of the vote of the Council, as described in 
        subsection (a).
    (c) Factors for Consideration.--The Board of Governors and 
the Council shall take into consideration the factors set forth 
in subsection (a) or (b) of section 113, as applicable, in 
making any determination under subsection (a).
    (d) Application to Foreign Financial Companies.--The Board 
of Governors may prescribe regulations regarding the 
application of this section to foreign nonbank financial 
companies supervised by the Board of Governors and foreign-
based bank holding companies--
            (1) giving due regard to the principle of national 
        treatment and equality of competitive opportunity; and
            (2) taking into account the extent to which the 
        foreign nonbank financial company or foreign-based bank 
        holding company is subject on a consolidated basis to 
        home country standards that are comparable to those 
        applied to financial companies in the United States.

SEC. 122. GAO AUDIT OF COUNCIL.

    (a) Authority To Audit.--The Comptroller General of the 
United States may audit the activities of--
            (1) the Council; and
            (2) any person or entity acting on behalf of or 
        under the authority of the Council, to the extent that 
        such activities relate to work for the Council by such 
        person or entity.
    (b) Access to Information.--
            (1) In general.--Notwithstanding any other 
        provision of law, the Comptroller General shall, upon 
        request and at such reasonable time and in such 
        reasonable form as the Comptroller General may request, 
        have access to--
                    (A) any records or other information under 
                the control of or used by the Council;
                    (B) any records or other information under 
                the control of a person or entity acting on 
                behalf of or under the authority of the 
                Council, to the extent that such records or 
                other information is relevant to an audit under 
                subsection (a); and
                    (C) the officers, directors, employees, 
                financial advisors, staff, working groups, and 
                agents and representatives of the Council (as 
                related to the activities on behalf of the 
                Council of such agent or representative), at 
                such reasonable times as the Comptroller 
                General may request.
            (2) Copies.--The Comptroller General may make and 
        retain copies of such books, accounts, and other 
        records, access to which is granted under this section, 
        as the Comptroller General considers appropriate.

SEC. 123. STUDY OF THE EFFECTS OF SIZE AND COMPLEXITY OF FINANCIAL 
                    INSTITUTIONS ON CAPITAL MARKET EFFICIENCY AND 
                    ECONOMIC GROWTH.

    (a) Study Required.--
            (1) In general.--The Chairperson of the Council 
        shall carry out a study of the economic impact of 
        possible financial services regulatory limitations 
        intended to reduce systemic risk. Such study shall 
        estimate the benefits and costs on the efficiency of 
        capital markets, on the financial sector, and on 
        national economic growth, of--
                    (A) explicit or implicit limits on the 
                maximum size of banks, bank holding companies, 
                and other large financial institutions;
                    (B) limits on the organizational complexity 
                and diversification of large financial 
                institutions;
                    (C) requirements for operational separation 
                between business units of large financial 
                institutions in order to expedite resolution in 
                case of failure;
                    (D) limits on risk transfer between 
                business units of large financial institutions;
                    (E) requirements to carry contingent 
                capital or similar mechanisms;
                    (F) limits on commingling of commercial and 
                financial activities by large financial 
                institutions;
                    (G) segregation requirements between 
                traditional financial activities and trading or 
                other high-risk operations in large financial 
                institutions; and
                    (H) other limitations on the activities or 
                structure of large financial institutions that 
                may be useful to limit systemic risk.
            (2) Recommendations.--The study required by this 
        section shall include recommendations for the optimal 
        structure of any limits considered in subparagraphs (A) 
        through (E), in order to maximize their effectiveness 
        and minimize their economic impact.
    (b) Report.--Not later than the end of the 180-day period 
beginning on the date of enactment of this title, and not later 
than every 5 years thereafter, the Chairperson shall issue a 
report to the Congress containing any findings and 
determinations made in carrying out the study required under 
subsection (a).

                Subtitle B--Office of Financial Research

SEC. 151. DEFINITIONS.

    For purposes of this subtitle--
            (1) the terms ``Office'' and ``Director'' mean the 
        Office of Financial Research established under this 
        subtitle and the Director thereof, respectively;
            (2) the term ``financial company'' has the same 
        meaning as in title II, and includes an insured 
        depository institution and an insurance company;
            (3) the term ``Data Center'' means the data center 
        established under section 154;
            (4) the term ``Research and Analysis Center'' means 
        the research and analysis center established under 
        section 154;
            (5) the term ``financial transaction data'' means 
        the structure and legal description of a financial 
        contract, with sufficient detail to describe the rights 
        and obligations between counterparties and make 
        possible an independent valuation;
            (6) the term ``position data''--
                    (A) means data on financial assets or 
                liabilities held on the balance sheet of a 
                financial company, where positions are created 
                or changed by the execution of a financial 
                transaction; and
                    (B) includes information that identifies 
                counterparties, the valuation by the financial 
                company of the position, and information that 
                makes possible an independent valuation of the 
                position;
            (7) the term ``financial contract'' means a legally 
        binding agreement between 2 or more counterparties, 
        describing rights and obligations relating to the 
        future delivery of items of intrinsic or extrinsic 
        value among the counterparties; and
            (8) the term ``financial instrument'' means a 
        financial contract in which the terms and conditions 
        are publicly available, and the roles of one or more of 
        the counterparties are assignable without the consent 
        of any of the other counterparties (including common 
        stock of a publicly traded company, government bonds, 
        or exchange traded futures and options contracts).

SEC. 152. OFFICE OF FINANCIAL RESEARCH ESTABLISHED.

    (a) Establishment.--There is established within the 
Department of the Treasury the Office of Financial Research.
    (b) Director.--
            (1) In general.--The Office shall be headed by a 
        Director, who shall be appointed by the President, by 
        and with the advice and consent of the Senate.
            (2) Term of service.--The Director shall serve for 
        a term of 6 years, except that, in the event that a 
        successor is not nominated and confirmed by the end of 
        the term of service of a Director, the Director may 
        continue to serve until such time as the next Director 
        is appointed and confirmed.
            (3) Executive level.--The Director shall be 
        compensated at Level III of the Executive Schedule.
            (4) Prohibition on dual service.--The individual 
        serving in the position of Director may not, during 
        such service, also serve as the head of any financial 
        regulatory agency.
            (5) Responsibilities, duties, and authority.--The 
        Director shall have sole discretion in the manner in 
        which the Director fulfills the responsibilities and 
        duties and exercises the authorities described in this 
        subtitle.
    (c) Budget.--The Director, in consultation with the 
Chairperson, shall establish the annual budget of the Office.
    (d) Office Personnel.--
            (1) In general.--The Director, in consultation with 
        the Chairperson, may fix the number of, and appoint and 
        direct, all employees of the Office.
            (2) Compensation.--The Director, in consultation 
        with the Chairperson, shall fix, adjust, and administer 
        the pay for all employees of the Office, without regard 
        to chapter 51 or subchapter III of chapter 53 of title 
        5, United States Code, relating to classification of 
        positions and General Schedule pay rates.
            (3) Comparability.--Section 1206(a) of the 
        Financial Institutions Reform, Recovery, and 
        Enforcement Act of 1989 (12 U.S.C. 1833b(a)) is 
        amended--
                    (A) by striking ``Finance Board,'' and 
                inserting ``Finance Board, the Office of 
                Financial Research, and the Bureau of Consumer 
                Financial Protection''; and
                    (B) by striking ``and the Office of Thrift 
                Supervision,''.
            (4) Senior executives.--Section 3132(a)(1)(D) of 
        title 5, United States Code, is amended by striking 
        ``and the National Credit Union Administration;'' and 
        inserting ``the National Credit Union Administration, 
        the Bureau of Consumer Financial Protection, and the 
        Office of Financial Research;''.
    (e) Assistance From Federal Agencies.--Any department or 
agency of the United States may provide to the Office and any 
special advisory, technical, or professional committees 
appointed by the Office, such services, funds, facilities, 
staff, and other support services as the Office may determine 
advisable. Any Federal Government employee may be detailed to 
the Office without reimbursement, and such detail shall be 
without interruption or loss of civil service status or 
privilege.
    (f) Procurement of Temporary and Intermittent Services.--
The Director may procure temporary and intermittent services 
under section 3109(b) of title 5, United States Code, at rates 
for individuals which do not exceed the daily equivalent of the 
annual rate of basic pay prescribed for Level V of the 
Executive Schedule under section 5316 of such title.
    (g) Post-employment Prohibitions.--The Secretary, with the 
concurrence of the Director of the Office of Government Ethics, 
shall issue regulations prohibiting the Director and any 
employee of the Office who has had access to the transaction or 
position data maintained by the Data Center or other business 
confidential information about financial entities required to 
report to the Office from being employed by or providing advice 
or consulting services to a financial company, for a period of 
1 year after last having had access in the course of official 
duties to such transaction or position data or business 
confidential information, regardless of whether that entity is 
required to report to the Office. For employees whose access to 
business confidential information was limited, the regulations 
may provide, on a case-by-case basis, for a shorter period of 
post-employment prohibition, provided that the shorter period 
does not compromise business confidential information.
    (h) Technical and Professional Advisory Committees.--The 
Office, in consultation with the Chairperson, may appoint such 
special advisory, technical, or professional committees as may 
be useful in carrying out the functions of the Office, and the 
members of such committees may be staff of the Office, or other 
persons, or both.
    (i) Fellowship Program.--The Office, in consultation with 
the Chairperson, may establish and maintain an academic and 
professional fellowship program, under which qualified 
academics and professionals shall be invited to spend not 
longer than 2 years at the Office, to perform research and to 
provide advanced training for Office personnel.
    (j) Executive Schedule Compensation.--Section 5314 of title 
5, United States Code, is amended by adding at the end the 
following new item:
            ``Director of the Office of Financial Research.''.

SEC. 153. PURPOSE AND DUTIES OF THE OFFICE.

    (a) Purpose and Duties.--The purpose of the Office is to 
support the Council in fulfilling the purposes and duties of 
the Council, as set forth in subtitle A, and to support member 
agencies, by--
            (1) collecting data on behalf of the Council, and 
        providing such data to the Council and member agencies;
            (2) standardizing the types and formats of data 
        reported and collected;
            (3) performing applied research and essential long-
        term research;
            (4) developing tools for risk measurement and 
        monitoring;
            (5) performing other related services;
            (6) making the results of the activities of the 
        Office available to financial regulatory agencies; and
            (7) assisting such member agencies in determining 
        the types and formats of data authorized by this Act to 
        be collected by such member agencies.
    (b) Administrative Authority.--The Office may--
            (1) share data and information, including software 
        developed by the Office, with the Council, member 
        agencies, and the Bureau of Economic Analysis, which 
        shared data, information, and software--
                    (A) shall be maintained with at least the 
                same level of security as is used by the 
                Office; and
                    (B) may not be shared with any individual 
                or entity without the permission of the 
                Council;
            (2) sponsor and conduct research projects; and
            (3) assist, on a reimbursable basis, with financial 
        analyses undertaken at the request of other Federal 
        agencies that are not member agencies.
    (c) Rulemaking Authority.--
            (1) Scope.--The Office, in consultation with the 
        Chairperson, shall issue rules, regulations, and orders 
        only to the extent necessary to carry out the purposes 
        and duties described in paragraphs (1), (2), and (7) of 
        subsection (a).
            (2) Standardization.--Member agencies, in 
        consultation with the Office, shall implement 
        regulations promulgated by the Office under paragraph 
        (1) to standardize the types and formats of data 
        reported and collected on behalf of the Council, as 
        described in subsection (a)(2). If a member agency 
        fails to implement such regulations prior to the 
        expiration of the 3-year period following the date of 
        publication of final regulations, the Office, in 
        consultation with the Chairperson, may implement such 
        regulations with respect to the financial entities 
        under the jurisdiction of the member agency. This 
        paragraph shall not supersede or interfere with the 
        independent authority of a member agency under other 
        law to collect data, in such format and manner as the 
        member agency requires.
    (d) Testimony.--
            (1) In general.--The Director of the Office shall 
        report to and testify before the Committee on Banking, 
        Housing, and Urban Affairs of the Senate and the 
        Committee on Financial Services of the House of 
        Representatives annually on the activities of the 
        Office, including the work of the Data Center and the 
        Research and Analysis Center, and the assessment of the 
        Office of significant financial market developments and 
        potential emerging threats to the financial stability 
        of the United States.
            (2) No prior review.--No officer or agency of the 
        United States shall have any authority to require the 
        Director to submit the testimony required under 
        paragraph (1) or other congressional testimony to any 
        officer or agency of the United States for approval, 
        comment, or review prior to the submission of such 
        testimony. Any such testimony to Congress shall include 
        a statement that the views expressed therein are those 
        of the Director and do not necessarily represent the 
        views of the President.
    (e) Additional Reports.--The Director may provide 
additional reports to Congress concerning the financial 
stability of the United States. The Director shall notify the 
Council of any such additional reports provided to Congress.
    (f) Subpoena.--
            (1) In general.--The Director may require from a 
        financial company, by subpoena, the production of the 
        data requested under subsection (a)(1) and section 
        154(b)(1), but only upon a written finding by the 
        Director that--
                    (A) such data is required to carry out the 
                functions described under this subtitle; and
                    (B) the Office has coordinated with the 
                relevant primary financial regulatory agency, 
                as required under section 154(b)(1)(B)(ii).
            (2) Format.--Subpoenas under paragraph (1) shall 
        bear the signature of the Director, and shall be served 
        by any person or class of persons designated by the 
        Director for that purpose.
            (3) Enforcement.--In the case of contumacy or 
        failure to obey a subpoena, the subpoena shall be 
        enforceable by order of any appropriate district court 
        of the United States. Any failure to obey the order of 
        the court may be punished by the court as a contempt of 
        court.

SEC. 154. ORGANIZATIONAL STRUCTURE; RESPONSIBILITIES OF PRIMARY 
                    PROGRAMMATIC UNITS.

    (a) In General.--There are established within the Office, 
to carry out the programmatic responsibilities of the Office--
            (1) the Data Center; and
            (2) the Research and Analysis Center.
    (b) Data Center.--
            (1) General duties.--
                    (A) Data collection.--The Data Center, on 
                behalf of the Council, shall collect, validate, 
                and maintain all data necessary to carry out 
                the duties of the Data Center, as described in 
                this subtitle. The data assembled shall be 
                obtained from member agencies, commercial data 
                providers, publicly available data sources, and 
                financial entities under subparagraph (B).
                    (B) Authority.--
                            (i) In general.--The Office may, as 
                        determined by the Council or by the 
                        Director in consultation with the 
                        Council, require the submission of 
                        periodic and other reports from any 
                        financial company for the purpose of 
                        assessing the extent to which a 
                        financial activity or financial market 
                        in which the financial company 
                        participates, or the financial company 
                        itself, poses a threat to the financial 
                        stability of the United States.
                            (ii) Mitigation of report burden.--
                        Before requiring the submission of a 
                        report from any financial company that 
                        is regulated by a member agency, any 
                        primary financial regulatory agency, a 
                        foreign supervisory authority, or the 
                        Office shall coordinate with such 
                        agencies or authority, and shall, 
                        whenever possible, rely on information 
                        available from such agencies or 
                        authority.
                            (iii) Collection of financial 
                        transaction and position data.--The 
                        Office shall collect, on a schedule 
                        determined by the Director, in 
                        consultation with the Council, 
                        financial transaction data and position 
                        data from financial companies.
                    (C) Rulemaking.--The Office shall 
                promulgate regulations pursuant to subsections 
                (a)(1), (a)(2), (a)(7), and (c)(1) of section 
                153 regarding the type and scope of the data to 
                be collected by the Data Center under this 
                paragraph.
            (2) Responsibilities.--
                    (A) Publication.--The Data Center shall 
                prepare and publish, in a manner that is easily 
                accessible to the public--
                            (i) a financial company reference 
                        database;
                            (ii) a financial instrument 
                        reference database; and
                            (iii) formats and standards for 
                        Office data, including standards for 
                        reporting financial transaction and 
                        position data to the Office.
                    (B) Confidentiality.--The Data Center shall 
                not publish any confidential data under 
                subparagraph (A).
            (3) Information security.--The Director shall 
        ensure that data collected and maintained by the Data 
        Center are kept secure and protected against 
        unauthorized disclosure.
            (4) Catalog of financial entities and 
        instruments.--The Data Center shall maintain a catalog 
        of the financial entities and instruments reported to 
        the Office.
            (5) Availability to the council and member 
        agencies.--The Data Center shall make data collected 
        and maintained by the Data Center available to the 
        Council and member agencies, as necessary to support 
        their regulatory responsibilities.
            (6) Other authority.--The Office shall, after 
        consultation with the member agencies, provide certain 
        data to financial industry participants and to the 
        general public to increase market transparency and 
        facilitate research on the financial system, to the 
        extent that intellectual property rights are not 
        violated, business confidential information is properly 
        protected, and the sharing of such information poses no 
        significant threats to the financial system of the 
        United States.
    (c) Research and Analysis Center.--
            (1) General duties.--The Research and Analysis 
        Center, on behalf of the Council, shall develop and 
        maintain independent analytical capabilities and 
        computing resources--
                    (A) to develop and maintain metrics and 
                reporting systems for risks to the financial 
                stability of the United States;
                    (B) to monitor, investigate, and report on 
                changes in systemwide risk levels and patterns 
                to the Council and Congress;
                    (C) to conduct, coordinate, and sponsor 
                research to support and improve regulation of 
                financial entities and markets;
                    (D) to evaluate and report on stress tests 
                or other stability-related evaluations of 
                financial entities overseen by the member 
                agencies;
                    (E) to maintain expertise in such areas as 
                may be necessary to support specific requests 
                for advice and assistance from financial 
                regulators;
                    (F) to investigate disruptions and failures 
                in the financial markets, report findings, and 
                make recommendations to the Council based on 
                those findings;
                    (G) to conduct studies and provide advice 
                on the impact of policies related to systemic 
                risk; and
                    (H) to promote best practices for financial 
                risk management.
    (d) Reporting Responsibilities.--
            (1) Required reports.--Not later than 2 years after 
        the date of enactment of this Act, and not later than 
        120 days after the end of each fiscal year thereafter, 
        the Office shall prepare and submit a report to 
        Congress.
            (2) Content.--Each report required by this 
        subsection shall assess the state of the United States 
        financial system, including--
                    (A) an analysis of any threats to the 
                financial stability of the United States;
                    (B) the status of the efforts of the Office 
                in meeting the mission of the Office; and
                    (C) key findings from the research and 
                analysis of the financial system by the Office.

SEC. 155. FUNDING.

    (a) Financial Research Fund.--
            (1) Fund established.--There is established in the 
        Treasury of the United States a separate fund to be 
        known as the ``Financial Research Fund''.
            (2) Fund receipts.--All amounts provided to the 
        Office under subsection (c), and all assessments that 
        the Office receives under subsection (d) shall be 
        deposited into the Financial Research Fund.
            (3) Investments authorized.--
                    (A) Amounts in fund may be invested.--The 
                Director may request the Secretary to invest 
                the portion of the Financial Research Fund that 
                is not, in the judgment of the Director, 
                required to meet the needs of the Office.
                    (B) Eligible investments.--Investments 
                shall be made by the Secretary 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 Financial Research Fund, as 
                determined by the Director.
            (4) Interest and proceeds credited.--The interest 
        on, and the proceeds from the sale or redemption of, 
        any obligations held in the Financial Research Fund 
        shall be credited to and form a part of the Financial 
        Research Fund.
    (b) Use of Funds.--
            (1) In general.--Funds obtained by, transferred to, 
        or credited to the Financial Research Fund shall be 
        immediately available to the Office, and shall remain 
        available until expended, to pay the expenses of the 
        Office in carrying out the duties and responsibilities 
        of the Office.
            (2) Fees, assessments, and other funds not 
        government funds.--Funds obtained by, transferred to, 
        or credited to the Financial Research Fund shall not be 
        construed to be Government funds or appropriated 
        moneys.
            (3) Amounts not subject to apportionment.--
        Notwithstanding any other provision of law, amounts in 
        the Financial Research Fund shall not be subject to 
        apportionment for purposes of chapter 15 of title 31, 
        United States Code, or under any other authority, or 
        for any other purpose.
    (c) Interim Funding.--During the 2-year period following 
the date of enactment of this Act, the Board of Governors shall 
provide to the Office an amount sufficient to cover the 
expenses of the Office.
    (d) Permanent Self-funding.--Beginning 2 years after the 
date of enactment of this Act, the Secretary shall establish, 
by regulation, and with the approval of the Council, an 
assessment schedule, including the assessment base and rates, 
applicable to bank holding companies with total consolidated 
assets of $50,000,000,000 or greater and nonbank financial 
companies supervised by the Board of Governors, that takes into 
account differences among such companies, based on the 
considerations for establishing the prudential standards under 
section 115, to collect assessments equal to the total expenses 
of the Office.

SEC. 156. TRANSITION OVERSIGHT.

    (a) Purpose.--The purpose of this section is to ensure that 
the Office--
            (1) has an orderly and organized startup;
            (2) attracts and retains a qualified workforce; and
            (3) establishes comprehensive employee training and 
        benefits programs.
    (b) Reporting Requirement.--
            (1) In general.--The Office shall submit an annual 
        report to the Committee on Banking, Housing, and Urban 
        Affairs of the Senate and the Committee on Financial 
        Services of the House of Representatives that includes 
        the plans described in paragraph (2).
            (2) Plans.--The plans described in this paragraph 
        are as follows:
                    (A) Training and workforce development 
                plan.--The Office shall submit a training and 
                workforce development plan that includes, to 
                the extent practicable--
                            (i) identification of skill and 
                        technical expertise needs and actions 
                        taken to meet those requirements;
                            (ii) steps taken to foster 
                        innovation and creativity;
                            (iii) leadership development and 
                        succession planning; and
                            (iv) effective use of technology by 
                        employees.
                    (B) Workplace flexibility plan.--The Office 
                shall submit a workforce flexibility plan that 
                includes, to the extent practicable--
                            (i) telework;
                            (ii) flexible work schedules;
                            (iii) phased retirement;
                            (iv) reemployed annuitants;
                            (v) part-time work;
                            (vi) job sharing;
                            (vii) parental leave benefits and 
                        childcare assistance;
                            (viii) domestic partner benefits;
                            (ix) other workplace flexibilities; 
                        or
                            (x) any combination of the items 
                        described in clauses (i) through (ix).
                    (C) Recruitment and retention plan.--The 
                Office shall submit a recruitment and retention 
                plan that includes, to the extent practicable, 
                provisions relating to--
                            (i) the steps necessary to target 
                        highly qualified applicant pools with 
                        diverse backgrounds;
                            (ii) streamlined employment 
                        application processes;
                            (iii) the provision of timely 
                        notification of the status of 
                        employment applications to applicants; 
                        and
                            (iv) the collection of information 
                        to measure indicators of hiring 
                        effectiveness.
    (c) Expiration.--The reporting requirement under subsection 
(b) shall terminate 5 years after the date of enactment of this 
Act.
    (d) Rule of Construction.--Nothing in this section may be 
construed to affect--
            (1) a collective bargaining agreement, as that term 
        is defined in section 7103(a)(8) of title 5, United 
        States Code, that is in effect on the date of enactment 
        of this Act; or
            (2) the rights of employees under chapter 71 of 
        title 5, United States Code.

Subtitle C--Additional Board of Governors Authority for Certain Nonbank 
             Financial Companies and Bank Holding Companies

SEC. 161. REPORTS BY AND EXAMINATIONS OF NONBANK FINANCIAL COMPANIES BY 
                    THE BOARD OF GOVERNORS.

    (a) Reports.--
            (1) In general.--The Board of Governors may require 
        each nonbank financial company supervised by the Board 
        of Governors, and any subsidiary thereof, to submit 
        reports under oath, to keep the Board of Governors 
        informed as to--
                    (A) the financial condition of the company 
                or subsidiary, systems of the company or 
                subsidiary for monitoring and controlling 
                financial, operating, and other risks, and the 
                extent to which the activities and operations 
                of the company or subsidiary pose a threat to 
                the financial stability of the United States; 
                and
                    (B) compliance by the company or subsidiary 
                with the requirements of this title.
            (2) Use of existing reports and information.--In 
        carrying out subsection (a), the Board of Governors 
        shall, to the fullest extent possible, use--
                    (A) reports and supervisory information 
                that a nonbank financial company or subsidiary 
                thereof has been required to provide to other 
                Federal or State regulatory agencies;
                    (B) information otherwise obtainable from 
                Federal or State regulatory agencies;
                    (C) information that is otherwise required 
                to be reported publicly; and
                    (D) externally audited financial statements 
                of such company or subsidiary.
            (3) Availability.--Upon the request of the Board of 
        Governors, a nonbank financial company supervised by 
        the Board of Governors, or a subsidiary thereof, shall 
        promptly provide to the Board of Governors any 
        information described in paragraph (2).
    (b) Examinations.--
            (1) In general.--Subject to paragraph (2), the 
        Board of Governors may examine any nonbank financial 
        company supervised by the Board of Governors and any 
        subsidiary of such company, to inform the Board of 
        Governors of--
                    (A) the nature of the operations and 
                financial condition of the company and such 
                subsidiary;
                    (B) the financial, operational, and other 
                risks of the company or such subsidiary that 
                may pose a threat to the safety and soundness 
                of such company or subsidiary or to the 
                financial stability of the United States;
                    (C) the systems for monitoring and 
                controlling such risks; and
                    (D) compliance by the company or such 
                subsidiary with the requirements of this title.
            (2) Use of examination reports and information.--
        For purposes of this subsection, the Board of Governors 
        shall, to the fullest extent possible, rely on reports 
        of examination of any subsidiary depository institution 
        or functionally regulated subsidiary made by the 
        primary financial regulatory agency for that 
        subsidiary, and on information described in subsection 
        (a)(2).
    (c) Coordination With Primary Financial Regulatory 
Agency.--The Board of Governors shall--
            (1) provide reasonable notice to, and consult with, 
        the primary financial regulatory agency for any 
        subsidiary before requiring a report or commencing an 
        examination of such subsidiary under this section; and
            (2) avoid duplication of examination activities, 
        reporting requirements, and requests for information, 
        to the fullest extent possible.

SEC. 162. ENFORCEMENT.

    (a) In General.--Except as provided in subsection (b), a 
nonbank financial company supervised by the Board of Governors 
and any subsidiaries of such company (other than any depository 
institution subsidiary) shall be subject to the provisions of 
subsections (b) through (n) of section 8 of the Federal Deposit 
Insurance Act (12 U.S.C. 1818), in the same manner and to the 
same extent as if the company were a bank holding company, as 
provided in section 8(b)(3) of the Federal Deposit Insurance 
Act (12 U.S.C. 1818(b)(3)).
    (b) Enforcement Authority for Functionally Regulated 
Subsidiaries.--
            (1) Referral.--If the Board of Governors determines 
        that a condition, practice, or activity of a depository 
        institution subsidiary or functionally regulated 
        subsidiary of a nonbank financial company supervised by 
        the Board of Governors does not comply with the 
        regulations or orders prescribed by the Board of 
        Governors under this Act, or otherwise poses a threat 
        to the financial stability of the United States, the 
        Board of Governors may recommend, in writing, to the 
        primary financial regulatory agency for the subsidiary 
        that such agency initiate a supervisory action or 
        enforcement proceeding. The recommendation shall be 
        accompanied by a written explanation of the concerns 
        giving rise to the recommendation.
            (2) Back-up authority of the board of governors.--
        If, during the 60-day period beginning on the date on 
        which the primary financial regulatory agency receives 
        a recommendation under paragraph (1), the primary 
        financial regulatory agency does not take supervisory 
        or enforcement action against a subsidiary that is 
        acceptable to the Board of Governors, the Board of 
        Governors (upon a vote of its members) may take the 
        recommended supervisory or enforcement action, as if 
        the subsidiary were a bank holding company subject to 
        supervision by the Board of Governors.

SEC. 163. ACQUISITIONS.

    (a) Acquisitions of Banks; Treatment as a Bank Holding 
Company.--For purposes of section 3 of the Bank Holding Company 
Act of 1956 (12 U.S.C. 1842), a nonbank financial company 
supervised by the Board of Governors shall be deemed to be, and 
shall be treated as, a bank holding company.
    (b) Acquisition of Nonbank Companies.--
            (1) Prior notice for large acquisitions.--
        Notwithstanding section 4(k)(6)(B) of the Bank Holding 
        Company Act of 1956 (12 U.S.C. 1843(k)(6)(B)), a bank 
        holding company with total consolidated assets equal to 
        or greater than $50,000,000,000 or a nonbank financial 
        company supervised by the Board of Governors shall not 
        acquire direct or indirect ownership or control of any 
        voting shares of any company (other than an insured 
        depository institution) that is engaged in activities 
        described in section 4(k) of the Bank Holding Company 
        Act of 1956 having total consolidated assets of 
        $10,000,000,000 or more, without providing written 
        notice to the Board of Governors in advance of the 
        transaction.
            (2) Exemptions.--The prior notice requirement in 
        paragraph (1) shall not apply with regard to the 
        acquisition of shares that would qualify for the 
        exemptions in section 4(c) or section 4(k)(4)(E) of the 
        Bank Holding Company Act of 1956 (12 U.S.C. 1843(c) and 
        (k)(4)(E)).
            (3) Notice procedures.--The notice procedures set 
        forth in section 4(j)(1) of the Bank Holding Company 
        Act of 1956 (12 U.S.C. 1843(j)(1)), without regard to 
        section 4(j)(3) of that Act, shall apply to an 
        acquisition of any company (other than an insured 
        depository institution) by a bank holding company with 
        total consolidated assets equal to or greater than 
        $50,000,000,000 or a nonbank financial company 
        supervised by the Board of Governors, as described in 
        paragraph (1), including any such company engaged in 
        activities described in section 4(k) of that Act.
            (4) Standards for review.--In addition to the 
        standards provided in section 4(j)(2) of the Bank 
        Holding Company Act of 1956 (12 U.S.C. 1843(j)(2)), the 
        Board of Governors shall consider the extent to which 
        the proposed acquisition would result in greater or 
        more concentrated risks to global or United States 
        financial stability or the United States economy.
            (5) Hart-Scott-Rodino filing requirement.--Solely 
        for purposes of section 7A(c)(8) of the Clayton Act (15 
        U.S.C. 18a(c)(8)), the transactions subject to the 
        requirements of paragraph (1) shall be treated as if 
        Board of Governors approval is not required.

SEC. 164. PROHIBITION AGAINST MANAGEMENT INTERLOCKS BETWEEN CERTAIN 
                    FINANCIAL COMPANIES.

    A nonbank financial company supervised by the Board of 
Governors shall be treated as a bank holding company for 
purposes of the Depository Institutions Management Interlocks 
Act (12 U.S.C. 3201 et seq.), except that the Board of 
Governors shall not exercise the authority provided in section 
7 of that Act (12 U.S.C. 3207) to permit service by a 
management official of a nonbank financial company supervised 
by the Board of Governors as a management official of any bank 
holding company with total consolidated assets equal to or 
greater than $50,000,000,000, or other nonaffiliated nonbank 
financial company supervised by the Board of Governors (other 
than to provide a temporary exemption for interlocks resulting 
from a merger, acquisition, or consolidation).

SEC. 165. ENHANCED SUPERVISION AND PRUDENTIAL STANDARDS FOR NONBANK 
                    FINANCIAL COMPANIES SUPERVISED BY THE BOARD OF 
                    GOVERNORS AND CERTAIN BANK HOLDING COMPANIES.

    (a) In General.--
            (1) Purpose.--In order to prevent or mitigate risks 
        to the financial stability of the United States that 
        could arise from the material financial distress or 
        failure, or ongoing activities, of large, 
        interconnected financial institutions, the Board of 
        Governors shall, on its own or pursuant to 
        recommendations by the Council under section 115, 
        establish prudential standards for nonbank financial 
        companies supervised by the Board of Governors and bank 
        holding companies with total consolidated assets equal 
        to or greater than $50,000,000,000 that--
                    (A) are more stringent than the standards 
                and requirements applicable to nonbank 
                financial companies and bank holding companies 
                that do not present similar risks to the 
                financial stability of the United States; and
                    (B) increase in stringency, based on the 
                considerations identified in subsection (b)(3).
            (2) Tailored application.--
                    (A) In general.--In prescribing more 
                stringent prudential standards under this 
                section, the Board of Governors may, on its own 
                or pursuant to a recommendation by the Council 
                in accordance with section 115, differentiate 
                among companies on an individual basis or by 
                category, taking into consideration their 
                capital structure, riskiness, complexity, 
                financial activities (including the financial 
                activities of their subsidiaries), size, and 
                any other risk-related factors that the Board 
                of Governors deems appropriate.
                    (B) Adjustment of threshold for application 
                of certain standards.--The Board of Governors 
                may, pursuant to a recommendation by the 
                Council in accordance with section 115, 
                establish an asset threshold above 
                $50,000,000,000 for the application of any 
                standard established under subsections (c) 
                through (g).
    (b) Development of Prudential Standards.--
            (1) In general.--
                    (A) Required standards.--The Board of 
                Governors shall establish prudential standards 
                for nonbank financial companies supervised by 
                the Board of Governors and bank holding 
                companies described in subsection (a), that 
                shall include--
                            (i) risk-based capital requirements 
                        and leverage limits, unless the Board 
                        of Governors, in consultation with the 
                        Council, determines that such 
                        requirements are not appropriate for a 
                        company subject to more stringent 
                        prudential standards because of the 
                        activities of such company (such as 
                        investment company activities or assets 
                        under management) or structure, in 
                        which case, the Board of Governors 
                        shall apply other standards that result 
                        in similarly stringent risk controls;
                            (ii) liquidity requirements;
                            (iii) overall risk management 
                        requirements;
                            (iv) resolution plan and credit 
                        exposure report requirements; and
                            (v) concentration limits.
                    (B) Additional standards authorized.--The 
                Board of Governors may establish additional 
                prudential standards for nonbank financial 
                companies supervised by the Board of Governors 
                and bank holding companies described in 
                subsection (a), that include--
                            (i) a contingent capital 
                        requirement;
                            (ii) enhanced public disclosures;
                            (iii) short-term debt limits; and
                            (iv) such other prudential 
                        standards as the Board or Governors, on 
                        its own or pursuant to a recommendation 
                        made by the Council in accordance with 
                        section 115, determines are 
                        appropriate.
            (2) Standards for foreign financial companies.--In 
        applying the standards set forth in paragraph (1) to 
        any foreign nonbank financial company supervised by the 
        Board of Governors or foreign-based bank holding 
        company, the Board of Governors shall--
                    (A) give due regard to the principle of 
                national treatment and equality of competitive 
                opportunity; and
                    (B) take into account the extent to which 
                the foreign financial company is subject on a 
                consolidated basis to home country standards 
                that are comparable to those applied to 
                financial companies in the United States.
            (3) Considerations.--In prescribing prudential 
        standards under paragraph (1), the Board of Governors 
        shall--
                    (A) take into account differences among 
                nonbank financial companies supervised by the 
                Board of Governors and bank holding companies 
                described in subsection (a), based on--
                            (i) the factors described in 
                        subsections (a) and (b) of section 113;
                            (ii) whether the company owns an 
                        insured depository institution;
                            (iii) nonfinancial activities and 
                        affiliations of the company; and
                            (iv) any other risk-related factors 
                        that the Board of Governors determines 
                        appropriate;
                    (B) to the extent possible, ensure that 
                small changes in the factors listed in 
                subsections (a) and (b) of section 113 would 
                not result in sharp, discontinuous changes in 
                the prudential standards established under 
                paragraph (1) of this subsection;
                    (C) take into account any recommendations 
                of the Council under section 115; and
                    (D) adapt the required standards as 
                appropriate in light of any predominant line of 
                business of such company, including assets 
                under management or other activities for which 
                particular standards may not be appropriate.
            (4) Consultation.--Before imposing prudential 
        standards or any other requirements pursuant to this 
        section, including notices of deficiencies in 
        resolution plans and more stringent requirements or 
        divestiture orders resulting from such notices, that 
        are likely to have a significant impact on a 
        functionally regulated subsidiary or depository 
        institution subsidiary of a nonbank financial company 
        supervised by the Board of Governors or a bank holding 
        company described in subsection (a), the Board of 
        Governors shall consult with each Council member that 
        primarily supervises any such subsidiary with respect 
        to any such standard or requirement.
            (5) Report.--The Board of Governors shall submit an 
        annual report to Congress regarding the implementation 
        of the prudential standards required pursuant to 
        paragraph (1), including the use of such standards to 
        mitigate risks to the financial stability of the United 
        States.
    (c) Contingent Capital.--
            (1) In general.--Subsequent to submission by the 
        Council of a report to Congress under section 115(c), 
        the Board of Governors may issue regulations that 
        require each nonbank financial company supervised by 
        the Board of Governors and bank holding companies 
        described in subsection (a) to maintain a minimum 
        amount of contingent capital that is convertible to 
        equity in times of financial stress.
            (2) Factors to consider.--In issuing regulations 
        under this subsection, the Board of Governors shall 
        consider--
                    (A) the results of the study undertaken by 
                the Council, and any recommendations of the 
                Council, under section 115(c);
                    (B) an appropriate transition period for 
                implementation of contingent capital under this 
                subsection;
                    (C) the factors described in subsection 
                (b)(3)(A);
                    (D) capital requirements applicable to the 
                nonbank financial company supervised by the 
                Board of Governors or a bank holding company 
                described in subsection (a), and subsidiaries 
                thereof; and
                    (E) any other factor that the Board of 
                Governors deems appropriate.
    (d) Resolution Plan and Credit Exposure Reports.--
            (1) Resolution plan.--The Board of Governors shall 
        require each nonbank financial company supervised by 
        the Board of Governors and bank holding companies 
        described in subsection (a) to report periodically to 
        the Board of Governors, the Council, and the 
        Corporation the plan of such company for rapid and 
        orderly resolution in the event of material financial 
        distress or failure, which shall include--
                    (A) information regarding the manner and 
                extent to which any insured depository 
                institution affiliated with the company is 
                adequately protected from risks arising from 
                the activities of any nonbank subsidiaries of 
                the company;
                    (B) full descriptions of the ownership 
                structure, assets, liabilities, and contractual 
                obligations of the company;
                    (C) identification of the cross-guarantees 
                tied to different securities, identification of 
                major counterparties, and a process for 
                determining to whom the collateral of the 
                company is pledged; and
                    (D) any other information that the Board of 
                Governors and the Corporation jointly require 
                by rule or order.
            (2) Credit exposure report.--The Board of Governors 
        shall require each nonbank financial company supervised 
        by the Board of Governors and bank holding companies 
        described in subsection (a) to report periodically to 
        the Board of Governors, the Council, and the 
        Corporation on--
                    (A) the nature and extent to which the 
                company has credit exposure to other 
                significant nonbank financial companies and 
                significant bank holding companies; and
                    (B) the nature and extent to which other 
                significant nonbank financial companies and 
                significant bank holding companies have credit 
                exposure to that company.
            (3) Review.--The Board of Governors and the 
        Corporation shall review the information provided in 
        accordance with this subsection by each nonbank 
        financial company supervised by the Board of Governors 
        and bank holding company described in subsection (a).
            (4) Notice of deficiencies.--If the Board of 
        Governors and the Corporation jointly determine, based 
        on their review under paragraph (3), that the 
        resolution plan of a nonbank financial company 
        supervised by the Board of Governors or a bank holding 
        company described in subsection (a) is not credible or 
        would not facilitate an orderly resolution of the 
        company under title 11, United States Code--
                    (A) the Board of Governors and the 
                Corporation shall notify the company of the 
                deficiencies in the resolution plan; and
                    (B) the company shall resubmit the 
                resolution plan within a timeframe determined 
                by the Board of Governors and the Corporation, 
                with revisions demonstrating that the plan is 
                credible and would result in an orderly 
                resolution under title 11, United States Code, 
                including any proposed changes in business 
                operations and corporate structure to 
                facilitate implementation of the plan.
            (5) Failure to resubmit credible plan.--
                    (A) In general.--If a nonbank financial 
                company supervised by the Board of Governors or 
                a bank holding company described in subsection 
                (a) fails to timely resubmit the resolution 
                plan as required under paragraph (4), with such 
                revisions as are required under subparagraph 
                (B), the Board of Governors and the Corporation 
                may jointly impose more stringent capital, 
                leverage, or liquidity requirements, or 
                restrictions on the growth, activities, or 
                operations of the company, or any subsidiary 
                thereof, until such time as the company 
                resubmits a plan that remedies the 
                deficiencies.
                    (B) Divestiture.--The Board of Governors 
                and the Corporation, in consultation with the 
                Council, may jointly direct a nonbank financial 
                company supervised by the Board of Governors or 
                a bank holding company described in subsection 
                (a), by order, to divest certain assets or 
                operations identified by the Board of Governors 
                and the Corporation, to facilitate an orderly 
                resolution of such company under title 11, 
                United States Code, in the event of the failure 
                of such company, in any case in which--
                            (i) the Board of Governors and the 
                        Corporation have jointly imposed more 
                        stringent requirements on the company 
                        pursuant to subparagraph (A); and
                            (ii) the company has failed, within 
                        the 2-year period beginning on the date 
                        of the imposition of such requirements 
                        under subparagraph (A), to resubmit the 
                        resolution plan with such revisions as 
                        were required under paragraph (4)(B).
            (6) No limiting effect.--A resolution plan 
        submitted in accordance with this subsection shall not 
        be binding on a bankruptcy court, a receiver appointed 
        under title II, or any other authority that is 
        authorized or required to resolve the nonbank financial 
        company supervised by the Board, any bank holding 
        company, or any subsidiary or affiliate of the 
        foregoing.
            (7) No private right of action.--No private right 
        of action may be based on any resolution plan submitted 
        in accordance with this subsection.
            (8) Rules.--Not later than 18 months after the date 
        of enactment of this Act, the Board of Governors and 
        the Corporation shall jointly issue final rules 
        implementing this subsection.
    (e) Concentration Limits.--
            (1) Standards.--In order to limit the risks that 
        the failure of any individual company could pose to a 
        nonbank financial company supervised by the Board of 
        Governors or a bank holding company described in 
        subsection (a), the Board of Governors, by regulation, 
        shall prescribe standards that limit such risks.
            (2) Limitation on credit exposure.--The regulations 
        prescribed by the Board of Governors under paragraph 
        (1) shall prohibit each nonbank financial company 
        supervised by the Board of Governors and bank holding 
        company described in subsection (a) from having credit 
        exposure to any unaffiliated company that exceeds 25 
        percent of the capital stock and surplus (or such lower 
        amount as the Board of Governors may determine by 
        regulation to be necessary to mitigate risks to the 
        financial stability of the United States) of the 
        company.
            (3) Credit exposure.--For purposes of paragraph 
        (2), ``credit exposure'' to a company means--
                    (A) all extensions of credit to the 
                company, including loans, deposits, and lines 
                of credit;
                    (B) all repurchase agreements and reverse 
                repurchase agreements with the company, and all 
                securities borrowing and lending transactions 
                with the company, to the extent that such 
                transactions create credit exposure for the 
                nonbank financial company supervised by the 
                Board of Governors or a bank holding company 
                described in subsection (a);
                    (C) all guarantees, acceptances, or letters 
                of credit (including endorsement or standby 
                letters of credit) issued on behalf of the 
                company;
                    (D) all purchases of or investment in 
                securities issued by the company;
                    (E) counterparty credit exposure to the 
                company in connection with a derivative 
                transaction between the nonbank financial 
                company supervised by the Board of Governors or 
                a bank holding company described in subsection 
                (a) and the company; and
                    (F) any other similar transactions that the 
                Board of Governors, by regulation, determines 
                to be a credit exposure for purposes of this 
                section.
            (4) Attribution rule.--For purposes of this 
        subsection, any transaction by a nonbank financial 
        company supervised by the Board of Governors or a bank 
        holding company described in subsection (a) with any 
        person is a transaction with a company, to the extent 
        that the proceeds of the transaction are used for the 
        benefit of, or transferred to, that company.
            (5) Rulemaking.--The Board of Governors may issue 
        such regulations and orders, including definitions 
        consistent with this section, as may be necessary to 
        administer and carry out this subsection.
            (6) Exemptions.--This subsection shall not apply to 
        any Federal home loan bank. The Board of Governors may, 
        by regulation or order, exempt transactions, in whole 
        or in part, from the definition of the term ``credit 
        exposure'' for purposes of this subsection, if the 
        Board of Governors finds that the exemption is in the 
        public interest and is consistent with the purpose of 
        this subsection.
            (7) Transition period.--
                    (A) In general.--This subsection and any 
                regulations and orders of the Board of 
                Governors under this subsection shall not be 
                effective until 3 years after the date of 
                enactment of this Act.
                    (B) Extension authorized.--The Board of 
                Governors may extend the period specified in 
                subparagraph (A) for not longer than an 
                additional 2 years.
    (f) Enhanced Public Disclosures.--The Board of Governors 
may prescribe, by regulation, periodic public disclosures by 
nonbank financial companies supervised by the Board of 
Governors and bank holding companies described in subsection 
(a) in order to support market evaluation of the risk profile, 
capital adequacy, and risk management capabilities thereof.
    (g) Short-term Debt Limits.--
            (1) In general.--In order to mitigate the risks 
        that an over-accumulation of short-term debt could pose 
        to financial companies and to the stability of the 
        United States financial system, the Board of Governors 
        may, by regulation, prescribe a limit on the amount of 
        short-term debt, including off-balance sheet exposures, 
        that may be accumulated by any bank holding company 
        described in subsection (a) and any nonbank financial 
        company supervised by the Board of Governors.
            (2) Basis of limit.--Any limit prescribed under 
        paragraph (1) shall be based on the short-term debt of 
        the company described in paragraph (1) as a percentage 
        of capital stock and surplus of the company or on such 
        other measure as the Board of Governors considers 
        appropriate.
            (3) Short-term debt defined.--For purposes of this 
        subsection, the term ``short-term debt'' means such 
        liabilities with short-dated maturity that the Board of 
        Governors identifies, by regulation, except that such 
        term does not include insured deposits.
            (4) Rulemaking authority.--In addition to 
        prescribing regulations under paragraphs (1) and (3), 
        the Board of Governors may prescribe such regulations, 
        including definitions consistent with this subsection, 
        and issue such orders, as may be necessary to carry out 
        this subsection.
            (5) Authority to issue exemptions and 
        adjustments.--Notwithstanding the Bank Holding Company 
        Act of 1956 (12 U.S.C. 1841 et seq.), the Board of 
        Governors may, if it determines such action is 
        necessary to ensure appropriate heightened prudential 
        supervision, with respect to a company described in 
        paragraph (1) that does not control an insured 
        depository institution, issue to such company an 
        exemption from or adjustment to the limit prescribed 
        under paragraph (1).
    (h) Risk Committee.--
            (1) Nonbank financial companies supervised by the 
        board of governors.--The Board of Governors shall 
        require each nonbank financial company supervised by 
        the Board of Governors that is a publicly traded 
        company to establish a risk committee, as set forth in 
        paragraph (3), not later than 1 year after the date of 
        receipt of a notice of final determination under 
        section 113(e)(3) with respect to such nonbank 
        financial company supervised by the Board of Governors.
            (2) Certain bank holding companies.--
                    (A) Mandatory regulations.--The Board of 
                Governors shall issue regulations requiring 
                each bank holding company that is a publicly 
                traded company and that has total consolidated 
                assets of not less than $10,000,000,000 to 
                establish a risk committee, as set forth in 
                paragraph (3).
                    (B) Permissive regulations.--The Board of 
                Governors may require each bank holding company 
                that is a publicly traded company and that has 
                total consolidated assets of less than 
                $10,000,000,000 to establish a risk committee, 
                as set forth in paragraph (3), as determined 
                necessary or appropriate by the Board of 
                Governors to promote sound risk management 
                practices.
            (3) Risk committee.--A risk committee required by 
        this subsection shall--
                    (A) be responsible for the oversight of the 
                enterprise-wide risk management practices of 
                the nonbank financial company supervised by the 
                Board of Governors or bank holding company 
                described in subsection (a), as applicable;
                    (B) include such number of independent 
                directors as the Board of Governors may 
                determine appropriate, based on the nature of 
                operations, size of assets, and other 
                appropriate criteria related to the nonbank 
                financial company supervised by the Board of 
                Governors or a bank holding company described 
                in subsection (a), as applicable; and
                    (C) include at least 1 risk management 
                expert having experience in identifying, 
                assessing, and managing risk exposures of 
                large, complex firms.
            (4) Rulemaking.--The Board of Governors shall issue 
        final rules to carry out this subsection, not later 
        than 1 year after the transfer date, to take effect not 
        later than 15 months after the transfer date.
    (i) Stress Tests.--
            (1) By the board of governors.--
                    (A) Annual tests required.--The Board of 
                Governors, in coordination with the appropriate 
                primary financial regulatory agencies and the 
                Federal Insurance Office, shall conduct annual 
                analyses in which nonbank financial companies 
                supervised by the Board of Governors and bank 
                holding companies described in subsection (a) 
                are subject to evaluation of whether such 
                companies have the capital, on a total 
                consolidated basis, necessary to absorb losses 
                as a result of adverse economic conditions.
                    (B) Test parameters and consequences.--The 
                Board of Governors--
                            (i) shall provide for at least 3 
                        different sets of conditions under 
                        which the evaluation required by this 
                        subsection shall be conducted, 
                        including baseline, adverse, and 
                        severely adverse;
                            (ii) may require the tests 
                        described in subparagraph (A) at bank 
                        holding companies and nonbank financial 
                        companies, in addition to those for 
                        which annual tests are required under 
                        subparagraph (A);
                            (iii) may develop and apply such 
                        other analytic techniques as are 
                        necessary to identify, measure, and 
                        monitor risks to the financial 
                        stability of the United States;
                            (iv) shall require the companies 
                        described in subparagraph (A) to update 
                        their resolution plans required under 
                        subsection (d)(1), as the Board of 
                        Governors determines appropriate, based 
                        on the results of the analyses; and
                            (v) shall publish a summary of the 
                        results of the tests required under 
                        subparagraph (A) or clause (ii) of this 
                        subparagraph.
            (2) By the company.--
                    (A) Requirement.--A nonbank financial 
                company supervised by the Board of Governors 
                and a bank holding company described in 
                subsection (a) shall conduct semiannual stress 
                tests. All other financial companies that have 
                total consolidated assets of more than 
                $10,000,000,000 and are regulated by a primary 
                Federal financial regulatory agency shall 
                conduct annual stress tests. The tests required 
                under this subparagraph shall be conducted in 
                accordance with the regulations prescribed 
                under subparagraph (C).
                    (B) Report.--A company required to conduct 
                stress tests under subparagraph (A) shall 
                submit a report to the Board of Governors and 
                to its primary financial regulatory agency at 
                such time, in such form, and containing such 
                information as the primary financial regulatory 
                agency shall require.
                    (C) Regulations.--Each Federal primary 
                financial regulatory agency, in coordination 
                with the Board of Governors and the Federal 
                Insurance Office, shall issue consistent and 
                comparable regulations to implement this 
                paragraph that shall--
                            (i) define the term ``stress test'' 
                        for purposes of this paragraph;
                            (ii) establish methodologies for 
                        the conduct of stress tests required by 
                        this paragraph that shall provide for 
                        at least 3 different sets of 
                        conditions, including baseline, 
                        adverse, and severely adverse;
                            (iii) establish the form and 
                        content of the report required by 
                        subparagraph (B); and
                            (iv) require companies subject to 
                        this paragraph to publish a summary of 
                        the results of the required stress 
                        tests.
    (j) Leverage Limitation.--
            (1) Requirement.--The Board of Governors shall 
        require a bank holding company with total consolidated 
        assets equal to or greater than $50,000,000,000 or a 
        nonbank financial company supervised by the Board of 
        Governors to maintain a debt to equity ratio of no more 
        than 15 to 1, upon a determination by the Council that 
        such company poses a grave threat to the financial 
        stability of the United States and that the imposition 
        of such requirement is necessary to mitigate the risk 
        that such company poses to the financial stability of 
        the United States. Nothing in this paragraph shall 
        apply to a Federal home loan bank.
            (2) Considerations.--In making a determination 
        under this subsection, the Council shall consider the 
        factors described in subsections (a) and (b) of section 
        113 and any other risk-related factors that the Council 
        deems appropriate.
            (3) Regulations.--The Board of Governors shall 
        promulgate regulations to establish procedures and 
        timelines for complying with the requirements of this 
        subsection.
    (k) Inclusion of Off-balance-sheet Activities in Computing 
Capital Requirements.--
            (1) In general.--In the case of any bank holding 
        company described in subsection (a) or nonbank 
        financial company supervised by the Board of Governors, 
        the computation of capital for purposes of meeting 
        capital requirements shall take into account any off-
        balance-sheet activities of the company.
            (2) Exemptions.--If the Board of Governors 
        determines that an exemption from the requirement under 
        paragraph (1) is appropriate, the Board of Governors 
        may exempt a company, or any transaction or 
        transactions engaged in by such company, from the 
        requirements of paragraph (1).
            (3) Off-balance-sheet activities defined.--For 
        purposes of this subsection, the term ``off-balance-
        sheet activities'' means an existing liability of a 
        company that is not currently a balance sheet 
        liability, but may become one upon the happening of 
        some future event, including the following 
        transactions, to the extent that they may create a 
        liability:
                    (A) Direct credit substitutes in which a 
                bank substitutes its own credit for a third 
                party, including standby letters of credit.
                    (B) Irrevocable letters of credit that 
                guarantee repayment of commercial paper or tax-
                exempt securities.
                    (C) Risk participations in bankers' 
                acceptances.
                    (D) Sale and repurchase agreements.
                    (E) Asset sales with recourse against the 
                seller.
                    (F) Interest rate swaps.
                    (G) Credit swaps.
                    (H) Commodities contracts.
                    (I) Forward contracts.
                    (J) Securities contracts.
                    (K) Such other activities or transactions 
                as the Board of Governors may, by rule, define.

SEC. 166. EARLY REMEDIATION REQUIREMENTS.

    (a) In General.--The Board of Governors, in consultation 
with the Council and the Corporation, shall prescribe 
regulations establishing requirements to provide for the early 
remediation of financial distress of a nonbank financial 
company supervised by the Board of Governors or a bank holding 
company described in section 165(a), except that nothing in 
this subsection authorizes the provision of financial 
assistance from the Federal Government.
    (b) Purpose of the Early Remediation Requirements.--The 
purpose of the early remediation requirements under subsection 
(a) shall be to establish a series of specific remedial actions 
to be taken by a nonbank financial company supervised by the 
Board of Governors or a bank holding company described in 
section 165(a) that is experiencing increasing financial 
distress, in order to minimize the probability that the company 
will become insolvent and the potential harm of such insolvency 
to the financial stability of the United States.
    (c) Remediation Requirements.--The regulations prescribed 
by the Board of Governors under subsection (a) shall--
            (1) define measures of the financial condition of 
        the company, including regulatory capital, liquidity 
        measures, and other forward-looking indicators; and
            (2) establish requirements that increase in 
        stringency as the financial condition of the company 
        declines, including--
                    (A) requirements in the initial stages of 
                financial decline, including limits on capital 
                distributions, acquisitions, and asset growth; 
                and
                    (B) requirements at later stages of 
                financial decline, including a capital 
                restoration plan and capital-raising 
                requirements, limits on transactions with 
                affiliates, management changes, and asset 
                sales.

SEC. 167. AFFILIATIONS.

    (a) Affiliations.--Nothing in this subtitle shall be 
construed to require a nonbank financial company supervised by 
the Board of Governors, or a company that controls a nonbank 
financial company supervised by the Board of Governors, to 
conform the activities thereof to the requirements of section 4 
of the Bank Holding Company Act of 1956 (12 U.S.C. 1843).
    (b) Requirement.--
            (1) In general.--
                    (A) Board authority.--If a nonbank 
                financial company supervised by the Board of 
                Governors conducts activities other than those 
                that are determined to be financial in nature 
                or incidental thereto under section 4(k) of the 
                Bank Holding Company Act of 1956, the Board of 
                Governors may require such company to establish 
                and conduct all or a portion of such activities 
                that are determined to be financial in nature 
                or incidental thereto in or through an 
                intermediate holding company established 
                pursuant to regulation of the Board of 
                Governors, not later than 90 days (or such 
                longer period as the Board of Governors may 
                deem appropriate) after the date on which the 
                nonbank financial company supervised by the 
                Board of Governors is notified of the 
                determination of the Board of Governors under 
                this section.
                    (B) Necessary actions.--Notwithstanding 
                subparagraph (A), the Board of Governors shall 
                require a nonbank financial company supervised 
                by the Board of Governors to establish an 
                intermediate holding company if the Board of 
                Governors makes a determination that the 
                establishment of such intermediate holding 
                company is necessary to--
                            (i) appropriately supervise 
                        activities that are determined to be 
                        financial in nature or incidental 
                        thereto; or
                            (ii) to ensure that supervision by 
                        the Board of Governors does not extend 
                        to the commercial activities of such 
                        nonbank financial company.
            (2) Internal financial activities.--For purposes of 
        this subsection, activities that are determined to be 
        financial in nature or incidental thereto under section 
        4(k) of the Bank Holding Company Act of 1956, as 
        described in paragraph (1), shall not include internal 
        financial activities, including internal treasury, 
        investment, and employee benefit functions. With 
        respect to any internal financial activity engaged in 
        for the company or an affiliate and a non-affiliate of 
        such company during the year prior to the date of 
        enactment of this Act, such company (or an affiliate 
        that is not an intermediate holding company or 
        subsidiary of an intermediate holding company) may 
        continue to engage in such activity, as long as not 
        less than 2/3 of the assets or 2/3 of the revenues 
        generated from the activity are from or attributable to 
        such company or an affiliate, subject to review by the 
        Board of Governors, to determine whether engaging in 
        such activity presents undue risk to such company or to 
        the financial stability of the United States.
            (3) Source of strength.--A company that directly or 
        indirectly controls an intermediate holding company 
        established under this section shall serve as a source 
        of strength to its subsidiary intermediate holding 
        company.
            (4) Parent company reports.--The Board of Governors 
        may, from time to time, require reports under oath from 
        a company that controls an intermediate holding 
        company, and from the appropriate officers or directors 
        of such company, solely for purposes of ensuring 
        compliance with the provisions of this section, 
        including assessing the ability of the company to serve 
        as a source of strength to its subsidiary intermediate 
        holding company pursuant to paragraph (3) and enforcing 
        such compliance.
            (5) Limited parent company enforcement.--
                    (A) In general.--In addition to any other 
                authority of the Board of Governors, the Board 
                of Governors may enforce compliance with the 
                provisions of this subsection that are 
                applicable to any company described in 
                paragraph (1) that controls an intermediate 
                holding company under section 8 of the Federal 
                Deposit Insurance Act, and such company shall 
                be subject to such section (solely for such 
                purposes) in the same manner and to the same 
                extent as if such company were a bank holding 
                company.
                    (B) Application of other act.--Any 
                violation of this subsection by any company 
                that controls an intermediate holding company 
                may also be treated as a violation of the 
                Federal Deposit Insurance Act for purposes of 
                subparagraph (A).
                    (C) No effect on other authority.--No 
                provision of this paragraph shall be construed 
                as limiting any authority of the Board of 
                Governors or any other Federal agency under any 
                other provision of law.
    (c) Regulations.--The Board of Governors--
            (1) shall promulgate regulations to establish the 
        criteria for determining whether to require a nonbank 
        financial company supervised by the Board of Governors 
        to establish an intermediate holding company under 
        subsection (b); and
            (2) may promulgate regulations to establish any 
        restrictions or limitations on transactions between an 
        intermediate holding company or a nonbank financial 
        company supervised by the Board of Governors and its 
        affiliates, as necessary to prevent unsafe and unsound 
        practices in connection with transactions between such 
        company, or any subsidiary thereof, and its parent 
        company or affiliates that are not subsidiaries of such 
        company, except that such regulations shall not 
        restrict or limit any transaction in connection with 
        the bona fide acquisition or lease by an unaffiliated 
        person of assets, goods, or services.

SEC. 168. REGULATIONS.

    The Board of Governors shall have authority to issue 
regulations to implement subtitles A and C and the amendments 
made thereunder. Except as otherwise specified in subtitle A or 
C, not later than 18 months after the effective date of this 
Act, the Board of Governors shall issue final regulations to 
implement subtitles A and C, and the amendments made 
thereunder.

SEC. 169. AVOIDING DUPLICATION.

    The Board of Governors shall take any action that the Board 
of Governors deems appropriate to avoid imposing requirements 
under this subtitle that are duplicative of requirements 
applicable to bank holding companies and nonbank financial 
companies under other provisions of law.

SEC. 170. SAFE HARBOR.

    (a) Regulations.--The Board of Governors shall promulgate 
regulations on behalf of, and in consultation with, the Council 
setting forth the criteria for exempting certain types or 
classes of U.S. nonbank financial companies or foreign nonbank 
financial companies from supervision by the Board of Governors.
    (b) Considerations.--In developing the criteria under 
subsection (a), the Board of Governors shall take into account 
the factors for consideration described in subsections (a) and 
(b) of section 113 in determining whether a U.S. nonbank 
financial company or foreign nonbank financial company shall be 
supervised by the Board of Governors.
    (c) Rule of Construction.--Nothing in this section shall be 
construed to require supervision by the Board of Governors of a 
U.S. nonbank financial company or foreign nonbank financial 
company, if such company does not meet the criteria for 
exemption established under subsection (a).
    (d) Revisions.--
            (1) In general.--The Board of Governors shall, in 
        consultation with the Council, review the regulations 
        promulgated under subsection (a), not less frequently 
        than every 5 years, and based upon the review, the 
        Board of Governors may revise such regulations on 
        behalf of, and in consultation with, the Council to 
        update as necessary the criteria set forth in such 
        regulations.
            (2) Transition period.--No revisions under 
        paragraph (1) shall take effect before the end of the 
        2-year period after the date of publication of such 
        revisions in final form.
    (e) Report.--The Chairman of the Board of Governors and the 
Chairperson of the Council shall submit a joint report to the 
Committee on Banking, Housing, and Urban Affairs of the Senate 
and the Committee on Financial Services of the House of 
Representatives not later than 30 days after the date of the 
issuance in final form of regulations under subsection (a), or 
any subsequent revision to such regulations under subsection 
(d), as applicable. Such report shall include, at a minimum, 
the rationale for exemption and empirical evidence to support 
the criteria for exemption.

SEC. 171. LEVERAGE AND RISK-BASED CAPITAL REQUIREMENTS.

    (a) Definitions.--For purposes of this section, the 
following definitions shall apply:
            (1) Generally applicable leverage capital 
        requirements.--The term ``generally applicable leverage 
        capital requirements'' means--
                    (A) the minimum ratios of tier 1 capital to 
                average total assets, as established by the 
                appropriate Federal banking agencies to apply 
                to insured depository institutions under the 
                prompt corrective action regulations 
                implementing section 38 of the Federal Deposit 
                Insurance Act, regardless of total consolidated 
                asset size or foreign financial exposure; and
                    (B) includes the regulatory capital 
                components in the numerator of that capital 
                requirement, average total assets in the 
                denominator of that capital requirement, and 
                the required ratio of the numerator to the 
                denominator.
            (2) Generally applicable risk-based capital 
        requirements.--The term ``generally applicable risk-
        based capital requirements'' means--
                    (A) the risk-based capital requirements, as 
                established by the appropriate Federal banking 
                agencies to apply to insured depository 
                institutions under the prompt corrective action 
                regulations implementing section 38 of the 
                Federal Deposit Insurance Act, regardless of 
                total consolidated asset size or foreign 
                financial exposure; and
                    (B) includes the regulatory capital 
                components in the numerator of those capital 
                requirements, the risk-weighted assets in the 
                denominator of those capital requirements, and 
                the required ratio of the numerator to the 
                denominator.
            (3) Definition of depository institution holding 
        company.--The term ``depository institution holding 
        company'' means a bank holding company or a savings and 
        loan holding company (as those terms are defined in 
        section 3 of the Federal Deposit Insurance Act) that is 
        organized in the United States, including any bank or 
        savings and loan holding company that is owned or 
        controlled by a foreign organization, but does not 
        include the foreign organization.
    (b) Minimum Capital Requirements.--
            (1) Minimum leverage capital requirements.--The 
        appropriate Federal banking agencies shall establish 
        minimum leverage capital requirements on a consolidated 
        basis for insured depository institutions, depository 
        institution holding companies, and nonbank financial 
        companies supervised by the Board of Governors. The 
        minimum leverage capital requirements established under 
        this paragraph shall not be less than the generally 
        applicable leverage capital requirements, which shall 
        serve as a floor for any capital requirements that the 
        agency may require, nor quantitatively lower than the 
        generally applicable leverage capital requirements that 
        were in
            (2) Minimum risk-based capital requirements.--The 
        appropriate Federal banking agencies shall establish 
        minimum risk-based capital requirements on a 
        consolidated basis for insured depository institutions, 
        depository institution holding companies, and nonbank 
        financial companies supervised by the Board of 
        Governors. The minimum risk-based capital requirements 
        established under this paragraph shall not be less than 
        the generally applicable risk-based capital 
        requirements, which shall serve as a floor for any 
        capital requirements that the agency may require, nor 
        quantitatively lower than the generally applicable 
        risk-based capital requirements that were in effect for 
        insured depository institutions as of the date of 
        enactment of this Act.
            (3) Investments in financial subsidiaries.--For 
        purposes of this section, investments in financial 
        subsidiaries that insured depository institutions are 
        required to deduct from regulatory capital under 
        section 5136A of the Revised Statutes of the United 
        States or section 46(a)(2) of the Federal Deposit 
        Insurance Act need not be deducted from regulatory 
        capital by depository institution holding companies or 
        nonbank financial companies supervised by the Board of 
        Governors, unless such capital deduction is required by 
        the Board of Governors or the primary financial 
        regulatory agency in the case of nonbank financial 
        companies supervised by the Board of Governors.
            (4) Effective dates and phase-in periods.--
                    (A) Debt or equity instruments on or after 
                may 19, 2010.--For debt or equity instruments 
                issued on or after May 19, 2010, by depository 
                institution holding companies or by nonbank 
                financial companies supervised by the Board of 
                Governors, this section shall be deemed to have 
                become effective as of May 19, 2010.
                    (B) Debt or equity instruments issued 
                before may 19, 2010.--For debt or equity 
                instruments issued before May 19, 2010, by 
                depository institution holding companies or by 
                nonbank financial companies supervised by the 
                Board of Governors, any regulatory capital 
                deductions required under this section shall be 
                phased in incrementally over a period of 3 
                years, with the phase-in period to begin on 
                January 1, 2013, except as set forth in 
                subparagraph (C).
                    (C) Debt or equity instruments of smaller 
                institutions.--For debt or equity instruments 
                issued before May 19, 2010, by depository 
                institution holding companies with total 
                consolidated assets of less than 
                $15,000,000,000 as of December 31, 2009, and by 
                organizations that were mutual holding 
                companies on May 19, 2010, the capital 
                deductions that would be required for other 
                institutions under this section are not 
                required as a result of this section.
                    (D) Depository institution holding 
                companies not previously supervised by the 
                board of governors.--For any depository 
                institution holding company that was not 
                supervised by the Board of Governors as of May 
                19, 2010, the requirements of this section, 
                except as set forth in subparagraphs (A) and 
                (B), shall be effective 5 years after the date 
                of enactment of this Act.
                    (E) Certain bank holding company 
                subsidiaries of foreign banking 
                organizations.--For bank holding company 
                subsidiaries of foreign banking organizations 
                that have relied on Supervision and Regulation 
                Letter SR-01-1 issued by the Board of Governors 
                (as in effect on May 19, 2010), the 
                requirements of this section, except as set 
                forth in subparagraph (A), shall be effective 5 
                years after the date of enactment of this Act.
            (5) Exceptions.--This section shall not apply to--
                    (A) debt or equity instruments issued to 
                the United States or any agency or 
                instrumentality thereof pursuant to the 
                Emergency Economic Stabilization Act of 2008, 
                and prior to October 4, 2010;
                    (B) any Federal home loan bank; or
                    (C) any small bank holding company that is 
                subject to the Small Bank Holding Company 
                Policy Statement of the Board of Governors, as 
                in effect on May 19, 2010.
            (6) Study and report on small institution access to 
        capital.--
                    (A) Study required.--The Comptroller 
                General of the United States, after 
                consultation with the Federal banking agencies, 
                shall conduct a study of access to capital by 
                smaller insured depository institutions.
                    (B) Scope.--For purposes of this study 
                required by subparagraph (A), the term 
                ``smaller insured depository institution'' 
                means an insured depository institution with 
                total consolidated assets of $5,000,000,000 or 
                less.
                    (C) Report to congress.--Not later than 18 
                months after the date of enactment of this Act, 
                the Comptroller General of the United States 
                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 a report summarizing 
                the results of the study conducted under 
                subparagraph (A), together with any 
                recommendations for legislative or regulatory 
                action that would enhance the access to capital 
                of smaller insured depository institutions, in 
                a manner that is consistent with safe and sound 
                banking operations.
            (7) Capital requirements to address activities that 
        pose risks to the financial system.--
                    (A) In general.--Subject to the 
                recommendations of the Council, in accordance 
                with section 120, the Federal banking agencies 
                shall develop capital requirements applicable 
                to insured depository institutions, depository 
                institution holding companies, and nonbank 
                financial companies supervised by the Board of 
                Governors that address the risks that the 
                activities of such institutions pose, not only 
                to the institution engaging in the activity, 
                but to other public and private stakeholders in 
                the event of adverse performance, disruption, 
                or failure of the institution or the activity.
                    (B) Content.--Such rules shall address, at 
                a minimum, the risks arising from--
                            (i) significant volumes of activity 
                        in derivatives, securitized products 
                        purchased and sold, financial 
                        guarantees purchased and sold, 
                        securities borrowing and lending, and 
                        repurchase agreements and reverse 
                        repurchase agreements;
                            (ii) concentrations in assets for 
                        which the values presented in financial 
                        reports are based on models rather than 
                        historical cost or prices deriving from 
                        deep and liquid 2-way markets; and
                            (iii) concentrations in market 
                        share for any activity that would 
                        substantially disrupt financial markets 
                        if the institution is forced to 
                        unexpectedly cease the activity.

SEC. 172. EXAMINATION AND ENFORCEMENT ACTIONS FOR INSURANCE AND ORDERLY 
                    LIQUIDATION PURPOSES.

    (a) Examinations for Insurance and Resolution Purposes.--
Section 10(b)(3) of the Federal Deposit Insurance Act (12 
U.S.C. 1820(b)(3)) is amended--
            (1) by striking ``In addition'' and inserting the 
        following:
                    ``(A) In general.--In addition''; and
            (2) by striking ``whenever the board of directors 
        determines'' and all that follows through the period 
        and inserting the following: ``or nonbank financial 
        company supervised by the Board of Governors or a bank 
        holding company described in section 165(a) of the 
        Financial Stability Act of 2010, whenever the Board of 
        Directors determines that a special examination of any 
        such depository institution is necessary to determine 
        the condition of such depository institution for 
        insurance purposes, or of such nonbank financial 
        company supervised by the Board of Governors or bank 
        holding company described in section 165(a) of the 
        Financial Stability Act of 2010, for the purpose of 
        implementing its authority to provide for orderly 
        liquidation of any such company under title II of that 
        Act, provided that such authority may not be used with 
        respect to any such company that is in a generally 
        sound condition.
                    ``(B) Limitation.--Before conducting a 
                special examination of a nonbank financial 
                company supervised by the Board of Governors or 
                a bank holding company described in section 
                165(a) of the Financial Stability Act of 2010, 
                the Corporation shall review any available and 
                acceptable resolution plan that the company has 
                submitted in accordance with section 165(d) of 
                that Act, consistent with the nonbinding effect 
                of such plan, and available reports of 
                examination, and shall coordinate to the 
                maximum extent practicable with the Board of 
                Governors, in order to minimize duplicative or 
                conflicting examinations.''.
    (b) Enforcement Authority.--Section 8(t) of the Federal 
Deposit Insurance Act (12 U.S.C. 1818(t)) is amended--
            (1) in paragraph (1), by inserting ``, any 
        depository institution holding company,'' before ``or 
        any institution-affiliated party'';
            (2) in paragraph (2)--
                    (A) by striking ``or'' at the end of 
                subparagraph (B);
                    (B) at the end of subparagraph (C), by 
                striking the period and inserting ``or''; and
                    (C) by inserting at the end the following 
                new subparagraph:
                    ``(D) the conduct or threatened conduct 
                (including any acts or omissions) of the 
                depository institution holding company poses a 
                risk to the Deposit Insurance Fund, provided 
                that such authority may not be used with 
                respect to a depository institution holding 
                company that is in generally sound condition 
                and whose conduct does not pose a foreseeable 
                and material risk of loss to the Deposit 
                Insurance Fund;''; and
            (3) by adding at the end the following:
            ``(6) Powers and duties with respect to depository 
        institution holding companies.--For purposes of 
        exercising the backup authority provided in this 
        subsection--
                    ``(A) the Corporation shall have the same 
                powers with respect to a depository institution 
                holding company and its affiliates as the 
                appropriate Federal banking agency has with 
                respect to the holding company and its 
                affiliates; and
                    ``(B) the holding company and its 
                affiliates shall have the same duties and 
                obligations with respect to the Corporation as 
                the holding company and its affiliates have 
                with respect to the appropriate Federal banking 
                agency.''.
    (c) Rule of Construction.--Nothing in this Act shall be 
construed to limit or curtail the Corporation's current 
authority to examine or bring enforcement actions with respect 
to any insured depository institution or institution-affiliated 
party.

SEC. 173. ACCESS TO UNITED STATES FINANCIAL MARKET BY FOREIGN 
                    INSTITUTIONS.

    (a) Establishment of Foreign Bank Offices in the United 
States.--Section 7(d)(3) of the International Banking Act of 
1978 (12 U.S.C. 3105(d)(3)) is amended--
            (1) in subparagraph (C), by striking ``and'' at the 
        end;
            (2) in subparagraph (D), by striking the period at 
        the end of and inserting ``; and''; and
            (3) by adding at the end the following new 
        subparagraph:
                    ``(E) for a foreign bank that presents a 
                risk to the stability of United States 
                financial system, whether the home country of 
                the foreign bank has adopted, or is making 
                demonstrable progress toward adopting, an 
                appropriate system of financial regulation for 
                the financial system of such home country to 
                mitigate such risk.''.
    (b) Termination of Foreign Bank Offices in the United 
States.--Section 7(e)(1) of the International Banking Act of 
1978 (12 U.S.C. 3105(e)(1)) is amended--
            (1) in subparagraph (A), by striking ``or'' at the 
        end;
            (2) in subparagraph (B), by striking the period at 
        the end of and inserting ``; or''; and
            (3) by inserting after subparagraph (B), the 
        following new subparagraph:
                    ``(C) for a foreign bank that presents a 
                risk to the stability of the United States 
                financial system, the home country of the 
                foreign bank has not adopted, or made 
                demonstrable progress toward adopting, an 
                appropriate system of financial regulation to 
                mitigate such risk.''.
    (c) Registration or Succession to a United States Broker or 
Dealer and Termination of Such Registration.--Section 15 of the 
Securities Exchange Act of 1934 (15 U.S.C. 78o) is amended by 
adding at the end the following new subsections:
    ``(k) Registration or Succession to a United States Broker 
or Dealer.--In determining whether to permit a foreign person 
or an affiliate of a foreign person to register as a United 
States broker or dealer, or succeed to the registration of a 
United States broker or dealer, the Commission may consider 
whether, for a foreign person, or an affiliate of a foreign 
person that presents a risk to the stability of the United 
States financial system, the home country of the foreign person 
has adopted, or made demonstrable progress toward adopting, an 
appropriate system of financial regulation to mitigate such 
risk.
    ``(l) Termination of a United States Broker or Dealer.--For 
a foreign person or an affiliate of a foreign person that 
presents such a risk to the stability of the United States 
financial system, the Commission may determine to terminate the 
registration of such foreign person or an affiliate of such 
foreign person as a broker or dealer in the United States, if 
the Commission determines that the home country of the foreign 
person has not adopted, or made demonstrable progress toward 
adopting, an appropriate system of financial regulation to 
mitigate such risk.''.

SEC. 174. STUDIES AND REPORTS ON HOLDING COMPANY CAPITAL REQUIREMENTS.

    (a) Study of Hybrid Capital Instruments.--The Comptroller 
General of the United States, in consultation with the Board of 
Governors, the Comptroller of the Currency, and the 
Corporation, shall conduct a study of the use of hybrid capital 
instruments as a component of Tier 1 capital for banking 
institutions and bank holding companies. The study shall 
consider--
            (1) the current use of hybrid capital instruments, 
        such as trust preferred shares, as a component of Tier 
        1 capital;
            (2) the differences between the components of 
        capital permitted for insured depository institutions 
        and those permitted for companies that control insured 
        depository institutions;
            (3) the benefits and risks of allowing such 
        instruments to be used to comply with Tier 1 capital 
        requirements;
            (4) the economic impact of prohibiting the use of 
        such capital instruments for Tier 1;
            (5) a review of the consequences of disqualifying 
        trust preferred instruments, and whether it could lead 
        to the failure or undercapitalization of existing 
        banking organizations;
            (6) the international competitive implications 
        prohibiting hybrid capital instruments for Tier 1;
            (7) the impact on the cost and availability of 
        credit in the United States from such a prohibition;
            (8) the availability of capital for financial 
        institutions with less than $10,000,000,000 in total 
        assets; and
            (9) any other relevant factors relating to the 
        safety and soundness of our financial system and 
        potential economic impact of such a prohibition.
    (b) Study of Foreign Bank Intermediate Holding Company 
Capital Requirements.--The Comptroller General of the United 
States, in consultation with the Secretary, the Board of 
Governors, the Comptroller of the Currency, and the 
Corporation, shall conduct a study of capital requirements 
applicable to United States intermediate holding companies of 
foreign banks that are bank holding companies or savings and 
loan holding companies. The study shall consider--
            (1) current Board of Governors policy regarding the 
        treatment of intermediate holding companies;
            (2) the principle of national treatment and 
        equality of competitive opportunity for foreign banks 
        operating in the United States;
            (3) the extent to which foreign banks are subject 
        on a consolidated basis to home country capital 
        standards comparable to United States capital 
        standards;
            (4) potential effects on United States banking 
        organizations operating abroad of changes to United 
        States policy regarding intermediate holding companies;
            (5) the impact on the cost and availability of 
        credit in the United States from a change in United 
        States policy regarding intermediate holding companies; 
        and
            (6) any other relevant factors relating to the 
        safety and soundness of our financial system and 
        potential economic impact of such a prohibition.
    (c) Report.--Not later than 18 months after the date of 
enactment of this Act, the Comptroller General of the United 
States shall submit reports to the Committee on Banking, 
Housing, and Urban Affairs of the Senate and the Committee on 
Financial Services of the House of Representatives summarizing 
the results of the studies required under subsection (a). The 
reports shall include specific recommendations for legislative 
or regulatory action regarding the treatment of hybrid capital 
instruments, including trust preferred shares, and shall 
explain the basis for such recommendations.

SEC. 175. INTERNATIONAL POLICY COORDINATION.

    (a) By the President.--The President, or a designee of the 
President, may coordinate through all available international 
policy channels, similar policies as those found in United 
States law relating to limiting the scope, nature, size, scale, 
concentration, and interconnectedness of financial companies, 
in order to protect financial stability and the global economy.
    (b) By the Council.--The Chairperson of the Council, in 
consultation with the other members of the Council, shall 
regularly consult with the financial regulatory entities and 
other appropriate organizations of foreign governments or 
international organizations on matters relating to systemic 
risk to the international financial system.
    (c) By the Board of Governors and the Secretary.--The Board 
of Governors and the Secretary shall consult with their foreign 
counterparts and through appropriate multilateral organizations 
to encourage comprehensive and robust prudential supervision 
and regulation for all highly leveraged and interconnected 
financial companies.

SEC. 176. RULE OF CONSTRUCTION.

    No regulation or standard imposed under this title may be 
construed in a manner that would lessen the stringency of the 
requirements of any applicable primary financial regulatory 
agency or any other Federal or State agency that are otherwise 
applicable. This title, and the rules and regulations or orders 
prescribed pursuant to this title, do not divest any such 
agency of any authority derived from any other applicable law.

                TITLE II--ORDERLY LIQUIDATION AUTHORITY

SEC. 201. DEFINITIONS.

    (a) In General.--In this title, the following definitions 
shall apply:
            (1) Administrative expenses of the receiver.--The 
        term ``administrative expenses of the receiver'' 
        includes--
                    (A) the actual, necessary costs and 
                expenses incurred by the Corporation as 
                receiver for a covered financial company in 
                liquidating a covered financial company; and
                    (B) any obligations that the Corporation as 
                receiver for a covered financial company 
                determines are necessary and appropriate to 
                facilitate the smooth and orderly liquidation 
                of the covered financial company.
            (2) Bankruptcy code.--The term ``Bankruptcy Code'' 
        means title 11, United States Code.
            (3) Bridge financial company.--The term ``bridge 
        financial company'' means a new financial company 
        organized by the Corporation in accordance with section 
        210(h) for the purpose of resolving a covered financial 
        company.
            (4) Claim.--The term ``claim'' means any right to 
        payment, whether or not such right is reduced to 
        judgment, liquidated, unliquidated, fixed, contingent, 
        matured, unmatured, disputed, undisputed, legal, 
        equitable, secured, or unsecured.
            (5) Company.--The term ``company'' has the same 
        meaning as in section 2(b) of the Bank Holding Company 
        Act of 1956 (12 U.S.C. 1841(b)), except that such term 
        includes any company described in paragraph (11), the 
        majority of the securities of which are owned by the 
        United States or any State.
            (6) Court.--The term ``Court'' means the United 
        States District Court for the District of Columbia, 
        unless the context otherwise requires.
            (7) Covered broker or dealer.--The term ``covered 
        broker or dealer'' means a covered financial company 
        that is a broker or dealer that--
                    (A) is registered with the Commission under 
                section 15(b) of the Securities Exchange Act of 
                1934 (15 U.S.C. 78o(b)); and
                    (B) is a member of SIPC.
            (8) Covered financial company.--The term ``covered 
        financial company''--
                    (A) means a financial company for which a 
                determination has been made under section 
                203(b); and
                    (B) does not include an insured depository 
                institution.
            (9) Covered subsidiary.--The term ``covered 
        subsidiary'' means a subsidiary of a covered financial 
        company, other than--
                    (A) an insured depository institution;
                    (B) an insurance company; or
                    (C) a covered broker or dealer.
            (10) Definitions relating to covered brokers and 
        dealers.--The terms ``customer'', ``customer name 
        securities'', ``customer property'', and ``net equity'' 
        in the context of a covered broker or dealer, have the 
        same meanings as in section 16 of the Securities 
        Investor Protection Act of 1970 (15 U.S.C. 78lll).
            (11) Financial company.--The term ``financial 
        company'' means any company that--
                    (A) is incorporated or organized under any 
                provision of Federal law or the laws of any 
                State;
                    (B) is--
                            (i) a bank holding company, as 
                        defined in section 2(a) of the Bank 
                        Holding Company Act of 1956 (12 U.S.C. 
                        1841(a));
                            (ii) a nonbank financial company 
                        supervised by the Board of Governors;
                            (iii) any company that is 
                        predominantly engaged in activities 
                        that the Board of Governors has 
                        determined are financial in nature or 
                        incidental thereto for purposes of 
                        section 4(k) of the Bank Holding 
                        Company Act of 1956 (12 U.S.C. 1843(k)) 
                        other than a company described in 
                        clause (i) or (ii); or
                            (iv) any subsidiary of any company 
                        described in any of clauses (i) through 
                        (iii) that is predominantly engaged in 
                        activities that the Board of Governors 
                        has determined are financial in nature 
                        or incidental thereto for purposes of 
                        section 4(k) of the Bank Holding 
                        Company Act of 1956 (12 U.S.C. 1843(k)) 
                        (other than a subsidiary that is an 
                        insured depository institution or an 
                        insurance company); and
                    (C) is not a Farm Credit System institution 
                chartered under and subject to the provisions 
                of the Farm Credit Act of 1971, as amended (12 
                U.S.C. 2001 et seq.), a governmental entity, or 
                a regulated entity, as defined under section 
                1303(20) of the Federal Housing Enterprises 
                Financial Safety and Soundness Act of 1992 (12 
                U.S.C. 4502(20)).
            (12) Fund.--The term ``Fund'' means the Orderly 
        Liquidation Fund established under section 210(n).
            (13) Insurance company.--The term ``insurance 
        company'' means any entity that is--
                    (A) engaged in the business of insurance;
                    (B) subject to regulation by a State 
                insurance regulator; and
                    (C) covered by a State law that is designed 
                to specifically deal with the rehabilitation, 
                liquidation, or insolvency of an insurance 
                company.
            (14) Nonbank financial company.--The term ``nonbank 
        financial company'' has the same meaning as in section 
        102(a)(4)(C).
            (15) Nonbank financial company supervised by the 
        board of governors.--The term ``nonbank financial 
        company supervised by the Board of Governors'' has the 
        same meaning as in section 102(a)(4)(D).
            (16) SIPC.--The term ``SIPC'' means the Securities 
        Investor Protection Corporation.
    (b) Definitional Criteria.--For purpose of the definition 
of the term ``financial company'' under subsection (a)(11), no 
company shall be deemed to be predominantly engaged in 
activities that the Board of Governors has determined are 
financial in nature or incidental thereto for purposes of 
section 4(k) of the Bank Holding Company Act of 1956 (12 U.S.C. 
1843(k)), if the consolidated revenues of such company from 
such activities constitute less than 85 percent of the total 
consolidated revenues of such company, as the Corporation, in 
consultation with the Secretary, shall establish by regulation. 
In determining whether a company is a financial company under 
this title, the consolidated revenues derived from the 
ownership or control of a depository institution shall be 
included.

SEC. 202. JUDICIAL REVIEW.

    (a) Commencement of Orderly Liquidation.--
            (1) Petition to district court.--
                    (A) District court review.--
                            (i) Petition to district court.--
                        Subsequent to a determination by the 
                        Secretary under section 203 that a 
                        financial company satisfies the 
                        criteria in section 203(b), the 
                        Secretary shall notify the Corporation 
                        and the covered financial company. If 
                        the board of directors (or body 
                        performing similar functions) of the 
                        covered financial company acquiesces or 
                        consents to the appointment of the 
                        Corporation as receiver, the Secretary 
                        shall appoint the Corporation as 
                        receiver. If the board of directors (or 
                        body performing similar functions) of 
                        the covered financial company does not 
                        acquiesce or consent to the appointment 
                        of the Corporation as receiver, the 
                        Secretary shall petition the United 
                        States District Court for the District 
                        of Columbia for an order authorizing 
                        the Secretary to appoint the 
                        Corporation as receiver.
                            (ii) Form and content of order.--
                        The Secretary shall present all 
                        relevant findings and the 
                        recommendation made pursuant to section 
                        203(a) to the Court. The petition shall 
                        be filed under seal.
                            (iii) Determination.--On a strictly 
                        confidential basis, and without any 
                        prior public disclosure, the Court, 
                        after notice to the covered financial 
                        company and a hearing in which the 
                        covered financial company may oppose 
                        the petition, shall determine whether 
                        the determination of the Secretary that 
                        the covered financial company is in 
                        default or in danger of default and 
                        satisfies the definition of a financial 
                        company under section 201(a)(11) is 
                        arbitrary and capricious.
                            (iv) Issuance of order.--If the 
                        Court determines that the determination 
                        of the Secretary that the covered 
                        financial company is in default or in 
                        danger of default and satisfies the 
                        definition of a financial company under 
                        section 201(a)(11)--
                                    (I) is not arbitrary and 
                                capricious, the Court shall 
                                issue an order immediately 
                                authorizing the Secretary to 
                                appoint the Corporation as 
                                receiver of the covered 
                                financial company; or
                                    (II) is arbitrary and 
                                capricious, the Court shall 
                                immediately provide to the 
                                Secretary a written statement 
                                of each reason supporting its 
                                determination, and afford the 
                                Secretary an immediate 
                                opportunity to amend and refile 
                                the petition under clause (i).
                            (v) Petition granted by operation 
                        of law.--If the Court does not make a 
                        determination within 24 hours of 
                        receipt of the petition--
                                    (I) the petition shall be 
                                granted by operation of law;
                                    (II) the Secretary shall 
                                appoint the Corporation as 
                                receiver; and
                                    (III) liquidation under 
                                this title shall automatically 
                                and without further notice or 
                                action be commenced and the 
                                Corporation may immediately 
                                take all actions authorized 
                                under this title.
                    (B) Effect of determination.--The 
                determination of the Court under subparagraph 
                (A) shall be final, and shall be subject to 
                appeal only in accordance with paragraph (2). 
                The decision shall not be subject to any stay 
                or injunction pending appeal. Upon conclusion 
                of its proceedings under subparagraph (A), the 
                Court shall provide immediately for the record 
                a written statement of each reason supporting 
                the decision of the Court, and shall provide 
                copies thereof to the Secretary and the covered 
                financial company.
                    (C) Criminal penalties.--A person who 
                recklessly discloses a determination of the 
                Secretary under section 203(b) or a petition of 
                the Secretary under subparagraph (A), or the 
                pendency of court proceedings as provided for 
                under subparagraph (A), shall be fined not more 
                than $250,000, or imprisoned for not more than 
                5 years, or both.
            (2) Appeal of decisions of the district court.--
                    (A) Appeal to court of appeals.--
                            (i) In general.--Subject to clause 
                        (ii), the United States Court of 
                        Appeals for the District of Columbia 
                        Circuit shall have jurisdiction of an 
                        appeal of a final decision of the Court 
                        filed by the Secretary or a covered 
                        financial company, through its board of 
                        directors, notwithstanding section 
                        210(a)(1)(A)(i), not later than 30 days 
                        after the date on which the decision of 
                        the Court is rendered or deemed 
                        rendered under this subsection.
                            (ii) Condition of jurisdiction.--
                        The Court of Appeals shall have 
                        jurisdiction of an appeal by a covered 
                        financial company only if the covered 
                        financial company did not acquiesce or 
                        consent to the appointment of a 
                        receiver by the Secretary under 
                        paragraph (1)(A).
                            (iii) Expedition.--The Court of 
                        Appeals shall consider any appeal under 
                        this subparagraph on an expedited 
                        basis.
                            (iv) Scope of review.--For an 
                        appeal taken under this subparagraph, 
                        review shall be limited to whether the 
                        determination of the Secretary that a 
                        covered financial company is in default 
                        or in danger of default and satisfies 
                        the definition of a financial company 
                        under section 201(a)(11) is arbitrary 
                        and capricious.
                    (B) Appeal to the supreme court.--
                            (i) In general.--A petition for a 
                        writ of certiorari to review a decision 
                        of the Court of Appeals under 
                        subparagraph (A) may be filed by the 
                        Secretary or the covered financial 
                        company, through its board of 
                        directors, notwithstanding section 
                        210(a)(1)(A)(i), with the Supreme Court 
                        of the United States, not later than 30 
                        days after the date of the final 
                        decision of the Court of Appeals, and 
                        the Supreme Court shall have 
                        discretionary jurisdiction to review 
                        such decision.
                            (ii) Written statement.--In the 
                        event of a petition under clause (i), 
                        the Court of Appeals shall immediately 
                        provide for the record a written 
                        statement of each reason for its 
                        decision.
                            (iii) Expedition.--The Supreme 
                        Court shall consider any petition under 
                        this subparagraph on an expedited 
                        basis.
                            (iv) Scope of review.--Review by 
                        the Supreme Court under this 
                        subparagraph shall be limited to 
                        whether the determination of the 
                        Secretary that the covered financial 
                        company is in default or in danger of 
                        default and satisfies the definition of 
                        a financial company under section 
                        201(a)(11) is arbitrary and capricious.
    (b) Establishment and Transmittal of Rules and 
Procedures.--
            (1) In general.--Not later than 6 months after the 
        date of enactment of this Act, the Court shall 
        establish such rules and procedures as may be necessary 
        to ensure the orderly conduct of proceedings, including 
        rules and procedures to ensure that the 24-hour 
        deadline is met and that the Secretary shall have an 
        ongoing opportunity to amend and refile petitions under 
        subsection (a)(1).
            (2) Publication of rules.--The rules and procedures 
        established under paragraph (1), and any modifications 
        of such rules and procedures, shall be recorded and 
        shall be transmitted to--
                    (A) the Committee on the Judiciary of the 
                Senate;
                    (B) the Committee on Banking, Housing, and 
                Urban Affairs of the Senate;
                    (C) the Committee on the Judiciary of the 
                House of Representatives; and
                    (D) the Committee on Financial Services of 
                the House of Representatives.
    (c) Provisions Applicable to Financial Companies.--
            (1) Bankruptcy code.--Except as provided in this 
        subsection, the provisions of the Bankruptcy Code and 
        rules issued thereunder or otherwise applicable 
        insolvency law, and not the provisions of this title, 
        shall apply to financial companies that are not covered 
        financial companies for which the Corporation has been 
        appointed as receiver.
            (2) This title.--The provisions of this title shall 
        exclusively apply to and govern all matters relating to 
        covered financial companies for which the Corporation 
        is appointed as receiver, and no provisions of the 
        Bankruptcy Code or the rules issued thereunder shall 
        apply in such cases, except as expressly provided in 
        this title.
    (d) Time Limit on Receivership Authority.--
            (1) Baseline period.--Any appointment of the 
        Corporation as receiver under this section shall 
        terminate at the end of the 3-year period beginning on 
        the date on which such appointment is made.
            (2) Extension of time limit.--The time limit 
        established in paragraph (1) may be extended by the 
        Corporation for up to 1 additional year, if the 
        Chairperson of the Corporation determines and certifies 
        in writing to the Committee on Banking, Housing, and 
        Urban Affairs of the Senate and the Committee on 
        Financial Services of the House of Representatives that 
        continuation of the receivership is necessary--
                    (A) to--
                            (i) maximize the net present value 
                        return from the sale or other 
                        disposition of the assets of the 
                        covered financial company; or
                            (ii) minimize the amount of loss 
                        realized upon the sale or other 
                        disposition of the assets of the 
                        covered financial company; and
                    (B) to protect the stability of the 
                financial system of the United States.
            (3) Second extension of time limit.--
                    (A) In general.--The time limit under this 
                subsection, as extended under paragraph (2), 
                may be extended for up to 1 additional year, if 
                the Chairperson of the Corporation, with the 
                concurrence of the Secretary, submits the 
                certifications described in paragraph (2).
                    (B) Additional report required.--Not later 
                than 30 days after the date of commencement of 
                the extension under subparagraph (A), the 
                Corporation shall submit a report to the 
                Committee on Banking, Housing, and Urban 
                Affairs of the Senate and the Committee on 
                Financial Services of the House of 
                Representatives describing the need for the 
                extension and the specific plan of the 
                Corporation to conclude the receivership before 
                the end of the second extension.
            (4) Ongoing litigation.--The time limit under this 
        subsection, as extended under paragraph (3), may be 
        further extended solely for the purpose of completing 
        ongoing litigation in which the Corporation as receiver 
        is a party, provided that the appointment of the 
        Corporation as receiver shall terminate not later than 
        90 days after the date of completion of such 
        litigation, if--
                    (A) the Council determines that the 
                Corporation used its best efforts to conclude 
                the receivership in accordance with its plan 
                before the end of the time limit described in 
                paragraph (3);
                    (B) the Council determines that the 
                completion of longer-term responsibilities in 
                the form of ongoing litigation justifies the 
                need for an extension; and
                    (C) the Corporation submits a report 
                approved by the Council not later than 30 days 
                after the date of the determinations by the 
                Council under subparagraphs (A) and (B) to the 
                Committee on Banking, Housing, and Urban 
                Affairs of the Senate and the Committee on 
                Financial Services of the House of 
                Representatives, describing--
                            (i) the ongoing litigation 
                        justifying the need for an extension; 
                        and
                            (ii) the specific plan of the 
                        Corporation to complete the litigation 
                        and conclude the receivership.
            (5) Regulations.--The Corporation may issue 
        regulations governing the termination of receiverships 
        under this title.
            (6) No liability.--The Corporation and the Deposit 
        Insurance Fund shall not be liable for unresolved 
        claims arising from the receivership after the 
        termination of the receivership.
    (e) Study of Bankruptcy and Orderly Liquidation Process for 
Financial Companies.--
            (1) Study.--
                    (A) In general.--The Administrative Office 
                of the United States Courts and the Comptroller 
                General of the United States shall each monitor 
                the activities of the Court, and each such 
                Office shall conduct separate studies regarding 
                the bankruptcy and orderly liquidation process 
                for financial companies under the Bankruptcy 
                Code.
                    (B) Issues to be studied.--In conducting 
                the study under subparagraph (A), the 
                Administrative Office of the United States 
                Courts and the Comptroller General of the 
                United States each shall evaluate--
                            (i) the effectiveness of chapter 7 
                        or chapter 11 of the Bankruptcy Code in 
                        facilitating the orderly liquidation or 
                        reorganization of financial companies;
                            (ii) ways to maximize the 
                        efficiency and effectiveness of the 
                        Court; and
                            (iii) ways to make the orderly 
                        liquidation process under the 
                        Bankruptcy Code for financial companies 
                        more effective.
            (2) Reports.--Not later than 1 year after the date 
        of enactment of this Act, in each successive year until 
        the third year, and every fifth year after that date of 
        enactment, the Administrative Office of the United 
        States Courts and the Comptroller General of the United 
        States shall submit to the Committee on Banking, 
        Housing, and Urban Affairs and the Committee on the 
        Judiciary of the Senate and the Committee on Financial 
        Services and the Committee on the Judiciary of the 
        House of Representatives separate reports summarizing 
        the results of the studies conducted under paragraph 
        (1).
    (f) Study of International Coordination Relating to 
Bankruptcy Process for Financial Companies.--
            (1) Study.--
                    (A) In general.--The Comptroller General of 
                the United States shall conduct a study 
                regarding international coordination relating 
                to the orderly liquidation of financial 
                companies under the Bankruptcy Code.
                    (B) Issues to be studied.--In conducting 
                the study under subparagraph (A), the 
                Comptroller General of the United States shall 
                evaluate, with respect to the bankruptcy 
                process for financial companies--
                            (i) the extent to which 
                        international coordination currently 
                        exists;
                            (ii) current mechanisms and 
                        structures for facilitating 
                        international cooperation;
                            (iii) barriers to effective 
                        international coordination; and
                            (iv) ways to increase and make more 
                        effective international coordination.
            (2) Report.--Not later than 1 year after the date 
        of enactment of this Act, the Comptroller General of 
        the United States shall submit to the Committee on 
        Banking, Housing, and Urban Affairs and the Committee 
        on the Judiciary of the Senate and the Committee on 
        Financial Services and the Committee on the Judiciary 
        of the House of Representatives and the Secretary a 
        report summarizing the results of the study conducted 
        under paragraph (1).
    (g) Study of Prompt Corrective Action Implementation by the 
Appropriate Federal Agencies.--
            (1) Study.--The Comptroller General of the United 
        States shall conduct a study regarding the 
        implementation of prompt corrective action by the 
        appropriate Federal banking agencies.
            (2) Issues to be studied.--In conducting the study 
        under paragraph (1), the Comptroller General shall 
        evaluate--
                    (A) the effectiveness of implementation of 
                prompt corrective action by the appropriate 
                Federal banking agencies and the resolution of 
                insured depository institutions by the 
                Corporation; and
                    (B) ways to make prompt corrective action a 
                more effective tool to resolve the insured 
                depository institutions at the least possible 
                long-term cost to the Deposit Insurance Fund.
            (3) Report to council.--Not later than 1 year after 
        the date of enactment of this Act, the Comptroller 
        General shall submit a report to the Council on the 
        results of the study conducted under this subsection.
            (4) Council report of action.--Not later than 6 
        months after the date of receipt of the report from the 
        Comptroller General under paragraph (3), the Council 
        shall submit a report to the Committee on Banking, 
        Housing, and Urban Affairs of the Senate and the 
        Committee on Financial Services of the House of 
        Representatives on actions taken in response to the 
        report, including any recommendations made to the 
        Federal primary financial regulatory agencies under 
        section 120.

SEC. 203. SYSTEMIC RISK DETERMINATION.

    (a) Written Recommendation and Determination.--
            (1) Vote required.--
                    (A) In general.--On their own initiative, 
                or at the request of the Secretary, the 
                Corporation and the Board of Governors shall 
                consider whether to make a written 
                recommendation described in paragraph (2) with 
                respect to whether the Secretary should appoint 
                the Corporation as receiver for a financial 
                company. Such recommendation shall be made upon 
                a vote of not fewer than \2/3\ of the members 
                of the Board of Governors then serving and \2/
                3\ of the members of the board of directors of 
                the Corporation then serving.
                    (B) Cases involving brokers or dealers.--In 
                the case of a broker or dealer, or in which the 
                largest United States subsidiary (as measured 
                by total assets as of the end of the previous 
                calendar quarter) of a financial company is a 
                broker or dealer, the Commission and the Board 
                of Governors, at the request of the Secretary, 
                or on their own initiative, shall consider 
                whether to make the written recommendation 
                described in paragraph (2) with respect to the 
                financial company. Subject to the requirements 
                in paragraph (2), such recommendation shall be 
                made upon a vote of not fewer than \2/3\ of the 
                members of the Board of Governors then serving 
                and \2/3\ of the members of the Commission then 
                serving, and in consultation with the 
                Corporation.
                    (C) Cases involving insurance companies.--
                In the case of an insurance company, or in 
                which the largest United States subsidiary (as 
                measured by total assets as of the end of the 
                previous calendar quarter) of a financial 
                company is an insurance company, the Director 
                of the Federal Insurance Office and the Board 
                of Governors, at the request of the Secretary 
                or on their own initiative, shall consider 
                whether to make the written recommendation 
                described in paragraph (2) with respect to the 
                financial company. Subject to the requirements 
                in paragraph (2), such recommendation shall be 
                made upon a vote of not fewer than \2/3\ of the 
                Board of Governors then serving and the 
                affirmative approval of the Director of the 
                Federal Insurance Office, and in consultation 
                with the Corporation.
            (2) Recommendation required.--Any written 
        recommendation pursuant to paragraph (1) shall 
        contain--
                    (A) an evaluation of whether the financial 
                company is in default or in danger of default;
                    (B) a description of the effect that the 
                default of the financial company would have on 
                financial stability in the United States;
                    (C) a description of the effect that the 
                default of the financial company would have on 
                economic conditions or financial stability for 
                low income, minority, or underserved 
                communities;
                    (D) a recommendation regarding the nature 
                and the extent of actions to be taken under 
                this title regarding the financial company;
                    (E) an evaluation of the likelihood of a 
                private sector alternative to prevent the 
                default of the financial company;
                    (F) an evaluation of why a case under the 
                Bankruptcy Code is not appropriate for the 
                financial company;
                    (G) an evaluation of the effects on 
                creditors, counterparties, and shareholders of 
                the financial company and other market 
                participants; and
                    (H) an evaluation of whether the company 
                satisfies the definition of a financial company 
                under section 201.
    (b) Determination by the Secretary.--Notwithstanding any 
other provision of Federal or State law, the Secretary shall 
take action in accordance with section 202(a)(1)(A), if, upon 
the written recommendation under subsection (a), the Secretary 
(in consultation with the President) determines that--
            (1) the financial company is in default or in 
        danger of default;
            (2) the failure of the financial company and its 
        resolution under otherwise applicable Federal or State 
        law would have serious adverse effects on financial 
        stability in the United States;
            (3) no viable private sector alternative is 
        available to prevent the default of the financial 
        company;
            (4) any effect on the claims or interests of 
        creditors, counterparties, and shareholders of the 
        financial company and other market participants as a 
        result of actions to be taken under this title is 
        appropriate, given the impact that any action taken 
        under this title would have on financial stability in 
        the United States;
            (5) any action under section 204 would avoid or 
        mitigate such adverse effects, taking into 
        consideration the effectiveness of the action in 
        mitigating potential adverse effects on the financial 
        system, the cost to the general fund of the Treasury, 
        and the potential to increase excessive risk taking on 
        the part of creditors, counterparties, and shareholders 
        in the financial company;
            (6) a Federal regulatory agency has ordered the 
        financial company to convert all of its convertible 
        debt instruments that are subject to the regulatory 
        order; and
            (7) the company satisfies the definition of a 
        financial company under section 201.
    (c) Documentation and Review.--
            (1) In general.--The Secretary shall--
                    (A) document any determination under 
                subsection (b);
                    (B) retain the documentation for review 
                under paragraph (2); and
                    (C) notify the covered financial company 
                and the Corporation of such determination.
            (2) Report to congress.--Not later than 24 hours 
        after the date of appointment of the Corporation as 
        receiver for a covered financial company, the Secretary 
        shall provide written notice of the recommendations and 
        determinations reached in accordance with subsections 
        (a) and (b) to the Majority Leader and the Minority 
        Leader of the Senate and the Speaker and the Minority 
        Leader of the House of Representatives, the Committee 
        on Banking, Housing, and Urban Affairs of the Senate, 
        and the Committee on Financial Services of the House of 
        Representatives, which shall consist of a summary of 
        the basis for the determination, including, to the 
        extent available at the time of the determination--
                    (A) the size and financial condition of the 
                covered financial company;
                    (B) the sources of capital and credit 
                support that were available to the covered 
                financial company;
                    (C) the operations of the covered financial 
                company that could have had a significant 
                impact on financial stability, markets, or 
                both;
                    (D) identification of the banks and 
                financial companies which may be able to 
                provide the services offered by the covered 
                financial company;
                    (E) any potential international 
                ramifications of resolution of the covered 
                financial company under other applicable 
                insolvency law;
                    (F) an estimate of the potential effect of 
                the resolution of the covered financial company 
                under other applicable insolvency law on the 
                financial stability of the United States;
                    (G) the potential effect of the appointment 
                of a receiver by the Secretary on consumers;
                    (H) the potential effect of the appointment 
                of a receiver by the Secretary on the financial 
                system, financial markets, and banks and other 
                financial companies; and
                    (I) whether resolution of the covered 
                financial company under other applicable 
                insolvency law would cause banks or other 
                financial companies to experience severe 
                liquidity distress.
            (3) Reports to congress and the public.--
                    (A) In general.--Not later than 60 days 
                after the date of appointment of the 
                Corporation as receiver for a covered financial 
                company, the Corporation shall file a report 
                with the Committee on Banking, Housing, and 
                Urban Affairs of the Senate and the Committee 
                on Financial Services of the House of 
                Representatives--
                            (i) setting forth information on 
                        the financial condition of the covered 
                        financial company as of the date of the 
                        appointment, including a description of 
                        its assets and liabilities;
                            (ii) describing the plan of, and 
                        actions taken by, the Corporation to 
                        wind down the covered financial 
                        company;
                            (iii) explaining each instance in 
                        which the Corporation waived any 
                        applicable requirements of part 366 of 
                        title 12, Code of Federal Regulations 
                        (or any successor thereto) with respect 
                        to conflicts of interest by any person 
                        in the private sector who was retained 
                        to provide services to the Corporation 
                        in connection with such receivership;
                            (iv) describing the reasons for the 
                        provision of any funding to the 
                        receivership out of the Fund;
                            (v) setting forth the expected 
                        costs of the orderly liquidation of the 
                        covered financial company;
                            (vi) setting forth the identity of 
                        any claimant that is treated in a 
                        manner different from other similarly 
                        situated claimants under subsection 
                        (b)(4), (d)(4), or (h)(5)(E), the 
                        amount of any additional payment to 
                        such claimant under subsection (d)(4), 
                        and the reason for any such action; and
                            (vii) which report the Corporation 
                        shall publish on an online website 
                        maintained by the Corporation, subject 
                        to maintaining appropriate 
                        confidentiality.
                    (B) Amendments.--The Corporation shall, on 
                a timely basis, not less frequently than 
                quarterly, amend or revise and resubmit the 
                reports prepared under this paragraph, as 
                necessary.
                    (C) Congressional testimony.--The 
                Corporation and the primary financial 
                regulatory agency, if any, of the financial 
                company for which the Corporation was appointed 
                receiver under this title shall appear before 
                Congress, if requested, not later than 30 days 
                after the date on which the Corporation first 
                files the reports required under subparagraph 
                (A).
            (4) Default or in danger of default.--For purposes 
        of this title, a financial company shall be considered 
        to be in default or in danger of default if, as 
        determined in accordance with subsection (b)--
                    (A) a case has been, or likely will 
                promptly be, commenced with respect to the 
                financial company under the Bankruptcy Code;
                    (B) the financial company has incurred, or 
                is likely to incur, losses that will deplete 
                all or substantially all of its capital, and 
                there is no reasonable prospect for the company 
                to avoid such depletion;
                    (C) the assets of the financial company 
                are, or are likely to be, less than its 
                obligations to creditors and others; or
                    (D) the financial company is, or is likely 
                to be, unable to pay its obligations (other 
                than those subject to a bona fide dispute) in 
                the normal course of business.
            (5) GAO review.--The Comptroller General of the 
        United States shall review and report to Congress on 
        any determination under subsection (b), that results in 
        the appointment of the Corporation as receiver, 
        including--
                    (A) the basis for the determination;
                    (B) the purpose for which any action was 
                taken pursuant thereto;
                    (C) the likely effect of the determination 
                and such action on the incentives and conduct 
                of financial companies and their creditors, 
                counterparties, and shareholders; and
                    (D) the likely disruptive effect of the 
                determination and such action on the reasonable 
                expectations of creditors, counterparties, and 
                shareholders, taking into account the impact 
                any action under this title would have on 
                financial stability in the United States, 
                including whether the rights of such parties 
                will be disrupted.
    (d) Corporation Policies and Procedures.--As soon as is 
practicable after the date of enactment of this Act, the 
Corporation shall establish policies and procedures that are 
acceptable to the Secretary governing the use of funds 
available to the Corporation to carry out this title, including 
the terms and conditions for the provision and use of funds 
under sections 204(d), 210(h)(2)(G)(iv), and 210(h)(9).
    (e) Treatment of Insurance Companies and Insurance Company 
Subsidiaries.--
            (1) In general.--Notwithstanding subsection (b), if 
        an insurance company is a covered financial company or 
        a subsidiary or affiliate of a covered financial 
        company, the liquidation or rehabilitation of such 
        insurance company, and any subsidiary or affiliate of 
        such company that is not excepted under paragraph (2), 
        shall be conducted as provided under applicable State 
        law.
            (2) Exception for subsidiaries and affiliates.--The 
        requirement of paragraph (1) shall not apply with 
        respect to any subsidiary or affiliate of an insurance 
        company that is not itself an insurance company.
            (3) Backup authority.--Notwithstanding paragraph 
        (1), with respect to a covered financial company 
        described in paragraph (1), if, after the end of the 
        60-day period beginning on the date on which a 
        determination is made under section 202(a) with respect 
        to such company, the appropriate regulatory agency has 
        not filed the appropriate judicial action in the 
        appropriate State court to place such company into 
        orderly liquidation under the laws and requirements of 
        the State, the Corporation shall have the authority to 
        stand in the place of the appropriate regulatory agency 
        and file the appropriate judicial action in the 
        appropriate State court to place such company into 
        orderly liquidation under the laws and requirements of 
        the State.

SEC. 204. ORDERLY LIQUIDATION OF COVERED FINANCIAL COMPANIES.

    (a) Purpose of Orderly Liquidation Authority.--It is the 
purpose of this title to provide the necessary authority to 
liquidate failing financial companies that pose a significant 
risk to the financial stability of the United States in a 
manner that mitigates such risk and minimizes moral hazard. The 
authority provided in this title shall be exercised in the 
manner that best fulfills such purpose, so that--
            (1) creditors and shareholders will bear the losses 
        of the financial company;
            (2) management responsible for the condition of the 
        financial company will not be retained; and
            (3) the Corporation and other appropriate agencies 
        will take all steps necessary and appropriate to assure 
        that all parties, including management, directors, and 
        third parties, having responsibility for the condition 
        of the financial company bear losses consistent with 
        their responsibility, including actions for damages, 
        restitution, and recoupment of compensation and other 
        gains not compatible with such responsibility.
    (b) Corporation as Receiver.--Upon the appointment of the 
Corporation under section 202, the Corporation shall act as the 
receiver for the covered financial company, with all of the 
rights and obligations set forth in this title.
    (c) Consultation.--The Corporation, as receiver--
            (1) shall consult with the primary financial 
        regulatory agency or agencies of the covered financial 
        company and its covered subsidiaries for purposes of 
        ensuring an orderly liquidation of the covered 
        financial company;
            (2) may consult with, or under subsection 
        (a)(1)(B)(v) or (a)(1)(L) of section 210, acquire the 
        services of, any outside experts, as appropriate to 
        inform and aid the Corporation in the orderly 
        liquidation process;
            (3) shall consult with the primary financial 
        regulatory agency or agencies of any subsidiaries of 
        the covered financial company that are not covered 
        subsidiaries, and coordinate with such regulators 
        regarding the treatment of such solvent subsidiaries 
        and the separate resolution of any such insolvent 
        subsidiaries under other governmental authority, as 
        appropriate; and
            (4) shall consult with the Commission and the 
        Securities Investor Protection Corporation in the case 
        of any covered financial company for which the 
        Corporation has been appointed as receiver that is a 
        broker or dealer registered with the Commission under 
        section 15(b) of the Securities Exchange Act of 1934 
        (15 U.S.C. 78o(b)) and is a member of the Securities 
        Investor Protection Corporation, for the purpose of 
        determining whether to transfer to a bridge financial 
        company organized by the Corporation as receiver, 
        without consent of any customer, customer accounts of 
        the covered financial company.
    (d) Funding for Orderly Liquidation.--Upon its appointment 
as receiver for a covered financial company, and thereafter as 
the Corporation may, in its discretion, determine to be 
necessary or appropriate, the Corporation may make available to 
the receivership, subject to the conditions set forth in 
section 206 and subject to the plan described in section 
210(n)(9), funds for the orderly liquidation of the covered 
financial company. All funds provided by the Corporation under 
this subsection shall have a priority of claims under 
subparagraph (A) or (B) of section 210(b)(1), as applicable, 
including funds used for--
            (1) making loans to, or purchasing any debt 
        obligation of, the covered financial company or any 
        covered subsidiary;
            (2) purchasing or guaranteeing against loss the 
        assets of the covered financial company or any covered 
        subsidiary, directly or through an entity established 
        by the Corporation for such purpose;
            (3) assuming or guaranteeing the obligations of the 
        covered financial company or any covered subsidiary to 
        1 or more third parties;
            (4) taking a lien on any or all assets of the 
        covered financial company or any covered subsidiary, 
        including a first priority lien on all unencumbered 
        assets of the covered financial company or any covered 
        subsidiary to secure repayment of any transactions 
        conducted under this subsection;
            (5) selling or transferring all, or any part, of 
        such acquired assets, liabilities, or obligations of 
        the covered financial company or any covered 
        subsidiary; and
            (6) making payments pursuant to subsections (b)(4), 
        (d)(4), and (h)(5)(E) of section 210.

SEC. 205. ORDERLY LIQUIDATION OF COVERED BROKERS AND DEALERS.

    (a) Appointment of SIPC as Trustee.--
            (1) Appointment.--Upon the appointment of the 
        Corporation as receiver for any covered broker or 
        dealer, the Corporation shall appoint, without any need 
        for court approval, the Securities Investor Protection 
        Corporation to act as trustee for the liquidation under 
        the Securities Investor Protection Act of 1970 (15 
        U.S.C. 78aaa et seq.) of the covered broker or dealer.
            (2) Actions by sipc.--
                    (A) Filing.--Upon appointment of SIPC under 
                paragraph (1), SIPC shall promptly file with 
                any Federal district court of competent 
                jurisdiction specified in section 21 or 27 of 
                the Securities Exchange Act of 1934 (15 U.S.C. 
                78u, 78aa), an application for a protective 
                decree under the Securities Investor Protection 
                Act of 1970 (15 U.S.C. 78aaa et seq.) as to the 
                covered broker or dealer. The Federal district 
                court shall accept and approve the filing, 
                including outside of normal business hours, and 
                shall immediately issue the protective decree 
                as to the covered broker or dealer.
                    (B) Administration by sipc.--Following 
                entry of the protective decree, and except as 
                otherwise provided in this section, the 
                determination of claims and the liquidation of 
                assets retained in the receivership of the 
                covered broker or dealer and not transferred to 
                the bridge financial company shall be 
                administered under the Securities Investor 
                Protection Act of 1970 (15 U.S.C. 78aaa et 
                seq.) by SIPC, as trustee for the covered 
                broker or dealer.
                    (C) Definition of filing date.--For 
                purposes of the liquidation proceeding, the 
                term ``filing date'' means the date on which 
                the Corporation is appointed as receiver of the 
                covered broker or dealer.
                    (D) Determination of claims.--As trustee 
                for the covered broker or dealer, SIPC shall 
                determine and satisfy, consistent with this 
                title and with the Securities Investor 
                Protection Act of 1970 (15 U.S.C. 78aaa et 
                seq.), all claims against the covered broker or 
                dealer arising on or before the filing date.
    (b) Powers and Duties of SIPC.--
            (1) In general.--Except as provided in this 
        section, upon its appointment as trustee for the 
        liquidation of a covered broker or dealer, SIPC shall 
        have all of the powers and duties provided by the 
        Securities Investor Protection Act of 1970 (15 U.S.C. 
        78aaa et seq.), including, without limitation, all 
        rights of action against third parties, and shall 
        conduct such liquidation in accordance with the terms 
        of the Securities Investor Protection Act of 1970 (15 
        U.S.C. 78aaa et seq.), except that SIPC shall have no 
        powers or duties with respect to assets and liabilities 
        transferred by the Corporation from the covered broker 
        or dealer to any bridge financial company established 
        in accordance with this title.
            (2) Limitation of powers.--The exercise by SIPC of 
        powers and functions as trustee under subsection (a) 
        shall not impair or impede the exercise of the powers 
        and duties of the Corporation with regard to--
                    (A) any action, except as otherwise 
                provided in this title--
                            (i) to make funds available under 
                        section 204(d);
                            (ii) to organize, establish, 
                        operate, or terminate any bridge 
                        financial company;
                            (iii) to transfer assets and 
                        liabilities;
                            (iv) to enforce or repudiate 
                        contracts; or
                            (v) to take any other action 
                        relating to such bridge financial 
                        company under section 210; or
                    (B) determining claims under subsection 
                (e).
            (3) Protective decree.--SIPC and the Corporation, 
        in consultation with the Commission, shall jointly 
        determine the terms of the protective decree to be 
        filed by SIPC with any court of competent jurisdiction 
        under section 21 or 27 of the Securities Exchange Act 
        of 1934 (15 U.S.C. 78u, 78aa), as required by 
        subsection (a).
            (4) Qualified financial contracts.--Notwithstanding 
        any provision of the Securities Investor Protection Act 
        of 1970 (15 U.S.C. 78aaa et seq.) to the contrary 
        (including section 5(b)(2)(C) of that Act (15 U.S.C. 
        78eee(b)(2)(C))), the rights and obligations of any 
        party to a qualified financial contract (as that term 
        is defined in section 210(c)(8)) to which a covered 
        broker or dealer for which the Corporation has been 
        appointed receiver is a party shall be governed 
        exclusively by section 210, including the limitations 
        and restrictions contained in section 210(c)(10)(B).
    (c) Limitation on Court Action.--Except as otherwise 
provided in this title, no court may take any action, including 
any action pursuant to the Securities Investor Protection Act 
of 1970 (15 U.S.C. 78aaa et seq.) or the Bankruptcy Code, to 
restrain or affect the exercise of powers or functions of the 
Corporation as receiver for a covered broker or dealer and any 
claims against the Corporation as such receiver shall be 
determined in accordance with subsection (e) and such claims 
shall be limited to money damages.
    (d) Actions by Corporation as Receiver.--
            (1) In general.--Notwithstanding any other 
        provision of this title, no action taken by the 
        Corporation as receiver with respect to a covered 
        broker or dealer shall--
                    (A) adversely affect the rights of a 
                customer to customer property or customer name 
                securities;
                    (B) diminish the amount or timely payment 
                of net equity claims of customers; or
                    (C) otherwise impair the recoveries 
                provided to a customer under the Securities 
                Investor Protection Act of 1970 (15 U.S.C. 
                78aaa et seq.).
            (2) Net proceeds.--The net proceeds from any 
        transfer, sale, or disposition of assets of the covered 
        broker or dealer, or proceeds thereof by the 
        Corporation as receiver for the covered broker or 
        dealer shall be for the benefit of the estate of the 
        covered broker or dealer, as provided in this title.
    (e) Claims Against the Corporation as Receiver.--Any claim 
against the Corporation as receiver for a covered broker or 
dealer for assets transferred to a bridge financial company 
established with respect to such covered broker or dealer--
            (1) shall be determined in accordance with section 
        210(a)(2); and
            (2) may be reviewed by the appropriate district or 
        territorial court of the United States in accordance 
        with section 210(a)(5).
    (f) Satisfaction of Customer Claims.--
            (1) Obligations to customers.--Notwithstanding any 
        other provision of this title, all obligations of a 
        covered broker or dealer or of any bridge financial 
        company established with respect to such covered broker 
        or dealer to a customer relating to, or net equity 
        claims based upon, customer property or customer name 
        securities shall be promptly discharged by SIPC, the 
        Corporation, or the bridge financial company, as 
        applicable, by the delivery of securities or the making 
        of payments to or for the account of such customer, in 
        a manner and in an amount at least as beneficial to the 
        customer as would have been the case had the actual 
        proceeds realized from the liquidation of the covered 
        broker or dealer under this title been distributed in a 
        proceeding under the Securities Investor Protection Act 
        of 1970 (15 U.S.C. 78aaa et seq.) without the 
        appointment of the Corporation as receiver and without 
        any transfer of assets or liabilities to a bridge 
        financial company, and with a filing date as of the 
        date on which the Corporation is appointed as receiver.
            (2) Satisfaction of claims by sipc.--SIPC, as 
        trustee for a covered broker or dealer, shall satisfy 
        customer claims in the manner and amount provided under 
        the Securities Investor Protection Act of 1970 (15 
        U.S.C. 78aaa et seq.), as if the appointment of the 
        Corporation as receiver had not occurred, and with a 
        filing date as of the date on which the Corporation is 
        appointed as receiver. The Corporation shall satisfy 
        customer claims, to the extent that a customer would 
        have received more securities or cash with respect to 
        the allocation of customer property had the covered 
        financial company been subject to a proceeding under 
        the Securities Investor Protection Act (15 U.S.C. 78aaa 
        et seq.) without the appointment of the Corporation as 
        receiver, and with a filing date as of the date on 
        which the Corporation is appointed as receiver.
    (g) Priorities.--
            (1) Customer property.--As trustee for a covered 
        broker or dealer, SIPC shall allocate customer property 
        and deliver customer name securities in accordance with 
        section 8(c) of the Securities Investor Protection Act 
        of 1970 (15 U.S.C. 78fff-2(c)).
            (2) Other claims.--All claims other than those 
        described in paragraph (1) (including any unpaid claim 
        by a customer for the allowed net equity claim of such 
        customer from customer property) shall be paid in 
        accordance with the priorities in section 210(b).
    (h) Rulemaking.--The Commission and the Corporation, after 
consultation with SIPC, shall jointly issue rules to implement 
this section.

SEC. 206. MANDATORY TERMS AND CONDITIONS FOR ALL ORDERLY LIQUIDATION 
                    ACTIONS.

    In taking action under this title, the Corporation shall--
            (1) determine that such action is necessary for 
        purposes of the financial stability of the United 
        States, and not for the purpose of preserving the 
        covered financial company;
            (2) ensure that the shareholders of a covered 
        financial company do not receive payment until after 
        all other claims and the Fund are fully paid;
            (3) ensure that unsecured creditors bear losses in 
        accordance with the priority of claim provisions in 
        section 210;
            (4) ensure that management responsible for the 
        failed condition of the covered financial company is 
        removed (if such management has not already been 
        removed at the time at which the Corporation is 
        appointed receiver);
            (5) ensure that the members of the board of 
        directors (or body performing similar functions) 
        responsible for the failed condition of the covered 
        financial company are removed, if such members have not 
        already been removed at the time the Corporation is 
        appointed as receiver; and
            (6) not take an equity interest in or become a 
        shareholder of any covered financial company or any 
        covered subsidiary.

SEC. 207. DIRECTORS NOT LIABLE FOR ACQUIESCING IN APPOINTMENT OF 
                    RECEIVER.

    The members of the board of directors (or body performing 
similar functions) of a covered financial company shall not be 
liable to the shareholders or creditors thereof for acquiescing 
in or consenting in good faith to the appointment of the 
Corporation as receiver for the covered financial company under 
section 203.

SEC. 208. DISMISSAL AND EXCLUSION OF OTHER ACTIONS.

    (a) In General.--Effective as of the date of the 
appointment of the Corporation as receiver for the covered 
financial company under section 202 or the appointment of SIPC 
as trustee for a covered broker or dealer under section 205, as 
applicable, any case or proceeding commenced with respect to 
the covered financial company under the Bankruptcy Code or the 
Securities Investor Protection Act of 1970 (15 U.S.C. 78aaa et 
seq.) shall be dismissed, upon notice to the bankruptcy court 
(with respect to a case commenced under the Bankruptcy Code), 
and upon notice to SIPC (with respect to a covered broker or 
dealer) and no such case or proceeding may be commenced with 
respect to a covered financial company at any time while the 
orderly liquidation is pending.
    (b) Revesting of Assets.--Effective as of the date of 
appointment of the Corporation as receiver, the assets of a 
covered financial company shall, to the extent they have vested 
in any entity other than the covered financial company as a 
result of any case or proceeding commenced with respect to the 
covered financial company under the Bankruptcy Code, the 
Securities Investor Protection Act of 1970 (15 U.S.C. 78aaa et 
seq.), or any similar provision of State liquidation or 
insolvency law applicable to the covered financial company, 
revest in the covered financial company.
    (c) Limitation.--Notwithstanding subsections (a) and (b), 
any order entered or other relief granted by a bankruptcy court 
prior to the date of appointment of the Corporation as receiver 
shall continue with the same validity as if an orderly 
liquidation had not been commenced.

SEC. 209. RULEMAKING; NON-CONFLICTING LAW.

    The Corporation shall, in consultation with the Council, 
prescribe such rules or regulations as the Corporation 
considers necessary or appropriate to implement this title, 
including rules and regulations with respect to the rights, 
interests, and priorities of creditors, counterparties, 
security entitlement holders, or other persons with respect to 
any covered financial company or any assets or other property 
of or held by such covered financial company, and address the 
potential for conflicts of interest between or among individual 
receiverships established under this title or under the Federal 
Deposit Insurance Act. To the extent possible, the Corporation 
shall seek to harmonize applicable rules and regulations 
promulgated under this section with the insolvency laws that 
would otherwise apply to a covered financial company.

SEC. 210. POWERS AND DUTIES OF THE CORPORATION.

    (a) Powers and Authorities.--
            (1) General powers.--
                    (A) Successor to covered financial 
                company.--The Corporation shall, upon 
                appointment as receiver for a covered financial 
                company under this title, succeed to--
                            (i) all rights, titles, powers, and 
                        privileges of the covered financial 
                        company and its assets, and of any 
                        stockholder, member, officer, or 
                        director of such company; and
                            (ii) title to the books, records, 
                        and assets of any previous receiver or 
                        other legal custodian of such covered 
                        financial company.
                    (B) Operation of the covered financial 
                company during the period of orderly 
                liquidation.--The Corporation, as receiver for 
                a covered financial company, may--
                            (i) take over the assets of and 
                        operate the covered financial company 
                        with all of the powers of the members 
                        or shareholders, the directors, and the 
                        officers of the covered financial 
                        company, and conduct all business of 
                        the covered financial company;
                            (ii) collect all obligations and 
                        money owed to the covered financial 
                        company;
                            (iii) perform all functions of the 
                        covered financial company, in the name 
                        of the covered financial company;
                            (iv) manage the assets and property 
                        of the covered financial company, 
                        consistent with maximization of the 
                        value of the assets in the context of 
                        the orderly liquidation; and
                            (v) provide by contract for 
                        assistance in fulfilling any function, 
                        activity, action, or duty of the 
                        Corporation as receiver.
                    (C) Functions of covered financial company 
                officers, directors, and shareholders.--The 
                Corporation may provide for the exercise of any 
                function by any member or stockholder, 
                director, or officer of any covered financial 
                company for which the Corporation has been 
                appointed as receiver under this title.
                    (D) Additional powers as receiver.--The 
                Corporation shall, as receiver for a covered 
                financial company, and subject to all legally 
                enforceable and perfected security interests 
                and all legally enforceable security 
                entitlements in respect of assets held by the 
                covered financial company, liquidate, and wind-
                up the affairs of a covered financial company, 
                including taking steps to realize upon the 
                assets of the covered financial company, in 
                such manner as the Corporation deems 
                appropriate, including through the sale of 
                assets, the transfer of assets to a bridge 
                financial company established under subsection 
                (h), or the exercise of any other rights or 
                privileges granted to the receiver under this 
                section.
                    (E) Additional powers with respect to 
                failing subsidiaries of a covered financial 
                company.--
                            (i) In general.--In any case in 
                        which a receiver is appointed for a 
                        covered financial company under section 
                        202, the Corporation may appoint itself 
                        as receiver of any covered subsidiary 
                        of the covered financial company that 
                        is organized under Federal law or the 
                        laws of any State, if the Corporation 
                        and the Secretary jointly determine 
                        that--
                                    (I) the covered subsidiary 
                                is in default or in danger of 
                                default;
                                    (II) such action would 
                                avoid or mitigate serious 
                                adverse effects on the 
                                financial stability or economic 
                                conditions of the United 
                                States; and
                                    (III) such action would 
                                facilitate the orderly 
                                liquidation of the covered 
                                financial company.
                            (ii) Treatment as covered financial 
                        company.--If the Corporation is 
                        appointed as receiver of a covered 
                        subsidiary of a covered financial 
                        company under clause (i), the covered 
                        subsidiary shall thereafter be 
                        considered a covered financial company 
                        under this title, and the Corporation 
                        shall thereafter have all the powers 
                        and rights with respect to that covered 
                        subsidiary as it has with respect to a 
                        covered financial company under this 
                        title.
                    (F) Organization of bridge companies.--The 
                Corporation, as receiver for a covered 
                financial company, may organize a bridge 
                financial company under subsection (h).
                    (G) Merger; transfer of assets and 
                liabilities.--
                            (i) In general.--Subject to clauses 
                        (ii) and (iii), the Corporation, as 
                        receiver for a covered financial 
                        company, may--
                                    (I) merge the covered 
                                financial company with another 
                                company; or
                                    (II) transfer any asset or 
                                liability of the covered 
                                financial company (including 
                                any assets and liabilities held 
                                by the covered financial 
                                company for security 
                                entitlement holders, any 
                                customer property, or any 
                                assets and liabilities 
                                associated with any trust or 
                                custody business) without 
                                obtaining any approval, 
                                assignment, or consent with 
                                respect to such transfer.
                            (ii) Federal agency approval; 
                        antitrust review.--With respect to a 
                        transaction described in clause (i)(I) 
                        that requires approval by a Federal 
                        agency--
                                    (I) the transaction may not 
                                be consummated before the 5th 
                                calendar day after the date of 
                                approval by the Federal agency 
                                responsible for such approval;
                                    (II) if, in connection with 
                                any such approval, a report on 
                                competitive factors is 
                                required, the Federal agency 
                                responsible for such approval 
                                shall promptly notify the 
                                Attorney General of the United 
                                States of the proposed 
                                transaction, and the Attorney 
                                General shall provide the 
                                required report not later than 
                                10 days after the date of the 
                                request; and
                                    (III) if notification under 
                                section 7A of the Clayton Act 
                                is required with respect to 
                                such transaction, then the 
                                required waiting period shall 
                                end on the 15th day after the 
                                date on which the Attorney 
                                General and the Federal Trade 
                                Commission receive such 
                                notification, unless the 
                                waiting period is terminated 
                                earlier under subsection (b)(2) 
                                of such section 7A, or is 
                                extended pursuant to subsection 
                                (e)(2) of such section 7A.
                            (iii) Setoff.--Subject to the other 
                        provisions of this title, any 
                        transferee of assets from a receiver, 
                        including a bridge financial company, 
                        shall be subject to such claims or 
                        rights as would prevail over the rights 
                        of such transferee in such assets under 
                        applicable noninsolvency law.
                    (H) Payment of valid obligations.--The 
                Corporation, as receiver for a covered 
                financial company, shall, to the extent that 
                funds are available, pay all valid obligations 
                of the covered financial company that are due 
                and payable at the time of the appointment of 
                the Corporation as receiver, in accordance with 
                the prescriptions and limitations of this 
                title.
                    (I) Applicable noninsolvency law.--Except 
                as may otherwise be provided in this title, the 
                applicable noninsolvency law shall be 
                determined by the noninsolvency choice of law 
                rules otherwise applicable to the claims, 
                rights, titles, persons, or entities at issue.
                    (J) Subpoena authority.--
                            (i) In general.--The Corporation, 
                        as receiver for a covered financial 
                        company, may, for purposes of carrying 
                        out any power, authority, or duty with 
                        respect to the covered financial 
                        company (including determining any 
                        claim against the covered financial 
                        company and determining and realizing 
                        upon any asset of any person in the 
                        course of collecting money due the 
                        covered financial company), exercise 
                        any power established under section 
                        8(n) of the Federal Deposit Insurance 
                        Act, as if the Corporation were the 
                        appropriate Federal banking agency for 
                        the covered financial company, and the 
                        covered financial company were an 
                        insured depository institution.
                            (ii) Rule of construction.--This 
                        subparagraph may not be construed as 
                        limiting any rights that the 
                        Corporation, in any capacity, might 
                        otherwise have to exercise any powers 
                        described in clause (i) or under any 
                        other provision of law.
                    (K) Incidental powers.--The Corporation, as 
                receiver for a covered financial company, may 
                exercise all powers and authorities 
                specifically granted to receivers under this 
                title, and such incidental powers as shall be 
                necessary to carry out such powers under this 
                title.
                    (L) Utilization of private sector.--In 
                carrying out its responsibilities in the 
                management and disposition of assets from the 
                covered financial company, the Corporation, as 
                receiver for a covered financial company, may 
                utilize the services of private persons, 
                including real estate and loan portfolio asset 
                management, property management, auction 
                marketing, legal, and brokerage services, if 
                such services are available in the private 
                sector, and the Corporation determines that 
                utilization of such services is practicable, 
                efficient, and cost effective.
                    (M) Shareholders and creditors of covered 
                financial company.--Notwithstanding any other 
                provision of law, the Corporation, as receiver 
                for a covered financial company, shall succeed 
                by operation of law to the rights, titles, 
                powers, and privileges described in 
                subparagraph (A), and shall terminate all 
                rights and claims that the stockholders and 
                creditors of the covered financial company may 
                have against the assets of the covered 
                financial company or the Corporation arising 
                out of their status as stockholders or 
                creditors, except for their right to payment, 
                resolution, or other satisfaction of their 
                claims, as permitted under this section. The 
                Corporation shall ensure that shareholders and 
                unsecured creditors bear losses, consistent 
                with the priority of claims provisions under 
                this section.
                    (N) Coordination with foreign financial 
                authorities.--The Corporation, as receiver for 
                a covered financial company, shall coordinate, 
                to the maximum extent possible, with the 
                appropriate foreign financial authorities 
                regarding the orderly liquidation of any 
                covered financial company that has assets or 
                operations in a country other than the United 
                States.
                    (O) Restriction on transfers.--
                            (i) Selection of accounts for 
                        transfer.--If the Corporation 
                        establishes one or more bridge 
                        financial companies with respect to a 
                        covered broker or dealer, the 
                        Corporation shall transfer to one of 
                        such bridge financial companies, all 
                        customer accounts of the covered broker 
                        or dealer, and all associated customer 
                        name securities and customer property, 
                        unless the Corporation, after 
                        consulting with the Commission and 
                        SIPC, determines that--
                                    (I) the customer accounts, 
                                customer name securities, and 
                                customer property are likely to 
                                be promptly transferred to 
                                another broker or dealer that 
                                is registered with the 
                                Commission under section 15(b) 
                                of the Securities Exchange Act 
                                of 1934 (15 U.S.C. 73o(b)) and 
                                is a member of SIPC; or
                                    (II) the transfer of the 
                                accounts to a bridge financial 
                                company would materially 
                                interfere with the ability of 
                                the Corporation to avoid or 
                                mitigate serious adverse 
                                effects on financial stability 
                                or economic conditions in the 
                                United States.
                            (ii) Transfer of property.--SIPC, 
                        as trustee for the liquidation of the 
                        covered broker or dealer, and the 
                        Commission shall provide any and all 
                        reasonable assistance necessary to 
                        complete such transfers by the 
                        Corporation.
                            (iii) Customer consent and court 
                        approval not required.--Neither 
                        customer consent nor court approval 
                        shall be required to transfer any 
                        customer accounts or associated 
                        customer name securities or customer 
                        property to a bridge financial company 
                        in accordance with this section.
                            (iv) Notification of sipc and 
                        sharing of information.--The 
                        Corporation shall identify to SIPC the 
                        customer accounts and associated 
                        customer name securities and customer 
                        property transferred to the bridge 
                        financial company. The Corporation and 
                        SIPC shall cooperate in the sharing of 
                        any information necessary for each 
                        entity to discharge its obligations 
                        under this title and under the 
                        Securities Investor Protection Act of 
                        1970 (15 U.S.C. 78aaa et seq.) 
                        including by providing access to the 
                        books and records of the covered 
                        financial company and any bridge 
                        financial company established in 
                        accordance with this title.
            (2) Determination of claims.--
                    (A) In general.--The Corporation, as 
                receiver for a covered financial company, shall 
                report on claims, as set forth in section 
                203(c)(3). Subject to paragraph (4) of this 
                subsection, the Corporation, as receiver for a 
                covered financial company, shall determine 
                claims in accordance with the requirements of 
                this subsection and regulations prescribed 
                under section 209.
                    (B) Notice requirements.--The Corporation, 
                as receiver for a covered financial company, in 
                any case involving the liquidation or winding 
                up of the affairs of a covered financial 
                company, shall--
                            (i) promptly publish a notice to 
                        the creditors of the covered financial 
                        company to present their claims, 
                        together with proof, to the receiver by 
                        a date specified in the notice, which 
                        shall be not earlier than 90 days after 
                        the date of publication of such notice; 
                        and
                            (ii) republish such notice 1 month 
                        and 2 months, respectively, after the 
                        date of publication under clause (i).
                    (C) Mailing required.--The Corporation as 
                receiver shall mail a notice similar to the 
                notice published under clause (i) or (ii) of 
                subparagraph (B), at the time of such 
                publication, to any creditor shown on the books 
                and records of the covered financial company--
                            (i) at the last address of the 
                        creditor appearing in such books;
                            (ii) in any claim filed by the 
                        claimant; or
                            (iii) upon discovery of the name 
                        and address of a claimant not appearing 
                        on the books and records of the covered 
                        financial company, not later than 30 
                        days after the date of the discovery of 
                        such name and address.
            (3) Procedures for resolution of claims.--
                    (A) Decision period.--
                            (i) In general.--Prior to the 180th 
                        day after the date on which a claim 
                        against a covered financial company is 
                        filed with the Corporation as receiver, 
                        or such later date as may be agreed as 
                        provided in clause (ii), the 
                        Corporation shall notify the claimant 
                        whether it allows or disallows the 
                        claim, in accordance with subparagraphs 
                        (B), (C), and (D).
                            (ii) Extension of time.--By written 
                        agreement executed not later than 180 
                        days after the date on which a claim 
                        against a covered financial company is 
                        filed with the Corporation, the period 
                        described in clause (i) may be extended 
                        by written agreement between the 
                        claimant and the Corporation. Failure 
                        to notify the claimant of any 
                        disallowance within the time period set 
                        forth in clause (i), as it may be 
                        extended by agreement under this 
                        clause, shall be deemed to be a 
                        disallowance of such claim, and the 
                        claimant may file or continue an action 
                        in court, as provided in paragraph (4).
                            (iii) Mailing of notice 
                        sufficient.--The requirements of clause 
                        (i) shall be deemed to be satisfied if 
                        the notice of any decision with respect 
                        to any claim is mailed to the last 
                        address of the claimant which appears--
                                    (I) on the books, records, 
                                or both of the covered 
                                financial company;
                                    (II) in the claim filed by 
                                the claimant; or
                                    (III) in documents 
                                submitted in proof of the 
                                claim.
                            (iv) Contents of notice of 
                        disallowance.--If the Corporation as 
                        receiver disallows any claim filed 
                        under clause (i), the notice to the 
                        claimant shall contain--
                                    (I) a statement of each 
                                reason for the disallowance; 
                                and
                                    (II) the procedures 
                                required to file or continue an 
                                action in court, as provided in 
                                paragraph (4).
                    (B) Allowance of proven claim.--The 
                receiver shall allow any claim received by the 
                receiver on or before the date specified in the 
                notice under paragraph (2)(B)(i), which is 
                proved to the satisfaction of the receiver.
                    (C) Disallowance of claims filed after end 
                of filing period.--
                            (i) In general.--Except as provided 
                        in clause (ii), claims filed after the 
                        date specified in the notice published 
                        under paragraph (2)(B)(i) shall be 
                        disallowed, and such disallowance shall 
                        be final.
                            (ii) Certain exceptions.--Clause 
                        (i) shall not apply with respect to any 
                        claim filed by a claimant after the 
                        date specified in the notice published 
                        under paragraph (2)(B)(i), and such 
                        claim may be considered by the receiver 
                        under subparagraph (B), if--
                                    (I) the claimant did not 
                                receive notice of the 
                                appointment of the receiver in 
                                time to file such claim before 
                                such date; and
                                    (II) such claim is filed in 
                                time to permit payment of such 
                                claim.
                    (D) Authority to disallow claims.--
                            (i) In general.--The Corporation 
                        may disallow any portion of any claim 
                        by a creditor or claim of a security, 
                        preference, setoff, or priority which 
                        is not proved to the satisfaction of 
                        the Corporation.
                            (ii) Payments to undersecured 
                        creditors.--In the case of a claim 
                        against a covered financial company 
                        that is secured by any property or 
                        other asset of such covered financial 
                        company, the receiver--
                                    (I) may treat the portion 
                                of such claim which exceeds an 
                                amount equal to the fair market 
                                value of such property or other 
                                asset as an unsecured claim; 
                                and
                                    (II) may not make any 
                                payment with respect to such 
                                unsecured portion of the claim, 
                                other than in connection with 
                                the disposition of all claims 
                                of unsecured creditors of the 
                                covered financial company.
                            (iii) Exceptions.--No provision of 
                        this paragraph shall apply with respect 
                        to--
                                    (I) any extension of credit 
                                from any Federal reserve bank, 
                                or the Corporation, to any 
                                covered financial company; or
                                    (II) subject to clause 
                                (ii), any legally enforceable 
                                and perfected security interest 
                                in the assets of the covered 
                                financial company securing any 
                                such extension of credit.
                    (E) Legal effect of filing.--
                            (i) Statute of limitations 
                        tolled.--For purposes of any applicable 
                        statute of limitations, the filing of a 
                        claim with the receiver shall 
                        constitute a commencement of an action.
                            (ii) No prejudice to other 
                        actions.--Subject to paragraph (8), the 
                        filing of a claim with the receiver 
                        shall not prejudice any right of the 
                        claimant to continue any action which 
                        was filed before the date of 
                        appointment of the receiver for the 
                        covered financial company.
            (4) Judicial determination of claims.--
                    (A) In general.--Subject to subparagraph 
                (B), a claimant may file suit on a claim (or 
                continue an action commenced before the date of 
                appointment of the Corporation as receiver) in 
                the district or territorial court of the United 
                States for the district within which the 
                principal place of business of the covered 
                financial company is located (and such court 
                shall have jurisdiction to hear such claim).
                    (B) Timing.--A claim under subparagraph (A) 
                may be filed before the end of the 60-day 
                period beginning on the earlier of--
                            (i) the end of the period described 
                        in paragraph (3)(A)(i) (or, if extended 
                        by agreement of the Corporation and the 
                        claimant, the period described in 
                        paragraph (3)(A)(ii)) with respect to 
                        any claim against a covered financial 
                        company for which the Corporation is 
                        receiver; or
                            (ii) the date of any notice of 
                        disallowance of such claim pursuant to 
                        paragraph (3)(A)(i).
                    (C) Statute of limitations.--If any 
                claimant fails to file suit on such claim (or 
                to continue an action on such claim commenced 
                before the date of appointment of the 
                Corporation as receiver) prior to the end of 
                the 60-day period described in subparagraph 
                (B), the claim shall be deemed to be disallowed 
                (other than any portion of such claim which was 
                allowed by the receiver) as of the end of such 
                period, such disallowance shall be final, and 
                the claimant shall have no further rights or 
                remedies with respect to such claim.
            (5) Expedited determination of claims.--
                    (A) Procedure required.--The Corporation 
                shall establish a procedure for expedited 
                relief outside of the claims process 
                established under paragraph (3), for any 
                claimant that alleges--
                            (i) having a legally valid and 
                        enforceable or perfected security 
                        interest in property of a covered 
                        financial company or control of any 
                        legally valid and enforceable security 
                        entitlement in respect of any asset 
                        held by the covered financial company 
                        for which the Corporation has been 
                        appointed receiver; and
                            (ii) that irreparable injury will 
                        occur if the claims procedure 
                        established under paragraph (3) is 
                        followed.
                    (B) Determination period.--Prior to the end 
                of the 90-day period beginning on the date on 
                which a claim is filed in accordance with the 
                procedures established pursuant to subparagraph 
                (A), the Corporation shall--
                            (i) determine--
                                    (I) whether to allow or 
                                disallow such claim, or any 
                                portion thereof; or
                                    (II) whether such claim 
                                should be determined pursuant 
                                to the procedures established 
                                pursuant to paragraph (3);
                            (ii) notify the claimant of the 
                        determination; and
                            (iii) if the claim is disallowed, 
                        provide a statement of each reason for 
                        the disallowance and the procedure for 
                        obtaining a judicial determination.
                    (C) Period for filing or renewing suit.--
                Any claimant who files a request for expedited 
                relief shall be permitted to file suit (or 
                continue a suit filed before the date of 
                appointment of the Corporation as receiver 
                seeking a determination of the rights of the 
                claimant with respect to such security interest 
                (or such security entitlement) after the 
                earlier of--
                            (i) the end of the 90-day period 
                        beginning on the date of the filing of 
                        a request for expedited relief; or
                            (ii) the date on which the 
                        Corporation denies the claim or a 
                        portion thereof.
                    (D) Statute of limitations.--If an action 
                described in subparagraph (C) is not filed, or 
                the motion to renew a previously filed suit is 
                not made, before the end of the 30-day period 
                beginning on the date on which such action or 
                motion may be filed in accordance with 
                subparagraph (C), the claim shall be deemed to 
                be disallowed as of the end of such period 
                (other than any portion of such claim which was 
                allowed by the receiver), such disallowance 
                shall be final, and the claimant shall have no 
                further rights or remedies with respect to such 
                claim.
                    (E) Legal effect of filing.--
                            (i) Statute of limitations 
                        tolled.--For purposes of any applicable 
                        statute of limitations, the filing of a 
                        claim with the receiver shall 
                        constitute a commencement of an action.
                            (ii) No prejudice to other 
                        actions.--Subject to paragraph (8), the 
                        filing of a claim with the receiver 
                        shall not prejudice any right of the 
                        claimant to continue any action which 
                        was filed before the appointment of the 
                        Corporation as receiver for the covered 
                        financial company.
            (6) Agreements against interest of the receiver.--
        No agreement that tends to diminish or defeat the 
        interest of the Corporation as receiver in any asset 
        acquired by the receiver under this section shall be 
        valid against the receiver, unless such agreement--
                    (A) is in writing;
                    (B) was executed by an authorized officer 
                or representative of the covered financial 
                company, or confirmed in the ordinary course of 
                business by the covered financial company; and
                    (C) has been, since the time of its 
                execution, an official record of the company or 
                the party claiming under the agreement provides 
                documentation, acceptable to the receiver, of 
                such agreement and its authorized execution or 
                confirmation by the covered financial company.
            (7) Payment of claims.--
                    (A) In general.--Subject to subparagraph 
                (B), the Corporation as receiver may, in its 
                discretion and to the extent that funds are 
                available, pay creditor claims, in such manner 
                and amounts as are authorized under this 
                section, which are--
                            (i) allowed by the receiver;
                            (ii) approved by the receiver 
                        pursuant to a final determination 
                        pursuant to paragraph (3) or (5), as 
                        applicable; or
                            (iii) determined by the final 
                        judgment of a court of competent 
                        jurisdiction.
                    (B) Limitation.--A creditor shall, in no 
                event, receive less than the amount that the 
                creditor is entitled to receive under 
                paragraphs (2) and (3) of subsection (d), as 
                applicable.
                    (C) Payment of dividends on claims.--The 
                Corporation as receiver may, in its sole 
                discretion, and to the extent otherwise 
                permitted by this section, pay dividends on 
                proven claims at any time, and no liability 
                shall attach to the Corporation as receiver, by 
                reason of any such payment or for failure to 
                pay dividends to a claimant whose claim is not 
                proved at the time of any such payment.
                    (D) Rulemaking by the corporation.--The 
                Corporation may prescribe such rules, including 
                definitions of terms, as the Corporation deems 
                appropriate to establish an interest rate for 
                or to make payments of post-insolvency interest 
                to creditors holding proven claims against the 
                receivership estate of a covered financial 
                company, except that no such interest shall be 
                paid until the Corporation as receiver has 
                satisfied the principal amount of all creditor 
                claims.
            (8) Suspension of legal actions.--
                    (A) In general.--After the appointment of 
                the Corporation as receiver for a covered 
                financial company, the Corporation may request 
                a stay in any judicial action or proceeding in 
                which such covered financial company is or 
                becomes a party, for a period of not to exceed 
                90 days.
                    (B) Grant of stay by all courts required.--
                Upon receipt of a request by the Corporation 
                pursuant to subparagraph (A), the court shall 
                grant such stay as to all parties.
            (9) Additional rights and duties.--
                    (A) Prior final adjudication.--The 
                Corporation shall abide by any final, non-
                appealable judgment of any court of competent 
                jurisdiction that was rendered before the 
                appointment of the Corporation as receiver.
                    (B) Rights and remedies of receiver.--In 
                the event of any appealable judgment, the 
                Corporation as receiver shall--
                            (i) have all the rights and 
                        remedies available to the covered 
                        financial company (before the date of 
                        appointment of the Corporation as 
                        receiver under section 202) and the 
                        Corporation, including removal to 
                        Federal court and all appellate rights; 
                        and
                            (ii) not be required to post any 
                        bond in order to pursue such remedies.
                    (C) No attachment or execution.--No 
                attachment or execution may be issued by any 
                court upon assets in the possession of the 
                Corporation as receiver for a covered financial 
                company.
                    (D) Limitation on judicial review.--Except 
                as otherwise provided in this title, no court 
                shall have jurisdiction over--
                            (i) any claim or action for payment 
                        from, or any action seeking a 
                        determination of rights with respect 
                        to, the assets of any covered financial 
                        company for which the Corporation has 
                        been appointed receiver, including any 
                        assets which the Corporation may 
                        acquire from itself as such receiver; 
                        or
                            (ii) any claim relating to any act 
                        or omission of such covered financial 
                        company or the Corporation as receiver.
                    (E) Disposition of assets.--In exercising 
                any right, power, privilege, or authority as 
                receiver in connection with any covered 
                financial company for which the Corporation is 
                acting as receiver under this section, the 
                Corporation shall, to the greatest extent 
                practicable, conduct its operations in a manner 
                that--
                            (i) maximizes the net present value 
                        return from the sale or disposition of 
                        such assets;
                            (ii) minimizes the amount of any 
                        loss realized in the resolution of 
                        cases;
                            (iii) mitigates the potential for 
                        serious adverse effects to the 
                        financial system;
                            (iv) ensures timely and adequate 
                        competition and fair and consistent 
                        treatment of offerors; and
                            (v) prohibits discrimination on the 
                        basis of race, sex, or ethnic group in 
                        the solicitation and consideration of 
                        offers.
            (10) Statute of limitations for actions brought by 
        receiver.--
                    (A) In general.--Notwithstanding any 
                provision of any contract, the applicable 
                statute of limitations with regard to any 
                action brought by the Corporation as receiver 
                for a covered financial company shall be--
                            (i) in the case of any contract 
                        claim, the longer of--
                                    (I) the 6-year period 
                                beginning on the date on which 
                                the claim accrues; or
                                    (II) the period applicable 
                                under State law; and
                            (ii) in the case of any tort claim, 
                        the longer of--
                                    (I) the 3-year period 
                                beginning on the date on which 
                                the claim accrues; or
                                    (II) the period applicable 
                                under State law.
                    (B) Date on which a claim accrues.--For 
                purposes of subparagraph (A), the date on which 
                the statute of limitations begins to run on any 
                claim described in subparagraph (A) shall be 
                the later of--
                            (i) the date of the appointment of 
                        the Corporation as receiver under this 
                        title; or
                            (ii) the date on which the cause of 
                        action accrues.
                    (C) Revival of expired state causes of 
                action.--
                            (i) In general.--In the case of any 
                        tort claim described in clause (ii) for 
                        which the applicable statute of 
                        limitations under State law has expired 
                        not more than 5 years before the date 
                        of appointment of the Corporation as 
                        receiver for a covered financial 
                        company, the Corporation may bring an 
                        action as receiver on such claim 
                        without regard to the expiration of the 
                        statute of limitations.
                            (ii) Claims described.--A tort 
                        claim referred to in clause (i) is a 
                        claim arising from fraud, intentional 
                        misconduct resulting in unjust 
                        enrichment, or intentional misconduct 
                        resulting in substantial loss to the 
                        covered financial company.
            (11) Avoidable transfers.--
                    (A) Fraudulent transfers.--The Corporation, 
                as receiver for any covered financial company, 
                may avoid a transfer of any interest of the 
                covered financial company in property, or any 
                obligation incurred by the covered financial 
                company, that was made or incurred at or within 
                2 years before the date on which the 
                Corporation was appointed receiver, if--
                            (i) the covered financial company 
                        voluntarily or involuntarily--
                                    (I) made such transfer or 
                                incurred such obligation with 
                                actual intent to hinder, delay, 
                                or defraud any entity to which 
                                the covered financial company 
                                was or became, on or after the 
                                date on which such transfer was 
                                made or such obligation was 
                                incurred, indebted; or
                                    (II) received less than a 
                                reasonably equivalent value in 
                                exchange for such transferor 
                                obligation; and
                            (ii) the covered financial company 
                        voluntarily or involuntarily--
                                    (I) was insolvent on the 
                                date that such transfer was 
                                made or such obligation was 
                                incurred, or became insolvent 
                                as a result of such transfer or 
                                obligation;
                                    (II) was engaged in 
                                business or a transaction, or 
                                was about to engage in business 
                                or a transaction, for which any 
                                property remaining with the 
                                covered financial company was 
                                an unreasonably small capital;
                                    (III) intended to incur, or 
                                believed that the covered 
                                financial company would incur, 
                                debts that would be beyond the 
                                ability of the covered 
                                financial company to pay as 
                                such debts matured; or
                                    (IV) made such transfer to 
                                or for the benefit of an 
                                insider, or incurred such 
                                obligation to or for the 
                                benefit of an insider, under an 
                                employment contract and not in 
                                the ordinary course of 
                                business.
                    (B) Preferential transfers.--The 
                Corporation as receiver for any covered 
                financial company may avoid a transfer of an 
                interest of the covered financial company in 
                property--
                            (i) to or for the benefit of a 
                        creditor;
                            (ii) for or on account of an 
                        antecedent debt that was owed by the 
                        covered financial company before the 
                        transfer was made;
                            (iii) that was made while the 
                        covered financial company was 
                        insolvent;
                            (iv) that was made--
                                    (I) 90 days or less before 
                                the date on which the 
                                Corporation was appointed 
                                receiver; or
                                    (II) more than 90 days, but 
                                less than 1 year before the 
                                date on which the Corporation 
                                was appointed receiver, if such 
                                creditor at the time of the 
                                transfer was an insider; and
                            (v) that enables the creditor to 
                        receive more than the creditor would 
                        receive if--
                                    (I) the covered financial 
                                company had been liquidated 
                                under chapter 7 of the 
                                Bankruptcy Code;
                                    (II) the transfer had not 
                                been made; and
                                    (III) the creditor received 
                                payment of such debt to the 
                                extent provided by the 
                                provisions of chapter 7 of the 
                                Bankruptcy Code.
                    (C) Post-receivership transactions.--The 
                Corporation as receiver for any covered 
                financial company may avoid a transfer of 
                property of the receivership that occurred 
                after the Corporation was appointed receiver 
                that was not authorized under this title by the 
                Corporation as receiver.
                    (D) Right of recovery.--To the extent that 
                a transfer is avoided under subparagraph (A), 
                (B), or (C), the Corporation may recover, for 
                the benefit of the covered financial company, 
                the property transferred or, if a court so 
                orders, the value of such property (at the time 
                of such transfer) from--
                            (i) the initial transferee of such 
                        transfer or the person for whose 
                        benefit such transfer was made; or
                            (ii) any immediate or mediate 
                        transferee of any such initial 
                        transferee.
                    (E) Rights of transferee or obligee.--The 
                Corporation may not recover under subparagraph 
                (D)(ii) from--
                            (i) any transferee that takes for 
                        value, including in satisfaction of or 
                        to secure a present or antecedent debt, 
                        in good faith, and without knowledge of 
                        the voidability of the transfer 
                        avoided; or
                            (ii) any immediate or mediate good 
                        faith transferee of such transferee.
                    (F) Defenses.--Subject to the other 
                provisions of this title--
                            (i) a transferee or obligee from 
                        which the Corporation seeks to recover 
                        a transfer or to avoid an obligation 
                        under subparagraph (A), (B), (C), or 
                        (D) shall have the same defenses 
                        available to a transferee or obligee 
                        from which a trustee seeks to recover a 
                        transfer or avoid an obligation under 
                        sections 547, 548, and 549 of the 
                        Bankruptcy Code; and
                            (ii) the authority of the 
                        Corporation to recover a transfer or 
                        avoid an obligation shall be subject to 
                        subsections (b) and (c) of section 546, 
                        section 547(c), and section 548(c) of 
                        the Bankruptcy Code.
                    (G) Rights under this section.--The rights 
                of the Corporation as receiver under this 
                section shall be superior to any rights of a 
                trustee or any other party (other than a 
                Federal agency) under the Bankruptcy Code.
                    (H) Rules of construction; definitions.--
                For purposes of--
                            (i) subparagraphs (A) and (B)--
                                    (I) the term ``insider'' 
                                has the same meaning as in 
                                section 101(31) of the 
                                Bankruptcy Code;
                                    (II) a transfer is made 
                                when such transfer is so 
                                perfected that a bona fide 
                                purchaser from the covered 
                                financial company against whom 
                                applicable law permits such 
                                transfer to be perfected cannot 
                                acquire an interest in the 
                                property transferred that is 
                                superior to the interest in 
                                such property of the 
                                transferee, but if such 
                                transfer is not so perfected 
                                before the date on which the 
                                Corporation is appointed as 
                                receiver for the covered 
                                financial company, such 
                                transfer is made immediately 
                                before the date of such 
                                appointment; and
                                    (III) the term ``value'' 
                                means property, or satisfaction 
                                or securing of a present or 
                                antecedent debt of the covered 
                                financial company, but does not 
                                include an unperformed promise 
                                to furnish support to the 
                                covered financial company; and
                            (ii) subparagraph (B)--
                                    (I) the covered financial 
                                company is presumed to have 
                                been insolvent on and during 
                                the 90-day period immediately 
                                preceding the date of 
                                appointment of the Corporation 
                                as receiver; and
                                    (II) the term ``insolvent'' 
                                has the same meaning as in 
                                section 101(32) of the 
                                Bankruptcy Code.
            (12) Setoff.--
                    (A) Generally.--Except as otherwise 
                provided in this title, any right of a creditor 
                to offset a mutual debt owed by the creditor to 
                any covered financial company that arose before 
                the Corporation was appointed as receiver for 
                the covered financial company against a claim 
                of such creditor may be asserted if enforceable 
                under applicable noninsolvency law, except to 
                the extent that--
                            (i) the claim of the creditor 
                        against the covered financial company 
                        is disallowed;
                            (ii) the claim was transferred, by 
                        an entity other than the covered 
                        financial company, to the creditor--
                                    (I) after the Corporation 
                                was appointed as receiver of 
                                the covered financial company; 
                                or
                                    (II)(aa) after the 90-day 
                                period preceding the date on 
                                which the Corporation was 
                                appointed as receiver for the 
                                covered financial company; and
                                    (bb) while the covered 
                                financial company was insolvent 
                                (except for a setoff in 
                                connection with a qualified 
                                financial contract); or
                            (iii) the debt owed to the covered 
                        financial company was incurred by the 
                        covered financial company--
                                    (I) after the 90-day period 
                                preceding the date on which the 
                                Corporation was appointed as 
                                receiver for the covered 
                                financial company;
                                    (II) while the covered 
                                financial company was 
                                insolvent; and
                                    (III) for the purpose of 
                                obtaining a right of setoff 
                                against the covered financial 
                                company (except for a setoff in 
                                connection with a qualified 
                                financial contract).
                    (B) Insufficiency.--
                            (i) In general.--Except with 
                        respect to a setoff in connection with 
                        a qualified financial contract, if a 
                        creditor offsets a mutual debt owed to 
                        the covered financial company against a 
                        claim of the covered financial company 
                        on or within the 90-day period 
                        preceding the date on which the 
                        Corporation is appointed as receiver 
                        for the covered financial company, the 
                        Corporation may recover from the 
                        creditor the amount so offset, to the 
                        extent that any insufficiency on the 
                        date of such setoff is less than the 
                        insufficiency on the later of--
                                    (I) the date that is 90 
                                days before the date on which 
                                the Corporation is appointed as 
                                receiver for the covered 
                                financial company; or
                                    (II) the first day on which 
                                there is an insufficiency 
                                during the 90-day period 
                                preceding the date on which the 
                                Corporation is appointed as 
                                receiver for the covered 
                                financial company.
                            (ii) Definition of insufficiency.--
                        In this subparagraph, the term 
                        ``insufficiency'' means the amount, if 
                        any, by which a claim against the 
                        covered financial company exceeds a 
                        mutual debt owed to the covered 
                        financial company by the holder of such 
                        claim.
                    (C) Insolvency.--The term ``insolvent'' has 
                the same meaning as in section 101(32) of the 
                Bankruptcy Code.
                    (D) Presumption of insolvency.--For 
                purposes of this paragraph, the covered 
                financial company is presumed to have been 
                insolvent on and during the 90-day period 
                preceding the date of appointment of the 
                Corporation as receiver.
                    (E) Limitation.--Nothing in this paragraph 
                (12) shall be the basis for any right of setoff 
                where no such right exists under applicable 
                noninsolvency law.
                    (F) Priority claim.--Except as otherwise 
                provided in this title, the Corporation as 
                receiver for the covered financial company may 
                sell or transfer any assets free and clear of 
                the setoff rights of any party, except that 
                such party shall be entitled to a claim, 
                subordinate to the claims payable under 
                subparagraphs (A), (B), (C), and (D) of 
                subsection (b)(1), but senior to all other 
                unsecured liabilities defined in subsection 
                (b)(1)(E), in an amount equal to the value of 
                such setoff rights.
            (13) Attachment of assets and other injunctive 
        relief.--Subject to paragraph (14), any court of 
        competent jurisdiction may, at the request of the 
        Corporation as receiver for a covered financial 
        company, issue an order in accordance with Rule 65 of 
        the Federal Rules of Civil Procedure, including an 
        order placing the assets of any person designated by 
        the Corporation under the control of the court and 
        appointing a trustee to hold such assets.
            (14) Standards.--
                    (A) Showing.--Rule 65 of the Federal Rules 
                of Civil Procedure shall apply with respect to 
                any proceeding under paragraph (13), without 
                regard to the requirement that the applicant 
                show that the injury, loss, or damage is 
                irreparable and immediate.
                    (B) State proceeding.--If, in the case of 
                any proceeding in a State court, the court 
                determines that rules of civil procedure 
                available under the laws of the State provide 
                substantially similar protections of the right 
                of the parties to due process as provided under 
                Rule 65 (as modified with respect to such 
                proceeding by subparagraph (A)), the relief 
                sought by the Corporation pursuant to paragraph 
                (14) may be requested under the laws of such 
                State.
            (15) Treatment of claims arising from breach of 
        contracts executed by the corporation as receiver.--
        Notwithstanding any other provision of this title, any 
        final and non-appealable judgment for monetary damages 
        entered against the Corporation as receiver for a 
        covered financial company for the breach of an 
        agreement executed or approved by the Corporation after 
        the date of its appointment shall be paid as an 
        administrative expense of the receiver. Nothing in this 
        paragraph shall be construed to limit the power of a 
        receiver to exercise any rights under contract or law, 
        including to terminate, breach, cancel, or otherwise 
        discontinue such agreement.
            (16) Accounting and recordkeeping requirements.--
                    (A) In general.--The Corporation as 
                receiver for a covered financial company shall, 
                consistent with the accounting and reporting 
                practices and procedures established by the 
                Corporation, maintain a full accounting of each 
                receivership or other disposition of any 
                covered financial company.
                    (B) Annual accounting or report.--With 
                respect to each receivership to which the 
                Corporation is appointed, the Corporation shall 
                make an annual accounting or report, as 
                appropriate, available to the Secretary and the 
                Comptroller General of the United States.
                    (C) Availability of reports.--Any report 
                prepared pursuant to subparagraph (B) and 
                section 203(c)(3) shall be made available to 
                the public by the Corporation.
                    (D) Recordkeeping requirement.--
                            (i) In general.--The Corporation 
                        shall prescribe such regulations and 
                        establish such retention schedules as 
                        are necessary to maintain the documents 
                        and records of the Corporation 
                        generated in exercising the authorities 
                        of this title and the records of a 
                        covered financial company for which the 
                        Corporation is appointed receiver, with 
                        due regard for--
                                    (I) the avoidance of 
                                duplicative record retention; 
                                and
                                    (II) the expected 
                                evidentiary needs of the 
                                Corporation as receiver for a 
                                covered financial company and 
                                the public regarding the 
                                records of covered financial 
                                companies.
                            (ii) Retention of records.--Unless 
                        otherwise required by applicable 
                        Federal law or court order, the 
                        Corporation may not, at any time, 
                        destroy any records that are subject to 
                        clause (i).
                            (iii) Records defined.--As used in 
                        this subparagraph, the terms 
                        ``records'' and ``records of a covered 
                        financial company'' mean any document, 
                        book, paper, map, photograph, 
                        microfiche, microfilm, computer or 
                        electronically-created record generated 
                        or maintained by the covered financial 
                        company in the course of and necessary 
                        to its transaction of business.
    (b) Priority of Expenses and Unsecured Claims.--
            (1) In general.--Unsecured claims against a covered 
        financial company, or the Corporation as receiver for 
        such covered financial company under this section, that 
        are proven to the satisfaction of the receiver shall 
        have priority in the following order:
                    (A) Administrative expenses of the 
                receiver.
                    (B) Any amounts owed to the United States, 
                unless the United States agrees or consents 
                otherwise.
                    (C) Wages, salaries, or commissions, 
                including vacation, severance, and sick leave 
                pay earned by an individual (other than an 
                individual described in subparagraph (G)), but 
                only to the extent of $11,725 for each 
                individual (as indexed for inflation, by 
                regulation of the Corporation) earned not later 
                than 180 days before the date of appointment of 
                the Corporation as receiver.
                    (D) Contributions owed to employee benefit 
                plans arising from services rendered not later 
                than 180 days before the date of appointment of 
                the Corporation as receiver, to the extent of 
                the number of employees covered by each such 
                plan, multiplied by $11,725 (as indexed for 
                inflation, by regulation of the Corporation), 
                less the aggregate amount paid to such 
                employees under subparagraph (C), plus the 
                aggregate amount paid by the receivership on 
                behalf of such employees to any other employee 
                benefit plan.
                    (E) Any other general or senior liability 
                of the covered financial company (which is not 
                a liability described under subparagraph (F), 
                (G), or (H)).
                    (F) Any obligation subordinated to general 
                creditors (which is not an obligation described 
                under subparagraph (G) or (H)).
                    (G) Any wages, salaries, or commissions, 
                including vacation, severance, and sick leave 
                pay earned, owed to senior executives and 
                directors of the covered financial company.
                    (H) Any obligation to shareholders, 
                members, general partners, limited partners, or 
                other persons, with interests in the equity of 
                the covered financial company arising as a 
                result of their status as shareholders, 
                members, general partners, limited partners, or 
                other persons with interests in the equity of 
                the covered financial company.
            (2) Post-receivership financing priority.--In the 
        event that the Corporation, as receiver for a covered 
        financial company, is unable to obtain unsecured credit 
        for the covered financial company from commercial 
        sources, the Corporation as receiver may obtain credit 
        or incur debt on the part of the covered financial 
        company, which shall have priority over any or all 
        administrative expenses of the receiver under paragraph 
        (1)(A).
            (3) Claims of the united states.--Unsecured claims 
        of the United States shall, at a minimum, have a higher 
        priority than liabilities of the covered financial 
        company that count as regulatory capital.
            (4) Creditors similarly situated.--All claimants of 
        a covered financial company that are similarly situated 
        under paragraph (1) shall be treated in a similar 
        manner, except that the Corporation may take any action 
        (including making payments, subject to subsection 
        (o)(1)(D)(i)) that does not comply with this 
        subsection, if--
                    (A) the Corporation determines that such 
                action is necessary--
                            (i) to maximize the value of the 
                        assets of the covered financial 
                        company;
                            (ii) to initiate and continue 
                        operations essential to implementation 
                        of the receivership or any bridge 
                        financial company;
                            (iii) to maximize the present value 
                        return from the sale or other 
                        disposition of the assets of the 
                        covered financial company; or
                            (iv) to minimize the amount of any 
                        loss realized upon the sale or other 
                        disposition of the assets of the 
                        covered financial company; and
                    (B) all claimants that are similarly 
                situated under paragraph (1) receive not less 
                than the amount provided in paragraphs (2) and 
                (3) of subsection (d).
            (5) Secured claims unaffected.--This section shall 
        not affect secured claims or security entitlements in 
        respect of assets or property held by the covered 
        financial company, except to the extent that the 
        security is insufficient to satisfy the claim, and then 
        only with regard to the difference between the claim 
        and the amount realized from the security.
            (6) Priority of expenses and unsecured claims in 
        the orderly liquidation of sipc member.--Where the 
        Corporation is appointed as receiver for a covered 
        broker or dealer, unsecured claims against such covered 
        broker or dealer, or the Corporation as receiver for 
        such covered broker or dealer under this section, that 
        are proven to the satisfaction of the receiver under 
        section 205(e), shall have the priority prescribed in 
        paragraph (1), except that--
                    (A) SIPC shall be entitled to recover 
                administrative expenses incurred in performing 
                its responsibilities under section 205 on an 
                equal basis with the Corporation, in accordance 
                with paragraph (1)(A);
                    (B) the Corporation shall be entitled to 
                recover any amounts paid to customers or to 
                SIPC pursuant to section 205(f), in accordance 
                with paragraph (1)(B);
                    (C) SIPC shall be entitled to recover any 
                amounts paid out of the SIPC Fund to meet its 
                obligations under section 205 and under the 
                Securities Investor Protection Act of 1970 (15 
                U.S.C. 78aaa et seq.), which claim shall be 
                subordinate to the claims payable under 
                subparagraphs (A) and (B) of paragraph (1), but 
                senior to all other claims; and
                    (D) the Corporation may, after paying any 
                proven claims to customers under section 205 
                and the Securities Investor Protection Act of 
                1970 (15 U.S.C. 78aaa et seq.), and as provided 
                above, pay dividends on other proven claims, in 
                its discretion, and to the extent that funds 
                are available, in accordance with the 
                priorities set forth in paragraph (1).
    (c) Provisions Relating to Contracts Entered Into Before 
Appointment of Receiver.--
            (1) Authority to repudiate contracts.--In addition 
        to any other rights that a receiver may have, the 
        Corporation as receiver for any covered financial 
        company may disaffirm or repudiate any contract or 
        lease--
                    (A) to which the covered financial company 
                is a party;
                    (B) the performance of which the 
                Corporation as receiver, in the discretion of 
                the Corporation, determines to be burdensome; 
                and
                    (C) the disaffirmance or repudiation of 
                which the Corporation as receiver determines, 
                in the discretion of the Corporation, will 
                promote the orderly administration of the 
                affairs of the covered financial company.
            (2) Timing of repudiation.--The Corporation, as 
        receiver for any covered financial company, shall 
        determine whether or not to exercise the rights of 
        repudiation under this section within a reasonable 
        period of time.
            (3) Claims for damages for repudiation.--
                    (A) In general.--Except as provided in 
                paragraphs (4), (5), and (6) and in 
                subparagraphs (C), (D), and (E) of this 
                paragraph, the liability of the Corporation as 
                receiver for a covered financial company for 
                the disaffirmance or repudiation of any 
                contract pursuant to paragraph (1) shall be--
                            (i) limited to actual direct 
                        compensatory damages; and
                            (ii) determined as of--
                                    (I) the date of the 
                                appointment of the Corporation 
                                as receiver; or
                                    (II) in the case of any 
                                contract or agreement referred 
                                to in paragraph (8), the date 
                                of the disaffirmance or 
                                repudiation of such contract or 
                                agreement.
                    (B) No liability for other damages.--For 
                purposes of subparagraph (A), the term ``actual 
                direct compensatory damages'' does not 
                include--
                            (i) punitive or exemplary damages;
                            (ii) damages for lost profits or 
                        opportunity; or
                            (iii) damages for pain and 
                        suffering.
                    (C) Measure of damages for repudiation of 
                qualified financial contracts.--In the case of 
                any qualified financial contract or agreement 
                to which paragraph (8) applies, compensatory 
                damages shall be--
                            (i) deemed to include normal and 
                        reasonable costs of cover or other 
                        reasonable measures of damages utilized 
                        in the industries for such contract and 
                        agreement claims; and
                            (ii) paid in accordance with this 
                        paragraph and subsection (d), except as 
                        otherwise specifically provided in this 
                        subsection.
                    (D) Measure of damages for repudiation or 
                disaffirmance of debt obligation.--In the case 
                of any debt for borrowed money or evidenced by 
                a security, actual direct compensatory damages 
                shall be no less than the amount lent plus 
                accrued interest plus any accreted original 
                issue discount as of the date the Corporation 
                was appointed receiver of the covered financial 
                company and, to the extent that an allowed 
                secured claim is secured by property the value 
                of which is greater than the amount of such 
                claim and any accrued interest through the date 
                of repudiation or disaffirmance, such accrued 
                interest pursuant to paragraph (1).
                    (E) Measure of damages for repudiation or 
                disaffirmance of contingent obligation.--In the 
                case of any contingent obligation of a covered 
                financial company consisting of any obligation 
                under a guarantee, letter of credit, loan 
                commitment, or similar credit obligation, the 
                Corporation may, by rule or regulation, 
                prescribe that actual direct compensatory 
                damages shall be no less than the estimated 
                value of the claim as of the date the 
                Corporation was appointed receiver of the 
                covered financial company, as such value is 
                measured based on the likelihood that such 
                contingent claim would become fixed and the 
                probable magnitude thereof.
            (4) Leases under which the covered financial 
        company is the lessee.--
                    (A) In general.--If the Corporation as 
                receiver disaffirms or repudiates a lease under 
                which the covered financial company is the 
                lessee, the receiver shall not be liable for 
                any damages (other than damages determined 
                pursuant to subparagraph (B)) for the 
                disaffirmance or repudiation of such lease.
                    (B) Payments of rent.--Notwithstanding 
                subparagraph (A), the lessor under a lease to 
                which subparagraph (A) would otherwise apply 
                shall--
                            (i) be entitled to the contractual 
                        rent accruing before the later of the 
                        date on which--
                                    (I) the notice of 
                                disaffirmance or repudiation is 
                                mailed; or
                                    (II) the disaffirmance or 
                                repudiation becomes effective, 
                                unless the lessor is in default 
                                or breach of the terms of the 
                                lease;
                            (ii) have no claim for damages 
                        under any acceleration clause or other 
                        penalty provision in the lease; and
                            (iii) have a claim for any unpaid 
                        rent, subject to all appropriate 
                        offsets and defenses, due as of the 
                        date of the appointment which shall be 
                        paid in accordance with this paragraph 
                        and subsection (d).
            (5) Leases under which the covered financial 
        company is the lessor.--
                    (A) In general.--If the Corporation as 
                receiver for a covered financial company 
                repudiates an unexpired written lease of real 
                property of the covered financial company under 
                which the covered financial company is the 
                lessor and the lessee is not, as of the date of 
                such repudiation, in default, the lessee under 
                such lease may either--
                            (i) treat the lease as terminated 
                        by such repudiation; or
                            (ii) remain in possession of the 
                        leasehold interest for the balance of 
                        the term of the lease, unless the 
                        lessee defaults under the terms of the 
                        lease after the date of such 
                        repudiation.
                    (B) Provisions applicable to lessee 
                remaining in possession.--If any lessee under a 
                lease described in subparagraph (A) remains in 
                possession of a leasehold interest pursuant to 
                clause (ii) of subparagraph (A)--
                            (i) the lessee--
                                    (I) shall continue to pay 
                                the contractual rent pursuant 
                                to the terms of the lease after 
                                the date of the repudiation of 
                                such lease; and
                                    (II) may offset against any 
                                rent payment which accrues 
                                after the date of the 
                                repudiation of the lease, any 
                                damages which accrue after such 
                                date due to the nonperformance 
                                of any obligation of the 
                                covered financial company under 
                                the lease after such date; and
                            (ii) the Corporation as receiver 
                        shall not be liable to the lessee for 
                        any damages arising after such date as 
                        a result of the repudiation, other than 
                        the amount of any offset allowed under 
                        clause (i)(II).
            (6) Contracts for the sale of real property.--
                    (A) In general.--If the receiver repudiates 
                any contract (which meets the requirements of 
                subsection (a)(6)) for the sale of real 
                property, and the purchaser of such real 
                property under such contract is in possession 
                and is not, as of the date of such repudiation, 
                in default, such purchaser may either--
                            (i) treat the contract as 
                        terminated by such repudiation; or
                            (ii) remain in possession of such 
                        real property.
                    (B) Provisions applicable to purchaser 
                remaining in possession.--If any purchaser of 
                real property under any contract described in 
                subparagraph (A) remains in possession of such 
                property pursuant to clause (ii) of 
                subparagraph (A)--
                            (i) the purchaser--
                                    (I) shall continue to make 
                                all payments due under the 
                                contract after the date of the 
                                repudiation of the contract; 
                                and
                                    (II) may offset against any 
                                such payments any damages which 
                                accrue after such date due to 
                                the nonperformance (after such 
                                date) of any obligation of the 
                                covered financial company under 
                                the contract; and
                            (ii) the Corporation as receiver 
                        shall--
                                    (I) not be liable to the 
                                purchaser for any damages 
                                arising after such date as a 
                                result of the repudiation, 
                                other than the amount of any 
                                offset allowed under clause 
                                (i)(II);
                                    (II) deliver title to the 
                                purchaser in accordance with 
                                the provisions of the contract; 
                                and
                                    (III) have no obligation 
                                under the contract other than 
                                the performance required under 
                                subclause (II).
                    (C) Assignment and sale allowed.--
                            (i) In general.--No provision of 
                        this paragraph shall be construed as 
                        limiting the right of the Corporation 
                        as receiver to assign the contract 
                        described in subparagraph (A) and sell 
                        the property, subject to the contract 
                        and the provisions of this paragraph.
                            (ii) No liability after assignment 
                        and sale.--If an assignment and sale 
                        described in clause (i) is consummated, 
                        the Corporation as receiver shall have 
                        no further liability under the contract 
                        described in subparagraph (A) or with 
                        respect to the real property which was 
                        the subject of such contract.
            (7) Provisions applicable to service contracts.--
                    (A) Services performed before 
                appointment.--In the case of any contract for 
                services between any person and any covered 
                financial company for which the Corporation has 
                been appointed receiver, any claim of such 
                person for services performed before the date 
                of appointment shall be--
                            (i) a claim to be paid in 
                        accordance with subsections (a), (b), 
                        and (d); and
                            (ii) deemed to have arisen as of 
                        the date on which the receiver was 
                        appointed.
                    (B) Services performed after appointment 
                and prior to repudiation.--If, in the case of 
                any contract for services described in 
                subparagraph (A), the Corporation as receiver 
                accepts performance by the other person before 
                making any determination to exercise the right 
                of repudiation of such contract under this 
                section--
                            (i) the other party shall be paid 
                        under the terms of the contract for the 
                        services performed; and
                            (ii) the amount of such payment 
                        shall be treated as an administrative 
                        expense of the receivership.
                    (C) Acceptance of performance no bar to 
                subsequent repudiation.--The acceptance by the 
                Corporation as receiver for services referred 
                to in subparagraph (B) in connection with a 
                contract described in subparagraph (B) shall 
                not affect the right of the Corporation as 
                receiver to repudiate such contract under this 
                section at any time after such performance.
            (8) Certain qualified financial contracts.--
                    (A) Rights of parties to contracts.--
                Subject to subsection (a)(8) and paragraphs (9) 
                and (10) of this subsection, and 
                notwithstanding any other provision of this 
                section, any other provision of Federal law, or 
                the law of any State, no person shall be stayed 
                or prohibited from exercising--
                            (i) any right that such person has 
                        to cause the termination, liquidation, 
                        or acceleration of any qualified 
                        financial contract with a covered 
                        financial company which arises upon the 
                        date of appointment of the Corporation 
                        as receiver for such covered financial 
                        company or at any time after such 
                        appointment;
                            (ii) any right under any security 
                        agreement or arrangement or other 
                        credit enhancement related to one or 
                        more qualified financial contracts 
                        described in clause (i); or
                            (iii) any right to offset or net 
                        out any termination value, payment 
                        amount, or other transfer obligation 
                        arising under or in connection with 1 
                        or more contracts or agreements 
                        described in clause (i), including any 
                        master agreement for such contracts or 
                        agreements.
                    (B) Applicability of other provisions.--
                Subsection (a)(8) shall apply in the case of 
                any judicial action or proceeding brought 
                against the Corporation as receiver referred to 
                in subparagraph (A), or the subject covered 
                financial company, by any party to a contract 
                or agreement described in subparagraph (A)(i) 
                with such covered financial company.
                    (C) Certain transfers not avoidable.--
                            (i) In general.--Notwithstanding 
                        subsection (a)(11), (a)(12), or 
                        (c)(12), section 5242 of the Revised 
                        Statutes of the United States, or any 
                        other provision of Federal or State law 
                        relating to the avoidance of 
                        preferential or fraudulent transfers, 
                        the Corporation, whether acting as the 
                        Corporation or as receiver for a 
                        covered financial company, may not 
                        avoid any transfer of money or other 
                        property in connection with any 
                        qualified financial contract with a 
                        covered financial company.
                            (ii) Exception for certain 
                        transfers.--Clause (i) shall not apply 
                        to any transfer of money or other 
                        property in connection with any 
                        qualified financial contract with a 
                        covered financial company if the 
                        transferee had actual intent to hinder, 
                        delay, or defraud such company, the 
                        creditors of such company, or the 
                        Corporation as receiver appointed for 
                        such company.
                    (D) Certain contracts and agreements 
                defined.--For purposes of this subsection, the 
                following definitions shall apply:
                            (i) Qualified financial contract.--
                        The term ``qualified financial 
                        contract'' means any securities 
                        contract, commodity contract, forward 
                        contract, repurchase agreement, swap 
                        agreement, and any similar agreement 
                        that the Corporation determines by 
                        regulation, resolution, or order to be 
                        a qualified financial contract for 
                        purposes of this paragraph.
                            (ii) Securities contract.--The term 
                        ``securities contract''--
                                    (I) means a contract for 
                                the purchase, sale, or loan of 
                                a security, a certificate of 
                                deposit, a mortgage loan, any 
                                interest in a mortgage loan, a 
                                group or index of securities, 
                                certificates of deposit, or 
                                mortgage loans or interests 
                                therein (including any interest 
                                therein or based on the value 
                                thereof), or any option on any 
                                of the foregoing, including any 
                                option to purchase or sell any 
                                such security, certificate of 
                                deposit, mortgage loan, 
                                interest, group or index, or 
                                option, and including any 
                                repurchase or reverse 
                                repurchase transaction on any 
                                such security, certificate of 
                                deposit, mortgage loan, 
                                interest, group or index, or 
                                option (whether or not such 
                                repurchase or reverse 
                                repurchase transaction is a 
                                ``repurchase agreement'', as 
                                defined in clause (v));
                                    (II) does not include any 
                                purchase, sale, or repurchase 
                                obligation under a 
                                participation in a commercial 
                                mortgage loan unless the 
                                Corporation determines by 
                                regulation, resolution, or 
                                order to include any such 
                                agreement within the meaning of 
                                such term;
                                    (III) means any option 
                                entered into on a national 
                                securities exchange relating to 
                                foreign currencies;
                                    (IV) means the guarantee 
                                (including by novation) by or 
                                to any securities clearing 
                                agency of any settlement of 
                                cash, securities, certificates 
                                of deposit, mortgage loans or 
                                interests therein, group or 
                                index of securities, 
                                certificates of deposit or 
                                mortgage loans or interests 
                                therein (including any interest 
                                therein or based on the value 
                                thereof) or an option on any of 
                                the foregoing, including any 
                                option to purchase or sell any 
                                such security, certificate of 
                                deposit, mortgage loan, 
                                interest, group or index, or 
                                option (whether or not such 
                                settlement is in connection 
                                with any agreement or 
                                transaction referred to in 
                                subclauses (I) through (XII) 
                                (other than subclause (II)));
                                    (V) means any margin loan;
                                    (VI) means any extension of 
                                credit for the clearance or 
                                settlement of securities 
                                transactions;
                                    (VII) means any loan 
                                transaction coupled with a 
                                securities collar transaction, 
                                any prepaid securities forward 
                                transaction, or any total 
                                return swap transaction coupled 
                                with a securities sale 
                                transaction;
                                    (VIII) means any other 
                                agreement or transaction that 
                                is similar to any agreement or 
                                transaction referred to in this 
                                clause;
                                    (IX) means any combination 
                                of the agreements or 
                                transactions referred to in 
                                this clause;
                                    (X) means any option to 
                                enter into any agreement or 
                                transaction referred to in this 
                                clause;
                                    (XI) means a master 
                                agreement that provides for an 
                                agreement or transaction 
                                referred to in any of 
                                subclauses (I) through (X), 
                                other than subclause (II), 
                                together with all supplements 
                                to any such master agreement, 
                                without regard to whether the 
                                master agreement provides for 
                                an agreement or transaction 
                                that is not a securities 
                                contract under this clause, 
                                except that the master 
                                agreement shall be considered 
                                to be a securities contract 
                                under this clause only with 
                                respect to each agreement or 
                                transaction under the master 
                                agreement that is referred to 
                                in any of subclauses (I) 
                                through (X), other than 
                                subclause (II); and
                                    (XII) means any security 
                                agreement or arrangement or 
                                other credit enhancement 
                                related to any agreement or 
                                transaction referred to in this 
                                clause, including any guarantee 
                                or reimbursement obligation in 
                                connection with any agreement 
                                or transaction referred to in 
                                this clause.
                            (iii) Commodity contract.--The term 
                        ``commodity contract'' means--
                                    (I) with respect to a 
                                futures commission merchant, a 
                                contract for the purchase or 
                                sale of a commodity for future 
                                delivery on, or subject to the 
                                rules of, a contract market or 
                                board of trade;
                                    (II) with respect to a 
                                foreign futures commission 
                                merchant, a foreign future;
                                    (III) with respect to a 
                                leverage transaction merchant, 
                                a leverage transaction;
                                    (IV) with respect to a 
                                clearing organization, a 
                                contract for the purchase or 
                                sale of a commodity for future 
                                delivery on, or subject to the 
                                rules of, a contract market or 
                                board of trade that is cleared 
                                by such clearing organization, 
                                or commodity option traded on, 
                                or subject to the rules of, a 
                                contract market or board of 
                                trade that is cleared by such 
                                clearing organization;
                                    (V) with respect to a 
                                commodity options dealer, a 
                                commodity option;
                                    (VI) any other agreement or 
                                transaction that is similar to 
                                any agreement or transaction 
                                referred to in this clause;
                                    (VII) any combination of 
                                the agreements or transactions 
                                referred to in this clause;
                                    (VIII) any option to enter 
                                into any agreement or 
                                transaction referred to in this 
                                clause;
                                    (IX) a master agreement 
                                that provides for an agreement 
                                or transaction referred to in 
                                any of subclauses (I) through 
                                (VIII), together with all 
                                supplements to any such master 
                                agreement, without regard to 
                                whether the master agreement 
                                provides for an agreement or 
                                transaction that is not a 
                                commodity contract under this 
                                clause, except that the master 
                                agreement shall be considered 
                                to be a commodity contract 
                                under this clause only with 
                                respect to each agreement or 
                                transaction under the master 
                                agreement that is referred to 
                                in any of subclauses (I) 
                                through (VIII); or
                                    (X) any security agreement 
                                or arrangement or other credit 
                                enhancement related to any 
                                agreement or transaction 
                                referred to in this clause, 
                                including any guarantee or 
                                reimbursement obligation in 
                                connection with any agreement 
                                or transaction referred to in 
                                this clause.
                            (iv) Forward contract.--The term 
                        ``forward contract'' means--
                                    (I) a contract (other than 
                                a commodity contract) for the 
                                purchase, sale, or transfer of 
                                a commodity or any similar 
                                good, article, service, right, 
                                or interest which is presently 
                                or in the future becomes the 
                                subject of dealing in the 
                                forward contract trade, or 
                                product or byproduct thereof, 
                                with a maturity date that is 
                                more than 2 days after the date 
                                on which the contract is 
                                entered into, including a 
                                repurchase or reverse 
                                repurchase transaction (whether 
                                or not such repurchase or 
                                reverse repurchase transaction 
                                is a ``repurchase agreement'', 
                                as defined in clause (v)), 
                                consignment, lease, swap, hedge 
                                transaction, deposit, loan, 
                                option, allocated transaction, 
                                unallocated transaction, or any 
                                other similar agreement;
                                    (II) any combination of 
                                agreements or transactions 
                                referred to in subclauses (I) 
                                and (III);
                                    (III) any option to enter 
                                into any agreement or 
                                transaction referred to in 
                                subclause (I) or (II);
                                    (IV) a master agreement 
                                that provides for an agreement 
                                or transaction referred to in 
                                subclause (I), (II), or (III), 
                                together with all supplements 
                                to any such master agreement, 
                                without regard to whether the 
                                master agreement provides for 
                                an agreement or transaction 
                                that is not a forward contract 
                                under this clause, except that 
                                the master agreement shall be 
                                considered to be a forward 
                                contract under this clause only 
                                with respect to each agreement 
                                or transaction under the master 
                                agreement that is referred to 
                                in subclause (I), (II), or 
                                (III); or
                                    (V) any security agreement 
                                or arrangement or other credit 
                                enhancement related to any 
                                agreement or transaction 
                                referred to in subclause (I), 
                                (II), (III), or (IV), including 
                                any guarantee or reimbursement 
                                obligation in connection with 
                                any agreement or transaction 
                                referred to in any such 
                                subclause.
                            (v) Repurchase agreement.--The term 
                        ``repurchase agreement'' (which 
                        definition also applies to a reverse 
                        repurchase agreement)--
                                    (I) means an agreement, 
                                including related terms, which 
                                provides for the transfer of 
                                one or more certificates of 
                                deposit, mortgage related 
                                securities (as such term is 
                                defined in section 3 of the 
                                Securities Exchange Act of 
                                1934), mortgage loans, 
                                interests in mortgage-related 
                                securities or mortgage loans, 
                                eligible bankers' acceptances, 
                                qualified foreign government 
                                securities (which, for purposes 
                                of this clause, means a 
                                security that is a direct 
                                obligation of, or that is fully 
                                guaranteed by, the central 
                                government of a member of the 
                                Organization for Economic 
                                Cooperation and Development, as 
                                determined by regulation or 
                                order adopted by the Board of 
                                Governors), or securities that 
                                are direct obligations of, or 
                                that are fully guaranteed by, 
                                the United States or any agency 
                                of the United States against 
                                the transfer of funds by the 
                                transferee of such certificates 
                                of deposit, eligible bankers' 
                                acceptances, securities, 
                                mortgage loans, or interests 
                                with a simultaneous agreement 
                                by such transferee to transfer 
                                to the transferor thereof 
                                certificates of deposit, 
                                eligible bankers' acceptances, 
                                securities, mortgage loans, or 
                                interests as described above, 
                                at a date certain not later 
                                than 1 year after such 
                                transfers or on demand, against 
                                the transfer of funds, or any 
                                other similar agreement;
                                    (II) does not include any 
                                repurchase obligation under a 
                                participation in a commercial 
                                mortgage loan, unless the 
                                Corporation determines, by 
                                regulation, resolution, or 
                                order to include any such 
                                participation within the 
                                meaning of such term;
                                    (III) means any combination 
                                of agreements or transactions 
                                referred to in subclauses (I) 
                                and (IV);
                                    (IV) means any option to 
                                enter into any agreement or 
                                transaction referred to in 
                                subclause (I) or (III);
                                    (V) means a master 
                                agreement that provides for an 
                                agreement or transaction 
                                referred to in subclause (I), 
                                (III), or (IV), together with 
                                all supplements to any such 
                                master agreement, without 
                                regard to whether the master 
                                agreement provides for an 
                                agreement or transaction that 
                                is not a repurchase agreement 
                                under this clause, except that 
                                the master agreement shall be 
                                considered to be a repurchase 
                                agreement under this subclause 
                                only with respect to each 
                                agreement or transaction under 
                                the master agreement that is 
                                referred to in subclause (I), 
                                (III), or (IV); and
                                    (VI) means any security 
                                agreement or arrangement or 
                                other credit enhancement 
                                related to any agreement or 
                                transaction referred to in 
                                subclause (I), (III), (IV), or 
                                (V), including any guarantee or 
                                reimbursement obligation in 
                                connection with any agreement 
                                or transaction referred to in 
                                any such subclause.
                            (vi) Swap agreement.--The term 
                        ``swap agreement'' means--
                                    (I) any agreement, 
                                including the terms and 
                                conditions incorporated by 
                                reference in any such 
                                agreement, which is an interest 
                                rate swap, option, future, or 
                                forward agreement, including a 
                                rate floor, rate cap, rate 
                                collar, cross-currency rate 
                                swap, and basis swap; a spot, 
                                same day-tomorrow, tomorrow-
                                next, forward, or other foreign 
                                exchange, precious metals, or 
                                other commodity agreement; a 
                                currency swap, option, future, 
                                or forward agreement; an equity 
                                index or equity swap, option, 
                                future, or forward agreement; a 
                                debt index or debt swap, 
                                option, future, or forward 
                                agreement; a total return, 
                                credit spread or credit swap, 
                                option, future, or forward 
                                agreement; a commodity index or 
                                commodity swap, option, future, 
                                or forward agreement; weather 
                                swap, option, future, or 
                                forward agreement; an emissions 
                                swap, option, future, or 
                                forward agreement; or an 
                                inflation swap, option, future, 
                                or forward agreement;
                                    (II) any agreement or 
                                transaction that is similar to 
                                any other agreement or 
                                transaction referred to in this 
                                clause and that is of a type 
                                that has been, is presently, or 
                                in the future becomes, the 
                                subject of recurrent dealings 
                                in the swap or other 
                                derivatives markets (including 
                                terms and conditions 
                                incorporated by reference in 
                                such agreement) and that is a 
                                forward, swap, future, option, 
                                or spot transaction on one or 
                                more rates, currencies, 
                                commodities, equity securities 
                                or other equity instruments, 
                                debt securities or other debt 
                                instruments, quantitative 
                                measures associated with an 
                                occurrence, extent of an 
                                occurrence, or contingency 
                                associated with a financial, 
                                commercial, or economic 
                                consequence, or economic or 
                                financial indices or measures 
                                of economic or financial risk 
                                or value;
                                    (III) any combination of 
                                agreements or transactions 
                                referred to in this clause;
                                    (IV) any option to enter 
                                into any agreement or 
                                transaction referred to in this 
                                clause;
                                    (V) a master agreement that 
                                provides for an agreement or 
                                transaction referred to in 
                                subclause (I), (II), (III), or 
                                (IV), together with all 
                                supplements to any such master 
                                agreement, without regard to 
                                whether the master agreement 
                                contains an agreement or 
                                transaction that is not a swap 
                                agreement under this clause, 
                                except that the master 
                                agreement shall be considered 
                                to be a swap agreement under 
                                this clause only with respect 
                                to each agreement or 
                                transaction under the master 
                                agreement that is referred to 
                                in subclause (I), (II), (III), 
                                or (IV); and
                                    (VI) any security agreement 
                                or arrangement or other credit 
                                enhancement related to any 
                                agreement or transaction 
                                referred to in any of 
                                subclauses (I) through (V), 
                                including any guarantee or 
                                reimbursement obligation in 
                                connection with any agreement 
                                or transaction referred to in 
                                any such clause.
                            (vii) Definitions relating to 
                        default.--When used in this paragraph 
                        and paragraphs (9) and (10)--
                                    (I) the term ``default'' 
                                means, with respect to a 
                                covered financial company, any 
                                adjudication or other official 
                                decision by any court of 
                                competent jurisdiction, or 
                                other public authority pursuant 
                                to which the Corporation has 
                                been appointed receiver; and
                                    (II) the term ``in danger 
                                of default'' means a covered 
                                financial company with respect 
                                to which the Corporation or 
                                appropriate State authority has 
                                determined that--
                                            (aa) in the opinion 
                                        of the Corporation or 
                                        such authority--
                                                    (AA) the 
                                                covered 
                                                financial 
                                                company is not 
                                                likely to be 
                                                able to pay its 
                                                obligations in 
                                                the normal 
                                                course of 
                                                business; and
                                                    (BB) there 
                                                is no 
                                                reasonable 
                                                prospect that 
                                                the covered 
                                                financial 
                                                company will be 
                                                able to pay 
                                                such 
                                                obligations 
                                                without Federal 
                                                assistance; or
                                            (bb) in the opinion 
                                        of the Corporation or 
                                        such authority--
                                                    (AA) the 
                                                covered 
                                                financial 
                                                company has 
                                                incurred or is 
                                                likely to incur 
                                                losses that 
                                                will deplete 
                                                all or 
                                                substantially 
                                                all of its 
                                                capital; and
                                                    (BB) there 
                                                is no 
                                                reasonable 
                                                prospect that 
                                                the capital 
                                                will be 
                                                replenished 
                                                without Federal 
                                                assistance.
                            (viii) Treatment of master 
                        agreement as one agreement.--Any master 
                        agreement for any contract or agreement 
                        described in any of clauses (i) through 
                        (vi) (or any master agreement for such 
                        master agreement or agreements), 
                        together with all supplements to such 
                        master agreement, shall be treated as a 
                        single agreement and a single qualified 
                        financial contact. If a master 
                        agreement contains provisions relating 
                        to agreements or transactions that are 
                        not themselves qualified financial 
                        contracts, the master agreement shall 
                        be deemed to be a qualified financial 
                        contract only with respect to those 
                        transactions that are themselves 
                        qualified financial contracts.
                            (ix) Transfer.--The term 
                        ``transfer'' means every mode, direct 
                        or indirect, absolute or conditional, 
                        voluntary or involuntary, of disposing 
                        of or parting with property or with an 
                        interest in property, including 
                        retention of title as a security 
                        interest and foreclosure of the equity 
                        of redemption of the covered financial 
                        company.
                            (x) Person.--The term ``person'' 
                        includes any governmental entity in 
                        addition to any entity included in the 
                        definition of such term in section 1, 
                        title 1, United States Code.
                    (E) Clarification.--No provision of law 
                shall be construed as limiting the right or 
                power of the Corporation, or authorizing any 
                court or agency to limit or delay, in any 
                manner, the right or power of the Corporation 
                to transfer any qualified financial contract or 
                to disaffirm or repudiate any such contract in 
                accordance with this subsection.
                    (F) Walkaway clauses not effective.--
                            (i) In general.--Notwithstanding 
                        the provisions of subparagraph (A) of 
                        this paragraph and sections 403 and 404 
                        of the Federal Deposit Insurance 
                        Corporation Improvement Act of 1991, no 
                        walkaway clause shall be enforceable in 
                        a qualified financial contract of a 
                        covered financial company in default.
                            (ii) Limited suspension of certain 
                        obligations.--In the case of a 
                        qualified financial contract referred 
                        to in clause (i), any payment or 
                        delivery obligations otherwise due from 
                        a party pursuant to the qualified 
                        financial contract shall be suspended 
                        from the time at which the Corporation 
                        is appointed as receiver until the 
                        earlier of--
                                    (I) the time at which such 
                                party receives notice that such 
                                contract has been transferred 
                                pursuant to paragraph (10)(A); 
                                or
                                    (II) 5:00 p.m. (eastern 
                                time) on the business day 
                                following the date of the 
                                appointment of the Corporation 
                                as receiver.
                            (iii) Walkaway clause defined.--For 
                        purposes of this subparagraph, the term 
                        ``walkaway clause'' means any provision 
                        in a qualified financial contract that 
                        suspends, conditions, or extinguishes a 
                        payment obligation of a party, in whole 
                        or in part, or does not create a 
                        payment obligation of a party that 
                        would otherwise exist, solely because 
                        of the status of such party as a 
                        nondefaulting party in connection with 
                        the insolvency of a covered financial 
                        company that is a party to the contract 
                        or the appointment of or the exercise 
                        of rights or powers by the Corporation 
                        as receiver for such covered financial 
                        company, and not as a result of the 
                        exercise by a party of any right to 
                        offset, setoff, or net obligations that 
                        exist under the contract, any other 
                        contract between those parties, or 
                        applicable law.
                    (G) Certain obligations to clearing 
                organizations.--In the event that the 
                Corporation has been appointed as receiver for 
                a covered financial company which is a party to 
                any qualified financial contract cleared by or 
                subject to the rules of a clearing organization 
                (as defined in paragraph (9)(D)), the receiver 
                shall use its best efforts to meet all margin, 
                collateral, and settlement obligations of the 
                covered financial company that arise under 
                qualified financial contracts (other than any 
                margin, collateral, or settlement obligation 
                that is not enforceable against the receiver 
                under paragraph (8)(F)(i) or paragraph 
                (10)(B)), as required by the rules of the 
                clearing organization when due. Notwithstanding 
                any other provision of this title, if the 
                receiver fails to satisfy any such margin, 
                collateral, or settlement obligations under the 
                rules of the clearing organization, the 
                clearing organization shall have the immediate 
                right to exercise, and shall not be stayed from 
                exercising, all of its rights and remedies 
                under its rules and applicable law with respect 
                to any qualified financial contract of the 
                covered financial company, including, without 
                limitation, the right to liquidate all 
                positions and collateral of such covered 
                financial company under the company's qualified 
                financial contracts, and suspend or cease to 
                act for such covered financial company, all in 
                accordance with the rules of the clearing 
                organization.
                    (H) Recordkeeping.--
                            (i) Joint rulemaking.--The Federal 
                        primary financial regulatory agencies 
                        shall jointly prescribe regulations 
                        requiring that financial companies 
                        maintain such records with respect to 
                        qualified financial contracts 
                        (including market valuations) that the 
                        Federal primary financial regulatory 
                        agencies determine to be necessary or 
                        appropriate in order to assist the 
                        Corporation as receiver for a covered 
                        financial company in being able to 
                        exercise its rights and fulfill its 
                        obligations under this paragraph or 
                        paragraph (9) or (10).
                            (ii) Time frame.--The Federal 
                        primary financial regulatory agencies 
                        shall prescribe joint final or interim 
                        final regulations not later than 24 
                        months after the date of enactment of 
                        this Act.
                            (iii) Back-up rulemaking 
                        authority.--If the Federal primary 
                        financial regulatory agencies do not 
                        prescribe joint final or interim final 
                        regulations within the time frame in 
                        clause (ii), the Chairperson of the 
                        Council shall prescribe, in 
                        consultation with the Corporation, the 
                        regulations required by clause (i).
                            (iv) Categorization and tiering.--
                        The joint regulations prescribed under 
                        clause (i) shall, as appropriate, 
                        differentiate among financial companies 
                        by taking into consideration their 
                        size, risk, complexity, leverage, 
                        frequency and dollar amount of 
                        qualified financial contracts, 
                        interconnectedness to the financial 
                        system, and any other factors deemed 
                        appropriate.
            (9) Transfer of qualified financial contracts.--
                    (A) In general.--In making any transfer of 
                assets or liabilities of a covered financial 
                company in default, which includes any 
                qualified financial contract, the Corporation 
                as receiver for such covered financial company 
                shall either--
                            (i) transfer to one financial 
                        institution, other than a financial 
                        institution for which a conservator, 
                        receiver, trustee in bankruptcy, or 
                        other legal custodian has been 
                        appointed or which is otherwise the 
                        subject of a bankruptcy or insolvency 
                        proceeding--
                                    (I) all qualified financial 
                                contracts between any person or 
                                any affiliate of such person 
                                and the covered financial 
                                company in default;
                                    (II) all claims of such 
                                person or any affiliate of such 
                                person against such covered 
                                financial company under any 
                                such contract (other than any 
                                claim which, under the terms of 
                                any such contract, is 
                                subordinated to the claims of 
                                general unsecured creditors of 
                                such company);
                                    (III) all claims of such 
                                covered financial company 
                                against such person or any 
                                affiliate of such person under 
                                any such contract; and
                                    (IV) all property securing 
                                or any other credit enhancement 
                                for any contract described in 
                                subclause (I) or any claim 
                                described in subclause (II) or 
                                (III) under any such contract; 
                                or
                            (ii) transfer none of the qualified 
                        financial contracts, claims, property 
                        or other credit enhancement referred to 
                        in clause (i) (with respect to such 
                        person and any affiliate of such 
                        person).
                    (B) Transfer to foreign bank, financial 
                institution, or branch or agency thereof.--In 
                transferring any qualified financial contracts 
                and related claims and property under 
                subparagraph (A)(i), the Corporation as 
                receiver for the covered financial company 
                shall not make such transfer to a foreign bank, 
                financial institution organized under the laws 
                of a foreign country, or a branch or agency of 
                a foreign bank or financial institution unless, 
                under the law applicable to such bank, 
                financial institution, branch or agency, to the 
                qualified financial contracts, and to any 
                netting contract, any security agreement or 
                arrangement or other credit enhancement related 
                to one or more qualified financial contracts, 
                the contractual rights of the parties to such 
                qualified financial contracts, netting 
                contracts, security agreements or arrangements, 
                or other credit enhancements are enforceable 
                substantially to the same extent as permitted 
                under this section.
                    (C) Transfer of contracts subject to the 
                rules of a clearing organization.--In the event 
                that the Corporation as receiver for a 
                financial institution transfers any qualified 
                financial contract and related claims, 
                property, or credit enhancement pursuant to 
                subparagraph (A)(i) and such contract is 
                cleared by or subject to the rules of a 
                clearing organization, the clearing 
                organization shall not be required to accept 
                the transferee as a member by virtue of the 
                transfer.
                    (D) Definitions.--For purposes of this 
                paragraph--
                            (i) the term ``financial 
                        institution'' means a broker or dealer, 
                        a depository institution, a futures 
                        commission merchant, a bridge financial 
                        company, or any other institution 
                        determined by the Corporation, by 
                        regulation, to be a financial 
                        institution; and
                            (ii) the term ``clearing 
                        organization'' has the same meaning as 
                        in section 402 of the Federal Deposit 
                        Insurance Corporation Improvement Act 
                        of 1991.
            (10) Notification of transfer.--
                    (A) In general.--
                            (i) Notice.--The Corporation shall 
                        provide notice in accordance with 
                        clause (ii), if--
                                    (I) the Corporation as 
                                receiver for a covered 
                                financial company in default or 
                                in danger of default transfers 
                                any assets or liabilities of 
                                the covered financial company; 
                                and
                                    (II) the transfer includes 
                                any qualified financial 
                                contract.
                            (ii) Timing.--The Corporation as 
                        receiver for a covered financial 
                        company shall notify any person who is 
                        a party to any contract described in 
                        clause (i) of such transfer not later 
                        than 5:00 p.m. (eastern time) on the 
                        business day following the date of the 
                        appointment of the Corporation as 
                        receiver.
                    (B) Certain rights not enforceable.--
                            (i) Receivership.--A person who is 
                        a party to a qualified financial 
                        contract with a covered financial 
                        company may not exercise any right that 
                        such person has to terminate, 
                        liquidate, or net such contract under 
                        paragraph (8)(A) solely by reason of or 
                        incidental to the appointment under 
                        this section of the Corporation as 
                        receiver for the covered financial 
                        company (or the insolvency or financial 
                        condition of the covered financial 
                        company for which the Corporation has 
                        been appointed as receiver)--
                                    (I) until 5:00 p.m. 
                                (eastern time) on the business 
                                day following the date of the 
                                appointment; or
                                    (II) after the person has 
                                received notice that the 
                                contract has been transferred 
                                pursuant to paragraph (9)(A).
                            (ii) Notice.--For purposes of this 
                        paragraph, the Corporation as receiver 
                        for a covered financial company shall 
                        be deemed to have notified a person who 
                        is a party to a qualified financial 
                        contract with such covered financial 
                        company, if the Corporation has taken 
                        steps reasonably calculated to provide 
                        notice to such person by the time 
                        specified in subparagraph (A).
                    (C) Treatment of bridge financial 
                company.--For purposes of paragraph (9), a 
                bridge financial company shall not be 
                considered to be a financial institution for 
                which a conservator, receiver, trustee in 
                bankruptcy, or other legal custodian has been 
                appointed, or which is otherwise the subject of 
                a bankruptcy or insolvency proceeding.
                    (D) Business day defined.--For purposes of 
                this paragraph, the term ``business day'' means 
                any day other than any Saturday, Sunday, or any 
                day on which either the New York Stock Exchange 
                or the Federal Reserve Bank of New York is 
                closed.
            (11) Disaffirmance or repudiation of qualified 
        financial contracts.--In exercising the rights of 
        disaffirmance or repudiation of the Corporation as 
        receiver with respect to any qualified financial 
        contract to which a covered financial company is a 
        party, the Corporation shall either--
                    (A) disaffirm or repudiate all qualified 
                financial contracts between--
                            (i) any person or any affiliate of 
                        such person; and
                            (ii) the covered financial company 
                        in default; or
                    (B) disaffirm or repudiate none of the 
                qualified financial contracts referred to in 
                subparagraph (A) (with respect to such person 
                or any affiliate of such person).
            (12) Certain security and customer interests not 
        avoidable.--No provision of this subsection shall be 
        construed as permitting the avoidance of any--
                    (A) legally enforceable or perfected 
                security interest in any of the assets of any 
                covered financial company, except in accordance 
                with subsection (a)(11); or
                    (B) legally enforceable interest in 
                customer property, security entitlements in 
                respect of assets or property held by the 
                covered financial company for any security 
                entitlement holder.
            (13) Authority to enforce contracts.--
                    (A) In general.--The Corporation, as 
                receiver for a covered financial company, may 
                enforce any contract, other than a liability 
                insurance contract of a director or officer, a 
                financial institution bond entered into by the 
                covered financial company, notwithstanding any 
                provision of the contract providing for 
                termination, default, acceleration, or exercise 
                of rights upon, or solely by reason of, 
                insolvency, the appointment of or the exercise 
                of rights or powers by the Corporation as 
                receiver, the filing of the petition pursuant 
                to section 202(a)(1), or the issuance of the 
                recommendations or determination, or any 
                actions or events occurring in connection 
                therewith or as a result thereof, pursuant to 
                section 203.
                    (B) Certain rights not affected.--No 
                provision of this paragraph may be construed as 
                impairing or affecting any right of the 
                Corporation as receiver to enforce or recover 
                under a liability insurance contract of a 
                director or officer or financial institution 
                bond under other applicable law.
                    (C) Consent requirement and ipso facto 
                clauses.--
                            (i) In general.--Except as 
                        otherwise provided by this section, no 
                        person may exercise any right or power 
                        to terminate, accelerate, or declare a 
                        default under any contract to which the 
                        covered financial company is a party 
                        (and no provision in any such contract 
                        providing for such default, 
                        termination, or acceleration shall be 
                        enforceable), or to obtain possession 
                        of or exercise control over any 
                        property of the covered financial 
                        company or affect any contractual 
                        rights of the covered financial 
                        company, without the consent of the 
                        Corporation as receiver for the covered 
                        financial company during the 90 day 
                        period beginning from the appointment 
                        of the Corporation as receiver.
                            (ii) Exceptions.--No provision of 
                        this subparagraph shall apply to a 
                        director or officer liability insurance 
                        contract or a financial institution 
                        bond, to the rights of parties to 
                        certain qualified financial contracts 
                        pursuant to paragraph (8), or to the 
                        rights of parties to netting contracts 
                        pursuant to subtitle A of title IV of 
                        the Federal Deposit Insurance 
                        Corporation Improvement Act of 1991 (12 
                        U.S.C. 4401 et seq.), or shall be 
                        construed as permitting the Corporation 
                        as receiver to fail to comply with 
                        otherwise enforceable provisions of 
                        such contract.
                    (D) Contracts to extend credit.--
                Notwithstanding any other provision in this 
                title, if the Corporation as receiver enforces 
                any contract to extend credit to the covered 
                financial company or bridge financial company, 
                any valid and enforceable obligation to repay 
                such debt shall be paid by the Corporation as 
                receiver, as an administrative expense of the 
                receivership.
            (14) Exception for federal reserve banks and 
        corporation security interest.--No provision of this 
        subsection shall apply with respect to--
                    (A) any extension of credit from any 
                Federal reserve bank or the Corporation to any 
                covered financial company; or
                    (B) any security interest in the assets of 
                the covered financial company securing any such 
                extension of credit.
            (15) Savings clause.--The meanings of terms used in 
        this subsection are applicable for purposes of this 
        subsection only, and shall not be construed or applied 
        so as to challenge or affect the characterization, 
        definition, or treatment of any similar terms under any 
        other statute, regulation, or rule, including the 
        Gramm-Leach-Bliley Act, the Legal Certainty for Bank 
        Products Act of 2000, the securities laws (as that term 
        is defined in section 3(a)(47) of the Securities 
        Exchange Act of 1934), and the Commodity Exchange Act.
            (16) Enforcement of contracts guaranteed by the 
        covered financial company.--
                    (A) In general.--The Corporation, as 
                receiver for a covered financial company or as 
                receiver for a subsidiary of a covered 
                financial company (including an insured 
                depository institution) shall have the power to 
                enforce contracts of subsidiaries or affiliates 
                of the covered financial company, the 
                obligations under which are guaranteed or 
                otherwise supported by or linked to the covered 
                financial company, notwithstanding any 
                contractual right to cause the termination, 
                liquidation, or acceleration of such contracts 
                based solely on the insolvency, financial 
                condition, or receivership of the covered 
                financial company, if--
                            (i) such guaranty or other support 
                        and all related assets and liabilities 
                        are transferred to and assumed by a 
                        bridge financial company or a third 
                        party (other than a third party for 
                        which a conservator, receiver, trustee 
                        in bankruptcy, or other legal custodian 
                        has been appointed, or which is 
                        otherwise the subject of a bankruptcy 
                        or insolvency proceeding) within the 
                        same period of time as the Corporation 
                        is entitled to transfer the qualified 
                        financial contracts of such covered 
                        financial company; or
                            (ii) the Corporation, as receiver, 
                        otherwise provides adequate protection 
                        with respect to such obligations.
                    (B) Rule of construction.--For purposes of 
                this paragraph, a bridge financial company 
                shall not be considered to be a third party for 
                which a conservator, receiver, trustee in 
                bankruptcy, or other legal custodian has been 
                appointed, or which is otherwise the subject of 
                a bankruptcy or insolvency proceeding.
    (d) Valuation of Claims in Default.--
            (1) In general.--Notwithstanding any other 
        provision of Federal law or the law of any State, and 
        regardless of the method utilized by the Corporation 
        for a covered financial company, including transactions 
        authorized under subsection (h), this subsection shall 
        govern the rights of the creditors of any such covered 
        financial company.
            (2) Maximum liability.--The maximum liability of 
        the Corporation, acting as receiver for a covered 
        financial company or in any other capacity, to any 
        person having a claim against the Corporation as 
        receiver or the covered financial company for which the 
        Corporation is appointed shall equal the amount that 
        such claimant would have received if--
                    (A) the Corporation had not been appointed 
                receiver with respect to the covered financial 
                company; and
                    (B) the covered financial company had been 
                liquidated under chapter 7 of the Bankruptcy 
                Code, or any similar provision of State 
                insolvency law applicable to the covered 
                financial company.
            (3) Special provision for orderly liquidation by 
        sipc.--The maximum liability of the Corporation, acting 
        as receiver or in its corporate capacity for any 
        covered broker or dealer to any customer of such 
        covered broker or dealer, with respect to customer 
        property of such customer, shall be--
                    (A) equal to the amount that such customer 
                would have received with respect to such 
                customer property in a case initiated by SIPC 
                under the Securities Investor Protection Act of 
                1970 (15 U.S.C. 78aaa et seq.); and
                    (B) determined as of the close of business 
                on the date on which the Corporation is 
                appointed as receiver.
            (4) Additional payments authorized.--
                    (A) In general.--Subject to subsection 
                (o)(1)(D)(i), the Corporation, with the 
                approval of the Secretary, may make additional 
                payments or credit additional amounts to or 
                with respect to or for the account of any 
                claimant or category of claimants of the 
                covered financial company, if the Corporation 
                determines that such payments or credits are 
                necessary or appropriate to minimize losses to 
                the Corporation as receiver from the orderly 
                liquidation of the covered financial company 
                under this section.
                    (B) Limitations.--
                            (i) Prohibition.--The Corporation 
                        shall not make any payments or credit 
                        amounts to any claimant or category of 
                        claimants that would result in any 
                        claimant receiving more than the face 
                        value amount of any claim that is 
                        proven to the satisfaction of the 
                        Corporation.
                            (ii) No obligation.--
                        Notwithstanding any other provision of 
                        Federal or State law, or the 
                        Constitution of any State, the 
                        Corporation shall not be obligated, as 
                        a result of having made any payment 
                        under subparagraph (A) or credited any 
                        amount described in subparagraph (A) to 
                        or with respect to, or for the account, 
                        of any claimant or category of 
                        claimants, to make payments to any 
                        other claimant or category of 
                        claimants.
                    (C) Manner of payment.--The Corporation may 
                make payments or credit amounts under 
                subparagraph (A) directly to the claimants or 
                may make such payments or credit such amounts 
                to a company other than a covered financial 
                company or a bridge financial company 
                established with respect thereto in order to 
                induce such other company to accept liability 
                for such claims.
    (e) Limitation on Court Action.--Except as provided in this 
title, no court may take any action to restrain or affect the 
exercise of powers or functions of the receiver hereunder, and 
any remedy against the Corporation or receiver shall be limited 
to money damages determined in accordance with this title.
    (f) Liability of Directors and Officers.--
            (1) In general.--A director or officer of a covered 
        financial company may be held personally liable for 
        monetary damages in any civil action described in 
        paragraph (2) by, on behalf of, or at the request or 
        direction of the Corporation, which action is 
        prosecuted wholly or partially for the benefit of the 
        Corporation--
                    (A) acting as receiver for such covered 
                financial company;
                    (B) acting based upon a suit, claim, or 
                cause of action purchased from, assigned by, or 
                otherwise conveyed by the Corporation as 
                receiver; or
                    (C) acting based upon a suit, claim, or 
                cause of action purchased from, assigned by, or 
                otherwise conveyed in whole or in part by a 
                covered financial company or its affiliate in 
                connection with assistance provided under this 
                title.
            (2) Actions covered.--Paragraph (1) shall apply 
        with respect to actions for gross negligence, including 
        any similar conduct or conduct that demonstrates a 
        greater disregard of a duty of care (than gross 
        negligence) including intentional tortious conduct, as 
        such terms are defined and determined under applicable 
        State law.
            (3) Savings clause.--Nothing in this subsection 
        shall impair or affect any right of the Corporation 
        under other applicable law.
    (g) Damages.--In any proceeding related to any claim 
against a director, officer, employee, agent, attorney, 
accountant, or appraiser of a covered financial company, or any 
other party employed by or providing services to a covered 
financial company, recoverable damages determined to result 
from the improvident or otherwise improper use or investment of 
any assets of the covered financial company shall include 
principal losses and appropriate interest.
    (h) Bridge Financial Companies.--
            (1) Organization.--
                    (A) Purpose.--The Corporation, as receiver 
                for one or more covered financial companies or 
                in anticipation of being appointed receiver for 
                one or more covered financial companies, may 
                organize one or more bridge financial companies 
                in accordance with this subsection.
                    (B) Authorities.--Upon the creation of a 
                bridge financial company under subparagraph (A) 
                with respect to a covered financial company, 
                such bridge financial company may--
                            (i) assume such liabilities 
                        (including liabilities associated with 
                        any trust or custody business, but 
                        excluding any liabilities that count as 
                        regulatory capital) of such covered 
                        financial company as the Corporation 
                        may, in its discretion, determine to be 
                        appropriate;
                            (ii) purchase such assets 
                        (including assets associated with any 
                        trust or custody business) of such 
                        covered financial company as the 
                        Corporation may, in its discretion, 
                        determine to be appropriate; and
                            (iii) perform any other temporary 
                        function which the Corporation may, in 
                        its discretion, prescribe in accordance 
                        with this section.
            (2) Charter and establishment.--
                    (A) Establishment.--Except as provided in 
                subparagraph (H), where the covered financial 
                company is a covered broker or dealer, the 
                Corporation, as receiver for a covered 
                financial company, may grant a Federal charter 
                to and approve articles of association for one 
                or more bridge financial company or companies, 
                with respect to such covered financial company 
                which shall, by operation of law and 
                immediately upon issuance of its charter and 
                approval of its articles of association, be 
                established and operate in accordance with, and 
                subject to, such charter, articles, and this 
                section.
                    (B) Management.--Upon its establishment, a 
                bridge financial company shall be under the 
                management of a board of directors appointed by 
                the Corporation.
                    (C) Articles of association.--The articles 
                of association and organization certificate of 
                a bridge financial company shall have such 
                terms as the Corporation may provide, and shall 
                be executed by such representatives as the 
                Corporation may designate.
                    (D) Terms of charter; rights and 
                privileges.--Subject to and in accordance with 
                the provisions of this subsection, the 
                Corporation shall--
                            (i) establish the terms of the 
                        charter of a bridge financial company 
                        and the rights, powers, authorities, 
                        and privileges of a bridge financial 
                        company granted by the charter or as an 
                        incident thereto; and
                            (ii) provide for, and establish the 
                        terms and conditions governing, the 
                        management (including the bylaws and 
                        the number of directors of the board of 
                        directors) and operations of the bridge 
                        financial company.
                    (E) Transfer of rights and privileges of 
                covered financial company.--
                            (i) In general.--Notwithstanding 
                        any other provision of Federal or State 
                        law, the Corporation may provide for a 
                        bridge financial company to succeed to 
                        and assume any rights, powers, 
                        authorities, or privileges of the 
                        covered financial company with respect 
                        to which the bridge financial company 
                        was established and, upon such 
                        determination by the Corporation, the 
                        bridge financial company shall 
                        immediately and by operation of law 
                        succeed to and assume such rights, 
                        powers, authorities, and privileges.
                            (ii) Effective without approval.--
                        Any succession to or assumption by a 
                        bridge financial company of rights, 
                        powers, authorities, or privileges of a 
                        covered financial company under clause 
                        (i) or otherwise shall be effective 
                        without any further approval under 
                        Federal or State law, assignment, or 
                        consent with respect thereto.
                    (F) Corporate governance and election and 
                designation of body of law.--To the extent 
                permitted by the Corporation and consistent 
                with this section and any rules, regulations, 
                or directives issued by the Corporation under 
                this section, a bridge financial company may 
                elect to follow the corporate governance 
                practices and procedures that are applicable to 
                a corporation incorporated under the general 
                corporation law of the State of Delaware, or 
                the State of incorporation or organization of 
                the covered financial company with respect to 
                which the bridge financial company was 
                established, as such law may be amended from 
                time to time.
                    (G) Capital.--
                            (i) Capital not required.--
                        Notwithstanding any other provision of 
                        Federal or State law, a bridge 
                        financial company may, if permitted by 
                        the Corporation, operate without any 
                        capital or surplus, or with such 
                        capital or surplus as the Corporation 
                        may in its discretion determine to be 
                        appropriate.
                            (ii) No contribution by the 
                        corporation required.--The Corporation 
                        is not required to pay capital into a 
                        bridge financial company or to issue 
                        any capital stock on behalf of a bridge 
                        financial company established under 
                        this subsection.
                            (iii) Authority.--If the 
                        Corporation determines that such action 
                        is advisable, the Corporation may cause 
                        capital stock or other securities of a 
                        bridge financial company established 
                        with respect to a covered financial 
                        company to be issued and offered for 
                        sale in such amounts and on such terms 
                        and conditions as the Corporation may, 
                        in its discretion, determine.
                            (iv) Operating funds in lieu of 
                        capital and implementation plan.--Upon 
                        the organization of a bridge financial 
                        company, and thereafter as the 
                        Corporation may, in its discretion, 
                        determine to be necessary or advisable, 
                        the Corporation may make available to 
                        the bridge financial company, subject 
                        to the plan described in subsection 
                        (n)(9), funds for the operation of the 
                        bridge financial company in lieu of 
                        capital.
                    (H) Bridge brokers or dealers.--
                            (i) In general.--The Corporation, 
                        as receiver for a covered broker or 
                        dealer, may approve articles of 
                        association for one or more bridge 
                        financial companies with respect to 
                        such covered broker or dealer, which 
                        bridge financial company or companies 
                        shall, by operation of law and 
                        immediately upon approval of its 
                        articles of association--
                                    (I) be established and 
                                deemed registered with the 
                                Commission under the Securities 
                                Exchange Act of 1934 and a 
                                member of SIPC;
                                    (II) operate in accordance 
                                with such articles and this 
                                section; and
                                    (III) succeed to any and 
                                all registrations and 
                                memberships of the covered 
                                financial company with or in 
                                any self-regulatory 
                                organizations.
                            (ii) Other requirements.--Except as 
                        provided in clause (i), and 
                        notwithstanding any other provision of 
                        this section, the bridge financial 
                        company shall be subject to the Federal 
                        securities laws and all requirements 
                        with respect to being a member of a 
                        self-regulatory organization, unless 
                        exempted from any such requirements by 
                        the Commission, as is necessary or 
                        appropriate in the public interest or 
                        for the protection of investors.
                            (iii) Treatment of customers.--
                        Except as otherwise provided by this 
                        title, any customer of the covered 
                        broker or dealer whose account is 
                        transferred to a bridge financial 
                        company shall have all the rights, 
                        privileges, and protections under 
                        section 205(f) and under the Securities 
                        Investor Protection Act of 1970 (15 
                        U.S.C. 78aaa et seq.), that such 
                        customer would have had if the account 
                        were not transferred from the covered 
                        financial company under this 
                        subparagraph.
                            (iv) Operation of bridge brokers or 
                        dealers.--Notwithstanding any other 
                        provision of this title, the 
                        Corporation shall not operate any 
                        bridge financial company created by the 
                        Corporation under this title with 
                        respect to a covered broker or dealer 
                        in such a manner as to adversely affect 
                        the ability of customers to promptly 
                        access their customer property in 
                        accordance with applicable law.
            (3) Interests in and assets and obligations of 
        covered financial company.--Notwithstanding paragraph 
        (1) or (2) or any other provision of law--
                    (A) a bridge financial company shall 
                assume, acquire, or succeed to the assets or 
                liabilities of a covered financial company 
                (including the assets or liabilities associated 
                with any trust or custody business) only to the 
                extent that such assets or liabilities are 
                transferred by the Corporation to the bridge 
                financial company in accordance with, and 
                subject to the restrictions set forth in, 
                paragraph (1)(B); and
                    (B) a bridge financial company shall not 
                assume, acquire, or succeed to any obligation 
                that a covered financial company for which the 
                Corporation has been appointed receiver may 
                have to any shareholder, member, general 
                partner, limited partner, or other person with 
                an interest in the equity of the covered 
                financial company that arises as a result of 
                the status of that person having an equity 
                claim in the covered financial company.
            (4) Bridge financial company treated as being in 
        default for certain purposes.--A bridge financial 
        company shall be treated as a covered financial company 
        in default at such times and for such purposes as the 
        Corporation may, in its discretion, determine.
            (5) Transfer of assets and liabilities.--
                    (A) Authority of corporation.--The 
                Corporation, as receiver for a covered 
                financial company, may transfer any assets and 
                liabilities of a covered financial company 
                (including any assets or liabilities associated 
                with any trust or custody business) to one or 
                more bridge financial companies, in accordance 
                with and subject to the restrictions of 
                paragraph (1).
                    (B) Subsequent transfers.--At any time 
                after the establishment of a bridge financial 
                company with respect to a covered financial 
                company, the Corporation, as receiver, may 
                transfer any assets and liabilities of such 
                covered financial company as the Corporation 
                may, in its discretion, determine to be 
                appropriate in accordance with and subject to 
                the restrictions of paragraph (1).
                    (C) Treatment of trust or custody 
                business.--For purposes of this paragraph, the 
                trust or custody business, including fiduciary 
                appointments, held by any covered financial 
                company is included among its assets and 
                liabilities.
                    (D) Effective without approval.--The 
                transfer of any assets or liabilities, 
                including those associated with any trust or 
                custody business of a covered financial 
                company, to a bridge financial company shall be 
                effective without any further approval under 
                Federal or State law, assignment, or consent 
                with respect thereto.
                    (E) Equitable treatment of similarly 
                situated creditors.--The Corporation shall 
                treat all creditors of a covered financial 
                company that are similarly situated under 
                subsection (b)(1), in a similar manner in 
                exercising the authority of the Corporation 
                under this subsection to transfer any assets or 
                liabilities of the covered financial company to 
                one or more bridge financial companies 
                established with respect to such covered 
                financial company, except that the Corporation 
                may take any action (including making payments, 
                subject to subsection (o)(1)(D)(i)) that does 
                not comply with this subparagraph, if--
                            (i) the Corporation determines that 
                        such action is necessary--
                                    (I) to maximize the value 
                                of the assets of the covered 
                                financial company;
                                    (II) to maximize the 
                                present value return from the 
                                sale or other disposition of 
                                the assets of the covered 
                                financial company; or
                                    (III) to minimize the 
                                amount of any loss realized 
                                upon the sale or other 
                                disposition of the assets of 
                                the covered financial company; 
                                and
                            (ii) all creditors that are 
                        similarly situated under subsection 
                        (b)(1) receive not less than the amount 
                        provided under paragraphs (2) and (3) 
                        of subsection (d).
                    (F) Limitation on transfer of 
                liabilities.--Notwithstanding any other 
                provision of law, the aggregate amount of 
                liabilities of a covered financial company that 
                are transferred to, or assumed by, a bridge 
                financial company from a covered financial 
                company may not exceed the aggregate amount of 
                the assets of the covered financial company 
                that are transferred to, or purchased by, the 
                bridge financial company from the covered 
                financial company.
            (6) Stay of judicial action.--Any judicial action 
        to which a bridge financial company becomes a party by 
        virtue of its acquisition of any assets or assumption 
        of any liabilities of a covered financial company shall 
        be stayed from further proceedings for a period of not 
        longer than 45 days (or such longer period as may be 
        agreed to upon the consent of all parties) at the 
        request of the bridge financial company.
            (7) Agreements against interest of the bridge 
        financial company.--No agreement that tends to diminish 
        or defeat the interest of the bridge financial company 
        in any asset of a covered financial company acquired by 
        the bridge financial company shall be valid against the 
        bridge financial company, unless such agreement--
                    (A) is in writing;
                    (B) was executed by an authorized officer 
                or representative of the covered financial 
                company or confirmed in the ordinary course of 
                business by the covered financial company; and
                    (C) has been on the official record of the 
                company, since the time of its execution, or 
                with which, the party claiming under the 
                agreement provides documentation of such 
                agreement and its authorized execution or 
                confirmation by the covered financial company 
                that is acceptable to the receiver.
            (8) No federal status.--
                    (A) Agency status.--A bridge financial 
                company is not an agency, establishment, or 
                instrumentality of the United States.
                    (B) Employee status.--Representatives for 
                purposes of paragraph (1)(B), directors, 
                officers, employees, or agents of a bridge 
                financial company are not, solely by virtue of 
                service in any such capacity, officers or 
                employees of the United States. Any employee of 
                the Corporation or of any Federal 
                instrumentality who serves at the request of 
                the Corporation as a representative for 
                purposes of paragraph (1)(B), director, 
                officer, employee, or agent of a bridge 
                financial company shall not--
                            (i) solely by virtue of service in 
                        any such capacity lose any existing 
                        status as an officer or employee of the 
                        United States for purposes of title 5, 
                        United States Code, or any other 
                        provision of law; or
                            (ii) receive any salary or benefits 
                        for service in any such capacity with 
                        respect to a bridge financial company 
                        in addition to such salary or benefits 
                        as are obtained through employment with 
                        the Corporation or such Federal 
                        instrumentality.
            (9) Funding authorized.--The Corporation may, 
        subject to the plan described in subsection (n)(9), 
        provide funding to facilitate any transaction described 
        in subparagraph (A), (B), (C), or (D) of paragraph (13) 
        with respect to any bridge financial company, or 
        facilitate the acquisition by a bridge financial 
        company of any assets, or the assumption of any 
        liabilities, of a covered financial company for which 
        the Corporation has been appointed receiver.
            (10) Exempt tax status.--Notwithstanding any other 
        provision of Federal or State law, a bridge financial 
        company, its franchise, property, and income shall be 
        exempt from all taxation now or hereafter imposed by 
        the United States, by any territory, dependency, or 
        possession thereof, or by any State, county, 
        municipality, or local taxing authority.
            (11) Federal agency approval; antitrust review.--If 
        a transaction involving the merger or sale of a bridge 
        financial company requires approval by a Federal 
        agency, the transaction may not be consummated before 
        the 5th calendar day after the date of approval by the 
        Federal agency responsible for such approval with 
        respect thereto. If, in connection with any such 
        approval a report on competitive factors from the 
        Attorney General is required, the Federal agency 
        responsible for such approval shall promptly notify the 
        Attorney General of the proposed transaction and the 
        Attorney General shall provide the required report 
        within 10 days of the request. If a notification is 
        required under section 7A of the Clayton Act with 
        respect to such transaction, the required waiting 
        period shall end on the 15th day after the date on 
        which the Attorney General and the Federal Trade 
        Commission receive such notification, unless the 
        waiting period is terminated earlier under section 
        7A(b)(2) of the Clayton Act, or extended under section 
        7A(e)(2) of that Act.
            (12) Duration of bridge financial company.--Subject 
        to paragraphs (13) and (14), the status of a bridge 
        financial company as such shall terminate at the end of 
        the 2-year period following the date on which it was 
        granted a charter. The Corporation may, in its 
        discretion, extend the status of the bridge financial 
        company as such for no more than 3 additional 1-year 
        periods.
            (13) Termination of bridge financial company 
        status.--The status of any bridge financial company as 
        such shall terminate upon the earliest of--
                    (A) the date of the merger or consolidation 
                of the bridge financial company with a company 
                that is not a bridge financial company;
                    (B) at the election of the Corporation, the 
                sale of a majority of the capital stock of the 
                bridge financial company to a company other 
                than the Corporation and other than another 
                bridge financial company;
                    (C) the sale of 80 percent, or more, of the 
                capital stock of the bridge financial company 
                to a person other than the Corporation and 
                other than another bridge financial company;
                    (D) at the election of the Corporation, 
                either the assumption of all or substantially 
                all of the liabilities of the bridge financial 
                company by a company that is not a bridge 
                financial company, or the acquisition of all or 
                substantially all of the assets of the bridge 
                financial company by a company that is not a 
                bridge financial company, or other entity as 
                permitted under applicable law; and
                    (E) the expiration of the period provided 
                in paragraph (12), or the earlier dissolution 
                of the bridge financial company, as provided in 
                paragraph (15).
            (14) Effect of termination events.--
                    (A) Merger or consolidation.--A merger or 
                consolidation, described in paragraph (13)(A) 
                shall be conducted in accordance with, and 
                shall have the effect provided in, the 
                provisions of applicable law. For the purpose 
                of effecting such a merger or consolidation, 
                the bridge financial company shall be treated 
                as a corporation organized under the laws of 
                the State of Delaware (unless the law of 
                another State has been selected by the bridge 
                financial company in accordance with paragraph 
                (2)(F)), and the Corporation shall be treated 
                as the sole shareholder thereof, 
                notwithstanding any other provision of State or 
                Federal law.
                    (B) Charter conversion.--Following the sale 
                of a majority of the capital stock of the 
                bridge financial company, as provided in 
                paragraph (13)(B), the Corporation may amend 
                the charter of the bridge financial company to 
                reflect the termination of the status of the 
                bridge financial company as such, whereupon the 
                company shall have all of the rights, powers, 
                and privileges under its constituent documents 
                and applicable Federal or State law. In 
                connection therewith, the Corporation may take 
                such steps as may be necessary or convenient to 
                reincorporate the bridge financial company 
                under the laws of a State and, notwithstanding 
                any provisions of Federal or State law, such 
                State-chartered corporation shall be deemed to 
                succeed by operation of law to such rights, 
                titles, powers, and interests of the bridge 
                financial company as the Corporation may 
                provide, with the same effect as if the bridge 
                financial company had merged with the State-
                chartered corporation under provisions of the 
                corporate laws of such State.
                    (C) Sale of stock.--Following the sale of 
                80 percent or more of the capital stock of a 
                bridge financial company, as provided in 
                paragraph (13)(C), the company shall have all 
                of the rights, powers, and privileges under its 
                constituent documents and applicable Federal or 
                State law. In connection therewith, the 
                Corporation may take such steps as may be 
                necessary or convenient to reincorporate the 
                bridge financial company under the laws of a 
                State and, notwithstanding any provisions of 
                Federal or State law, the State-chartered 
                corporation shall be deemed to succeed by 
                operation of law to such rights, titles, powers 
                and interests of the bridge financial company 
                as the Corporation may provide, with the same 
                effect as if the bridge financial company had 
                merged with the State-chartered corporation 
                under provisions of the corporate laws of such 
                State.
                    (D) Assumption of liabilities and sale of 
                assets.--Following the assumption of all or 
                substantially all of the liabilities of the 
                bridge financial company, or the sale of all or 
                substantially all of the assets of the bridge 
                financial company, as provided in paragraph 
                (13)(D), at the election of the Corporation, 
                the bridge financial company may retain its 
                status as such for the period provided in 
                paragraph (12) or may be dissolved at the 
                election of the Corporation.
                    (E) Amendments to charter.--Following the 
                consummation of a transaction described in 
                subparagraph (A), (B), (C), or (D) of paragraph 
                (13), the charter of the resulting company 
                shall be amended to reflect the termination of 
                bridge financial company status, if 
                appropriate.
            (15) Dissolution of bridge financial company.--
                    (A) In general.--Notwithstanding any other 
                provision of Federal or State law, if the 
                status of a bridge financial company as such 
                has not previously been terminated by the 
                occurrence of an event specified in 
                subparagraph (A), (B), (C), or (D) of paragraph 
                (13)--
                            (i) the Corporation may, in its 
                        discretion, dissolve the bridge 
                        financial company in accordance with 
                        this paragraph at any time; and
                            (ii) the Corporation shall promptly 
                        commence dissolution proceedings in 
                        accordance with this paragraph upon the 
                        expiration of the 2-year period 
                        following the date on which the bridge 
                        financial company was chartered, or any 
                        extension thereof, as provided in 
                        paragraph (12).
                    (B) Procedures.--The Corporation shall 
                remain the receiver for a bridge financial 
                company for the purpose of dissolving the 
                bridge financial company. The Corporation as 
                receiver for a bridge financial company shall 
                wind up the affairs of the bridge financial 
                company in conformity with the provisions of 
                law relating to the liquidation of covered 
                financial companies under this title. With 
                respect to any such bridge financial company, 
                the Corporation as receiver shall have all the 
                rights, powers, and privileges and shall 
                perform the duties related to the exercise of 
                such rights, powers, or privileges granted by 
                law to the Corporation as receiver for a 
                covered financial company under this title and, 
                notwithstanding any other provision of law, in 
                the exercise of such rights, powers, and 
                privileges, the Corporation shall not be 
                subject to the direction or supervision of any 
                State agency or other Federal agency.
            (16) Authority to obtain credit.--
                    (A) In general.--A bridge financial company 
                may obtain unsecured credit and issue unsecured 
                debt.
                    (B) Inability to obtain credit.--If a 
                bridge financial company is unable to obtain 
                unsecured credit or issue unsecured debt, the 
                Corporation may authorize the obtaining of 
                credit or the issuance of debt by the bridge 
                financial company--
                            (i) with priority over any or all 
                        of the obligations of the bridge 
                        financial company;
                            (ii) secured by a lien on property 
                        of the bridge financial company that is 
                        not otherwise subject to a lien; or
                            (iii) secured by a junior lien on 
                        property of the bridge financial 
                        company that is subject to a lien.
                    (C) Limitations.--
                            (i) In general.--The Corporation, 
                        after notice and a hearing, may 
                        authorize the obtaining of credit or 
                        the issuance of debt by a bridge 
                        financial company that is secured by a 
                        senior or equal lien on property of the 
                        bridge financial company that is 
                        subject to a lien, only if--
                                    (I) the bridge financial 
                                company is unable to otherwise 
                                obtain such credit or issue 
                                such debt; and
                                    (II) there is adequate 
                                protection of the interest of 
                                the holder of the lien on the 
                                property with respect to which 
                                such senior or equal lien is 
                                proposed to be granted.
                            (ii) Hearing.--The hearing required 
                        pursuant to this subparagraph shall be 
                        before a court of the United States, 
                        which shall have jurisdiction to 
                        conduct such hearing and to authorize a 
                        bridge financial company to obtain 
                        secured credit under clause (i).
                    (D) Burden of proof.--In any hearing under 
                this paragraph, the Corporation has the burden 
                of proof on the issue of adequate protection.
                    (E) Qualified financial contracts.--No 
                credit or debt obtained or issued by a bridge 
                financial company may contain terms that impair 
                the rights of a counterparty to a qualified 
                financial contract upon a default by the bridge 
                financial company, other than the priority of 
                such counterparty's unsecured claim (after the 
                exercise of rights) relative to the priority of 
                the bridge financial company's obligations in 
                respect of such credit or debt, unless such 
                counterparty consents in writing to any such 
                impairment.
            (17) Effect on debts and liens.--The reversal or 
        modification on appeal of an authorization under this 
        subsection to obtain credit or issue debt, or of a 
        grant under this section of a priority or a lien, does 
        not affect the validity of any debt so issued, or any 
        priority or lien so granted, to an entity that extended 
        such credit in good faith, whether or not such entity 
        knew of the pendency of the appeal, unless such 
        authorization and the issuance of such debt, or the 
        granting of such priority or lien, were stayed pending 
        appeal.
    (i) Sharing Records.--If the Corporation has been appointed 
as receiver for a covered financial company, other Federal 
regulators shall make all records relating to the covered 
financial company available to the Corporation, which may be 
used by the Corporation in any manner that the Corporation 
determines to be appropriate.
    (j) Expedited Procedures for Certain Claims.--
            (1) Time for filing notice of appeal.--The notice 
        of appeal of any order, whether interlocutory or final, 
        entered in any case brought by the Corporation against 
        a director, officer, employee, agent, attorney, 
        accountant, or appraiser of the covered financial 
        company, or any other person employed by or providing 
        services to a covered financial company, shall be filed 
        not later than 30 days after the date of entry of the 
        order. The hearing of the appeal shall be held not 
        later than 120 days after the date of the notice of 
        appeal. The appeal shall be decided not later than 180 
        days after the date of the notice of appeal.
            (2) Scheduling.--The court shall expedite the 
        consideration of any case brought by the Corporation 
        against a director, officer, employee, agent, attorney, 
        accountant, or appraiser of a covered financial company 
        or any other person employed by or providing services 
        to a covered financial company. As far as practicable, 
        the court shall give such case priority on its docket.
            (3) Judicial discretion.--The court may modify the 
        schedule and limitations stated in paragraphs (1) and 
        (2) in a particular case, based on a specific finding 
        that the ends of justice that would be served by making 
        such a modification would outweigh the best interest of 
        the public in having the case resolved expeditiously.
    (k) Foreign Investigations.--The Corporation, as receiver 
for any covered financial company, and for purposes of carrying 
out any power, authority, or duty with respect to a covered 
financial company--
            (1) may request the assistance of any foreign 
        financial authority and provide assistance to any 
        foreign financial authority in accordance with section 
        8(v) of the Federal Deposit Insurance Act, as if the 
        covered financial company were an insured depository 
        institution, the Corporation were the appropriate 
        Federal banking agency for the company, and any foreign 
        financial authority were the foreign banking authority; 
        and
            (2) may maintain an office to coordinate foreign 
        investigations or investigations on behalf of foreign 
        financial authorities.
    (l) Prohibition on Entering Secrecy Agreements and 
Protective Orders.--The Corporation may not enter into any 
agreement or approve any protective order which prohibits the 
Corporation from disclosing the terms of any settlement of an 
administrative or other action for damages or restitution 
brought by the Corporation in its capacity as receiver for a 
covered financial company.
    (m) Liquidation of Certain Covered Financial Companies or 
Bridge Financial Companies.--
            (1) In general.--Except as specifically provided in 
        this section, and notwithstanding any other provision 
        of law, the Corporation, in connection with the 
        liquidation of any covered financial company or bridge 
        financial company with respect to which the Corporation 
        has been appointed as receiver, shall--
                    (A) in the case of any covered financial 
                company or bridge financial company that is a 
                stockbroker, but is not a member of the 
                Securities Investor Protection Corporation, 
                apply the provisions of subchapter III of 
                chapter 7 of the Bankruptcy Code, in respect of 
                the distribution to any customer of all 
                customer name security and customer property 
                and member property, as if such covered 
                financial company or bridge financial company 
                were a debtor for purposes of such subchapter; 
                or
                    (B) in the case of any covered financial 
                company or bridge financial company that is a 
                commodity broker, apply the provisions of 
                subchapter IV of chapter 7 the Bankruptcy Code, 
                in respect of the distribution to any customer 
                of all customer property and member property, 
                as if such covered financial company or bridge 
                financial company were a debtor for purposes of 
                such subchapter.
            (2) Definitions.--For purposes of this subsection--
                    (A) the terms ``customer'', ``customer name 
                security'', and ``customer property and member 
                property'' have the same meanings as in 
                sections 741 and 761 of title 11, United States 
                Code; and
                    (B) the terms ``commodity broker'' and 
                ``stockbroker'' have the same meanings as in 
                section 101 of the Bankruptcy Code.
    (n) Orderly Liquidation Fund.--
            (1) Establishment.--There is established in the 
        Treasury of the United States a separate fund to be 
        known as the ``Orderly Liquidation Fund'', which shall 
        be available to the Corporation to carry out the 
        authorities contained in this title, for the cost of 
        actions authorized by this title, including the orderly 
        liquidation of covered financial companies, payment of 
        administrative expenses, the payment of principal and 
        interest by the Corporation on obligations issued under 
        paragraph (5), and the exercise of the authorities of 
        the Corporation under this title.
            (2) Proceeds.--Amounts received by the Corporation, 
        including assessments received under subsection (o), 
        proceeds of obligations issued under paragraph (5), 
        interest and other earnings from investments, and 
        repayments to the Corporation by covered financial 
        companies, shall be deposited into the Fund.
            (3) Management.--The Corporation shall manage the 
        Fund in accordance with this subsection and the 
        policies and procedures established under section 
        203(d).
            (4) Investments.--At the request of the 
        Corporation, the Secretary may invest such portion of 
        amounts held in the Fund that are not, in the judgment 
        of the Corporation, required to meet the current needs 
        of the Corporation, in obligations of the United States 
        having suitable maturities, as determined by the 
        Corporation. The interest on and the proceeds from the 
        sale or redemption of such obligations shall be 
        credited to the Fund.
            (5) Authority to issue obligations.--
                    (A) Corporation authorized to issue 
                obligations.--Upon appointment by the Secretary 
                of the Corporation as receiver for a covered 
                financial company, the Corporation is 
                authorized to issue obligations to the 
                Secretary.
                    (B) Secretary authorized to purchase 
                obligations.--The Secretary may, under such 
                terms and conditions as the Secretary may 
                require, purchase or agree to purchase any 
                obligations issued under subparagraph (A), and 
                for such purpose, the Secretary is authorized 
                to use as a public debt transaction the 
                proceeds of the sale of any securities issued 
                under chapter 31 of title 31, United States 
                Code, and the purposes for which securities may 
                be issued under chapter 31 of title 31, United 
                States Code, are extended to include such 
                purchases.
                    (C) Interest rate.--Each purchase of 
                obligations by the Secretary under this 
                paragraph shall be upon such terms and 
                conditions as to yield a return at a rate 
                determined by the Secretary, taking into 
                consideration the current average yield on 
                outstanding marketable obligations of the 
                United States of comparable maturity, plus an 
                interest rate surcharge to be determined by the 
                Secretary, which shall be greater than the 
                difference between--
                            (i) the current average rate on an 
                        index of corporate obligations of 
                        comparable maturity; and
                            (ii) the current average rate on 
                        outstanding marketable obligations of 
                        the United States of comparable 
                        maturity.
                    (D) Secretary authorized to sell 
                obligations.--The Secretary may sell, upon such 
                terms and conditions as the Secretary shall 
                determine, any of the obligations acquired 
                under this paragraph.
                    (E) Public debt transactions.--All 
                purchases and sales by the Secretary of such 
                obligations under this paragraph shall be 
                treated as public debt transactions of the 
                United States, and the proceeds from the sale 
                of any obligations acquired by the Secretary 
                under this paragraph shall be deposited into 
                the Treasury of the United States as 
                miscellaneous receipts.
            (6) Maximum obligation limitation.--The Corporation 
        may not, in connection with the orderly liquidation of 
        a covered financial company, issue or incur any 
        obligation, if, after issuing or incurring the 
        obligation, the aggregate amount of such obligations 
        outstanding under this subsection for each covered 
        financial company would exceed--
                    (A) an amount that is equal to 10 percent 
                of the total consolidated assets of the covered 
                financial company, based on the most recent 
                financial statement available, during the 30-
                day period immediately following the date of 
                appointment of the Corporation as receiver (or 
                a shorter time period if the Corporation has 
                calculated the amount described under 
                subparagraph (B)); and
                    (B) the amount that is equal to 90 percent 
                of the fair value of the total consolidated 
                assets of each covered financial company that 
                are available for repayment, after the time 
                period described in subparagraph (A).
            (7) Rulemaking.--The Corporation and the Secretary 
        shall jointly, in consultation with the Council, 
        prescribe regulations governing the calculation of the 
        maximum obligation limitation defined in this 
        paragraph.
            (8) Rule of construction.--
                    (A) In general.--Nothing in this section 
                shall be construed to affect the authority of 
                the Corporation under subsection (a) or (b) of 
                section 14 or section 15(c)(5) of the Federal 
                Deposit Insurance Act (12 U.S.C. 1824, 
                1825(c)(5)), the management of the Deposit 
                Insurance Fund by the Corporation, or the 
                resolution of insured depository institutions, 
                provided that--
                            (i) the authorities of the 
                        Corporation contained in this title 
                        shall not be used to assist the Deposit 
                        Insurance Fund or to assist any 
                        financial company under applicable law 
                        other than this Act;
                            (ii) the authorities of the 
                        Corporation relating to the Deposit 
                        Insurance Fund, or any other 
                        responsibilities of the Corporation 
                        under applicable law other than this 
                        title, shall not be used to assist a 
                        covered financial company pursuant to 
                        this title; and
                            (iii) the Deposit Insurance Fund 
                        may not be used in any manner to 
                        otherwise circumvent the purposes of 
                        this title.
                    (B) Valuation.--For purposes of determining 
                the amount of obligations under this 
                subsection--
                            (i) the Corporation shall include 
                        as an obligation any contingent 
                        liability of the Corporation pursuant 
                        to this title; and
                            (ii) the Corporation shall value 
                        any contingent liability at its 
                        expected cost to the Corporation.
            (9) Orderly liquidation and repayment plans.--
                    (A) Orderly liquidation plan.--Amounts in 
                the Fund shall be available to the Corporation 
                with regard to a covered financial company for 
                which the Corporation is appointed receiver 
                after the Corporation has developed an orderly 
                liquidation plan that is acceptable to the 
                Secretary with regard to such covered financial 
                company, including the provision and use of 
                funds, including taking any actions specified 
                under section 204(d) and subsection 
                (h)(2)(G)(iv) and (h)(9) of this section, and 
                payments to third parties. The orderly 
                liquidation plan shall take into account 
                actions to avoid or mitigate potential adverse 
                effects on low income, minority, or underserved 
                communities affected by the failure of the 
                covered financial company, and shall provide 
                for coordination with the primary financial 
                regulatory agencies, as appropriate, to ensure 
                that such actions are taken. The Corporation 
                may, at any time, amend any orderly liquidation 
                plan approved by the Secretary with the 
                concurrence of the Secretary.
                    (B) Mandatory repayment plan.--
                            (i) In general.--No amount 
                        authorized under paragraph (6)(B) may 
                        be provided by the Secretary to the 
                        Corporation under paragraph (5), unless 
                        an agreement is in effect between the 
                        Secretary and the Corporation that--
                                    (I) provides a specific 
                                plan and schedule to achieve 
                                the repayment of the 
                                outstanding amount of any 
                                borrowing under paragraph (5); 
                                and
                                    (II) demonstrates that 
                                income to the Corporation from 
                                the liquidated assets of the 
                                covered financial company and 
                                assessments under subsection 
                                (o) will be sufficient to 
                                amortize the outstanding 
                                balance within the period 
                                established in the repayment 
                                schedule and pay the interest 
                                accruing on such balance within 
                                the time provided in subsection 
                                (o)(1)(B).
                            (ii) Consultation with and report 
                        to congress.--The Secretary and the 
                        Corporation shall--
                                    (I) consult with the 
                                Committee on Banking, Housing, 
                                and Urban Affairs of the Senate 
                                and the Committee on Financial 
                                Services of the House of 
                                Representatives on the terms of 
                                any repayment schedule 
                                agreement; and
                                    (II) submit a copy of the 
                                repayment schedule agreement to 
                                the Committees described in 
                                subclause (I) before the end of 
                                the 30-day period beginning on 
                                the date on which any amount is 
                                provided by the Secretary to 
                                the Corporation under paragraph 
                                (5).
            (10) Implementation expenses.--
                    (A) In general.--Reasonable implementation 
                expenses of the Corporation incurred after the 
                date of enactment of this Act shall be treated 
                as expenses of the Council.
                    (B) Requests for reimbursement.--The 
                Corporation shall periodically submit a request 
                for reimbursement for implementation expenses 
                to the Chairperson of the Council, who shall 
                arrange for prompt reimbursement to the 
                Corporation of reasonable implementation 
                expenses.
                    (C) Definition.--As used in this paragraph, 
                the term ``implementation expenses''--
                            (i) means costs incurred by the 
                        Corporation beginning on the date of 
                        enactment of this Act, as part of its 
                        efforts to implement this title that do 
                        not relate to a particular covered 
                        financial company; and
                            (ii) includes the costs incurred in 
                        connection with the development of 
                        policies, procedures, rules, and 
                        regulations and other planning 
                        activities of the Corporation 
                        consistent with carrying out this 
                        title.
    (o) Assessments.--
            (1) Risk-based assessments.--
                    (A) Eligible financial companies defined.--
                For purposes of this subsection, the term 
                ``eligible financial company'' means any bank 
                holding company with total consolidated assets 
                equal to or greater than $50,000,000,000 and 
                any nonbank financial company supervised by the 
                Board of Governors.
                    (B) Assessments.--The Corporation shall 
                charge one or more risk-based assessments in 
                accordance with the provisions of subparagraph 
                (D), if such assessments are necessary to pay 
                in full the obligations issued by the 
                Corporation to the Secretary under this title 
                within 60 months of the date of issuance of 
                such obligations.
                    (C) Extensions authorized.--The Corporation 
                may, with the approval of the Secretary, extend 
                the time period under subparagraph (B), if the 
                Corporation determines that an extension is 
                necessary to avoid a serious adverse effect on 
                the financial system of the United States.
                    (D) Application of assessments.--To meet 
                the requirements of subparagraph (B), the 
                Corporation shall--
                            (i) impose assessments, as soon as 
                        practicable, on any claimant that 
                        received additional payments or amounts 
                        from the Corporation pursuant to 
                        subsection (b)(4), (d)(4), or 
                        (h)(5)(E), except for payments or 
                        amounts necessary to initiate and 
                        continue operations essential to 
                        implementation of the receivership or 
                        any bridge financial company, to 
                        recover on a cumulative basis, the 
                        entire difference between--
                                    (I) the aggregate value the 
                                claimant received from the 
                                Corporation on a claim pursuant 
                                to this title (including 
                                pursuant to subsection (b)(4), 
                                (d)(4), and (h)(5)(E)), as of 
                                the date on which such value 
                                was received; and
                                    (II) the value the claimant 
                                was entitled to receive from 
                                the Corporation on such claim 
                                solely from the proceeds of the 
                                liquidation of the covered 
                                financial company under this 
                                title; and
                            (ii) if the amounts to be recovered 
                        on a cumulative basis under clause (i) 
                        are insufficient to meet the 
                        requirements of subparagraph (B), after 
                        taking into account the considerations 
                        set forth in paragraph (4), impose 
                        assessments on--
                                    (I) eligible financial 
                                companies; and
                                    (II) financial companies 
                                with total consolidated assets 
                                equal to or greater than 
                                $50,000,000,000 that are not 
                                eligible financial companies.
                    (E) Provision of financing.--Payments or 
                amounts necessary to initiate and continue 
                operations essential to implementation of the 
                receivership or any bridge financial company 
                described in subparagraph (D)(i) shall not 
                include the provision of financing, as defined 
                by rule of the Corporation, to third parties.
            (2) Graduated assessment rate.--The Corporation 
        shall impose assessments on a graduated basis, with 
        financial companies having greater assets and risk 
        being assessed at a higher rate.
            (3) Notification and payment.--The Corporation 
        shall notify each financial company of that company's 
        assessment under this subsection. Any financial company 
        subject to assessment under this subsection shall pay 
        such assessment in accordance with the regulations 
        prescribed pursuant to paragraph (6).
            (4) Risk-based assessment considerations.--In 
        imposing assessments under paragraph (1)(D)(ii), the 
        Corporation shall use a risk matrix. The Council shall 
        make a recommendation to the Corporation on the risk 
        matrix to be used in imposing such assessments, and the 
        Corporation shall take into account any such 
        recommendation in the establishment of the risk matrix 
        to be used to impose such assessments. In recommending 
        or establishing such risk matrix, the Council and the 
        Corporation, respectively, shall take into account--
                    (A) economic conditions generally affecting 
                financial companies so as to allow assessments 
                to increase during more favorable economic 
                conditions and to decrease during less 
                favorable economic conditions;
                    (B) any assessments imposed on a financial 
                company or an affiliate of a financial company 
                that--
                            (i) is an insured depository 
                        institution, assessed pursuant to 
                        section 7 or 13(c)(4)(G) of the Federal 
                        Deposit Insurance Act;
                            (ii) is a member of the Securities 
                        Investor Protection Corporation, 
                        assessed pursuant to section 4 of the 
                        Securities Investor Protection Act of 
                        1970 (15 U.S.C. 78ddd);
                            (iii) is an insured credit union, 
                        assessed pursuant to section 
                        202(c)(1)(A)(i) of the Federal Credit 
                        Union Act (12 U.S.C. 1782(c)(1)(A)(i)); 
                        or
                            (iv) is an insurance company, 
                        assessed pursuant to applicable State 
                        law to cover (or reimburse payments 
                        made to cover) the costs of the 
                        rehabilitation, liquidation, or other 
                        State insolvency proceeding with 
                        respect to 1 or more insurance 
                        companies;
                    (C) the risks presented by the financial 
                company to the financial system and the extent 
                to which the financial company has benefitted, 
                or likely would benefit, from the orderly 
                liquidation of a financial company under this 
                title, including--
                            (i) the amount, different 
                        categories, and concentrations of 
                        assets of the financial company and its 
                        affiliates, including both on-balance 
                        sheet and off-balance sheet assets;
                            (ii) the activities of the 
                        financial company and its affiliates;
                            (iii) the relevant market share of 
                        the financial company and its 
                        affiliates;
                            (iv) the extent to which the 
                        financial company is leveraged;
                            (v) the potential exposure to 
                        sudden calls on liquidity precipitated 
                        by economic distress;
                            (vi) the amount, maturity, 
                        volatility, and stability of the 
                        company's financial obligations to, and 
                        relationship with, other financial 
                        companies;
                            (vii) the amount, maturity, 
                        volatility, and stability of the 
                        liabilities of the company, including 
                        the degree of reliance on short-term 
                        funding, taking into consideration 
                        existing systems for measuring a 
                        company's risk-based capital;
                            (viii) the stability and variety of 
                        the company's sources of funding;
                            (ix) the company's importance as a 
                        source of credit for households, 
                        businesses, and State and local 
                        governments and as a source of 
                        liquidity for the financial system;
                            (x) the extent to which assets are 
                        simply managed and not owned by the 
                        financial company and the extent to 
                        which ownership of assets under 
                        management is diffuse; and
                            (xi) the amount, different 
                        categories, and concentrations of 
                        liabilities, both insured and 
                        uninsured, contingent and 
                        noncontingent, including both on-
                        balance sheet and off-balance sheet 
                        liabilities, of the financial company 
                        and its affiliates;
                    (D) any risks presented by the financial 
                company during the 10-year period immediately 
                prior to the appointment of the Corporation as 
                receiver for the covered financial company that 
                contributed to the failure of the covered 
                financial company; and
                    (E) such other risk-related factors as the 
                Corporation, or the Council, as applicable, may 
                determine to be appropriate.
            (5) Collection of information.--The Corporation may 
        impose on covered financial companies such collection 
        of information requirements as the Corporation deems 
        necessary to carry out this subsection after the 
        appointment of the Corporation as receiver under this 
        title.
            (6) Rulemaking.--
                    (A) In general.--The Corporation shall 
                prescribe regulations to carry out this 
                subsection. The Corporation shall consult with 
                the Secretary in the development and 
                finalization of such regulations.
                    (B) Equitable treatment.--The regulations 
                prescribed under subparagraph (A) shall take 
                into account the differences in risks posed to 
                the financial stability of the United States by 
                financial companies, the differences in the 
                liability structures of financial companies, 
                and the different bases for other assessments 
                that such financial companies may be required 
                to pay, to ensure that assessed financial 
                companies are treated equitably and that 
                assessments under this subsection reflect such 
                differences.
    (p) Unenforceability of Certain Agreements.--
            (1) In general.--No provision described in 
        paragraph (2) shall be enforceable against or impose 
        any liability on any person, as such enforcement or 
        liability shall be contrary to public policy.
            (2) Prohibited provisions.--A provision described 
        in this paragraph is any term contained in any existing 
        or future standstill, confidentiality, or other 
        agreement that, directly or indirectly--
                    (A) affects, restricts, or limits the 
                ability of any person to offer to acquire or 
                acquire;
                    (B) prohibits any person from offering to 
                acquire or acquiring; or
                    (C) prohibits any person from using any 
                previously disclosed information in connection 
                with any such offer to acquire or acquisition 
                of,

        all or part of any covered financial company, including 
        any liabilities, assets, or interest therein, in 
        connection with any transaction in which the 
        Corporation exercises its authority under this title.
    (q) Other Exemptions.--
            (1) In general.--When acting as a receiver under 
        this title--
                    (A) the Corporation, including its 
                franchise, its capital, reserves and surplus, 
                and its income, shall be exempt from all 
                taxation imposed by any State, county, 
                municipality, or local taxing authority, except 
                that any real property of the Corporation shall 
                be subject to State, territorial, county, 
                municipal, or local taxation to the same extent 
                according to its value as other real property 
                is taxed, except that, notwithstanding the 
                failure of any person to challenge an 
                assessment under State law of the value of such 
                property, such value, and the tax thereon, 
                shall be determined as of the period for which 
                such tax is imposed;
                    (B) no property of the Corporation shall be 
                subject to levy, attachment, garnishment, 
                foreclosure, or sale without the consent of the 
                Corporation, nor shall any involuntary lien 
                attach to the property of the Corporation; and
                    (C) the Corporation shall not be liable for 
                any amounts in the nature of penalties or 
                fines, including those arising from the failure 
                of any person to pay any real property, 
                personal property, probate, or recording tax or 
                any recording or filing fees when due; and
                    (D) the Corporation shall be exempt from 
                all prosecution by the United States or any 
                State, county, municipality, or local authority 
                for any criminal offense arising under Federal, 
                State, county, municipal, or local law, which 
                was allegedly committed by the covered 
                financial company, or persons acting on behalf 
                of the covered financial company, prior to the 
                appointment of the Corporation as receiver.
            (2) Limitation.--Paragraph (1) shall not apply with 
        respect to any tax imposed (or other amount arising) 
        under the Internal Revenue Code of 1986.
    (r) Certain Sales of Assets Prohibited.--
            (1) Persons who engaged in improper conduct with, 
        or caused losses to, covered financial companies.--The 
        Corporation shall prescribe regulations which, at a 
        minimum, shall prohibit the sale of assets of a covered 
        financial company by the Corporation to--
                    (A) any person who--
                            (i) has defaulted, or was a member 
                        of a partnership or an officer or 
                        director of a corporation that has 
                        defaulted, on 1 or more obligations, 
                        the aggregate amount of which exceeds 
                        $1,000,000, to such covered financial 
                        company;
                            (ii) has been found to have engaged 
                        in fraudulent activity in connection 
                        with any obligation referred to in 
                        clause (i); and
                            (iii) proposes to purchase any such 
                        asset in whole or in part through the 
                        use of the proceeds of a loan or 
                        advance of credit from the Corporation 
                        or from any covered financial company;
                    (B) any person who participated, as an 
                officer or director of such covered financial 
                company or of any affiliate of such company, in 
                a material way in any transaction that resulted 
                in a substantial loss to such covered financial 
                company; or
                    (C) any person who has demonstrated a 
                pattern or practice of defalcation regarding 
                obligations to such covered financial company.
            (2) Convicted debtors.--Except as provided in 
        paragraph (3), a person may not purchase any asset of 
        such institution from the receiver, if that person--
                    (A) has been convicted of an offense under 
                section 215, 656, 657, 1005, 1006, 1007, 1008, 
                1014, 1032, 1341, 1343, or 1344 of title 18, 
                United States Code, or of conspiring to commit 
                such an offense, affecting any covered 
                financial company; and
                    (B) is in default on any loan or other 
                extension of credit from such covered financial 
                company which, if not paid, will cause 
                substantial loss to the Fund or the 
                Corporation.
            (3) Settlement of claims.--Paragraphs (1) and (2) 
        shall not apply to the sale or transfer by the 
        Corporation of any asset of any covered financial 
        company to any person, if the sale or transfer of the 
        asset resolves or settles, or is part of the resolution 
        or settlement, of 1 or more claims that have been, or 
        could have been, asserted by the Corporation against 
        the person.
            (4) Definition of default.--For purposes of this 
        subsection, the term ``default'' means a failure to 
        comply with the terms of a loan or other obligation to 
        such an extent that the property securing the 
        obligation is foreclosed upon.
    (s) Recoupment of Compensation From Senior Executives and 
Directors.--
            (1) In general.--The Corporation, as receiver of a 
        covered financial company, may recover from any current 
        or former senior executive or director substantially 
        responsible for the failed condition of the covered 
        financial company any compensation received during the 
        2-year period preceding the date on which the 
        Corporation was appointed as the receiver of the 
        covered financial company, except that, in the case of 
        fraud, no time limit shall apply.
            (2) Cost considerations.--In seeking to recover any 
        such compensation, the Corporation shall weigh the 
        financial and deterrent benefits of such recovery 
        against the cost of executing the recovery.
            (3) Rulemaking.--The Corporation shall promulgate 
        regulations to implement the requirements of this 
        subsection, including defining the term 
        ``compensation'' to mean any financial remuneration, 
        including salary, bonuses, incentives, benefits, 
        severance, deferred compensation, or golden parachute 
        benefits, and any profits realized from the sale of the 
        securities of the covered financial company.

SEC. 211. MISCELLANEOUS PROVISIONS.

    (a) Clarification of Prohibition Regarding Concealment of 
Assets From Receiver or Liquidating Agent.--Section 1032(1) of 
title 18, United States Code, is amended by inserting ``the 
Federal Deposit Insurance Corporation acting as receiver for a 
covered financial company, in accordance with title II of the 
Dodd-Frank Wall Street Reform and Consumer Protection Act,'' 
before ``or the National Credit''.
    (b) Conforming Amendment.--Section 1032 of title 18, United 
States Code, is amended in the section heading, by striking 
``of financial institution''.
    (c) Federal Deposit Insurance Corporation Improvement Act 
of 1991.--Section 403(a) of the Federal Deposit Insurance 
Corporation Improvement Act of 1991 (12 U.S.C. 4403(a)) is 
amended by inserting ``section 210(c) of the Dodd-Frank Wall 
Street Reform and Consumer Protection Act, section 1367 of the 
Federal Housing Enterprises Financial Safety and Soundness Act 
of 1992 (12 U.S.C. 4617(d)),'' after ``section 11(e) of the 
Federal Deposit Insurance Act,''.
    (d) FDIC Inspector General Reviews.--
            (1) Scope.--The Inspector General of the 
        Corporation shall conduct, supervise, and coordinate 
        audits and investigations of the liquidation of any 
        covered financial company by the Corporation as 
        receiver under this title, including collecting and 
        summarizing--
                    (A) a description of actions taken by the 
                Corporation as receiver;
                    (B) a description of any material sales, 
                transfers, mergers, obligations, purchases, and 
                other material transactions entered into by the 
                Corporation;
                    (C) an evaluation of the adequacy of the 
                policies and procedures of the Corporation 
                under section 203(d) and orderly liquidation 
                plan under section 210(n)(14);
                    (D) an evaluation of the utilization by the 
                Corporation of the private sector in carrying 
                out its functions, including the adequacy of 
                any conflict-of-interest reviews; and
                    (E) an evaluation of the overall 
                performance of the Corporation in liquidating 
                the covered financial company, including 
                administrative costs, timeliness of liquidation 
                process, and impact on the financial system.
            (2) Frequency.--Not later than 6 months after the 
        date of appointment of the Corporation as receiver 
        under this title and every 6 months thereafter, the 
        Inspector General of the Corporation shall conduct the 
        audit and investigation described in paragraph (1).
            (3) Reports and testimony.--The Inspector General 
        of the Corporation shall include in the semiannual 
        reports required by section 5(a) of the Inspector 
        General Act of 1978 (5 U.S.C. App.), a summary of the 
        findings and evaluations under paragraph (1), and shall 
        appear before the appropriate committees of Congress, 
        if requested, to present each such report.
            (4) Funding.--
                    (A) Initial funding.--The expenses of the 
                Inspector General of the Corporation in 
                carrying out this subsection shall be 
                considered administrative expenses of the 
                receivership.
                    (B) Additional funding.--If the maximum 
                amount available to the Corporation as receiver 
                under this title is insufficient to enable the 
                Inspector General of the Corporation to carry 
                out the duties under this subsection, the 
                Corporation shall pay such additional amounts 
                from assessments imposed under section 210.
            (5) Termination of responsibilities.--The duties 
        and responsibilities of the Inspector General of the 
        Corporation under this subsection shall terminate 1 
        year after the date of termination of the receivership 
        under this title.
    (e) Treasury Inspector General Reviews.--
            (1) Scope.--The Inspector General of the Department 
        of the Treasury shall conduct, supervise, and 
        coordinate audits and investigations of actions taken 
        by the Secretary related to the liquidation of any 
        covered financial company under this title, including 
        collecting and summarizing--
                    (A) a description of actions taken by the 
                Secretary under this title;
                    (B) an analysis of the approval by the 
                Secretary of the policies and procedures of the 
                Corporation under section 203 and acceptance of 
                the orderly liquidation plan of the Corporation 
                under section 210; and
                    (C) an assessment of the terms and 
                conditions underlying the purchase by the 
                Secretary of obligations of the Corporation 
                under section 210.
            (2) Frequency.--Not later than 6 months after the 
        date of appointment of the Corporation as receiver 
        under this title and every 6 months thereafter, the 
        Inspector General of the Department of the Treasury 
        shall conduct the audit and investigation described in 
        paragraph (1).
            (3) Reports and testimony.--The Inspector General 
        of the Department of the Treasury shall include in the 
        semiannual reports required by section 5(a) of the 
        Inspector General Act of 1978 (5 U.S.C. App.), a 
        summary of the findings and assessments under paragraph 
        (1), and shall appear before the appropriate committees 
        of Congress, if requested, to present each such report.
            (4) Termination of responsibilities.--The duties 
        and responsibilities of the Inspector General of the 
        Department of the Treasury under this subsection shall 
        terminate 1 year after the date on which the 
        obligations purchased by the Secretary from the 
        Corporation under section 210 are fully redeemed.
    (f) Primary Financial Regulatory Agency Inspector General 
Reviews.--
            (1) Scope.--Upon the appointment of the Corporation 
        as receiver for a covered financial company supervised 
        by a Federal primary financial regulatory agency or the 
        Board of Governors under section 165, the Inspector 
        General of the agency or the Board of Governors shall 
        make a written report reviewing the supervision by the 
        agency or the Board of Governors of the covered 
        financial company, which shall--
                    (A) evaluate the effectiveness of the 
                agency or the Board of Governors in carrying 
                out its supervisory responsibilities with 
                respect to the covered financial company;
                    (B) identify any acts or omissions on the 
                part of agency or Board of Governors officials 
                that contributed to the covered financial 
                company being in default or in danger of 
                default;
                    (C) identify any actions that could have 
                been taken by the agency or the Board of 
                Governors that would have prevented the company 
                from being in default or in danger of default; 
                and
                    (D) recommend appropriate administrative or 
                legislative action.
            (2) Reports and testimony.--Not later than 1 year 
        after the date of appointment of the Corporation as 
        receiver under this title, the Inspector General of the 
        Federal primary financial regulatory agency or the 
        Board of Governors shall provide the report required by 
        paragraph (1) to such agency or the Board of Governors, 
        and along with such agency or the Board of Governors, 
        as applicable, shall appear before the appropriate 
        committees of Congress, if requested, to present the 
        report required by paragraph (1). Not later than 90 
        days after the date of receipt of the report required 
        by paragraph (1), such agency or the Board of 
        Governors, as applicable, shall provide a written 
        report to Congress describing any actions taken in 
        response to the recommendations in the report, and if 
        no such actions were taken, describing the reasons why 
        no actions were taken.

SEC. 212. PROHIBITION OF CIRCUMVENTION AND PREVENTION OF CONFLICTS OF 
                    INTEREST.

    (a) No Other Funding.--Funds for the orderly liquidation of 
any covered financial company under this title shall only be 
provided as specified under this title.
    (b) Limit on Governmental Actions.--No governmental entity 
may take any action to circumvent the purposes of this title.
    (c) Conflict of Interest.--In the event that the 
Corporation is appointed receiver for more than 1 covered 
financial company or is appointed receiver for a covered 
financial company and receiver for any insured depository 
institution that is an affiliate of such covered financial 
company, the Corporation shall take appropriate action, as 
necessary to avoid any conflicts of interest that may arise in 
connection with multiple receiverships.

SEC. 213. BAN ON CERTAIN ACTIVITIES BY SENIOR EXECUTIVES AND DIRECTORS.

    (a) Prohibition Authority.--The Board of Governors or, if 
the covered financial company was not supervised by the Board 
of Governors, the Corporation, may exercise the authority 
provided by this section.
    (b) Authority To Issue Order.--The appropriate agency 
described in subsection (a) may take any action authorized by 
subsection (c), if the agency determines that--
            (1) a senior executive or a director of the covered 
        financial company, prior to the appointment of the 
        Corporation as receiver, has, directly or indirectly--
                    (A) violated--
                            (i) any law or regulation;
                            (ii) any cease-and-desist order 
                        which has become final;
                            (iii) any condition imposed in 
                        writing by a Federal agency in 
                        connection with any action on any 
                        application, notice, or request by such 
                        company or senior executive; or
                            (iv) any written agreement between 
                        such company and such agency;
                    (B) engaged or participated in any unsafe 
                or unsound practice in connection with any 
                financial company; or
                    (C) committed or engaged in any act, 
                omission, or practice which constitutes a 
                breach of the fiduciary duty of such senior 
                executive or director;
            (2) by reason of the violation, practice, or breach 
        described in any subparagraph of paragraph (1), such 
        senior executive or director has received financial 
        gain or other benefit by reason of such violation, 
        practice, or breach and such violation, practice, or 
        breach contributed to the failure of the company; and
            (3) such violation, practice, or breach--
                    (A) involves personal dishonesty on the 
                part of such senior executive or director; or
                    (B) demonstrates willful or continuing 
                disregard by such senior executive or director 
                for the safety or soundness of such company.
    (c) Authorized Actions.--
            (1) In general.--The appropriate agency for a 
        financial company, as described in subsection (a), may 
        serve upon a senior executive or director described in 
        subsection (b) a written notice of the intention of the 
        agency to prohibit any further participation by such 
        person, in any manner, in the conduct of the affairs of 
        any financial company for a period of time determined 
        by the appropriate agency to be commensurate with such 
        violation, practice, or breach, provided such period 
        shall be not less than 2 years.
            (2) Procedures.--The due process requirements and 
        other procedures under section 8(e) of the Federal 
        Deposit Insurance Act (12 U.S.C. 1818(e)) shall apply 
        to actions under this section as if the covered 
        financial company were an insured depository 
        institution and the senior executive or director were 
        an institution-affiliated party, as those terms are 
        defined in that Act.
    (d) Regulations.--The Corporation and the Board of 
Governors, in consultation with the Council, shall jointly 
prescribe rules or regulations to administer and carry out this 
section, including rules, regulations, or guidelines to further 
define the term senior executive for the purposes of this 
section.

SEC. 214. PROHIBITION ON TAXPAYER FUNDING.

    (a) Liquidation Required.--All financial companies put into 
receivership under this title shall be liquidated. No taxpayer 
funds shall be used to prevent the liquidation of any financial 
company under this title.
    (b) Recovery of Funds.--All funds expended in the 
liquidation of a financial company under this title shall be 
recovered from the disposition of assets of such financial 
company, or shall be the responsibility of the financial 
sector, through assessments.
    (c) No Losses to Taxpayers.--Taxpayers shall bear no losses 
from the exercise of any authority under this title.

SEC. 215. STUDY ON SECURED CREDITOR HAIRCUTS.

    (a) Study Required.--The Council shall conduct a study 
evaluating the importance of maximizing United States taxpayer 
protections and promoting market discipline with respect to the 
treatment of fully secured creditors in the utilization of the 
orderly liquidation authority authorized by this Act. In 
carrying out such study, the Council shall--
            (1) not be prejudicial to current or past laws or 
        regulations with respect to secured creditor treatment 
        in a resolution process;
            (2) study the similarities and differences between 
        the resolution mechanisms authorized by the Bankruptcy 
        Code, the Federal Deposit Insurance Corporation 
        Improvement Act of 1991, and the orderly liquidation 
        authority authorized by this Act;
            (3) determine how various secured creditors are 
        treated in such resolution mechanisms and examine how a 
        haircut (of various degrees) on secured creditors could 
        improve market discipline and protect taxpayers;
            (4) compare the benefits and dynamics of prudent 
        lending practices by depository institutions in secured 
        loans for consumers and small businesses to the lending 
        practices of secured creditors to large, interconnected 
        financial firms;
            (5) consider whether credit differs according to 
        different types of collateral and different terms and 
        timing of the extension of credit; and
            (6) include an examination of stakeholders who were 
        unsecured or under-collateralized and seek collateral 
        when a firm is failing, and the impact that such 
        behavior has on financial stability and an orderly 
        resolution that protects taxpayers if the firm fails.
    (b) Report.--Not later than the end of the 1-year period 
beginning on the date of enactment of this Act, the Council 
shall issue a report to the Congress containing all findings 
and conclusions made by the Council in carrying out the study 
required under subsection (a).

SEC. 216. STUDY ON BANKRUPTCY PROCESS FOR FINANCIAL AND NONBANK 
                    FINANCIAL INSTITUTIONS.

    (a) Study.--
            (1) In general.--Upon enactment of this Act, the 
        Board of Governors, in consultation with the 
        Administrative Office of the United States Courts, 
        shall conduct a study regarding the resolution of 
        financial companies under the Bankruptcy Code, under 
        chapter 7 or 11 thereof.
            (2) Issues to be studied.--Issues to be studied 
        under this section include--
                    (A) the effectiveness of chapter 7 and 
                chapter 11 of the Bankruptcy Code in 
                facilitating the orderly resolution or 
                reorganization of systemic financial companies;
                    (B) whether a special financial resolution 
                court or panel of special masters or judges 
                should be established to oversee cases 
                involving financial companies to provide for 
                the resolution of such companies under the 
                Bankruptcy Code, in a manner that minimizes 
                adverse impacts on financial markets without 
                creating moral hazard;
                    (C) whether amendments to the Bankruptcy 
                Code should be adopted to enhance the ability 
                of the Code to resolve financial companies in a 
                manner that minimizes adverse impacts on 
                financial markets without creating moral 
                hazard;
                    (D) whether amendments should be made to 
                the Bankruptcy Code, the Federal Deposit 
                Insurance Act, and other insolvency laws to 
                address the manner in which qualified financial 
                contracts of financial companies are treated; 
                and
                    (E) the implications, challenges, and 
                benefits to creating a new chapter or 
                subchapter of the Bankruptcy Code to deal with 
                financial companies.
    (b) Reports to Congress.--Not later than 1 year after the 
date of enactment of this Act, and in each successive year 
until the fifth year after the date of enactment of this Act, 
the Administrative Office of the United States courts shall 
submit to the Committees on Banking, Housing, and Urban Affairs 
and the Judiciary of the Senate and the Committees on Financial 
Services and the Judiciary of the House of Representatives a 
report summarizing the results of the study conducted under 
subsection (a).

SEC. 217. STUDY ON INTERNATIONAL COORDINATION RELATING TO BANKRUPTCY 
                    PROCESS FOR NONBANK FINANCIAL INSTITUTIONS.

    (a) Study.--
            (1) In general.--The Board of Governors, in 
        consultation with the Administrative Office of the 
        United States Courts, shall conduct a study regarding 
        international coordination relating to the resolution 
        of systemic financial companies under the United States 
        Bankruptcy Code and applicable foreign law.
            (2) Issues to be studied.--With respect to the 
        bankruptcy process for financial companies, issues to 
        be studied under this section include--
                    (A) the extent to which international 
                coordination currently exists;
                    (B) current mechanisms and structures for 
                facilitating international cooperation;
                    (C) barriers to effective international 
                coordination; and
                    (D) ways to increase and make more 
                effective international coordination of the 
                resolution of financial companies, so as to 
                minimize the impact on the financial system 
                without creating moral hazard.
    (b) Report to Congress.--Not later than 1 year after the 
date of enactment of this Act, the Administrative office of the 
United States Courts shall submit to the Committees on Banking, 
Housing, and Urban Affairs and the Judiciary of the Senate and 
the Committees on Financial Services and the Judiciary of the 
House of Representatives a report summarizing the results of 
the study conducted under subsection (a).

 TITLE III--TRANSFER OF POWERS TO THE COMPTROLLER OF THE CURRENCY, THE 
                CORPORATION, AND THE BOARD OF GOVERNORS

SEC. 300. SHORT TITLE.

    This title may be cited as the ``Enhancing Financial 
Institution Safety and Soundness Act of 2010''.

SEC. 301. PURPOSES.

    The purposes of this title are--
            (1) to provide for the safe and sound operation of 
        the banking system of the United States;
            (2) to preserve and protect the dual system of 
        Federal and State-chartered depository institutions;
            (3) to ensure the fair and appropriate supervision 
        of each depository institution, regardless of the size 
        or type of charter of the depository institution; and
            (4) to streamline and rationalize the supervision 
        of depository institutions and the holding companies of 
        depository institutions.

SEC. 302. DEFINITION.

    In this title, the term ``transferred employee'' means, as 
the context requires, an employee transferred to the Office of 
the Comptroller of the Currency or the Corporation under 
section 322.

               Subtitle A--Transfer of Powers and Duties

SEC. 311. TRANSFER DATE.

    (a) Transfer Date.--Except as provided in subsection (b), 
the term ``transfer date'' means the date that is 1 year after 
the date of enactment of this Act.
    (b) Extension Permitted.--
            (1) Notice required.--The Secretary, in 
        consultation with the Comptroller of the Currency, the 
        Director of the Office of Thrift Supervision, the 
        Chairman of the Board of Governors, and the Chairperson 
        of the Corporation, may extend the period under 
        subsection (a) and designate a transfer date that is 
        not later than 18 months after the date of enactment of 
        this Act, if the Secretary transmits to the Committee 
        on Banking, Housing, and Urban Affairs of the Senate 
        and the Committee on Financial Services of the House of 
        Representatives--
                    (A) a written determination that 
                commencement of the orderly process to 
                implement this title is not feasible by the 
                date that is 1 year after the date of enactment 
                of this Act;
                    (B) an explanation of why an extension is 
                necessary to commence the process of orderly 
                implementation of this title;
                    (C) the transfer date designated under this 
                subsection; and
                    (D) a description of the steps that will be 
                taken to initiate the process of an orderly and 
                timely implementation of this title within the 
                extended time period.
            (2) Publication of notice.--Not later than 270 days 
        after the date of enactment of this Act, the Secretary 
        shall publish in the Federal Register notice of any 
        transfer date designated under paragraph (1).

SEC. 312. POWERS AND DUTIES TRANSFERRED.

    (a) Effective Date.--This section, and the amendments made 
by this section, shall take effect on the transfer date.
    (b) Functions of the Office of Thrift Supervision.--
            (1) Savings and loan holding company functions 
        transferred.--
                    (A) Transfer of functions.--There are 
                transferred to the Board of Governors all 
                functions of the Office of Thrift Supervision 
                and the Director of the Office of Thrift 
                Supervision (including the authority to issue 
                orders) relating to--
                            (i) the supervision of--
                                    (I) any savings and loan 
                                holding company; and
                                    (II) any subsidiary (other 
                                than a depository institution) 
                                of a savings and loan holding 
                                company; and
                            (ii) all rulemaking authority of 
                        the Office of Thrift Supervision and 
                        the Director of the Office of Thrift 
                        Supervision relating to savings and 
                        loan holding companies.
                    (B) Powers, authorities, rights, and 
                duties.--The Board of Governors shall succeed 
                to all powers, authorities, rights, and duties 
                that were vested in the Office of Thrift 
                Supervision and the Director of the Office of 
                Thrift Supervision on the day before the 
                transfer date relating to the functions and 
                authority transferred under subparagraph (A).
            (2) All other functions transferred.--
                    (A) Board of governors.--All rulemaking 
                authority of the Office of Thrift Supervision 
                and the Director of the Office of Thrift 
                Supervision under section 11 of the Home 
                Owners' Loan Act (12 U.S.C. 1468) relating to 
                transactions with affiliates and extensions of 
                credit to executive officers, directors, and 
                principal shareholders and under section 5(q) 
                of such Act relating to tying arrangements is 
                transferred to the Board of Governors.
                    (B) Comptroller of the currency.--Except as 
                provided in paragraph (1) and subparagraph 
                (A)--
                            (i) there are transferred to the 
                        Office of the Comptroller of the 
                        Currency and the Comptroller of the 
                        Currency--
                                    (I) all functions of the 
                                Office of Thrift Supervision 
                                and the Director of the Office 
                                of Thrift Supervision, 
                                respectively, relating to 
                                Federal savings associations; 
                                and
                                    (II) all rulemaking 
                                authority of the Office of 
                                Thrift Supervision and the 
                                Director of the Office of 
                                Thrift Supervision, 
                                respectively, relating to 
                                savings associations; and
                            (ii) the Office of the Comptroller 
                        of the Currency and the Comptroller of 
                        the Currency shall succeed to all 
                        powers, authorities, rights, and duties 
                        that were vested in the Office of 
                        Thrift Supervision and the Director of 
                        the Office of Thrift Supervision, 
                        respectively, on the day before the 
                        transfer date relating to the functions 
                        and authority transferred under clause 
                        (i).
                    (C) Corporation.--Except as provided in 
                paragraph (1) and subparagraphs (A) and (B)--
                            (i) all functions of the Office of 
                        Thrift Supervision and the Director of 
                        the Office of Thrift Supervision 
                        relating to State savings associations 
                        are transferred to the Corporation; and
                            (ii) the Corporation shall succeed 
                        to all powers, authorities, rights, and 
                        duties that were vested in the Office 
                        of Thrift Supervision and the Director 
                        of the Office of Thrift Supervision on 
                        the day before the transfer date 
                        relating to the functions transferred 
                        under clause (i).
    (c) Conforming Amendments.--Section 3 of the Federal 
Deposit Insurance Act (12 U.S.C. 1813) is amended--
            (1) in subsection (q), by striking paragraphs (1) 
        through (4) and inserting the following:
            ``(1) the Office of the Comptroller of the 
        Currency, in the case of--
                    ``(A) any national banking association;
                    ``(B) any Federal branch or agency of a 
                foreign bank; and
                    ``(C) any Federal savings association;
            ``(2) the Federal Deposit Insurance Corporation, in 
        the case of--
                    ``(A) any State nonmember insured bank;
                    ``(B) any foreign bank having an insured 
                branch; and
                    ``(C) any State savings association;
            ``(3) the Board of Governors of the Federal Reserve 
        System, in the case of--
                    ``(A) any State member bank;
                    ``(B) any branch or agency of a foreign 
                bank with respect to any provision of the 
                Federal Reserve Act which is made applicable 
                under the International Banking Act of 1978;
                    ``(C) any foreign bank which does not 
                operate an insured branch;
                    ``(D) any agency or commercial lending 
                company other than a Federal agency;
                    ``(E) supervisory or regulatory proceedings 
                arising from the authority given to the Board 
                of Governors under section 7(c)(1) of the 
                International Banking Act of 1978, including 
                such proceedings under the Financial 
                Institutions Supervisory Act of 1966;
                    ``(F) any bank holding company and any 
                subsidiary (other than a depository 
                institution) of a bank holding company; and
                    ``(G) any savings and loan holding company 
                and any subsidiary (other than a depository 
                institution) of a savings and loan holding 
                company.''; and
            (2) in paragraphs (1) and (3) of subsection (u), by 
        striking ``(other than a bank holding company'' and 
        inserting ``(other than a bank holding company or 
        savings and loan holding company''.
    (d) Consumer Protection.--Nothing in this section may be 
construed to limit or otherwise affect the transfer of powers 
under title X.

SEC. 313. ABOLISHMENT.

    Effective 90 days after the transfer date, the Office of 
Thrift Supervision and the position of Director of the Office 
of Thrift Supervision are abolished.

SEC. 314. AMENDMENTS TO THE REVISED STATUTES.

    (a) Amendment to Section 324.--Section 324 of the Revised 
Statutes of the United States (12 U.S.C. 1) is amended to read 
as follows:

``SEC. 324. COMPTROLLER OF THE CURRENCY.

    ``(a) Office of the Comptroller of the Currency 
Established.--There is established in the Department of the 
Treasury a bureau to be known as the `Office of the Comptroller 
of the Currency' which is charged with assuring the safety and 
soundness of, and compliance with laws and regulations, fair 
access to financial services, and fair treatment of customers 
by, the institutions and other persons subject to its 
jurisdiction.
    ``(b) Comptroller of the Currency.--
            ``(1) In general.--The chief officer of the Office 
        of the Comptroller of the Currency shall be known as 
        the Comptroller of the Currency. The Comptroller of the 
        Currency shall perform the duties of the Comptroller of 
        the Currency under the general direction of the 
        Secretary of the Treasury. The Secretary of the 
        Treasury may not delay or prevent the issuance of any 
        rule or the promulgation of any regulation by the 
        Comptroller of the Currency, and may not intervene in 
        any matter or proceeding before the Comptroller of the 
        Currency (including agency enforcement actions), unless 
        otherwise specifically provided by law.
            ``(2) Additional authority.--The Comptroller of the 
        Currency shall have the same authority with respect to 
        functions transferred to the Comptroller of the 
        Currency under the Enhancing Financial Institution 
        Safety and Soundness Act of 2010 as was vested in the 
        Director of the Office of Thrift Supervision on the 
        transfer date, as defined in section 311 of that 
        Act.''.
    (b) Supervision of Federal Savings Associations.--Chapter 9 
of title VII of the Revised Statutes of the United States (12 
U.S.C. 1 et seq.) is amended by inserting after section 327A 
(12 U.S.C. 4a) the following:

``SEC. 327B. DEPUTY COMPTROLLER FOR THE SUPERVISION AND EXAMINATION OF 
                    FEDERAL SAVINGS ASSOCIATIONS.

    ``The Comptroller of the Currency shall designate a Deputy 
Comptroller, who shall be responsible for the supervision and 
examination of Federal savings associations.''.
    (c) Amendment to Section 329.--Section 329 of the Revised 
Statutes of the United States (12 U.S.C. 11) is amended by 
inserting before the period at the end the following: ``or any 
Federal savings association''.
    (d) Effective Date.--This section, and the amendments made 
by this section, shall take effect on the transfer date.

SEC. 315. FEDERAL INFORMATION POLICY.

    Section 3502(5) of title 44, United States Code, is amended 
by inserting ``Office of the Comptroller of the Currency,'' 
after ``the Securities and Exchange Commission,''.

SEC. 316. SAVINGS PROVISIONS.

    (a) Office of Thrift Supervision.--
            (1) Existing rights, duties, and obligations not 
        affected.--Sections 312(b) and 313 shall not affect the 
        validity of any right, duty, or obligation of the 
        United States, the Director of the Office of Thrift 
        Supervision, the Office of Thrift Supervision, or any 
        other person, that existed on the day before the 
        transfer date.
            (2) Continuation of suits.--This title shall not 
        abate any action or proceeding commenced by or against 
        the Director of the Office of Thrift Supervision or the 
        Office of Thrift Supervision before the transfer date, 
        except that--
                    (A) for any action or proceeding arising 
                out of a function of the Office of Thrift 
                Supervision or the Director of the Office of 
                Thrift Supervision transferred to the Board of 
                Governors by this title, the Board of Governors 
                shall be substituted for the Office of Thrift 
                Supervision or the Director of the Office of 
                Thrift Supervision as a party to the action or 
                proceeding on and after the transfer date;
                    (B) for any action or proceeding arising 
                out of a function of the Office of Thrift 
                Supervision or the Director of the Office of 
                Thrift Supervision transferred to the Office of 
                the Comptroller of the Currency or the 
                Comptroller of the Currency by this title, the 
                Office of the Comptroller of the Currency or 
                the Comptroller of the Currency shall be 
                substituted for the Office of Thrift 
                Supervision or the Director of the Office of 
                Thrift Supervision, as the case may be, as a 
                party to the action or proceeding on and after 
                the transfer date; and
                    (C) for any action or proceeding arising 
                out of a function of the Office of Thrift 
                Supervision or the Director of the Office of 
                Thrift Supervision transferred to the 
                Corporation by this title, the Corporation 
                shall be substituted for the Office of Thrift 
                Supervision or the Director of the Office of 
                Thrift Supervision as a party to the action or 
                proceeding on and after the transfer date.
    (b) Continuation of Existing OTS Orders, Resolutions, 
Determinations, Agreements, Regulations, etc.--All orders, 
resolutions, determinations, agreements, and regulations, 
interpretative rules, other interpretations, guidelines, 
procedures, and other advisory materials, that have been 
issued, made, prescribed, or allowed to become effective by the 
Office of Thrift Supervision or the Director of the Office of 
Thrift Supervision, or by a court of competent jurisdiction, in 
the performance of functions that are transferred by this title 
and that are in effect on the day before the transfer date, 
shall continue in effect according to the terms of such orders, 
resolutions, determinations, agreements, and regulations, 
interpretative rules, other interpretations, guidelines, 
procedures, and other advisory materials, and shall be 
enforceable by or against--
            (1) the Board of Governors, in the case of a 
        function of the Office of Thrift Supervision or the 
        Director of the Office of Thrift Supervision 
        transferred to the Board of Governors, until modified, 
        terminated, set aside, or superseded in accordance with 
        applicable law by the Board of Governors, by any court 
        of competent jurisdiction, or by operation of law;
            (2) the Office of the Comptroller of the Currency 
        or the Comptroller of the Currency, in the case of a 
        function of the Office of Thrift Supervision or the 
        Director of the Office of Thrift Supervision 
        transferred to the Office of the Comptroller of the 
        Currency or the Comptroller of the Currency, 
        respectively, until modified, terminated, set aside, or 
        superseded in accordance with applicable law by the 
        Office of the Comptroller of the Currency or the 
        Comptroller of the Currency, by any court of competent 
        jurisdiction, or by operation of law; and
            (3) the Corporation, in the case of a function of 
        the Office of Thrift Supervision or the Director of the 
        Office of Thrift Supervision transferred to the 
        Corporation, until modified, terminated, set aside, or 
        superseded in accordance with applicable law by the 
        Corporation, by any court of competent jurisdiction, or 
        by operation of law.
    (c) Identification of Regulations Continued.--
            (1) By the board of governors.--Not later than the 
        transfer date, the Board of Governors shall--
                    (A) identify the regulations continued 
                under subsection (b) that will be enforced by 
                the Board of Governors; and
                    (B) publish a list of the regulations 
                identified under subparagraph (A) in the 
                Federal Register.
            (2) By office of the comptroller of the currency.--
        Not later than the transfer date, the Office of the 
        Comptroller of the Currency shall--
                    (A) after consultation with the 
                Corporation, identify the regulations continued 
                under subsection (b) that will be enforced by 
                the Office of the Comptroller of the Currency; 
                and
                    (B) publish a list of the regulations 
                identified under subparagraph (A) in the 
                Federal Register.
            (3) By the corporation.--Not later than the 
        transfer date, the Corporation shall--
                    (A) after consultation with the Office of 
                the Comptroller of the Currency, identify the 
                regulations continued under subsection (b) that 
                will be enforced by the Corporation; and
                    (B) publish a list of the regulations 
                identified under subparagraph (A) in the 
                Federal Register.
    (d) Status of Regulations Proposed or Not Yet Effective.--
            (1) Proposed regulations.--Any proposed regulation 
        of the Office of Thrift Supervision, which the Office 
        of Thrift Supervision in performing functions 
        transferred by this title, has proposed before the 
        transfer date but has not published as a final 
        regulation before such date, shall be deemed to be a 
        proposed regulation of the Office of the Comptroller of 
        the Currency or the Board of Governors, as appropriate, 
        according to the terms of the proposed regulation.
            (2) Regulations not yet effective.--Any interim or 
        final regulation of the Office of Thrift Supervision, 
        which the Office of Thrift Supervision, in performing 
        functions transferred by this title, has published 
        before the transfer date but which has not become 
        effective before that date, shall become effective as a 
        regulation of the Office of the Comptroller of the 
        Currency or the Board of Governors, as appropriate, 
        according to the terms of the interim or final 
        regulation, unless modified, terminated, set aside, or 
        superseded in accordance with applicable law by the 
        Office of the Comptroller of the Currency or the Board 
        of Governors, as appropriate, by any court of competent 
        jurisdiction, or by operation of law.

SEC. 317. REFERENCES IN FEDERAL LAW TO FEDERAL BANKING AGENCIES.

    On and after the transfer date, any reference in Federal 
law to the Director of the Office of Thrift Supervision or the 
Office of Thrift Supervision, in connection with any function 
of the Director of the Office of Thrift Supervision or the 
Office of Thrift Supervision transferred under section 312(b) 
or any other provision of this subtitle, shall be deemed to be 
a reference to the Comptroller of the Currency, the Office of 
the Comptroller of the Currency, the Chairperson of the 
Corporation, the Corporation, the Chairman of the Board of 
Governors, or the Board of Governors, as appropriate and 
consistent with the amendments made in subtitle E.

SEC. 318. FUNDING.

    (a) Compensation of Examiners.--Section 5240 of the Revised 
Statutes of the United States (12 U.S.C. 481 et seq.) is 
amended--
            (1) in the second undesignated paragraph (12 U.S.C. 
        481), in the fourth sentence, by striking ``without 
        regard to the provisions of other laws applicable to 
        officers or employees of the United States'' and 
        inserting the following: ``set and adjusted subject to 
        chapter 71 of title 5, United States Code, and without 
        regard to the provisions of other laws applicable to 
        officers or employees of the United States''; and
            (2) in the third undesignated paragraph (12 U.S.C. 
        482), in the first sentence, by striking ``shall fix'' 
        and inserting ``shall, subject to chapter 71 of title 
        5, United States Code, fix''.
    (b) Funding of Office of the Comptroller of the Currency.--
Chapter 4 of title LXII of the Revised Statutes is amended by 
inserting after section 5240 (12 U.S.C. 481, 482) the 
following:
    ``Sec. 5240A.  The Comptroller of the Currency may collect 
an assessment, fee, or other charge from any entity described 
in section 3(q)(1) of the Federal Deposit Insurance Act (12 
U.S.C. 1813(q)(1)), as the Comptroller determines is necessary 
or appropriate to carry out the responsibilities of the Office 
of the Comptroller of the Currency. In establishing the amount 
of an assessment, fee, or charge collected from an entity under 
this section, the Comptroller of the Currency may take into 
account the nature and scope of the activities of the entity, 
the amount and type of assets that the entity holds, the 
financial and managerial condition of the entity, and any other 
factor, as the Comptroller of the Currency determines is 
appropriate. Funds derived from any assessment, fee, or charge 
collected or payment made pursuant to this section may be 
deposited by the Comptroller of the Currency in accordance with 
the provisions of section 5234. Such funds shall not be 
construed to be Government funds or appropriated monies, and 
shall not be subject to apportionment for purposes of chapter 
15 of title 31, United States Code, or any other provision of 
law. The authority of the Comptroller of the Currency under 
this section shall be in addition to the authority under 
section 5240.
    ``The Comptroller of the Currency shall have sole authority 
to determine the manner in which the obligations of the Office 
of the Comptroller of the Currency shall be incurred and its 
disbursements and expenses allowed and paid, in accordance with 
this section, except as provided in chapter 71 of title 5, 
United States Code (with respect to compensation).''.
    (c) Funding of Board of Governors.--Section 11 of the 
Federal Reserve Act (12 U.S.C. 248) is amended by adding at the 
end the following:
    ``(s) Assessments, Fees, and Other Charges for Certain 
Companies.--
            ``(1) In general.--The Board shall collect a total 
        amount of assessments, fees, or other charges from the 
        companies described in paragraph (2) that is equal to 
        the total expenses the Board estimates are necessary or 
        appropriate to carry out the supervisory and regulatory 
        responsibilities of the Board with respect to such 
        companies.
            ``(2) Companies.--The companies described in this 
        paragraph are--
                    ``(A) all bank holding companies having 
                total consolidated assets of $50,000,000,000 or 
                more;
                    ``(B) all savings and loan holding 
                companies having total consolidated assets of 
                $50,000,000,000 or more; and
                    ``(C) all nonbank financial companies 
                supervised by the Board under section 113 of 
                the Dodd-Frank Wall Street Reform and Consumer 
                Protection Act.''.
    (d) Corporation Examination Fees.--Section 10(e) of the 
Federal Deposit Insurance Act (12 U.S.C. 1820(e)) is amended by 
striking paragraph (1) and inserting the following:
            ``(1) Regular and special examinations of 
        depository institutions.--The cost of conducting any 
        regular examination or special examination of any 
        depository institution under subsection (b)(2), (b)(3), 
        or (d) or of any entity described in section 3(q)(2) 
        may be assessed by the Corporation against the 
        institution or entity to meet the expenses of the 
        Corporation in carrying out such examinations.''.
    (e) Effective Date.--This section, and the amendments made 
by this section, shall take effect on the transfer date.

SEC. 319. CONTRACTING AND LEASING AUTHORITY.

    Notwithstanding the Federal Property and Administrative 
Services Act of 1949 (41 U.S.C. 251 et seq.) or any other 
provision of law (except the full and open competition 
requirements of the Competition in Contracting Act), the Office 
of the Comptroller of the Currency may--
            (1) enter into and perform contracts, execute 
        instruments, and acquire real property (or property 
        interest) as the Comptroller deems necessary to carry 
        out the duties and responsibilities of the Office of 
        the Comptroller of the Currency; and
            (2) hold, maintain, sell, lease, or otherwise 
        dispose of the property (or property interest) acquired 
        under paragraph (1).

                  Subtitle B--Transitional Provisions

SEC. 321. INTERIM USE OF FUNDS, PERSONNEL, AND PROPERTY OF THE OFFICE 
                    OF THRIFT SUPERVISION.

    (a) In General.--Before the transfer date, the Office of 
the Comptroller of the Currency, the Corporation, and the Board 
of Governors shall--
            (1) consult and cooperate with the Office of Thrift 
        Supervision to facilitate the orderly transfer of 
        functions to the Office of the Comptroller of the 
        Currency, the Corporation, and the Board of Governors 
        in accordance with this title;
            (2) determine jointly, from time to time--
                    (A) the amount of funds necessary to pay 
                any expenses associated with the transfer of 
                functions (including expenses for personnel, 
                property, and administrative services) during 
                the period beginning on the date of enactment 
                of this Act and ending on the transfer date;
                    (B) which personnel are appropriate to 
                facilitate the orderly transfer of functions by 
                this title; and
                    (C) what property and administrative 
                services are necessary to support the Office of 
                the Comptroller of the Currency, the 
                Corporation, and the Board of Governors during 
                the period beginning on the date of enactment 
                of this Act and ending on the transfer date; 
                and
            (3) take such actions as may be necessary to 
        provide for the orderly implementation of this title.
    (b) Agency Consultation.--When requested jointly by the 
Office of the Comptroller of the Currency, the Corporation, and 
the Board of Governors to do so before the transfer date, the 
Office of Thrift Supervision shall--
            (1) pay to the Office of the Comptroller of the 
        Currency, the Corporation, or the Board of Governors, 
        as applicable, from funds obtained by the Office of 
        Thrift Supervision through assessments, fees, or other 
        charges that the Office of Thrift Supervision is 
        authorized by law to impose, such amounts as the Office 
        of the Comptroller of the Currency, the Corporation, 
        and the Board of Governors jointly determine to be 
        necessary under subsection (a);
            (2) detail to the Office of the Comptroller of the 
        Currency, the Corporation, or the Board of Governors, 
        as applicable, such personnel as the Office of the 
        Comptroller of the Currency, the Corporation, and the 
        Board of Governors jointly determine to be appropriate 
        under subsection (a); and
            (3) make available to the Office of the Comptroller 
        of the Currency, the Corporation, or the Board of 
        Governors, as applicable, such property and provide to 
        the Office of the Comptroller of the Currency, the 
        Corporation, or the Board of Governors, as applicable, 
        such administrative services as the Office of the 
        Comptroller of the Currency, the Corporation, and the 
        Board of Governors jointly determine to be necessary 
        under subsection (a).
    (c) Notice Required.--The Office of the Comptroller of the 
Currency, the Corporation, and the Board of Governors shall 
jointly give the Office of Thrift Supervision reasonable prior 
notice of any request that the Office of the Comptroller of the 
Currency, the Corporation, and the Board of Governors jointly 
intend to make under subsection (b).

SEC. 322. TRANSFER OF EMPLOYEES.

    (a) In General.--
            (1) Office of thrift supervision employees.--
                    (A) In general.--Except as provided in 
                section 1064, all employees of the Office of 
                Thrift Supervision shall be transferred to the 
                Office of the Comptroller of the Currency or 
                the Corporation for employment in accordance 
                with this section.
                    (B) Allocating employees for transfer to 
                receiving agencies.--The Director of the Office 
                of Thrift Supervision, the Comptroller of the 
                Currency, and the Chairperson of the 
                Corporation shall--
                            (i) jointly determine the number of 
                        employees of the Office of Thrift 
                        Supervision necessary to perform or 
                        support the functions that are 
                        transferred to the Office of the 
                        Comptroller of the Currency or the 
                        Corporation by this title; and
                            (ii) consistent with the 
                        determination under clause (i), jointly 
                        identify employees of the Office of 
                        Thrift Supervision for transfer to the 
                        Office of the Comptroller of the 
                        Currency or the Corporation.
            (2) Employees transferred; service periods 
        credited.--For purposes of this section, periods of 
        service with a Federal home loan bank, a joint office 
        of Federal home loan banks, or a Federal reserve bank 
        shall be credited as periods of service with a Federal 
        agency.
            (3) Appointment authority for excepted service 
        transferred.--
                    (A) In general.--Except as provided in 
                subparagraph (B), any appointment authority of 
                the Office of Thrift Supervision under Federal 
                law that relates to the functions transferred 
                under section 312, including the regulations of 
                the Office of Personnel Management, for filling 
                the positions of employees in the excepted 
                service shall be transferred to the Comptroller 
                of the Currency or the Chairperson of the 
                Corporation, as appropriate.
                    (B) Declining transfers allowed.--The 
                Comptroller of the Currency or the Chairperson 
                of the Corporation may decline to accept a 
                transfer of authority under subparagraph (A) 
                (and the employees appointed under that 
                authority) to the extent that such authority 
                relates to positions excepted from the 
                competitive service because of their 
                confidential, policy-making, policy-
                determining, or policy-advocating character.
            (4) Additional appointment authority.--
        Notwithstanding any other provision of law, the Office 
        of the Comptroller of the Currency and the Corporation 
        may appoint transferred employees to positions in the 
        Office of the Comptroller of the Currency or the 
        Corporation, respectively.
    (b) Timing of Transfers and Position Assignments.--Each 
employee to be transferred under subsection (a)(1) shall--
            (1) be transferred not later than 90 days after the 
        transfer date; and
            (2) receive notice of the position assignment of 
        the employee not later than 120 days after the 
        effective date of the transfer of the employee.
    (c) Transfer of Functions.--
            (1) In general.--Notwithstanding any other 
        provision of law, the transfer of employees under this 
        subtitle shall be deemed a transfer of functions for 
        the purpose of section 3503 of title 5, United States 
        Code.
            (2) Priority.--If any provision of this subtitle 
        conflicts with any protection provided to a transferred 
        employee under section 3503 of title 5, United States 
        Code, the provisions of this subtitle shall control.
    (d) Employee Status and Eligibility.--The transfer of 
functions and employees under this subtitle, and the 
abolishment of the Office of Thrift Supervision under section 
313, shall not affect the status of the transferred employees 
as employees of an agency of the United States under any 
provision of law.
    (e) Equal Status and Tenure Positions.--
            (1) Status and tenure.--Each transferred employee 
        from the Office of Thrift Supervision shall be placed 
        in a position at the Office of the Comptroller of the 
        Currency or the Corporation with the same status and 
        tenure as the transferred employee held on the day 
        before the date on which the employee was transferred.
            (2) Functions.--To the extent practicable, each 
        transferred employee shall be placed in a position at 
        the Office of the Comptroller of the Currency or the 
        Corporation, as applicable, responsible for the same 
        functions and duties as the transferred employee had on 
        the day before the date on which the employee was 
        transferred, in accordance with the expertise and 
        preferences of the transferred employee.
    (f) No Additional Certification Requirements.--An examiner 
who is a transferred employee shall not be subject to any 
additional certification requirements before being placed in a 
comparable position at the Office of the Comptroller of the 
Currency or the Corporation, if the examiner carries out 
examinations of the same type of institutions as an employee of 
the Office of the Comptroller of the Currency or the 
Corporation as the employee was responsible for carrying out 
before the date on which the employee was transferred.
    (g) Personnel Actions Limited.--
            (1) Protection.--
                    (A) In general.--Except as provided in 
                paragraph (2), each affected employee shall 
                not, during the 30-month period beginning on 
                the transfer date, be involuntarily separated, 
                or involuntarily reassigned outside his or her 
                locality pay area.
                    (B) Affected employees.--For purposes of 
                this paragraph, the term ``affected employee'' 
                means--
                            (i) an employee transferred from 
                        the Office of Thrift Supervision 
                        holding a permanent position on the day 
                        before the transfer date; and
                            (ii) an employee of the Office of 
                        the Comptroller of the Currency or the 
                        Corporation holding a permanent 
                        position on the day before the transfer 
                        date.
            (2) Exceptions.--Paragraph (1) does not limit the 
        right of the Office of the Comptroller of the Currency 
        or the Corporation to--
                    (A) separate an employee for cause or for 
                unacceptable performance;
                    (B) terminate an appointment to a position 
                excepted from the competitive service because 
                of its confidential policy-making, policy-
                determining, or policy-advocating character; or
                    (C) reassign an employee outside such 
                employee's locality pay area when the Office of 
                the Comptroller of the Currency or the 
                Corporation determines that the reassignment is 
                necessary for the efficient operation of the 
                agency.
    (h) Pay.--
            (1) 30-month protection.--Except as provided in 
        paragraph (2), during the 30-month period beginning on 
        the date on which the employee was transferred under 
        this subtitle, a transferred employee shall be paid at 
        a rate that is not less than the basic rate of pay, 
        including any geographic differential, that the 
        transferred employee received during the pay period 
        immediately preceding the date on which the employee 
        was transferred. Notwithstanding the preceding 
        sentence, if the employee was receiving a higher rate 
        of basic pay on a temporary basis (because of a 
        temporary assignment, temporary promotion, or other 
        temporary action) immediately before the transfer, the 
        Agency may reduce the rate of basic pay on the date the 
        rate would have been reduced but for the transfer, and 
        the protected rate for the remainder of the 30-month 
        period will be the reduced rate that would have applied 
        but for the transfer.
            (2) Exceptions.--The Comptroller of the Currency or 
        the Corporation may reduce the rate of basic pay of a 
        transferred employee--
                    (A) for cause, including for unacceptable 
                performance; or
                    (B) with the consent of the transferred 
                employee.
            (3) Protection only while employed.--This 
        subsection shall apply to a transferred employee only 
        during the period that the transferred employee remains 
        employed by Office of the Comptroller of the Currency 
        or the Corporation.
            (4) Pay increases permitted.--Nothing in this 
        subsection shall limit the authority of the Comptroller 
        of the Currency or the Chairperson of the Corporation 
        to increase the pay of a transferred employee.
    (i) Benefits.--
            (1) Retirement benefits for transferred 
        employees.--
                    (A) In general.--
                            (i) Continuation of existing 
                        retirement plan.--Each transferred 
                        employee shall remain enrolled in the 
                        retirement plan of the transferred 
                        employee, for as long as the 
                        transferred employee is employed by the 
                        Office of the Comptroller of the 
                        Currency or the Corporation.
                            (ii) Employer's contribution.--The 
                        Comptroller of the Currency or the 
                        Chairperson of the Corporation, as 
                        appropriate, shall pay any employer 
                        contributions to the existing 
                        retirement plan of each transferred 
                        employee, as required under each such 
                        existing retirement plan.
                    (B) Definition.--In this paragraph, the 
                term ``existing retirement plan'' means, with 
                respect to a transferred employee, the 
                retirement plan (including the Financial 
                Institutions Retirement Fund), and any 
                associated thrift savings plan, of the agency 
                from which the employee was transferred in 
                which the employee was enrolled on the day 
                before the date on which the employee was 
                transferred.
            (2) Benefits other than retirement benefits.--
                    (A) During first year.--
                            (i) Existing plans continue.--
                        During the 1-year period following the 
                        transfer date, each transferred 
                        employee may retain membership in any 
                        employee benefit program (other than a 
                        retirement benefit program) of the 
                        agency from which the employee was 
                        transferred under this title, including 
                        any dental, vision, long term care, or 
                        life insurance program to which the 
                        employee belonged on the day before the 
                        transfer date.
                            (ii) Employer's contribution.--The 
                        Office of the Comptroller of the 
                        Currency or the Corporation, as 
                        appropriate, shall pay any employer 
                        cost required to extend coverage in the 
                        benefit program to the transferred 
                        employee as required under that program 
                        or negotiated agreements.
                    (B) Dental, vision, or life insurance after 
                first year.--If, after the 1-year period 
                beginning on the transfer date, the Office of 
                the Comptroller of the Currency or the 
                Corporation determines that the Office of the 
                Comptroller of the Currency or the Corporation, 
                as the case may be, will not continue to 
                participate in any dental, vision, or life 
                insurance program of an agency from which an 
                employee was transferred, a transferred 
                employee who is a member of the program may, 
                before the decision takes effect and without 
                regard to any regularly scheduled open season, 
                elect to enroll in--
                            (i) the enhanced dental benefits 
                        program established under chapter 89A 
                        of title 5, United States Code;
                            (ii) the enhanced vision benefits 
                        established under chapter 89B of title 
                        5, United States Code; and
                            (iii) the Federal Employees' Group 
                        Life Insurance Program established 
                        under chapter 87 of title 5, United 
                        States Code, without regard to any 
                        requirement of insurability.
                    (C) Long term care insurance after 1st 
                year.--If, after the 1-year period beginning on 
                the transfer date, the Office of the 
                Comptroller of the Currency or the Corporation 
                determines that the Office of the Comptroller 
                of the Currency or the Corporation, as 
                appropriate, will not continue to participate 
                in any long term care insurance program of an 
                agency from which an employee transferred, a 
                transferred employee who is a member of such a 
                program may, before the decision takes effect, 
                elect to apply for coverage under the Federal 
                Long Term Care Insurance Program established 
                under chapter 90 of title 5, United States 
                Code, under the underwriting requirements 
                applicable to a new active workforce member, as 
                described in part 875 of title 5, Code of 
                Federal Regulations (or any successor thereto).
                    (D) Contribution of transferred employee.--
                            (i) In general.--Subject to clause 
                        (ii), a transferred employee who is 
                        enrolled in a plan under the Federal 
                        Employees Health Benefits Program shall 
                        pay any employee contribution required 
                        under the plan.
                            (ii) Cost differential.--The Office 
                        of the Comptroller of the Currency or 
                        the Corporation, as applicable, shall 
                        pay any difference in cost between the 
                        employee contribution required under 
                        the plan provided to transferred 
                        employees by the agency from which the 
                        employee transferred on the date of 
                        enactment of this Act and the plan 
                        provided by the Office of the 
                        Comptroller of the Currency or the 
                        Corporation, as the case may be, under 
                        this section.
                            (iii) Funds transfer.--The Office 
                        of the Comptroller of the Currency or 
                        the Corporation, as the case may be, 
                        shall transfer to the Employees Health 
                        Benefits Fund established under section 
                        8909 of title 5, United States Code, an 
                        amount determined by the Director of 
                        the Office of Personnel Management, 
                        after consultation with the Comptroller 
                        of the Currency or the Chairperson of 
                        the Corporation, as the case may be, 
                        and the Office of Management and 
                        Budget, to be necessary to reimburse 
                        the Fund for the cost to the Fund of 
                        providing any benefits under this 
                        subparagraph that are not otherwise 
                        paid for by a transferred employee 
                        under clause (i).
                    (E) Special provisions to ensure 
                continuation of life insurance benefits.--
                            (i) In general.--An annuitant, as 
                        defined in section 8901 of title 5, 
                        United States Code, who is enrolled in 
                        a life insurance plan administered by 
                        an agency from which employees are 
                        transferred under this title on the day 
                        before the transfer date shall be 
                        eligible for coverage by a life 
                        insurance plan under sections 8706(b), 
                        8714a, 8714b, or 8714c of title 5, 
                        United States Code, or by a life 
                        insurance plan established by the 
                        Office of the Comptroller of the 
                        Currency or the Corporation, as 
                        applicable, without regard to any 
                        regularly scheduled open season or any 
                        requirement of insurability.
                            (ii) Contribution of transferred 
                        employee.--
                                    (I) In general.--Subject to 
                                subclause (II), a transferred 
                                employee enrolled in a life 
                                insurance plan under this 
                                subparagraph shall pay any 
                                employee contribution required 
                                by the plan.
                                    (II) Cost differential.--
                                The Office of the Comptroller 
                                of the Currency or the 
                                Corporation, as the case may 
                                be, shall pay any difference in 
                                cost between the benefits 
                                provided by the agency from 
                                which the employee transferred 
                                on the date of enactment of 
                                this Act and the benefits 
                                provided under this section.
                                    (III) Funds transfer.--The 
                                Office of the Comptroller of 
                                the Currency or the 
                                Corporation, as the case may 
                                be, shall transfer to the 
                                Federal Employees' Group Life 
                                Insurance Fund established 
                                under section 8714 of title 5, 
                                United States Code, an amount 
                                determined by the Director of 
                                the Office of Personnel 
                                Management, after consultation 
                                with the Comptroller of the 
                                Currency or the Chairperson of 
                                the Corporation, as the case 
                                may be, and the Office of 
                                Management and Budget, to be 
                                necessary to reimburse the 
                                Federal Employees' Group Life 
                                Insurance Fund for the cost to 
                                the Federal Employees' Group 
                                Life Insurance Fund of 
                                providing benefits under this 
                                subparagraph not otherwise paid 
                                for by a transferred employee 
                                under subclause (I).
                                    (IV) Credit for time 
                                enrolled in other plans.--For 
                                any transferred employee, 
                                enrollment in a life insurance 
                                plan administered by the agency 
                                from which the employee 
                                transferred, immediately before 
                                enrollment in a life insurance 
                                plan under chapter 87 of title 
                                5, United States Code, shall be 
                                considered as enrollment in a 
                                life insurance plan under that 
                                chapter for purposes of section 
                                8706(b)(1)(A) of title 5, 
                                United States Code.
    (j) Incorporation Into Agency Pay System.--Not later than 
30 months after the transfer date, the Comptroller of the 
Currency and the Chairperson of the Corporation shall place 
each transferred employee into the established pay system and 
structure of the appropriate employing agency.
    (k) Equitable Treatment.--In administering the provisions 
of this section, the Comptroller of the Currency and the 
Chairperson of the Corporation--
            (1) may not take any action that would unfairly 
        disadvantage a transferred employee relative to any 
        other employee of the Office of the Comptroller of the 
        Currency or the Corporation on the basis of prior 
        employment by the Office of Thrift Supervision;
            (2) may take such action as is appropriate in an 
        individual case to ensure that a transferred employee 
        receives equitable treatment, with respect to the 
        status, tenure, pay, benefits (other than benefits 
        under programs administered by the Office of Personnel 
        Management), and accrued leave or vacation time for 
        prior periods of service with any Federal agency of the 
        transferred employee;
            (3) shall, jointly with the Director of the Office 
        of Thrift Supervision, develop and adopt procedures and 
        safeguards designed to ensure that the requirements of 
        this subsection are met; and
            (4) shall conduct a study detailing the position 
        assignments of all employees transferred pursuant to 
        subsection (a), describing the procedures and 
        safeguards adopted pursuant to paragraph (3), and 
        demonstrating that the requirements of this subsection 
        have been met; and shall, not later than 365 days after 
        the transfer date, submit a copy of such study to 
        Congress.
    (l) Reorganization.--
            (1) In general.--If the Comptroller of the Currency 
        or the Chairperson of the Corporation determines, 
        during the 2-year period beginning 1 year after the 
        transfer date, that a reorganization of the staff of 
        the Office of the Comptroller of the Currency or the 
        Corporation, respectively, is required, the 
        reorganization shall be deemed a ``major 
        reorganization'' for purposes of affording affected 
        employees retirement under section 8336(d)(2) or 
        8414(b)(1)(B) of title 5, United States Code.
            (2) Service credit.--For purposes of this 
        subsection, periods of service with a Federal home loan 
        bank or a joint office of Federal home loan banks shall 
        be credited as periods of service with a Federal 
        agency.

SEC. 323. PROPERTY TRANSFERRED.

    (a) Property Defined.--For purposes of this section, the 
term ``property'' includes all real property (including 
leaseholds) and all personal property, including computers, 
furniture, fixtures, equipment, books, accounts, records, 
reports, files, memoranda, paper, reports of examination, work 
papers, and correspondence related to such reports, and any 
other information or materials.
    (b) Property of the Office of Thrift Supervision.--
            (1) In general.--No later than 90 days after the 
        transfer date, all property of the Office of Thrift 
        Supervision (other than property described under 
        paragraph (b)(2)) that the Comptroller of the Currency 
        and the Chairperson of the Corporation jointly 
        determine is used, on the day before the transfer date, 
        to perform or support the functions of the Office of 
        Thrift Supervision transferred to the Office of the 
        Comptroller of the Currency or the Corporation under 
        this title, shall be transferred to the Office of the 
        Comptroller of the Currency or the Corporation in a 
        manner consistent with the transfer of employees under 
        this subtitle.
            (2) Personal property.--All books, accounts, 
        records, reports, files, memoranda, papers, documents, 
        reports of examination, work papers, and correspondence 
        of the Office of Thrift Supervision that the 
        Comptroller of the Currency, the Chairperson of the 
        Corporation, and the Chairman of the Board of Governors 
        jointly determine is used, on the day before the 
        transfer date, to perform or support the functions of 
        the Office of Thrift Supervision transferred to the 
        Board of Governors under this title shall be 
        transferred to the Board of Governors in a manner 
        consistent with the purposes of this title.
    (c) Contracts Related to Property Transferred.--Each 
contract, agreement, lease, license, permit, and similar 
arrangement relating to property transferred to the Office of 
the Comptroller of the Currency or the Corporation by this 
section shall be transferred to the Office of the Comptroller 
of the Currency or the Corporation, as appropriate, together 
with the property to which it relates.
    (d) Preservation of Property.--Property identified for 
transfer under this section shall not be altered, destroyed, or 
deleted before transfer under this section.

SEC. 324. FUNDS TRANSFERRED.

    The funds that, on the day before the transfer date, the 
Director of the Office of Thrift Supervision (in consultation 
with the Comptroller of the Currency, the Chairperson of the 
Corporation, and the Chairman of the Board of Governors) 
determines are not necessary to dispose of the affairs of the 
Office of Thrift Supervision under section 325 and are 
available to the Office of Thrift Supervision to pay the 
expenses of the Office of Thrift Supervision--
            (1) relating to the functions of the Office of 
        Thrift Supervision transferred under section 
        312(b)(2)(B), shall be transferred to the Office of the 
        Comptroller of the Currency on the transfer date;
            (2) relating to the functions of the Office of 
        Thrift Supervision transferred under section 
        312(b)(2)(C), shall be transferred to the Corporation 
        on the transfer date; and
            (3) relating to the functions of the Office of 
        Thrift Supervision transferred under section 
        312(b)(1)(A), shall be transferred to the Board of 
        Governors on the transfer date.

SEC. 325. DISPOSITION OF AFFAIRS.

    (a) Authority of Director.--During the 90-day period 
beginning on the transfer date, the Director of the Office of 
Thrift Supervision--
            (1) shall, solely for the purpose of winding up the 
        affairs of the Office of Thrift Supervision relating to 
        any function transferred to the Office of the 
        Comptroller of the Currency, the Corporation, or the 
        Board of Governors under this title--
                    (A) manage the employees of the Office of 
                Thrift Supervision who have not yet been 
                transferred and provide for the payment of the 
                compensation and benefits of the employees that 
                accrue before the date on which the employees 
                are transferred under this title; and
                    (B) manage any property of the Office of 
                Thrift Supervision, until the date on which the 
                property is transferred under section 323; and
            (2) may take any other action necessary to wind up 
        the affairs of the Office of Thrift Supervision.
    (b) Status of Director.--
            (1) In general.--Notwithstanding the transfer of 
        functions under this subtitle, during the 90-day period 
        beginning on the transfer date, the Director of the 
        Office of Thrift Supervision shall retain and may 
        exercise any authority vested in the Director of the 
        Office of Thrift Supervision on the day before the 
        transfer date, only to the extent necessary--
                    (A) to wind up the Office of Thrift 
                Supervision; and
                    (B) to carry out the transfer under this 
                subtitle during such 90-day period.
            (2) Other provisions.--For purposes of paragraph 
        (1), the Director of the Office of Thrift Supervision 
        shall, during the 90-day period beginning on the 
        transfer date, continue to be--
                    (A) treated as an officer of the United 
                States; and
                    (B) entitled to receive compensation at the 
                same annual rate of basic pay that the Director 
                of the Office of Thrift Supervision received on 
                the day before the transfer date.

SEC. 326. CONTINUATION OF SERVICES.

    Any agency, department, or other instrumentality of the 
United States, and any successor to any such agency, 
department, or instrumentality, that was, before the transfer 
date, providing support services to the Office of Thrift 
Supervision in connection with functions transferred to the 
Office of the Comptroller of the Currency, the Corporation or 
the Board of Governors under this title, shall--
            (1) continue to provide such services, subject to 
        reimbursement by the Office of the Comptroller of the 
        Currency, the Corporation, or the Board of Governors, 
        until the transfer of functions under this title is 
        complete; and
            (2) consult with the Comptroller of the Currency, 
        the Chairperson of the Corporation, or the Chairman of 
        the Board of Governors, as appropriate, to coordinate 
        and facilitate a prompt and orderly transition.

SEC. 327. IMPLEMENTATION PLAN AND REPORTS.

    (a) Plan Submission.--Within 180 days of the enactment of 
the Dodd-Frank Wall Street Reform and Consumer Protection Act, 
the Board of Governors, the Corporation, the Office of the 
Comptroller of the Currency, and the Office of Thrift 
Supervision, shall jointly submit a plan to the Committee on 
Banking, Housing, and Urban Affairs of the Senate, the 
Committee on Financial Services of the House of 
Representatives, and the Inspectors General of the Department 
of the Treasury, the Corporation, and the Board of Governors 
detailing the steps the Board of Governors, the Corporation, 
the Office of the Comptroller of the Currency, and the Office 
of Thrift Supervision will take to implement the provisions of 
sections 301 through 326, and the provisions of the amendments 
made by such sections.
    (b) Inspectors General Review of the Plan.--Within 60 days 
of receiving the plan required under subsection (a), the 
Inspectors General of the Department of the Treasury, the 
Corporation, and the Board of Governors shall jointly provide a 
written report to the Board of Governors, the Corporation, the 
Office of the Comptroller of the Currency, and the Office of 
Thrift Supervision and shall submit a copy to the Committee on 
Banking, Housing, and Urban Affairs of the Senate and the 
Committee on Financial Services of the House of Representatives 
detailing whether the plan conforms with the provisions of 
sections 301 through 326, and the provisions of the amendments 
made by such sections, including--
            (1) whether the plan sufficiently takes into 
        consideration the orderly transfer of personnel;
            (2) whether the plan describes procedures and 
        safeguards to ensure that the Office of Thrift 
        Supervision employees are not unfairly disadvantaged 
        relative to employees of the Office of the Comptroller 
        of the Currency and the Corporation;
            (3) whether the plan sufficiently takes into 
        consideration the orderly transfer of authority and 
        responsibilities;
            (4) whether the plan sufficiently takes into 
        consideration the effective transfer of funds;
            (5) whether the plan sufficiently takes in 
        consideration the orderly transfer of property; and
            (6) any additional recommendations for an orderly 
        and effective process.
    (c) Implementation Reports.--Not later than 6 months after 
the date on which the Committee on Banking, Housing, and Urban 
Affairs of the Senate and the Committee on Financial Services 
of the House of Representatives receives the report required 
under subsection (b), and every 6 months thereafter until all 
aspects of the plan have been implemented, the Inspectors 
General of the Department of the Treasury, the Corporation, and 
the Board of Governors shall jointly provide a written report 
on the status of the implementation of the plan to the Board of 
Governors, the Corporation, the Office of the Comptroller of 
the Currency, and the Office of Thrift Supervision and shall 
submit a copy to the Committee on Banking, Housing, and Urban 
Affairs of the Senate and the Committee on Financial Services 
of the House of Representatives.

           Subtitle C--Federal Deposit Insurance Corporation

SEC. 331. DEPOSIT INSURANCE REFORMS.

    (a) Size Distinctions.--Section 7(b)(2) of the Federal 
Deposit Insurance Act (12 U.S.C. 1817(b)(2)) is amended--
            (1) by striking subparagraph (D); and
            (2) by redesignating subparagraph (C) as 
        subparagraph (D).
    (b) Assessment Base.--The Corporation shall amend the 
regulations issued by the Corporation under section 7(b)(2) of 
the Federal Deposit Insurance Act (12 U.S.C. 1817(b)(2)) to 
define the term ``assessment base'' with respect to an insured 
depository institution for purposes of that section 7(b)(2), as 
an amount equal to--
            (1) the average consolidated total assets of the 
        insured depository institution during the assessment 
        period; minus
            (2) the sum of--
                    (A) the average tangible equity of the 
                insured depository institution during the 
                assessment period; and
                    (B) in the case of an insured depository 
                institution that is a custodial bank (as 
                defined by the Corporation, based on factors 
                including the percentage of total revenues 
                generated by custodial businesses and the level 
                of assets under custody) or a banker's bank (as 
                that term is used in section 5136 of the 
                Revised Statutes (12 U.S.C. 24)), an amount 
                that the Corporation determines is necessary to 
                establish assessments consistent with the 
                definition under section 7(b)(1) of the Federal 
                Deposit Insurance Act (12 U.S.C. 1817(b)(1)) 
                for a custodial bank or a banker's bank.

SEC. 332. ELIMINATION OF PROCYCLICAL ASSESSMENTS.

    Section 7(e) of the Federal Deposit Insurance Act is 
amended--
            (1) in paragraph (2)--
                    (A) by amending subparagraph (B) to read as 
                follows:
                    ``(B) Limitation.--The Board of Directors 
                may, in its sole discretion, suspend or limit 
                the declaration of payment of dividends under 
                subparagraph (A).'';
                    (B) by amending subparagraph (C) to read as 
                follows:
                    ``(C) Notice and opportunity for comment.--
                The Corporation shall prescribe, by regulation, 
                after notice and opportunity for comment, the 
                method for the declaration, calculation, 
                distribution, and payment of dividends under 
                this paragraph''; and
                    (C) by striking subparagraphs (D) through 
                (G); and
            (2) in paragraph (4)(A) by striking ``paragraphs 
        (2)(D) and'' and inserting ``paragraphs (2) and''.

SEC. 333. ENHANCED ACCESS TO INFORMATION FOR DEPOSIT INSURANCE 
                    PURPOSES.

    (a) Section 7(a)(2)(B) of the Federal Deposit Insurance Act 
is amended by striking ``agreement'' and inserting 
``consultation''.
    (b) Section 7(b)(1)(E) of the Federal Deposit Insurance Act 
is amended--
            (1) in clause (i), by striking ``such as'' and 
        inserting ``including''; and
            (2) in clause (iii), by striking ``Corporation'' 
        and inserting ``Corporation, except as provided in 
        section 7(a)(2)(B)''.

SEC. 334. TRANSITION RESERVE RATIO REQUIREMENTS TO REFLECT NEW 
                    ASSESSMENT BASE.

    (a) Section 7(b)(3)(B) of the Federal Deposit Insurance Act 
is amended to read as follows:
                    ``(B) Minimum reserve ratio.--The reserve 
                ratio designated by the Board of Directors for 
                any year may not be less than 1.35 percent of 
                estimated insured deposits, or the comparable 
                percentage of the assessment base set forth in 
                paragraph (2)(C).''.
    (b) Section 3(y)(3) of the Federal Deposit Insurance Act is 
amended by inserting ``, or such comparable percentage of the 
assessment base set forth in section 7(b)(2)(C)'' before the 
period.
    (c) For a period of not less than 5 years after the date of 
the enactment of this title, the Federal Deposit Insurance 
Corporation shall make available to the public the reserve 
ratio and the designated reserve ratio using both estimated 
insured deposits and the assessment base under section 
7(b)(2)(C) of the Federal Deposit Insurance Act.
    (d) Reserve ratio.--Notwithstanding the timing requirements 
of section 7(b)(3)(E)(ii) of the Federal Deposit Insurance Act, 
the Corporation shall take such steps as may be necessary for 
the reserve ratio of the Deposit Insurance Fund to reach 1.35 
percent of estimated insured deposits by September 30, 2020.
    (e) Offset.--In setting the assessments necessary to meet 
the requirements of subsection (d), the Corporation shall 
offset the effect of subsection (d) on insured depository 
institutions with total consolidated assets of less than 
$10,000,000,000.

SEC. 335. PERMANENT INCREASE IN DEPOSIT AND SHARE INSURANCE.

    (a) Permanent Increase in Deposit Insurance.--Section 
11(a)(1)(E) of the Federal Deposit Insurance Act (12 U.S.C. 
1821(a)(1)(E)) is amended--
            (1) by striking ``$100,000'' and inserting 
        ``$250,000''; and
            (2) by adding at the end the following new 
        sentences: ``Notwithstanding any other provision of 
        law, the increase in the standard maximum deposit 
        insurance amount to $250,000 shall apply to depositors 
        in any institution for which the Corporation was 
        appointed as receiver or conservator on or after 
        January 1, 2008, and before October 3, 2008. The 
        Corporation shall take such actions as are necessary to 
        carry out the requirements of this section with respect 
        to such depositors, without regard to any time 
        limitations under this Act. In implementing this and 
        the preceding 2 sentences, any payment on a deposit 
        claim made by the Corporation as receiver or 
        conservator to a depositor above the standard maximum 
        deposit insurance amount in effect at the time of the 
        appointment of the Corporation as receiver or 
        conservator shall be deemed to be part of the net 
        amount due to the depositor under subparagraph (B).''
    (b) Permanent Increase in Share Insurance.--Section 
207(k)(5) of the Federal Credit Union Act (12 U.S.C. 
1787(k)(5)) is amended by striking ``$100,000'' and inserting 
``$250,000''.

SEC. 336. MANAGEMENT OF THE FEDERAL DEPOSIT INSURANCE CORPORATION.

    (a) In General.--Section 2 of the Federal Deposit Insurance 
Act (12 U.S.C. 1812) is amended--
            (1) in subsection (a)(1)(B), by striking ``Director 
        of the Office of Thrift Supervision'' and inserting 
        ``Director of the Consumer Financial Protection 
        Bureau'';
            (2) by amending subsection (d)(2) to read as 
        follows:
            ``(2) Acting officials may serve.--In the event of 
        a vacancy in the office of the Comptroller of the 
        Currency or the office of Director of the Consumer 
        Financial Protection Bureau and pending the appointment 
        of a successor, or during the absence or disability of 
        the Comptroller of the Currency or the Director of the 
        Consumer Financial Protection Bureau, the acting 
        Comptroller of the Currency or the acting Director of 
        the Consumer Financial Protection Bureau, as the case 
        may be, shall be a member of the Board of Directors in 
        the place of the Comptroller or Director.''; and
            (3) in subsection (f)(2), by striking ``Office of 
        Thrift Supervision'' and inserting ``Consumer Financial 
        Protection Bureau''.
    (b) Effective Date.--This section, and the amendments made 
by this section, shall take effect on the transfer date.

                       Subtitle D--Other Matters

SEC. 341. BRANCHING.

    Notwithstanding the Federal Deposit Insurance Act (12 
U.S.C. 1811 et seq.), the Bank Holding Company Act of 1956 (12 
U.S.C. 1841 et seq.), or any other provision of Federal or 
State law, a savings association that becomes a bank may--
            (1) continue to operate any branch or agency that 
        the savings association operated immediately before the 
        savings association became a bank; and
            (2) establish, acquire, and operate additional 
        branches and agencies at any location within any State 
        in which the savings association operated a branch 
        immediately before the savings association became a 
        bank, if the law of the State in which the branch is 
        located, or is to be located, would permit 
        establishment of the branch if the bank were a State 
        bank chartered by such State.

SEC. 342. OFFICE OF MINORITY AND WOMEN INCLUSION.

    (a) Office of Minority and Women Inclusion.--
            (1) Establishment.--
                    (A) In general.--Except as provided in 
                subparagraph (B), not later than 6 months after 
                the date of enactment of this Act, each agency 
                shall establish an Office of Minority and Women 
                Inclusion that shall be responsible for all 
                matters of the agency relating to diversity in 
                management, employment, and business 
                activities.
                    (B) Bureau.--The Bureau shall establish an 
                Office of Minority and Women Inclusion not 
                later than 6 months after the designated 
                transfer date established under section 1062.
            (2) Transfer of responsibilities.--Each agency 
        that, on the day before the date of enactment of this 
        Act, assigned the responsibilities described in 
        paragraph (1) (or comparable responsibilities) to 
        another office of the agency shall ensure that such 
        responsibilities are transferred to the Office.
            (3) Duties with respect to civil rights laws.--The 
        responsibilities described in paragraph (1) do not 
        include enforcement of statutes, regulations, or 
        executive orders pertaining to civil rights, except 
        each Director shall coordinate with the agency 
        administrator, or the designee of the agency 
        administrator, regarding the design and implementation 
        of any remedies resulting from violations of such 
        statutes, regulations, or executive orders.
    (b) Director.--
            (1) In general.--The Director of each Office shall 
        be appointed by, and shall report to, the agency 
        administrator. The position of Director shall be a 
        career reserved position in the Senior Executive 
        Service, as that position is defined in section 3132 of 
        title 5, United States Code, or an equivalent 
        designation.
            (2) Duties.--Each Director shall develop standards 
        for--
                    (A) equal employment opportunity and the 
                racial, ethnic, and gender diversity of the 
                workforce and senior management of the agency;
                    (B) increased participation of minority-
                owned and women-owned businesses in the 
                programs and contracts of the agency, including 
                standards for coordinating technical assistance 
                to such businesses; and
                    (C) assessing the diversity policies and 
                practices of entities regulated by the agency.
            (3) Other duties.--Each Director shall advise the 
        agency administrator on the impact of the policies and 
        regulations of the agency on minority-owned and women-
        owned businesses.
            (4) Rule of construction.--Nothing in paragraph 
        (2)(C) may be construed to mandate any requirement on 
        or otherwise affect the lending policies and practices 
        of any regulated entity, or to require any specific 
        action based on the findings of the assessment.
    (c) Inclusion in All Levels of Business Activities.--
            (1) In general.--The Director of each Office shall 
        develop and implement standards and procedures to 
        ensure, to the maximum extent possible, the fair 
        inclusion and utilization of minorities, women, and 
        minority-owned and women-owned businesses in all 
        business and activities of the agency at all levels, 
        including in procurement, insurance, and all types of 
        contracts.
            (2) Contracts.--The procedures established by each 
        agency for review and evaluation of contract proposals 
        and for hiring service providers shall include, to the 
        extent consistent with applicable law, a component that 
        gives consideration to the diversity of the applicant. 
        Such procedure shall include a written statement, in a 
        form and with such content as the Director shall 
        prescribe, that a contractor shall ensure, to the 
        maximum extent possible, the fair inclusion of women 
        and minorities in the workforce of the contractor and, 
        as applicable, subcontractors.
            (3) Termination.--
                    (A) Determination.--The standards and 
                procedures developed and implemented under this 
                subsection shall include a procedure for the 
                Director to make a determination whether an 
                agency contractor, and, as applicable, a 
                subcontractor has failed to make a good faith 
                effort to include minorities and women in their 
                workforce.
                    (B) Effect of determination.--
                            (i) Recommendation to agency 
                        administrator.--Upon a determination 
                        described in subparagraph (A), the 
                        Director shall make a recommendation to 
                        the agency administrator that the 
                        contract be terminated.
                            (ii) Action by agency 
                        administrator.--Upon receipt of a 
                        recommendation under clause (i), the 
                        agency administrator may--
                                    (I) terminate the contract;
                                    (II) make a referral to the 
                                Office of Federal Contract 
                                Compliance Programs of the 
                                Department of Labor; or
                                    (III) take other 
                                appropriate action.
    (d) Applicability.--This section shall apply to all 
contracts of an agency for services of any kind, including the 
services of financial institutions, investment banking firms, 
mortgage banking firms, asset management firms, brokers, 
dealers, financial services entities, underwriters, 
accountants, investment consultants, and providers of legal 
services. The contracts referred to in this subsection include 
all contracts for all business and activities of an agency, at 
all levels, including contracts for the issuance or guarantee 
of any debt, equity, or security, the sale of assets, the 
management of the assets of the agency, the making of equity 
investments by the agency, and the implementation by the agency 
of programs to address economic recovery.
    (e) Reports.--Each Office shall submit to Congress an 
annual report regarding the actions taken by the agency and the 
Office pursuant to this section, which shall include--
            (1) a statement of the total amounts paid by the 
        agency to contractors since the previous report;
            (2) the percentage of the amounts described in 
        paragraph (1) that were paid to contractors described 
        in subsection (c)(1);
            (3) the successes achieved and challenges faced by 
        the agency in operating minority and women outreach 
        programs;
            (4) the challenges the agency may face in hiring 
        qualified minority and women employees and contracting 
        with qualified minority-owned and women-owned 
        businesses; and
            (5) any other information, findings, conclusions, 
        and recommendations for legislative or agency action, 
        as the Director determines appropriate.
    (f) Diversity in Agency Workforce.--Each agency shall take 
affirmative steps to seek diversity in the workforce of the 
agency at all levels of the agency in a manner consistent with 
applicable law. Such steps shall include--
            (1) recruiting at historically black colleges and 
        universities, Hispanic-serving institutions, women's 
        colleges, and colleges that typically serve majority 
        minority populations;
            (2) sponsoring and recruiting at job fairs in urban 
        communities;
            (3) placing employment advertisements in newspapers 
        and magazines oriented toward minorities and women;
            (4) partnering with organizations that are focused 
        on developing opportunities for minorities and women to 
        place talented young minorities and women in industry 
        internships, summer employment, and full-time 
        positions;
            (5) where feasible, partnering with inner-city high 
        schools, girls' high schools, and high schools with 
        majority minority populations to establish or enhance 
        financial literacy programs and provide mentoring; and
            (6) any other mass media communications that the 
        Office determines necessary.
    (g) Definitions.--For purposes of this section, the 
following definitions shall apply:
            (1) Agency.--The term ``agency'' means--
                    (A) the Departmental Offices of the 
                Department of the Treasury;
                    (B) the Corporation;
                    (C) the Federal Housing Finance Agency;
                    (D) each of the Federal reserve banks;
                    (E) the Board;
                    (F) the National Credit Union 
                Administration;
                    (G) the Office of the Comptroller of the 
                Currency;
                    (H) the Commission; and
                    (I) the Bureau.
            (2) Agency administrator.--The term ``agency 
        administrator'' means the head of an agency.
            (3) Minority.--The term ``minority'' has the same 
        meaning as in section 1204(c) of the Financial 
        Institutions Reform, Recovery, and Enforcement Act of 
        1989 (12 U.S.C. 1811 note).
            (4) Minority-owned business.--The term ``minority-
        owned business'' has the same meaning as in section 
        21A(r)(4)(A) of the Federal Home Loan Bank Act (12 
        U.S.C. 1441a(r)(4)(A)), as in effect on the day before 
        the transfer date.
            (5) Office.--The term ``Office'' means the Office 
        of Minority and Women Inclusion established by an 
        agency under subsection (a).
            (6) Women-owned business.--The term ``women-owned 
        business'' has the meaning given the term ``women's 
        business'' in section 21A(r)(4)(B) of the Federal Home 
        Loan Bank Act (12 U.S.C. 1441a(r)(4)(B)), as in effect 
        on the day before the transfer date.

SEC. 343. INSURANCE OF TRANSACTION ACCOUNTS.

    (a) Banks and Savings Associations.--
            (1) Amendments.--Section 11(a)(1) of the Federal 
        Deposit Insurance Act (12 U.S.C. 1821(a)(1)) is 
        amended--
                    (A) in subparagraph (B)--
                            (i) by striking ``The net amount'' 
                        and inserting the following:
                            ``(i) In general.--Subject to 
                        clause (ii), the net amount''; and
                            (ii) by adding at the end the 
                        following new clauses:
                            ``(ii) Insurance for noninterest-
                        bearing transaction accounts.--
                        Notwithstanding clause (i), the 
                        Corporation shall fully insure the net 
                        amount that any depositor at an insured 
                        depository institution maintains in a 
                        noninterest-bearing transaction 
                        account. Such amount shall not be taken 
                        into account when computing the net 
                        amount due to such depositor under 
                        clause (i).
                            ``(iii) Noninterest-bearing 
                        transaction account defined.--For 
                        purposes of this subparagraph, the term 
                        `noninterest-bearing transaction 
                        account' means a deposit or account 
                        maintained at an insured depository 
                        institution--
                                    ``(I) with respect to which 
                                interest is neither accrued nor 
                                paid;
                                    ``(II) on which the 
                                depositor or account holder is 
                                permitted to make withdrawals 
                                by negotiable or transferable 
                                instrument, payment orders of 
                                withdrawal, telephone or other 
                                electronic media transfers, or 
                                other similar items for the 
                                purpose of making payments or 
                                transfers to third parties or 
                                others; and
                                    ``(III) on which the 
                                insured depository institution 
                                does not reserve the right to 
                                require advance notice of an 
                                intended withdrawal.''; and
                    (B) in subparagraph (C), by striking 
                ``subparagraph (B)'' and inserting 
                ``subparagraph (B)(i)''.
            (2) Effective date.--The amendments made by 
        paragraph (1) shall take effect on December 31, 2010.
            (3) Prospective repeal.--Effective January 1, 2013, 
        section 11(a)(1) of the Federal Deposit Insurance Act 
        (12 U.S.C. 1821(a)(1)), as amended by paragraph (1), is 
        amended--
                    (A) in subparagraph (B)--
                            (i) by striking ``deposit.--'' and 
                        all that follows through ``clause (ii), 
                        the net amount'' and insert 
                        ``deposit.--The net amount''; and
                            (ii) by striking clauses (ii) and 
                        (iii); and
                    (B) in subparagraph (C), by striking 
                ``subparagraph (B)(i)'' and inserting 
                ``subparagraph (B)''.
    (b) Credit Unions.--
            (1) Amendments.--Section 207(k)(1) of the Federal 
        Credit Union Act (12 U.S.C. 1787(k)(1)) is amended--
                    (A) in subparagraph (A)--
                            (i) by striking ``Subject to the 
                        provisions of paragraph (2), the net 
                        amount'' and inserting the following:
                            ``(i) Net amount of insurance 
                        payable.--Subject to clause (ii) and 
                        the provisions of paragraph (2), the 
                        net amount''; and
                            (ii) by adding at the end the 
                        following new clauses:
                            ``(ii) Insurance for noninterest-
                        bearing transaction accounts.--
                        Notwithstanding clause (i), the Board 
                        shall fully insure the net amount that 
                        any member or depositor at an insured 
                        credit union maintains in a 
                        noninterest-bearing transaction 
                        account. Such amount shall not be taken 
                        into account when computing the net 
                        amount due to such member or depositor 
                        under clause (i).
                            ``(iii) Noninterest-bearing 
                        transaction account defined.--For 
                        purposes of this subparagraph, the term 
                        `noninterest-bearing transaction 
                        account' means an account or deposit 
                        maintained at an insured credit union--
                                    ``(I) with respect to which 
                                interest is neither accrued nor 
                                paid;
                                    ``(II) on which the account 
                                holder or depositor is 
                                permitted to make withdrawals 
                                by negotiable or transferable 
                                instrument, payment orders of 
                                withdrawal, telephone or other 
                                electronic media transfers, or 
                                other similar items for the 
                                purpose of making payments or 
                                transfers to third parties or 
                                others; and
                                    ``(III) on which the 
                                insured credit union does not 
                                reserve the right to require 
                                advance notice of an intended 
                                withdrawal.''; and
                    (B) in subparagraph (B), by striking 
                ``subparagraph (A)'' and inserting 
                ``subparagraph (A)(i)''.
            (2) Effective date.--The amendments made by 
        paragraph (1) shall take effect upon the date of the 
        enactment of this Act.
            (3) Prospective repeal.--Effective January 1, 2013, 
        section 207(k)(1) of the Federal Credit Union Act (12 
        U.S.C. 1787(k)(1)), as amended by paragraph (1), is 
        amended--
                    (A) in subparagraph (A)--
                            (i) by striking ``(i) net amount of 
                        insurance payable.--'' and all that 
                        follows through ``paragraph (2), the 
                        net amount'' and inserting ``Subject to 
                        the provisions of paragraph (2), the 
                        net amount''; and
                            (ii) by striking clauses (ii) and 
                        (iii); and
                    (B) in subparagraph (B), by striking 
                ``subparagraph (A)(i)'' and inserting 
                ``subparagraph (A)''.

            Subtitle E--Technical and Conforming Amendments

SEC. 351. EFFECTIVE DATE.

    Except as provided in section 364(a), the amendments made 
by this subtitle shall take effect on the transfer date.

SEC. 352. BALANCED BUDGET AND EMERGENCY DEFICIT CONTROL ACT OF 1985.

    Section 256(h) of the Balanced Budget and Emergency Deficit 
Control Act of 1985 (2 U.S.C. 906(h)) is amended--
            (1) in paragraph (4), by striking subparagraphs (C) 
        and (G); and
            (2) by redesignating subparagraphs (D), (E), (F), 
        and (H) as subparagraphs (C), (D), (E), and (F), 
        respectively.

SEC. 353. BANK ENTERPRISE ACT OF 1991.

    Section 232(a) of the Bank Enterprise Act of 1991 (12 
U.S.C. 1834(a)) is amended--
            (1) in the subsection heading, by striking ``by 
        Federal Reserve Board'';
            (2) in paragraph (1)--
                    (A) by striking ``The Board of Governors of 
                the Federal Reserve System,'' and inserting 
                ``The Comptroller of the Currency''; and
                    (B) by striking ``section 7(b)(2)(H)'' and 
                inserting ``section 7(b)(2)(E)'';
            (3) in paragraph (2)(A), by striking ``Board'' and 
        inserting ``Comptroller''; and
            (4) in paragraph (3)--
                    (A) by redesignating subparagraphs (A) 
                through (C) as subparagraphs (B) through (D), 
                respectively; and
                    (B) by inserting before subparagraph (B) 
                the following:
                    ``(A) Comptroller.--The term `Comptroller' 
                means the Comptroller of the Currency.''.

SEC. 354. 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(j)(3) (12 U.S.C. 1841(j)(3)), 
        strike ``Director of the Office of Thrift Supervision'' 
        and inserting ``appropriate Federal banking agency'';
            (2) in section 4 (12 U.S.C. 1843)--
                    (A) in subsection (i)--
                            (i) in paragraph (4)--
                                    (I) in subparagraph (A)--
                                            (aa) in the 
                                        subparagraph heading, 
                                        by striking ``to 
                                        director''; and
                                            (bb) by striking 
                                        ``Board'' and all that 
                                        follows through the end 
                                        of the subparagraph and 
                                        inserting ``Board shall 
                                        solicit comments and 
                                        recommendations from--
                            ``(i) the Comptroller of the 
                        Currency, with respect to the 
                        acquisition of a Federal savings 
                        association; and
                            ``(ii) the Federal Deposit 
                        Insurance Corporation, with respect to 
                        the acquisition of a State savings 
                        association.''.
                                    (II) in subparagraph (B), 
                                by striking ``Director'' each 
                                place that term appears and 
                                inserting ``Comptroller of the 
                                Currency or the Federal Deposit 
                                Insurance Corporation, as 
                                applicable,'';
                            (ii) in paragraph (5)--
                                    (I) in subparagraph (B), by 
                                striking ``Director with'' and 
                                inserting ``Comptroller of the 
                                Currency or the Federal Deposit 
                                Insurance Corporation, as 
                                applicable, with''; and
                                    (II) by striking 
                                ``Director'' each place that 
                                term appears and inserting 
                                ``Comptroller of the Currency 
                                or the Federal Deposit 
                                Insurance Corporation'';
                            (iii) in paragraph (6), by striking 
                        ``Director'' and inserting 
                        ``Comptroller of the Currency or the 
                        Federal Deposit Insurance Corporation, 
                        as applicable,''; and
                            (iv) by striking paragraph (7); and
            (3) in section 5(f) (12 U.S.C. 1844(f))--
                    (A) by striking ``subpena'' each place that 
                term appears and inserting ``subpoena'';
                    (B) by striking ``subpenas'' each place 
                that term appears and inserting ``subpoenas''; 
                and
                    (C) by striking ``subpenaed'' and inserting 
                ``subpoenaed''.

SEC. 355. BANK HOLDING COMPANY ACT AMENDMENTS OF 1970.

    Section 106(b)(1) of the Bank Holding Company Act 
Amendments of 1970 (12 U.S.C. 1972(1)) is amended in the 
undesignated matter following subparagraph (E) by inserting 
``issue such regulations as are necessary to carry out this 
section, and, in consultation with the Comptroller of the 
Currency and the Federal Deposit Insurance Company, may'' after 
``The Board may''.

SEC. 356. BANK PROTECTION ACT OF 1968.

    The Bank Protection Act of 1968 (12 U.S.C. 1881 et seq.) is 
amended--
            (1) in section 2 (12 U.S.C. 1881), by striking 
        ``the term'' and all that follows through the end of 
        the section and inserting ``the term `Federal 
        supervisory agency' means the appropriate Federal 
        banking agency, as defined in section 3(q) of the 
        Federal Deposit Insurance Act (12 U.S.C. 1813(q)).'';
            (2) in section 3 (12 U.S.C. 1882), by striking 
        ``and loan'' each place that term appears; and
            (3) in section 5 (12 U.S.C. 1884), by striking 
        ``and loan''.

SEC. 357. BANK SERVICE COMPANY ACT.

    The Bank Service Company Act (12 U.S.C. 1861 et seq.) is 
amended--
            (1) in section 1(b)(4) (12 U.S.C. 1861(b)(4))--
                    (A) by inserting after ``an insured bank,'' 
                the following: ``a savings association,'';
                    (B) by striking ``Director of the Office of 
                Thrift Supervision'' and inserting 
                ``appropriate Federal banking agency''; and
                    (C) by striking ``, the Federal Savings and 
                Loan Insurance Corporation,'';
            (2) in section 1(b)(5), by striking ``term `insured 
        depository institution' has the same meaning as in 
        section 3(c)'' and inserting ``terms `depository 
        institution' and `savings association' have the same 
        meanings as in section 3''; and
            (3) in section 7(c)(2) (12 U.S.C. 1867(c)(2)), by 
        inserting ``each'' after ``notify''.

SEC. 358. COMMUNITY REINVESTMENT ACT OF 1977.

    The Community Reinvestment Act of 1977 (12 U.S.C. 2901 et 
seq.) is amended--
            (1) in section 803 (12 U.S.C. 2902)--
                    (A) in paragraph (1)--
                            (i) in subparagraph (A), by 
                        inserting ``and Federal savings 
                        associations (the deposits of which are 
                        insured by the Federal Deposit 
                        Insurance Corporation)'' after 
                        ``banks'';
                            (ii) in subparagraph (B), by 
                        striking ``and bank holding companies'' 
                        and inserting ``, bank holding 
                        companies, and savings and loan holding 
                        companies''; and
                            (iii) in subparagraph (C), by 
                        striking ``; and'' and inserting ``, 
                        and State savings associations (the 
                        deposits of which are insured by the 
                        Federal Deposit Insurance 
                        Corporation).''; and
                    (B) by striking paragraph (2) (relating to 
                the Office of Thrift Supervision), as added by 
                section 744(q) of the Financial Institutions 
                Reform, Recovery, and Enforcement Act of 1989 
                (Public Law 101-73; 103 Stat. 440); and
            (2) in section 806 (12 U.S.C. 2905), by inserting 
        ``, except that the Comptroller of the Currency shall 
        prescribe regulations applicable to savings 
        associations and the Board of Governors shall prescribe 
        regulations applicable to insured State member banks, 
        bank holding companies and savings and loan holding 
        companies,'' after ``supervisory agency''.

SEC. 359. CRIME CONTROL ACT OF 1990.

    The Crime Control Act of 1990 is amended--
            (1) in section 2539(c)(2) (28 U.S.C. 509 note)--
                    (A) by striking subparagraphs (C) and (D); 
                and
                    (B) by redesignating subparagraphs (E) 
                through (H) as subparagraphs (C) through (G), 
                respectively; and
            (2) in section 2554(b)(2) (Public Law 101-647; 104 
        Stat. 4890)--
                    (A) in subparagraph (A), by striking ``, 
                the Director of the Office of Thrift 
                Supervision,'' and inserting ``the Comptroller 
                of the Currency''; and
                    (B) in subparagraph (B), by striking ``, 
                the Director'' and all that follows through 
                ``Trust Corporation'' and inserting ``or the 
                Federal Deposit Insurance Corporation''.

SEC. 360. DEPOSITORY INSTITUTION MANAGEMENT INTERLOCKS ACT.

    The Depository Institution Management Interlocks Act (12 
U.S.C. 3201 et seq.) is amended--
            (1) in section 207 (12 U.S.C. 3206)--
                    (A) in paragraph (1), by inserting before 
                the comma at the end the following: ``and 
                Federal savings associations (the deposits of 
                which are insured by the Federal Deposit 
                Insurance Corporation)'';
                    (B) in paragraph (2), by striking ``, and 
                bank holding companies'' and inserting ``, bank 
                holding companies, and savings and loan holding 
                companies'';
                    (C) in paragraph (3), by striking 
                ``Corporation,'' and inserting ``Corporation 
                and State savings associations (the deposits of 
                which are insured by the Federal Deposit 
                Insurance Corporation),'';
                    (D) by striking paragraph (4);
                    (E) by redesignating paragraphs (5) and (6) 
                as paragraphs (4) and (5), respectively; and
                    (F) in paragraph (5), as so redesignated, 
                by striking ``through (5)'' and inserting 
                ``through (4)'';
            (2) in section 209 (12 U.S.C. 3207)--
                    (A) in paragraph (1), by inserting before 
                the comma at the end the following: ``and 
                Federal savings associations (the deposits of 
                which are insured by the Federal Deposit 
                Insurance Corporation)'';
                    (B) in paragraph (2), by striking ``, and 
                bank holding companies'' and inserting ``, bank 
                holding companies, and savings and loan holding 
                companies'';
                    (C) in paragraph (3), by striking 
                ``Corporation,'' and inserting ``Corporation 
                and State savings associations (the deposits of 
                which are insured by the Federal Deposit 
                Insurance Corporation),'';
                    (D) by striking paragraph (4); and
                    (E) by redesignating paragraph (5) as 
                paragraph (4); and
            (3) in section 210(a) (12 U.S.C. 3208(a))--
                    (A) by striking ``his'' and inserting 
                ``the''; and
                    (B) by inserting ``of the Attorney 
                General'' after ``enforcement functions''.

SEC. 361. EMERGENCY HOMEOWNERS' RELIEF ACT.

    Section 110 of the Emergency Homeowners' Relief Act (12 
U.S.C. 2709) is amended in the second sentence, by striking 
``Home Loan Bank Board, the Federal Savings and Loan Insurance 
Corporation'' and inserting ``Housing Finance Agency''.

SEC. 362. FEDERAL CREDIT UNION ACT.

    The Federal Credit Union Act (12 U.S.C. 1751 et seq.) is 
amended--
            (1) in section 107(8) (12 U.S.C. 1757(8)), by 
        striking ``or the Federal Savings and Loan Insurance 
        Corporation'';
            (2) in section 205 (12 U.S.C. 1785)--
                    (A) in subsection (b)(2)(G)(i), by striking 
                ``the Office of Thrift Supervision and''; and
                    (B) in subsection (i)(1), by striking ``or 
                the Federal Savings and Loan Insurance 
                Corporation''; and
            (3) in section 206(g)(7) (12 U.S.C. 1786(g)(7))--
                    (A) in subparagraph (A)--
                            (i) in clause (ii), by striking 
                        ``(b)(8)'' and inserting ``(b)(9)'';
                            (ii) in clause (v)--
                                    (I) by striking 
                                ``depository'' and inserting 
                                ``financial''; and
                                    (II) by adding ``and'' at 
                                the end;
                            (iii) in clause (vi)--
                                    (I) by striking ``Board'' 
                                and inserting ``Agency''; and
                                    (II) by striking ``; and'' 
                                and inserting a period; and
                            (iv) by striking clause (vii); and
                    (B) in subparagraph (D)--
                            (i) in clause (iii), by adding 
                        ``and'' at the end;
                            (ii) in clause (iv)--
                                    (I) by striking ``Board'' 
                                and inserting ``Agency''; and
                                    (II) by striking ``and'' at 
                                the end; and
                            (iii) by striking clause (v).

SEC. 363. FEDERAL DEPOSIT INSURANCE ACT.

    The Federal Deposit Insurance Act (12 U.S.C. 1811 et seq.) 
is amended--
            (1) in section 3 (12 U.S.C. 1813)--
                    (A) in subsection (b)(1)(C), by striking 
                ``Director of the Office of Thrift 
                Supervision'' and inserting ``Comptroller of 
                the Currency'';
                    (B) in subsection (l)(5), in the matter 
                preceding subparagraph (A), by striking 
                ``Director of the Office of Thrift 
                Supervision,''; and
                    (C) in subsection (z), by striking ``the 
                Director of the Office of Thrift 
                Supervision,'';
            (2) in section 7 (12 U.S.C. 1817)--
                    (A) in subsection (a)--
                            (i) in paragraph (2)--
                                    (I) in subparagraph (A)--
                                            (aa) in the first 
                                        sentence, by striking 
                                        ``the Director of the 
                                        Office of Thrift 
                                        Supervision,'';
                                            (bb) in the second 
                                        sentence--
                                            (AA) by striking 
                                        ``the Director of the 
                                        Office of Thrift 
                                        Supervision,'' and 
                                        inserting ``to''; and
                                            (BB) by inserting 
                                        ``to'' before ``any 
                                        Federal home''; and
                                            (cc) by striking 
                                        ``Finance Board'' each 
                                        place that term appears 
                                        and inserting ``Finance 
                                        Agency''; and
                                    (II) in subparagraph (B), 
                                by striking ``the Comptroller 
                                of the Currency, the Board of 
                                Governors of the Federal 
                                Reserve System, and the 
                                Director of the Office of 
                                Thrift Supervision,'' and 
                                inserting ``the Comptroller of 
                                the Currency and the Board of 
                                Governors of the Federal 
                                Reserve System,'';
                            (ii) in paragraph (3), in the first 
                        sentence, by striking ``Comptroller of 
                        the Currency, the Chairman of the Board 
                        of Governors of the Federal Reserve 
                        System, and the Director of the Office 
                        of Thrift Supervision.'' and inserting 
                        ``Comptroller of the Currency, and the 
                        Chairman of the Board of Governors of 
                        the Federal Reserve System.'';
                            (iii) in paragraph (6), by striking 
                        ``section 232(a)(3)(C)'' and inserting 
                        ``section 232(a)(3)(D)''; and
                            (iv) in paragraph (7), by striking 
                        ``, the Director of the Office of 
                        Thrift Supervision,''; and
                    (B) in subsection (n)--
                            (i) in the heading, by striking 
                        ``Director of the Office of Thrift 
                        Supervision'' and inserting 
                        ``Comptroller of the Currency'';
                            (ii) in the first sentence--
                                    (I) by striking ``the 
                                Director of the Office of 
                                Thrift Supervision'' and 
                                inserting ``the Comptroller of 
                                the Currency''; and
                                    (II) by inserting 
                                ``Federal'' before ``savings 
                                associations'';
                            (iii) in the third sentence, by 
                        striking ``, the Financing Corporation, 
                        and the Resolution Funding 
                        Corporation''; and
                            (iv) by striking ``the Director'' 
                        each place that term appears and 
                        inserting ``the Comptroller'';
            (3) in section 8 (12 U.S.C. 1818)--
                    (A) in subsection (a)(8)(B)(ii), in the 
                last sentence, by striking ``Director of the 
                Office of Thrift Supervision'' each place that 
                term appears and inserting ``Comptroller of the 
                Currency'';
                    (B) in subsection (b)(3)--
                            (i) by inserting ``any savings and 
                        loan holding company and any subsidiary 
                        (other than a depository institution) 
                        of a savings and loan holding company 
                        (as such terms are defined in section 
                        10 of Home Owners' Loan Act), any 
                        noninsured State member bank'' after 
                        ``Bank Holding Company Act of 1956,''; 
                        and
                            (ii) by inserting ``or against a 
                        savings and loan holding company or any 
                        subsidiary thereof (other than a 
                        depository institution or a subsidiary 
                        of such depository institution)'' 
                        before the period at the end;
                    (C) by striking paragraph (9) of subsection 
                (b) and inserting the following new paragraph:
            ``(9) [Repealed]''.
                    (D) in subsection (e)(7)--
                            (i) in subparagraph (A)--
                                    (I) in clause (v), by 
                                inserting ``and'' after the 
                                semicolon;
                                    (II) in clause (vi)--
                                            (aa) by striking 
                                        ``Board'' and inserting 
                                        ``Agency''; and
                                            (bb) by striking 
                                        ``; and'' and inserting 
                                        a period; and
                                    (III) by striking clause 
                                (vii); and
                            (ii) in subparagraph (D)--
                                    (I) in clause (iii), by 
                                inserting ``and'' after the 
                                semicolon;
                                    (II) in clause (iv)--
                                            (aa) by striking 
                                        ``Board'' and inserting 
                                        ``Agency''; and
                                            (bb) by striking 
                                        ``; and'' and inserting 
                                        a period; and
                                    (III) by striking clause 
                                (v);
                    (E) in subsection (j)--
                            (i) in paragraph (2), by striking 
                        ``, or as a savings association under 
                        subsection (b)(9) of this section'';
                            (ii) in paragraph (3), by inserting 
                        ``or'' after the semicolon;
                            (iii) in paragraph (4), by striking 
                        ``; or'' and inserting a comma; and
                            (iv) by striking paragraph (5);
                    (F) in subsection (o), by striking 
                ``Director of the Office of Thrift 
                Supervision'' and inserting ``Comptroller of 
                the Currency''; and
                    (G) in subsection (w)(3)(A), by striking 
                ``and the Office of Thrift Supervision'';
            (4) in section 10 (12 U.S.C. 1820)--
                    (A) in subsection (d)(5), by striking ``or 
                the Resolution Trust Corporation'' each place 
                that term appears; and
                    (B) in subsection (k)(5)(B)--
                            (i) in clause (ii), by inserting 
                        ``and'' after the semicolon;
                            (ii) in clause (iii), by striking 
                        ``; and'' and inserting a period; and
                            (iii) by striking clause (iv);
            (5) in section 11 (12 U.S.C. 1821)--
                    (A) in subsection (c)--
                            (i) in paragraph (2)(A)(ii), by 
                        striking ``(other than section 21A of 
                        the Federal Home Loan Bank Act)'';
                            (ii) in paragraph (4), by striking 
                        ``Except as otherwise provided in 
                        section 21A of the Federal Home Loan 
                        Bank Act and notwithstanding'' and 
                        inserting ``Notwithstanding'';
                            (iii) in paragraph (6)--
                                    (I) in the heading, by 
                                striking ``Director of the 
                                office of thrift supervision'' 
                                and inserting ``Comptroller of 
                                the currency'';
                                    (II) in subparagraph (A)--
                                            (aa) by striking 
                                        ``or the Resolution 
                                        Trust Corporation''; 
                                        and
                                            (bb) by striking 
                                        ``Director of the 
                                        Office of Thrift 
                                        Supervision'' and 
                                        inserting ``Comptroller 
                                        of the Currency''; and
                                    (III) by amending 
                                subparagraph (B) to read as 
                                follows:
                    ``(B) Receiver.--The Corporation may, at 
                the discretion of the Comptroller of the 
                Currency, be appointed receiver and the 
                Corporation may accept any such appointment.'';
                            (iv) in paragraph (12)(A), by 
                        striking ``or the Resolution Trust 
                        Corporation'';
                    (B) in subsection (d)--
                            (i) in paragraph (17)(A), by 
                        striking ``or the Director of the 
                        Office of Thrift Supervision''; and
                            (ii) in paragraph (18)(B), by 
                        striking ``or the Director of the 
                        Office of Thrift Supervision'';
                    (C) in subsection (m)--
                            (i) in paragraph (9), by striking 
                        ``or the Director of the Office of 
                        Thrift Supervision, as appropriate'';
                            (ii) in paragraph (16), by striking 
                        ``or the Director of the Office of 
                        Thrift Supervision, as appropriate'' 
                        each place that term appears; and
                            (iii) in paragraph (18), by 
                        striking ``or the Director of the 
                        Office of Thrift Supervision, as 
                        appropriate'' each place that term 
                        appears;
                    (D) in subsection (n)--
                            (i) in paragraph (1)(A)--
                                    (I) by striking ``, or the 
                                Director of the Office of 
                                Thrift Supervision, with 
                                respect to'' and inserting 
                                ``or''; and
                                    (II) by striking 
                                ``applicable,,'' and inserting 
                                ``applicable,'';
                            (ii) in paragraph (2)(A), by 
                        striking ``or the Director of the 
                        Office of Thrift Supervision'';
                            (iii) in paragraph (4)(D), by 
                        striking ``and the Director of the 
                        Office of Thrift Supervision, as 
                        appropriate,'';
                            (iv) in paragraph (4)(G), by 
                        striking ``and the Director of the 
                        Office of Thrift Supervision, as 
                        appropriate,''; and
                            (v) in paragraph (12)(B)--
                                    (I) by inserting ``as'' 
                                after ``shall appoint the 
                                Corporation'';
                                    (II) by striking ``or the 
                                Director of the Office of 
                                Thrift Supervision, as 
                                appropriate,'' each place such 
                                term appears;
                    (E) in subsection (p)--
                            (i) in paragraph (2)(B), by 
                        striking ``the Corporation, the FSLIC 
                        Resolution Fund, or the Resolution 
                        Trust Corporation,'' and inserting ``or 
                        the Corporation,''; and
                            (ii) in paragraph (3)(B), by 
                        striking ``, the FSLIC Resolution Fund, 
                        the Resolution Trust Corporation,''; 
                        and
                    (F) in subsection (r), by striking ``and 
                the Resolution Trust Corporation'';
            (6) in section 13(k)(1)(A)(iv) (12 U.S.C. 
        1823(k)(1)(A)(iv)), by striking ``Director of the 
        Office of Thrift Supervision'' and inserting 
        ``Comptroller of the Currency'';
            (7) in section 18 (12 U.S.C. 1828)--
                    (A) in subsection (c)(2)--
                            (i) in subparagraph (A), by 
                        inserting ``or a Federal savings 
                        association'' before the semicolon;
                            (ii) in subparagraph (B), by adding 
                        ``and'' at the end;
                            (iii) in subparagraph (C), by 
                        striking ``(except'' and all that 
                        follows through ``; and'' and inserting 
                        ``or a State savings association.''; 
                        and
                            (iv) by striking subparagraph (D);
                    (B) in subsection (g)(1), by striking ``the 
                Director of the Office of Thrift Supervision'' 
                and inserting ``the Comptroller of the 
                Currency'';
                    (C) in subsection (i)(2)(C), by striking 
                ``Director of the Office of Thrift 
                Supervision'' and inserting ``Corporation''; 
                and
                    (D) in subsection (m)--
                            (i) in paragraph (1)--
                                    (I) in subparagraph (A), by 
                                striking ``and the Director of 
                                the Office of Thrift 
                                Supervision'' and inserting 
                                ``or the Comptroller of the 
                                Currency, as appropriate,''; 
                                and
                                    (II) in subparagraph (B), 
                                by striking ``and orders of the 
                                Director of the Office of 
                                Thrift Supervision'' and 
                                inserting ``of the Comptroller 
                                of the Currency and orders of 
                                the Corporation and the 
                                Comptroller of the Currency'';
                            (ii) in paragraph (2)--
                                    (I) in subparagraph (A), by 
                                striking ``Director of the 
                                Office of Thrift Supervision'' 
                                and inserting ``Comptroller of 
                                the Currency, as 
                                appropriate,''; and
                                    (II) in subparagraph (B)--
                                            (aa) in the matter 
                                        before clause (i), by 
                                        striking ``Director of 
                                        the Office of Thrift 
                                        Supervision'' and 
                                        inserting ``Corporation 
                                        or the Comptroller of 
                                        the Currency, as 
                                        appropriate,''; and
                                            (bb) in the matter 
                                        following clause (ii)--
                                                    (AA) in the 
                                                first sentence, 
                                                by striking 
                                                ``Director of 
                                                the Office of 
                                                Thrift 
                                                Supervision'' 
                                                and inserting 
                                                ``Office of the 
                                                Comptroller of 
                                                the Currency, 
                                                as 
                                                appropriate,''; 
                                                and
                                                    (BB) by 
                                                striking the 
                                                second sentence 
                                                and inserting 
                                                the following: 
                                                ``The 
                                                Corporation or 
                                                the Comptroller 
                                                of the 
                                                Currency, as 
                                                appropriate, 
                                                may take any 
                                                other 
                                                corrective 
                                                measures with 
                                                respect to the 
                                                subsidiary, 
                                                including the 
                                                authority to 
                                                require the 
                                                subsidiary to 
                                                terminate the 
                                                activities or 
                                                operations 
                                                posing such 
                                                risks, as the 
                                                Corporation or 
                                                the Comptroller 
                                                of the 
                                                Currency, 
                                                respectively, 
                                                may deem 
                                                appropriate.''; 
                                                and
                            (iii) in paragraph (3)--
                                    (I) in subparagraph (A), in 
                                the second sentence--
                                            (aa) by inserting 
                                        ``, in the case of a 
                                        Federal savings 
                                        association,'' before 
                                        ``consult with''; and
                                            (bb) by striking 
                                        ``Director of the 
                                        Office of Thrift 
                                        Supervision'' and 
                                        inserting ``Comptroller 
                                        of the Currency''; and
                                    (II) in subparagraph (B)--
                                            (aa) in the 
                                        subparagraph heading, 
                                        by striking 
                                        ``Director'' and 
                                        inserting ``Comptroller 
                                        of the currency'';
                                            (bb) by striking 
                                        ``Office of Thrift 
                                        Supervision'' and 
                                        inserting ``Comptroller 
                                        of the Currency'';
                                            (cc) by inserting a 
                                        comma after 
                                        ``soundness''; and
                                            (dd) by inserting 
                                        ``as to Federal savings 
                                        associations'' after 
                                        ``compliance'';
            (8) in section 19(e) (12 U.S.C. 1829(e))--
                    (A) in paragraph (1), by striking 
                ``Director of the Office of Thrift 
                Supervision'' and inserting ``Board of 
                Governors of the Federal Reserve System''; and
                    (B) in paragraph (2), by striking 
                ``Director of the Office of Thrift 
                Supervision'' and inserting ``Board of 
                Governors of the Federal Reserve System'';
            (9) in section 28 (12 U.S.C. 1831e)--
                    (A) in subsection (e)--
                            (i) in paragraph (2)--
                                    (I) in subparagraph 
                                (A)(ii), by striking ``Director 
                                of the Office of Thrift 
                                Supervision'' and inserting 
                                ``Comptroller of the Currency 
                                or the Corporation, as 
                                appropriate'';
                                    (II) in subparagraph (C), 
                                by striking ``Director of the 
                                Office of Thrift Supervision'' 
                                and inserting ``Comptroller of 
                                the Currency or the 
                                Corporation, as appropriate,''; 
                                and
                                    (III) in subparagraph (F), 
                                by striking ``Director of the 
                                Office of Thrift Supervision'' 
                                and inserting ``Comptroller of 
                                the Currency or the 
                                Corporation, as appropriate''; 
                                and
                            (ii) in paragraph (3)--
                                    (I) in subparagraph (A), by 
                                striking ``Director of the 
                                Office of Thrift Supervision'' 
                                and inserting ``Comptroller of 
                                the Currency or the 
                                Corporation, as appropriate''; 
                                and
                                    (II) in subparagraph (B), 
                                by striking ``Director of the 
                                Office of Thrift Supervision'' 
                                and inserting ``Comptroller of 
                                the Currency or the 
                                Corporation, as appropriate,''; 
                                and
                    (B) in subsection (h)(2), by striking 
                ``Director of the Office of Thrift 
                Supervision'' and inserting ``Comptroller of 
                the Currency, of the Corporation,''; and
            (10) in section 33(e) (12 U.S.C. 1831j(e)), by 
        striking ``Federal Housing Finance Board, the 
        Comptroller of the Currency, and the Director of the 
        Office of Thrift Supervision'' and inserting ``Federal 
        Housing Finance Agency and the Comptroller of the 
        Currency''.

SEC. 364. FEDERAL HOME LOAN BANK ACT.

    (a) Repeal of Section 18(c).--Effective 90 days after the 
transfer date, section 18(c) of the Federal Home Loan Bank Act 
(12 U.S.C. 1438(c)) is repealed.
    (b) Repeal of Section 21A.--Section 21A of the Federal Home 
Loan Bank Act (12 U.S.C. 1441a) is repealed.

SEC. 365. FEDERAL HOUSING ENTERPRISES FINANCIAL SAFETY AND SOUNDNESS 
                    ACT OF 1992.

    The Federal Housing Enterprises Financial Safety and 
Soundness Act of 1992 (12 U.S.C. 4501 et seq.) is amended--
            (1) in section 1315(b) (12 U.S.C. 4515(b)), by 
        striking ``the Federal Deposit Insurance Corporation, 
        and the Office of Thrift Supervision.'' and inserting 
        ``and the Federal Deposit Insurance Corporation.''; and
            (2) in section 1317(c) (12 U.S.C. 4517(c)), by 
        striking ``the Federal Deposit Insurance Corporation, 
        or the Director of the Office of Thrift Supervision'' 
        and inserting ``or the Federal Deposit Insurance 
        Corporation''.

SEC. 366. FEDERAL RESERVE ACT.

    The Federal Reserve Act (12 U.S.C. 221 et seq.) is 
amended--
            (1) in section 11(a)(2) (12 U.S.C. 248(a)(2))--
                    (A) by inserting ``State savings 
                associations that are insured depository 
                institutions (as defined in section 3 of the 
                Federal Deposit Insurance Act),'' after ``case 
                of insured'';
                    (B) by striking ``Director of the Office of 
                Thrift Supervision'' and inserting 
                ``Comptroller of the Currency'';
                    (C) by inserting ``Federal'' before 
                ``savings association which''; and
                    (D) by striking ``savings and loan 
                association'' and inserting ``savings 
                association''; and
            (2) in section 19(b) (12 U.S.C. 461(b))--
                    (A) in paragraph (1)(F), by striking 
                ``Director of the Office of Thrift 
                Supervision'' and inserting ``Comptroller of 
                the Currency''; and
                    (B) in paragraph (4)(B), by striking 
                ``Director of the Office of Thrift 
                Supervision'' and inserting ``Comptroller of 
                the Currency''.

SEC. 367. FINANCIAL INSTITUTIONS REFORM, RECOVERY, AND ENFORCEMENT ACT 
                    OF 1989.

    The Financial Institutions Reform, Recovery, and 
Enforcement Act of 1989 is amended--
            (1) in section 203 (12 U.S.C. 1812 note), by 
        striking subsection (b);
            (2) in section 302(1) (12 U.S.C. 1467a note), by 
        striking ``Director of the Office of Thrift 
        Supervision'' and inserting ``Comptroller of the 
        Currency'';
            (3) in section 305 (12 U.S.C. 1464 note), by 
        striking subsection (b);
            (4) in section 308 (12 U.S.C. 1463 note)--
                    (A) in subsection (a), by striking 
                ``Director of the Office of Thrift 
                Supervision'' and inserting ``Chairman of the 
                Board of Governors of the Federal Reserve 
                System, the Comptroller of the Currency, the 
                Chairman of the National Credit Union 
                Administration,''; and
                    (B) by adding at the end the following new 
                subsection:
    ``(c) Reports.--The Secretary of the Treasury, the Chairman 
of the Board of Governors of the Federal Reserve System, the 
Comptroller of the Currency, the Chairman of the National 
Credit Union Administration, and the Chairperson of Board of 
Directors of the Federal Deposit Insurance Corporation shall 
each submit an annual report to the Congress containing a 
description of actions taken to carry out this section.'';
            (5) in section 402 (12 U.S.C. 1437 note)--
                    (A) in subsection (a), by striking 
                ``Director of the Office of Thrift 
                Supervision'' and inserting ``Comptroller of 
                the Currency'';
                    (B) by striking subsection (b);
                    (C) in subsection (e)--
                            (i) in paragraph (1), by striking 
                        ``Office of Thrift Supervision'' and 
                        inserting ``Comptroller of the 
                        Currency''; and
                            (ii) in each of paragraphs (2), 
                        (3), and (4), by striking ``Director of 
                        the Office of Thrift Supervision'' each 
                        place that term appears and inserting 
                        ``Comptroller of the Currency''; and
                    (D) by striking ``Federal Housing Finance 
                Board'' each place that term appears and 
                inserting ``Federal Housing Finance Agency'';
            (6) in section 1103(a) (12 U.S.C. 3332(a)), by 
        striking ``and the Resolution Trust Corporation'';
            (7) in section 1205(b) (12 U.S.C. 1818 note)--
                    (A) in paragraph (1)--
                            (i) by striking subparagraph (B); 
                        and
                            (ii) by redesignating subparagraphs 
                        (C) through (F) as subparagraphs (B) 
                        through (E), respectively; and
                    (B) in paragraph (2), by striking 
                ``paragraph (1)(F)'' and inserting ``paragraph 
                (1)(E)'';
            (8) in section 1206 (12 U.S.C. 1833b)--
                    (A) by striking ``Board, the Oversight 
                Board of the Resolution Trust Corporation'' and 
                inserting ``Agency, and''; and
                    (B) by striking ``, and the Office of 
                Thrift Supervision'';
            (9) in section 1216 (12 U.S.C. 1833e)--
                    (A) in subsection (a)--
                            (i) in paragraph (3), by adding 
                        ``and'' at the end;
                            (ii) in paragraph (4), by striking 
                        the semicolon at the end and inserting 
                        a period;
                            (iii) by striking paragraphs (2), 
                        (5), and (6); and
                            (iv) by redesignating paragraphs 
                        (3) and (4), as paragraphs (2) and (3), 
                        respectively;
                    (B) in subsection (c)--
                            (i) by striking ``the Director of 
                        the Office of Thrift Supervision,'' and 
                        inserting ``and''; and
                            (ii) by striking ``the Thrift 
                        Depositor Protection Oversight Board of 
                        the Resolution Trust Corporation, and 
                        the Resolution Trust Corporation''; and
                    (C) in subsection (d)--
                            (i) by striking paragraphs (3), 
                        (5), and (6); and
                            (ii) by redesignating paragraphs 
                        (4), (7), and (8) as paragraphs (3), 
                        (4), and (5), respectively.

SEC. 368. FLOOD DISASTER PROTECTION ACT OF 1973.

    Section 3(a)(5) of the Flood Disaster Protection Act of 
1973 (42 U.S.C. 4003(a)(5)) is amended by striking ``, the 
Office of Thrift Supervision''.

SEC. 369. HOME OWNERS' LOAN ACT.

    The Home Owners' Loan Act (12 U.S.C. 1461 et seq.) is 
amended--
            (1) in section 1 (12 U.S.C. 1461), by striking the 
        table of contents;
            (2) in section 2 (12 U.S.C. 1462), as amended by 
        this Act--
                    (A) by striking paragraphs (1) and (3);
                    (B) by redesignating paragraph (2) as 
                paragraph (1);
                    (C) by redesignating paragraphs (4) through 
                (9) as paragraphs (2) through (7), 
                respectively; and
                    (D) by adding at the end the following:
            ``(8) Board.--The term `Board', other than in the 
        context of the Board of Directors of the Corporation, 
        means the Board of Governors of the Federal Reserve 
        System.
            ``(9) Comptroller.--The term `Comptroller' means 
        the Comptroller of the Currency.'';
            (3) in section 3 (12 U.S.C. 1462a)--
                    (A) by striking the section heading and 
                inserting the following:

``SEC. 3. ADMINISTRATIVE PROVISIONS.'';

                    (B) by striking subsections (a), (b), (c), 
                (d), (g), (h), (i), and (j);
                    (C) by redesignating subsections (e) and 
                (f) as subsections (a) and (b), respectively;
                    (D) in subsection (a), as so redesignated--
                            (i) in the heading by striking ``of 
                        the Director''; and
                            (ii) in the matter preceding 
                        paragraph (1), by striking ``The 
                        Director'' and inserting ``In 
                        accordance with subtitle A of title III 
                        of the Dodd-Frank Wall Street Reform 
                        and Consumer Protection Act, the 
                        appropriate Federal banking agency''; 
                        and
                    (E) in subsection (b), as so redesignated, 
                by striking ``Director'' and inserting 
                ``appropriate Federal banking agency'';
            (4) in section 4 (12 U.S.C. 1463)--
                    (A) in subsection (a)--
                            (i) in the subsection heading, by 
                        striking ``Federal'';
                            (ii) by striking paragraphs (1) and 
                        (2) and inserting the following:
            ``(1) Examination and safe and sound operation.--
                    ``(A) Federal savings associations.--The 
                Comptroller shall provide for the examination 
                and safe and sound operation of Federal savings 
                associations.
                    ``(B) State savings associations.--The 
                Corporation shall provide for the examination 
                and safe and sound operation of State savings 
                associations.
            ``(2) Regulations for savings associations.--The 
        Comptroller may prescribe regulations with respect to 
        savings associations, as the Comptroller determines to 
        be appropriate to carry out the purposes of this 
        Act.''; and
                            (iii) in paragraph (3), by striking 
                        ``Director'' each place that term 
                        appears and inserting ``Comptroller and 
                        the Corporation'';
                    (B) in subsection (b)--
                            (i) in paragraph (2)--
                                    (I) in subparagraph (A), by 
                                adding ``and'' at the end;
                                    (II) in subparagraph (B), 
                                by striking ``; and'' and 
                                inserting a period; and
                                    (III) by striking 
                                subparagraph (C); and
                            (ii) by striking ``Director'' each 
                        place that term appears and inserting 
                        ``Comptroller'';
                    (C) in subsection (c)--
                            (i) by striking ``All regulations 
                        and policies of the Director'' and 
                        inserting ``The regulations of the 
                        Comptroller and the policies of the 
                        Comptroller and the Corporation''; and
                            (ii) by striking ``of the 
                        Currency'';
                    (D) in subsection (e)(5), by striking 
                ``Director'' and inserting ``Comptroller'';
                    (E) in subsection (f), by striking 
                ``Director'' each place that term appears and 
                inserting ``appropriate Federal banking 
                agency''; and
                    (F) in subsection (h), by striking 
                ``Director'' each place that term appears and 
                inserting ``appropriate Federal banking 
                agency'';
            (5) in section 5 (12 U.S.C. 1464)--
                    (A) in subsection (a), by striking 
                ``Director'', each place such term appears and 
                inserting ``Comptroller of the Currency'';
                    (B) in subsection (b), by striking 
                ``Director'', each place such term appears and 
                inserting ``Comptroller of the Currency'';
                    (C) in subsection (c)--
                            (i) in paragraph (5)--
                                    (I) in subparagraph (A), by 
                                striking ``Director'' and 
                                inserting ``appropriate Federal 
                                banking agency''; and
                                    (II) in subparagraph (B)--
                                            (aa) by striking 
                                        ``The Director'' and 
                                        inserting ``The 
                                        appropriate Federal 
                                        banking agency''; and
                                            (bb) by striking 
                                        ``the Director'' and 
                                        inserting ``the 
                                        appropriate Federal 
                                        banking agency'';
                    (D) in subsection (d)--
                            (i) in paragraph (1)--
                                    (I) in subparagraph (A)--
                                            (aa) in the first 
                                        sentence, by striking 
                                        ``Director'' and 
                                        inserting ``appropriate 
                                        Federal banking 
                                        agency'';
                                            (bb) in the second 
                                        sentence--
                                                    (AA) by 
                                                striking 
                                                ``Director's 
                                                own name and 
                                                through the 
                                                Director's own 
                                                attorneys'' and 
                                                inserting 
                                                ``name of the 
                                                appropriate 
                                                Federal banking 
                                                agency and 
                                                through the 
                                                attorneys of 
                                                the appropriate 
                                                Federal banking 
                                                agency''; and
                                                    (BB) by 
                                                striking 
                                                ``Director'' 
                                                each place that 
                                                term appears 
                                                and inserting 
                                                ``appropriate 
                                                Federal banking 
                                                agency''; and
                                            (cc) in the third 
                                        sentence, by striking 
                                        ``Director'' each place 
                                        that term appears and 
                                        inserting 
                                        ``Comptroller'';
                                    (II) in subparagraph (B)--
                                            (aa) in clauses (i) 
                                        through (iv), by 
                                        striking ``Director'' 
                                        each place that term 
                                        appears and inserting 
                                        ``appropriate Federal 
                                        banking agency'';
                                    (III) in clause (v)--
                                            (aa) in the matter 
                                        preceding subclause 
                                        (I), by striking 
                                        ``Director'' and 
                                        inserting ``appropriate 
                                        Federal banking 
                                        agency'';
                                            (bb) in subclause 
                                        (II), by striking 
                                        ``subpenas'' and 
                                        inserting 
                                        ``subpoenas''; and
                                            (cc) in the matter 
                                        following subclause 
                                        (II), by striking 
                                        ``subpena'' and 
                                        inserting ``subpoena'';
                                    (IV) in clause (vi)--
                                            (aa) in the first 
                                        sentence, by striking 
                                        ``Director'' and 
                                        inserting ``appropriate 
                                        Federal banking 
                                        agency''; and
                                            (bb) in the second 
                                        sentence, by striking 
                                        ``Director'' and 
                                        inserting 
                                        ``Comptroller'';
                                    (V) in clause (vii)--
                                            (aa) in the first 
                                        sentence, by striking 
                                        ``subpena'' and 
                                        inserting ``subpoena'';
                                            (bb) in the second 
                                        sentence, by striking 
                                        ``subpenaed'' and 
                                        inserting 
                                        ``subpoenaed''; and
                                            (cc) in the third 
                                        sentence, by striking 
                                        ``Director'' and 
                                        inserting ``appropriate 
                                        Federal banking 
                                        agency'';
                            (ii) in paragraph (2)--
                                    (I) in subparagraph (A)--
                                            (aa) by striking 
                                        ``Director of the 
                                        Office of Thrift 
                                        Supervision'' and 
                                        inserting ``appropriate 
                                        Federal banking 
                                        agency'';
                                            (bb) by striking 
                                        ``any insured savings 
                                        association'' and 
                                        inserting ``an insured 
                                        savings association''; 
                                        and
                                            (cc) by striking 
                                        ``Director determines, 
                                        in the Director's 
                                        discretion'' and 
                                        inserting ``appropriate 
                                        Federal banking agency 
                                        determines, in the 
                                        discretion of the 
                                        appropriate Federal 
                                        banking agency'';
                                    (II) in subparagraph (B), 
                                by striking ``Director'' each 
                                place that term appears and 
                                inserting ``appropriate Federal 
                                banking agency'';
                                    (III) in subparagraphs (C) 
                                and (D), by striking 
                                ``Director'' and inserting 
                                ``appropriate Federal banking 
                                agency'';
                                    (IV) in subparagraph (E)--
                                            (aa) in clause 
                                        (ii)--
                                            (AA) in the clause 
                                        heading, by striking 
                                        ``or rtc''; and
                                            (BB) by striking 
                                        ``or the Resolution 
                                        Trust Corporation, as 
                                        appropriate,'' each 
                                        place that term 
                                        appears; and
                                            (bb) by striking 
                                        ``Director'' each place 
                                        that term appears and 
                                        inserting ``appropriate 
                                        Federal banking 
                                        agency''; and
                            (iii) in paragraph (3)--
                                    (I) in subparagraph (A), by 
                                striking ``Director'' each 
                                place that term appears and 
                                inserting ``Comptroller''; and
                                    (II) in subparagraph (B)--
                                            (aa) in the 
                                        subparagraph heading, 
                                        by striking ``or rtc'';
                                            (bb) by striking 
                                        ``Corporation or the 
                                        Resolution Trust''; and
                                            (cc) by striking 
                                        ``Director'' and 
                                        inserting 
                                        ``Comptroller'';
                            (iv) in paragraph (4), by striking 
                        ``Director'' and inserting 
                        ``appropriate Federal banking agency'';
                            (v) in paragraph (6)--
                                    (I) in subparagraph (A), by 
                                striking ``Director'' and 
                                inserting ``Comptroller''; and
                                    (II) in subparagraphs (B) 
                                and (C), by striking 
                                ``Director'' each place that 
                                term appears and inserting 
                                ``appropriate Federal banking 
                                agency'';
                            (vi) in paragraph (7)--
                                    (I) in subparagraphs (A), 
                                (B), and (D), by striking 
                                ``Director'' each place that 
                                term appears and inserting 
                                ``appropriate Federal banking 
                                agency'';
                                    (II) in subparagraph (C), 
                                by striking ``Director'' and 
                                inserting ``Federal Deposit 
                                Insurance Corporation or the 
                                Comptroller, as appropriate,''; 
                                and
                                    (III) by striking 
                                subparagraph (E) and inserting 
                                the following:
                    ``(E) Administration by the comptroller and 
                the corporation.--The Comptroller may issue 
                such regulations, and the appropriate Federal 
                banking agency may issue such orders, including 
                those issued pursuant to section 8 of the 
                Federal Deposit Insurance Act, as may be 
                necessary to administer and carry out this 
                paragraph and to prevent evasion of this 
                paragraph.'';
                    (E) in subsection (e)(2), strike 
                ``Director'' and insert ``Comptroller'';
                    (F) in subsection (i)--
                            (i) by striking ``Director'', each 
                        place such term appears, and inserting 
                        ``Comptroller'';
                            (ii) in paragraph (2), in the 
                        heading, by striking ``director'' and 
                        inserting ``Comptroller'';
                            (iii) in paragraph (5)(A), by 
                        striking ``of the Currency''; and
                            (iv) except as provided in clauses 
                        (i) through (iii), by striking 
                        ``Director'' each place such term 
                        appears and inserting ``Comptroller'';
                    (G) in subsection (o)--
                            (i) in paragraph (1), by striking 
                        ``Director'' and inserting 
                        ``Comptroller''; and
                            (ii) in paragraph (2)(B), by 
                        striking ``Director's determination'' 
                        and inserting ``determination of the 
                        Comptroller'';
                    (H) in subsections (m), (n), (o), and (p), 
                by striking ``Director'', each place such term 
                appears, and inserting ``Comptroller'';
                    (I) in subsection (q)--
                            (i) in paragraph (6), by striking 
                        ``of Governors of the Federal Reserve 
                        System'';
                            (ii) by striking ``Director'' each 
                        place that term appears and inserting 
                        ``Board''; and
                            (iii) by inserting ``in 
                        consultation with the Comptroller and 
                        the Corporation,'' before 
                        ``considers'';
                    (J) in subsection (r)(3), by striking 
                ``Director'' and inserting ``Comptroller of the 
                Currency'';
                    (K) in subsection (s)--
                            (i) in paragraph (1), strike 
                        ``Director'' and insert ``Comptroller 
                        of the Currency'';
                            (ii) in paragraph (2), strike 
                        ``Director'' and insert ``Comptroller 
                        of the Currency'';
                            (iii) in paragraph (3), by striking 
                        ``Director's discretion, the Director'' 
                        and inserting ``discretion of the 
                        appropriate Federal banking agency, the 
                        appropriate Federal banking agency,'';
                            (iv) in paragraph (4), by striking 
                        ``Director'' each place that term 
                        appears and inserting ``appropriate 
                        Federal banking agency''; and
                            (v) in paragraph (5)--
                                    (I) by striking 
                                ``Director'', each place such 
                                term appears, and inserting 
                                ``appropriate Federal banking 
                                agency''; and
                                    (II) by striking 
                                ``Director's approval'' and 
                                inserting ``approval of the 
                                appropriate Federal banking 
                                agency'';
                    (L) in subsection (t)--
                            (i) in paragraph (1), by striking 
                        subparagraph (D);
                            (ii) by striking paragraph (3) and 
                        inserting the following:
            ``(3) [Repealed].'';
                            (iii) in paragraph (5)--
                                    (I) in subparagraph (B), by 
                                striking ``Corporation, in its 
                                sole discretion'' and inserting 
                                ``appropriate Federal banking 
                                agency, in the sole discretion 
                                of the appropriate Federal 
                                banking agency''; and
                                    (II) by striking 
                                subparagraph (D);
                            (iv) in paragraph (6)--
                                    (I) by striking 
                                subparagraph (A) and inserting 
                                the following:
                    ``(A) [Reserved].'';
                                    (II) in subparagraph (B), 
                                by striking ``Director'' each 
                                place that term appears and 
                                inserting ``appropriate Federal 
                                banking agency'';
                                    (III) in subparagraph (C)--
                                            (aa) in clause (i), 
                                        by striking 
                                        ``Director's prior 
                                        approval'' and 
                                        inserting ``prior 
                                        approval of the 
                                        appropriate Federal 
                                        banking agency'';
                                            (bb) in clause 
                                        (ii), by striking 
                                        ``Director's 
                                        discretion'' and 
                                        inserting ``discretion 
                                        of the appropriate 
                                        Federal banking 
                                        agency''; and
                                            (cc) by striking 
                                        ``Director'' each place 
                                        that term appears and 
                                        inserting ``appropriate 
                                        Federal banking 
                                        agency'';
                                    (IV) in subparagraph (E), 
                                by striking ``Director shall'' 
                                and inserting ``appropriate 
                                Federal banking agency may''; 
                                and
                                    (V) in subparagraph (F), by 
                                striking ``Director'' and all 
                                that follows through the end of 
                                the subparagraph and inserting 
                                ``appropriate Federal banking 
                                agency under this Act or any 
                                other provision of law.'';
                            (v) in paragraph (7), by striking 
                        ``Director'' each place that term 
                        appears and inserting ``appropriate 
                        Federal banking agency'';
                            (vi) by striking paragraph (8) and 
                        inserting the following:
            ``(8) [Repealed].'';
                            (vii) in paragraph (9)--
                                    (I) in subparagraph (A), by 
                                striking ``Director'' and 
                                inserting ``Comptroller'';
                                    (II) in subparagraph (C), 
                                by striking ``of the 
                                Currency''; and
                                    (III) by striking 
                                subparagraph (B) and 
                                redesignating subparagraphs (C) 
                                and (D) as subparagraphs (B) 
                                and (C), respectively; and
                            (viii) except as provided in 
                        clauses (i) through (vii), by striking 
                        ``Director'' each place that term 
                        appears and inserting ``appropriate 
                        Federal banking agency'';
                    (M) in subsection (u), by striking 
                ``Director'' each place that term appears and 
                inserting ``appropriate Federal banking 
                agency'';
                    (N) in subsection (v)--
                            (i) in paragraph (2), by striking 
                        ``Director's determinations'' and 
                        inserting ``determinations of the 
                        appropriate Federal banking agency''; 
                        and
                            (ii) by striking ``Director'' each 
                        place that term appears and inserting 
                        ``appropriate Federal banking agency'';
                    (O) in subsection (w)(1)--
                            (i) in subparagraph (A)(II), by 
                        striking ``Director's intention'' and 
                        inserting ``intention of the 
                        Comptroller''; and
                            (ii) in subparagraph (B), by 
                        striking ``Director's intention'' and 
                        inserting ``intention of the 
                        Comptroller''; and
                    (P) except as provided in subparagraphs (A) 
                through (J), by striking ``Director'' each 
                place that term appears and inserting 
                ``Comptroller'';
            (6) in section 8 (12 U.S.C. 1466a), by striking 
        ``Director'' each place that term appears and inserting 
        ``Comptroller'';
            (7) in section 9 (12 U.S.C. 1467)--
                    (A) in subsection (a), by striking 
                ``assessed by the Director'' and all that 
                follows through the end of the subsection and 
                inserting the following: ``assessed by--
            ``(1) the Comptroller, against each such Federal 
        savings association, as the Comptroller deems necessary 
        or appropriate; and
            ``(2) the Corporation, against each such State 
        savings association, as the Corporation deems necessary 
        or appropriate.'';
                    (B) in subsection (b), by striking 
                ``Director'', each place such term appears, and 
                inserting ``Comptroller or Corporation, as 
                appropriate'';
                    (C) in subsection (e)--
                            (i) by striking ``Only the 
                        Director'' and inserting ``The 
                        Comptroller''; and
                            (ii) by striking ``Director's 
                        designee'' and inserting ``designee of 
                        the Comptroller'';
                    (D) by striking subsection (f) and 
                inserting the following:
    ``(f) [Reserved].'';
                    (E) in subsection (g)--
                            (i) in paragraph (1), by striking 
                        ``Director'' and inserting 
                        ``appropriate Federal banking agency''; 
                        and
                            (ii) in paragraph (2), by striking 
                        ``Director, or the Corporation, as the 
                        case may be,'' and inserting 
                        ``appropriate Federal banking agency 
                        for the savings association'';
                    (F) in subsection (i), by striking 
                ``Director'' each place that term appears and 
                inserting ``appropriate Federal banking 
                agency'';
                    (G) in subsection (j), by striking 
                ``Director's sole discretion'' and inserting 
                ``sole discretion of the appropriate Federal 
                banking agency'';
                    (H) in subsection (k), by striking 
                ``Director may assess against institutions for 
                which the Director is the appropriate Federal 
                banking agency, as defined in section 3 of the 
                Federal Deposit Insurance Act,'' and inserting 
                ``appropriate Federal banking agency may assess 
                against an institution''; and
                    (I) except as provided in subparagraphs (A) 
                through (G), by striking ``Director'' each 
                place that term appears and inserting 
                ``appropriate Federal banking agency'';
            (8) in section 10 (12 U.S.C. 1467a)--
                    (A) in subsection (a)(1), by striking 
                ``Director'' each place that term appears and 
                inserting ``appropriate Federal banking 
                agency'';
                    (B) in subsection (b)--
                            (i) in paragraph (2), by striking 
                        ``and the regional office of the 
                        Director of the district in which its 
                        principal office is located,''; and
                            (ii) in paragraph (6), by striking 
                        ``Director's own motion or 
                        application'' and inserting ``motion or 
                        application of the Board'';
                    (C) in subsection (c)--
                            (i) in paragraph (2)(F), by 
                        striking ``of Governors of the Federal 
                        Reserve System'';
                            (ii) in paragraph (4)(B), in the 
                        subparagraph heading, by striking ``by 
                        director'';
                            (iii) in paragraph (6)(D), in the 
                        subparagraph heading, by striking ``by 
                        director''; and
                            (iv) in paragraph (9)(E), by 
                        inserting ``(in consultation with the 
                        appropriate Federal banking agency)'' 
                        after ``including a determination'';
                    (D) in subsection (g)(5)(B), by striking 
                ``the Director's discretion'' and inserting 
                ``the discretion of the Board'';
                    (E) in subsection (l), by striking 
                ``Director'' each place that term appears and 
                inserting ``appropriate Federal banking 
                agency'';
                    (F) in subsection (m), by striking 
                ``Director'' and inserting ``appropriate 
                Federal banking agency'';
                    (G) in subsection (p)--
                            (i) in paragraph (1)--
                                    (I) by striking ``Director 
                                determines'' the 1st place such 
                                term appears and inserting 
                                ``Board or the appropriate 
                                Federal banking agency for the 
                                savings association 
                                determines'';
                                    (II) by striking ``Director 
                                may'' and inserting ``Board 
                                may''; and
                                    (III) by striking 
                                ``Director determines'' the 2nd 
                                place such term appears and 
                                inserting ``Board, in 
                                consultation with the 
                                appropriate Federal banking 
                                agency for the savings 
                                association determines''; and
                            (ii) in paragraph (2), by striking 
                        ``Director'', each place such term 
                        appears, and inserting ``Board'';
                    (H) in subsection (q), by striking 
                ``Director'', each place such term appears, and 
                inserting ``Board'';
                    (I) in subsection (r), by striking 
                ``Director'', each place such term appears, and 
                inserting ``Board or appropriate Federal 
                banking agency'';
                    (J) in subsection (s)--
                            (i) in paragraph (2)--
                                    (I) in subparagraph 
                                (B)(ii), by striking 
                                ``Director's judgment'' and 
                                inserting ``judgment of the 
                                appropriate Federal banking 
                                agency for the savings 
                                association''; and
                                    (II) by striking 
                                ``Director'' each place that 
                                term appears and inserting 
                                ``appropriate Federal banking 
                                agency for the savings 
                                association''; and
                            (ii) in paragraph (4), by striking 
                        ``Director'' and inserting 
                        ``Comptroller''; and
                    (K) except as provided in subparagraphs (A) 
                through (J), by striking ``Director'' each 
                place that term appears and inserting 
                ``Board'';
            (9) in section 11 (12 U.S.C. 1468), by striking 
        ``Director'' each place that term appears and inserting 
        ``appropriate Federal banking agency'';
            (10) in section 12 (12 U.S.C. 1468a), by striking 
        ``the Director'' and inserting ``a Federal banking 
        agency''; and
            (11) in section 13 (12 U.S.C. 1468a) is amended by 
        striking ``Director'' and inserting ``a Federal banking 
        agency''.

SEC. 370. HOUSING ACT OF 1948.

    Section 502(c) of the Housing Act of 1948 (12 U.S.C. 
1701c(c)) is amended--
            (1) in the matter preceding paragraph (1), by 
        striking ``and the Director of the Office of Thrift 
        Supervision'' and inserting ``, the Comptroller of the 
        Currency, and the Federal Deposit Insurance 
        Corporation''; and
            (2) in paragraph (3), by striking ``Board'' and 
        inserting ``Agency''.

SEC. 371. HOUSING AND COMMUNITY DEVELOPMENT ACT OF 1992.

    Section 543 of the Housing and Community Development Act of 
1992 (Public Law 102-550; 106 Stat. 3798) is amended--
            (1) in subsection (c)(1)--
                    (A) by striking subparagraphs (D) through 
                (F); and
                    (B) by redesignating subparagraphs (G) and 
                (H) as subparagraphs (D) and (E), respectively; 
                and
            (2) in subsection (f)--
                    (A) in paragraph (2), by striking ``the 
                Office of Thrift Supervision,'' each place that 
                term appears; and
                    (B) in paragraph (3)--
                            (i) in the matter preceding 
                        subparagraph (A), by striking ``the 
                        Office of Thrift Supervision,''; and
                            (ii) in subparagraph (D), by 
                        striking ``Office of Thrift 
                        Supervision,''.

SEC. 372. HOUSING AND URBAN-RURAL RECOVERY ACT OF 1983.

    Section 469 of the Housing and Urban-Rural Recovery Act of 
1983 (12 U.S.C. 1701p-1) is amended in the first sentence, by 
striking ``Federal Home Loan Bank Board'' and inserting 
``Federal Housing Finance Agency''.

SEC. 373. NATIONAL HOUSING ACT.

    Section 202(f) of the National Housing Act (12 U.S.C. 
1708(f)) is amended--
            (1) by striking paragraph (5) and inserting the 
        following:
            ``(5) if the mortgagee is a national bank, a 
        subsidiary or affiliate of such bank, a Federal savings 
        association or a subsidiary or affiliate of a savings 
        association, the Comptroller of the Currency;'';
            (2) in paragraph (6), by adding ``and'' at the end;
            (3) in paragraph (7)--
                    (A) by inserting ``or State savings 
                association'' after ``State bank''; and
                    (B) by striking ``; and'' and inserting a 
                period; and
            (4) by striking paragraph (8).

SEC. 374. NEIGHBORHOOD REINVESTMENT CORPORATION ACT.

    Section 606(c)(3) of the Neighborhood Reinvestment 
Corporation Act (42 U.S.C. 8105(c)(3)) is amended by striking 
``Federal Home Loan Bank Board'' and inserting ``Federal 
Housing Finance Agency''.

SEC. 375. PUBLIC LAW 93-100.

    Section 5(d) of Public Law 93-100 (12 U.S.C. 1470(a)) is 
amended--
            (1) in paragraph (1), by striking ``Federal Savings 
        and Loan Insurance Corporation with respect to insured 
        institutions, the Board of Governors of the Federal 
        Reserve System with respect to State member insured 
        banks, and the Federal Deposit Insurance Corporation 
        with respect to State nonmember insured banks'' and 
        inserting ``appropriate Federal banking agency, with 
        respect to the institutions subject to the jurisdiction 
        of each such agency,''; and
            (2) in paragraph (2), by striking ``supervisory'' 
        and inserting ``banking''.

SEC. 376. 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)(34) (15 U.S.C. 78c(a)(34))--
                    (A) in subparagraph (A)--
                            (i) in clause (i), by striking ``or 
                        a subsidiary or a department or 
                        division of any such bank'' and 
                        inserting ``a subsidiary or a 
                        department or division of any such 
                        bank, a Federal savings association (as 
                        defined in section 3(b)(2) of the 
                        Federal Deposit Insurance Act (12 
                        U.S.C. 1813(b)(2))), the deposits of 
                        which are insured by the Federal 
                        Deposit Insurance Corporation, or a 
                        subsidiary or department or division of 
                        any such Federal savings association'';
                            (ii) in clause (ii), by striking 
                        ``or a subsidiary or a department or 
                        division of such subsidiary'' and 
                        inserting ``a subsidiary or a 
                        department or division of such 
                        subsidiary, or a savings and loan 
                        holding company'';
                            (iii) in clause (iii), by striking 
                        ``or a subsidiary or department or 
                        division thereof;'' and inserting ``a 
                        subsidiary or department or division of 
                        any such bank, a State savings 
                        association (as defined in section 
                        3(b)(3) of the Federal Deposit 
                        Insurance Act (12 U.S.C. 1813(b)(3))), 
                        the deposits of which are insured by 
                        the Federal Deposit Insurance 
                        Corporation, or a subsidiary or a 
                        department or division of any such 
                        State savings association; and'';
                            (iv) by striking clause (iv); and
                            (v) by redesignating clause (v) as 
                        clause (iv);
                    (B) in subparagraph (B)--
                            (i) in clause (i), by striking ``or 
                        a subsidiary of any such bank'' and 
                        inserting ``a subsidiary of any such 
                        bank, a Federal savings association (as 
                        defined in section 3(b)(2) of the 
                        Federal Deposit Insurance Act (12 
                        U.S.C. 1813(b)(2))), the deposits of 
                        which are insured by the Federal 
                        Deposit Insurance Corporation, or a 
                        subsidiary of any such Federal savings 
                        association'';
                            (ii) in clause (ii), by striking 
                        ``or a subsidiary of a bank holding 
                        company which is a bank other than a 
                        bank specified in clause (i), (iii), or 
                        (iv) of this subparagraph'' and 
                        inserting ``a subsidiary of a bank 
                        holding company that is a bank other 
                        than a bank specified in clause (i) or 
                        (iii) of this subparagraph, or a 
                        savings and loan holding company'';
                            (iii) in clause (iii), by striking 
                        ``or a subsidiary thereof;'' and 
                        inserting ``a subsidiary of any such 
                        bank, a State savings association (as 
                        defined in section 3(b)(3) of the 
                        Federal Deposit Insurance Act (12 
                        U.S.C. 1813(b)(3))), the deposits of 
                        which are insured by the Federal 
                        Deposit Insurance Corporation, or a 
                        subsidiary of any such State savings 
                        association; and'';
                            (iv) by striking clause (iv); and
                            (v) by redesignating clause (v) as 
                        clause (iv);
                    (C) in subparagraph (C)--
                            (i) in clause (i), by striking 
                        ``bank'' and inserting ``bank or a 
                        Federal savings association (as defined 
                        in section 3(b)(2) of the Federal 
                        Deposit Insurance Act (12 U.S.C. 
                        1813(b)(2))), the deposits of which are 
                        insured by the Federal Deposit 
                        Insurance Corporation'';
                            (ii) in clause (ii), by striking 
                        ``or a subsidiary of a bank holding 
                        company which is a bank other than a 
                        bank specified in clause (i), (iii), or 
                        (iv) of this subparagraph'' and 
                        inserting ``a subsidiary of a bank 
                        holding company that is a bank other 
                        than a bank specified in clause (i) or 
                        (iii) of this subparagraph, or a 
                        savings and loan holding company'';
                            (iii) in clause (iii), by striking 
                        ``System)'' and inserting, ``System) or 
                        a State savings association (as defined 
                        in section 3(b)(3) of the Federal 
                        Deposit Insurance Act (12 U.S.C. 
                        1813(b)(3))), the deposits of which are 
                        insured by the Federal Deposit 
                        Insurance Corporation; and'';
                            (iv) by striking clause (iv); and
                            (v) by redesignating clause (v) as 
                        clause (iv);
                    (D) in subparagraph (D)--
                            (i) in clause (i), by inserting 
                        after ``bank'' the following: ``or a 
                        Federal savings association (as defined 
                        in section 3(b)(2) of the Federal 
                        Deposit Insurance Act (12 U.S.C. 
                        1813(b)(2))), the deposits of which are 
                        insured by the Federal Deposit 
                        Insurance Corporation'';
                            (ii) in clause (ii), by adding 
                        ``and'' at the end;
                            (iii) by striking clause (iii);
                            (iv) by redesignating clause (iv) 
                        as clause (iii); and
                            (v) in clause (iii), as so 
                        redesignated, by inserting after 
                        ``bank'' the following: ``or a State 
                        savings association (as defined in 
                        section 3(b)(3) of the Federal Deposit 
                        Insurance Act (12 U.S.C. 1813(b)(3))), 
                        the deposits of which are insured by 
                        the Federal Deposit Insurance 
                        Corporation'';
                    (E) in subparagraph (F)--
                            (i) in clause (i), by inserting 
                        after ``bank'' the following: ``or a 
                        Federal savings association (as defined 
                        in section 3(b)(2) of the Federal 
                        Deposit Insurance Act (12 U.S.C. 
                        1813(b)(2))), the deposits of which are 
                        insured by the Federal Deposit 
                        Insurance Corporation'';
                            (ii) by striking clause (ii);
                            (iii) by redesignating clauses 
                        (iii), (iv), and (v) as clauses (ii), 
                        (iii), and (iv), respectively; and
                            (iv) in clause (iii), as so 
                        redesignated, by inserting before the 
                        semicolon the following: ``or a State 
                        savings association (as defined in 
                        section 3(b)(3) of the Federal Deposit 
                        Insurance Act (12 U.S.C. 1813(b)(3))), 
                        the deposits of which are insured by 
                        the Federal Deposit Insurance 
                        Corporation'';
                    (F) in subparagraph (G)--
                            (i) in clause (i), by inserting 
                        after ``national bank'' the following: 
                        ``, a Federal savings association (as 
                        defined in section 3(b)(2) of the 
                        Federal Deposit Insurance Act), the 
                        deposits of which are insured by the 
                        Federal Deposit Insurance 
                        Corporation,'';
                            (ii) in clause (iii)--
                                    (I) by inserting after 
                                ``bank)'' the following: ``, a 
                                State savings association (as 
                                defined in section 3(b)(3) of 
                                the Federal Deposit Insurance 
                                Act), the deposits of which are 
                                insured by the Federal Deposit 
                                Insurance Corporation,''; and
                                    (II) by adding ``and'' at 
                                the end;
                            (iii) by striking clause (iv); and
                            (iv) by redesignating clause (v) as 
                        clause (iv); and
                    (G) in the undesignated matter following 
                subparagraph (H), by striking ``, and the term 
                `District of Columbia savings and loan 
                association' means any association subject to 
                examination and supervision by the Office of 
                Thrift Supervision under section 8 of the Home 
                Owners' Loan Act of 1933'';
            (2) in section 12(i) (15 U.S.C. 78l(i))--
                    (A) in paragraph (1), by inserting after 
                ``national banks'' the following: ``and Federal 
                savings associations, the accounts of which are 
                insured by the Federal Deposit Insurance 
                Corporation'';
                    (B) by striking ``(3)'' and all that 
                follows through ``vested in the Office of 
                Thrift Supervision'' and inserting ``and (3) 
                with respect to all other insured banks and 
                State savings associations, the accounts of 
                which are insured by the Federal Deposit 
                Insurance Corporation, are vested in the 
                Federal Deposit Insurance Corporation''; and
                    (C) in the second sentence, by striking 
                ``the Federal Deposit Insurance Corporation, 
                and the Office of Thrift Supervision'' and 
                inserting ``and the Federal Deposit Insurance 
                Corporation'';
            (3) in section 15C(g)(1) (15 U.S.C. 78o-5(g)(1)), 
        by striking ``the Director of the Office of Thrift 
        Supervision, the Federal Savings and Loan Insurance 
        Corporation,''; and
            (4) in section 23(b)(1) (15 U.S.C. 78w(b)(1)), by 
        striking ``, other than the Office of Thrift 
        Supervision,''.

SEC. 377. TITLE 18, UNITED STATES CODE.

    Title 18, United States Code, is amended--
            (1) in section 212(c)(2)--
                    (A) by striking subparagraph (C); and
                    (B) by redesignating subparagraphs (D) 
                through (H) as subparagraphs (C) through (G), 
                respectively;
            (2) in section 657, by striking ``Office of Thrift 
        Supervision, the Resolution Trust Corporation,'';
            (3) in section 981(a)(1)(D)--
                    (A) by striking ``Resolution Trust 
                Corporation,''; and
                    (B) by striking ``or the Office of Thrift 
                Supervision'';
            (4) in section 982(a)(3)--
                    (A) by striking ``Resolution Trust 
                Corporation,''; and
                    (B) by striking ``or the Office of Thrift 
                Supervision'';
            (5) in section 1006--
                    (A) by striking ``Office of Thrift 
                Supervision,''; and
                    (B) by striking ``the Resolution Trust 
                Corporation,'';
            (6) in section 1014--
                    (A) by striking ``the Office of Thrift 
                Supervision''; and
                    (B) by striking ``the Resolution Trust 
                Corporation,''; and
            (7) in section 1032(1)--
                    (A) by striking ``the Resolution Trust 
                Corporation,''; and
                    (B) by striking ``or the Director of the 
                Office of Thrift Supervision''.

SEC. 378. TITLE 31, UNITED STATES CODE.

    Title 31, United States Code, is amended--
            (1) in section 321--
                    (A) in subsection (c)--
                            (i) in paragraph (1), by adding 
                        ``and'' at the end;
                            (ii) in paragraph (2), by striking 
                        ``; and'' and inserting a period; and
                            (iii) by striking paragraph (3); 
                        and
                    (B) by striking subsection (e); and
            (2) in section 714(a), by striking ``the Office of 
        the Comptroller of the Currency, and the Office of 
        Thrift Supervision.'' and inserting ``and the Office of 
        the Comptroller of the Currency.''.

       TITLE IV--REGULATION OF ADVISERS TO HEDGE FUNDS AND OTHERS

SEC. 401. SHORT TITLE.

    This title may be cited as the ``Private Fund Investment 
Advisers Registration Act of 2010''.

SEC. 402. DEFINITIONS.

    (a) Investment Advisers Act of 1940 Definitions.--Section 
202(a) of the Investment Advisers Act of 1940 (15 U.S.C. 80b-
2(a)) is amended by adding at the end the following:
            ``(29) The term `private fund' means an issuer that 
        would be an investment company, as defined in section 3 
        of the Investment Company Act of 1940 (15 U.S.C. 80a-
        3), but for section 3(c)(1) or 3(c)(7) of that Act.
            ``(30) The term `foreign private adviser' means any 
        investment adviser who--
                    ``(A) has no place of business in the 
                United States;
                    ``(B) has, in total, fewer than 15 clients 
                and investors in the United States in private 
                funds advised by the investment adviser;
                    ``(C) has aggregate assets under management 
                attributable to clients in the United States 
                and investors in the United States in private 
                funds advised by the investment adviser of less 
                than $25,000,000, or such higher amount as the 
                Commission may, by rule, deem appropriate in 
                accordance with the purposes of this title; and
                    ``(D) neither--
                            ``(i) holds itself out generally to 
                        the public in the United States as an 
                        investment adviser; nor
                            ``(ii) acts as--
                                    ``(I) an investment adviser 
                                to any investment company 
                                registered under the Investment 
                                Company Act of 1940; or
                                    ``(II) a company that has 
                                elected to be a business 
                                development company pursuant to 
                                section 54 of the Investment 
                                Company Act of 1940 (15 U.S.C. 
                                80a-53), and has not withdrawn 
                                its election.''.
    (b) Other Definitions.--As used in this title, the terms 
``investment adviser'' and ``private fund'' have the same 
meanings as in section 202 of the Investment Advisers Act of 
1940, as amended by this title.

SEC. 403. ELIMINATION OF PRIVATE ADVISER EXEMPTION; LIMITED EXEMPTION 
                    FOR FOREIGN PRIVATE ADVISERS; LIMITED INTRASTATE 
                    EXEMPTION.

    Section 203(b) of the Investment Advisers Act of 1940 (15 
U.S.C. 80b-3(b)) is amended--
            (1) in paragraph (1), by inserting ``, other than 
        an investment adviser who acts as an investment adviser 
        to any private fund,'' before ``all of whose'';
            (2) by striking paragraph (3) and inserting the 
        following:
            ``(3) any investment adviser that is a foreign 
        private adviser;''; and
            (3) in paragraph (5), by striking ``or'' at the 
        end;
            (4) in paragraph (6)--
                    (A) by striking ``any investment adviser'' 
                and inserting ``(A) any investment adviser'';
                    (B) by redesignating subparagraphs (A) and 
                (B) as clauses (i) and (ii), respectively; and
                    (C) in clause (ii) (as so redesignated), by 
                striking the period at the end and inserting 
                ``; or''; and
                    (D) by adding at the end the following:
    ``(B) any investment adviser that is registered with the 
Commodity Futures Trading Commission as a commodity trading 
advisor and advises a private fund, provided that, if after the 
date of enactment of the Private Fund Investment Advisers 
Registration Act of 2010, the business of the advisor should 
become predominately the provision of securities-related 
advice, then such adviser shall register with the 
Commission.''.
            (5) by adding at the end the following:
            ``(7) any investment adviser, other than any entity 
        that has elected to be regulated or is regulated as a 
        business development company pursuant to section 54 of 
        the Investment Company Act of 1940 (15 U.S.C. 80a-54), 
        who solely advises--
                    ``(A) small business investment companies 
                that are licensees under the Small Business 
                Investment Act of 1958;
                    ``(B) entities that have received from the 
                Small Business Administration notice to proceed 
                to qualify for a license as a small business 
                investment company under the Small Business 
                Investment Act of 1958, which notice or license 
                has not been revoked; or
                    ``(C) applicants that are affiliated with 1 
                or more licensed small business investment 
                companies described in subparagraph (A) and 
                that have applied for another license under the 
                Small Business Investment Act of 1958, which 
                application remains pending.''.

SEC. 404. COLLECTION OF SYSTEMIC RISK DATA; REPORTS; EXAMINATIONS; 
                    DISCLOSURES.

    Section 204 of the Investment Advisers Act of 1940 (15 
U.S.C. 80b-4) is amended--
            (1) by redesignating subsections (b) and (c) as 
        subsections (c) and (d), respectively; and
            (2) by inserting after subsection (a) the 
        following:
    ``(b) Records and Reports of Private Funds.--
            ``(1) In general.--The Commission may require any 
        investment adviser registered under this title--
                    ``(A) to maintain such records of, and file 
                with the Commission such reports regarding, 
                private funds advised by the investment 
                adviser, as necessary and appropriate in the 
                public interest and for the protection of 
                investors, or for the assessment of systemic 
                risk by the Financial Stability Oversight 
                Council (in this subsection referred to as the 
                `Council'); and
                    ``(B) to provide or make available to the 
                Council those reports or records or the 
                information contained therein.
            ``(2) Treatment of records.--The records and 
        reports of any private fund to which an investment 
        adviser registered under this title provides investment 
        advice shall be deemed to be the records and reports of 
        the investment adviser.
            ``(3) Required information.--The records and 
        reports required to be maintained by an investment 
        adviser and subject to inspection by the Commission 
        under this subsection shall include, for each private 
        fund advised by the investment adviser, a description 
        of--
                    ``(A) the amount of assets under management 
                and use of leverage, including off-balance-
                sheet leverage;
                    ``(B) counterparty credit risk exposure;
                    ``(C) trading and investment positions;
                    ``(D) valuation policies and practices of 
                the fund;
                    ``(E) types of assets held;
                    ``(F) side arrangements or side letters, 
                whereby certain investors in a fund obtain more 
                favorable rights or entitlements than other 
                investors;
                    ``(G) trading practices; and
                    ``(H) such other information as the 
                Commission, in consultation with the Council, 
                determines is necessary and appropriate in the 
                public interest and for the protection of 
                investors or for the assessment of systemic 
                risk, which may include the establishment of 
                different reporting requirements for different 
                classes of fund advisers, based on the type or 
                size of private fund being advised.
            ``(4) Maintenance of records.--An investment 
        adviser registered under this title shall maintain such 
        records of private funds advised by the investment 
        adviser for such period or periods as the Commission, 
        by rule, may prescribe as necessary and appropriate in 
        the public interest and for the protection of 
        investors, or for the assessment of systemic risk.
            ``(5) Filing of records.--The Commission shall 
        issue rules requiring each investment adviser to a 
        private fund to file reports containing such 
        information as the Commission deems necessary and 
        appropriate in the public interest and for the 
        protection of investors or for the assessment of 
        systemic risk.
            ``(6) Examination of records.--
                    ``(A) Periodic and special examinations.--
                The Commission--
                            ``(i) shall conduct periodic 
                        inspections of the records of private 
                        funds maintained by an investment 
                        adviser registered under this title in 
                        accordance with a schedule established 
                        by the Commission; and
                            ``(ii) may conduct at any time and 
                        from time to time such additional, 
                        special, and other examinations as the 
                        Commission may prescribe as necessary 
                        and appropriate in the public interest 
                        and for the protection of investors, or 
                        for the assessment of systemic risk.
                    ``(B) Availability of records.--An 
                investment adviser registered under this title 
                shall make available to the Commission any 
                copies or extracts from such records as may be 
                prepared without undue effort, expense, or 
                delay, as the Commission or its representatives 
                may reasonably request.
            ``(7) Information sharing.--
                    ``(A) In general.--The Commission shall 
                make available to the Council copies of all 
                reports, documents, records, and information 
                filed with or provided to the Commission by an 
                investment adviser under this subsection as the 
                Council may consider necessary for the purpose 
                of assessing the systemic risk posed by a 
                private fund.
                    ``(B) Confidentiality.--The Council shall 
                maintain the confidentiality of information 
                received under this paragraph in all such 
                reports, documents, records, and information, 
                in a manner consistent with the level of 
                confidentiality established for the Commission 
                pursuant to paragraph (8). The Council shall be 
                exempt from section 552 of title 5, United 
                States Code, with respect to any information in 
                any report, document, record, or information 
                made available, to the Council under this 
                subsection.''.
            ``(8) Commission confidentiality of reports.--
        Notwithstanding any other provision of law, the 
        Commission may not be compelled to disclose any report 
        or information contained therein required to be filed 
        with the Commission under this subsection, except that 
        nothing in this subsection authorizes the Commission--
                    ``(A) to withhold information from 
                Congress, upon an agreement of confidentiality; 
                or
                    ``(B) prevent the Commission from complying 
                with--
                            ``(i) a request for information 
                        from any other Federal department or 
                        agency or any self-regulatory 
                        organization requesting the report or 
                        information for purposes within the 
                        scope of its jurisdiction; or
                            ``(ii) an order of a court of the 
                        United States in an action brought by 
                        the United States or the Commission.
            ``(9) Other recipients confidentiality.--Any 
        department, agency, or self-regulatory organization 
        that receives reports or information from the 
        Commission under this subsection shall maintain the 
        confidentiality of such reports, documents, records, 
        and information in a manner consistent with the level 
        of confidentiality established for the Commission under 
        paragraph (8).
            ``(10) Public information exception.--
                    ``(A) In general.--The Commission, the 
                Council, and any other department, agency, or 
                self-regulatory organization that receives 
                information, reports, documents, records, or 
                information from the Commission under this 
                subsection, shall be exempt from the provisions 
                of section 552 of title 5, United States Code, 
                with respect to any such report, document, 
                record, or information. Any proprietary 
                information of an investment adviser 
                ascertained by the Commission from any report 
                required to be filed with the Commission 
                pursuant to this subsection shall be subject to 
                the same limitations on public disclosure as 
                any facts ascertained during an examination, as 
                provided by section 210(b) of this title.
                    ``(B) Proprietary information.--For 
                purposes of this paragraph, proprietary 
                information includes sensitive, non-public 
                information regarding--
                            ``(i) the investment or trading 
                        strategies of the investment adviser;
                            ``(ii) analytical or research 
                        methodologies;
                            ``(iii) trading data;
                            ``(iv) computer hardware or 
                        software containing intellectual 
                        property; and
                            ``(v) any additional information 
                        that the Commission determines to be 
                        proprietary.
            ``(11) Annual report to congress.--The Commission 
        shall report annually to Congress on how the Commission 
        has used the data collected pursuant to this subsection 
        to monitor the markets for the protection of investors 
        and the integrity of the markets.''.

SEC. 405. DISCLOSURE PROVISION AMENDMENT.

    Section 210(c) of the Investment Advisers Act of 1940 (15 
U.S.C. 80b-10(c)) is amended by inserting before the period at 
the end the following: ``or for purposes of assessment of 
potential systemic risk''.

SEC. 406. CLARIFICATION OF RULEMAKING AUTHORITY.

    Section 211 of the Investment Advisers Act of 1940 (15 
U.S.C. 80b-11) is amended--
            (1) in subsection (a), by inserting before the 
        period at the end of the first sentence the following: 
        ``, including rules and regulations defining technical, 
        trade, and other terms used in this title, except that 
        the Commission may not define the term `client' for 
        purposes of paragraphs (1) and (2) of section 206 to 
        include an investor in a private fund managed by an 
        investment adviser, if such private fund has entered 
        into an advisory contract with such adviser''; and
            (2) by adding at the end the following:
    ``(e) Disclosure Rules on Private Funds.--The Commission 
and the Commodity Futures Trading Commission shall, after 
consultation with the Council but not later than 12 months 
after the date of enactment of the Private Fund Investment 
Advisers Registration Act of 2010, jointly promulgate rules to 
establish the form and content of the reports required to be 
filed with the Commission under subsection 204(b) and with the 
Commodity Futures Trading Commission by investment advisers 
that are registered both under this title and the Commodity 
Exchange Act (7 U.S.C. 1a et seq.).''.

SEC. 407. EXEMPTION OF AND REPORTING BY VENTURE CAPITAL FUND ADVISERS.

    Section 203 of the Investment Advisers Act of 1940 (15 
U.S.C. 80b-3) is amended by adding at the end the following:
    ``(l) Exemption of Venture Capital Fund Advisers.--No 
investment adviser that acts as an investment adviser solely to 
1 or more venture capital funds shall be subject to the 
registration requirements of this title with respect to the 
provision of investment advice relating to a venture capital 
fund. Not later than 1 year after the date of enactment of this 
subsection, the Commission shall issue final rules to define 
the term `venture capital fund' for purposes of this 
subsection. The Commission shall require such advisers to 
maintain such records and provide to the Commission such annual 
or other reports as the Commission determines necessary or 
appropriate in the public interest or for the protection of 
investors.''.

SEC. 408. EXEMPTION OF AND REPORTING BY CERTAIN PRIVATE FUND ADVISERS.

    Section 203 of the Investment Advisers Act of 1940 (15 
U.S.C. 80b-3) is amended by adding at the end the following:
    ``(m) Exemption of and Reporting by Certain Private Fund 
Advisers.--
            ``(1) In general.--The Commission shall provide an 
        exemption from the registration requirements under this 
        section to any investment adviser of private funds, if 
        each of such investment adviser acts solely as an 
        adviser to private funds and has assets under 
        management in the United States of less than 
        $150,000,000.
            ``(2) Reporting.--The Commission shall require 
        investment advisers exempted by reason of this 
        subsection to maintain such records and provide to the 
        Commission such annual or other reports as the 
        Commission determines necessary or appropriate in the 
        public interest or for the protection of investors.
    ``(n) Registration and Examination of Mid-Sized Private 
Fund Advisers.--In prescribing regulations to carry out the 
requirements of this section with respect to investment 
advisers acting as investment advisers to mid-sized private 
funds, the Commission shall take into account the size, 
governance, and investment strategy of such funds to determine 
whether they pose systemic risk, and shall provide for 
registration and examination procedures with respect to the 
investment advisers of such funds which reflect the level of 
systemic risk posed by such funds.''.

SEC. 409. FAMILY OFFICES.

    (a) In General.--Section 202(a)(11) of the Investment 
Advisers Act of 1940 (15 U.S.C. 80b-2(a)(11)) is amended by 
striking ``or (G)'' and inserting the following: ``; (G) any 
family office, as defined by rule, regulation, or order of the 
Commission, in accordance with the purposes of this title; or 
(H)''.
    (b) Rulemaking.--The rules, regulations, or orders issued 
by the Commission pursuant to section 202(a)(11)(G) of the 
Investment Advisers Act of 1940, as added by this section, 
regarding the definition of the term ``family office'' shall 
provide for an exemption that--
            (1) is consistent with the previous exemptive 
        policy of the Commission, as reflected in exemptive 
        orders for family offices in effect on the date of 
        enactment of this Act, and the grandfathering 
        provisions in paragraph (3);
            (2) recognizes the range of organizational, 
        management, and employment structures and arrangements 
        employed by family offices; and
            (3) does not exclude any person who was not 
        registered or required to be registered under the 
        Investment Advisers Act of 1940 on January 1, 2010 from 
        the definition of the term ``family office'', solely 
        because such person provides investment advice to, and 
        was engaged before January 1, 2010 in providing 
        investment advice to--
                    (A) natural persons who, at the time of 
                their applicable investment, are officers, 
                directors, or employees of the family office 
                who--
                            (i) have invested with the family 
                        office before January 1, 2010; and
                            (ii) are accredited investors, as 
                        defined in Regulation D of the 
                        Commission (or any successor thereto) 
                        under the Securities Act of 1933, or, 
                        as the Commission may prescribe by 
                        rule, the successors-in-interest 
                        thereto;
                    (B) any company owned exclusively and 
                controlled by members of the family of the 
                family office, or as the Commission may 
                prescribe by rule;
                    (C) any investment adviser registered under 
                the Investment Adviser Act of 1940 that 
                provides investment advice to the family office 
                and who identifies investment opportunities to 
                the family office, and invests in such 
                transactions on substantially the same terms as 
                the family office invests, but does not invest 
                in other funds advised by the family office, 
                and whose assets as to which the family office 
                directly or indirectly provides investment 
                advice represent, in the aggregate, not more 
                than 5 percent of the value of the total assets 
                as to which the family office provides 
                investment advice.
    (c) Antifraud Authority.--A family office that would not be 
a family office, but for subsection (b)(3), shall be deemed to 
be an investment adviser for the purposes of paragraphs (1), 
(2) and (4) of section 206 of the Investment Advisers Act of 
1940.

SEC. 410. STATE AND FEDERAL RESPONSIBILITIES; ASSET THRESHOLD FOR 
                    FEDERAL REGISTRATION OF INVESTMENT ADVISERS.

    Section 203A(a) of the of the Investment Advisers Act of 
1940 (15 U.S.C. 80b-3a(a)) is amended--
            (1) by redesignating paragraph (2) as paragraph 
        (3); and
            (2) by inserting after paragraph (1) the following:
            ``(2) Treatment of mid-sized investment advisers.--
                    ``(A) In general.--No investment adviser 
                described in subparagraph (B) shall register 
                under section 203, unless the investment 
                adviser is an adviser to an investment company 
                registered under the Investment Company Act of 
                1940, or a company which has elected to be a 
                business development company pursuant to 
                section 54 of the Investment Company Act of 
                1940, and has not withdrawn the election, 
                except that, if by effect of this paragraph an 
                investment adviser would be required to 
                register with 15 or more States, then the 
                adviser may register under section 203.
                    ``(B) Covered persons.--An investment 
                adviser described in this subparagraph is an 
                investment adviser that--
                            ``(i) is required to be registered 
                        as an investment adviser with the 
                        securities commissioner (or any agency 
                        or office performing like functions) of 
                        the State in which it maintains its 
                        principal office and place of business 
                        and, if registered, would be subject to 
                        examination as an investment adviser by 
                        any such commissioner, agency, or 
                        office; and
                            ``(ii) has assets under management 
                        between--
                                    ``(I) the amount specified 
                                under subparagraph (A) of 
                                paragraph (1), as such amount 
                                may have been adjusted by the 
                                Commission pursuant to that 
                                subparagraph; and
                                    ``(II) $100,000,000, or 
                                such higher amount as the 
                                Commission may, by rule, deem 
                                appropriate in accordance with 
                                the purposes of this title.''.

SEC. 411. CUSTODY OF CLIENT ASSETS.

    The Investment Advisers Act of 1940 (15 U.S.C. 80b-1 et 
seq.) is amended by adding at the end the following new 
section:

``SEC. 223. CUSTODY OF CLIENT ACCOUNTS.

    ``An investment adviser registered under this title shall 
take such steps to safeguard client assets over which such 
adviser has custody, including, without limitation, 
verification of such assets by an independent public 
accountant, as the Commission may, by rule, prescribe.''.

SEC. 412. COMPTROLLER GENERAL STUDY ON CUSTODY RULE COSTS.

    The Comptroller General of the United States shall--
            (1) conduct a study of--
                    (A) the compliance costs associated with 
                the current Securities and Exchange Commission 
                rules 204-2 (17 C.F.R. Parts 275.204-2) and 
                rule 206(4)-2 (17 C.F.R. 275.206(4)-2) under 
                the Investment Advisers Act of 1940 regarding 
                custody of funds or securities of clients by 
                investment advisers; and
                    (B) the additional costs if subsection 
                (b)(6) of rule 206(4)-2 (17 C.F.R. 275.206(4)-
                2(b)(6)) relating to operational independence 
                were eliminated; and
            (2) submit a report to the Committee on Banking, 
        Housing, and Urban Affairs of the Senate and the 
        Committee on Financial Services of the House of 
        Representatives on the results of such study, not later 
        than 3 years after the date of enactment of this Act.

SEC. 413. ADJUSTING THE ACCREDITED INVESTOR STANDARD.

    (a) In General.--The Commission shall adjust any net worth 
standard for an accredited investor, as set forth in the rules 
of the Commission under the Securities Act of 1933, so that the 
individual net worth of any natural person, or joint net worth 
with the spouse of that person, at the time of purchase, is 
more than $1,000,000 (as such amount is adjusted periodically 
by rule of the Commission), excluding the value of the primary 
residence of such natural person, except that during the 4-year 
period that begins on the date of enactment of this Act, any 
net worth standard shall be $1,000,000, excluding the value of 
the primary residence of such natural person.
    (b) Review and Adjustment.--
            (1) Initial review and adjustment.--
                    (A) Initial review.--The Commission may 
                undertake a review of the definition of the 
                term ``accredited investor'', as such term 
                applies to natural persons, to determine 
                whether the requirements of the definition, 
                excluding the requirement relating to the net 
                worth standard described in subsection (a), 
                should be adjusted or modified for the 
                protection of investors, in the public 
                interest, and in light of the economy.
                    (B) Adjustment or modification.--Upon 
                completion of a review under subparagraph (A), 
                the Commission may, by notice and comment 
                rulemaking, make such adjustments to the 
                definition of the term ``accredited investor'', 
                excluding adjusting or modifying the 
                requirement relating to the net worth standard 
                described in subsection (a), as such term 
                applies to natural persons, as the Commission 
                may deem appropriate for the protection of 
                investors, in the public interest, and in light 
                of the economy.
            (2) Subsequent reviews and adjustment.--
                    (A) Subsequent reviews.--Not earlier than 4 
                years after the date of enactment of this Act, 
                and not less frequently than once every 4 years 
                thereafter, the Commission shall undertake a 
                review of the definition, in its entirety, of 
                the term ``accredited investor'', as defined in 
                section 230.215 of title 17, Code of Federal 
                Regulations, or any successor thereto, as such 
                term applies to natural persons, to determine 
                whether the requirements of the definition 
                should be adjusted or modified for the 
                protection of investors, in the public 
                interest, and in light of the economy.
                    (B) Adjustment or modification.--Upon 
                completion of a review under subparagraph (A), 
                the Commission may, by notice and comment 
                rulemaking, make such adjustments to the 
                definition of the term ``accredited investor'', 
                as defined in section 230.215 of title 17, Code 
                of Federal Regulations, or any successor 
                thereto, as such term applies to natural 
                persons, as the Commission may deem appropriate 
                for the protection of investors, in the public 
                interest, and in light of the economy.

SEC. 414. RULE OF CONSTRUCTION RELATING TO THE COMMODITIES EXCHANGE 
                    ACT.

    The Investment Advisers Act of 1940 (15 U.S.C. 80b-1 et 
seq.) is further amended by adding at the end the following new 
section:

``SEC. 224. RULE OF CONSTRUCTION RELATING TO THE COMMODITIES EXCHANGE 
                    ACT.

    ``Nothing in this title shall relieve any person of any 
obligation or duty, or affect the availability of any right or 
remedy available to the Commodity Futures Trading Commission or 
any private party, arising under the Commodity Exchange Act (7 
U.S.C. 1 et seq.) governing commodity pools, commodity pool 
operators, or commodity trading advisors.''.

SEC. 415. GAO STUDY AND REPORT ON ACCREDITED INVESTORS.

    The Comptroller General of the United States shall conduct 
a study on the appropriate criteria for determining the 
financial thresholds or other criteria needed to qualify for 
accredited investor status and eligibility to invest in private 
funds, and shall submit a report to the Committee on Banking, 
Housing, and Urban Affairs of the Senate and the Committee on 
Financial Services of the House of Representatives on the 
results of such study not later than 3 years after the date of 
enactment of this Act.

SEC. 416. GAO STUDY ON SELF-REGULATORY ORGANIZATION FOR PRIVATE FUNDS.

    The Comptroller General of the United States shall--
            (1) conduct a study of the feasibility of forming a 
        self-regulatory organization to oversee private funds; 
        and
            (2) submit a report to the Committee on Banking, 
        Housing, and Urban Affairs of the Senate and the 
        Committee on Financial Services of the House of 
        Representatives on the results of such study, not later 
        than 1 year after the date of enactment of this Act.

SEC. 417. COMMISSION STUDY AND REPORT ON SHORT SELLING.

    (a) Studies.--The Division of Risk, Strategy, and Financial 
Innovation of the Commission shall conduct--
            (1) a study, taking into account current 
        scholarship, on the state of short selling on national 
        securities exchanges and in the over-the-counter 
        markets, with particular attention to the impact of 
        recent rule changes and the incidence of--
                    (A) the failure to deliver shares sold 
                short; or
                    (B) delivery of shares on the fourth day 
                following the short sale transaction; and
            (2) a study of--
                    (A) the feasibility, benefits, and costs of 
                requiring reporting publicly, in real time 
                short sale positions of publicly listed 
                securities, or, in the alternative, reporting 
                such short positions in real time only to the 
                Commission and the Financial Industry 
                Regulatory Authority; and
                    (B) the feasibility, benefits, and costs of 
                conducting a voluntary pilot program in which 
                public companies will agree to have all trades 
                of their shares marked ``short'', ``market 
                maker short'', ``buy'', ``buy-to-cover'', or 
                ``long'', and reported in real time through the 
                Consolidated Tape.
    (b) Reports.--The Commission shall submit a report to the 
Committee on Banking, Housing, and Urban Affairs of the Senate 
and the Committee on Financial Services of the House of 
Representatives--
            (1) on the results of the study required under 
        subsection (a)(1), including recommendations for market 
        improvements, not later than 2 years after the date of 
        enactment of this Act; and
            (2) on the results of the study required under 
        subsection (a)(2), not later than 1 year after the date 
        of enactment of this Act.

SEC. 418. QUALIFIED CLIENT STANDARD.

    Section 205(e) of the Investment Advisers Act of 1940 (15 
U.S.C. 80b-5(e)) is amended by adding at the end the following: 
``With respect to any factor used in any rule or regulation by 
the Commission in making a determination under this subsection, 
if the Commission uses a dollar amount test in connection with 
such factor, such as a net asset threshold, the Commission 
shall, by order, not later than 1 year after the date of 
enactment of the Private Fund Investment Advisers Registration 
Act of 2010, and every 5 years thereafter, adjust for the 
effects of inflation on such test. Any such adjustment that is 
not a multiple of $100,000 shall be rounded to the nearest 
multiple of $100,000.''.

SEC. 419. TRANSITION PERIOD.

    Except as otherwise provided in this title, this title and 
the amendments made by this title shall become effective 1 year 
after the date of enactment of this Act, except that any 
investment adviser may, at the discretion of the investment 
adviser, register with the Commission under the Investment 
Advisers Act of 1940 during that 1-year period, subject to the 
rules of the Commission.

                           TITLE V--INSURANCE

                  Subtitle A--Federal Insurance Office

SEC. 501. SHORT TITLE.

    This subtitle may be cited as the ``Federal Insurance 
Office Act of 2010''.

SEC. 502. FEDERAL INSURANCE OFFICE.

    (a) Establishment of Office.--Subchapter I of chapter 3 of 
subtitle I of title 31, United States Code, is amended--
            (1) by redesignating section 312 as section 315;
            (2) by redesignating section 313 as section 312; 
        and
            (3) by inserting after section 312 (as so 
        redesignated) the following new sections:

``SEC. 313. FEDERAL INSURANCE OFFICE.

    ``(a) Establishment.--There is established within the 
Department of the Treasury the Federal Insurance Office.
    ``(b) Leadership.--The Office shall be headed by a 
Director, who shall be appointed by the Secretary of the 
Treasury. The position of Director shall be a career reserved 
position in the Senior Executive Service, as that position is 
defined under section 3132 of title 5, United States Code.
    ``(c) Functions.--
            ``(1) Authority pursuant to direction of 
        secretary.--The Office, pursuant to the direction of 
        the Secretary, shall have the authority--
                    ``(A) to monitor all aspects of the 
                insurance industry, including identifying 
                issues or gaps in the regulation of insurers 
                that could contribute to a systemic crisis in 
                the insurance industry or the United States 
                financial system;
                    ``(B) to monitor the extent to which 
                traditionally underserved communities and 
                consumers, minorities (as such term is defined 
                in section 1204(c) of the Financial 
                Institutions Reform, Recovery, and Enforcement 
                Act of 1989 (12 U.S.C. 1811 note)), and low- 
                and moderate-income persons have access to 
                affordable insurance products regarding all 
                lines of insurance, except health insurance;
                    ``(C) to recommend to the Financial 
                Stability Oversight Council that it designate 
                an insurer, including the affiliates of such 
                insurer, as an entity subject to regulation as 
                a nonbank financial company supervised by the 
                Board of Governors pursuant to title I of the 
                Dodd-Frank Wall Street Reform and Consumer 
                Protection Act;
                    ``(D) to assist the Secretary in 
                administering the Terrorism Insurance Program 
                established in the Department of the Treasury 
                under the Terrorism Risk Insurance Act of 2002 
                (15 U.S.C. 6701 note);
                    ``(E) to coordinate Federal efforts and 
                develop Federal policy on prudential aspects of 
                international insurance matters, including 
                representing the United States, as appropriate, 
                in the International Association of Insurance 
                Supervisors (or a successor entity) and 
                assisting the Secretary in negotiating covered 
                agreements (as such term is defined in 
                subsection (r));
                    ``(F) to determine, in accordance with 
                subsection (f), whether State insurance 
                measures are preempted by covered agreements;
                    ``(G) to consult with the States (including 
                State insurance regulators) regarding insurance 
                matters of national importance and prudential 
                insurance matters of international importance; 
                and
                    ``(H) to perform such other related duties 
                and authorities as may be assigned to the 
                Office by the Secretary.
            ``(2) Advisory functions.--The Office shall advise 
        the Secretary on major domestic and prudential 
        international insurance policy issues.
            ``(3) Advisory capacity on council.--The Director 
        shall serve in an advisory capacity on the Financial 
        Stability Oversight Council established under the 
        Financial Stability Act of 2010.
    ``(d) Scope.--The authority of the Office shall extend to 
all lines of insurance except--
            ``(1) health insurance, as determined by the 
        Secretary in coordination with the Secretary of Health 
        and Human Services based on section 2791 of the Public 
        Health Service Act (42 U.S.C. 300gg-91);
            ``(2) long-term care insurance, except long-term 
        care insurance that is included with life or annuity 
        insurance components, as determined by the Secretary in 
        coordination with the Secretary of Health and Human 
        Services, and in the case of long-term care insurance 
        that is included with such components, the Secretary 
        shall coordinate with the Secretary of Health and Human 
        Services in performing the functions of the Office; and
            ``(3) crop insurance, as established by the Federal 
        Crop Insurance Act (7 U.S.C. 1501 et seq.).
    ``(e) Gathering of Information.--
            ``(1) In general.--In carrying out the functions 
        required under subsection (c), the Office may--
                    ``(A) receive and collect data and 
                information on and from the insurance industry 
                and insurers;
                    ``(B) enter into information-sharing 
                agreements;
                    ``(C) analyze and disseminate data and 
                information; and
                    ``(D) issue reports regarding all lines of 
                insurance except health insurance.
            ``(2) Collection of information from insurers and 
        affiliates.--
                    ``(A) In general.--Except as provided in 
                paragraph (3), the Office may require an 
                insurer, or any affiliate of an insurer, to 
                submit such data or information as the Office 
                may reasonably require in carrying out the 
                functions described under subsection (c).
                    ``(B) Rule of construction.--
                Notwithstanding any other provision of this 
                section, for purposes of subparagraph (A), the 
                term `insurer' means any entity that writes 
                insurance or reinsures risks and issues 
                contracts or policies in 1 or more States.
            ``(3) Exception for small insurers.--Paragraph (2) 
        shall not apply with respect to any insurer or 
        affiliate thereof that meets a minimum size threshold 
        that the Office may establish, whether by order or 
        rule.
            ``(4) Advance coordination.--Before collecting any 
        data or information under paragraph (2) from an 
        insurer, or affiliate of an insurer, the Office shall 
        coordinate with each relevant Federal agency and State 
        insurance regulator (or other relevant Federal or State 
        regulatory agency, if any, in the case of an affiliate 
        of an insurer) and any publicly available sources to 
        determine if the information to be collected is 
        available from, and may be obtained in a timely manner 
        by, such Federal agency or State insurance regulator, 
        individually or collectively, other regulatory agency, 
        or publicly available sources. If the Director 
        determines that such data or information is available, 
        and may be obtained in a timely manner, from such an 
        agency, regulator, regulatory agency, or source, the 
        Director shall obtain the data or information from such 
        agency, regulator, regulatory agency, or source. If the 
        Director determines that such data or information is 
        not so available, the Director may collect such data or 
        information from an insurer (or affiliate) only if the 
        Director complies with the requirements of subchapter I 
        of chapter 35 of title 44, United States Code (relating 
        to Federal information policy; commonly known as the 
        Paperwork Reduction Act), in collecting such data or 
        information. Notwithstanding any other provision of 
        law, each such relevant Federal agency and State 
        insurance regulator or other Federal or State 
        regulatory agency is authorized to provide to the 
        Office such data or information.
            ``(5) Confidentiality.--
                    ``(A) Retention of privilege.--The 
                submission of any nonpublicly available data 
                and information to the Office under this 
                subsection shall not constitute a waiver of, or 
                otherwise affect, any privilege arising under 
                Federal or State law (including the rules of 
                any Federal or State court) to which the data 
                or information is otherwise subject.
                    ``(B) Continued application of prior 
                confidentiality agreements.--Any requirement 
                under Federal or State law to the extent 
                otherwise applicable, or any requirement 
                pursuant to a written agreement in effect 
                between the original source of any nonpublicly 
                available data or information and the source of 
                such data or information to the Office, 
                regarding the privacy or confidentiality of any 
                data or information in the possession of the 
                source to the Office, shall continue to apply 
                to such data or information after the data or 
                information has been provided pursuant to this 
                subsection to the Office.
                    ``(C) Information-sharing agreement.--Any 
                data or information obtained by the Office may 
                be made available to State insurance 
                regulators, individually or collectively, 
                through an information-sharing agreement that--
                            ``(i) shall comply with applicable 
                        Federal law; and
                            ``(ii) shall not constitute a 
                        waiver of, or otherwise affect, any 
                        privilege under Federal or State law 
                        (including the rules of any Federal or 
                        State court) to which the data or 
                        information is otherwise subject.
                    ``(D) Agency disclosure requirements.--
                Section 552 of title 5, United States Code, 
                shall apply to any data or information 
                submitted to the Office by an insurer or an 
                affiliate of an insurer.
            ``(6) Subpoenas and enforcement.--The Director 
        shall have the power to require by subpoena the 
        production of the data or information requested under 
        paragraph (2), but only upon a written finding by the 
        Director that such data or information is required to 
        carry out the functions described under subsection (c) 
        and that the Office has coordinated with such regulator 
        or agency as required under paragraph (4). Subpoenas 
        shall bear the signature of the Director and shall be 
        served by any person or class of persons designated by 
        the Director for that purpose. In the case of contumacy 
        or failure to obey a subpoena, the subpoena shall be 
        enforceable by order of any appropriate district court 
        of the United States. Any failure to obey the order of 
        the court may be punished by the court as a contempt of 
        court.
    ``(f) Preemption of State Insurance Measures.--
            ``(1) Standard.--A State insurance measure shall be 
        preempted pursuant to this section or section 314 if, 
        and only to the extent that the Director determines, in 
        accordance with this subsection, that the measure--
                    ``(A) results in less favorable treatment 
                of a non-United States insurer domiciled in a 
                foreign jurisdiction that is subject to a 
                covered agreement than a United States insurer 
                domiciled, licensed, or otherwise admitted in 
                that State; and
                    ``(B) is inconsistent with a covered 
                agreement.
            ``(2) Determination.--
                    ``(A) Notice of potential inconsistency.--
                Before making any determination under paragraph 
                (1), the Director shall--
                            ``(i) notify and consult with the 
                        appropriate State regarding any 
                        potential inconsistency or preemption;
                            ``(ii) notify and consult with the 
                        United States Trade Representative 
                        regarding any potential inconsistency 
                        or preemption;
                            ``(iii) cause to be published in 
                        the Federal Register notice of the 
                        issue regarding the potential 
                        inconsistency or preemption, including 
                        a description of each State insurance 
                        measure at issue and any applicable 
                        covered agreement;
                            ``(iv) provide interested parties a 
                        reasonable opportunity to submit 
                        written comments to the Office; and
                            ``(v) consider any comments 
                        received.
                    ``(B) Scope of review.--For purposes of 
                this subsection, any determination of the 
                Director regarding State insurance measures, 
                and any preemption under paragraph (1) as a 
                result of such determination, shall be limited 
                to the subject matter contained within the 
                covered agreement involved and shall achieve a 
                level of protection for insurance or 
                reinsurance consumers that is substantially 
                equivalent to the level of protection achieved 
                under State insurance or reinsurance 
                regulation.
                    ``(C) Notice of determination of 
                inconsistency.--Upon making any determination 
                under paragraph (1), the Director shall--
                            ``(i) notify the appropriate State 
                        of the determination and the extent of 
                        the inconsistency;
                            ``(ii) establish a reasonable 
                        period of time, which shall not be less 
                        than 30 days, before the determination 
                        shall become effective; and
                            ``(iii) notify the Committees on 
                        Financial Services and Ways and Means 
                        of the House of Representatives and the 
                        Committees on Banking, Housing, and 
                        Urban Affairs and Finance of the 
                        Senate.
            ``(3) Notice of effectiveness.--Upon the conclusion 
        of the period referred to in paragraph (2)(C)(ii), if 
        the basis for such determination still exists, the 
        determination shall become effective and the Director 
        shall--
                    ``(A) cause to be published a notice in the 
                Federal Register that the preemption has become 
                effective, as well as the effective date; and
                    ``(B) notify the appropriate State.
            ``(4) Limitation.--No State may enforce a State 
        insurance measure to the extent that such measure has 
        been preempted under this subsection.
    ``(g) Applicability of Administrative Procedures Act.--
Determinations of inconsistency made pursuant to subsection 
(f)(2) shall be subject to the applicable provisions of 
subchapter II of chapter 5 of title 5, United States Code 
(relating to administrative procedure), and chapter 7 of such 
title (relating to judicial review), except that in any action 
for judicial review of a determination of inconsistency, the 
court shall determine the matter de novo.
    ``(h) Regulations, Policies, and Procedures.--The Secretary 
may issue orders, regulations, policies, and procedures to 
implement this section.
    ``(i) Consultation.--The Director shall consult with State 
insurance regulators, individually or collectively, to the 
extent the Director determines appropriate, in carrying out the 
functions of the Office.
    ``(j) Savings Provisions.--Nothing in this section shall--
            ``(1) preempt--
                    ``(A) any State insurance measure that 
                governs any insurer's rates, premiums, 
                underwriting, or sales practices;
                    ``(B) any State coverage requirements for 
                insurance;
                    ``(C) the application of the antitrust laws 
                of any State to the business of insurance; or
                    ``(D) any State insurance measure governing 
                the capital or solvency of an insurer, except 
                to the extent that such State insurance measure 
                results in less favorable treatment of a non-
                United States insurer than a United States 
                insurer;
            ``(2) be construed to alter, amend, or limit any 
        provision of the Consumer Financial Protection Agency 
        Act of 2010; or
            ``(3) affect the preemption of any States insurance 
        measure otherwise inconsistent with and preempted by 
        Federal law.
    ``(k) Retention of Existing State Regulatory Authority.--
Nothing in this section or section 314 shall be construed to 
establish or provide the Office or the Department of the 
Treasury with general supervisory or regulatory authority over 
the business of insurance.
    ``(l) Retention of Authority of Federal Financial 
Regulatory Agencies.--Nothing in this section or section 314 
shall be construed to limit the authority of any Federal 
financial regulatory agency, including the authority to develop 
and coordinate policy, negotiate, and enter into agreements 
with foreign governments, authorities, regulators, and 
multinational regulatory committees and to preempt State 
measures to affect uniformity with international regulatory 
agreements.
    ``(m) Retention of Authority of United States Trade 
Representative.--Nothing in this section or section 314 shall 
be construed to affect the authority of the Office of the 
United States Trade Representative pursuant to section 141 of 
the Trade Act of 1974 (19 U.S.C. 2171) or any other provision 
of law, including authority over the development and 
coordination of United States international trade policy and 
the administration of the United States trade agreements 
program.
    ``(n) Annual Reports to Congress.--
            ``(1) Section 313(f) reports.--Beginning September 
        30, 2011, the Director shall submit a report on or 
        before September 30 of each calendar year to the 
        President and to the Committees on Financial Services 
        and Ways and Means of the House of Representatives and 
        the Committees on Banking, Housing, and Urban Affairs 
        and Finance of the Senate on any actions taken by the 
        Office pursuant to subsection (f) (regarding preemption 
        of inconsistent State insurance measures).
            ``(2) Insurance industry.--Beginning September 30, 
        2011, the Director shall submit a report on or before 
        September 30 of each calendar year to the President and 
        to the Committee on Financial Services of the House of 
        Representatives and the Committee on Banking, Housing, 
        and Urban Affairs of the Senate on the insurance 
        industry and any other information as deemed relevant 
        by the Director or requested by such Committees.
    ``(o) Reports on U.S. and Global Reinsurance Market.--The 
Director shall submit to the Committee on Financial Services of 
the House of Representatives and the Committee on Banking, 
Housing, and Urban Affairs of the Senate--
            ``(1) a report received not later than September 
        30, 2012, describing the breadth and scope of the 
        global reinsurance market and the critical role such 
        market plays in supporting insurance in the United 
        States; and
            ``(2) a report received not later than January 1, 
        2013, and updated not later than January 1, 2015, 
        describing the impact of part II of the Nonadmitted and 
        Reinsurance Reform Act of 2010 on the ability of State 
        regulators to access reinsurance information for 
        regulated companies in their jurisdictions.
    ``(p) Study and Report on Regulation of Insurance.--
            ``(1) In general.--Not later than 18 months after 
        the date of enactment of this section, the Director 
        shall conduct a study and submit a report to Congress 
        on how to modernize and improve the system of insurance 
        regulation in the United States.
            ``(2) Considerations.--The study and report 
        required under paragraph (1) shall be based on and 
        guided by the following considerations:
                    ``(A) Systemic risk regulation with respect 
                to insurance.
                    ``(B) Capital standards and the 
                relationship between capital allocation and 
                liabilities, including standards relating to 
                liquidity and duration risk.
                    ``(C) Consumer protection for insurance 
                products and practices, including gaps in State 
                regulation.
                    ``(D) The degree of national uniformity of 
                State insurance regulation.
                    ``(E) The regulation of insurance companies 
                and affiliates on a consolidated basis.
                    ``(F) International coordination of 
                insurance regulation.
            ``(3) Additional factors.--The study and report 
        required under paragraph (1) shall also examine the 
        following factors:
                    ``(A) The costs and benefits of potential 
                Federal regulation of insurance across various 
                lines of insurance (except health insurance).
                    ``(B) The feasibility of regulating only 
                certain lines of insurance at the Federal 
                level, while leaving other lines8 of insurance 
                to be regulated at the State level.
                    ``(C) The ability of any potential Federal 
                regulation or Federal regulators to eliminate 
                or minimize regulatory arbitrage.
                    ``(D) The impact that developments in the 
                regulation of insurance in foreign 
                jurisdictions might have on the potential 
                Federal regulation of insurance.
                    ``(E) The ability of any potential Federal 
                regulation or Federal regulator to provide 
                robust consumer protection for policyholders.
                    ``(F) The potential consequences of 
                subjecting insurance companies to a Federal 
                resolution authority, including the effects of 
                any Federal resolution authority--
                            ``(i) on the operation of State 
                        insurance guaranty fund systems, 
                        including the loss of guaranty fund 
                        coverage if an insurance company is 
                        subject to a Federal resolution 
                        authority;
                            ``(ii) on policyholder protection, 
                        including the loss of the priority 
                        status of policyholder claims over 
                        other unsecured general creditor 
                        claims;
                            ``(iii) in the case of life 
                        insurance companies, on the loss of the 
                        special status of separate account 
                        assets and separate account 
                        liabilities; and
                            ``(iv) on the international 
                        competitiveness of insurance companies.
                    ``(G) Such other factors as the Director 
                determines necessary or appropriate, consistent 
                with the principles set forth in paragraph (2).
            ``(4) Required recommendations.--The study and 
        report required under paragraph (1) shall also contain 
        any legislative, administrative, or regulatory 
        recommendations, as the Director determines 
        appropriate, to carry out or effectuate the findings 
        set forth in such report.
            ``(5) Consultation.--With respect to the study and 
        report required under paragraph (1), the Director shall 
        consult with the State insurance regulators, consumer 
        organizations, representatives of the insurance 
        industry and policyholders, and other organizations and 
        experts, as appropriate.
    ``(q) Use of Existing Resources.--To carry out this 
section, the Office may employ personnel, facilities, and any 
other resource of the Department of the Treasury available to 
the Secretary and the Secretary shall dedicate specific 
personnel to the Office.
    ``(r) Definitions.--In this section and section 314, the 
following definitions shall apply:
            ``(1) Affiliate.--The term `affiliate' means, with 
        respect to an insurer, any person who controls, is 
        controlled by, or is under common control with the 
        insurer.
            ``(2) Covered agreement.--The term `covered 
        agreement' means a written bilateral or multilateral 
        agreement regarding prudential measures with respect to 
        the business of insurance or reinsurance that--
                    ``(A) is entered into between the United 
                States and one or more foreign governments, 
                authorities, or regulatory entities; and
                    ``(B) relates to the recognition of 
                prudential measures with respect to the 
                business of insurance or reinsurance that 
                achieves a level of protection for insurance or 
                reinsurance consumers that is substantially 
                equivalent to the level of protection achieved 
                under State insurance or reinsurance 
                regulation.
            ``(3) Insurer.--The term `insurer' means any person 
        engaged in the business of insurance, including 
        reinsurance.
            ``(4) Federal financial regulatory agency.--The 
        term `Federal financial regulatory agency' means the 
        Department of the Treasury, the Board of Governors of 
        the Federal Reserve System, the Office of the 
        Comptroller of the Currency, the Office of Thrift 
        Supervision, the Securities and Exchange Commission, 
        the Commodity Futures Trading Commission, the Federal 
        Deposit Insurance Corporation, the Federal Housing 
        Finance Agency, or the National Credit Union 
        Administration.
            ``(5) Non-united states insurer.--The term `non-
        United States insurer' means an insurer that is 
        organized under the laws of a jurisdiction other than a 
        State, but does not include any United States branch of 
        such an insurer.
            ``(6) Office.--The term `Office' means the Federal 
        Insurance Office established by this section.
            ``(7) State insurance measure.--The term `State 
        insurance measure' means any State law, regulation, 
        administrative ruling, bulletin, guideline, or practice 
        relating to or affecting prudential measures applicable 
        to insurance or reinsurance.
            ``(8) State insurance regulator.--The term `State 
        insurance regulator' means any State regulatory 
        authority responsible for the supervision of insurers.
            ``(9) Substantially equivalent to the level of 
        protection achieved.--The term `substantially 
        equivalent to the level of protection achieved' means 
        the prudential measures of a foreign government, 
        authority, or regulatory entity achieve a similar 
        outcome in consumer protection as the outcome achieved 
        under State insurance or reinsurance regulation.
            ``(10) United states insurer.--The term `United 
        States insurer' means--
                    ``(A) an insurer that is organized under 
                the laws of a State; or
                    ``(B) a United States branch of a non-
                United States insurer.
    ``(s) Authorization of Appropriations.--There are 
authorized to be appropriated for the Office for each fiscal 
year such sums as may be necessary.

``SEC. 314. COVERED AGREEMENTS.

    ``(a) Authority.--The Secretary and the United States Trade 
Representative are authorized, jointly, to negotiate and enter 
into covered agreements on behalf of the United States.
    ``(b) Requirements for Consultation With Congress.--
            ``(1) In general.--Before initiating negotiations 
        to enter into a covered agreement under subsection (a), 
        during such negotiations, and before entering into any 
        such agreement, the Secretary and the United States 
        Trade Representative shall jointly consult with the 
        Committee on Financial Services and the Committee on 
        Ways and Means of the House of Representatives and the 
        Committee on Banking, Housing, and Urban Affairs and 
        the Committee on Finance of the Senate.
            ``(2) Scope.--The consultation described in 
        paragraph (1) shall include consultation with respect 
        to--
                    ``(A) the nature of the agreement;
                    ``(B) how and to what extent the agreement 
                will achieve the applicable purposes, policies, 
                priorities, and objectives of section 313 and 
                this section; and
                    ``(C) the implementation of the agreement, 
                including the general effect of the agreement 
                on existing State laws.
    ``(c) Submission and Layover Provisions.--A covered 
agreement under subsection (a) may enter into force with 
respect to the United States only if--
            ``(1) the Secretary and the United States Trade 
        Representative jointly submit to the congressional 
        committees specified in subsection (b)(1), on a day on 
        which both Houses of Congress are in session, a copy of 
        the final legal text of the agreement; and
            ``(2) a period of 90 calendar days beginning on the 
        date on which the copy of the final legal text of the 
        agreement is submitted to the congressional committees 
        under paragraph (1) has expired.''.
    (b) Duties of Secretary.--Section 321(a) of title 31, 
United States Code, is amended--
            (1) in paragraph (7), by striking ``; and'' and 
        inserting a semicolon;
            (2) in paragraph (8)(C), by striking the period at 
        the end and inserting ``; and''; and
            (3) by adding at the end the following new 
        paragraph:
            ``(9) advise the President on major domestic and 
        international prudential policy issues in connection 
        with all lines of insurance except health insurance.''.
    (c) Clerical Amendment.--The table of sections for 
subchapter I of chapter 3 of title 31, United States Code, is 
amended by striking the item relating to section 312 and 
inserting the following new items:

``Sec. 312. Terrorism and financial intelligence.
``Sec. 313. Federal Insurance Office.
``Sec. 314. Covered agreements.
``Sec. 315. Continuing in office.''.

                Subtitle B--State-Based Insurance Reform

SEC. 511. SHORT TITLE.

    This subtitle may be cited as the ``Nonadmitted and 
Reinsurance Reform Act of 2010''.

SEC. 512. EFFECTIVE DATE.

    Except as otherwise specifically provided in this subtitle, 
this subtitle shall take effect upon the expiration of the 12-
month period beginning on the date of the enactment of this 
subtitle.

                     PART I--NONADMITTED INSURANCE

SEC. 521. REPORTING, PAYMENT, AND ALLOCATION OF PREMIUM TAXES.

    (a) Home State's Exclusive Authority.--No State other than 
the home State of an insured may require any premium tax 
payment for nonadmitted insurance.
    (b) Allocation of Nonadmitted Premium Taxes.--
            (1) In general.--The States may enter into a 
        compact or otherwise establish procedures to allocate 
        among the States the premium taxes paid to an insured's 
        home State described in subsection (a).
            (2) Effective date.--Except as expressly otherwise 
        provided in such compact or other procedures, any such 
        compact or other procedures--
                    (A) if adopted on or before the expiration 
                of the 330-day period that begins on the date 
                of the enactment of this subtitle, shall apply 
                to any premium taxes that, on or after such 
                date of enactment, are required to be paid to 
                any State that is subject to such compact or 
                procedures; and
                    (B) if adopted after the expiration of such 
                330-day period, shall apply to any premium 
                taxes that, on or after January 1 of the first 
                calendar year that begins after the expiration 
                of such 330-day period, are required to be paid 
                to any State that is subject to such compact or 
                procedures.
            (3) Report.--Upon the expiration of the 330-day 
        period referred to in paragraph (2), the NAIC may 
        submit a report to the Committee on Financial Services 
        and the Committee on the Judiciary of the House of 
        Representatives and the Committee on Banking, Housing, 
        and Urban Affairs of the Senate identifying and 
        describing any compact or other procedures for 
        allocation among the States of premium taxes that have 
        been adopted during such period by any States.
            (4) Nationwide system.--The Congress intends that 
        each State adopt nationwide uniform requirements, 
        forms, and procedures, such as an interstate compact, 
        that provide for the reporting, payment, collection, 
        and allocation of premium taxes for nonadmitted 
        insurance consistent with this section.
    (c) Allocation Based on Tax Allocation Report.--To 
facilitate the payment of premium taxes among the States, an 
insured's home State may require surplus lines brokers and 
insureds who have independently procured insurance to annually 
file tax allocation reports with the insured's home State 
detailing the portion of the nonadmitted insurance policy 
premium or premiums attributable to properties, risks, or 
exposures located in each State. The filing of a nonadmitted 
insurance tax allocation report and the payment of tax may be 
made by a person authorized by the insured to act as its agent.

SEC. 522. REGULATION OF NONADMITTED INSURANCE BY INSURED'S HOME STATE.

    (a) Home State Authority.--Except as otherwise provided in 
this section, the placement of nonadmitted insurance shall be 
subject to the statutory and regulatory requirements solely of 
the insured's home State.
    (b) Broker Licensing.--No State other than an insured's 
home State may require a surplus lines broker to be licensed in 
order to sell, solicit, or negotiate nonadmitted insurance with 
respect to such insured.
    (c) Enforcement Provision.--With respect to section 521 and 
subsections (a) and (b) of this section, any law, regulation, 
provision, or action of any State that applies or purports to 
apply to nonadmitted insurance sold to, solicited by, or 
negotiated with an insured whose home State is another State 
shall be preempted with respect to such application.
    (d) Workers' Compensation Exception.--This section may not 
be construed to preempt any State law, rule, or regulation that 
restricts the placement of workers' compensation insurance or 
excess insurance for self-funded workers' compensation plans 
with a nonadmitted insurer.

SEC. 523. PARTICIPATION IN NATIONAL PRODUCER DATABASE.

    After the expiration of the 2-year period beginning on the 
date of the enactment of this subtitle, a State may not collect 
any fees relating to licensing of an individual or entity as a 
surplus lines broker in the State unless the State has in 
effect at such time laws or regulations that provide for 
participation by the State in the national insurance producer 
database of the NAIC, or any other equivalent uniform national 
database, for the licensure of surplus lines brokers and the 
renewal of such licenses.

SEC. 524. UNIFORM STANDARDS FOR SURPLUS LINES ELIGIBILITY.

    A State may not--
            (1) impose eligibility requirements on, or 
        otherwise establish eligibility criteria for, 
        nonadmitted insurers domiciled in a United States 
        jurisdiction, except in conformance with such 
        requirements and criteria in sections 5A(2) and 
        5C(2)(a) of the Non-Admitted Insurance Model Act, 
        unless the State has adopted nationwide uniform 
        requirements, forms, and procedures developed in 
        accordance with section 521(b) of this subtitle that 
        include alternative nationwide uniform eligibility 
        requirements; or
            (2) prohibit a surplus lines broker from placing 
        nonadmitted insurance with, or procuring nonadmitted 
        insurance from, a nonadmitted insurer domiciled outside 
        the United States that is listed on the Quarterly 
        Listing of Alien Insurers maintained by the 
        International Insurers Department of the NAIC.

SEC. 525. STREAMLINED APPLICATION FOR COMMERCIAL PURCHASERS.

    A surplus lines broker seeking to procure or place 
nonadmitted insurance in a State for an exempt commercial 
purchaser shall not be required to satisfy any State 
requirement to make a due diligence search to determine whether 
the full amount or type of insurance sought by such exempt 
commercial purchaser can be obtained from admitted insurers 
if--
            (1) the broker procuring or placing the surplus 
        lines insurance has disclosed to the exempt commercial 
        purchaser that such insurance may or may not be 
        available from the admitted market that may provide 
        greater protection with more regulatory oversight; and
            (2) the exempt commercial purchaser has 
        subsequently requested in writing the broker to procure 
        or place such insurance from a nonadmitted insurer.

SEC. 526. GAO STUDY OF NONADMITTED INSURANCE MARKET.

    (a) In General.--The Comptroller General of the United 
States shall conduct a study of the nonadmitted insurance 
market to determine the effect of the enactment of this part on 
the size and market share of the nonadmitted insurance market 
for providing coverage typically provided by the admitted 
insurance market.
    (b) Contents.--The study shall determine and analyze--
            (1) the change in the size and market share of the 
        nonadmitted insurance market and in the number of 
        insurance companies and insurance holding companies 
        providing such business in the 18-month period that 
        begins upon the effective date of this subtitle;
            (2) the extent to which insurance coverage 
        typically provided by the admitted insurance market has 
        shifted to the nonadmitted insurance market;
            (3) the consequences of any change in the size and 
        market share of the nonadmitted insurance market, 
        including differences in the price and availability of 
        coverage available in both the admitted and nonadmitted 
        insurance markets;
            (4) the extent to which insurance companies and 
        insurance holding companies that provide both admitted 
        and nonadmitted insurance have experienced shifts in 
        the volume of business between admitted and nonadmitted 
        insurance; and
            (5) the extent to which there has been a change in 
        the number of individuals who have nonadmitted 
        insurance policies, the type of coverage provided under 
        such policies, and whether such coverage is available 
        in the admitted insurance market.
    (c) Consultation With NAIC.--In conducting the study under 
this section, the Comptroller General shall consult with the 
NAIC.
    (d) Report.--The Comptroller General shall complete the 
study under this section and submit a report to the Committee 
on Banking, Housing, and Urban Affairs of the Senate and the 
Committee on Financial Services of the House of Representatives 
regarding the findings of the study not later than 30 months 
after the effective date of this subtitle.

SEC. 527. DEFINITIONS.

    For purposes of this part, the following definitions shall 
apply:
            (1) Admitted insurer.--The term ``admitted 
        insurer'' means, with respect to a State, an insurer 
        licensed to engage in the business of insurance in such 
        State.
            (2) Affiliate.--The term ``affiliate'' means, with 
        respect to an insured, any entity that controls, is 
        controlled by, or is under common control with the 
        insured.
            (3) Affiliated group.--The term ``affiliated 
        group'' means any group of entities that are all 
        affiliated.
            (4) Control.--An entity has ``control'' over 
        another entity if--
                    (A) the entity directly or indirectly or 
                acting through 1 or more other persons owns, 
                controls, or has the power to vote 25 percent 
                or more of any class of voting securities of 
                the other entity; or
                    (B) the entity controls in any manner the 
                election of a majority of the directors or 
                trustees of the other entity.
            (5) Exempt commercial purchaser.--The term ``exempt 
        commercial purchaser'' means any person purchasing 
        commercial insurance that, at the time of placement, 
        meets the following requirements:
                    (A) The person employs or retains a 
                qualified risk manager to negotiate insurance 
                coverage.
                    (B) The person has paid aggregate 
                nationwide commercial property and casualty 
                insurance premiums in excess of $100,000 in the 
                immediately preceding 12 months.
                    (C)(i) The person meets at least 1 of the 
                following criteria:
                            (I) The person possesses a net 
                        worth in excess of $20,000,000, as such 
                        amount is adjusted pursuant to clause 
                        (ii).
                            (II) The person generates annual 
                        revenues in excess of $50,000,000, as 
                        such amount is adjusted pursuant to 
                        clause (ii).
                            (III) The person employs more than 
                        500 full-time or full-time equivalent 
                        employees per individual insured or is 
                        a member of an affiliated group 
                        employing more than 1,000 employees in 
                        the aggregate.
                            (IV) The person is a not-for-profit 
                        organization or public entity 
                        generating annual budgeted expenditures 
                        of at least $30,000,000, as such amount 
                        is adjusted pursuant to clause (ii).
                            (V) The person is a municipality 
                        with a population in excess of 50,000 
                        persons.
                    (ii) Effective on the fifth January 1 
                occurring after the date of the enactment of 
                this subtitle and each fifth January 1 
                occurring thereafter, the amounts in subclauses 
                (I), (II), and (IV) of clause (i) shall be 
                adjusted to reflect the percentage change for 
                such 5-year period in the Consumer Price Index 
                for All Urban Consumers published by the Bureau 
                of Labor Statistics of the Department of Labor.
            (6) Home state.--
                    (A) In general.--Except as provided in 
                subparagraph (B), the term ``home State'' 
                means, with respect to an insured--
                            (i) the State in which an insured 
                        maintains its principal place of 
                        business or, in the case of an 
                        individual, the individual's principal 
                        residence; or
                            (ii) if 100 percent of the insured 
                        risk is located out of the State 
                        referred to in clause (i), the State to 
                        which the greatest percentage of the 
                        insured's taxable premium for that 
                        insurance contract is allocated.
                    (B) Affiliated groups.--If more than 1 
                insured from an affiliated group are named 
                insureds on a single nonadmitted insurance 
                contract, the term ``home State'' means the 
                home State, as determined pursuant to 
                subparagraph (A), of the member of the 
                affiliated group that has the largest 
                percentage of premium attributed to it under 
                such insurance contract.
            (7) Independently procured insurance.--The term 
        ``independently procured insurance'' means insurance 
        procured directly by an insured from a nonadmitted 
        insurer.
            (8) NAIC.--The term ``NAIC'' means the National 
        Association of Insurance Commissioners or any successor 
        entity.
            (9) Nonadmitted insurance.--The term ``nonadmitted 
        insurance'' means any property and casualty insurance 
        permitted to be placed directly or through a surplus 
        lines broker with a nonadmitted insurer eligible to 
        accept such insurance.
            (10) Non-admitted insurance model act.--The term 
        ``Non-Admitted Insurance Model Act'' means the 
        provisions of the Non-Admitted Insurance Model Act, as 
        adopted by the NAIC on August 3, 1994, and amended on 
        September 30, 1996, December 6, 1997, October 2, 1999, 
        and June 8, 2002.
            (11) Nonadmitted insurer.--The term ``nonadmitted 
        insurer''--
                    (A) means, with respect to a State, an 
                insurer not licensed to engage in the business 
                of insurance in such State; but
                    (B) does not include a risk retention 
                group, as that term is defined in section 
                2(a)(4) of the Liability Risk Retention Act of 
                1986 (15 U.S.C. 3901(a)(4)).
            (12) Premium tax.--The term ``premium tax'' means, 
        with respect to surplus lines or independently procured 
        insurance coverage, any tax, fee, assessment, or other 
        charge imposed by a government entity directly or 
        indirectly based on any payment made as consideration 
        for an insurance contract for such insurance, including 
        premium deposits, assessments, registration fees, and 
        any other compensation given in consideration for a 
        contract of insurance.
            (13) Qualified risk manager.--The term ``qualified 
        risk manager'' means, with respect to a policyholder of 
        commercial insurance, a person who meets all of the 
        following requirements:
                    (A) The person is an employee of, or third-
                party consultant retained by, the commercial 
                policyholder.
                    (B) The person provides skilled services in 
                loss prevention, loss reduction, or risk and 
                insurance coverage analysis, and purchase of 
                insurance.
                    (C) The person--
                            (i)(I) has a bachelor's degree or 
                        higher from an accredited college or 
                        university in risk management, business 
                        administration, finance, economics, or 
                        any other field determined by a State 
                        insurance commissioner or other State 
                        regulatory official or entity to 
                        demonstrate minimum competence in risk 
                        management; and
                            (II)(aa) has 3 years of experience 
                        in risk financing, claims 
                        administration, loss prevention, risk 
                        and insurance analysis, or purchasing 
                        commercial lines of insurance; or
                            (bb) has--
                                    (AA) a designation as a 
                                Chartered Property and Casualty 
                                Underwriter (in this 
                                subparagraph referred to as 
                                ``CPCU'') issued by the 
                                American Institute for CPCU/
                                Insurance Institute of America;
                                    (BB) a designation as an 
                                Associate in Risk Management 
                                (ARM) issued by the American 
                                Institute for CPCU/Insurance 
                                Institute of America;
                                    (CC) a designation as 
                                Certified Risk Manager (CRM) 
                                issued by the National Alliance 
                                for Insurance Education & 
                                Research;
                                    (DD) a designation as a 
                                RIMS Fellow (RF) issued by the 
                                Global Risk Management 
                                Institute; or
                                    (EE) any other designation, 
                                certification, or license 
                                determined by a State insurance 
                                commissioner or other State 
                                insurance regulatory official 
                                or entity to demonstrate 
                                minimum competency in risk 
                                management;
                            (ii)(I) has at least 7 years of 
                        experience in risk financing, claims 
                        administration, loss prevention, risk 
                        and insurance coverage analysis, or 
                        purchasing commercial lines of 
                        insurance; and
                            (II) has any 1 of the designations 
                        specified in subitems (AA) through (EE) 
                        of clause (i)(II)(bb);
                            (iii) has at least 10 years of 
                        experience in risk financing, claims 
                        administration, loss prevention, risk 
                        and insurance coverage analysis, or 
                        purchasing commercial lines of 
                        insurance; or
                            (iv) has a graduate degree from an 
                        accredited college or university in 
                        risk management, business 
                        administration, finance, economics, or 
                        any other field determined by a State 
                        insurance commissioner or other State 
                        regulatory official or entity to 
                        demonstrate minimum competence in risk 
                        management.
            (14) Reinsurance.--The term ``reinsurance'' means 
        the assumption by an insurer of all or part of a risk 
        undertaken originally by another insurer.
            (15) Surplus lines broker.--The term ``surplus 
        lines broker'' means an individual, firm, or 
        corporation which is licensed in a State to sell, 
        solicit, or negotiate insurance on properties, risks, 
        or exposures located or to be performed in a State with 
        nonadmitted insurers.
            (16) State.--The term ``State'' includes any State 
        of the United States, the District of Columbia, the 
        Commonwealth of Puerto Rico, Guam, the Northern Mariana 
        Islands, the Virgin Islands, and American Samoa.

                          PART II--REINSURANCE

SEC. 531. REGULATION OF CREDIT FOR REINSURANCE AND REINSURANCE 
                    AGREEMENTS.

    (a) Credit for Reinsurance.--If the State of domicile of a 
ceding insurer is an NAIC-accredited State, or has financial 
solvency requirements substantially similar to the requirements 
necessary for NAIC accreditation, and recognizes credit for 
reinsurance for the insurer's ceded risk, then no other State 
may deny such credit for reinsurance.
    (b) Additional Preemption of Extraterritorial Application 
of State Law.--In addition to the application of subsection 
(a), all laws, regulations, provisions, or other actions of a 
State that is not the domiciliary State of the ceding insurer, 
except those with respect to taxes and assessments on insurance 
companies or insurance income, are preempted to the extent that 
they--
            (1) restrict or eliminate the rights of the ceding 
        insurer or the assuming insurer to resolve disputes 
        pursuant to contractual arbitration to the extent such 
        contractual provision is not inconsistent with the 
        provisions of title 9, United States Code;
            (2) require that a certain State's law shall govern 
        the reinsurance contract, disputes arising from the 
        reinsurance contract, or requirements of the 
        reinsurance contract;
            (3) attempt to enforce a reinsurance contract on 
        terms different than those set forth in the reinsurance 
        contract, to the extent that the terms are not 
        inconsistent with this part; or
            (4) otherwise apply the laws of the State to 
        reinsurance agreements of ceding insurers not domiciled 
        in that State.

SEC. 532. REGULATION OF REINSURER SOLVENCY.

    (a) Domiciliary State Regulation.--If the State of domicile 
of a reinsurer is an NAIC-accredited State or has financial 
solvency requirements substantially similar to the requirements 
necessary for NAIC accreditation, such State shall be solely 
responsible for regulating the financial solvency of the 
reinsurer.
    (b) Nondomiciliary States.--
            (1) Limitation on financial information 
        requirements.--If the State of domicile of a reinsurer 
        is an NAIC-accredited State or has financial solvency 
        requirements substantially similar to the requirements 
        necessary for NAIC accreditation, no other State may 
        require the reinsurer to provide any additional 
        financial information other than the information the 
        reinsurer is required to file with its domiciliary 
        State.
            (2) Receipt of information.--No provision of this 
        section shall be construed as preventing or prohibiting 
        a State that is not the State of domicile of a 
        reinsurer from receiving a copy of any financial 
        statement filed with its domiciliary State.

SEC. 533. DEFINITIONS.

    For purposes of this part, the following definitions shall 
apply:
            (1) Ceding insurer.--The term ``ceding insurer'' 
        means an insurer that purchases reinsurance.
            (2) Domiciliary state.--The terms ``State of 
        domicile'' and ``domiciliary State'' mean, with respect 
        to an insurer or reinsurer, the State in which the 
        insurer or reinsurer is incorporated or entered 
        through, and licensed.
            (3) NAIC.--The term ``NAIC'' means the National 
        Association of Insurance Commissioners or any successor 
        entity.
            (4) Reinsurance.--The term ``reinsurance'' means 
        the assumption by an insurer of all or part of a risk 
        undertaken originally by another insurer.
            (5) Reinsurer.--
                    (A) In general.--The term ``reinsurer'' 
                means an insurer to the extent that the 
                insurer--
                            (i) is principally engaged in the 
                        business of reinsurance;
                            (ii) does not conduct significant 
                        amounts of direct insurance as a 
                        percentage of its net premiums; and
                            (iii) is not engaged in an ongoing 
                        basis in the business of soliciting 
                        direct insurance.
                    (B) Determination.--A determination of 
                whether an insurer is a reinsurer shall be made 
                under the laws of the State of domicile in 
                accordance with this paragraph.
            (6) State.--The term ``State'' includes any State 
        of the United States, the District of Columbia, the 
        Commonwealth of Puerto Rico, Guam, the Northern Mariana 
        Islands, the Virgin Islands, and American Samoa.

                     PART III--RULE OF CONSTRUCTION

SEC. 541. RULE OF CONSTRUCTION.

    Nothing in this subtitle or the amendments made by this 
subtitle shall be construed to modify, impair, or supersede the 
application of the antitrust laws. Any implied or actual 
conflict between this subtitle and any amendments to this 
subtitle and the antitrust laws shall be resolved in favor of 
the operation of the antitrust laws.

SEC. 542. SEVERABILITY.

    If any section or subsection of this subtitle, or any 
application of such provision to any person or circumstance, is 
held to be unconstitutional, the remainder of this subtitle, 
and the application of the provision to any other person or 
circumstance, shall not be affected.

 TITLE VI--IMPROVEMENTS TO REGULATION OF BANK AND SAVINGS ASSOCIATION 
             HOLDING COMPANIES AND DEPOSITORY INSTITUTIONS

SEC. 601. SHORT TITLE.

    This title may be cited as the ``Bank and Savings 
Association Holding Company and Depository Institution 
Regulatory Improvements Act of 2010''.

SEC. 602. DEFINITION.

    For purposes of this title, a company is a ``commercial 
firm'' if the annual gross revenues derived by the company and 
all of its affiliates from activities that are financial in 
nature (as defined in section 4(k) of the Bank Holding Company 
Act of 1956 (12 U.S.C. 1843(k))) and, if applicable, from the 
ownership or control of one or more insured depository 
institutions, represent less than 15 percent of the 
consolidated annual gross revenues of the company.

SEC. 603. MORATORIUM AND STUDY ON TREATMENT OF CREDIT CARD BANKS, 
                    INDUSTRIAL LOAN COMPANIES, AND CERTAIN OTHER 
                    COMPANIES UNDER THE BANK HOLDING COMPANY ACT OF 
                    1956.

    (a) Moratorium.--
            (1) Definitions.--In this subsection--
                    (A) the term ``credit card bank'' means an 
                institution described in section 2(c)(2)(F) of 
                the Bank Holding Company Act of 1956 (12 U.S.C. 
                1841(c)(2)(F));
                    (B) the term ``industrial bank'' means an 
                institution described in section 2(c)(2)(H) of 
                the Bank Holding Company Act of 1956 (12 U.S.C. 
                1841(c)(2)(H)); and
                    (C) the term ``trust bank'' means an 
                institution described in section 2(c)(2)(D) of 
                the Bank Holding Company Act of 1956 (12 U.S.C. 
                1841(c)(2)(D)).
            (2) Moratorium on provision of deposit insurance.--
        The Corporation may not approve an application for 
        deposit insurance under section 5 of the Federal 
        Deposit Insurance Act (12 U.S.C. 1815) that is received 
        after November 23, 2009, for an industrial bank, a 
        credit card bank, or a trust bank that is directly or 
        indirectly owned or controlled by a commercial firm.
            (3) Change in control.--
                    (A) In general.--Except as provided in 
                subparagraph (B), the appropriate Federal 
                banking agency shall disapprove a change in 
                control, as provided in section 7(j) of the 
                Federal Deposit Insurance Act (12 U.S.C. 
                1817(j)), of an industrial bank, a credit card 
                bank, or a trust bank if the change in control 
                would result in direct or indirect control of 
                the industrial bank, credit card bank, or trust 
                bank by a commercial firm.
                    (B) Exceptions.--Subparagraph (A) shall not 
                apply to a change in control of an industrial 
                bank, credit card bank, or trust bank--
                            (i) that--
                                    (I) is in danger of 
                                default, as determined by the 
                                appropriate Federal banking 
                                agency;
                                    (II) results from the 
                                merger or whole acquisition of 
                                a commercial firm that directly 
                                or indirectly controls the 
                                industrial bank, credit card 
                                bank, or trust bank in a bona 
                                fide merger with or acquisition 
                                by another commercial firm, as 
                                determined by the appropriate 
                                Federal banking agency; or
                                    (III) results from an 
                                acquisition of voting shares of 
                                a publicly traded company that 
                                controls an industrial bank, 
                                credit card bank, or trust 
                                bank, if, after the 
                                acquisition, the acquiring 
                                shareholder (or group of 
                                shareholders acting in concert) 
                                holds less than 25 percent of 
                                any class of the voting shares 
                                of the company; and
                            (ii) that has obtained all 
                        regulatory approvals otherwise required 
                        for such change of control under any 
                        applicable Federal or State law, 
                        including section 7(j) of the Federal 
                        Deposit Insurance Act (12 U.S.C. 
                        1817(j)).
            (4) Sunset.--This subsection shall cease to have 
        effect 3 years after the date of enactment of this Act.
    (b) Government Accountability Office Study of Exceptions 
Under the Bank Holding Company Act of 1956.--
            (1) Study required.--The Comptroller General of the 
        United States shall carry out a study to determine 
        whether it is necessary, in order to strengthen the 
        safety and soundness of institutions or the stability 
        of the financial system, to eliminate the exceptions 
        under section 2 of the Bank Holding Company Act of 1956 
        (12 U.S.C. 1841) for institutions described in--
                    (A) section 2(a)(5)(E) of the Bank Holding 
                Company Act of 1956 (12 U.S.C. 1841(a)(5)(E));
                    (B) section 2(a)(5)(F) of the Bank Holding 
                Company Act of 1956 (12 U.S.C. 1841(a)(5)(F));
                    (C) section 2(c)(2)(D) of the Bank Holding 
                Company Act of 1956 (12 U.S.C. 1841(c)(2)(D));
                    (D) section 2(c)(2)(F) of the Bank Holding 
                Company Act of 1956 (12 U.S.C. 1841(c)(2)(F));
                    (E) section 2(c)(2)(H) of the Bank Holding 
                Company Act of 1956 (12 U.S.C. 1841(c)(2)(H)); 
                and
                    (F) section 2(c)(2)(B) of the Bank Holding 
                Company Act of 1956 (12 U.S.C. 1841(c)(2)(B)).
            (2) Content of study.--
                    (A) In general.--The study required under 
                paragraph (1), with respect to the institutions 
                referenced in each of subparagraphs (A) through 
                (E) of paragraph (1), shall, to the extent 
                feasible be based on information provided to 
                the Comptroller General by the appropriate 
                Federal or State regulator, and shall--
                            (i) identify the types and number 
                        of institutions excepted from section 2 
                        of the Bank Holding Company Act of 1956 
                        (12 U.S.C. 1841) under each of the 
                        subparagraphs described in 
                        subparagraphs (A) through (E) of 
                        paragraph (1);
                            (ii) generally describe the size 
                        and geographic locations of the 
                        institutions described in clause (i);
                            (iii) determine the extent to which 
                        the institutions described in clause 
                        (i) are held by holding companies that 
                        are commercial firms;
                            (iv) determine whether the 
                        institutions described in clause (i) 
                        have any affiliates that are commercial 
                        firms;
                            (v) identify the Federal banking 
                        agency responsible for the supervision 
                        of the institutions described in clause 
                        (i) on and after the transfer date;
                            (vi) determine the adequacy of the 
                        Federal bank regulatory framework 
                        applicable to each category of 
                        institution described in clause (i), 
                        including any restrictions (including 
                        limitations on affiliate transactions 
                        or cross-marketing) that apply to 
                        transactions between an institution, 
                        the holding company of the institution, 
                        and any other affiliate of the 
                        institution; and
                            (vii) evaluate the potential 
                        consequences of subjecting the 
                        institutions described in clause (i) to 
                        the requirements of the Bank Holding 
                        Company Act of 1956, including with 
                        respect to the availability and 
                        allocation of credit, the stability of 
                        the financial system and the economy, 
                        the safe and sound operation of each 
                        category of institution, and the impact 
                        on the types of activities in which 
                        such institutions, and the holding 
                        companies of such institutions, may 
                        engage.
                    (B) Savings associations.--With respect to 
                institutions described in paragraph (1)(F), the 
                study required under paragraph (1) shall--
                            (i) determine the adequacy of the 
                        Federal bank regulatory framework 
                        applicable to such institutions, 
                        including any restrictions (including 
                        limitations on affiliate transactions 
                        or cross-marketing) that apply to 
                        transactions between an institution, 
                        the holding company of the institution, 
                        and any other affiliate of the 
                        institution; and
                            (ii) evaluate the potential 
                        consequences of subjecting the 
                        institutions described in paragraph 
                        (1)(F) to the requirements of the Bank 
                        Holding Company Act of 1956, including 
                        with respect to the availability and 
                        allocation of credit, the stability of 
                        the financial system and the economy, 
                        the safe and sound operation of such 
                        institutions, and the impact on the 
                        types of activities in which such 
                        institutions, and the holding companies 
                        of such institutions, may engage.
            (3) Report.--Not later than 18 months after the 
        date of enactment of this Act, the Comptroller General 
        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 a 
        report on the study required under paragraph (1).

SEC. 604. REPORTS AND EXAMINATIONS OF HOLDING COMPANIES; REGULATION OF 
                    FUNCTIONALLY REGULATED SUBSIDIARIES.

    (a) Reports by Bank Holding Companies.--Sections 5(c)(1) of 
the Bank Holding Company Act of 1956 (12 U.S.C. 1844(c)(1)) is 
amended--
            (1) by striking subclause (A)(ii) and inserting the 
        following:
                            ``(ii) compliance by the bank 
                        holding company or subsidiary with--
                                    ``(I) this Act;
                                    ``(II) Federal laws that 
                                the Board has specific 
                                jurisdiction to enforce against 
                                the company or subsidiary; and
                                    ``(III) other than in the 
                                case of an insured depository 
                                institution or functionally 
                                regulated subsidiary, any other 
                                applicable provision of Federal 
                                law.'';
            (2) by striking subparagraph (B) and inserting the 
        following:
                    ``(B) Use of existing reports and other 
                supervisory information.--The Board shall, to 
                the fullest extent possible, use--
                            ``(i) reports and other supervisory 
                        information that the bank holding 
                        company or any subsidiary thereof has 
                        been required to provide to other 
                        Federal or State regulatory agencies;
                            ``(ii) externally audited financial 
                        statements of the bank holding company 
                        or subsidiary;
                            ``(iii) information otherwise 
                        available from Federal or State 
                        regulatory agencies; and
                            ``(iv) information that is 
                        otherwise required to be reported 
                        publicly.''; and
            (3) by adding at the end the following:
                    ``(C) Availability.--Upon the request of 
                the Board, the bank holding company or a 
                subsidiary of the bank holding company shall 
                promptly provide to the Board any information 
                described in clauses (i) through (iii) of 
                subparagraph (B).''.
    (b) Examinations of Bank Holding Companies.--Section 
5(c)(2) of the Bank Holding Company Act of 1956 (12 U.S.C. 
1844(c)(2)) is amended to read as follows:
            ``(2) Examinations.--
                    ``(A) In general.--Subject to subtitle B of 
                the Consumer Financial Protection Act of 2010, 
                the Board may make examinations of a bank 
                holding company and each subsidiary of a bank 
                holding company in order to--
                            ``(i) inform the Board of--
                                    ``(I) the nature of the 
                                operations and financial 
                                condition of the bank holding 
                                company and the subsidiary;
                                    ``(II) the financial, 
                                operational, and other risks 
                                within the bank holding company 
                                system that may pose a threat 
                                to--
                                            ``(aa) the safety 
                                        and soundness of the 
                                        bank holding company or 
                                        of any depository 
                                        institution subsidiary 
                                        of the bank holding 
                                        company; or
                                            ``(bb) the 
                                        stability of the 
                                        financial system of the 
                                        United States; and
                                    ``(III) the systems of the 
                                bank holding company for 
                                monitoring and controlling the 
                                risks described in subclause 
                                (II); and
                            ``(ii) monitor the compliance of 
                        the bank holding company and the 
                        subsidiary with--
                                    ``(I) this Act;
                                    ``(II) Federal laws that 
                                the Board has specific 
                                jurisdiction to enforce against 
                                the company or subsidiary; and
                                    ``(III) other than in the 
                                case of an insured depository 
                                institution or functionally 
                                regulated subsidiary, any other 
                                applicable provisions of 
                                Federal law.
                    ``(B) Use of reports to reduce 
                examinations.--For purposes of this paragraph, 
                the Board shall, to the fullest extent 
                possible, rely on--
                            ``(i) examination reports made by 
                        other Federal or State regulatory 
                        agencies relating to a bank holding 
                        company and any subsidiary of a bank 
                        holding company; and
                            ``(ii) the reports and other 
                        information required under paragraph 
                        (1).
                    ``(C) Coordination with other regulators.--
                The Board shall--
                            ``(i) provide reasonable notice to, 
                        and consult with, the appropriate 
                        Federal banking agency, the Securities 
                        and Exchange Commission, the Commodity 
                        Futures Trading Commission, or State 
                        regulatory agency, as appropriate, for 
                        a subsidiary that is a depository 
                        institution or a functionally regulated 
                        subsidiary of a bank holding company 
                        before commencing an examination of the 
                        subsidiary under this section; and
                            ``(ii) to the fullest extent 
                        possible, avoid duplication of 
                        examination activities, reporting 
                        requirements, and requests for 
                        information.''.
    (c) Authority To Regulate Functionally Regulated 
Subsidiaries of Bank Holding Companies.--The Bank Holding 
Company Act of 1956 (12 U.S.C. 1841 et seq.) is amended--
            (1) in section 5(c)(5)(B) (12 U.S.C. 
        1844(c)(5)(B)), by striking clause (v) and inserting 
        the following:
                            ``(v) an entity that is subject to 
                        regulation by, or registration with, 
                        the Commodity Futures Trading 
                        Commission, with respect to activities 
                        conducted as a futures commission 
                        merchant, commodity trading adviser, 
                        commodity pool, commodity pool 
                        operator, swap execution facility, swap 
                        data repository, swap dealer, major 
                        swap participant, and activities that 
                        are incidental to such commodities and 
                        swaps activities.''; and
            (2) by striking section 10A (12 U.S.C. 1848a).
    (d) Acquisitions of Banks.--Section 3(c) of the Bank 
Holding Company Act of 1956 (12 U.S.C. 1842(c)) is amended by 
adding at the end the following:
            ``(7) Financial stability.--In every case, the 
        Board shall take into consideration the extent to which 
        a proposed acquisition, merger, or consolidation would 
        result in greater or more concentrated risks to the 
        stability of the United States banking or financial 
        system.''.
    (e) Acquisitions of Nonbanks.--
            (1) Notice procedures.--Section 4(j)(2)(A) of the 
        Bank Holding Company Act of 1956 (12 U.S.C. 
        1843(j)(2)(A)) is amended by striking ``or unsound 
        banking practices'' and inserting ``unsound banking 
        practices, or risk to the stability of the United 
        States banking or financial system''.
            (2) Activities that are financial in nature.--
        Section 4(k)(6)(B) of the Bank Holding Company Act of 
        1956 (12 U.S.C. 1843(k)(6)(B)) is amended to read as 
        follows:
                    ``(B) Approval not required for certain 
                financial activities.--
                            ``(i) In general.--Except as 
                        provided in subsection (j) with regard 
                        to the acquisition of a savings 
                        association and clause (ii), a 
                        financial holding company may commence 
                        any activity, or acquire any company, 
                        pursuant to paragraph (4) or any 
                        regulation prescribed or order issued 
                        under paragraph (5), without prior 
                        approval of the Board.
                            ``(ii) Exception.--A financial 
                        holding company may not acquire a 
                        company, without the prior approval of 
                        the Board, in a transaction in which 
                        the total consolidated assets to be 
                        acquired by the financial holding 
                        company exceed $10,000,000,000.
                            ``(iii) Hart-scott-rodino filing 
                        requirement.--Solely for purposes of 
                        section 7A(c)(8) of the Clayton Act (15 
                        U.S.C. 18a(c)(8)), the transactions 
                        subject to the requirements of this 
                        paragraph shall be treated as if the 
                        approval of the Board is not 
                        required.''.
    (f) Bank Merger Act Transactions.--Section 18(c)(5) of the 
Federal Deposit Insurance Act (12 U.S.C. 1828(c)(5)) is 
amended, in the matter immediately following subparagraph (B), 
by striking ``and the convenience and needs of the community to 
be served'' and inserting ``the convenience and needs of the 
community to be served, and the risk to the stability of the 
United States banking or financial system''.
    (g) Reports by Savings and Loan Holding Companies.--Section 
10(b)(2) of the Home Owners' Loan Act (12 U.S.C. 1467a(b)(2) is 
amended--
            (1) by striking ``Each savings'' and inserting the 
        following:
                    ``(A) In general.--Each savings''; and
            (2) by adding at the end the following:
                    ``(B) Use of existing reports and other 
                supervisory information.--The Board shall, to 
                the fullest extent possible, use--
                            ``(i) reports and other supervisory 
                        information that the savings and loan 
                        holding company or any subsidiary 
                        thereof has been required to provide to 
                        other Federal or State regulatory 
                        agencies;
                            ``(ii) externally audited financial 
                        statements of the savings and loan 
                        holding company or subsidiary;
                            ``(iii) information that is 
                        otherwise available from Federal or 
                        State regulatory agencies; and
                            ``(iv) information that is 
                        otherwise required to be reported 
                        publicly.
                    ``(C) Availability.--Upon the request of 
                the Board, a savings and loan holding company 
                or a subsidiary of a savings and loan holding 
                company shall promptly provide to the Board any 
                information described in clauses (i) through 
                (iii) of subparagraph (B).''.
    (h) Examination of Savings and Loan Holding Companies.--
            (1) Definitions.--Section 2 of the Home Owners' 
        Loan Act (12 U.S.C. 1462) is amended by adding at the 
        end the following:
            ``(10) Appropriate federal banking agency.--The 
        term `appropriate Federal banking agency' has the same 
        meaning as in section 3(q) of the Federal Deposit 
        Insurance Act (12 U.S.C. 1813(q)).
            ``(11) Functionally regulated subsidiary.--The term 
        `functionally regulated subsidiary' has the same 
        meaning as in section 5(c)(5) of the Bank Holding 
        Company Act of 1956 (12 U.S.C. 1844(c)(5)).''.
            (2) Examination.--Section 10(b) of the Home Owners' 
        Loan Act (12 U.S.C. 1467a(b)) is amended by striking 
        paragraph (4) and inserting the following:
            ``(4) Examinations.--
                    ``(A) In general.--Subject to subtitle B of 
                the Consumer Financial Protection Act of 2010, 
                the Board may make examinations of a savings 
                and loan holding company and each subsidiary of 
                a savings and loan holding company system, in 
                order to--
                            ``(i) inform the Board of--
                                    ``(I) the nature of the 
                                operations and financial 
                                condition of the savings and 
                                loan holding company and the 
                                subsidiary;
                                    ``(II) the financial, 
                                operational, and other risks 
                                within the savings and loan 
                                holding company system that may 
                                pose a threat to--
                                            ``(aa) the safety 
                                        and soundness of the 
                                        savings and loan 
                                        holding company or of 
                                        any depository 
                                        institution subsidiary 
                                        of the savings and loan 
                                        holding company; or
                                            ``(bb) the 
                                        stability of the 
                                        financial system of the 
                                        United States; and
                                    ``(III) the systems of the 
                                savings and loan holding 
                                company for monitoring and 
                                controlling the risks described 
                                in subclause (II); and
                            ``(ii) monitor the compliance of 
                        the savings and loan holding company 
                        and the subsidiary with--
                                    ``(I) this Act;
                                    ``(II) Federal laws that 
                                the Board has specific 
                                jurisdiction to enforce against 
                                the company or subsidiary; and
                                    ``(III) other than in the 
                                case of an insured depository 
                                institution or functionally 
                                regulated subsidiary, any other 
                                applicable provisions of 
                                Federal law.
                    ``(B) Use of reports to reduce 
                examinations.--For purposes of this subsection, 
                the Board shall, to the fullest extent 
                possible, rely on--
                            ``(i) the examination reports made 
                        by other Federal or State regulatory 
                        agencies relating to a savings and loan 
                        holding company and any subsidiary; and
                            ``(ii) the reports and other 
                        information required under paragraph 
                        (2).
                    ``(C) Coordination with other regulators.--
                The Board shall--
                            ``(i) provide reasonable notice to, 
                        and consult with, the appropriate 
                        Federal banking agency, the Securities 
                        and Exchange Commission, the Commodity 
                        Futures Trading Commission, or State 
                        regulatory agency, as appropriate, for 
                        a subsidiary that is a depository 
                        institution or a functionally regulated 
                        subsidiary of a savings and loan 
                        holding company before commencing an 
                        examination of the subsidiary under 
                        this section; and
                            ``(ii) to the fullest extent 
                        possible, avoid duplication of 
                        examination activities, reporting 
                        requirements, and requests for 
                        information.''.
    (i) Definition of the Term ``Savings and Loan Holding 
Company''.--Section 10(a)(1)(D)(ii) of the Home Owners' Loan 
Act (12 U.S.C. 1467a(a)(1)(D)(ii)) is amended to read as 
follows:
                            ``(ii) Exclusion.--The term 
                        `savings and loan holding company' does 
                        not include--
                                    ``(I) a bank holding 
                                company that is registered 
                                under, and subject to, the Bank 
                                Holding Company Act of 1956 (12 
                                U.S.C. 1841 et seq.), or to any 
                                company directly or indirectly 
                                controlled by such company 
                                (other than a savings 
                                association);
                                    ``(II) a company that 
                                controls a savings association 
                                that functions solely in a 
                                trust or fiduciary capacity as 
                                described in section 2(c)(2)(D) 
                                of the Bank Holding Company Act 
                                of 1956 (12 U.S.C. 
                                1841(c)(2)(D)); or
                                    ``(III) a company described 
                                in subsection (c)(9)(C) solely 
                                by virtue of such company's 
                                control of an intermediate 
                                holding company established 
                                pursuant to section 10A.''.
    (j) Effective Date.--The amendments made by this section 
shall take effect on the transfer date.

SEC. 605. ASSURING CONSISTENT OVERSIGHT OF PERMISSIBLE ACTIVITIES OF 
                    DEPOSITORY INSTITUTION SUBSIDIARIES OF HOLDING 
                    COMPANIES.

    (a) In General.--The Federal Deposit Insurance Act (12 
U.S.C. 1811 et seq.) is amended by inserting after section 25 
the following new section:

``SEC. 26. ASSURING CONSISTENT OVERSIGHT OF SUBSIDIARIES OF HOLDING 
                    COMPANIES.

    ``(a) Definitions.--For purposes of this section:
            ``(1) Board.--The term `Board' means the Board of 
        Governors of the Federal Reserve System.
            ``(2) Functionally regulated subsidiary.--The term 
        `functionally regulated subsidiary' has the same 
        meaning as in section 5(c)(5) of the Bank Holding 
        Company Act.
            ``(3) Lead insured depository institution.--The 
        term `lead insured depository institution' has the same 
        meaning as in section 2(o)(8) of the Bank Holding 
        Company Act.
    ``(b) Examination Requirements.--Subject to subtitle B of 
the Consumer Financial Protection Act of 2010, the Board shall 
examine the activities of a nondepository institution 
subsidiary (other than a functionally regulated subsidiary or a 
subsidiary of a depository institution) of a depository 
institution holding company that are permissible for the 
insured depository institution subsidiaries of the depository 
institution holding company in the same manner, subject to the 
same standards, and with the same frequency as would be 
required if such activities were conducted in the lead insured 
depository institution of the depository institution holding 
company.
    ``(c) State Coordination.--
            ``(1) Consultation and coordination.--If a 
        nondepository institution subsidiary is supervised by a 
        State bank supervisor or other State regulatory 
        authority, the Board, in conducting the examinations 
        required in subsection (b), shall consult and 
        coordinate with such State regulator.
            ``(2) Alternating examinations permitted.--The 
        examinations required under subsection (b) may be 
        conducted in joint or alternating manner with a State 
        regulator, if the Board determines that an examination 
        of a nondepository institution subsidiary conducted by 
        the State carries out the purposes of this section.
    ``(d) Appropriate Federal Banking Agency Backup Examination 
Authority.--
            ``(1) In general.--In the event that the Board does 
        not conduct examinations required under subsection (b) 
        in the same manner, subject to the same standards, and 
        with the same frequency as would be required if such 
        activities were conducted by the lead insured 
        depository institution subsidiary of the depository 
        institution holding company, the appropriate Federal 
        banking agency for the lead insured depository 
        institution may recommend in writing (which shall 
        include a written explanation of the concerns giving 
        rise to the recommendation) that the Board perform the 
        examination required under subsection (b).
            ``(2) Examination by an appropriate federal banking 
        agency.--If the Board does not, before the end of the 
        60-day period beginning on the date on which the Board 
        receives a recommendation under paragraph (1), begin an 
        examination as required under subsection (b) or provide 
        a written explanation or plan to the appropriate 
        Federal banking agency making such recommendation 
        responding to the concerns raised by the appropriate 
        Federal banking agency for the lead insured depository 
        institution, the appropriate Federal banking agency for 
        the lead insured depository institution may, subject to 
        the Consumer Financial Protection Act of 2010, examine 
        the activities that are permissible for a depository 
        institution subsidiary conducted by such nondepository 
        institution subsidiary (other than a functionally 
        regulated subsidiary or a subsidiary of a depository 
        institution) of the depository institution holding 
        company as if the nondepository institution subsidiary 
        were an insured depository institution for which the 
        appropriate Federal banking agency of the lead insured 
        depository institution was the appropriate Federal 
        banking agency, to determine whether the activities--
                    ``(A) pose a material threat to the safety 
                and soundness of any insured depository 
                institution subsidiary of the depository 
                institution holding company;
                    ``(B) are conducted in accordance with 
                applicable Federal law; and
                    ``(C) are subject to appropriate systems 
                for monitoring and controlling the financial, 
                operating, and other material risks of the 
                activities that may pose a material threat to 
                the safety and soundness of the insured 
                depository institution subsidiaries of the 
                holding company.
            ``(3) Agency coordination with the board.--An 
        appropriate Federal banking agency that conducts an 
        examination pursuant to paragraph (2) shall coordinate 
        examination of the activities of nondepository 
        institution subsidiaries described in subsection (b) 
        with the Board in a manner that--
                    ``(A) avoids duplication;
                    ``(B) shares information relevant to the 
                supervision of the depository institution 
                holding company;
                    ``(C) achieves the objectives of subsection 
                (b); and
                    ``(D) ensures that the depository 
                institution holding company and the 
                subsidiaries of the depository institution 
                holding company are not subject to conflicting 
                supervisory demands by such agency and the 
                Board.
            ``(4) Fee permitted for examination costs.--An 
        appropriate Federal banking agency that conducts an 
        examination or enforcement action pursuant to this 
        section may collect an assessment, fee, or such other 
        charge from the subsidiary as the appropriate Federal 
        banking agency determines necessary or appropriate to 
        carry out the responsibilities of the appropriate 
        Federal banking agency in connection with such 
        examination.
    ``(e) Referrals for Enforcement by Appropriate Federal 
Banking Agency.--
            ``(1) Recommendation of enforcement action.--The 
        appropriate Federal banking agency for the lead insured 
        depository institution, based upon its examination of a 
        nondepository institution subsidiary conducted pursuant 
        to subsection (d), or other relevant information, may 
        submit to the Board, in writing, a recommendation that 
        the Board take enforcement action against such 
        nondepository institution subsidiary, together with an 
        explanation of the concerns giving rise to the 
        recommendation, if the appropriate Federal banking 
        agency determines (by a vote of its members, if 
        applicable) that the activities of the nondepository 
        institution subsidiary pose a material threat to the 
        safety and soundness of any insured depository 
        institution subsidiary of the depository institution 
        holding company.
            ``(2) Back-up authority of the appropriate federal 
        banking agency.--If, within the 60-day period beginning 
        on the date on which the Board receives a 
        recommendation under paragraph (1), the Board does not 
        take enforcement action against the nondepository 
        institution subsidiary or provide a plan for 
        supervisory or enforcement action that is acceptable to 
        the appropriate Federal banking agency that made the 
        recommendation pursuant to paragraph (1), such agency 
        may take the recommended enforcement action against the 
        nondepository institution subsidiary, in the same 
        manner as if the nondepository institution subsidiary 
        were an insured depository institution for which the 
        agency was the appropriate Federal banking agency.
    ``(f) Coordination Among Appropriate Federal Banking 
Agencies.--Each Federal banking agency, prior to or when 
exercising authority under subsection (d) or (e) shall--
            ``(1) provide reasonable notice to, and consult 
        with, the appropriate Federal banking agency or State 
        bank supervisor (or other State regulatory agency) of 
        the nondepository institution subsidiary of a 
        depository institution holding company that is 
        described in subsection (d) before commencing any 
        examination of the subsidiary;
            ``(2) to the fullest extent possible--
                    ``(A) rely on the examinations, 
                inspections, and reports of the appropriate 
                Federal banking agency or the State bank 
                supervisor (or other State regulatory agency) 
                of the subsidiary;
                    ``(B) avoid duplication of examination 
                activities, reporting requirements, and 
                requests for information; and
                    ``(C) ensure that the depository 
                institution holding company and the 
                subsidiaries of the depository institution 
                holding company are not subject to conflicting 
                supervisory demands by the appropriate Federal 
                banking agencies.
    ``(g) Rule of Construction.--No provision of this section 
shall be construed as limiting any authority of the Board, the 
Corporation, or the Comptroller of the Currency under any other 
provision of law.''.
    (b) Effective Date.--The amendment made by subsection (a) 
shall take effect on the transfer date.

SEC. 606. REQUIREMENTS FOR FINANCIAL HOLDING COMPANIES TO REMAIN WELL 
                    CAPITALIZED AND WELL MANAGED.

    (a) Amendment.--Section 4(l)(1) of the Bank Holding Company 
Act of 1956 (12 U.S.C. 1843(l)(1)) is amended--
            (1) in subparagraph (B), by striking ``and'' at the 
        end;
            (2) by redesignating subparagraph (C) as 
        subparagraph (D);
            (3) by inserting after subparagraph (B) the 
        following:
                    ``(C) the bank holding company is well 
                capitalized and well managed; and''; and
            (4) in subparagraph (D)(ii), as so redesignated, by 
        striking ``subparagraphs (A) and (B)'' and inserting 
        ``subparagraphs (A), (B), and (C)''.
    (b) Home Owners' Loan Act Amendment.--Section 10(c)(2) of 
the Home Owners' Loan Act (12 U.S.C. 1467a(c)(2)) is amended by 
adding at the end the following new subparagraph:
                    ``(H) Any activity that is permissible for 
                a financial holding company (as such term is 
                defined under section 2(p) of the Bank Holding 
                Company Act of 1956 (12 U.S.C. 1841(p)) to 
                conduct under section 4(k) of the Bank Holding 
                Company Act of 1956 if--
                            ``(i) the savings and loan holding 
                        company meets all of the criteria to 
                        qualify as a financial holding company, 
                        and complies with all of the 
                        requirements applicable to a financial 
                        holding company, under sections 4(l) 
                        and 4(m) of the Bank Holding Company 
                        Act and section 804(c) of the Community 
                        Reinvestment Act of 1977 (12 U.S.C. 
                        2903(c)) as if the savings and loan 
                        holding company was a bank holding 
                        company; and
                            ``(ii) the savings and loan holding 
                        company conducts the activity in 
                        accordance with the same terms, 
                        conditions, and requirements that apply 
                        to the conduct of such activity by a 
                        bank holding company under the Bank 
                        Holding Company Act of 1956 and the 
                        Board's regulations and interpretations 
                        under such Act.''.
    (c) Effective Date.--The amendments made by this section 
shall take effect on the transfer date.

SEC. 607. STANDARDS FOR INTERSTATE ACQUISITIONS.

    (a) Acquisition of Banks.--Section 3(d)(1)(A) of the Bank 
Holding Company Act of 1956 (12 U.S.C. 1842(d)(1)(A)) is 
amended by striking ``adequately capitalized and adequately 
managed'' and inserting ``well capitalized and well managed''.
    (b) Interstate Bank Mergers.--Section 44(b)(4)(B) of the 
Federal Deposit Insurance Act (12 U.S.C. 1831u(b)(4)(B)) is 
amended by striking ``will continue to be adequately 
capitalized and adequately managed'' and inserting ``will be 
well capitalized and well managed''.
    (c) Effective Date.--The amendments made by this section 
shall take effect on the transfer date.

SEC. 608. ENHANCING EXISTING RESTRICTIONS ON BANK TRANSACTIONS WITH 
                    AFFILIATES.

    (a) Affiliate Transactions.--Section 23A of the Federal 
Reserve Act (12 U.S.C. 371c) is amended--
            (1) in subsection (b)--
                    (A) in paragraph (1), by striking 
                subparagraph (D) and inserting the following:
                    ``(D) any investment fund with respect to 
                which a member bank or affiliate thereof is an 
                investment adviser; and''; and
                    (B) in paragraph (7)--
                            (i) in subparagraph (A), by 
                        inserting before the semicolon at the 
                        end the following: ``, including a 
                        purchase of assets subject to an 
                        agreement to repurchase'';
                            (ii) in subparagraph (C), by 
                        striking ``, including assets subject 
                        to an agreement to repurchase,'';
                            (iii) in subparagraph (D)--
                                    (I) by inserting ``or other 
                                debt obligations'' after 
                                ``acceptance of securities''; 
                                and
                                    (II) by striking ``or'' at 
                                the end; and
                            (iv) by adding at the end the 
                        following:
                    ``(F) a transaction with an affiliate that 
                involves the borrowing or lending of 
                securities, to the extent that the transaction 
                causes a member bank or a subsidiary to have 
                credit exposure to the affiliate; or
                    ``(G) a derivative transaction, as defined 
                in paragraph (3) of section 5200(b) of the 
                Revised Statutes of the United States (12 
                U.S.C. 84(b)), with an affiliate, to the extent 
                that the transaction causes a member bank or a 
                subsidiary to have credit exposure to the 
                affiliate;'';
            (2) in subsection (c)--
                    (A) in paragraph (1)--
                            (i) in the matter preceding 
                        subparagraph (A), by striking 
                        ``subsidiary'' and all that follows 
                        through ``time of the transaction'' and 
                        inserting ``subsidiary, and any credit 
                        exposure of a member bank or a 
                        subsidiary to an affiliate resulting 
                        from a securities borrowing or lending 
                        transaction, or a derivative 
                        transaction, shall be secured at all 
                        times''; and
                            (ii) in each of subparagraphs (A) 
                        through (D), by striking ``or letter of 
                        credit'' and inserting ``letter of 
                        credit, or credit exposure'';
                    (B) by striking paragraph (2);
                    (C) by redesignating paragraphs (3) through 
                (5) as paragraphs (2) through (4), 
                respectively;
                    (D) in paragraph (2), as so redesignated, 
                by inserting before the period at the end ``, 
                or credit exposure to an affiliate resulting 
                from a securities borrowing or lending 
                transaction, or derivative transaction''; and
                    (E) in paragraph (3), as so redesignated--
                            (i) by inserting ``or other debt 
                        obligations'' after ``securities''; and
                            (ii) by striking ``or guarantee'' 
                        and all that follows through ``behalf 
                        of,'' and inserting ``guarantee, 
                        acceptance, or letter of credit issued 
                        on behalf of, or credit exposure from a 
                        securities borrowing or lending 
                        transaction, or derivative transaction 
                        to,'';
            (3) in subsection (d)(4), in the matter preceding 
        subparagraph (A), by striking ``or issuing'' and all 
        that follows through ``behalf of,'' and inserting 
        ``issuing a guarantee, acceptance, or letter of credit 
        on behalf of, or having credit exposure resulting from 
        a securities borrowing or lending transaction, or 
        derivative transaction to,''; and
            (4) in subsection (f)--
                    (A) in paragraph (2)--
                            (i) by striking ``or order'';
                            (ii) by striking ``if it finds'' 
                        and all that follows through the end of 
                        the paragraph and inserting the 
                        following: ``if--
                            ``(i) the Board finds the exemption 
                        to be in the public interest and 
                        consistent with the purposes of this 
                        section, and notifies the Federal 
                        Deposit Insurance Corporation of such 
                        finding; and
                            ``(ii) before the end of the 60-day 
                        period beginning on the date on which 
                        the Federal Deposit Insurance 
                        Corporation receives notice of the 
                        finding under clause (i), the Federal 
                        Deposit Insurance Corporation does not 
                        object, in writing, to the finding, 
                        based on a determination that the 
                        exemption presents an unacceptable risk 
                        to the Deposit Insurance Fund.'';
                            (iii) by striking the Board and 
                        inserting the following:
                    ``(A) In general.--The Board''; and
                            (iv) by adding at the end the 
                        following:
                    ``(B) Additional exemptions.--
                            ``(i) National banks.--The 
                        Comptroller of the Currency may, by 
                        order, exempt a transaction of a 
                        national bank from the requirements of 
                        this section if--
                                    ``(I) the Board and the 
                                Office of the Comptroller of 
                                the Currency jointly find the 
                                exemption to be in the public 
                                interest and consistent with 
                                the purposes of this section 
                                and notify the Federal Deposit 
                                Insurance Corporation of such 
                                finding; and
                                    ``(II) before the end of 
                                the 60-day period beginning on 
                                the date on which the Federal 
                                Deposit Insurance Corporation 
                                receives notice of the finding 
                                under subclause (I), the 
                                Federal Deposit Insurance 
                                Corporation does not object, in 
                                writing, to the finding, based 
                                on a determination that the 
                                exemption presents an 
                                unacceptable risk to the 
                                Deposit Insurance Fund.
                            ``(ii) State banks.--The Federal 
                        Deposit Insurance Corporation may, by 
                        order, exempt a transaction of a State 
                        nonmember bank, and the Board may, by 
                        order, exempt a transaction of a State 
                        member bank, from the requirements of 
                        this section if--
                                    ``(I) the Board and the 
                                Federal Deposit Insurance 
                                Corporation jointly find that 
                                the exemption is in the public 
                                interest and consistent with 
                                the purposes of this section; 
                                and
                                    ``(II) the Federal Deposit 
                                Insurance Corporation finds 
                                that the exemption does not 
                                present an unacceptable risk to 
                                the Deposit Insurance Fund.''; 
                                and
                    (B) by adding at the end the following:
            ``(4) Amounts of covered transactions.--The Board 
        may issue such regulations or interpretations as the 
        Board determines are necessary or appropriate with 
        respect to the manner in which a netting agreement may 
        be taken into account in determining the amount of a 
        covered transaction between a member bank or a 
        subsidiary and an affiliate, including the extent to 
        which netting agreements between a member bank or a 
        subsidiary and an affiliate may be taken into account 
        in determining whether a covered transaction is fully 
        secured for purposes of subsection (d)(4). An 
        interpretation under this paragraph with respect to a 
        specific member bank, subsidiary, or affiliate shall be 
        issued jointly with the appropriate Federal banking 
        agency for such member bank, subsidiary, or 
        affiliate.''.
    (b) Transactions With Affiliates.--Section 23B(e) of the 
Federal Reserve Act (12 U.S.C. 371c-1(e)) is amended--
            (1) by striking the undesignated matter following 
        subparagraph (B);
            (2) by redesignating subparagraphs (A) and (B) as 
        clauses (i) and (ii), respectively, and adjusting the 
        clause margins accordingly;
            (3) by redesignating paragraphs (1) and (2) as 
        subparagraphs (A) and (B), respectively, and adjusting 
        the subparagraph margins accordingly;
            (4) by striking ``The Board'' and inserting the 
        following:
            ``(1) In general.--The Board'';
            (5) in paragraph (1)(B), as so redesignated--
                    (A) in the matter preceding clause (i), by 
                inserting before ``regulations'' the following: 
                ``subject to paragraph (2), if the Board finds 
                that an exemption or exclusion is in the public 
                interest and is consistent with the purposes of 
                this section, and notifies the Federal Deposit 
                Insurance Corporation of such finding,''; and
                    (B) in clause (ii), by striking the comma 
                at the end and inserting a period; and
            (6) by adding at the end the following:
            ``(2) Exception.--The Board may grant an exemption 
        or exclusion under this subsection only if, during the 
        60-day period beginning on the date of receipt of 
        notice of the finding from the Board under paragraph 
        (1)(B), the Federal Deposit Insurance Corporation does 
        not object, in writing, to such exemption or exclusion, 
        based on a determination that the exemption presents an 
        unacceptable risk to the Deposit Insurance Fund.''.
    (c) Home Owners' Loan Act.--Section 11 of the Home Owners' 
Loan Act (12 U.S.C. 1468) is amended by adding at the end the 
following:
    ``(d) Exemptions.--
            ``(1) Federal savings associations.--The 
        Comptroller of the Currency may, by order, exempt a 
        transaction of a Federal savings association from the 
        requirements of this section if--
                    ``(A) the Board and the Office of the 
                Comptroller of the Currency jointly find the 
                exemption to be in the public interest and 
                consistent with the purposes of this section 
                and notify the Federal Deposit Insurance 
                Corporation of such finding; and
                    ``(B) before the end of the 60-day period 
                beginning on the date on which the Federal 
                Deposit Insurance Corporation receives notice 
                of the finding under subparagraph (A), the 
                Federal Deposit Insurance Corporation does not 
                object, in writing, to the finding, based on a 
                determination that the exemption presents an 
                unacceptable risk to the Deposit Insurance 
                Fund.
            ``(2) State savings association.--The Federal 
        Deposit Insurance Corporation may, by order, exempt a 
        transaction of a State savings association from the 
        requirements of this section if the Board and the 
        Federal Deposit Insurance Corporation jointly find 
        that--
                    ``(A) the exemption is in the public 
                interest and consistent with the purposes of 
                this section; and
                    ``(B) the exemption does not present an 
                unacceptable risk to the Deposit Insurance 
                Fund.''.
    (d) Effective Date.--The amendments made by this section 
shall take effect 1 year after the transfer date.

SEC. 609. ELIMINATING EXCEPTIONS FOR TRANSACTIONS WITH FINANCIAL 
                    SUBSIDIARIES.

    (a) Amendment.--Section 23A(e) of the Federal Reserve Act 
(12 U.S.C. 371c(e)) is amended--
            (1) by striking paragraph (3); and
            (2) by redesignating paragraph (4) as paragraph 
        (3).
    (b) Prospective Application of Amendment.--The amendments 
made by this section shall apply with respect to any covered 
transaction between a bank and a subsidiary of the bank, as 
those terms are defined in section 23A of the Federal Reserve 
Act (12 U.S.C. 371c), that is entered into on or after the date 
of enactment of this Act.
    (c) Effective Date.--The amendments made by this section 
shall take effect 1 year after the transfer date.

SEC. 610. LENDING LIMITS APPLICABLE TO CREDIT EXPOSURE ON DERIVATIVE 
                    TRANSACTIONS, REPURCHASE AGREEMENTS, REVERSE 
                    REPURCHASE AGREEMENTS, AND SECURITIES LENDING AND 
                    BORROWING TRANSACTIONS.

    (a) National Banks.--Section 5200(b) of the Revised 
Statutes of the United States (12 U.S.C. 84(b)) is amended--
            (1) in paragraph (1), by striking ``shall include'' 
        and all that follows through the end of the paragraph 
        and inserting the following: ``shall include--
                    ``(A) all direct or indirect advances of 
                funds to a person made on the basis of any 
                obligation of that person to repay the funds or 
                repayable from specific property pledged by or 
                on behalf of the person;
                    ``(B) to the extent specified by the 
                Comptroller of the Currency, any liability of a 
                national banking association to advance funds 
                to or on behalf of a person pursuant to a 
                contractual commitment; and
                    ``(C) any credit exposure to a person 
                arising from a derivative transaction, 
                repurchase agreement, reverse repurchase 
                agreement, securities lending transaction, or 
                securities borrowing transaction between the 
                national banking association and the person;'';
            (2) in paragraph (2), by striking the period at the 
        end and inserting ``; and''; and
            (3) by adding at the end the following:
            ``(3) the term `derivative transaction' includes 
        any transaction that is a contract, agreement, swap, 
        warrant, note, or option that is based, in whole or in 
        part, on the value of, any interest in, or any 
        quantitative measure or the occurrence of any event 
        relating to, one or more commodities, securities, 
        currencies, interest or other rates, indices, or other 
        assets.''.
    (b) Savings Associations.--Section 5(u)(3) of the Home 
Owners' Loan Act (12 U.S.C. 1464(u)(3)) is amended by striking 
``Director'' each place that term appears and inserting 
``Comptroller of the Currency''.
    (c) Effective Date.--The amendments made by this section 
shall take effect 1 year after the transfer date.

SEC. 611. CONSISTENT TREATMENT OF DERIVATIVE TRANSACTIONS IN LENDING 
                    LIMITS.

    (a) Amendment.--Section 18 of the Federal Deposit Insurance 
Act (12 U.S.C. 1828) is amended by adding at the end the 
following:
    ``(y) State Lending Limit Treatment of Derivatives 
Transactions.--An insured State bank may engage in a derivative 
transaction, as defined in section 5200(b)(3) of the Revised 
Statutes of the United States (12 U.S.C. 84(b)(3)), only if the 
law with respect to lending limits of the State in which the 
insured State bank is chartered takes into consideration credit 
exposure to derivative transactions.''.
    (b) Effective Date.--The amendment made by this section 
shall take effect 18 months after the transfer date.

SEC. 612. RESTRICTION ON CONVERSIONS OF TROUBLED BANKS.

    (a) Conversion of a National Banking Association.--The Act 
entitled ``An Act to provide for the conversion of national 
banking associations into and their merger or consolidation 
with State banks, and for other purposes.'' (12 U.S.C. 214 et 
seq.) is amended by adding at the end the following:

``SEC. 10. PROHIBITION ON CONVERSION.

    ``A national banking association may not convert to a State 
bank or State savings association during any period in which 
the national banking association is subject to a cease and 
desist order (or other formal enforcement order) issued by, or 
a memorandum of understanding entered into with, the 
Comptroller of the Currency with respect to a significant 
supervisory matter.''.
    (b) Conversion of a State Bank or Savings Association.--
Section 5154 of the Revised Statutes of the United States (12 
U.S.C. 35) is amended by adding at the end the following: ``The 
Comptroller of the Currency may not approve the conversion of a 
State bank or State savings association to a national banking 
association or Federal savings association during any period in 
which the State bank or State savings association is subject to 
a cease and desist order (or other formal enforcement order) 
issued by, or a memorandum of understanding entered into with, 
a State bank supervisor or the appropriate Federal banking 
agency with respect to a significant supervisory matter or a 
final enforcement action by a State Attorney General.''.
    (c) Conversion of a Federal Savings Association.--Section 
5(i) of the Home Owners' Loan Act (12 U.S.C. 1464(i)) is 
amended by adding at the end the following:
            ``(6) Limitation on certain conversions by federal 
        savings associations.--A Federal savings association 
        may not convert to a State bank or State savings 
        association during any period in which the Federal 
        savings association is subject to a cease and desist 
        order (or other formal enforcement order) issued by, or 
        a memorandum of understanding entered into with, the 
        Office of Thrift Supervision or the Comptroller of the 
        Currency with respect to a significant supervisory 
        matter.''.
    (d) Exception.--The prohibition on the approval of 
conversions under the amendments made by subsections (a), (b), 
and (c) shall not apply, if--
            (1) the Federal banking agency that would be the 
        appropriate Federal banking agency after the proposed 
        conversion gives the appropriate Federal banking agency 
        or State bank supervisor that issued the cease and 
        desist order (or other formal enforcement order) or 
        memorandum of understanding, as appropriate, written 
        notice of the proposed conversion including a plan to 
        address the significant supervisory matter in a manner 
        that is consistent with the safe and sound operation of 
        the institution;
            (2) within 30 days of receipt of the written notice 
        required under paragraph (1), the appropriate Federal 
        banking agency or State bank supervisor that issued the 
        cease and desist order (or other formal enforcement 
        order) or memorandum of understanding, as appropriate, 
        does not object to the conversion or the plan to 
        address the significant supervisory matter;
            (3) after conversion of the insured depository 
        institution, the appropriate Federal banking agency 
        after the conversion implements such plan; and
            (4) in the case of a final enforcement action by a 
        State Attorney General, approval of the conversion is 
        conditioned on compliance by the insured depository 
        institution with the terms of such final enforcement 
        action.
    (e) Notification of Pending Enforcement Actions.--
            (1) Copy of conversion application.--At the time an 
        insured depository institution files a conversion 
        application, the insured depository institution shall 
        transmit a copy of the conversion application to--
                    (A) the appropriate Federal banking agency 
                for the insured depository institution; and
                    (B) the Federal banking agency that would 
                be the appropriate Federal banking agency of 
                the insured depository institution after the 
                proposed conversion.
            (2) Notification and access to information.--Upon 
        receipt of a copy of the application described in 
        paragraph (1), the appropriate Federal banking agency 
        for the insured depository institution proposing the 
        conversion shall--
                    (A) notify the Federal banking agency that 
                would be the appropriate Federal banking agency 
                for the institution after the proposed 
                conversion in writing of any ongoing 
                supervisory or investigative proceedings that 
                the appropriate Federal banking agency for the 
                institution proposing to convert believes is 
                likely to result, in the near term and absent 
                the proposed conversion, in a cease and desist 
                order (or other formal enforcement order) or 
                memorandum of understanding with respect to a 
                significant supervisory matter; and
                    (B) provide the Federal banking agency that 
                would be the appropriate Federal banking agency 
                for the institution after the proposed 
                conversion access to all investigative and 
                supervisory information relating to the 
                proceedings described in subparagraph (A).

SEC. 613. DE NOVO BRANCHING INTO STATES.

    (a) National Banks.--Section 5155(g)(1)(A) of the Revised 
Statutes of the United States (12 U.S.C. 36(g)(1)(A)) is 
amended to read as follows:
                    ``(A) the law of the State in which the 
                branch is located, or is to be located, would 
                permit establishment of the branch, if the 
                national bank were a State bank chartered by 
                such State; and''.
    (b) State Insured Banks.--Section 18(d)(4)(A)(i) of the 
Federal Deposit Insurance Act (12 U.S.C. 1828(d)(4)(A)(i)) is 
amended to read as follows:
                            ``(i) the law of the State in which 
                        the branch is located, or is to be 
                        located, would permit establishment of 
                        the branch, if the bank were a State 
                        bank chartered by such State; and''.

SEC. 614. LENDING LIMITS TO INSIDERS.

    (a) Extensions of Credit.--Section 22(h)(9)(D)(i) of the 
Federal Reserve Act (12 U.S.C. 375b(9)(D)(i)) is amended--
            (1) by striking the period at the end and inserting 
        ``; or'';
            (2) by striking ``a person'' and inserting ``the 
        person'';
            (3) by striking ``extends credit by making'' and 
        inserting the following: ``extends credit to a person 
        by--
                                    ``(I) making''; and
            (4) by adding at the end the following:
                                    ``(II) having credit 
                                exposure to the person arising 
                                from a derivative transaction 
                                (as defined in section 5200(b) 
                                of the Revised Statutes of the 
                                United States (12 U.S.C. 
                                84(b))), repurchase agreement, 
                                reverse repurchase agreement, 
                                securities lending transaction, 
                                or securities borrowing 
                                transaction between the member 
                                bank and the person.''.
    (b) Effective Date.--The amendments made by this section 
shall take effect 1 year after the transfer date.

SEC. 615. LIMITATIONS ON PURCHASES OF ASSETS FROM INSIDERS.

    (a) Amendment to the Federal Deposit Insurance Act.--
Section 18 of the Federal Deposit Insurance Act (12 U.S.C. 
1828) is amended by adding at the end the following:
    ``(z) General Prohibition on Sale of Assets.--
            ``(1) In general.--An insured depository 
        institution may not purchase an asset from, or sell an 
        asset to, an executive officer, director, or principal 
        shareholder of the insured depository institution, or 
        any related interest of such person (as such terms are 
        defined in section 22(h) of Federal Reserve Act), 
        unless--
                    ``(A) the transaction is on market terms; 
                and
                    ``(B) if the transaction represents more 
                than 10 percent of the capital stock and 
                surplus of the insured depository institution, 
                the transaction has been approved in advance by 
                a majority of the members of the board of 
                directors of the insured depository institution 
                who do not have an interest in the transaction.
            ``(2) Rulemaking.--The Board of Governors of the 
        Federal Reserve System may issue such rules as may be 
        necessary to define terms and to carry out the purposes 
        of this subsection. Before proposing or adopting a rule 
        under this paragraph, the Board of Governors of the 
        Federal Reserve System shall consult with the 
        Comptroller of the Currency and the Corporation as to 
        the terms of the rule.''.
    (b) Amendments to the Federal Reserve Act.--Section 22(d) 
of the Federal Reserve Act (12 U.S.C. 375) is amended to read 
as follows:
    ``(d) [Reserved]''.
    (c) Effective Date.--The amendments made by this section 
shall take effect on the transfer date.

SEC. 616. REGULATIONS REGARDING CAPITAL LEVELS.

    (a) Capital Levels of Bank Holding Companies.--Section 5(b) 
of the Bank Holding Company Act of 1956 (12 U.S.C. 1844(b)) is 
amended--
            (1) by inserting after ``orders'' the following: 
        ``, including regulations and orders relating to the 
        capital requirements for bank holding companies,''; and
            (2) by adding at the end the following: ``In 
        establishing capital regulations pursuant to this 
        subsection, the Board shall seek to make such 
        requirements countercyclical, so that the amount of 
        capital required to be maintained by a company 
        increases in times of economic expansion and decreases 
        in times of economic contraction, consistent with the 
        safety and soundness of the company.''.
    (b) Capital Levels of Savings and Loan Holding Companies.--
Section 10(g)(1) of the Home Owners' Loan Act (12 U.S.C. 
1467a(g)(1)) is amended--
            (1) by inserting after ``orders'' the following: 
        ``, including regulations and orders relating to 
        capital requirements for savings and loan holding 
        companies,''; and
            (2) by inserting at the end the following: ``In 
        establishing capital regulations pursuant to this 
        subsection, the appropriate Federal banking agency 
        shall seek to make such requirements countercyclical so 
        that the amount of capital required to be maintained by 
        a company increases in times of economic expansion and 
        decreases in times of economic contraction, consistent 
        with the safety and soundness of the company.''.
    (c) Capital Levels of Insured Depository Institutions.--
Section 908(a)(1) of the International Lending Supervision Act 
of 1983 (12 U.S.C. 3907(a)(1)) is amended by adding at the end 
the following: ``Each appropriate Federal banking agency shall 
seek to make the capital standards required under this section 
or other provisions of Federal law for insured depository 
institutions countercyclical so that the amount of capital 
required to be maintained by an insured depository institution 
increases in times of economic expansion and decreases in times 
of economic contraction, consistent with the safety and 
soundness of the insured depository institution.''
    (d) Source of Strength.--The Federal Deposit Insurance Act 
(12 U.S.C. 1811 et seq.) is amended by inserting after section 
38 (12 U.S.C. 1831o) the following:

``SEC. 38A. SOURCE OF STRENGTH.

    ``(a) Holding Companies.--The appropriate Federal banking 
agency for a bank holding company or savings and loan holding 
company shall require the bank holding company or savings and 
loan holding company to serve as a source of financial strength 
for any subsidiary of the bank holding company or savings and 
loan holding company that is a depository institution.
    ``(b) Other Companies.--If an insured depository 
institution is not the subsidiary of a bank holding company or 
savings and loan holding company, the appropriate Federal 
banking agency for the insured depository institution shall 
require any company that directly or indirectly controls the 
insured depository institution to serve as a source of 
financial strength for such institution.
    ``(c) Reports.--The appropriate Federal banking agency for 
an insured depository institution described in subsection (b) 
may, from time to time, require the company, or a company that 
directly or indirectly controls the insured depository 
institution, to submit a report, under oath, for the purposes 
of--
            ``(1) assessing the ability of such company to 
        comply with the requirement under subsection (b); and
            ``(2) enforcing the compliance of such company with 
        the requirement under subsection (b).
    ``(d) Rules.--Not later than 1 year after the transfer 
date, as defined in section 311 of the Enhancing Financial 
Institution Safety and Soundness Act of 2010, the appropriate 
Federal banking agencies shall jointly issue final rules to 
carry out this section.
    ``(e) Definition.--In this section, the term `source of 
financial strength' means the ability of a company that 
directly or indirectly owns or controls an insured depository 
institution to provide financial assistance to such insured 
depository institution in the event of the financial distress 
of the insured depository institution.''.
    (e) Effective Date.--The amendments made by this section 
shall take effect on the transfer date.

SEC. 617. ELIMINATION OF ELECTIVE INVESTMENT BANK HOLDING COMPANY 
                    FRAMEWORK.

    (a) Amendment.--Section 17 of the Securities Exchange Act 
of 1934 (15 U.S.C. 78q) is amended--
            (1) by striking subsection (i); and
            (2) by redesignating subsections (j) and (k) as 
        subsections (i) and (j), respectively.
    (b) Effective Date.--The amendments made by this section 
shall take effect on the transfer date.

SEC. 618. SECURITIES HOLDING COMPANIES.

    (a) Definitions.--In this section--
            (1) the term ``associated person of a securities 
        holding company'' means a person directly or indirectly 
        controlling, controlled by, or under common control 
        with, a securities holding company;
            (2) the term ``foreign bank'' has the same meaning 
        as in section 1(b)(7) of the International Banking Act 
        of 1978 (12 U.S.C. 3101(7));
            (3) the term ``insured bank'' has the same meaning 
        as in section 3 of the Federal Deposit Insurance Act 
        (12 U.S.C. 1813);
            (4) the term ``securities holding company''--
                    (A) means--
                            (i) a person (other than a natural 
                        person) that owns or controls 1 or more 
                        brokers or dealers registered with the 
                        Commission; and
                            (ii) the associated persons of a 
                        person described in clause (i); and
                    (B) does not include a person that is--
                            (i) a nonbank financial company 
                        supervised by the Board under title I;
                            (ii) an insured bank (other than an 
                        institution described in subparagraphs 
                        (D), (F), or (H) of section 2(c)(2) of 
                        the Bank Holding Company Act of 1956 
                        (12 U.S.C. 1841(c)(2)) or a savings 
                        association;
                            (iii) an affiliate of an insured 
                        bank (other than an institution 
                        described in subparagraphs (D), (F), or 
                        (H) of section 2(c)(2) of the Bank 
                        Holding Company Act of 1956 (12 U.S.C. 
                        1841(c)(2)) or an affiliate of a 
                        savings association;
                            (iv) a foreign bank, foreign 
                        company, or company that is described 
                        in section 8(a) of the International 
                        Banking Act of 1978 (12 U.S.C. 
                        3106(a));
                            (v) a foreign bank that controls, 
                        directly or indirectly, a corporation 
                        chartered under section 25A of the 
                        Federal Reserve Act (12 U.S.C. 611 et 
                        seq.); or
                            (vi) subject to comprehensive 
                        consolidated supervision by a foreign 
                        regulator;
            (5) the term ``supervised securities holding 
        company'' means a securities holding company that is 
        supervised by the Board of Governors under this 
        section; and
            (6) the terms ``affiliate'', ``bank'', ``bank 
        holding company'', ``company'', ``control'', ``savings 
        association'', and ``subsidiary'' have the same 
        meanings as in section 2 of the Bank Holding Company 
        Act of 1956.
    (b) Supervision of a Securities Holding Company Not Having 
a Bank or Savings Association Affiliate.--
            (1) In general.--A securities holding company that 
        is required by a foreign regulator or provision of 
        foreign law to be subject to comprehensive consolidated 
        supervision may register with the Board of Governors 
        under paragraph (2) to become a supervised securities 
        holding company. Any securities holding company filing 
        such a registration shall be supervised in accordance 
        with this section, and shall comply with the rules and 
        orders prescribed by the Board of Governors applicable 
        to supervised securities holding companies.
            (2) Registration as a supervised securities holding 
        company.--
                    (A) Registration.--A securities holding 
                company that elects to be subject to 
                comprehensive consolidated supervision shall 
                register by filing with the Board of Governors 
                such information and documents as the Board of 
                Governors, by regulation, may prescribe as 
                necessary or appropriate in furtherance of the 
                purposes of this section.
                    (B) Effective date.--A securities holding 
                company that registers under subparagraph (A) 
                shall be deemed to be a supervised securities 
                holding company, effective on the date that is 
                45 days after the date of receipt of the 
                registration information and documents under 
                subparagraph (A) by the Board of Governors, or 
                within such shorter period as the Board of 
                Governors, by rule or order, may determine.
    (c) Supervision of Securities Holding Companies.--
            (1) Recordkeeping and reporting.--
                    (A) Recordkeeping and reporting required.--
                Each supervised securities holding company and 
                each affiliate of a supervised securities 
                holding company shall make and keep for periods 
                determined by the Board of Governors such 
                records, furnish copies of such records, and 
                make such reports, as the Board of Governors 
                determines to be necessary or appropriate to 
                carry out this section, to prevent evasions 
                thereof, and to monitor compliance by the 
                supervised securities holding company or 
                affiliate with applicable provisions of law.
                    (B) Form and contents.--
                            (i) In general.--Any record or 
                        report required to be made, furnished, 
                        or kept under this paragraph shall--
                                    (I) be prepared in such 
                                form and according to such 
                                specifications (including 
                                certification by a registered 
                                public accounting firm), as the 
                                Board of Governors may require; 
                                and
                                    (II) be provided promptly 
                                to the Board of Governors at 
                                any time, upon request by the 
                                Board of Governors.
                            (ii) Contents.--Records and reports 
                        required to be made, furnished, or kept 
                        under this paragraph may include--
                                    (I) a balance sheet or 
                                income statement of the 
                                supervised securities holding 
                                company or an affiliate of a 
                                supervised securities holding 
                                company;
                                    (II) an assessment of the 
                                consolidated capital and 
                                liquidity of the supervised 
                                securities holding company;
                                    (III) a report by an 
                                independent auditor attesting 
                                to the compliance of the 
                                supervised securities holding 
                                company with the internal risk 
                                management and internal control 
                                objectives of the supervised 
                                securities holding company; and
                                    (IV) a report concerning 
                                the extent to which the 
                                supervised securities holding 
                                company or affiliate has 
                                complied with the provisions of 
                                this section and any 
                                regulations prescribed and 
                                orders issued under this 
                                section.
            (2) Use of existing reports.--
                    (A) In general.--The Board of Governors 
                shall, to the fullest extent possible, accept 
                reports in fulfillment of the requirements of 
                this paragraph that a supervised securities 
                holding company or an affiliate of a supervised 
                securities holding company has been required to 
                provide to another regulatory agency or a self-
                regulatory organization.
                    (B) Availability.--A supervised securities 
                holding company or an affiliate of a supervised 
                securities holding company shall promptly 
                provide to the Board of Governors, at the 
                request of the Board of Governors, any report 
                described in subparagraph (A), as permitted by 
                law.
            (3) Examination authority.--
                    (A) Focus of examination authority.--The 
                Board of Governors may make examinations of any 
                supervised securities holding company and any 
                affiliate of a supervised securities holding 
                company to carry out this subsection, to 
                prevent evasions thereof, and to monitor 
                compliance by the supervised securities holding 
                company or affiliate with applicable provisions 
                of law.
                    (B) Deference to other examinations.--For 
                purposes of this subparagraph, the Board of 
                Governors shall, to the fullest extent 
                possible, use the reports of examination made 
                by other appropriate Federal or State 
                regulatory authorities with respect to any 
                functionally regulated subsidiary or any 
                institution described in subparagraph (D), (F), 
                or (H) of section 2(c)(2) of the Bank Holding 
                Company Act of 1956 (12 U.S.C. 1841(c)(2)).
    (d) Capital and Risk Management.--
            (1) In general.--The Board of Governors shall, by 
        regulation or order, prescribe capital adequacy and 
        other risk management standards for supervised 
        securities holding companies that are appropriate to 
        protect the safety and soundness of the supervised 
        securities holding companies and address the risks 
        posed to financial stability by supervised securities 
        holding companies.
            (2) Differentiation.--In imposing standards under 
        this subsection, the Board of Governors may 
        differentiate among supervised securities holding 
        companies on an individual basis, or by category, 
        taking into consideration the requirements under 
        paragraph (3).
            (3) Content.--Any standards imposed on a supervised 
        securities holding company under this subsection shall 
        take into account--
                    (A) the differences among types of business 
                activities carried out by the supervised 
                securities holding company;
                    (B) the amount and nature of the financial 
                assets of the supervised securities holding 
                company;
                    (C) the amount and nature of the 
                liabilities of the supervised securities 
                holding company, including the degree of 
                reliance on short-term funding;
                    (D) the extent and nature of the off-
                balance sheet exposures of the supervised 
                securities holding company;
                    (E) the extent and nature of the 
                transactions and relationships of the 
                supervised securities holding company with 
                other financial companies;
                    (F) the importance of the supervised 
                securities holding company as a source of 
                credit for households, businesses, and State 
                and local governments, and as a source of 
                liquidity for the financial system; and
                    (G) the nature, scope, and mix of the 
                activities of the supervised securities holding 
                company.
            (4) Notice.--A capital requirement imposed under 
        this subsection may not take effect earlier than 180 
        days after the date on which a supervised securities 
        holding company is provided notice of the capital 
        requirement.
    (e) Other Provisions of Law Applicable to Supervised 
Securities Holding Companies.--
            (1) Federal deposit insurance act.--Subsections 
        (b), (c) through (s), and (u) of section 8 of the 
        Federal Deposit Insurance Act (12 U.S.C. 1818) shall 
        apply to any supervised securities holding company, and 
        to any subsidiary (other than a bank or an institution 
        described in subparagraph (D), (F), or (H) of section 
        2(c)(2) of the Bank Holding Company Act of 1956 (12 
        U.S.C. 1841(c)(2))) of a supervised securities holding 
        company, in the same manner as such subsections apply 
        to a bank holding company for which the Board of 
        Governors is the appropriate Federal banking agency. 
        For purposes of applying such subsections to a 
        supervised securities holding company or a subsidiary 
        (other than a bank or an institution described in 
        subparagraph (D), (F), or (H) of section 2(c)(2) of the 
        Bank Holding Company Act of 1956 (12 U.S.C. 
        1841(c)(2))) of a supervised securities holding 
        company, the Board of Governors shall be deemed the 
        appropriate Federal banking agency for the supervised 
        securities holding company or subsidiary.
            (2) Bank holding company act of 1956.--Except as 
        the Board of Governors may otherwise provide by 
        regulation or order, a supervised securities holding 
        company shall be subject to the provisions of the Bank 
        Holding Company Act of 1956 (12 U.S.C. 1841 et seq.) in 
        the same manner and to the same extent a bank holding 
        company is subject to such provisions, except that a 
        supervised securities holding company may not, by 
        reason of this paragraph, be deemed to be a bank 
        holding company for purposes of section 4 of the Bank 
        Holding Company Act of 1956 (12 U.S.C. 1843).

SEC. 619. PROHIBITIONS ON PROPRIETARY TRADING AND CERTAIN RELATIONSHIPS 
                    WITH HEDGE FUNDS AND PRIVATE EQUITY FUNDS.

    The Bank Holding Company Act of 1956 (12 U.S.C. 1841 et 
seq.) is amended by adding at the end the following:

``SEC. 13. PROHIBITIONS ON PROPRIETARY TRADING AND CERTAIN 
                    RELATIONSHIPS WITH HEDGE FUNDS AND PRIVATE EQUITY 
                    FUNDS.

    ``(a) In General.--
            ``(1) Prohibition.--Unless otherwise provided in 
        this section, a banking entity shall not--
                    ``(A) engage in proprietary trading; or
                    ``(B) acquire or retain any equity, 
                partnership, or other ownership interest in or 
                sponsor a hedge fund or a private equity fund.
            ``(2) Nonbank financial companies supervised by the 
        board.--Any nonbank financial company supervised by the 
        Board that engages in proprietary trading or takes or 
        retains any equity, partnership, or other ownership 
        interest in or sponsors a hedge fund or a private 
        equity fund shall be subject, by rule, as provided in 
        subsection (b)(2), to additional capital requirements 
        for and additional quantitative limits with regards to 
        such proprietary trading and taking or retaining any 
        equity, partnership, or other ownership interest in or 
        sponsorship of a hedge fund or a private equity fund, 
        except that permitted activities as described in 
        subsection (d) shall not be subject to the additional 
        capital and additional quantitative limits except as 
        provided in subsection (d)(3), as if the nonbank 
        financial company supervised by the Board were a 
        banking entity.
    ``(b) Study and Rulemaking.--
            ``(1) Study.--Not later than 6 months after the 
        date of enactment of this section, the Financial 
        Stability Oversight Council shall study and make 
        recommendations on implementing the provisions of this 
        section so as to--
                    ``(A) promote and enhance the safety and 
                soundness of banking entities;
                    ``(B) protect taxpayers and consumers and 
                enhance financial stability by minimizing the 
                risk that insured depository institutions and 
                the affiliates of insured depository 
                institutions will engage in unsafe and unsound 
                activities;
                    ``(C) limit the inappropriate transfer of 
                Federal subsidies from institutions that 
                benefit from deposit insurance and liquidity 
                facilities of the Federal Government to 
                unregulated entities;
                    ``(D) reduce conflicts of interest between 
                the self-interest of banking entities and 
                nonbank financial companies supervised by the 
                Board, and the interests of the customers of 
                such entities and companies;
                    ``(E) limit activities that have caused 
                undue risk or loss in banking entities and 
                nonbank financial companies supervised by the 
                Board, or that might reasonably be expected to 
                create undue risk or loss in such banking 
                entities and nonbank financial companies 
                supervised by the Board;
                    ``(F) appropriately accommodate the 
                business of insurance within an insurance 
                company, subject to regulation in accordance 
                with the relevant insurance company investment 
                laws, while protecting the safety and soundness 
                of any banking entity with which such insurance 
                company is affiliated and of the United States 
                financial system; and
                    ``(G) appropriately time the divestiture of 
                illiquid assets that are affected by the 
                implementation of the prohibitions under 
                subsection (a).
            ``(2) Rulemaking.--
                    ``(A) In general.--Unless otherwise 
                provided in this section, not later than 9 
                months after the completion of the study under 
                paragraph (1), the appropriate Federal banking 
                agencies, the Securities and Exchange 
                Commission, and the Commodity Futures Trading 
                Commission, shall consider the findings of the 
                study under paragraph (1) and adopt rules to 
                carry out this section, as provided in 
                subparagraph (B).
                    ``(B) Coordinated rulemaking.--
                            ``(i) Regulatory authority.--The 
                        regulations issued under this paragraph 
                        shall be issued by--
                                    ``(I) the appropriate 
                                Federal banking agencies, 
                                jointly, with respect to 
                                insured depository 
                                institutions;
                                    ``(II) the Board, with 
                                respect to any company that 
                                controls an insured depository 
                                institution, or that is treated 
                                as a bank holding company for 
                                purposes of section 8 of the 
                                International Banking Act, any 
                                nonbank financial company 
                                supervised by the Board, and 
                                any subsidiary of any of the 
                                foregoing (other than a 
                                subsidiary for which an agency 
                                described in subclause (I), 
                                (III), or (IV) is the primary 
                                financial regulatory agency);
                                    ``(III) the Commodity 
                                Futures Trading Commission, 
                                with respect to any entity for 
                                which the Commodity Futures 
                                Trading Commission is the 
                                primary financial regulatory 
                                agency, as defined in section 2 
                                of the Dodd-Frank Wall Street 
                                Reform and Consumer Protection 
                                Act; and
                                    ``(IV) the Securities and 
                                Exchange Commission, with 
                                respect to any entity for which 
                                the Securities and Exchange 
                                Commission is the primary 
                                financial regulatory agency, as 
                                defined in section 2 of the 
                                Dodd-Frank Wall Street Reform 
                                and Consumer Protection Act.
                            ``(ii) Coordination, consistency, 
                        and comparability.--In developing and 
                        issuing regulations pursuant to this 
                        section, the appropriate Federal 
                        banking agencies, the Securities and 
                        Exchange Commission, and the Commodity 
                        Futures Trading Commission shall 
                        consult and coordinate with each other, 
                        as appropriate, for the purposes of 
                        assuring, to the extent possible, that 
                        such regulations are comparable and 
                        provide for consistent application and 
                        implementation of the applicable 
                        provisions of this section to avoid 
                        providing advantages or imposing 
                        disadvantages to the companies affected 
                        by this subsection and to protect the 
                        safety and soundness of banking 
                        entities and nonbank financial 
                        companies supervised by the Board.
                            ``(iii) Council role.--The 
                        Chairperson of the Financial Stability 
                        Oversight Council shall be responsible 
                        for coordination of the regulations 
                        issued under this section.
    ``(c) Effective Date.--
            ``(1) In general.--Except as provided in paragraphs 
        (2) and (3), this section shall take effect on the 
        earlier of--
                    ``(A) 12 months after the date of the 
                issuance of final rules under subsection (b); 
                or
                    ``(B) 2 years after the date of enactment 
                of this section.
            ``(2) Conformance period for divestiture.--A 
        banking entity or nonbank financial company supervised 
        by the Board shall bring its activities and investments 
        into compliance with the requirements of this section 
        not later than 2 years after the date on which the 
        requirements become effective pursuant to this section 
        or 2 years after the date on which the entity or 
        company becomes a nonbank financial company supervised 
        by the Board. The Board may, by rule or order, extend 
        this two-year period for not more than one year at a 
        time, if, in the judgment of the Board, such an 
        extension is consistent with the purposes of this 
        section and would not be detrimental to the public 
        interest. The extensions made by the Board under the 
        preceding sentence may not exceed an aggregate of 3 
        years.
            ``(3) Extended transition for illiquid funds.--
                    ``(A) Application.--The Board may, upon the 
                application of a banking entity, extend the 
                period during which the banking entity, to the 
                extent necessary to fulfill a contractual 
                obligation that was in effect on May 1, 2010, 
                may take or retain its equity, partnership, or 
                other ownership interest in, or otherwise 
                provide additional capital to, an illiquid 
                fund.
                    ``(B) Time limit on approval.--The Board 
                may grant 1 extension under subparagraph (A), 
                which may not exceed 5 years.
            ``(4) Divestiture required.--Except as otherwise 
        provided in subsection (d)(1)(G), a banking entity may 
        not engage in any activity prohibited under subsection 
        (a)(1)(B) after the earlier of--
                    ``(A) the date on which the contractual 
                obligation to invest in the illiquid fund 
                terminates; and
                    ``(B) the date on which any extensions 
                granted by the Board under paragraph (3) 
                expire.
            ``(5) Additional capital during transition 
        period.--Notwithstanding paragraph (2), on the date on 
        which the rules are issued under subsection (b)(2), the 
        appropriate Federal banking agencies, the Securities 
        and Exchange Commission, and the Commodity Futures 
        Trading Commission shall issue rules, as provided in 
        subsection (b)(2), to impose additional capital 
        requirements, and any other restrictions, as 
        appropriate, on any equity, partnership, or ownership 
        interest in or sponsorship of a hedge fund or private 
        equity fund by a banking entity.
            ``(6) Special rulemaking.--Not later than 6 months 
        after the date of enactment of this section, the Board 
        shall issue rules to implement paragraphs (2) and (3).
    ``(d) Permitted Activities.--
            ``(1) In general.--Notwithstanding the restrictions 
        under subsection (a), to the extent permitted by any 
        other provision of Federal or State law, and subject to 
        the limitations under paragraph (2) and any 
        restrictions or limitations that the appropriate 
        Federal banking agencies, the Securities and Exchange 
        Commission, and the Commodity Futures Trading 
        Commission, may determine, the following activities (in 
        this section referred to as `permitted activities') are 
        permitted:
                    ``(A) The purchase, sale, acquisition, or 
                disposition of obligations of the United States 
                or any agency thereof, obligations, 
                participations, or other instruments of or 
                issued by the Government National Mortgage 
                Association, the Federal National Mortgage 
                Association, the Federal Home Loan Mortgage 
                Corporation, a Federal Home Loan Bank, the 
                Federal Agricultural Mortgage Corporation, or a 
                Farm Credit System institution chartered under 
                and subject to the provisions of the Farm 
                Credit Act of 1971 (12 U.S.C. 2001 et seq.), 
                and obligations of any State or of any 
                political subdivision thereof.
                    ``(B) The purchase, sale, acquisition, or 
                disposition of securities and other instruments 
                described in subsection (h)(4) in connection 
                with underwriting or market-making-related 
                activities, to the extent that any such 
                activities permitted by this subparagraph are 
                designed not to exceed the reasonably expected 
                near term demands of clients, customers, or 
                counterparties.
                    ``(C) Risk-mitigating hedging activities in 
                connection with and related to individual or 
                aggregated positions, contracts, or other 
                holdings of a banking entity that are designed 
                to reduce the specific risks to the banking 
                entity in connection with and related to such 
                positions, contracts, or other holdings.
                    ``(D) The purchase, sale, acquisition, or 
                disposition of securities and other instruments 
                described in subsection (h)(4) on behalf of 
                customers.
                    ``(E) Investments in one or more small 
                business investment companies, as defined in 
                section 102 of the Small Business Investment 
                Act of 1958 (15 U.S.C. 662), investments 
                designed primarily to promote the public 
                welfare, of the type permitted under paragraph 
                (11) of section 5136 of the Revised Statutes of 
                the United States (12 U.S.C. 24), or 
                investments that are qualified rehabilitation 
                expenditures with respect to a qualified 
                rehabilitated building or certified historic 
                structure, as such terms are defined in section 
                47 of the Internal Revenue Code of 1986 or a 
                similar State historic tax credit program.
                    ``(F) The purchase, sale, acquisition, or 
                disposition of securities and other instruments 
                described in subsection (h)(4) by a regulated 
                insurance company directly engaged in the 
                business of insurance for the general account 
                of the company and by any affiliate of such 
                regulated insurance company, provided that such 
                activities by any affiliate are solely for the 
                general account of the regulated insurance 
                company, if--
                            ``(i) the purchase, sale, 
                        acquisition, or disposition is 
                        conducted in compliance with, and 
                        subject to, the insurance company 
                        investment laws, regulations, and 
                        written guidance of the State or 
                        jurisdiction in which each such 
                        insurance company is domiciled; and
                            ``(ii) the appropriate Federal 
                        banking agencies, after consultation 
                        with the Financial Stability Oversight 
                        Council and the relevant insurance 
                        commissioners of the States and 
                        territories of the United States, have 
                        not jointly determined, after notice 
                        and comment, that a particular law, 
                        regulation, or written guidance 
                        described in clause (i) is insufficient 
                        to protect the safety and soundness of 
                        the banking entity, or of the financial 
                        stability of the United States.
                    ``(G) Organizing and offering a private 
                equity or hedge fund, including serving as a 
                general partner, managing member, or trustee of 
                the fund and in any manner selecting or 
                controlling (or having employees, officers, 
                directors, or agents who constitute) a majority 
                of the directors, trustees, or management of 
                the fund, including any necessary expenses for 
                the foregoing, only if--
                            ``(i) the banking entity provides 
                        bona fide trust, fiduciary, or 
                        investment advisory services;
                            ``(ii) the fund is organized and 
                        offered only in connection with the 
                        provision of bona fide trust, 
                        fiduciary, or investment advisory 
                        services and only to persons that are 
                        customers of such services of the 
                        banking entity;
                            ``(iii) the banking entity does not 
                        acquire or retain an equity interest, 
                        partnership interest, or other 
                        ownership interest in the funds except 
                        for a de minimis investment subject to 
                        and in compliance with paragraph (4);
                            ``(iv) the banking entity complies 
                        with the restrictions under paragraphs 
                        (1) and (2) of subparagraph (f);
                            ``(v) the banking entity does not, 
                        directly or indirectly, guarantee, 
                        assume, or otherwise insure the 
                        obligations or performance of the hedge 
                        fund or private equity fund or of any 
                        hedge fund or private equity fund in 
                        which such hedge fund or private equity 
                        fund invests;
                            ``(vi) the banking entity does not 
                        share with the hedge fund or private 
                        equity fund, for corporate, marketing, 
                        promotional, or other purposes, the 
                        same name or a variation of the same 
                        name;
                            ``(vii) no director or employee of 
                        the banking entity takes or retains an 
                        equity interest, partnership interest, 
                        or other ownership interest in the 
                        hedge fund or private equity fund, 
                        except for any director or employee of 
                        the banking entity who is directly 
                        engaged in providing investment 
                        advisory or other services to the hedge 
                        fund or private equity fund; and
                            ``(viii) the banking entity 
                        discloses to prospective and actual 
                        investors in the fund, in writing, that 
                        any losses in such hedge fund or 
                        private equity fund are borne solely by 
                        investors in the fund and not by the 
                        banking entity, and otherwise complies 
                        with any additional rules of the 
                        appropriate Federal banking agencies, 
                        the Securities and Exchange Commission, 
                        or the Commodity Futures Trading 
                        Commission, as provided in subsection 
                        (b)(2), designed to ensure that losses 
                        in such hedge fund or private equity 
                        fund are borne solely by investors in 
                        the fund and not by the banking entity.
                    ``(H) Proprietary trading conducted by a 
                banking entity pursuant to paragraph (9) or 
                (13) of section 4(c), provided that the trading 
                occurs solely outside of the United States and 
                that the banking entity is not directly or 
                indirectly controlled by a banking entity that 
                is organized under the laws of the United 
                States or of one or more States.
                    ``(I) The acquisition or retention of any 
                equity, partnership, or other ownership 
                interest in, or the sponsorship of, a hedge 
                fund or a private equity fund by a banking 
                entity pursuant to paragraph (9) or (13) of 
                section 4(c) solely outside of the United 
                States, provided that no ownership interest in 
                such hedge fund or private equity fund is 
                offered for sale or sold to a resident of the 
                United States and that the banking entity is 
                not directly or indirectly controlled by a 
                banking entity that is organized under the laws 
                of the United States or of one or more States.
                    ``(J) Such other activity as the 
                appropriate Federal banking agencies, the 
                Securities and Exchange Commission, and the 
                Commodity Futures Trading Commission determine, 
                by rule, as provided in subsection (b)(2), 
                would promote and protect the safety and 
                soundness of the banking entity and the 
                financial stability of the United States.
            ``(2) Limitation on permitted activities.--
                    ``(A) In general.--No transaction, class of 
                transactions, or activity may be deemed a 
                permitted activity under paragraph (1) if the 
                transaction, class of transactions, or 
                activity--
                            ``(i) would involve or result in a 
                        material conflict of interest (as such 
                        term shall be defined by rule as 
                        provided in subsection (b)(2)) between 
                        the banking entity and its clients, 
                        customers, or counterparties;
                            ``(ii) would result, directly or 
                        indirectly, in a material exposure by 
                        the banking entity to high-risk assets 
                        or high-risk trading strategies (as 
                        such terms shall be defined by rule as 
                        provided in subsection (b)(2));
                            ``(iii) would pose a threat to the 
                        safety and soundness of such banking 
                        entity; or
                            ``(iv) would pose a threat to the 
                        financial stability of the United 
                        States.
                    ``(B) Rulemaking.--The appropriate Federal 
                banking agencies, the Securities and Exchange 
                Commission, and the Commodity Futures Trading 
                Commission shall issue regulations to implement 
                subparagraph (A), as part of the regulations 
                issued under subsection (b)(2).
            ``(3) Capital and quantitative limitations.--The 
        appropriate Federal banking agencies, the Securities 
        and Exchange Commission, and the Commodity Futures 
        Trading Commission shall, as provided in subsection 
        (b)(2), adopt rules imposing additional capital 
        requirements and quantitative limitations, including 
        diversification requirements, regarding the activities 
        permitted under this section if the appropriate Federal 
        banking agencies, the Securities and Exchange 
        Commission, and the Commodity Futures Trading 
        Commission determine that additional capital and 
        quantitative limitations are appropriate to protect the 
        safety and soundness of banking entities engaged in 
        such activities.
            ``(4) De minimis investment.--
                    ``(A) In general.--A banking entity may 
                make and retain an investment in a hedge fund 
                or private equity fund that the banking entity 
                organizes and offers, subject to the 
                limitations and restrictions in subparagraph 
                (B) for the purposes of--
                            ``(i) establishing the fund and 
                        providing the fund with sufficient 
                        initial equity for investment to permit 
                        the fund to attract unaffiliated 
                        investors; or
                            ``(ii) making a de minimis 
                        investment.
                    ``(B) Limitations and restrictions on 
                investments.--
                            ``(i) Requirement to seek other 
                        investors.--A banking entity shall 
                        actively seek unaffiliated investors to 
                        reduce or dilute the investment of the 
                        banking entity to the amount permitted 
                        under clause (ii).
                            ``(ii) Limitations on size of 
                        investments.--Notwithstanding any other 
                        provision of law, investments by a 
                        banking entity in a hedge fund or 
                        private equity fund shall--
                                    ``(I) not later than 1 year 
                                after the date of establishment 
                                of the fund, be reduced through 
                                redemption, sale, or dilution 
                                to an amount that is not more 
                                than 3 percent of the total 
                                ownership interests of the 
                                fund;
                                    ``(II) be immaterial to the 
                                banking entity, as defined, by 
                                rule, pursuant to subsection 
                                (b)(2), but in no case may the 
                                aggregate of all of the 
                                interests of the banking entity 
                                in all such funds exceed 3 
                                percent of the Tier 1 capital 
                                of the banking entity.
                            ``(iii) Capital.--For purposes of 
                        determining compliance with applicable 
                        capital standards under paragraph (3), 
                        the aggregate amount of the outstanding 
                        investments by a banking entity under 
                        this paragraph, including retained 
                        earnings, shall be deducted from the 
                        assets and tangible equity of the 
                        banking entity, and the amount of the 
                        deduction shall increase commensurate 
                        with the leverage of the hedge fund or 
                        private equity fund.
                    ``(C) Extension.--Upon an application by a 
                banking entity, the Board may extend the period 
                of time to meet the requirements under 
                subparagraph (B)(ii)(I) for 2 additional years, 
                if the Board finds that an extension would be 
                consistent with safety and soundness and in the 
                public interest.
    ``(e) Anti-evasion.--
            ``(1) Rulemaking.--The appropriate Federal banking 
        agencies, the Securities and Exchange Commission, and 
        the Commodity Futures Trading Commission shall issue 
        regulations, as part of the rulemaking provided for in 
        subsection (b)(2), regarding internal controls and 
        recordkeeping, in order to insure compliance with this 
        section.
            ``(2) Termination of activities or investment.--
        Notwithstanding any other provision of law, whenever an 
        appropriate Federal banking agency, the Securities and 
        Exchange Commission, or the Commodity Futures Trading 
        Commission, as appropriate, has reasonable cause to 
        believe that a banking entity or nonbank financial 
        company supervised by the Board under the respective 
        agency's jurisdiction has made an investment or engaged 
        in an activity in a manner that functions as an evasion 
        of the requirements of this section (including through 
        an abuse of any permitted activity) or otherwise 
        violates the restrictions under this section, the 
        appropriate Federal banking agency, the Securities and 
        Exchange Commission, or the Commodity Futures Trading 
        Commission, as appropriate, shall order, after due 
        notice and opportunity for hearing, the banking entity 
        or nonbank financial company supervised by the Board to 
        terminate the activity and, as relevant, dispose of the 
        investment. 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.
    ``(f) Limitations on Relationships With Hedge Funds and 
Private Equity Funds.--
            ``(1) In general.--No banking entity that serves, 
        directly or indirectly, as the investment manager, 
        investment adviser, or sponsor to a hedge fund or 
        private equity fund, or that organizes and offers a 
        hedge fund or private equity fund pursuant to paragraph 
        (d)(1)(G), and no affiliate of such entity, may enter 
        into a transaction with the fund, or with any other 
        hedge fund or private equity fund that is controlled by 
        such fund, that would be a covered transaction, as 
        defined in section 23A of the Federal Reserve Act (12 
        U.S.C. 371c), with the hedge fund or private equity 
        fund, as if such banking entity and the affiliate 
        thereof were a member bank and the hedge fund or 
        private equity fund were an affiliate thereof.
            ``(2) Treatment as member bank.--A banking entity 
        that serves, directly or indirectly, as the investment 
        manager, investment adviser, or sponsor to a hedge fund 
        or private equity fund, or that organizes and offers a 
        hedge fund or private equity fund pursuant to paragraph 
        (d)(1)(G), shall be subject to section 23B of the 
        Federal Reserve Act (12 U.S.C. 371c-1), as if such 
        banking entity were a member bank and such hedge fund 
        or private equity fund were an affiliate thereof.
            ``(3) Permitted services.--
                    ``(A) In general.--Notwithstanding 
                paragraph (1), the Board may permit a banking 
                entity to enter into any prime brokerage 
                transaction with any hedge fund or private 
                equity fund in which a hedge fund or private 
                equity fund managed, sponsored, or advised by 
                such banking entity has taken an equity, 
                partnership, or other ownership interest, if--
                            ``(i) the banking entity is in 
                        compliance with each of the limitations 
                        set forth in subsection (d)(1)(G) with 
                        regard to a hedge fund or private 
                        equity fund organized and offered by 
                        such banking entity;
                            ``(ii) the chief executive officer 
                        (or equivalent officer) of the banking 
                        entity certifies in writing annually 
                        (with a duty to update the 
                        certification if the information in the 
                        certification materially changes) that 
                        the conditions specified in subsection 
                        (d)(1)(g)(v) are satisfied; and
                            ``(iii) the Board has determined 
                        that such transaction is consistent 
                        with the safe and sound operation and 
                        condition of the banking entity.
                    ``(B) Treatment of prime brokerage 
                transactions.--For purposes of subparagraph 
                (A), a prime brokerage transaction described in 
                subparagraph (A) shall be subject to section 
                23B of the Federal Reserve Act (12 U.S.C. 371c-
                1) as if the counterparty were an affiliate of 
                the banking entity.
            ``(4) Application to nonbank financial companies 
        supervised by the board.--The appropriate Federal 
        banking agencies, the Securities and Exchange 
        Commission, and the Commodity Futures Trading 
        Commission shall adopt rules, as provided in subsection 
        (b)(2), imposing additional capital charges or other 
        restrictions for nonbank financial companies supervised 
        by the Board to address the risks to and conflicts of 
        interest of banking entities described in paragraphs 
        (1), (2), and (3) of this subsection.
    ``(g) Rules of Construction.--
            ``(1) Limitation on contrary authority.--Except as 
        provided in this section, notwithstanding any other 
        provision of law, the prohibitions and restrictions 
        under this section shall apply to activities of a 
        banking entity or nonbank financial company supervised 
        by the Board, even if such activities are authorized 
        for a banking entity or nonbank financial company 
        supervised by the Board.
            ``(2) Sale or securitization of loans.--Nothing in 
        this section shall be construed to limit or restrict 
        the ability of a banking entity or nonbank financial 
        company supervised by the Board to sell or securitize 
        loans in a manner otherwise permitted by law.
            ``(3) Authority of federal agencies and state 
        regulatory authorities.--Nothing in this section shall 
        be construed to limit the inherent authority of any 
        Federal agency or State regulatory authority under 
        otherwise applicable provisions of law.
    ``(h) Definitions.--In this section, the following 
definitions shall apply:
            ``(1) Banking entity.--The term `banking entity' 
        means any insured depository institution (as defined in 
        section 3 of the Federal Deposit Insurance Act (12 
        U.S.C. 1813)), any company that controls an insured 
        depository institution, or that is treated as a bank 
        holding company for purposes of section 8 of the 
        International Banking Act of 1978, and any affiliate or 
        subsidiary of any such entity. For purposes of this 
        paragraph, the term `insured depository institution' 
        does not include an institution that functions solely 
        in a trust or fiduciary capacity, if--
                    ``(A) all or substantially all of the 
                deposits of such institution are in trust funds 
                and are received in a bona fide fiduciary 
                capacity;
                    ``(B) no deposits of such institution which 
                are insured by the Federal Deposit Insurance 
                Corporation are offered or marketed by or 
                through an affiliate of such institution;
                    ``(C) such institution does not accept 
                demand deposits or deposits that the depositor 
                may withdraw by check or similar means for 
                payment to third parties or others or make 
                commercial loans; and
                    ``(D) such institution does not--
                            ``(i) obtain payment or payment 
                        related services from any Federal 
                        Reserve bank, including any service 
                        referred to in section 11A of the 
                        Federal Reserve Act (12 U.S.C. 248a); 
                        or
                            ``(ii) exercise discount or 
                        borrowing privileges pursuant to 
                        section 19(b)(7) of the Federal Reserve 
                        Act (12 U.S.C. 461(b)(7)).
            ``(2) Hedge fund; private equity fund.--The terms 
        `hedge fund' and `private equity fund' mean an issuer 
        that would be an investment company, as defined in the 
        Investment Company Act of 1940 (15 U.S.C. 80a-1 et 
        seq.), but for section 3(c)(1) or 3(c)(7) of that Act, 
        or such similar funds as the appropriate Federal 
        banking agencies, the Securities and Exchange 
        Commission, and the Commodity Futures Trading 
        Commission may, by rule, as provided in subsection 
        (b)(2), determine.
            ``(3) Nonbank financial company supervised by the 
        board.--The term `nonbank financial company supervised 
        by the Board' means a nonbank financial company 
        supervised by the Board of Governors, as defined in 
        section 102 of the Financial Stability Act of 2010.
            ``(4) Proprietary trading.--The term `proprietary 
        trading', when used with respect to a banking entity or 
        nonbank financial company supervised by the Board, 
        means engaging as a principal for the trading account 
        of the banking entity or nonbank financial company 
        supervised by the Board in any transaction to purchase 
        or sell, or otherwise acquire or dispose of, any 
        security, any derivative, any contract of sale of a 
        commodity for future delivery, any option on any such 
        security, derivative, or contract, or any other 
        security or financial instrument that the appropriate 
        Federal banking agencies, the Securities and Exchange 
        Commission, and the Commodity Futures Trading 
        Commission may, by rule as provided in subsection 
        (b)(2), determine.
            ``(5) Sponsor.--The term to `sponsor' a fund 
        means--
                    ``(A) to serve as a general partner, 
                managing member, or trustee of a fund;
                    ``(B) in any manner to select or to control 
                (or to have employees, officers, or directors, 
                or agents who constitute) a majority of the 
                directors, trustees, or management of a fund; 
                or
                    ``(C) to share with a fund, for corporate, 
                marketing, promotional, or other purposes, the 
                same name or a variation of the same name.
            ``(6) Trading account.--The term `trading account' 
        means any account used for acquiring or taking 
        positions in the securities and instruments described 
        in paragraph (4) principally for the purpose of selling 
        in the near term (or otherwise with the intent to 
        resell in order to profit from short-term price 
        movements), and any such other accounts as the 
        appropriate Federal banking agencies, the Securities 
        and Exchange Commission, and the Commodity Futures 
        Trading Commission may, by rule as provided in 
        subsection (b)(2), determine.
            ``(7) Illiquid fund.--
                    ``(A) In general.--The term `illiquid fund' 
                means a hedge fund or private equity fund 
                that--
                            ``(i) as of May 1, 2010, was 
                        principally invested in, or was 
                        invested and contractually committed to 
                        principally invest in, illiquid assets, 
                        such as portfolio companies, real 
                        estate investments, and venture capital 
                        investments; and
                            ``(ii) makes all investments 
                        pursuant to, and consistent with, an 
                        investment strategy to principally 
                        invest in illiquid assets. In issuing 
                        rules regarding this subparagraph, the 
                        Board shall take into consideration the 
                        terms of investment for the hedge fund 
                        or private equity fund, including 
                        contractual obligations, the ability of 
                        the fund to divest of assets held by 
                        the fund, and any other factors that 
                        the Board determines are appropriate.
                    ``(B) Hedge fund.--For the purposes of this 
                paragraph, the term `hedge fund' means any fund 
                identified under subsection (h)(2), and does 
                not include a private equity fund, as such term 
                is used in section 203(m) of the Investment 
                Advisers Act of 1940 (15 U.S.C. 80b-3(m)).''.

SEC. 620. STUDY OF BANK INVESTMENT ACTIVITIES.

    (a) Study.--
            (1) In general.--Not later than 18 months after the 
        date of enactment of this Act, the appropriate Federal 
        banking agencies shall jointly review and prepare a 
        report on the activities that a banking entity, as such 
        term is defined in the Bank Holding Company Act of 1956 
        (12 U.S.C. 1841 et seq.), may engage in under Federal 
        and State law, including activities authorized by 
        statute and by order, interpretation and guidance.
            (2) Content.--In carrying out the study under 
        paragraph (1), the appropriate Federal banking agencies 
        shall review and consider--
                    (A) the type of activities or investments;
                    (B) any financial, operational, managerial, 
                or reputation risks associated with or 
                presented as a result of the banking entity 
                engaged in the activity or making the 
                investment; and
                    (C) risk mitigation activities undertaken 
                by the banking entity with regard to the risks.
    (b) Report and Recommendations to the Council and to 
Congress.--The appropriate Federal banking agencies shall 
submit to the Council, the Committee on Financial Services of 
the House of Representatives, and the Committee on Banking, 
Housing, and Urban Affairs of the Senate the study conducted 
pursuant to subsection (a) no later than 2 months after its 
completion. In addition to the information described in 
subsection (a), the report shall include recommendations 
regarding--
            (1) whether each activity or investment has or 
        could have a negative effect on the safety and 
        soundness of the banking entity or the United States 
        financial system;
            (2) the appropriateness of the conduct of each 
        activity or type of investment by banking entities; and
            (3) additional restrictions as may be necessary to 
        address risks to safety and soundness arising from the 
        activities or types of investments described in 
        subsection (a).

SEC. 621. CONFLICTS OF INTEREST.

    (a) In General.--The Securities Act of 1933 (15 U.S.C. 77a 
et seq.) is amended by inserting after section 27A the 
following:

``SEC. 27B. CONFLICTS OF INTEREST RELATING TO CERTAIN SECURITIZATIONS.

    ``(a) In General.--An underwriter, placement agent, initial 
purchaser, or sponsor, or any affiliate or subsidiary of any 
such entity, of an asset-backed security (as such term is 
defined in section 3 of the Securities and Exchange Act of 1934 
(15 U.S.C. 78c), which for the purposes of this section shall 
include a synthetic asset-backed security), shall not, at any 
time for a period ending on the date that is one year after the 
date of the first closing of the sale of the asset-backed 
security, engage in any transaction that would involve or 
result in any material conflict of interest with respect to any 
investor in a transaction arising out of such activity.
    ``(b) Rulemaking.--Not later than 270 days after the date 
of enactment of this section, the Commission shall issue rules 
for the purpose of implementing subsection (a).
    ``(c) Exception.--The prohibitions of subsection (a) shall 
not apply to--
            ``(1) risk-mitigating hedging activities in 
        connection with positions or holdings arising out of 
        the underwriting, placement, initial purchase, or 
        sponsorship of an asset-backed security, provided that 
        such activities are designed to reduce the specific 
        risks to the underwriter, placement agent, initial 
        purchaser, or sponsor associated with positions or 
        holdings arising out of such underwriting, placement, 
        initial purchase, or sponsorship; or
            ``(2) purchases or sales of asset-backed securities 
        made pursuant to and consistent with--
                    ``(A) commitments of the underwriter, 
                placement agent, initial purchaser, or sponsor, 
                or any affiliate or subsidiary of any such 
                entity, to provide liquidity for the asset-
                backed security, or
                    ``(B) bona fide market-making in the asset 
                backed security.
    ``(d) Rule of Construction.--This subsection shall not 
otherwise limit the application of section 15G of the 
Securities Exchange Act of 1934.''.
    (b) Effective Date.--Section 27B of the Securities Act of 
1933, as added by this section, shall take effect on the 
effective date of final rules issued by the Commission under 
subsection (b) of such section 27B, except that subsections (b) 
and (d) of such section 27B shall take effect on the date of 
enactment of this Act.

SEC. 622. CONCENTRATION LIMITS ON LARGE FINANCIAL FIRMS.

    The Bank Holding Company Act of 1956 (12 U.S.C. 1841 et 
seq.) is amended by adding at the end the following:

``SEC. 14. CONCENTRATION LIMITS ON LARGE FINANCIAL FIRMS.

    ``(a) Definitions.--In this section--
            ``(1) the term `Council' means the Financial 
        Stability Oversight Council;
            ``(2) the term `financial company' means--
                    ``(A) an insured depository institution;
                    ``(B) a bank holding company;
                    ``(C) a savings and loan holding company;
                    ``(D) a company that controls an insured 
                depository institution;
                    ``(E) a nonbank financial company 
                supervised by the Board under title I of the 
                Dodd-Frank Wall Street Reform and Consumer 
                Protection Act; and
                    ``(F) a foreign bank or company that is 
                treated as a bank holding company for purposes 
                of this Act; and
            ``(3) the term `liabilities' means--
                    ``(A) with respect to a United States 
                financial company--
                            ``(i) the total risk-weighted 
                        assets of the financial company, as 
                        determined under the risk-based capital 
                        rules applicable to bank holding 
                        companies, as adjusted to reflect 
                        exposures that are deducted from 
                        regulatory capital; less
                            ``(ii) the total regulatory capital 
                        of the financial company under the 
                        risk-based capital rules applicable to 
                        bank holding companies;
                    ``(B) with respect to a foreign-based 
                financial company--
                            ``(i) the total risk-weighted 
                        assets of the United States operations 
                        of the financial company, as determined 
                        under the applicable risk-based capital 
                        rules, as adjusted to reflect exposures 
                        that are deducted from regulatory 
                        capital; less
                            ``(ii) the total regulatory capital 
                        of the United States operations of the 
                        financial company, as determined under 
                        the applicable risk-based capital 
                        rules; and
                    ``(C) with respect to an insurance company 
                or other nonbank financial company supervised 
                by the Board, such assets of the company as the 
                Board shall specify by rule, in order to 
                provide for consistent and equitable treatment 
                of such companies.
    ``(b) Concentration Limit.--Subject to the recommendations 
by the Council under subsection (e), a financial company may 
not merge or consolidate with, acquire all or substantially all 
of the assets of, or otherwise acquire control of, another 
company, if the total consolidated liabilities of the acquiring 
financial company upon consummation of the transaction would 
exceed 10 percent of the aggregate consolidated liabilities of 
all financial companies at the end of the calendar year 
preceding the transaction.
    ``(c) Exception to Concentration Limit.--With the prior 
written consent of the Board, the concentration limit under 
subsection (b) shall not apply to an acquisition--
            ``(1) of a bank in default or in danger of default;
            ``(2) with respect to which assistance is provided 
        by the Federal Deposit Insurance Corporation under 
        section 13(c) of the Federal Deposit Insurance Act (12 
        U.S.C. 1823(c)); or
            ``(3) that would result only in a de minimis 
        increase in the liabilities of the financial company.
    ``(d) Rulemaking and Guidance.--The Board shall issue 
regulations implementing this section in accordance with the 
recommendations of the Council under subsection (e), including 
the definition of terms, as necessary. The Board may issue 
interpretations or guidance regarding the application of this 
section to an individual financial company or to financial 
companies in general.
    ``(e) Council Study and Rulemaking.--
            ``(1) Study and recommendations.--Not later than 6 
        months after the date of enactment of this section, the 
        Council shall--
                    ``(A) complete a study of the extent to 
                which the concentration limit under this 
                section would affect financial stability, moral 
                hazard in the financial system, the efficiency 
                and competitiveness of United States financial 
                firms and financial markets, and the cost and 
                availability of credit and other financial 
                services to households and businesses in the 
                United States; and
                    ``(B) make recommendations regarding any 
                modifications to the concentration limit that 
                the Council determines would more effectively 
                implement this section.
            ``(2) Rulemaking.--Not later than 9 months after 
        the date of completion of the study under paragraph 
        (1), and notwithstanding subsections (b) and (d), the 
        Board shall issue final regulations implementing this 
        section, which shall reflect any recommendations by the 
        Council under paragraph (1)(B).''.

SEC. 623. INTERSTATE MERGER TRANSACTIONS.

    (a) Interstate Merger Transactions.--Section 18(c) of the 
Federal Deposit Insurance Act (12 U.S.C. 1828(c)) is amended by 
adding at the end the following:
    ``(13)(A) Except as provided in subparagraph (B), the 
responsible agency may not approve an application for an 
interstate merger transaction if the resulting insured 
depository institution (including all insured depository 
institutions which are affiliates of the resulting insured 
depository institution), upon consummation of the transaction, 
would control more than 10 percent of the total amount of 
deposits of insured depository institutions in the United 
States.
    ``(B) Subparagraph (A) shall not apply to an interstate 
merger transaction that involves 1 or more insured depository 
institutions in default or in danger of default, or with 
respect to which the Corporation provides assistance under 
section 13.
    ``(C) In this paragraph--
            ``(i) the term `interstate merger transaction' 
        means a merger transaction involving 2 or more insured 
        depository institutions that have different home States 
        and that are not affiliates; and
            ``(ii) the term `home State' means--
                    ``(I) with respect to a national bank, the 
                State in which the main office of the bank is 
                located;
                    ``(II) with respect to a State bank or 
                State savings association, the State by which 
                the State bank or State savings association is 
                chartered; and
                    ``(III) with respect to a Federal savings 
                association, the State in which the home office 
                (as defined by the regulations of the Director 
                of the Office of Thrift Supervision, or, on and 
                after the transfer date, the Comptroller of the 
                Currency) of the Federal savings association is 
                located.''.
    (b) Acquisitions by Bank Holding Companies.--
            (1) In general.--Section 4 of the Bank Holding 
        Company Act of 1956 (12 U.S.C. 1843) is amended--
                    (A) in subsection (i), by adding at the end 
                the following:
            ``(8) Interstate acquisitions.--
                    ``(A) In general.--The Board may not 
                approve an application by a bank holding 
                company to acquire an insured depository 
                institution under subsection (c)(8) or any 
                other provision of this Act if--
                            ``(i) the home State of such 
                        insured depository institution is a 
                        State other than the home State of the 
                        bank holding company; and
                            ``(ii) the applicant (including all 
                        insured depository institutions which 
                        are affiliates of the applicant) 
                        controls, or upon consummation of the 
                        transaction would control, more than 10 
                        percent of the total amount of deposits 
                        of insured depository institutions in 
                        the United States.
                    ``(B) Exception.--Subparagraph (A) shall 
                not apply to an acquisition that involves an 
                insured depository institution in default or in 
                danger of default, or with respect to which the 
                Federal Deposit Insurance Corporation provides 
                assistance under section 13 of the Federal 
                Deposit Insurance Act (12 U.S.C. 1823).''; and
                    (B) in subsection (k)(6)(B), by striking 
                ``savings association'' and inserting ``insured 
                depository institution''.
            (2) Definitions.--Section 2(o)(4) of the Bank 
        Holding Company Act of 1956 (12 U.S.C. 1841(o)(4)) is 
        amended--
                    (A) in subparagraph (B), by striking 
                ``and'' at the end;
                    (B) in subparagraph (C)(ii), by striking 
                the period at the end and inserting a 
                semicolon; and
                    (C) by adding at the end the following:
                    ``(D) with respect to a State savings 
                association, the State by which the savings 
                association is chartered; and
                    ``(E) with respect to a Federal savings 
                association, the State in which the home office 
                (as defined by the regulations of the Director 
                of the Office of Thrift Supervision, or, on and 
                after the transfer date, the Comptroller of the 
                Currency) of the Federal savings association is 
                located.''.
    (c) Acquisitions by Savings and Loan Holding Companies.--
Section 10(e)(2) of the Home Owners' Loan Act (12 U.S.C. 
1467a(e)(2)) is amended--
            (1) in paragraph (2)--
                    (A) in subparagraph (C), by striking ``or'' 
                at the end;
                    (B) in subparagraph (D), by striking the 
                period at the end and inserting ``, or''; and
                    (C) by adding at the end the following:
                    ``(E) in the case of an application by a 
                savings and loan holding company to acquire an 
                insured depository institution, if--
                            ``(i) the home State of the insured 
                        depository institution is a State other 
                        than the home State of the savings and 
                        loan holding company;
                            ``(ii) the applicant (including all 
                        insured depository institutions which 
                        are affiliates of the applicant) 
                        controls, or upon consummation of the 
                        transaction would control, more than 10 
                        percent of the total amount of deposits 
                        of insured depository institutions in 
                        the United States; and
                            ``(iii) the acquisition does not 
                        involve an insured depository 
                        institution in default or in danger of 
                        default, or with respect to which the 
                        Federal Deposit Insurance Corporation 
                        provides assistance under section 13 of 
                        the Federal Deposit Insurance Act (12 
                        U.S.C. 1823).''; and
            (2) by adding at the end the following:
            ``(7) Definitions.--For purposes of paragraph 
        (2)(E)--
                    ``(A) the terms `default', `in danger of 
                default', and `insured depository institution' 
                have the same meanings as in section 3 of the 
                Federal Deposit Insurance Act (12 U.S.C. 1813); 
                and
                    ``(B) the term `home State' means--
                            ``(i) with respect to a national 
                        bank, the State in which the main 
                        office of the bank is located;
                            ``(ii) with respect to a State bank 
                        or State savings association, the State 
                        by which the savings association is 
                        chartered;
                            ``(iii) with respect to a Federal 
                        savings association, the State in which 
                        the home office (as defined by the 
                        regulations of the Director of the 
                        Office of Thrift Supervision, or, on 
                        and after the transfer date, the 
                        Comptroller of the Currency) of the 
                        Federal savings association is located; 
                        and
                            ``(iv) with respect to a savings 
                        and loan holding company, the State in 
                        which the amount of total deposits of 
                        all insured depository institution 
                        subsidiaries of such company was the 
                        greatest on the date on which the 
                        company became a savings and loan 
                        holding company.''.

SEC. 624. QUALIFIED THRIFT LENDERS.

    Section 10(m)(3) of the Home Owners' Loan Act (12 U.S.C. 
1467a(m)(3)) is amended--
            (1) by striking subparagraph (A) and inserting the 
        following:
                    ``(A) In general.--A savings association 
                that fails to become or remain a qualified 
                thrift lender shall immediately be subject to 
                the restrictions under subparagraph (B).''; and
            (2) in subparagraph (B)(i), by striking subclause 
        (III) and inserting the following:
                                    ``(III) Dividends.--The 
                                savings association may not pay 
                                dividends, except for dividends 
                                that--
                                            ``(aa) would be 
                                        permissible for a 
                                        national bank;
                                            ``(bb) are 
                                        necessary to meet 
                                        obligations of a 
                                        company that controls 
                                        such savings 
                                        association; and
                                            ``(cc) are 
                                        specifically approved 
                                        by the Comptroller of 
                                        the Currency and the 
                                        Board after a written 
                                        request submitted to 
                                        the Comptroller of the 
                                        Currency and the Board 
                                        by the savings 
                                        association not later 
                                        than 30 days before the 
                                        date of the proposed 
                                        payment.
                                    ``(IV) Regulatory 
                                authority.--A savings 
                                association that fails to 
                                become or remain a qualified 
                                thrift lender shall be deemed 
                                to have violated section 5 of 
                                the Home Owners' Loan Act (12 
                                U.S.C. 1464) and subject to 
                                actions authorized by section 
                                5(d) of the Home Owners' Loan 
                                Act (12 U.S.C. 1464(d)).''.

SEC. 625. TREATMENT OF DIVIDENDS BY CERTAIN MUTUAL HOLDING COMPANIES.

    (a) In General.--Section 10(o) of the Home Owners' Loan Act 
(12 U.S.C. 1467a(o) is amended by adding at the end the 
following:
            ``(11) Dividends.--
                    ``(A) Declaration of dividends.--
                            ``(i) Advance notice required.--
                        Each subsidiary of a mutual holding 
                        company that is a savings association 
                        shall give the appropriate Federal 
                        banking agency and the Board notice not 
                        later than 30 days before the date of a 
                        proposed declaration by the board of 
                        directors of the savings association of 
                        any dividend on the guaranty, 
                        permanent, or other nonwithdrawable 
                        stock of the savings association.
                            ``(ii) Invalid dividends.--Any 
                        dividend described in clause (i) that 
                        is declared without giving notice to 
                        the appropriate Federal banking agency 
                        and the Board under clause (i), or that 
                        is declared during the 30-day period 
                        preceding the date of a proposed 
                        declaration for which notice is given 
                        to the appropriate Federal banking 
                        agency and the Board under clause (i), 
                        shall be invalid and shall confer no 
                        rights or benefits upon the holder of 
                        any such stock.
                    ``(B) Waiver of dividends.--A mutual 
                holding company may waive the right to receive 
                any dividend declared by a subsidiary of the 
                mutual holding company, if--
                            ``(i) no insider of the mutual 
                        holding company, associate of an 
                        insider, or tax-qualified or non-tax-
                        qualified employee stock benefit plan 
                        of the mutual holding company holds any 
                        share of the stock in the class of 
                        stock to which the waiver would apply; 
                        or
                            ``(ii) the mutual holding company 
                        gives written notice to the Board of 
                        the intent of the mutual holding 
                        company to waive the right to receive 
                        dividends, not later than 30 days 
                        before the date of the proposed date of 
                        payment of the dividend, and the Board 
                        does not object to the waiver.
                    ``(C) Resolution included in waiver 
                notice.--A notice of a waiver under 
                subparagraph (B) shall include a copy of the 
                resolution of the board of directors of the 
                mutual holding company, in such form and 
                substance as the Board may determine, together 
                with any supporting materials relied upon by 
                the board of directors of the mutual holding 
                company, concluding that the proposed dividend 
                waiver is consistent with the fiduciary duties 
                of the board of directors to the mutual members 
                of the mutual holding company.
                    ``(D) Standards for waiver of dividend.--
                The Board may not object to a waiver of 
                dividends under subparagraph (B) if--
                            ``(i) the waiver would not be 
                        detrimental to the safe and sound 
                        operation of the savings association;
                            ``(ii) the board of directors of 
                        the mutual holding company expressly 
                        determines that a waiver of the 
                        dividend by the mutual holding company 
                        is consistent with the fiduciary duties 
                        of the board of directors to the mutual 
                        members of the mutual holding company; 
                        and
                            ``(iii) the mutual holding company 
                        has, prior to December 1, 2009--
                                    ``(I) reorganized into a 
                                mutual holding company under 
                                subsection (o);
                                    ``(II) issued minority 
                                stock either from its mid-tier 
                                stock holding company or its 
                                subsidiary stock savings 
                                association; and
                                    ``(III) waived dividends it 
                                had a right to receive from the 
                                subsidiary stock savings 
                                association.
                    ``(E) Valuation.--
                            ``(i) In general.--The appropriate 
                        Federal banking agency shall consider 
                        waived dividends in determining an 
                        appropriate exchange ratio in the event 
                        of a full conversion to stock form.
                            ``(ii) Exception.--In the case of a 
                        savings association that has 
                        reorganized into a mutual holding 
                        company, has issued minority stock from 
                        a mid-tier stock holding company or a 
                        subsidiary stock savings association of 
                        the mutual holding company, and has 
                        waived dividends it had a right to 
                        receive from a subsidiary savings 
                        association before December 1, 2009, 
                        the appropriate Federal banking agency 
                        shall not consider waived dividends in 
                        determining an appropriate exchange 
                        ratio in the event of a full conversion 
                        to stock form.''.
    (b) Effective Date.--The amendment made by subsection (a) 
shall take effect on the transfer date.

SEC. 626. INTERMEDIATE HOLDING COMPANIES.

    The Home Owners' Loan Act (12 U.S.C. 1461 et seq.) is 
amended by inserting after section 10 (12 U.S.C. 1467a) the 
following new section:

``SEC. 10A. INTERMEDIATE HOLDING COMPANIES.

    ``(a) Definition.--For purposes of this section:
            ``(1) Financial activities.--The term `financial 
        activities' means activities described in clauses (i) 
        and (ii) of section 10(c)(9)(A).
            ``(2) Grandfathered unitary savings and loan 
        holding company.--The term `grandfathered unitary 
        savings and loan holding company' means a company 
        described in section 10(c)(9)(C).
            ``(3) Internal financial activities.--The term 
        `internal financial activities' includes--
                    ``(A) internal financial activities 
                conducted by a grandfathered savings and loan 
                holding company or any affiliate; and
                    ``(B) internal treasury, investment, and 
                employee benefit functions.
    ``(b) Requirement.--
            ``(1) In general.--
                    ``(A) Activities other than financial 
                activities.--If a grandfathered unitary savings 
                and loan holding company conducts activities 
                other than financial activities, the Board may 
                require such company to establish and conduct 
                all or a portion of such financial activities 
                in or through an intermediate holding company, 
                which shall be a savings and loan holding 
                company, established pursuant to regulations of 
                the Board, not later than 90 days (or such 
                longer period as the Board may deem 
                appropriate) after the transfer date.
                    ``(B) Other activities.--Notwithstanding 
                subparagraph (A), the Board shall require a 
                grandfathered unitary savings and loan holding 
                company to establish an intermediate holding 
                company if the Board makes a determination that 
                the establishment of such intermediate holding 
                company is necessary--
                            ``(i) to appropriately supervise 
                        activities that are determined to be 
                        financial activities; or
                            ``(ii) to ensure that supervision 
                        by the Board does not extend to the 
                        activities of such company that are not 
                        financial activities.
            ``(2) Internal financial activities.--
                    ``(A) Treatment of internal financial 
                activities.--For purposes of this subsection, 
                the internal financial activities of a 
                grandfathered unitary savings and loan holding 
                company shall not be required to be placed in 
                an intermediate holding company.
                    ``(B) Grandfathered activities.--A 
                grandfathered unitary savings and loan holding 
                company may continue to engage in an internal 
                financial activity, subject to review by the 
                Board to determine whether engaging in such 
                activity presents undue risk to the 
                grandfathered unitary savings and loan holding 
                company or to the financial stability of the 
                United States, if--
                            ``(i) the grandfathered unitary 
                        savings and loan holding company 
                        engaged in the activity during the year 
                        before the date of enactment of this 
                        section; and
                            ``(ii) at least \2/3\ of the assets 
                        or \2/3\ of the revenues generated from 
                        the activity are from or attributable 
                        to the grandfathered unitary savings 
                        and loan holding company.
            ``(3) Source of strength.--A grandfathered unitary 
        savings and loan holding company that directly or 
        indirectly controls an intermediate holding company 
        established under this section shall serve as a source 
        of strength to its subsidiary intermediate holding 
        company.
            ``(4) Parent company reports.--The Board, may from 
        time to time, examine and require reports under oath 
        from a grandfathered unitary savings and loan holding 
        company that controls an intermediate holding company, 
        and from the appropriate officers or directors of such 
        company, solely for purposes of ensuring compliance 
        with the provisions of this section, including 
        assessing the ability of the company to serve as a 
        source of strength to its subsidiary intermediate 
        holding company as required under paragraph (3) and 
        enforcing compliance with such requirement.
            ``(5) Limited parent company enforcement.--
                    ``(A) In general.--In addition to any other 
                authority of the Board, the Board may enforce 
                compliance with the provisions of this 
                subsection that are applicable to any company 
                described in paragraph (1)(A) that controls an 
                intermediate holding company under section 8 of 
                the Federal Deposit Insurance Act, and a 
                company described in paragraph (1)(A) shall be 
                subject to such section (solely for purposes of 
                this subparagraph) in the same manner and to 
                the same extent as if the company described in 
                paragraph (1)(A) were a savings and loan 
                holding company.
                    ``(B) Application of other act.--Any 
                violation of this subsection by a grandfathered 
                unitary savings and loan holding company that 
                controls an intermediate holding company may 
                also be treated as a violation of the Federal 
                Deposit Insurance Act for purposes of 
                subparagraph (A).
                    ``(C) No effect on other authority.--No 
                provision of this paragraph shall be construed 
                as limiting any authority of the Board or any 
                other Federal agency under any other provision 
                of law.
    ``(c) Regulations.--The Board--
            ``(1) shall promulgate regulations to establish the 
        criteria for determining whether to require a 
        grandfathered unitary savings and loan holding company 
        to establish an intermediate holding company under 
        subsection (b); and
            ``(2) may promulgate regulations to establish any 
        restrictions or limitations on transactions between an 
        intermediate holding company or a parent of such 
        company and its affiliates, as necessary to prevent 
        unsafe and unsound practices in connection with 
        transactions between the intermediate holding company, 
        or any subsidiary thereof, and its parent company or 
        affiliates that are not subsidiaries of the 
        intermediate holding company, except that such 
        regulations shall not restrict or limit any transaction 
        in connection with the bona fide acquisition or lease 
        by an unaffiliated person of assets, goods, or 
        services.
    ``(d) Rules of Construction.--
            ``(1) Activities.--Nothing in this section shall be 
        construed to require a grandfathered unitary savings 
        and loan holding company to conform its activities to 
        permissible activities.
            ``(2) Permissible corporate reorganization.--The 
        formation of an intermediate holding company as 
        required in subsection (b) shall be presumed to be a 
        permissible corporate reorganization as described in 
        section 10(c)(9)(D).''.

SEC. 627. INTEREST-BEARING TRANSACTION ACCOUNTS AUTHORIZED.

    (a) Repeal of Prohibition on Payment of Interest on Demand 
Deposits.--
            (1) Federal reserve act.--Section 19(i) of the 
        Federal Reserve Act (12 U.S.C. 371a) is amended to read 
        as follows:
    ``(i) [Repealed]''.
            (2) Home owners' loan act.--The first sentence of 
        section 5(b)(1)(B) of the Home Owners' Loan Act (12 
        U.S.C. 1464(b)(1)(B)) is amended by striking ``savings 
        association may not--'' and all that follows through 
        ``(ii) permit any'' and inserting ``savings association 
        may not permit any''.
            (3) Federal deposit insurance act.--Section 18(g) 
        of the Federal Deposit Insurance Act (12 U.S.C. 
        1828(g)) is amended to read as follows:
    ``(g) [Repealed]''.
    (b) Effective Date.--The amendments made by subsection (a) 
shall take effect 1 year after the date of the enactment of 
this Act.

SEC. 628. CREDIT CARD BANK SMALL BUSINESS LENDING.

    Section 2(c)(2)(F)(v) of the Bank Holding Company Act of 
1956 (12 U.S.C. 1841(c)(2)(F)(v)) is amended by inserting 
before the period the following: ``, other than credit card 
loans that are made to businesses that meet the criteria for a 
small business concern to be eligible for business loans under 
regulations established by the Small Business Administration 
under part 121 of title 13, Code of Federal Regulations''.

         TITLE VII--WALL STREET TRANSPARENCY AND ACCOUNTABILITY

SEC. 701. SHORT TITLE.

    This title may be cited as the ``Wall Street Transparency 
and Accountability Act of 2010''.

        Subtitle A--Regulation of Over-the-Counter Swaps Markets

                      PART I--REGULATORY AUTHORITY

SEC. 711. DEFINITIONS.

    In this subtitle, the terms ``prudential regulator'', 
``swap'', ``swap dealer'', ``major swap participant'', ``swap 
data repository'', ``associated person of a swap dealer or 
major swap participant'', ``eligible contract participant'', 
``swap execution facility'', ``security-based swap'', 
``security-based swap dealer'', ``major security-based swap 
participant'', and ``associated person of a security-based swap 
dealer or major security-based swap participant'' have the 
meanings given the terms in section 1a of the Commodity 
Exchange Act (7 U.S.C. 1a), including any modification of the 
meanings under section 721(b) of this Act.

SEC. 712. REVIEW OF REGULATORY AUTHORITY.

    (a) Consultation.--
            (1) Commodity futures trading commission.--Before 
        commencing any rulemaking or issuing an order regarding 
        swaps, swap dealers, major swap participants, swap data 
        repositories, derivative clearing organizations with 
        regard to swaps, persons associated with a swap dealer 
        or major swap participant, eligible contract 
        participants, or swap execution facilities pursuant to 
        this subtitle, the Commodity Futures Trading Commission 
        shall consult and coordinate to the extent possible 
        with the Securities and Exchange Commission and the 
        prudential regulators for the purposes of assuring 
        regulatory consistency and comparability, to the extent 
        possible.
            (2) Securities and exchange commission.--Before 
        commencing any rulemaking or issuing an order regarding 
        security-based swaps, security-based swap dealers, 
        major security-based swap participants, security-based 
        swap data repositories, clearing agencies with regard 
        to security-based swaps, persons associated with a 
        security-based swap dealer or major security-based swap 
        participant, eligible contract participants with regard 
        to security-based swaps, or security-based swap 
        execution facilities pursuant to subtitle B, the 
        Securities and Exchange Commission shall consult and 
        coordinate to the extent possible with the Commodity 
        Futures Trading Commission and the prudential 
        regulators for the purposes of assuring regulatory 
        consistency and comparability, to the extent possible.
            (3) Procedures and deadline.--Such regulations 
        shall be prescribed in accordance with applicable 
        requirements of title 5, United States Code, and shall 
        be issued in final form not later than 360 days after 
        the date of enactment of this Act.
            (4) Applicability.--The requirements of paragraphs 
        (1) and (2) shall not apply to an order issued--
                    (A) in connection with or arising from a 
                violation or potential violation of any 
                provision of the Commodity Exchange Act (7 
                U.S.C. 1 et seq.);
                    (B) in connection with or arising from a 
                violation or potential violation of any 
                provision of the securities laws; or
                    (C) in any proceeding that is conducted on 
                the record in accordance with sections 556 and 
                557 of title 5, United States Code.
            (5) Effect.--Nothing in this subsection authorizes 
        any consultation or procedure for consultation that is 
        not consistent with the requirements of subchapter II 
        of chapter 5, and chapter 7, of title 5, United States 
        Code (commonly known as the ``Administrative Procedure 
        Act'').
            (6) Rules; orders.--In developing and promulgating 
        rules or orders pursuant to this subsection, each 
        Commission shall consider the views of the prudential 
        regulators.
            (7) Treatment of similar products and entities.--
                    (A) In general.--In adopting rules and 
                orders under this subsection, the Commodity 
                Futures Trading Commission and the Securities 
                and Exchange Commission shall treat 
                functionally or economically similar products 
                or entities described in paragraphs (1) and (2) 
                in a similar manner.
                    (B) Effect.--Nothing in this subtitle 
                requires the Commodity Futures Trading 
                Commission or the Securities and Exchange 
                Commission to adopt joint rules or orders that 
                treat functionally or economically similar 
                products or entities described in paragraphs 
                (1) and (2) in an identical manner.
            (8) Mixed swaps.--The Commodity Futures Trading 
        Commission and the Securities and Exchange Commission, 
        after consultation with the Board of Governors, shall 
        jointly prescribe such regulations regarding mixed 
        swaps, as described in section 1a(47)(D) of the 
        Commodity Exchange Act (7 U.S.C. 1a(47)(D)) and in 
        section 3(a)(68)(D) of the Securities Exchange Act of 
        1934 (15 U.S.C. 78c(a)(68)(D)), as may be necessary to 
        carry out the purposes of this title.
    (b) Limitation.--
            (1) Commodity futures trading commission.--Nothing 
        in this title, unless specifically provided, confers 
        jurisdiction on the Commodity Futures Trading 
        Commission to issue a rule, regulation, or order 
        providing for oversight or regulation of--
                    (A) security-based swaps; or
                    (B) with regard to its activities or 
                functions concerning security-based swaps--
                            (i) security-based swap dealers;
                            (ii) major security-based swap 
                        participants;
                            (iii) security-based swap data 
                        repositories;
                            (iv) associated persons of a 
                        security-based swap dealer or major 
                        security-based swap participant;
                            (v) eligible contract participants 
                        with respect to security-based swaps; 
                        or
                            (vi) swap execution facilities with 
                        respect to security-based swaps.
            (2) Securities and exchange commission.--Nothing in 
        this title, unless specifically provided, confers 
        jurisdiction on the Securities and Exchange Commission 
        or State securities regulators to issue a rule, 
        regulation, or order providing for oversight or 
        regulation of--
                    (A) swaps; or
                    (B) with regard to its activities or 
                functions concerning swaps--
                            (i) swap dealers;
                            (ii) major swap participants;
                            (iii) swap data repositories;
                            (iv) persons associated with a swap 
                        dealer or major swap participant;
                            (v) eligible contract participants 
                        with respect to swaps; or
                            (vi) swap execution facilities with 
                        respect to swaps.
            (3) Prohibition on certain futures associations and 
        national securities associations.--
                    (A) Futures associations.--Notwithstanding 
                any other provision of law (including 
                regulations), unless otherwise authorized by 
                this title, no futures association registered 
                under section 17 of the Commodity Exchange Act 
                (7 U.S.C. 21) may issue a rule, regulation, or 
                order for the oversight or regulation of, or 
                otherwise assert jurisdiction over, for any 
                purpose, any security-based swap, except that 
                this subparagraph shall not limit the authority 
                of a registered futures association to examine 
                for compliance with, and enforce, its rules on 
                capital adequacy.
                    (B) National securities associations.--
                Notwithstanding any other provision of law 
                (including regulations), unless otherwise 
                authorized by this title, no national 
                securities association registered under section 
                15A of the Securities Exchange Act of 1934 (15 
                U.S.C. 78o-3) may issue a rule, regulation, or 
                order for the oversight or regulation of, or 
                otherwise assert jurisdiction over, for any 
                purpose, any swap, except that this 
                subparagraph shall not limit the authority of a 
                national securities association to examine for 
                compliance with, and enforce, its rules on 
                capital adequacy.
    (c) Objection to Commission Regulation.--
            (1) Filing of petition for review.--
                    (A) In general.--If either Commission 
                referred to in this section determines that a 
                final rule, regulation, or order of the other 
                Commission conflicts with subsection (a)(7) or 
                (b), then the complaining Commission may obtain 
                review of the final rule, regulation, or order 
                in the United States Court of Appeals for the 
                District of Columbia Circuit by filing in the 
                court, not later than 60 days after the date of 
                publication of the final rule, regulation, or 
                order, a written petition requesting that the 
                rule, regulation, or order be set aside.
                    (B) Expedited proceeding.--A proceeding 
                described in subparagraph (A) shall be 
                expedited by the United States Court of Appeals 
                for the District of Columbia Circuit.
            (2) Transmittal of petition and record.--
                    (A) In general.--A copy of a petition 
                described in paragraph (1) shall be transmitted 
                not later than 1 business day after the date of 
                filing by the complaining Commission to the 
                Secretary of the responding Commission.
                    (B) Duty of responding commission.--On 
                receipt of the copy of a petition described in 
                paragraph (1), the responding Commission shall 
                file with the United States Court of Appeals 
                for the District of Columbia Circuit--
                            (i) a copy of the rule, regulation, 
                        or order under review (including any 
                        documents referred to therein); and
                            (ii) any other materials prescribed 
                        by the United States Court of Appeals 
                        for the District of Columbia Circuit.
            (3) Standard of review.--The United States Court of 
        Appeals for the District of Columbia Circuit shall--
                    (A) give deference to the views of neither 
                Commission; and
                    (B) determine to affirm or set aside a 
                rule, regulation, or order of the responding 
                Commission under this subsection, based on the 
                determination of the court as to whether the 
                rule, regulation, or order is in conflict with 
                subsection (a)(7) or (b), as applicable.
            (4) Judicial stay.--The filing of a petition by the 
        complaining Commission pursuant to paragraph (1) shall 
        operate as a stay of the rule, regulation, or order 
        until the date on which the determination of the United 
        States Court of Appeals for the District of Columbia 
        Circuit is final (including any appeal of the 
        determination).
    (d) Joint Rulemaking.--
            (1) In general.--Notwithstanding any other 
        provision of this title and subsections (b) and (c), 
        the Commodity Futures Trading Commission and the 
        Securities and Exchange Commission, in consultation 
        with the Board of Governors, shall further define the 
        terms ``swap'', ``security-based swap'', ``swap 
        dealer'', ``security-based swap dealer'', ``major swap 
        participant'', ``major security-based swap 
        participant'', ``eligible contract participant'', and 
        ``security-based swap agreement'' in section 
        1a(47)(A)(v) of the Commodity Exchange Act (7 U.S.C. 
        1a(47)(A)(v)) and section 3(a)(78) of the Securities 
        Exchange Act of 1934 (15 U.S.C. 78c(a)(78)).
            (2) Authority of the commissions.--
                    (A) In general.--Notwithstanding any other 
                provision of this title, the Commodity Futures 
                Trading Commission and the Securities and 
                Exchange Commission, in consultation with the 
                Board of Governors, shall jointly adopt such 
                other rules regarding such definitions as the 
                Commodity Futures Trading Commission and the 
                Securities and Exchange Commission determine 
                are necessary and appropriate, in the public 
                interest, and for the protection of investors.
                    (B) Trade repository recordkeeping.--
                Notwithstanding any other provision of this 
                title, the Commodity Futures Trading Commission 
                and the Securities and Exchange Commission, in 
                consultation with the Board of Governors, shall 
                engage in joint rulemaking to jointly adopt a 
                rule or rules governing the books and records 
                that are required to be kept and maintained 
                regarding security-based swap agreements by 
                persons that are registered as swap data 
                repositories under the Commodity Exchange Act, 
                including uniform rules that specify the data 
                elements that shall be collected and maintained 
                by each repository.
                    (C) Books and records.--Notwithstanding any 
                other provision of this title, the Commodity 
                Futures Trading Commission and the Securities 
                and Exchange Commission, in consultation with 
                the Board of Governors, shall engage in joint 
                rulemaking to jointly adopt a rule or rules 
                governing books and records regarding security-
                based swap agreements, including daily trading 
                records, for swap dealers, major swap 
                participants, security-based swap dealers, and 
                security-based swap participants.
                    (D) Comparable rules.--Rules and 
                regulations prescribed jointly under this title 
                by the Commodity Futures Trading Commission and 
                the Securities and Exchange Commission shall be 
                comparable to the maximum extent possible, 
                taking into consideration differences in 
                instruments and in the applicable statutory 
                requirements.
                    (E) Tracking uncleared transactions.--Any 
                rules prescribed under subparagraph (A) shall 
                require the maintenance of records of all 
                activities relating to security-based swap 
                agreement transactions defined under 
                subparagraph (A) that are not cleared.
                    (F) Sharing of information.--The Commodity 
                Futures Trading Commission shall make available 
                to the Securities and Exchange Commission 
                information relating to security-based swap 
                agreement transactions defined in subparagraph 
                (A) that are not cleared.
            (3) Financial stability oversight council.--In the 
        event that the Commodity Futures Trading Commission and 
        the Securities and Exchange Commission fail to jointly 
        prescribe rules pursuant to paragraph (1) or (2) in a 
        timely manner, at the request of either Commission, the 
        Financial Stability Oversight Council shall resolve the 
        dispute--
                    (A) within a reasonable time after 
                receiving the request;
                    (B) after consideration of relevant 
                information provided by each Commission; and
                    (C) by agreeing with 1 of the Commissions 
                regarding the entirety of the matter or by 
                determining a compromise position.
            (4) Joint interpretation.--Any interpretation of, 
        or guidance by either Commission regarding, a provision 
        of this title, shall be effective only if issued 
        jointly by the Commodity Futures Trading Commission and 
        the Securities and Exchange Commission, after 
        consultation with the Board of Governors, if this title 
        requires the Commodity Futures Trading Commission and 
        the Securities and Exchange Commission to issue joint 
        regulations to implement the provision.
    (e) Global Rulemaking Timeframe.--Unless otherwise provided 
in this title, or an amendment made by this title, the 
Commodity Futures Trading Commission or the Securities and 
Exchange Commission, or both, shall individually, and not 
jointly, promulgate rules and regulations required of each 
Commission under this title or an amendment made by this title 
not later than 360 days after the date of enactment of this 
Act.
    (f) Rules and Registration Before Final Effective Dates.--
Beginning on the date of enactment of this Act and 
notwithstanding the effective date of any provision of this 
Act, the Commodity Futures Trading Commission and the 
Securities and Exchange Commission may, in order to prepare for 
the effective dates of the provisions of this Act--
            (1) promulgate rules, regulations, or orders 
        permitted or required by this Act;
            (2) conduct studies and prepare reports and 
        recommendations required by this Act;
            (3) register persons under the provisions of this 
        Act; and
            (4) exempt persons, agreements, contracts, or 
        transactions from provisions of this Act, under the 
        terms contained in this Act,
provided, however, that no action by the Commodity Futures 
Trading Commission or the Securities and Exchange Commission 
described in paragraphs (1) through (4) shall become effective 
prior to the effective date applicable to such action under the 
provisions of this Act.

SEC. 713. PORTFOLIO MARGINING CONFORMING CHANGES.

    (a) Securities Exchange Act of 1934.--Section 15(c)(3) of 
the Securities Exchange Act of 1934 (15 U.S.C. 78o(c)(3)) is 
amended by adding at the end the following:
                    ``(C) Notwithstanding any provision of 
                sections 2(a)(1)(C)(i) or 4d(a)(2) of the 
                Commodity Exchange Act and the rules and 
                regulations thereunder, and pursuant to an 
                exemption granted by the Commission under 
                section 36 of this title or pursuant to a rule 
                or regulation, cash and securities may be held 
                by a broker or dealer registered pursuant to 
                subsection (b)(1) and also registered as a 
                futures commission merchant pursuant to section 
                4f(a)(1) of the Commodity Exchange Act, in a 
                portfolio margining account carried as a 
                futures account subject to section 4d of the 
                Commodity Exchange Act and the rules and 
                regulations thereunder, pursuant to a portfolio 
                margining program approved by the Commodity 
                Futures Trading Commission, and subject to 
                subchapter IV of chapter 7 of title 11 of the 
                United States Code and the rules and 
                regulations thereunder. The Commission shall 
                consult with the Commodity Futures Trading 
                Commission to adopt rules to ensure that such 
                transactions and accounts are subject to 
                comparable requirements to the extent 
                practicable for similar products.''.
    (b) Commodity Exchange Act.--Section 4d of the Commodity 
Exchange Act (7 U.S.C. 6d) is amended by adding at the end the 
following:
    ``(h) Notwithstanding subsection (a)(2) or the rules and 
regulations thereunder, and pursuant to an exemption granted by 
the Commission under section 4(c) of this Act or pursuant to a 
rule or regulation, a futures commission merchant that is 
registered pursuant to section 4f(a)(1) of this Act and also 
registered as a broker or dealer pursuant to section 15(b)(1) 
of the Securities Exchange Act of 1934 may, pursuant to a 
portfolio margining program approved by the Securities and 
Exchange Commission pursuant to section 19(b) of the Securities 
Exchange Act of 1934, hold in a portfolio margining account 
carried as a securities account subject to section 15(c)(3) of 
the Securities Exchange Act of 1934 and the rules and 
regulations thereunder, a contract for the purchase or sale of 
a commodity for future delivery or an option on such a 
contract, and any money, securities or other property received 
from a customer to margin, guarantee or secure such a contract, 
or accruing to a customer as the result of such a contract. The 
Commission shall consult with the Securities and Exchange 
Commission to adopt rules to ensure that such transactions and 
accounts are subject to comparable requirements to the extent 
practical for similar products.''.
    (c) Duty of Commodity Futures Trading Commission.--Section 
20 of the Commodity Exchange Act (7 U.S.C. 24) is amended by 
adding at the end the following:
    ``(c) The Commission shall exercise its authority to ensure 
that securities held in a portfolio margining account carried 
as a futures account are customer property and the owners of 
those accounts are customers for the purposes of subchapter IV 
of chapter 7 of title 11 of the United States Code.''.

SEC. 714. ABUSIVE SWAPS.

    The Commodity Futures Trading Commission or the Securities 
and Exchange Commission, or both, individually may, by rule or 
order--
            (1) collect information as may be necessary 
        concerning the markets for any types of--
                    (A) swap (as defined in section 1a of the 
                Commodity Exchange Act (7 U.S.C. 1a)); or
                    (B) security-based swap (as defined in 
                section 1a of the Commodity Exchange Act (7 
                U.S.C. 1a)); and
            (2) issue a report with respect to any types of 
        swaps or security-based swaps that the Commodity 
        Futures Trading Commission or the Securities and 
        Exchange Commission determines to be detrimental to--
                    (A) the stability of a financial market; or
                    (B) participants in a financial market.

SEC. 715. AUTHORITY TO PROHIBIT PARTICIPATION IN SWAP ACTIVITIES.

    Except as provided in section 4 of the Commodity Exchange 
Act (7 U.S.C. 6), if the Commodity Futures Trading Commission 
or the Securities and Exchange Commission determines that the 
regulation of swaps or security-based swaps markets in a 
foreign country undermines the stability of the United States 
financial system, either Commission, in consultation with the 
Secretary of the Treasury, may prohibit an entity domiciled in 
the foreign country from participating in the United States in 
any swap or security-based swap activities.

SEC. 716. PROHIBITION AGAINST FEDERAL GOVERNMENT BAILOUTS OF SWAPS 
                    ENTITIES.

    (a) Prohibition on Federal Assistance.--Notwithstanding any 
other provision of law (including regulations), no Federal 
assistance may be provided to any swaps entity with respect to 
any swap, security-based swap, or other activity of the swaps 
entity.
    (b) Definitions.--In this section:
            (1) Federal assistance.--The term ``Federal 
        assistance'' means the use of any advances from any 
        Federal Reserve credit facility or discount window that 
        is not part of a program or facility with broad-based 
        eligibility under section 13(3)(A) of the Federal 
        Reserve Act, Federal Deposit Insurance Corporation 
        insurance or guarantees for the purpose of--
                    (A) making any loan to, or purchasing any 
                stock, equity interest, or debt obligation of, 
                any swaps entity;
                    (B) purchasing the assets of any swaps 
                entity;
                    (C) guaranteeing any loan or debt issuance 
                of any swaps entity; or
                    (D) entering into any assistance 
                arrangement (including tax breaks), loss 
                sharing, or profit sharing with any swaps 
                entity.
            (2) Swaps entity.--
                    (A) In general.--The term ``swaps entity'' 
                means any swap dealer, security-based swap 
                dealer, major swap participant, 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) Exclusion.--The term ``swaps entity'' 
                does not include any major swap participant or 
                major security-based swap participant that is 
                an insured depository institution.
    (c) Affiliates of Insured Depository Institutions.--The 
prohibition on Federal assistance contained in subsection (a) 
does not apply to and shall not prevent an insured depository 
institution from having or establishing an affiliate which is a 
swaps entity, as long as such insured depository institution is 
part of a bank holding company, or savings and loan holding 
company, that is supervised by the Federal Reserve and such 
swaps entity affiliate complies with sections 23A and 23B of 
the Federal Reserve Act and such other requirements as the 
Commodity Futures Trading Commission or the Securities Exchange 
Commission, as appropriate, and the Board of Governors of the 
Federal Reserve System, may determine to be necessary and 
appropriate.
    (d) Only Bona Fide Hedging and Traditional Bank Activities 
Permitted.--The prohibition in subsection (a) shall apply to 
any insured depository institution unless the insured 
depository institution limits its swap or security-based swap 
activities to:
            (1) Hedging and other similar risk mitigating 
        activities directly related to the insured depository 
        institution's activities.
            (2) Acting as a swaps entity for swaps or security-
        based swaps involving rates or reference assets that 
        are permissible for investment by a national bank under 
        the paragraph designated as ``Seventh.'' of section 
        5136 of the Revised Statutes of the United States ( 12 
        U.S.C. 24), other than as described in paragraph (3).
            (3) Limitation on credit default swaps.--Acting as 
        a swaps entity for credit default swaps, including 
        swaps or security-based swaps referencing the credit 
        risk of asset-backed securities as defined in section 
        3(a)(77) of the Securities Exchange Act of 1934 (15 
        U.S.C. 78c(a)(77)) (as amended by this Act) shall not 
        be considered a bank permissible activity for purposes 
        of subsection (d)(2) unless such swaps or security-
        based swaps are cleared by a derivatives clearing 
        organization (as such term is defined in section la of 
        the Commodity Exchange Act (7 U.S.C. la)) or a clearing 
        agency (as such term is defined in section 3 of the 
        Securities Exchange Act (15 U.S.C. 78c)) that is 
        registered, or exempt from registration, as a 
        derivatives clearing organization under the Commodity 
        Exchange Act or as a clearing agency under the 
        Securities Exchange Act, respectively.
    (e) Existing Swaps and Security-based Swaps.--The 
prohibition in subsection (a) shall only apply to swaps or 
security-based swaps entered into by an insured depository 
institution after the end of the transition period described in 
subsection (f).
    (f) Transition Period.--To the extent an insured depository 
institution qualifies as a ``swaps entity'' and would be 
subject to the Federal assistance prohibition in subsection 
(a), the appropriate Federal banking agency, after consulting 
with and considering the views of the Commodity Futures Trading 
Commission or the Securities Exchange Commission, as 
appropriate, shall permit the insured depository institution up 
to 24 months to divest the swaps entity or cease the activities 
that require registration as a swaps entity. In establishing 
the appropriate transition period to effect such divestiture or 
cessation of activities, which may include making the swaps 
entity an affiliate of the insured depository institution, the 
appropriate Federal banking agency shall take into account and 
make written findings regarding the potential impact of such 
divestiture or cessation of activities on the insured 
depository institution's (1) mortgage lending, (2) small 
business lending, (3) job creation, and (4) capital formation 
versus the potential negative impact on insured depositors and 
the Deposit Insurance Fund of the Federal Deposit Insurance 
Corporation. The appropriate Federal banking agency may 
consider such other factors as may be appropriate. The 
appropriate Federal banking agency may place such conditions on 
the insured depository institution's divestiture or ceasing of 
activities of the swaps entity as it deems necessary and 
appropriate. The transition period under this subsection may be 
extended by the appropriate Federal banking agency, after 
consultation with the Commodity Futures Trading Commission and 
the Securities and Exchange Commission, for a period of up to 1 
additional year.
    (g) Excluded Entities.--For purposes of this section, the 
term ``swaps entity'' shall not include any insured depository 
institution under the Federal Deposit Insurance Act or a 
covered financial company under title II which is in a 
conservatorship, receivership, or a bridge bank operated by the 
Federal Deposit Insurance Corporation.
    (h) Effective Date.--The prohibition in subsection (a) 
shall be effective 2 years following the date on which this Act 
is effective.
    (i) Liquidation Required.--
            (1) In general.--
                    (A) FDIC insured institutions.--All swaps 
                entities that are FDIC insured institutions 
                that are put into receivership or declared 
                insolvent as a result of swap or security-based 
                swap activity of the swaps entities shall be 
                subject to the termination or transfer of that 
                swap or security-based swap activity in 
                accordance with applicable law prescribing the 
                treatment of those contracts. No taxpayer funds 
                shall be used to prevent the receivership of 
                any swap entity resulting from swap or 
                security-based swap activity of the swaps 
                entity.
                    (B) Institutions that pose a systemic risk 
                and are subject to heightened prudential 
                supervision as regulated under section 113.--
                All swaps entities that are institutions that 
                pose a systemic risk and are subject to 
                heightened prudential supervision as regulated 
                under section 113, that are put into 
                receivership or declared insolvent as a result 
                of swap or security-based swap activity of the 
                swaps entities shall be subject to the 
                termination or transfer of that swap or 
                security-based swap activity in accordance with 
                applicable law prescribing the treatment of 
                those contracts. No taxpayer funds shall be 
                used to prevent the receivership of any swap 
                entity resulting from swap or security-based 
                swap activity of the swaps entity.
                    (C) Non-FDIC insured, non-systemically 
                significant institutions not subject to 
                heightened prudential supervision as regulated 
                under section 113.--No taxpayer resources shall 
                be used for the orderly liquidation of any 
                swaps entities that are non-FDIC insured, non-
                systemically significant institutions not 
                subject to heightened prudential supervision as 
                regulated under section 113.
            (2) Recovery of funds.--All funds expended on the 
        termination or transfer of the swap or security-based 
        swap activity of the swaps entity shall be recovered in 
        accordance with applicable law from the disposition of 
        assets of such swap entity or through assessments, 
        including on the financial sector as provided under 
        applicable law.
            (3) No losses to taxpayers.--Taxpayers shall bear 
        no losses from the exercise of any authority under this 
        title.
    (j) Prohibition on Unregulated Combination of Swaps 
Entities and Banking.--At no time following adoption of the 
rules in subsection (k) may a bank or bank holding company be 
permitted to be or become a swap entity unless it conducts its 
swap or security-based swap activity in compliance with such 
minimum standards set by its prudential regulator as are 
reasonably calculated to permit the swaps entity to conduct its 
swap or security-based swap activities in a safe and sound 
manner and mitigate systemic risk.
    (k) Rules.--In prescribing rules, the prudential regulator 
for a swaps entity shall consider the following factors:
            (1) The expertise and managerial strength of the 
        swaps entity, including systems for effective 
        oversight.
            (2) The financial strength of the swaps entity.
            (3) Systems for identifying, measuring and 
        controlling risks arising from the swaps entity's 
        operations.
            (4) Systems for identifying, measuring and 
        controlling the swaps entity's participation in 
        existing markets.
            (5) Systems for controlling the swaps entity's 
        participation or entry into in new markets and 
        products.
    (l) Authority of the Financial Stability Oversight 
Council.--The Financial Stability Oversight Council may 
determine that, when other provisions established by this Act 
are insufficient to effectively mitigate systemic risk and 
protect taxpayers, that swaps entities may no longer access 
Federal assistance with respect to any swap, security-based 
swap, or other activity of the swaps entity. Any such 
determination by the Financial Stability Oversight Council of a 
prohibition of federal assistance shall be made on an 
institution-by-institution basis, and shall require the vote of 
not fewer than two-thirds of the members of the Financial 
Stability Oversight Council, which must include the vote by the 
Chairman of the Council, the Chairman of the Board of Governors 
of the Federal Reserve System, and the Chairperson of the 
Federal Deposit Insurance Corporation. Notice and hearing 
requirements for such determinations shall be consistent with 
the standards provided in title I.
    (m) Ban on Proprietary Trading in Derivatives.--An insured 
depository institution shall comply with the prohibition on 
proprietary trading in derivatives as required by section 619 
of the Dodd-Frank Wall Street Reform and Consumer Protection 
Act.

SEC. 717. NEW PRODUCT APPROVAL CFTC--SEC PROCESS.

    (a) Amendments to the Commodity Exchange Act.--Section 
2(a)(1)(C) of the Commodity Exchange Act (7 U.S.C. 2(a)(1)(C)) 
is amended--
            (1) in clause (i) by striking ``This'' and 
        inserting ``(I) Except as provided in subclause (II), 
        this''; and
            (2) by adding at the end of clause (i) the 
        following:
                                    ``(II) This Act shall apply 
                                to and the Commission shall 
                                have jurisdiction with respect 
                                to accounts, agreements, and 
                                transactions involving, and may 
                                permit the listing for trading 
                                pursuant to section 5c(c) of, a 
                                put, call, or other option on 1 
                                or more securities (as defined 
                                in section 2(a)(1) of the 
                                Securities Act of 1933 or 
                                section 3(a)(10) of the 
                                Securities Exchange Act of 1934 
                                on the date of enactment of the 
                                Futures Trading Act of 1982), 
                                including any group or index of 
                                such securities, or any 
                                interest therein or based on 
                                the value thereof, that is 
                                exempted by the Securities and 
                                Exchange Commission pursuant to 
                                section 36(a)(1) of the 
                                Securities Exchange Act of 1934 
                                with the condition that the 
                                Commission exercise concurrent 
                                jurisdiction over such put, 
                                call, or other option; 
                                provided, however, that nothing 
                                in this paragraph shall be 
                                construed to affect the 
                                jurisdiction and authority of 
                                the Securities and Exchange 
                                Commission over such put, call, 
                                or other option.''.
    (b) Amendments to the Securities Exchange Act of 1934.--The 
Securities Exchange Act of 1934 is amended by adding the 
following section after section 3A (15 U.S.C. 78c-1):

``SEC. 3B. SECURITIES-RELATED DERIVATIVES.

    ``(a) Any agreement, contract, or transaction (or class 
thereof) that is exempted by the Commodity Futures Trading 
Commission pursuant to section 4(c)(1) of the Commodity 
Exchange Act (7 U.S.C. 6(c)(1)) with the condition that the 
Commission exercise concurrent jurisdiction over such 
agreement, contract, or transaction (or class thereof) shall be 
deemed a security for purposes of the securities laws.
    ``(b) With respect to any agreement, contract, or 
transaction (or class thereof) that is exempted by the 
Commodity Futures Trading Commission pursuant to section 
4(c)(1) of the Commodity Exchange Act (7 U.S.C. 6(c)(1)) with 
the condition that the Commission exercise concurrent 
jurisdiction over such agreement, contract, or transaction (or 
class thereof), references in the securities laws to the 
`purchase' or `sale' of a security shall be deemed to include 
the execution, termination (prior to its scheduled maturity 
date), assignment, exchange, or similar transfer or conveyance 
of, or extinguishing of rights or obligations under such 
agreement, contract, or transaction, as the context may 
require.''.
    (c) Amendment to Securities Exchange Act of 1934.--Section 
19(b) of the Securities Exchange Act of 1934 (15 U.S.C. 78s(b)) 
is amended by adding at the end the following:
            ``(10) Notwithstanding paragraph (2), the time 
        period within which the Commission is required by order 
        to approve a proposed rule change or institute 
        proceedings to determine whether the proposed rule 
        change should be disapproved is stayed pending a 
        determination by the Commission upon the request of the 
        Commodity Futures Trading Commission or its Chairman 
        that the Commission issue a determination as to whether 
        a product that is the subject of such proposed rule 
        change is a security pursuant to section 718 of the 
        Wall Street Transparency and Accountability Act of 
        2010.''.
    (d) Amendment to Commodity Exchange Act.--Section 5c(c)(1) 
of the Commodity Exchange Act (7 U.S.C. 7a-2(c)(1)) is 
amended--
            (1) by striking ``Subject to paragraph (2)'' and 
        inserting the following:
                    ``(A) Election.--Subject to paragraph 
                (2)''; and
            (2) by adding at the end the following:
                    ``(B) Certification.--The certification of 
                a product pursuant to this paragraph shall be 
                stayed pending a determination by the 
                Commission upon the request of the Securities 
                and Exchange Commission or its Chairman that 
                the Commission issue a determination as to 
                whether the product that is the subject of such 
                certification is a contract of sale of a 
                commodity for future delivery, an option on 
                such a contract, or an option on a commodity 
                pursuant to section 718 of the Wall Street 
                Transparency and Accountability Act of 2010.''.

SEC. 718. DETERMINING STATUS OF NOVEL DERIVATIVE PRODUCTS.

    (a) Process for Determining the Status of a Novel 
Derivative Product.--
            (1) Notice.--
                    (A) In general.--Any person filing a 
                proposal to list or trade a novel derivative 
                product that may have elements of both 
                securities and contracts of sale of a commodity 
                for future delivery (or options on such 
                contracts or options on commodities) may 
                concurrently provide notice and furnish a copy 
                of such filing with the Securities and Exchange 
                Commission and the Commodity Futures Trading 
                Commission. Any such notice shall state that 
                notice has been made with both Commissions.
                    (B) Notification.--If no concurrent notice 
                is made pursuant to subparagraph (A), within 5 
                business days after determining that a proposal 
                that seeks to list or trade a novel derivative 
                product may have elements of both securities 
                and contracts of sale of a commodity for future 
                delivery (or options on such contracts or 
                options on commodities), the Securities and 
                Exchange Commission or the Commodity Futures 
                Trading Commission, as applicable, shall notify 
                the other Commission and provide a copy of such 
                filing to the other Commission.
            (2) Request for determination.--
                    (A) In general.--No later than 21 days 
                after receipt of a notice under paragraph (1), 
                or upon its own initiative if no such notice is 
                received, the Commodity Futures Trading 
                Commission may request that the Securities and 
                Exchange Commission issue a determination as to 
                whether a product is a security, as defined in 
                section 3(a)(10) of the Securities Exchange Act 
                of 1934 (15 U.S.C. 78c(a)(10)).
                    (B) Request.--No later than 21 days after 
                receipt of a notice under paragraph (1), or 
                upon its own initiative if no such notice is 
                received, the Securities and Exchange 
                Commission may request that the Commodity 
                Futures Trading Commission issue a 
                determination as to whether a product is a 
                contract of sale of a commodity for future 
                delivery, an option on such a contract, or an 
                option on a commodity subject to the Commodity 
                Futures Trading Commission's exclusive 
                jurisdiction under section 2(a)(1)(A) of the 
                Commodity Exchange Act (7 U.S.C. 2(a)(1)(A)).
                    (C) Requirement relating to request.--A 
                request under subparagraph (A) or (B) shall be 
                made by submitting such request, in writing, to 
                the Securities and Exchange Commission or the 
                Commodity Futures Trading Commission, as 
                applicable.
                    (D) Effect.--Nothing in this paragraph 
                shall be construed to prevent--
                            (i) the Commodity Futures Trading 
                        Commission from requesting that the 
                        Securities and Exchange Commission 
                        grant an exemption pursuant to section 
                        36(a)(1) of the Securities Exchange Act 
                        of 1934 (15 U.S.C. 78mm(a)(1)) with 
                        respect to a product that is the 
                        subject of a filing under paragraph 
                        (1); or
                            (ii) the Securities and Exchange 
                        Commission from requesting that the 
                        Commodity Futures Trading Commission 
                        grant an exemption pursuant to section 
                        4(c)(1) of the Commodity Exchange Act 
                        (7 U.S.C. 6(c)(1)) with respect to a 
                        product that is the subject of a filing 
                        under paragraph (1),
                Provided, however, that nothing in this 
                subparagraph shall be construed to require the 
                Commodity Futures Trading Commission or the 
                Securities and Exchange Commission to issue an 
                exemption requested pursuant to this 
                subparagraph; provided further, That an order 
                granting or denying an exemption described in 
                this subparagraph and issued under paragraph 
                (3)(B) shall not be subject to judicial review 
                pursuant to subsection (b).
                    (E) Withdrawal of request.--A request under 
                subparagraph (A) or (B) may be withdrawn by the 
                Commission making the request at any time prior 
                to a determination being made pursuant to 
                paragraph (3) for any reason by providing 
                written notice to the head of the other 
                Commission.
            (3) Determination.--Notwithstanding any other 
        provision of law, no later than 120 days after the date 
        of receipt of a request--
                    (A) under subparagraph (A) or (B) of 
                paragraph (2), unless such request has been 
                withdrawn pursuant to paragraph (2)(E), the 
                Securities and Exchange Commission or the 
                Commodity Futures Trading Commission, as 
                applicable, shall, by order, issue the 
                determination requested in subparagraph (A) or 
                (B) of paragraph (2), as applicable, and the 
                reasons therefor; or
                    (B) under paragraph (2)(D), unless such 
                request has been withdrawn, the Securities and 
                Exchange Commission or the Commodity Futures 
                Trading Commission, as applicable, shall grant 
                an exemption or provide reasons for not 
                granting such exemption, provided that any 
                decision by the Securities and Exchange 
                Commission not to grant such exemption shall 
                not be reviewable under section 25 of the 
                Securities Exchange Act of 1934 (15 U.S.C. 
                78y).
    (b) Judicial Resolution.--
            (1) In general.--The Commodity Futures Trading 
        Commission or the Securities and Exchange Commission 
        may petition the United States Court of Appeals for the 
        District of Columbia Circuit for review of a final 
        order of the other Commission issued pursuant to 
        subsection (a)(3)(A), with respect to a novel 
        derivative product that may have elements of both 
        securities and contracts of sale of a commodity for 
        future delivery (or options on such contracts or 
        options on commodities) that it believes affects its 
        statutory jurisdiction within 60 days after the date of 
        entry of such order, a written petition requesting a 
        review of the order. Any such proceeding shall be 
        expedited by the Court of Appeals.
            (2) Transmittal of petition and record.--A copy of 
        a petition described in paragraph (1) shall be 
        transmitted not later than 1 business day after filing 
        by the complaining Commission to the responding 
        Commission. On receipt of the petition, the responding 
        Commission shall file with the court a copy of the 
        order under review and any documents referred to 
        therein, and any other materials prescribed by the 
        court.
            (3) Standard of review.--The court, in considering 
        a petition filed pursuant to paragraph (1), shall give 
        no deference to, or presumption in favor of, the views 
        of either Commission.
            (4) Judicial stay.--The filing of a petition by the 
        complaining Commission pursuant to paragraph (1) shall 
        operate as a stay of the order, until the date on which 
        the determination of the court is final (including any 
        appeal of the determination).

SEC. 719. STUDIES.

    (a) Study on Effects of Position Limits on Trading on 
Exchanges in the United States.--
            (1) Study.--The Commodity Futures Trading 
        Commission, in consultation with each entity that is a 
        designated contract market under the Commodity Exchange 
        Act, shall conduct a study of the effects (if any) of 
        the position limits imposed pursuant to the other 
        provisions of this title on excessive speculation and 
        on the movement of transactions from exchanges in the 
        United States to trading venues outside the United 
        States.
            (2) Report to the congress.--Within 12 months after 
        the imposition of position limits pursuant to the other 
        provisions of this title, the Commodity Futures Trading 
        Commission, in consultation with each entity that is a 
        designated contract market under the Commodity Exchange 
        Act, shall submit to the Congress a report on the 
        matters described in paragraph (1).
            (3) Required hearing.--Within 30 legislative days 
        after the submission to the Congress of the report 
        described in paragraph (2), the Committee on 
        Agriculture of the House of Representatives shall hold 
        a hearing examining the findings of the report.
            (4) Biennial reporting.--In addition to the study 
        required in paragraph (1), the Chairman of the 
        Commodity Futures Trading Commission shall prepare and 
        submit to the Congress biennial reports on the growth 
        or decline of the derivatives markets in the United 
        States and abroad, which shall include assessments of 
        the causes of any such growth or decline, the 
        effectiveness of regulatory regimes in managing 
        systemic risk, a comparison of the costs of compliance 
        at the time of the report for market participants 
        subject to regulation by the United States with the 
        costs of compliance in December 2008 for the market 
        participants, and the quality of the available data. In 
        preparing the report, the Chairman shall solicit the 
        views of, consult with, and address the concerns raised 
        by, market participants, regulators, legislators, and 
        other interested parties.
    (b) Study on Feasibility of Requiring Use of Standardized 
Algorithmic Descriptions for Financial Derivatives.--
            (1) In general.--The Securities and Exchange 
        Commission and the Commodity Futures Trading Commission 
        shall conduct a joint study of the feasibility of 
        requiring the derivatives industry to adopt 
        standardized computer-readable algorithmic descriptions 
        which may be used to describe complex and standardized 
        financial derivatives.
            (2) Goals.--The algorithmic descriptions defined in 
        the study shall be designed to facilitate computerized 
        analysis of individual derivative contracts and to 
        calculate net exposures to complex derivatives. The 
        algorithmic descriptions shall be optimized for 
        simultaneous use by--
                    (A) commercial users and traders of 
                derivatives;
                    (B) derivative clearing houses, exchanges 
                and electronic trading platforms;
                    (C) trade repositories and regulator 
                investigations of market activities; and
                    (D) systemic risk regulators.
        The study will also examine the extent to which the 
        algorithmic description, together with standardized and 
        extensible legal definitions, may serve as the binding 
        legal definition of derivative contracts. The study 
        will examine the logistics of possible implementations 
        of standardized algorithmic descriptions for 
        derivatives contracts. The study shall be limited to 
        electronic formats for exchange of derivative contract 
        descriptions and will not contemplate disclosure of 
        proprietary valuation models.
            (3) International coordination.--In conducting the 
        study, the Securities and Exchange Commission and the 
        Commodity Futures Trading Commission shall coordinate 
        the study with international financial institutions and 
        regulators as appropriate and practical.
            (4) Report.--Within 8 months after the date of the 
        enactment of this Act, the Securities and Exchange 
        Commission and the Commodity Futures Trading Commission 
        shall jointly submit to the Committees on Agriculture 
        and on Financial Services of the House of 
        Representatives and the Committees on Agriculture, 
        Nutrition, and Forestry and on Banking, Housing, and 
        Urban Affairs of the Senate a written report which 
        contains the results of the study required by 
        paragraphs (1) through (3).
    (c) International Swap Regulation.--
            (1) In general.--The Commodity Futures Trading 
        Commission and the Securities and Exchange Commission 
        shall jointly conduct a study--
                    (A) relating to--
                            (i) swap regulation in the United 
                        States, Asia, and Europe; and
                            (ii) clearing house and clearing 
                        agency regulation in the United States, 
                        Asia, and Europe; and
                    (B) that identifies areas of regulation 
                that are similar in the United States, Asia and 
                Europe and other areas of regulation that could 
                be harmonized
            (2) Report.--Not later than 18 months after the 
        date of enactment of this Act, the Commodity Futures 
        Trading Commission and the Securities and Exchange 
        Commission shall submit to the Committee on 
        Agriculture, Nutrition, and Forestry and the Committee 
        on Banking, Housing, and Urban Affairs of the Senate 
        and the Committee on Agriculture and the Committee on 
        Financial Services of the House of Representatives a 
        report that includes a description of the results of 
        the study under subsection (a), including--
                    (A) identification of the major exchanges 
                and their regulator in each geographic area for 
                the trading of swaps and security-based swaps 
                including a listing of the major contracts and 
                their trading volumes and notional values as 
                well as identification of the major swap 
                dealers participating in such markets;
                    (B) identification of the major clearing 
                houses and clearing agencies and their 
                regulator in each geographic area for the 
                clearing of swaps and security-based swaps, 
                including a listing of the major contracts and 
                the clearing volumes and notional values as 
                well as identification of the major clearing 
                members of such clearing houses and clearing 
                agencies in such markets;
                    (C) a description of the comparative 
                methods of clearing swaps in the United States, 
                Asia, and Europe; and
                    (D) a description of the various systems 
                used for establishing margin on individual 
                swaps, security-based swaps, and swap 
                portfolios.
    (d) Stable Value Contracts.--
            (1) Determination.--
                    (A) Status.--Not later than 15 months after 
                the date of the enactment of this Act, the 
                Securities and Exchange Commission and the 
                Commodity Futures Trading Commission shall, 
                jointly, conduct a study to determine whether 
                stable value contracts fall within the 
                definition of a swap. In making the 
                determination required under this subparagraph, 
                the Commissions jointly shall consult with the 
                Department of Labor, the Department of the 
                Treasury, and the State entities that regulate 
                the issuers of stable value contracts.
                    (B) Regulations.--If the Commissions 
                determine that stable value contracts fall 
                within the definition of a swap, the 
                Commissions jointly shall determine if an 
                exemption for stable value contracts from the 
                definition of swap is appropriate and in the 
                public interest. The Commissions shall issue 
                regulations implementing the determinations 
                required under this paragraph. Until the 
                effective date of such regulations, and 
                notwithstanding any other provision of this 
                title, the requirements of this title shall not 
                apply to stable value contracts.
                    (C) Legal certainty.--Stable value 
                contracts in effect prior to the effective date 
                of the regulations described in subparagraph 
                (B) shall not be considered swaps.
            (2) Definition.--For purposes of this subsection, 
        the term ``stable value contract'' means any contract, 
        agreement, or transaction that provides a crediting 
        interest rate and guaranty or financial assurance of 
        liquidity at contract or book value prior to maturity 
        offered by a bank, insurance company, or other State or 
        federally regulated financial institution for the 
        benefit of any individual or commingled fund available 
        as an investment in an employee benefit plan (as 
        defined in section 3(3) of the Employee Retirement 
        Income Security Act of 1974, including plans described 
        in section 3(32) of such Act) subject to participant 
        direction, an eligible deferred compensation plan (as 
        defined in section 457(b) of the Internal Revenue Code 
        of 1986) that is maintained by an eligible employer 
        described in section 457(e)(1)(A) of such Code, an 
        arrangement described in section 403(b) of such Code, 
        or a qualified tuition program (as defined in section 
        529 of such Code).

SEC. 720. MEMORANDUM.

    (a)(1) The Commodity Futures Trading Commission and the 
Federal Energy Regulatory Commission shall, not later than 180 
days after the date of the enactment of this Act, negotiate a 
memorandum of understanding to establish procedures for--
            (A) applying their respective authorities in a 
        manner so as to ensure effective and efficient 
        regulation in the public interest;
            (B) resolving conflicts concerning overlapping 
        jurisdiction between the 2 agencies; and
            (C) avoiding, to the extent possible, conflicting 
        or duplicative regulation.
    (2) Such memorandum and any subsequent amendments to the 
memorandum shall be promptly submitted to the appropriate 
committees of Congress.
    (b) The Commodity Futures Trading Commission and the 
Federal Energy Regulatory Commission shall, not later than 180 
days after the date of the enactment of this section, negotiate 
a memorandum of understanding to share information that may be 
requested where either Commission is conducting an 
investigation into potential manipulation, fraud, or market 
power abuse in markets subject to such Commission's regulation 
or oversight. Shared information shall remain subject to the 
same restrictions on disclosure applicable to the Commission 
initially holding the information.

                  PART II--REGULATION OF SWAP MARKETS

SEC. 721. DEFINITIONS.

    (a) In General.--Section 1a of the Commodity Exchange Act 
(7 U.S.C. 1a) is amended--
            (1) by redesignating paragraphs (2), (3) and (4), 
        (5) through (17), (18) through (23), (24) through (28), 
        (29), (30), (31) through (33), and (34) as paragraphs 
        (6), (8) and (9), (11) through (23), (26) through (31), 
        (34) through (38), (40), (41), (44) through (46), and 
        (51), respectively;
            (2) by inserting after paragraph (1) the following:
            ``(2) Appropriate federal banking agency.--The term 
        `appropriate Federal banking agency'--
                    ``(A) has the meaning given the term in 
                section 3 of the Federal Deposit Insurance Act 
                (12 U.S.C. 1813);
                    ``(B) means the Board in the case of a 
                noninsured State bank; and
                    ``(C) is the Farm Credit Administration for 
                farm credit system institutions.
            ``(3) Associated person of a security-based swap 
        dealer or major security-based swap participant.--The 
        term `associated person of a security-based swap dealer 
        or major security-based swap participant' has the 
        meaning given the term in section 3(a) of the 
        Securities Exchange Act of 1934 (15 U.S.C. 78c(a)).
            ``(4) Associated person of a swap dealer or major 
        swap participant.--
                    ``(A) In general.--The term `associated 
                person of a swap dealer or major swap 
                participant' means a person who is associated 
                with a swap dealer or major swap participant as 
                a partner, officer, employee, or agent (or any 
                person occupying a similar status or performing 
                similar functions), in any capacity that 
                involves--
                            ``(i) the solicitation or 
                        acceptance of swaps; or
                            ``(ii) the supervision of any 
                        person or persons so engaged.
                    ``(B) Exclusion.--Other than for purposes 
                of section 4s(b)(6), the term `associated 
                person of a swap dealer or major swap 
                participant' does not include any person 
                associated with a swap dealer or major swap 
                participant the functions of which are solely 
                clerical or ministerial.
            ``(5) Board.--The term `Board' means the Board of 
        Governors of the Federal Reserve System.'';
            (3) by inserting after paragraph (6) (as 
        redesignated by paragraph (1)) the following:
            ``(7) Cleared swap.--The term `cleared swap' means 
        any swap that is, directly or indirectly, submitted to 
        and cleared by a derivatives clearing organization 
        registered with the Commission.'';
            (4) in paragraph (9) (as redesignated by paragraph 
        (1)), by striking ``except onions'' and all that 
        follows through the period at the end and inserting the 
        following: ``except onions (as provided by the first 
        section of Public Law 85-839 (7 U.S.C. 13-1)) and 
        motion picture box office receipts (or any index, 
        measure, value, or data related to such receipts), and 
        all services, rights, and interests (except motion 
        picture box office receipts, or any index, measure, 
        value or data related to such receipts) in which 
        contracts for future delivery are presently or in the 
        future dealt in.'';
            (5) by inserting after paragraph (9) (as 
        redesignated by paragraph (1)) the following:
            ``(10) Commodity pool.--
                    ``(A) In general.--The term `commodity 
                pool' means any investment trust, syndicate, or 
                similar form of enterprise operated for the 
                purpose of trading in commodity interests, 
                including any--
                            ``(i) commodity for future 
                        delivery, security futures product, or 
                        swap;
                            ``(ii) agreement, contract, or 
                        transaction described in section 
                        2(c)(2)(C)(i) or section 2(c)(2)(D)(i);
                            ``(iii) commodity option authorized 
                        under section 4c; or
                            ``(iv) leverage transaction 
                        authorized under section 19.
                    ``(B) Further definition.--The Commission, 
                by rule or regulation, may include within, or 
                exclude from, the term `commodity pool' any 
                investment trust, syndicate, or similar form of 
                enterprise if the Commission determines that 
                the rule or regulation will effectuate the 
                purposes of this Act.'';
            (6) by striking paragraph (11) (as redesignated by 
        paragraph (1)) and inserting the following:
            ``(11) Commodity pool operator.--
                    ``(A) In general.--The term `commodity pool 
                operator' means any person--
                            ``(i) engaged in a business that is 
                        of the nature of a commodity pool, 
                        investment trust, syndicate, or similar 
                        form of enterprise, and who, in 
                        connection therewith, solicits, 
                        accepts, or receives from others, 
                        funds, securities, or property, either 
                        directly or through capital 
                        contributions, the sale of stock or 
                        other forms of securities, or 
                        otherwise, for the purpose of trading 
                        in commodity interests, including any--
                                    ``(I) commodity for future 
                                delivery, security futures 
                                product, or swap;
                                    ``(II) agreement, contract, 
                                or transaction described in 
                                section 2(c)(2)(C)(i) or 
                                section 2(c)(2)(D)(i);
                                    ``(III) commodity option 
                                authorized under section 4c; or
                                    ``(IV) leverage transaction 
                                authorized under section 19; or
                            ``(ii) who is registered with the 
                        Commission as a commodity pool 
                        operator.
                    ``(B) Further definition.--The Commission, 
                by rule or regulation, may include within, or 
                exclude from, the term `commodity pool 
                operator' any person engaged in a business that 
                is of the nature of a commodity pool, 
                investment trust, syndicate, or similar form of 
                enterprise if the Commission determines that 
                the rule or regulation will effectuate the 
                purposes of this Act.'';
            (7) in paragraph (12) (as redesignated by paragraph 
        (1)), in subparagraph (A)--
                    (A) in clause (i)--
                            (i) in subclause (I), by striking 
                        ``made or to be made on or subject to 
                        the rules of a contract market or 
                        derivatives transaction execution 
                        facility'' and inserting ``, security 
                        futures product, or swap'';
                            (ii) by redesignating subclauses 
                        (II) and (III) as subclauses (III) and 
                        (IV);
                            (iii) by inserting after subclause 
                        (I) the following:
                                    ``(II) any agreement, 
                                contract, or transaction 
                                described in section 
                                2(c)(2)(C)(i) or section 
                                2(c)(2)(D)(i)''; and
                            (iv) in subclause (IV) (as so 
                        redesignated), by striking ``or'';
                    (B) in clause (ii), by striking the period 
                at the end and inserting a semicolon; and
                    (C) by adding at the end the following:
                            ``(iii) is registered with the 
                        Commission as a commodity trading 
                        advisor; or
                            ``(iv) the Commission, by rule or 
                        regulation, may include if the 
                        Commission determines that the rule or 
                        regulation will effectuate the purposes 
                        of this Act.'';
            (8) in paragraph (17) (as redesignated by paragraph 
        (1)), in subparagraph (A), in the matter preceding 
        clause (i), by striking ``paragraph (12)(A)'' and 
        inserting ``paragraph (18)(A)'';
            (9) in paragraph (18) (as redesignated by paragraph 
        (1))--
                    (A) in subparagraph (A)--
                            (i) in the matter following clause 
                        (vii)(III)--
                                    (I) by striking ``section 
                                1a (11)(A)'' and inserting 
                                ``paragraph (17)(A)''; and
                                    (II) by striking 
                                ``$25,000,000'' and inserting 
                                ``$50,000,000''; and
                            (ii) in clause (xi), in the matter 
                        preceding subclause (I), by striking 
                        ``total assets in an amount'' and 
                        inserting ``amounts invested on a 
                        discretionary basis, the aggregate of 
                        which is'';
            (10) by striking paragraph (22) (as redesignated by 
        paragraph (1)) and inserting the following:
            ``(22) Floor broker.--
                    ``(A) In general.--The term `floor broker' 
                means any person--
                            ``(i) who, in or surrounding any 
                        pit, ring, post, or other place 
                        provided by a contract market for the 
                        meeting of persons similarly engaged, 
                        shall purchase or sell for any other 
                        person--
                                    ``(I) any commodity for 
                                future delivery, security 
                                futures product, or swap; or
                                    ``(II) any commodity option 
                                authorized under section 4c; or
                            ``(ii) who is registered with the 
                        Commission as a floor broker.
                    ``(B) Further definition.--The Commission, 
                by rule or regulation, may include within, or 
                exclude from, the term `floor broker' any 
                person in or surrounding any pit, ring, post, 
                or other place provided by a contract market 
                for the meeting of persons similarly engaged 
                who trades for any other person if the 
                Commission determines that the rule or 
                regulation will effectuate the purposes of this 
                Act.'';
            (11) by striking paragraph (23) (as redesignated by 
        paragraph (1)) and inserting the following:
            ``(23) Floor trader.--
                    ``(A) In general.--The term `floor trader' 
                means any person--
                            ``(i) who, in or surrounding any 
                        pit, ring, post, or other place 
                        provided by a contract market for the 
                        meeting of persons similarly engaged, 
                        purchases, or sells solely for such 
                        person's own account--
                                    ``(I) any commodity for 
                                future delivery, security 
                                futures product, or swap; or
                                    ``(II) any commodity option 
                                authorized under section 4c; or
                            ``(ii) who is registered with the 
                        Commission as a floor trader.
                    ``(B) Further definition.--The Commission, 
                by rule or regulation, may include within, or 
                exclude from, the term `floor trader' any 
                person in or surrounding any pit, ring, post, 
                or other place provided by a contract market 
                for the meeting of persons similarly engaged 
                who trades solely for such person's own account 
                if the Commission determines that the rule or 
                regulation will effectuate the purposes of this 
                Act.'';
            (12) by inserting after paragraph (23) (as 
        redesignated by paragraph (1)) the following:
            ``(24) Foreign exchange forward.--The term `foreign 
        exchange forward' means a transaction that solely 
        involves the exchange of 2 different currencies on a 
        specific future date at a fixed rate agreed upon on the 
        inception of the contract covering the exchange.
            ``(25) Foreign exchange swap.--The term `foreign 
        exchange swap' means a transaction that solely 
        involves--
                    ``(A) an exchange of 2 different currencies 
                on a specific date at a fixed rate that is 
                agreed upon on the inception of the contract 
                covering the exchange; and
                    ``(B) a reverse exchange of the 2 
                currencies described in subparagraph (A) at a 
                later date and at a fixed rate that is agreed 
                upon on the inception of the contract covering 
                the exchange.'';
            (13) by striking paragraph (28) (as redesignated by 
        paragraph (1)) and inserting the following:
            ``(28) Futures commission merchant.--
                    ``(A) In general.--The term `futures 
                commission merchant' means an individual, 
                association, partnership, corporation, or 
                trust--
                            ``(i) that--
                                    ``(I) is--
                                            ``(aa) engaged in 
                                        soliciting or in 
                                        accepting orders for--
                                            ``(AA) the purchase 
                                        or sale of a commodity 
                                        for future delivery;
                                            ``(BB) a security 
                                        futures product;
                                            ``(CC) a swap;
                                            ``(DD) any 
                                        agreement, contract, or 
                                        transaction described 
                                        in section 
                                        2(c)(2)(C)(i) or 
                                        section 2(c)(2)(D)(i);
                                            ``(EE) any 
                                        commodity option 
                                        authorized under 
                                        section 4c; or
                                            ``(FF) any leverage 
                                        transaction authorized 
                                        under section 19; or
                                            ``(bb) acting as a 
                                        counterparty in any 
                                        agreement, contract, or 
                                        transaction described 
                                        in section 
                                        2(c)(2)(C)(i) or 
                                        section 2(c)(2)(D)(i); 
                                        and
                                    ``(II) in or in connection 
                                with the activities described 
                                in items (aa) or (bb) of 
                                subclause (I), accepts any 
                                money, securities, or property 
                                (or extends credit in lieu 
                                thereof) to margin, guarantee, 
                                or secure any trades or 
                                contracts that result or may 
                                result therefrom; or
                            ``(ii) that is registered with the 
                        Commission as a futures commission 
                        merchant.
                    ``(B) Further definition.--The Commission, 
                by rule or regulation, may include within, or 
                exclude from, the term `futures commission 
                merchant' any person who engages in soliciting 
                or accepting orders for, or acting as a 
                counterparty in, any agreement, contract, or 
                transaction subject to this Act, and who 
                accepts any money, securities, or property (or 
                extends credit in lieu thereof) to margin, 
                guarantee, or secure any trades or contracts 
                that result or may result therefrom, if the 
                Commission determines that the rule or 
                regulation will effectuate the purposes of this 
                Act.'';
            (14) in paragraph (30) (as redesignated by 
        paragraph (1)), in subparagraph (B), by striking 
        ``state'' and inserting ``State'';
            (15) by striking paragraph (31) (as redesignated by 
        paragraph (1)) and inserting the following:
            ``(31) Introducing broker.--
                    ``(A) In general.--The term `introducing 
                broker' means any person (except an individual 
                who elects to be and is registered as an 
                associated person of a futures commission 
                merchant)--
                            ``(i) who--
                                    ``(I) is engaged in 
                                soliciting or in accepting 
                                orders for--
                                            ``(aa) the purchase 
                                        or sale of any 
                                        commodity for future 
                                        delivery, security 
                                        futures product, or 
                                        swap;
                                            ``(bb) any 
                                        agreement, contract, or 
                                        transaction described 
                                        in section 
                                        2(c)(2)(C)(i) or 
                                        section 2(c)(2)(D)(i);
                                            ``(cc) any 
                                        commodity option 
                                        authorized under 
                                        section 4c; or
                                            ``(dd) any leverage 
                                        transaction authorized 
                                        under section 19; and
                                    ``(II) does not accept any 
                                money, securities, or property 
                                (or extend credit in lieu 
                                thereof) to margin, guarantee, 
                                or secure any trades or 
                                contracts that result or may 
                                result therefrom; or
                            ``(ii) who is registered with the 
                        Commission as an introducing broker.
                    ``(B) Further definition.--The Commission, 
                by rule or regulation, may include within, or 
                exclude from, the term `introducing broker' any 
                person who engages in soliciting or accepting 
                orders for any agreement, contract, or 
                transaction subject to this Act, and who does 
                not accept any money, securities, or property 
                (or extend credit in lieu thereof) to margin, 
                guarantee, or secure any trades or contracts 
                that result or may result therefrom, if the 
                Commission determines that the rule or 
                regulation will effectuate the purposes of this 
                Act.'';
            (16) by inserting after paragraph (31) (as 
        redesignated by paragraph (1)) the following:
            ``(32) Major security-based swap participant.--The 
        term `major security-based swap participant' has the 
        meaning given the term in section 3(a) of the 
        Securities Exchange Act of 1934 (15 U.S.C. 78c(a)).
            ``(33) Major swap participant.--
                    ``(A) In general.--The term `major swap 
                participant' means any person who is not a swap 
                dealer, and--
                            ``(i) maintains a substantial 
                        position in swaps for any of the major 
                        swap categories as determined by the 
                        Commission, excluding--
                                    ``(I) positions held for 
                                hedging or mitigating 
                                commercial risk; and
                                    ``(II) positions maintained 
                                by any employee benefit plan 
                                (or any contract held by such a 
                                plan) as defined in paragraphs 
                                (3) and (32) of section 3 of 
                                the Employee Retirement Income 
                                Security Act of 1974 (29 U.S.C. 
                                1002) for the primary purpose 
                                of hedging or mitigating any 
                                risk directly associated with 
                                the operation of the plan;
                            ``(ii) whose outstanding swaps 
                        create substantial counterparty 
                        exposure that could have serious 
                        adverse effects on the financial 
                        stability of the United States banking 
                        system or financial markets; or
                            ``(iii)(I) is a financial entity 
                        that is highly leveraged relative to 
                        the amount of capital it holds and that 
                        is not subject to capital requirements 
                        established by an appropriate Federal 
                        banking agency; and
                            ``(II) maintains a substantial 
                        position in outstanding swaps in any 
                        major swap category as determined by 
                        the Commission.
                    ``(B) Definition of substantial position.--
                For purposes of subparagraph (A), the 
                Commission shall define by rule or regulation 
                the term `substantial position' at the 
                threshold that the Commission determines to be 
                prudent for the effective monitoring, 
                management, and oversight of entities that are 
                systemically important or can significantly 
                impact the financial system of the United 
                States. In setting the definition under this 
                subparagraph, the Commission shall consider the 
                person's relative position in uncleared as 
                opposed to cleared swaps and may take into 
                consideration the value and quality of 
                collateral held against counterparty exposures.
                    ``(C) Scope of designation.--For purposes 
                of subparagraph (A), a person may be designated 
                as a major swap participant for 1 or more 
                categories of swaps without being classified as 
                a major swap participant for all classes of 
                swaps.
                    ``(D) Exclusions.--The definition under 
                this paragraph shall not include an entity 
                whose primary business is providing financing, 
                and uses derivatives for the purpose of hedging 
                underlying commercial risks related to interest 
                rate and foreign currency exposures, 90 percent 
                or more of which arise from financing that 
                facilitates the purchase or lease of products, 
                90 percent or more of which are manufactured by 
                the parent company or another subsidiary of the 
                parent company.'';
            (17) by inserting after paragraph (38) (as 
        redesignated by paragraph (1)) the following:
            ``(39) Prudential regulator.--The term `prudential 
        regulator' means--
                    ``(A) the Board in the case of a swap 
                dealer, major swap participant, security-based 
                swap dealer, or major security-based swap 
                participant that is--
                            ``(i) a State-chartered bank that 
                        is a member of the Federal Reserve 
                        System;
                            ``(ii) a State-chartered branch or 
                        agency of a foreign bank;
                            ``(iii) any foreign bank which does 
                        not operate an insured branch;
                            ``(iv) any organization operating 
                        under section 25A of the Federal 
                        Reserve Act or having an agreement with 
                        the Board under section 225 of the 
                        Federal Reserve Act;
                            ``(v) any bank holding company (as 
                        defined in section 2 of the Bank 
                        Holding Company Act of 1965 (12 U.S.C. 
                        1841)), any foreign bank (as defined in 
                        section 1(b)(7) of the International 
                        Banking Act of 1978 (12 U.S.C. 
                        3101(b)(7)) that is treated as a bank 
                        holding company under section 8(a) of 
                        the International Banking Act of 1978 
                        (12 U.S.C. 3106(a)), and any subsidiary 
                        of such a company or foreign bank 
                        (other than a subsidiary that is 
                        described in subparagraph (A) or (B) or 
                        that is required to be registered with 
                        the Commission as a swap dealer or 
                        major swap participant under this Act 
                        or with the Securities and Exchange 
                        Commission as a security-based swap 
                        dealer or major security-based swap 
                        participant);
                            ``(vi) after the transfer date (as 
                        defined in section 311 of the Dodd-
                        Frank Wall Street Reform and Consumer 
                        Protection Act), any savings and loan 
                        holding company (as defined in section 
                        10 of the Home Owners' Loan Act (12 
                        U.S.C. 1467a)) and any subsidiary of 
                        such company (other than a subsidiary 
                        that is described in subparagraph (A) 
                        or (B) or that is required to be 
                        registered as a swap dealer or major 
                        swap participant with the Commission 
                        under this Act or with the Securities 
                        and Exchange Commission as a security-
                        based swap dealer or major security-
                        based swap participant); or
                            ``(vii) any organization operating 
                        under section 25A of the Federal 
                        Reserve Act (12 U.S.C. 611 et seq.) or 
                        having an agreement with the Board 
                        under section 25 of the Federal Reserve 
                        Act (12 U.S.C. 601 et seq.);
                    ``(B) the Office of the Comptroller of the 
                Currency in the case of a swap dealer, major 
                swap participant, security-based swap dealer, 
                or major security-based swap participant that 
                is--
                            ``(i) a national bank;
                            ``(ii) a federally chartered branch 
                        or agency of a foreign bank; or
                            ``(iii) any Federal savings 
                        association;
                    ``(C) the Federal Deposit Insurance 
                Corporation in the case of a swap dealer, major 
                swap participant, security-based swap dealer, 
                or major security-based swap participant that 
                is--
                            ``(i) a State-chartered bank that 
                        is not a member of the Federal Reserve 
                        System; or
                            ``(ii) any State savings 
                        association;
                    ``(D) the Farm Credit Administration, in 
                the case of a swap dealer, major swap 
                participant, security-based swap dealer, or 
                major security-based swap participant that is 
                an institution chartered under the Farm Credit 
                Act of 1971 (12 U.S.C. 2001 et seq.); and
                    ``(E) the Federal Housing Finance Agency in 
                the case of a swap dealer, major swap 
                participant, security-based swap dealer, or 
                major security-based swap participant that is a 
                regulated entity (as such term is defined in 
                section 1303 of the Federal Housing Enterprises 
                Financial Safety and Soundness Act of 1992).'';
            (18) in paragraph (40) (as redesignated by 
        paragraph (1))--
                    (A) by striking subparagraph (B);
                    (B) by redesignating subparagraphs (C), 
                (D), and (E) as subparagraphs (B), (C), and 
                (F), respectively;
                    (C) in subparagraph (C) (as so 
                redesignated), by striking ``and''; and
                    (D) by inserting after subparagraph (C) (as 
                so redesignated) the following:
                    ``(D) a swap execution facility registered 
                under section 5h;
                    ``(E) a swap data repository registered 
                under section 21; and'';
            (19) by inserting after paragraph (41) (as 
        redesignated by paragraph (1)) the following:
            ``(42) Security-based swap.--The term `security-
        based swap' has the meaning given the term in section 
        3(a) of the Securities Exchange Act of 1934 (15 U.S.C. 
        78c(a)).
            ``(43) Security-based swap dealer.--The term 
        `security-based swap dealer' has the meaning given the 
        term in section 3(a) of the Securities Exchange Act of 
        1934 (15 U.S.C. 78c(a)).'';
            (20) in paragraph (46) (as redesignated by 
        paragraph (1)), by striking ``subject to section 
        2(h)(7)'' and inserting ``subject to section 2(h)(5)'';
            (21) by inserting after paragraph (46) (as 
        redesignated by paragraph (1)) the following:
            ``(47) Swap.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), the term `swap' means any 
                agreement, contract, or transaction--
                            ``(i) that is a put, call, cap, 
                        floor, collar, or similar option of any 
                        kind that is for the purchase or sale, 
                        or based on the value, of 1 or more 
                        interest or other rates, currencies, 
                        commodities, securities, instruments of 
                        indebtedness, indices, quantitative 
                        measures, or other financial or 
                        economic interests or property of any 
                        kind;
                            ``(ii) that provides for any 
                        purchase, sale, payment, or delivery 
                        (other than a dividend on an equity 
                        security) that is dependent on the 
                        occurrence, nonoccurrence, or the 
                        extent of the occurrence of an event or 
                        contingency associated with a potential 
                        financial, economic, or commercial 
                        consequence;
                            ``(iii) that provides on an 
                        executory basis for the exchange, on a 
                        fixed or contingent basis, of 1 or more 
                        payments based on the value or level of 
                        1 or more interest or other rates, 
                        currencies, commodities, securities, 
                        instruments of indebtedness, indices, 
                        quantitative measures, or other 
                        financial or economic interests or 
                        property of any kind, or any interest 
                        therein or based on the value thereof, 
                        and that transfers, as between the 
                        parties to the transaction, in whole or 
                        in part, the financial risk associated 
                        with a future change in any such value 
                        or level without also conveying a 
                        current or future direct or indirect 
                        ownership interest in an asset 
                        (including any enterprise or investment 
                        pool) or liability that incorporates 
                        the financial risk so transferred, 
                        including any agreement, contract, or 
                        transaction commonly known as--
                                    ``(I) an interest rate 
                                swap;
                                    ``(II) a rate floor;
                                    ``(III) a rate cap;
                                    ``(IV) a rate collar;
                                    ``(V) a cross-currency rate 
                                swap;
                                    ``(VI) a basis swap;
                                    ``(VII) a currency swap;
                                    ``(VIII) a foreign exchange 
                                swap;
                                    ``(IX) a total return swap;
                                    ``(X) an equity index swap;
                                    ``(XI) an equity swap;
                                    ``(XII) a debt index swap;
                                    ``(XIII) a debt swap;
                                    ``(XIV) a credit spread;
                                    ``(XV) a credit default 
                                swap;
                                    ``(XVI) a credit swap;
                                    ``(XVII) a weather swap;
                                    ``(XVIII) an energy swap;
                                    ``(XIX) a metal swap;
                                    ``(XX) an agricultural 
                                swap;
                                    ``(XXI) an emissions swap; 
                                and
                                    ``(XXII) a commodity swap;
                            ``(iv) that is an agreement, 
                        contract, or transaction that is, or in 
                        the future becomes, commonly known to 
                        the trade as a swap;
                            ``(v) including any security-based 
                        swap agreement which meets the 
                        definition of `swap agreement' as 
                        defined in section 206A of the Gramm-
                        Leach-Bliley Act (15 U.S.C. 78c note) 
                        of which a material term is based on 
                        the price, yield, value, or volatility 
                        of any security or any group or index 
                        of securities, or any interest therein; 
                        or
                            ``(vi) that is any combination or 
                        permutation of, or option on, any 
                        agreement, contract, or transaction 
                        described in any of clauses (i) through 
                        (v).
                    ``(B) Exclusions.--The term `swap' does not 
                include--
                            ``(i) any contract of sale of a 
                        commodity for future delivery (or 
                        option on such a contract), leverage 
                        contract authorized under section 19, 
                        security futures product, or agreement, 
                        contract, or transaction described in 
                        section 2(c)(2)(C)(i) or section 
                        2(c)(2)(D)(i);
                            ``(ii) any sale of a nonfinancial 
                        commodity or security for deferred 
                        shipment or delivery, so long as the 
                        transaction is intended to be 
                        physically settled;
                            ``(iii) any put, call, straddle, 
                        option, or privilege on any security, 
                        certificate of deposit, or group or 
                        index of securities, including any 
                        interest therein or based on the value 
                        thereof, that is subject to--
                                    ``(I) the Securities Act of 
                                1933 (15 U.S.C. 77a et seq.); 
                                and
                                    ``(II) the Securities 
                                Exchange Act of 1934 (15 U.S.C. 
                                78a et seq.);
                            ``(iv) any put, call, straddle, 
                        option, or privilege relating to a 
                        foreign currency entered into on a 
                        national securities exchange registered 
                        pursuant to section 6(a) of the 
                        Securities Exchange Act of 1934 (15 
                        U.S.C. 78f(a));
                            ``(v) any agreement, contract, or 
                        transaction providing for the purchase 
                        or sale of 1 or more securities on a 
                        fixed basis that is subject to--
                                    ``(I) the Securities Act of 
                                1933 (15 U.S.C. 77a et seq.); 
                                and
                                    ``(II) the Securities 
                                Exchange Act of 1934 (15 U.S.C. 
                                78a et seq.);
                            ``(vi) any agreement, contract, or 
                        transaction providing for the purchase 
                        or sale of 1 or more securities on a 
                        contingent basis that is subject to the 
                        Securities Act of 1933 (15 U.S.C. 77a 
                        et seq.) and the Securities Exchange 
                        Act of 1934 (15 U.S.C. 78a et seq.), 
                        unless the agreement, contract, or 
                        transaction predicates the purchase or 
                        sale on the occurrence of a bona fide 
                        contingency that might reasonably be 
                        expected to affect or be affected by 
                        the creditworthiness of a party other 
                        than a party to the agreement, 
                        contract, or transaction;
                            ``(vii) any note, bond, or evidence 
                        of indebtedness that is a security, as 
                        defined in section 2(a)(1) of the 
                        Securities Act of 1933 (15 U.S.C. 
                        77b(a)(1));
                            ``(viii) any agreement, contract, 
                        or transaction that is--
                                    ``(I) based on a security; 
                                and
                                    ``(II) entered into 
                                directly or through an 
                                underwriter (as defined in 
                                section 2(a)(11) of the 
                                Securities Act of 1933 (15 
                                U.S.C. 77b(a)(11)) by the 
                                issuer of such security for the 
                                purposes of raising capital, 
                                unless the agreement, contract, 
                                or transaction is entered into 
                                to manage a risk associated 
                                with capital raising;
                            ``(ix) any agreement, contract, or 
                        transaction a counterparty of which is 
                        a Federal Reserve bank, the Federal 
                        Government, or a Federal agency that is 
                        expressly backed by the full faith and 
                        credit of the United States; and
                            ``(x) any security-based swap, 
                        other than a security-based swap as 
                        described in subparagraph (D).
                    ``(C) Rule of construction regarding master 
                agreements.--
                            ``(i) In general.--Except as 
                        provided in clause (ii), the term 
                        `swap' includes a master agreement that 
                        provides for an agreement, contract, or 
                        transaction that is a swap under 
                        subparagraph (A), together with each 
                        supplement to any master agreement, 
                        without regard to whether the master 
                        agreement contains an agreement, 
                        contract, or transaction that is not a 
                        swap pursuant to subparagraph (A).
                            ``(ii) Exception.--For purposes of 
                        clause (i), the master agreement shall 
                        be considered to be a swap only with 
                        respect to each agreement, contract, or 
                        transaction covered by the master 
                        agreement that is a swap pursuant to 
                        subparagraph (A).
                    ``(D) Mixed swap.--The term `security-based 
                swap' includes any agreement, contract, or 
                transaction that is as described in section 
                3(a)(68)(A) of the Securities Exchange Act of 
                1934 (15 U.S.C. 78c(a)(68)(A)) and also is 
                based on the value of 1 or more interest or 
                other rates, currencies, commodities, 
                instruments of indebtedness, indices, 
                quantitative measures, other financial or 
                economic interest or property of any kind 
                (other than a single security or a narrow-based 
                security index), or the occurrence, non-
                occurrence, or the extent of the occurrence of 
                an event or contingency associated with a 
                potential financial, economic, or commercial 
                consequence (other than an event described in 
                subparagraph (A)(iii)).
                    ``(E) Treatment of foreign exchange swaps 
                and forwards.--
                            ``(i) In general.--Foreign exchange 
                        swaps and foreign exchange forwards 
                        shall be considered swaps under this 
                        paragraph unless the Secretary makes a 
                        written determination under section 1b 
                        that either foreign exchange swaps or 
                        foreign exchange forwards or both--
                                    ``(I) should be not be 
                                regulated as swaps under this 
                                Act; and
                                    ``(II) are not structured 
                                to evade the Dodd-Frank Wall 
                                Street Reform and Consumer 
                                Protection Act in violation of 
                                any rule promulgated by the 
                                Commission pursuant to section 
                                721(c) of that Act.
                            ``(ii) Congressional notice; 
                        effectiveness.--The Secretary shall 
                        submit any written determination under 
                        clause (i) to the appropriate 
                        committees of Congress, including the 
                        Committee on Agriculture, Nutrition, 
                        and Forestry of the Senate and the 
                        Committee on Agriculture of the House 
                        of Representatives. Any such written 
                        determination by the Secretary shall 
                        not be effective until it is submitted 
                        to the appropriate committees of 
                        Congress.
                            ``(iii) Reporting.--Notwithstanding 
                        a written determination by the 
                        Secretary under clause (i), all foreign 
                        exchange swaps and foreign exchange 
                        forwards shall be reported to either a 
                        swap data repository, or, if there is 
                        no swap data repository that would 
                        accept such swaps or forwards, to the 
                        Commission pursuant to section 4r 
                        within such time period as the 
                        Commission may by rule or regulation 
                        prescribe.
                            ``(iv) Business standards.--
                        Notwithstanding a written determination 
                        by the Secretary pursuant to clause 
                        (i), any party to a foreign exchange 
                        swap or forward that is a swap dealer 
                        or major swap participant shall conform 
                        to the business conduct standards 
                        contained in section 4s(h).
                            ``(v) Secretary.--For purposes of 
                        this subparagraph, the term `Secretary' 
                        means the Secretary of the Treasury.
                    ``(F) Exception for certain foreign 
                exchange swaps and forwards.--
                            ``(i) Registered entities.--Any 
                        foreign exchange swap and any foreign 
                        exchange forward that is listed and 
                        traded on or subject to the rules of a 
                        designated contract market or a swap 
                        execution facility, or that is cleared 
                        by a derivatives clearing organization, 
                        shall not be exempt from any provision 
                        of this Act or amendments made by the 
                        Wall Street Transparency and 
                        Accountability Act of 2010 prohibiting 
                        fraud or manipulation.
                            ``(ii) Retail transactions.--
                        Nothing in subparagraph (E) shall 
                        affect, or be construed to affect, the 
                        applicability of this Act or the 
                        jurisdiction of the Commission with 
                        respect to agreements, contracts, or 
                        transactions in foreign currency 
                        pursuant to section 2(c)(2).
            ``(48) Swap data repository.--The term `swap data 
        repository' means any person that collects and 
        maintains information or records with respect to 
        transactions or positions in, or the terms and 
        conditions of, swaps entered into by third parties for 
        the purpose of providing a centralized recordkeeping 
        facility for swaps.
            ``(49) Swap dealer.--
                    ``(A) In general.--The term `swap dealer' 
                means any person who--
                            ``(i) holds itself out as a dealer 
                        in swaps;
                            ``(ii) makes a market in swaps;
                            ``(iii) regularly enters into swaps 
                        with counterparties as an ordinary 
                        course of business for its own account; 
                        or
                            ``(iv) engages in any activity 
                        causing the person to be commonly known 
                        in the trade as a dealer or market 
                        maker in swaps,
                provided however, in no event shall an insured 
                depository institution be considered to be a 
                swap dealer to the extent it offers to enter 
                into a swap with a customer in connection with 
                originating a loan with that customer.
                    ``(B) Inclusion.--A person may be 
                designated as a swap dealer for a single type 
                or single class or category of swap or 
                activities and considered not to be a swap 
                dealer for other types, classes, or categories 
                of swaps or activities.
                    ``(C) Exception.--The term `swap dealer' 
                does not include a person that enters into 
                swaps for such person's own account, either 
                individually or in a fiduciary capacity, but 
                not as a part of a regular business.
                    ``(D) De minimis exception.--The Commission 
                shall exempt from designation as a swap dealer 
                an entity that engages in a de minimis quantity 
                of swap dealing in connection with transactions 
                with or on behalf of its customers. The 
                Commission shall promulgate regulations to 
                establish factors with respect to the making of 
                this determination to exempt.
            ``(50) Swap execution facility.--The term `swap 
        execution facility' means a trading system or platform 
        in which multiple participants have the ability to 
        execute or trade swaps by accepting bids and offers 
        made by multiple participants in the facility or 
        system, through any means of interstate commerce, 
        including any trading facility, that--
                    ``(A) facilitates the execution of swaps 
                between persons; and
                    ``(B) is not a designated contract 
                market.''.
            (22) in paragraph (51) (as redesignated by 
        paragraph (1)), in subparagraph (A)(i), by striking 
        ``partipants'' and inserting ``participants''.
    (b) Authority To Define Terms.--The Commodity Futures 
Trading Commission may adopt a rule to define--
            (1) the term ``commercial risk''; and
            (2) any other term included in an amendment to the 
        Commodity Exchange Act (7 U.S.C. 1 et seq.) made by 
        this subtitle.
    (c) Modification of Definitions.--To include transactions 
and entities that have been structured to evade this subtitle 
(or an amendment made by this subtitle), the Commodity Futures 
Trading Commission shall adopt a rule to further define the 
terms ``swap'', ``swap dealer'', ``major swap participant'', 
and ``eligible contract participant''.
    (d) Exemptions.--Section 4(c)(1) of the Commodity Exchange 
Act (7 U.S.C. 6(c)(1)) is amended by striking ``except that'' 
and all that follows through the period at the end and 
inserting the following: ``except that--
            ``(A) unless the Commission is expressly authorized 
        by any provision described in this subparagraph to 
        grant exemptions, with respect to amendments made by 
        subtitle A of the Wall Street Transparency and 
        Accountability Act of 2010--
                    ``(i) with respect to--
                            ``(I) paragraphs (2), (3), (4), 
                        (5), and (7), paragraph 
                        (18)(A)(vii)(III), paragraphs (23), 
                        (24), (31), (32), (38), (39), (41), 
                        (42), (46), (47), (48), and (49) of 
                        section 1a, and sections 2(a)(13), 
                        2(c)(1)(D), 4a(a), 4a(b), 4d(c), 4d(d), 
                        4r, 4s, 5b(a), 5b(b), 5(d), 5(g), 5(h), 
                        5b(c), 5b(i), 8e, and 21; and
                            ``(II) section 206(e) of the Gramm-
                        Leach-Bliley Act (Public Law 106-102; 
                        15 U.S.C. 78c note); and
                    ``(ii) in sections 721(c) and 742 of the 
                Dodd-Frank Wall Street Reform and Consumer 
                Protection Act; and
            ``(B) the Commission and the Securities and 
        Exchange Commission may by rule, regulation, or order 
        jointly exclude any agreement, contract, or transaction 
        from section 2(a)(1)(D)) if the Commissions determine 
        that the exemption would be consistent with the public 
        interest.''.
    (e) Conforming Amendments.--
            (1) Section 2(c)(2)(B)(i)(II) of the Commodity 
        Exchange Act (7 U.S.C. 2(c)(2)(B)(i)(II)) is amended--
                    (A) in item (cc)--
                            (i) in subitem (AA), by striking 
                        ``section 1a(20)'' and inserting 
                        ``section 1a''; and
                            (ii) in subitem (BB), by striking 
                        ``section 1a(20)'' and inserting 
                        ``section 1a''; and
                    (B) in item (dd), by striking ``section 
                1a(12)(A)(ii)'' and inserting ``section 
                1a(18)(A)(ii)''.
            (2) Section 4m(3) of the Commodity Exchange Act (7 
        U.S.C. 6m(3)) is amended by striking ``section 1a(6)'' 
        and inserting ``section 1a''.
            (3) Section 4q(a)(1) of the Commodity Exchange Act 
        (7 U.S.C. 6o-1(a)(1)) is amended by striking ``section 
        1a(4)'' and inserting ``section 1a(9)''.
            (4) Section 5(e)(1) of the Commodity Exchange Act 
        (7 U.S.C. 7(e)(1)) is amended by striking ``section 
        1a(4)'' and inserting ``section 1a(9)''.
            (5) Section 5a(b)(2)(F) of the Commodity Exchange 
        Act (7 U.S.C. 7a(b)(2)(F)) is amended by striking 
        ``section 1a(4)'' and inserting ``section 1a(9)''.
            (6) Section 5b(a) of the Commodity Exchange Act (7 
        U.S.C. 7a-1(a)) is amended, in the matter preceding 
        paragraph (1), by striking ``section 1a(9)'' and 
        inserting ``section 1a''.
            (7) Section 5c(c)(2)(B) of the Commodity Exchange 
        Act (7 U.S.C. 7a-2(c)(2)(B)) is amended by striking 
        ``section 1a(4)'' and inserting ``section 1a(9)''.
            (8) Section 6(g)(5)(B)(i) of the Securities 
        Exchange Act of 1934 (15 U.S.C. 78f(g)(5)(B)(i)) is 
        amended--
                    (A) in subclause (I), by striking ``section 
                1a(12)(B)(ii)'' and inserting ``section 
                1a(18)(B)(ii)''; and
                    (B) in subclause (II), by striking 
                ``section 1a(12)'' and inserting ``section 
                1a(18)''.
            (9) Section 402 of the Legal Certainty for Bank 
        Products Act of 2000 (7 U.S.C. 27 et seq.) is amended--
                    (A) in subsection (a)(7), by striking 
                ``section 1a(20)'' and inserting ``section 
                1a'';
                    (B) in subsection (b)(2), by striking 
                ``section 1a(12)'' and inserting ``section 
                1a''; and
                    (C) in subsection (c), by striking 
                ``section 1a(4)'' and inserting ``section 1a''.
            (10) The first section of Public Law 85-839 (7 
        U.S.C. 13-1) is amended in subsection (a), in the first 
        sentence, by inserting ``motion picture box office 
        receipts (or any index, measure, value, or data related 
        to such receipts) or'' after ``sale of''.
    (f) Effective Date.--Notwithstanding any other provision of 
this Act, the amendments made by subsection (a)(4) shall take 
effect on June 1, 2010.

SEC. 722. JURISDICTION.

    (a) Exclusive Jurisdiction.--Section 2(a)(1) of the 
Commodity Exchange Act (7 U.S.C. 2(a)(1)) is amended--
            (1) in subparagraph (A), in the first sentence--
                    (A) by inserting ``the Wall Street 
                Transparency and Accountability Act of 2010 
                (including an amendment made by that Act) and'' 
                after ``otherwise provided in'';
                    (B) by striking ``(C) and (D)'' and 
                inserting ``(C), (D), and (I)'';
                    (C) by striking ``(c) through (i) of this 
                section'' and inserting ``(c) and (f)'';
                    (D) by striking ``contracts of sale'' and 
                inserting ``swaps or contracts of sale''; and
                    (E) by striking ``or derivatives 
                transaction execution facility registered 
                pursuant to section 5 or 5a'' and inserting 
                ``pursuant to section 5 or a swap execution 
                facility pursuant to section 5h''; and
            (2) by adding at the end the following:
                    ``(G)(i) Nothing in this paragraph shall 
                limit the jurisdiction conferred on the 
                Securities and Exchange Commission by the Wall 
                Street Transparency and Accountability Act of 
                2010 with regard to security-based swap 
                agreements as defined pursuant to section 
                3(a)(78) of the Securities Exchange Act of 
                1934, and security-based swaps.
                    ``(ii) In addition to the authority of the 
                Securities and Exchange Commission described in 
                clause (i), nothing in this subparagraph shall 
                limit or affect any statutory authority of the 
                Commission with respect to an agreement, 
                contract, or transaction described in clause 
                (i).
                    ``(H) Notwithstanding any other provision 
                of law, the Wall Street Transparency and 
                Accountability Act of 2010 shall not apply to, 
                and the Commodity Futures Trading Commission 
                shall have no jurisdiction under such Act (or 
                any amendments to the Commodity Exchange Act 
                made by such Act) with respect to, any security 
                other than a security-based swap.''.
    (b) Regulation of Swaps Under Federal and State Law.--
Section 12 of the Commodity Exchange Act (7 U.S.C. 16) is 
amended by adding at the end the following:
    ``(h) Regulation of Swaps as Insurance Under State Law.--A 
swap--
            ``(1) shall not be considered to be insurance; and
            ``(2) may not be regulated as an insurance contract 
        under the law of any State.''.
    (c) Agreements, Contracts, and Transactions Traded on an 
Organized Exchange.--Section 2(c)(2)(A) of the Commodity 
Exchange Act (7 U.S.C. 2(c)(2)(A)) is amended--
            (1) in clause (i), by striking ``or'' at the end;
            (2) by redesignating clause (ii) as clause (iii); 
        and
            (3) by inserting after clause (i) the following:
                            ``(ii) a swap; or''.
    (d) Applicability.--Section 2 of the Commodity Exchange Act 
(7 U.S.C. 2) (as amended by section 723(a)(3)) is amended by 
adding at the end the following:
    ``(i) Applicability.--The provisions of this Act relating 
to swaps that were enacted by the Wall Street Transparency and 
Accountability Act of 2010 (including any rule prescribed or 
regulation promulgated under that Act), shall not apply to 
activities outside the United States unless those activities--
            ``(1) have a direct and significant connection with 
        activities in, or effect on, commerce of the United 
        States; or
            ``(2) contravene such rules or regulations as the 
        Commission may prescribe or promulgate as are necessary 
        or appropriate to prevent the evasion of any provision 
        of this Act that was enacted by the Wall Street 
        Transparency and Accountability Act of 2010.''.
    (e) Federal Energy Regulatory Commission.--Section 2(a)(1) 
of the Commodity Exchange Act (7 U.S.C. 2(a)(1)) is amended by 
adding at the end the following:
                    ``(I)(i) Nothing in this Act shall limit or 
                affect any statutory authority of the Federal 
                Energy Regulatory Commission or a State 
                regulatory authority (as defined in section 
                3(21) of the Federal Power Act (16 U.S.C. 
                796(21)) with respect to an agreement, 
                contract, or transaction that is entered into 
                pursuant to a tariff or rate schedule approved 
                by the Federal Energy Regulatory Commission or 
                a State regulatory authority and is--
                            ``(I) not executed, traded, or 
                        cleared on a registered entity or 
                        trading facility; or
                            ``(II) executed, traded, or cleared 
                        on a registered entity or trading 
                        facility owned or operated by a 
                        regional transmission organization or 
                        independent system operator.
                    ``(ii) In addition to the authority of the 
                Federal Energy Regulatory Commission or a State 
                regulatory authority described in clause (i), 
                nothing in this subparagraph shall limit or 
                affect--
                            ``(I) any statutory authority of 
                        the Commission with respect to an 
                        agreement, contract, or transaction 
                        described in clause (i); or
                            ``(II) the jurisdiction of the 
                        Commission under subparagraph (A) with 
                        respect to an agreement, contract, or 
                        transaction that is executed, traded, 
                        or cleared on a registered entity or 
                        trading facility that is not owned or 
                        operated by a regional transmission 
                        organization or independent system 
                        operator (as defined by sections 3(27) 
                        and (28) of the Federal Power Act (16 
                        U.S.C. 796(27), 796(28)).''.
    (f) Public Interest Waiver.--Section 4(c) of the Commodity 
Exchange Act (7 U.S.C. 6(c)) (as amended by section 721(d)) is 
amended by adding at the end the following:
            ``(6) If the Commission determines that the 
        exemption would be consistent with the public interest 
        and the purposes of this Act, the Commission shall, in 
        accordance with paragraphs (1) and (2), exempt from the 
        requirements of this Act an agreement, contract, or 
        transaction that is entered into--
                    ``(A) pursuant to a tariff or rate schedule 
                approved or permitted to take effect by the 
                Federal Energy Regulatory Commission;
                    ``(B) pursuant to a tariff or rate schedule 
                establishing rates or charges for, or protocols 
                governing, the sale of electric energy approved 
                or permitted to take effect by the regulatory 
                authority of the State or municipality having 
                jurisdiction to regulate rates and charges for 
                the sale of electric energy within the State or 
                municipality; or
                    ``(C) between entities described in section 
                201(f) of the Federal Power Act (16 U.S.C. 
                824(f)).''.
    (g) Authority of FERC.--Nothing in the Wall Street 
Transparency and Accountability Act of 2010 or the amendments 
to the Commodity Exchange Act made by such Act shall limit or 
affect any statutory enforcement authority of the Federal 
Energy Regulatory Commission pursuant to section 222 of the 
Federal Power Act and section 4A of the Natural Gas Act that 
existed prior to the date of enactment of the Wall Street 
Transparency and Accountability Act of 2010.
    (h) Determination.--The Commodity Exchange Act is amended 
by inserting after section 1a (7 U.S.C. 1a) the following:

``SEC. 1B. REQUIREMENTS OF SECRETARY OF THE TREASURY REGARDING 
                    EXEMPTION OF FOREIGN EXCHANGE SWAPS AND FOREIGN 
                    EXCHANGE FORWARDS FROM DEFINITION OF THE TERM 
                    `SWAP'.

    ``(a) Required Considerations.--In determining whether to 
exempt foreign exchange swaps and foreign exchange forwards 
from the definition of the term `swap', the Secretary of the 
Treasury (referred to in this section as the `Secretary') shall 
consider--
            ``(1) whether the required trading and clearing of 
        foreign exchange swaps and foreign exchange forwards 
        would create systemic risk, lower transparency, or 
        threaten the financial stability of the United States;
            ``(2) whether foreign exchange swaps and foreign 
        exchange forwards are already subject to a regulatory 
        scheme that is materially comparable to that 
        established by this Act for other classes of swaps;
            ``(3) the extent to which bank regulators of 
        participants in the foreign exchange market provide 
        adequate supervision, including capital and margin 
        requirements;
            ``(4) the extent of adequate payment and settlement 
        systems; and
            ``(5) the use of a potential exemption of foreign 
        exchange swaps and foreign exchange forwards to evade 
        otherwise applicable regulatory requirements.
    ``(b) Determination.--If the Secretary makes a 
determination to exempt foreign exchange swaps and foreign 
exchange forwards from the definition of the term `swap', the 
Secretary shall submit to the appropriate committees of 
Congress a determination that contains--
            ``(1) an explanation regarding why foreign exchange 
        swaps and foreign exchange forwards are qualitatively 
        different from other classes of swaps in a way that 
        would make the foreign exchange swaps and foreign 
        exchange forwards ill-suited for regulation as swaps; 
        and
            ``(2) an identification of the objective 
        differences of foreign exchange swaps and foreign 
        exchange forwards with respect to standard swaps that 
        warrant an exempted status.
    ``(c) Effect of Determination.--A determination by the 
Secretary under subsection (b) shall not exempt any foreign 
exchange swaps and foreign exchange forwards traded on a 
designated contract market or swap execution facility from any 
applicable antifraud and antimanipulation provision under this 
title.''.

SEC. 723. CLEARING.

    (a) Clearing Requirement.--
            (1) In general.--Section 2 of the Commodity 
        Exchange Act (7 U.S.C. 2) is amended--
                    (A) by striking subsections (d), (e), (g), 
                and (h); and
                    (B) by redesignating subsection (i) as 
                subsection (g).
            (2) Swaps; limitation on participation.--Section 2 
        of the Commodity Exchange Act (7 U.S.C. 2) (as amended 
        by paragraph (1)) is amended by inserting after 
        subsection (c) the following:
    ``(d) Swaps.--Nothing in this Act (other than subparagraphs 
(A), (B), (C), (D), (G), and (H) of subsection (a)(1), 
subsections (f) and (g), sections 1a, 2(a)(13), 2(c)(2)(A)(ii), 
2(e), 2(h), 4(c), 4a, 4b, and 4b-1, subsections (a), (b), and 
(g) of section 4c, sections 4d, 4e, 4f, 4g, 4h, 4i, 4j, 4k, 4l, 
4m, 4n, 4o, 4p, 4r, 4s, 4t, 5, 5b, 5c, 5e, and 5h, subsections 
(c) and (d) of section 6, sections 6c, 6d, 8, 8a, and 9, 
subsections (e)(2), (f), and (h) of section 12, subsections (a) 
and (b) of section 13, sections 17, 20, 21, and 22(a)(4), and 
any other provision of this Act that is applicable to 
registered entities or Commission registrants) governs or 
applies to a swap.
    ``(e) Limitation on Participation.--It shall be unlawful 
for any person, other than an eligible contract participant, to 
enter into a swap unless the swap is entered into on, or 
subject to the rules of, a board of trade designated as a 
contract market under section 5.''.
            (3) Mandatory clearing of swaps.--Section 2 of the 
        Commodity Exchange Act (7 U.S.C. 2) is amended by 
        inserting after subsection (g) (as redesignated by 
        paragraph (1)(B)) the following:
    ``(h) Clearing Requirement.--
            ``(1) In general.--
                    ``(A) Standard for clearing.--It shall be 
                unlawful for any person to engage in a swap 
                unless that person submits such swap for 
                clearing to a derivatives clearing organization 
                that is registered under this Act or a 
                derivatives clearing organization that is 
                exempt from registration under this Act if the 
                swap is required to be cleared.
                    ``(B) Open access.--The rules of a 
                derivatives clearing organization described in 
                subparagraph (A) shall--
                            ``(i) prescribe that all swaps (but 
                        not contracts of sale of a commodity 
                        for future delivery or options on such 
                        contracts) submitted to the derivatives 
                        clearing organization with the same 
                        terms and conditions are economically 
                        equivalent within the derivatives 
                        clearing organization and may be offset 
                        with each other within the derivatives 
                        clearing organization; and
                            ``(ii) provide for non-
                        discriminatory clearing of a swap (but 
                        not a contract of sale of a commodity 
                        for future delivery or option on such 
                        contract) executed bilaterally or on or 
                        through the rules of an unaffiliated 
                        designated contract market or swap 
                        execution facility.
            ``(2) Commission review.--
                    ``(A) Commission-initiated review.--
                            ``(i) The Commission on an ongoing 
                        basis shall review each swap, or any 
                        group, category, type, or class of 
                        swaps to make a determination as to 
                        whether the swap or group, category, 
                        type, or class of swaps should be 
                        required to be cleared.
                            ``(ii) The Commission shall provide 
                        at least a 30-day public comment period 
                        regarding any determination made under 
                        clause (i).
                    ``(B) Swap submissions.--
                            ``(i) A derivatives clearing 
                        organization shall submit to the 
                        Commission each swap, or any group, 
                        category, type, or class of swaps that 
                        it plans to accept for clearing, and 
                        provide notice to its members (in a 
                        manner to be determined by the 
                        Commission) of the submission.
                            ``(ii) Any swap or group, category, 
                        type, or class of swaps listed for 
                        clearing by a derivative clearing 
                        organization as of the date of 
                        enactment of this subsection shall be 
                        considered submitted to the Commission.
                            ``(iii) The Commission shall--
                                    ``(I) make available to the 
                                public submissions received 
                                under clauses (i) and (ii);
                                    ``(II) review each 
                                submission made under clauses 
                                (i) and (ii), and determine 
                                whether the swap, or group, 
                                category, type, or class of 
                                swaps described in the 
                                submission is required to be 
                                cleared; and
                                    ``(III) provide at least a 
                                30-day public comment period 
                                regarding its determination as 
                                to whether the clearing 
                                requirement under paragraph 
                                (1)(A) shall apply to the 
                                submission.
                    ``(C) Deadline.--The Commission shall make 
                its determination under subparagraph (B)(iii) 
                not later than 90 days after receiving a 
                submission made under subparagraphs (B)(i) and 
                (B)(ii), unless the submitting derivatives 
                clearing organization agrees to an extension 
                for the time limitation established under this 
                subparagraph.
                    ``(D) Determination.--
                            ``(i) In reviewing a submission 
                        made under subparagraph (B), the 
                        Commission shall review whether the 
                        submission is consistent with section 
                        5b(c)(2).
                            ``(ii) In reviewing a swap, group 
                        of swaps, or class of swaps pursuant to 
                        subparagraph (A) or a submission made 
                        under subparagraph (B), the Commission 
                        shall take into account the following 
                        factors:
                                    ``(I) The existence of 
                                significant outstanding 
                                notional exposures, trading 
                                liquidity, and adequate pricing 
                                data.
                                    ``(II) The availability of 
                                rule framework, capacity, 
                                operational expertise and 
                                resources, and credit support 
                                infrastructure to clear the 
                                contract on terms that are 
                                consistent with the material 
                                terms and trading conventions 
                                on which the contract is then 
                                traded.
                                    ``(III) The effect on the 
                                mitigation of systemic risk, 
                                taking into account the size of 
                                the market for such contract 
                                and the resources of the 
                                derivatives clearing 
                                organization available to clear 
                                the contract.
                                    ``(IV) The effect on 
                                competition, including 
                                appropriate fees and charges 
                                applied to clearing.
                                    ``(V) The existence of 
                                reasonable legal certainty in 
                                the event of the insolvency of 
                                the relevant derivatives 
                                clearing organization or 1 or 
                                more of its clearing members 
                                with regard to the treatment of 
                                customer and swap counterparty 
                                positions, funds, and property.
                            ``(iii) In making a determination 
                        under subparagraph (A) or (B)(iii) that 
                        the clearing requirement shall apply, 
                        the Commission may require such terms 
                        and conditions to the requirement as 
                        the Commission determines to be 
                        appropriate.
                    ``(E) Rules.--Not later than 1 year after 
                the date of the enactment of this subsection, 
                the Commission shall adopt rules for a 
                derivatives clearing organization's submission 
                for review, pursuant to this paragraph, of a 
                swap, or a group, category, type, or class of 
                swaps, that it seeks to accept for clearing. 
                Nothing in this subparagraph limits the 
                Commission from making a determination under 
                subparagraph (B)(iii) for swaps described in 
                subparagraph (B)(ii).
            ``(3) Stay of clearing requirement.--
                    ``(A) In general.--After making a 
                determination pursuant to paragraph (2)(B), the 
                Commission, on application of a counterparty to 
                a swap or on its own initiative, may stay the 
                clearing requirement of paragraph (1) until the 
                Commission completes a review of the terms of 
                the swap (or the group, category, type, or 
                class of swaps) and the clearing arrangement.
                    ``(B) Deadline.--The Commission shall 
                complete a review undertaken pursuant to 
                subparagraph (A) not later than 90 days after 
                issuance of the stay, unless the derivatives 
                clearing organization that clears the swap, or 
                group, category, type, or class of swaps agrees 
                to an extension of the time limitation 
                established under this subparagraph.
                    ``(C) Determination.--Upon completion of 
                the review undertaken pursuant to subparagraph 
                (A), the Commission may--
                            ``(i) determine, unconditionally or 
                        subject to such terms and conditions as 
                        the Commission determines to be 
                        appropriate, that the swap, or group, 
                        category, type, or class of swaps must 
                        be cleared pursuant to this subsection 
                        if it finds that such clearing is 
                        consistent with paragraph (2)(D); or
                            ``(ii) determine that the clearing 
                        requirement of paragraph (1) shall not 
                        apply to the swap, or group, category, 
                        type, or class of swaps.
                    ``(D) Rules.--Not later than 1 year after 
                the date of the enactment of the Wall Street 
                Transparency and Accountability Act of 2010, 
                the Commission shall adopt rules for reviewing, 
                pursuant to this paragraph, a derivatives 
                clearing organization's clearing of a swap, or 
                a group, category, type, or class of swaps, 
                that it has accepted for clearing.
            ``(4) Prevention of evasion.--
                    ``(A) In general.--The Commission shall 
                prescribe rules under this subsection (and 
                issue interpretations of rules prescribed under 
                this subsection) as determined by the 
                Commission to be necessary to prevent evasions 
                of the mandatory clearing requirements under 
                this Act.
                    ``(B) Duty of commission to investigate and 
                take certain actions.--To the extent the 
                Commission finds that a particular swap, group, 
                category, type, or class of swaps would 
                otherwise be subject to mandatory clearing but 
                no derivatives clearing organization has listed 
                the swap, group, category, type, or class of 
                swaps for clearing, the Commission shall--
                            ``(i) investigate the relevant 
                        facts and circumstances;
                            ``(ii) within 30 days issue a 
                        public report containing the results of 
                        the investigation; and
                            ``(iii) take such actions as the 
                        Commission determines to be necessary 
                        and in the public interest, which may 
                        include requiring the retaining of 
                        adequate margin or capital by parties 
                        to the swap, group, category, type, or 
                        class of swaps.
                    ``(C) Effect on authority.--Nothing in this 
                paragraph--
                            ``(i) authorizes the Commission to 
                        adopt rules requiring a derivatives 
                        clearing organization to list for 
                        clearing a swap, group, category, type, 
                        or class of swaps if the clearing of 
                        the swap, group, category, type, or 
                        class of swaps would threaten the 
                        financial integrity of the derivatives 
                        clearing organization; and
                            ``(ii) affects the authority of the 
                        Commission to enforce the open access 
                        provisions of paragraph (1)(B) with 
                        respect to a swap, group, category, 
                        type, or class of swaps that is listed 
                        for clearing by a derivatives clearing 
                        organization.
            ``(5) Reporting transition rules.--Rules adopted by 
        the Commission under this section shall provide for the 
        reporting of data, as follows:
                    ``(A) Swaps entered into before the date of 
                the enactment of this subsection shall be 
                reported to a registered swap data repository 
                or the Commission no later than 180 days after 
                the effective date of this subsection.
                    ``(B) Swaps entered into on or after such 
                date of enactment shall be reported to a 
                registered swap data repository or the 
                Commission no later than the later of--
                            ``(i) 90 days after such effective 
                        date; or
                            ``(ii) such other time after 
                        entering into the swap as the 
                        Commission may prescribe by rule or 
                        regulation.
            ``(6) Clearing transition rules.--
                    ``(A) Swaps entered into before the date of 
                the enactment of this subsection are exempt 
                from the clearing requirements of this 
                subsection if reported pursuant to paragraph 
                (5)(A).
                    ``(B) Swaps entered into before application 
                of the clearing requirement pursuant to this 
                subsection are exempt from the clearing 
                requirements of this subsection if reported 
                pursuant to paragraph (5)(B).
            ``(7) Exceptions.--
                    ``(A) In general.--The requirements of 
                paragraph (1)(A) shall not apply to a swap if 1 
                of the counterparties to the swap--
                            ``(i) is not a financial entity;
                            ``(ii) is using swaps to hedge or 
                        mitigate commercial risk; and
                            ``(iii) notifies the Commission, in 
                        a manner set forth by the Commission, 
                        how it generally meets its financial 
                        obligations associated with entering 
                        into non-cleared swaps.
                    ``(B) Option to clear.--The application of 
                the clearing exception in subparagraph (A) is 
                solely at the discretion of the counterparty to 
                the swap that meets the conditions of clauses 
                (i) through (iii) of subparagraph (A).
                    ``(C) Financial entity definition.--
                            ``(i) In general.--For the purposes 
                        of this paragraph, the term `financial 
                        entity' means--
                                    ``(I) a swap dealer;
                                    ``(II) a security-based 
                                swap dealer;
                                    ``(III) a major swap 
                                participant;
                                    ``(IV) a major security-
                                based swap participant;
                                    ``(V) a commodity pool;
                                    ``(VI) a private fund as 
                                defined in section 202(a) of 
                                the Investment Advisers Act of 
                                1940 (15 U.S.C. 80-b-2(a));
                                    ``(VII) an employee benefit 
                                plan as defined in paragraphs 
                                (3) and (32) of section 3 of 
                                the Employee Retirement Income 
                                Security Act of 1974 (29 U.S.C. 
                                1002);
                                    ``(VIII) a person 
                                predominantly engaged in 
                                activities that are in the 
                                business of banking, or in 
                                activities that are financial 
                                in nature, as defined in 
                                section 4(k) of the Bank 
                                Holding Company Act of 1956.
                            ``(ii) Exclusion.--The Commission 
                        shall consider whether to exempt small 
                        banks, savings associations, farm 
                        credit system institutions, and credit 
                        unions, including--
                                    ``(I) depository 
                                institutions with total assets 
                                of $10,000,000,000 or less;
                                    ``(II) farm credit system 
                                institutions with total assets 
                                of $10,000,000,000 or less; or
                                    ``(III) credit unions with 
                                total assets of $10,000,000,000 
                                or less.
                            ``(iii) Limitation.--Such 
                        definition shall not include an entity 
                        whose primary business is providing 
                        financing, and uses derivatives for the 
                        purpose of hedging underlying 
                        commercial risks related to interest 
                        rate and foreign currency exposures, 90 
                        percent or more of which arise from 
                        financing that facilitates the purchase 
                        or lease of products, 90 percent or 
                        more of which are manufactured by the 
                        parent company or another subsidiary of 
                        the parent company.
                    ``(D) Treatment of affiliates.--
                            ``(i) In general.--An affiliate of 
                        a person that qualifies for an 
                        exception under subparagraph (A) 
                        (including affiliate entities 
                        predominantly engaged in providing 
                        financing for the purchase of the 
                        merchandise or manufactured goods of 
                        the person) may qualify for the 
                        exception only if the affiliate, acting 
                        on behalf of the person and as an 
                        agent, uses the swap to hedge or 
                        mitigate the commercial risk of the 
                        person or other affiliate of the person 
                        that is not a financial entity.
                            ``(ii) Prohibition relating to 
                        certain affiliates.--The exception in 
                        clause (i) shall not apply if the 
                        affiliate is--
                                    ``(I) a swap dealer;
                                    ``(II) a security-based 
                                swap dealer;
                                    ``(III) a major swap 
                                participant;
                                    ``(IV) a major security-
                                based swap participant;
                                    ``(V) an issuer that would 
                                be an investment company, as 
                                defined in section 3 of the 
                                Investment Company Act of 1940 
                                (15 U.S.C. 80a-3), but for 
                                paragraph (1) or (7) of 
                                subsection (c) of that Act (15 
                                U.S.C. 80a-3(c));
                                    ``(VI) a commodity pool; or
                                    ``(VII) a bank holding 
                                company with over 
                                $50,000,000,000 in consolidated 
                                assets.
                            ``(iii) Transition rule for 
                        affiliates.--An affiliate, subsidiary, 
                        or a wholly owned entity of a person 
                        that qualifies for an exception under 
                        subparagraph (A) and is predominantly 
                        engaged in providing financing for the 
                        purchase or lease of merchandise or 
                        manufactured goods of the person shall 
                        be exempt from the margin requirement 
                        described in section 4s(e) and the 
                        clearing requirement described in 
                        paragraph (1) with regard to swaps 
                        entered into to mitigate the risk of 
                        the financing activities for not less 
                        than a 2-year period beginning on the 
                        date of enactment of this clause.
                    ``(E) Election of counterparty.--
                            ``(i) Swaps required to be 
                        cleared.--With respect to any swap that 
                        is subject to the mandatory clearing 
                        requirement under this subsection and 
                        entered into by a swap dealer or a 
                        major swap participant with a 
                        counterparty that is not a swap dealer, 
                        major swap participant, security-based 
                        swap dealer, or major security-based 
                        swap participant, the counterparty 
                        shall have the sole right to select the 
                        derivatives clearing organization at 
                        which the swap will be cleared.
                            ``(ii) Swaps not required to be 
                        cleared.--With respect to any swap that 
                        is not subject to the mandatory 
                        clearing requirement under this 
                        subsection and entered into by a swap 
                        dealer or a major swap participant with 
                        a counterparty that is not a swap 
                        dealer, major swap participant, 
                        security-based swap dealer, or major 
                        security-based swap participant, the 
                        counterparty--
                                    ``(I) may elect to require 
                                clearing of the swap; and
                                    ``(II) shall have the sole 
                                right to select the derivatives 
                                clearing organization at which 
                                the swap will be cleared.
                    ``(F) Abuse of exception.--The Commission 
                may prescribe such rules or issue 
                interpretations of the rules as the Commission 
                determines to be necessary to prevent abuse of 
                the exceptions described in this paragraph. The 
                Commission may also request information from 
                those persons claiming the clearing exception 
                as necessary to prevent abuse of the exceptions 
                described in this paragraph.
            ``(8) Trade execution.--
                    ``(A) In general.--With respect to 
                transactions involving swaps subject to the 
                clearing requirement of paragraph (1), 
                counterparties shall--
                            ``(i) execute the transaction on a 
                        board of trade designated as a contract 
                        market under section 5; or
                            ``(ii) execute the transaction on a 
                        swap execution facility registered 
                        under 5h or a swap execution facility 
                        that is exempt from registration under 
                        section 5h(f) of this Act.
                    ``(B) Exception.--The requirements of 
                clauses (i) and (ii) of subparagraph (A) shall 
                not apply if no board of trade or swap 
                execution facility makes the swap available to 
                trade or for swap transactions subject to the 
                clearing exception under paragraph (7).''.
    (b) Commodity Exchange Act.--Section 2 of the Commodity 
Exchange Act (7 U.S.C. 2) is amended by adding at the end the 
following:
    ``(j)  Committee Approval by Board.--Exemptions from the 
requirements of subsection (h)(1) to clear a swap and 
subsection (h)(8) to execute a swap through a board of trade or 
swap execution facility shall be available to a counterparty 
that is an issuer of securities that are registered under 
section 12 of the Securities Exchange Act of 1934 (15 U.S.C. 
78l) or that is required to file reports pursuant to section 
15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78o) 
only if an appropriate committee of the issuer's board or 
governing body has reviewed and approved its decision to enter 
into swaps that are subject to such exemptions.''.
    (c) Grandfather Provisions.--
            (1) Legal certainty for certain transactions in 
        exempt commodities.--Not later than 60 days after the 
        date of enactment of this Act, a person may submit to 
        the Commodity Futures Trading Commission a petition to 
        remain subject to section 2(h) of the Commodity 
        Exchange Act (7 U.S.C. 2(h)) (as in effect on the day 
        before the date of enactment of this Act).
            (2) Consideration; authority of commodity futures 
        trading commission.--The Commodity Futures Trading 
        Commission--
                    (A) shall consider any petition submitted 
                under subparagraph (A) in a prompt manner; and
                    (B) may allow a person to continue 
                operating subject to section 2(h) of the 
                Commodity Exchange Act (7 U.S.C. 2(h)) (as in 
                effect on the day before the date of enactment 
                of this Act) for not longer than a 1-year 
                period.
            (3) Agricultural swaps.--
                    (A) In general.--Except as provided in 
                subparagraph (B), no person shall offer to 
                enter into, enter into, or confirm the 
                execution of, any swap in an agricultural 
                commodity (as defined by the Commodity Futures 
                Trading Commission).
                    (B) Exception.--Notwithstanding 
                subparagraph (A), a person may offer to enter 
                into, enter into, or confirm the execution of, 
                any swap in an agricultural commodity pursuant 
                to section 4(c) of the Commodity Exchange Act 
                (7 U.S.C. 6(c)) or any rule, regulation, or 
                order issued thereunder (including any rule, 
                regulation, or order in effect as of the date 
                of enactment of this Act) by the Commodity 
                Futures Trading Commission to allow swaps under 
                such terms and conditions as the Commission 
                shall prescribe.
            (4) Required reporting.--If the exception described 
        in section 2(h)(8)(B) of the Commodity Exchange Act 
        applies, the counterparties shall comply with any 
        recordkeeping and transaction reporting requirements 
        that may be prescribed by the Commission with respect 
        to swaps subject to section 2(h)(8)(B) of the Commodity 
        Exchange Act.

SEC. 724. SWAPS; SEGREGATION AND BANKRUPTCY TREATMENT.

    (a) Segregation Requirements for Cleared Swaps.--Section 4d 
of the Commodity Exchange Act (7 U.S.C. 6d) (as amended by 
section 732) is amended by adding at the end the following:
    ``(f) Swaps.--
            ``(1) Registration requirement.--It shall be 
        unlawful for any person to accept any money, 
        securities, or property (or to extend any credit in 
        lieu of money, securities, or property) from, for, or 
        on behalf of a swaps customer to margin, guarantee, or 
        secure a swap cleared by or through a derivatives 
        clearing organization (including money, securities, or 
        property accruing to the customer as the result of such 
        a swap), unless the person shall have registered under 
        this Act with the Commission as a futures commission 
        merchant, and the registration shall not have expired 
        nor been suspended nor revoked.
            ``(2) Cleared swaps.--
                    ``(A) Segregation required.--A futures 
                commission merchant shall treat and deal with 
                all money, securities, and property of any 
                swaps customer received to margin, guarantee, 
                or secure a swap cleared by or through a 
                derivatives clearing organization (including 
                money, securities, or property accruing to the 
                swaps customer as the result of such a swap) as 
                belonging to the swaps customer.
                    ``(B) Commingling prohibited.--Money, 
                securities, and property of a swaps customer 
                described in subparagraph (A) shall be 
                separately accounted for and shall not be 
                commingled with the funds of the futures 
                commission merchant or be used to margin, 
                secure, or guarantee any trades or contracts of 
                any swaps customer or person other than the 
                person for whom the same are held.
            ``(3) Exceptions.--
                    ``(A) Use of funds.--
                            ``(i) In general.--Notwithstanding 
                        paragraph (2), money, securities, and 
                        property of swap customers of a futures 
                        commission merchant described in 
                        paragraph (2) may, for convenience, be 
                        commingled and deposited in the same 
                        account or accounts with any bank or 
                        trust company or with a derivatives 
                        clearing organization.
                            ``(ii) Withdrawal.--Notwithstanding 
                        paragraph (2), such share of the money, 
                        securities, and property described in 
                        clause (i) as in the normal course of 
                        business shall be necessary to margin, 
                        guarantee, secure, transfer, adjust, or 
                        settle a cleared swap with a 
                        derivatives clearing organization, or 
                        with any member of the derivatives 
                        clearing organization, may be withdrawn 
                        and applied to such purposes, including 
                        the payment of commissions, brokerage, 
                        interest, taxes, storage, and other 
                        charges, lawfully accruing in 
                        connection with the cleared swap.
                    ``(B) Commission action.--Notwithstanding 
                paragraph (2), in accordance with such terms 
                and conditions as the Commission may prescribe 
                by rule, regulation, or order, any money, 
                securities, or property of the swaps customers 
                of a futures commission merchant described in 
                paragraph (2) may be commingled and deposited 
                in customer accounts with any other money, 
                securities, or property received by the futures 
                commission merchant and required by the 
                Commission to be separately accounted for and 
                treated and dealt with as belonging to the 
                swaps customer of the futures commission 
                merchant.
            ``(4) Permitted investments.--Money described in 
        paragraph (2) may be invested in obligations of the 
        United States, in general obligations of any State or 
        of any political subdivision of a State, and in 
        obligations fully guaranteed as to principal and 
        interest by the United States, or in any other 
        investment that the Commission may by rule or 
        regulation prescribe, and such investments shall be 
        made in accordance with such rules and regulations and 
        subject to such conditions as the Commission may 
        prescribe.
            ``(5) Commodity contract.--A swap cleared by or 
        through a derivatives clearing organization shall be 
        considered to be a commodity contract as such term is 
        defined in section 761 of title 11, United States Code, 
        with regard to all money, securities, and property of 
        any swaps customer received by a futures commission 
        merchant or a derivatives clearing organization to 
        margin, guarantee, or secure the swap (including money, 
        securities, or property accruing to the customer as the 
        result of the swap).
            ``(6) Prohibition.--It shall be unlawful for any 
        person, including any derivatives clearing organization 
        and any depository institution, that has received any 
        money, securities, or property for deposit in a 
        separate account or accounts as provided in paragraph 
        (2) to hold, dispose of, or use any such money, 
        securities, or property as belonging to the depositing 
        futures commission merchant or any person other than 
        the swaps customer of the futures commission 
        merchant.''.
    (b) Bankruptcy Treatment of Cleared Swaps.--Section 761 of 
title 11, United States Code, is amended--
            (1) in paragraph (4), by striking subparagraph (F) 
        and inserting the following:
                    ``(F)(i) any other contract, option, 
                agreement, or transaction that is similar to a 
                contract, option, agreement, or transaction 
                referred to in this paragraph; and
                    ``(ii) with respect to a futures commission 
                merchant or a clearing organization, any other 
                contract, option, agreement, or transaction, in 
                each case, that is cleared by a clearing 
                organization;''; and
            (2) in paragraph (9)(A)(i), by striking ``the 
        commodity futures account'' and inserting ``a commodity 
        contract account''.
    (c) Segregation Requirements for Uncleared Swaps.--Section 
4s of the Commodity Exchange Act (as added by section 731) is 
amended by adding at the end the following:
    ``(l) Segregation Requirements.--
            ``(1) Segregation of assets held as collateral in 
        uncleared swap transactions.--
                    ``(A) Notification.--A swap dealer or major 
                swap participant shall be required to notify 
                the counterparty of the swap dealer or major 
                swap participant at the beginning of a swap 
                transaction that the counterparty has the right 
                to require segregation of the funds or other 
                property supplied to margin, guarantee, or 
                secure the obligations of the counterparty.
                    ``(B) Segregation and maintenance of 
                funds.--At the request of a counterparty to a 
                swap that provides funds or other property to a 
                swap dealer or major swap participant to 
                margin, guarantee, or secure the obligations of 
                the counterparty, the swap dealer or major swap 
                participant shall--
                            ``(i) segregate the funds or other 
                        property for the benefit of the 
                        counterparty; and
                            ``(ii) in accordance with such 
                        rules and regulations as the Commission 
                        may promulgate, maintain the funds or 
                        other property in a segregated account 
                        separate from the assets and other 
                        interests of the swap dealer or major 
                        swap participant.
            ``(2) Applicability.--The requirements described in 
        paragraph (1) shall--
                    ``(A) apply only to a swap between a 
                counterparty and a swap dealer or major swap 
                participant that is not submitted for clearing 
                to a derivatives clearing organization; and
                    ``(B)(i) not apply to variation margin 
                payments; or
                    ``(ii) not preclude any commercial 
                arrangement regarding--
                            ``(I) the investment of segregated 
                        funds or other property that may only 
                        be invested in such investments as the 
                        Commission may permit by rule or 
                        regulation; and
                            ``(II) the related allocation of 
                        gains and losses resulting from any 
                        investment of the segregated funds or 
                        other property.
            ``(3) Use of independent third-party custodians.--
        The segregated account described in paragraph (1) shall 
        be--
                    ``(A) carried by an independent third-party 
                custodian; and
                    ``(B) designated as a segregated account 
                for and on behalf of the counterparty.
            ``(4) Reporting requirement.--If the counterparty 
        does not choose to require segregation of the funds or 
        other property supplied to margin, guarantee, or secure 
        the obligations of the counterparty, the swap dealer or 
        major swap participant shall report to the counterparty 
        of the swap dealer or major swap participant on a 
        quarterly basis that the back office procedures of the 
        swap dealer or major swap participant relating to 
        margin and collateral requirements are in compliance 
        with the agreement of the counterparties.''.

SEC. 725. DERIVATIVES CLEARING ORGANIZATIONS.

    (a) Registration Requirement.--Section 5b of the Commodity 
Exchange Act (7 U.S.C. 7a-1) is amended by striking subsections 
(a) and (b) and inserting the following:
    ``(a) Registration Requirement.--
            ``(1) In general.--Except as provided in paragraph 
        (2), it shall be unlawful for a derivatives clearing 
        organization, directly or indirectly, to make use of 
        the mails or any means or instrumentality of interstate 
        commerce to perform the functions of a derivatives 
        clearing organization with respect to--
                    ``(A) a contract of sale of a commodity for 
                future delivery (or an option on the contract 
                of sale) or option on a commodity, in each 
                case, unless the contract or option is--
                            ``(i) excluded from this Act by 
                        subsection (a)(1)(C)(i), (c), or (f) of 
                        section 2; or
                            ``(ii) a security futures product 
                        cleared by a clearing agency registered 
                        with the Securities and Exchange 
                        Commission under the Securities 
                        Exchange Act of 1934 (15 U.S.C. 78a et 
                        seq.); or
                    ``(B) a swap.
            ``(2) Exception.--Paragraph (1) shall not apply to 
        a derivatives clearing organization that is registered 
        with the Commission.
    ``(b) Voluntary Registration.--A person that clears 1 or 
more agreements, contracts, or transactions that are not 
required to be cleared under this Act may register with the 
Commission as a derivatives clearing organization.''.
    (b) Registration for Depository Institutions and Clearing 
Agencies; Exemptions; Compliance Officer; Annual Reports.--
Section 5b of the Commodity Exchange Act (7 U.S.C. 7a-1) is 
amended by adding at the end the following:
    ``(g) Existing Depository Institutions and Clearing 
Agencies.--
            ``(1) In general.--A depository institution or 
        clearing agency registered with the Securities and 
        Exchange Commission under the Securities Exchange Act 
        of 1934 (15 U.S.C. 78a et seq.) that is required to be 
        registered as a derivatives clearing organization under 
        this section is deemed to be registered under this 
        section to the extent that, before the date of 
        enactment of this subsection--
                    ``(A) the depository institution cleared 
                swaps as a multilateral clearing organization; 
                or
                    ``(B) the clearing agency cleared swaps.
            ``(2) Conversion of depository institutions.--A 
        depository institution to which this subsection applies 
        may, by the vote of the shareholders owning not less 
        than 51 percent of the voting interests of the 
        depository institution, be converted into a State 
        corporation, partnership, limited liability company, or 
        similar legal form pursuant to a plan of conversion, if 
        the conversion is not in contravention of applicable 
        State law.
            ``(3) Sharing of information.--The Securities and 
        Exchange Commission shall make available to the 
        Commission, upon request, all information determined to 
        be relevant by the Securities and Exchange Commission 
        regarding a clearing agency deemed to be registered 
        with the Commission under paragraph (1).
    ``(h) Exemptions.--The Commission may exempt, conditionally 
or unconditionally, a derivatives clearing organization from 
registration under this section for the clearing of swaps if 
the Commission determines that the derivatives clearing 
organization is subject to comparable, comprehensive 
supervision and regulation by the Securities and Exchange 
Commission or the appropriate government authorities in the 
home country of the organization. Such conditions may include, 
but are not limited to, requiring that the derivatives clearing 
organization be available for inspection by the Commission and 
make available all information requested by the Commission.
    ``(i) Designation of Chief Compliance Officer.--
            ``(1) In general.--Each derivatives clearing 
        organization shall designate an individual to serve as 
        a chief compliance officer.
            ``(2) Duties.--The chief compliance officer shall--
                    ``(A) report directly to the board or to 
                the senior officer of the derivatives clearing 
                organization;
                    ``(B) review the compliance of the 
                derivatives clearing organization with respect 
                to the core principles described in subsection 
                (c)(2);
                    ``(C) in consultation with the board of the 
                derivatives clearing organization, a body 
                performing a function similar to the board of 
                the derivatives clearing organization, or the 
                senior officer of the derivatives clearing 
                organization, resolve any conflicts of interest 
                that may arise;
                    ``(D) be responsible for administering each 
                policy and procedure that is required to be 
                established pursuant to this section;
                    ``(E) ensure compliance with this Act 
                (including regulations) relating to agreements, 
                contracts, or transactions, including each rule 
                prescribed by the Commission under this 
                section;
                    ``(F) establish procedures for the 
                remediation of noncompliance issues identified 
                by the compliance officer through any--
                            ``(i) compliance office review;
                            ``(ii) look-back;
                            ``(iii) internal or external audit 
                        finding;
                            ``(iv) self-reported error; or
                            ``(v) validated complaint; and
                    ``(G) establish and follow appropriate 
                procedures for the handling, management 
                response, remediation, retesting, and closing 
                of noncompliance issues.
            ``(3) Annual reports.--
                    ``(A) In general.--In accordance with rules 
                prescribed by the Commission, the chief 
                compliance officer shall annually prepare and 
                sign a report that contains a description of--
                            ``(i) the compliance of the 
                        derivatives clearing organization of 
                        the compliance officer with respect to 
                        this Act (including regulations); and
                            ``(ii) each policy and procedure of 
                        the derivatives clearing organization 
                        of the compliance officer (including 
                        the code of ethics and conflict of 
                        interest policies of the derivatives 
                        clearing organization).
                    ``(B) Requirements.--A compliance report 
                under subparagraph (A) shall--
                            ``(i) accompany each appropriate 
                        financial report of the derivatives 
                        clearing organization that is required 
                        to be furnished to the Commission 
                        pursuant to this section; and
                            ``(ii) include a certification 
                        that, under penalty of law, the 
                        compliance report is accurate and 
                        complete.''.
    (c) Core Principles for Derivatives Clearing 
Organizations.--Section 5b(c) of the Commodity Exchange Act (7 
U.S.C. 7a-1(c)) is amended by striking paragraph (2) and 
inserting the following:
            ``(2) Core principles for derivatives clearing 
        organizations.--
                    ``(A) Compliance.--
                            ``(i) In general.--To be registered 
                        and to maintain registration as a 
                        derivatives clearing organization, a 
                        derivatives clearing organization shall 
                        comply with each core principle 
                        described in this paragraph and any 
                        requirement that the Commission may 
                        impose by rule or regulation pursuant 
                        to section 8a(5).
                            ``(ii) Discretion of derivatives 
                        clearing organization.--Subject to any 
                        rule or regulation prescribed by the 
                        Commission, a derivatives clearing 
                        organization shall have reasonable 
                        discretion in establishing the manner 
                        by which the derivatives clearing 
                        organization complies with each core 
                        principle described in this paragraph.
                    ``(B) Financial resources.--
                            ``(i) In general.--Each derivatives 
                        clearing organization shall have 
                        adequate financial, operational, and 
                        managerial resources, as determined by 
                        the Commission, to discharge each 
                        responsibility of the derivatives 
                        clearing organization.
                            ``(ii) Minimum amount of financial 
                        resources.--Each derivatives clearing 
                        organization shall possess financial 
                        resources that, at a minimum, exceed 
                        the total amount that would--
                                    ``(I) enable the 
                                organization to meet its 
                                financial obligations to its 
                                members and participants 
                                notwithstanding a default by 
                                the member or participant 
                                creating the largest financial 
                                exposure for that organization 
                                in extreme but plausible market 
                                conditions; and
                                    ``(II) enable the 
                                derivatives clearing 
                                organization to cover the 
                                operating costs of the 
                                derivatives clearing 
                                organization for a period of 1 
                                year (as calculated on a 
                                rolling basis).
                    ``(C) Participant and product 
                eligibility.--
                            ``(i) In general.--Each derivatives 
                        clearing organization shall establish--
                                    ``(I) appropriate admission 
                                and continuing eligibility 
                                standards (including sufficient 
                                financial resources and 
                                operational capacity to meet 
                                obligations arising from 
                                participation in the 
                                derivatives clearing 
                                organization) for members of, 
                                and participants in, the 
                                derivatives clearing 
                                organization; and
                                    ``(II) appropriate 
                                standards for determining the 
                                eligibility of agreements, 
                                contracts, or transactions 
                                submitted to the derivatives 
                                clearing organization for 
                                clearing.
                            ``(ii) Required procedures.--Each 
                        derivatives clearing organization shall 
                        establish and implement procedures to 
                        verify, on an ongoing basis, the 
                        compliance of each participation and 
                        membership requirement of the 
                        derivatives clearing organization.
                            ``(iii) Requirements.--The 
                        participation and membership 
                        requirements of each derivatives 
                        clearing organization shall--
                                    ``(I) be objective;
                                    ``(II) be publicly 
                                disclosed; and
                                    ``(III) permit fair and 
                                open access.
                    ``(D) Risk management.--
                            ``(i) In general.--Each derivatives 
                        clearing organization shall ensure that 
                        the derivatives clearing organization 
                        possesses the ability to manage the 
                        risks associated with discharging the 
                        responsibilities of the derivatives 
                        clearing organization through the use 
                        of appropriate tools and procedures.
                            ``(ii) Measurement of credit 
                        exposure.--Each derivatives clearing 
                        organization shall--
                                    ``(I) not less than once 
                                during each business day of the 
                                derivatives clearing 
                                organization, measure the 
                                credit exposures of the 
                                derivatives clearing 
                                organization to each member and 
                                participant of the derivatives 
                                clearing organization; and
                                    ``(II) monitor each 
                                exposure described in subclause 
                                (I) periodically during the 
                                business day of the derivatives 
                                clearing organization.
                            ``(iii) Limitation of exposure to 
                        potential losses from defaults.--Each 
                        derivatives clearing organization, 
                        through margin requirements and other 
                        risk control mechanisms, shall limit 
                        the exposure of the derivatives 
                        clearing organization to potential 
                        losses from defaults by members and 
                        participants of the derivatives 
                        clearing organization to ensure that--
                                    ``(I) the operations of the 
                                derivatives clearing 
                                organization would not be 
                                disrupted; and
                                    ``(II) nondefaulting 
                                members or participants would 
                                not be exposed to losses that 
                                nondefaulting members or 
                                participants cannot anticipate 
                                or control.
                            ``(iv) Margin requirements.--The 
                        margin required from each member and 
                        participant of a derivatives clearing 
                        organization shall be sufficient to 
                        cover potential exposures in normal 
                        market conditions.
                            ``(v) Requirements regarding models 
                        and parameters.--Each model and 
                        parameter used in setting margin 
                        requirements under clause (iv) shall 
                        be--
                                    ``(I) risk-based; and
                                    ``(II) reviewed on a 
                                regular basis.
                    ``(E) Settlement procedures.--Each 
                derivatives clearing organization shall--
                            ``(i) complete money settlements on 
                        a timely basis (but not less frequently 
                        than once each business day);
                            ``(ii) employ money settlement 
                        arrangements to eliminate or strictly 
                        limit the exposure of the derivatives 
                        clearing organization to settlement 
                        bank risks (including credit and 
                        liquidity risks from the use of banks 
                        to effect money settlements);
                            ``(iii) ensure that money 
                        settlements are final when effected;
                            ``(iv) maintain an accurate record 
                        of the flow of funds associated with 
                        each money settlement;
                            ``(v) possess the ability to comply 
                        with each term and condition of any 
                        permitted netting or offset arrangement 
                        with any other clearing organization;
                            ``(vi) regarding physical 
                        settlements, establish rules that 
                        clearly state each obligation of the 
                        derivatives clearing organization with 
                        respect to physical deliveries; and
                            ``(vii) ensure that each risk 
                        arising from an obligation described in 
                        clause (vi) is identified and managed.
                    ``(F) Treatment of funds.--
                            ``(i) Required standards and 
                        procedures.--Each derivatives clearing 
                        organization shall establish standards 
                        and procedures that are designed to 
                        protect and ensure the safety of member 
                        and participant funds and assets.
                            ``(ii) Holding of funds and 
                        assets.--Each derivatives clearing 
                        organization shall hold member and 
                        participant funds and assets in a 
                        manner by which to minimize the risk of 
                        loss or of delay in the access by the 
                        derivatives clearing organization to 
                        the assets and funds.
                            ``(iii) Permissible investments.--
                        Funds and assets invested by a 
                        derivatives clearing organization shall 
                        be held in instruments with minimal 
                        credit, market, and liquidity risks.
                    ``(G) Default rules and procedures.--
                            ``(i) In general.--Each derivatives 
                        clearing organization shall have rules 
                        and procedures designed to allow for 
                        the efficient, fair, and safe 
                        management of events during which 
                        members or participants--
                                    ``(I) become insolvent; or
                                    ``(II) otherwise default on 
                                the obligations of the members 
                                or participants to the 
                                derivatives clearing 
                                organization.
                            ``(ii) Default procedures.--Each 
                        derivatives clearing organization 
                        shall--
                                    ``(I) clearly state the 
                                default procedures of the 
                                derivatives clearing 
                                organization;
                                    ``(II) make publicly 
                                available the default rules of 
                                the derivatives clearing 
                                organization; and
                                    ``(III) ensure that the 
                                derivatives clearing 
                                organization may take timely 
                                action--
                                            ``(aa) to contain 
                                        losses and liquidity 
                                        pressures; and
                                            ``(bb) to continue 
                                        meeting each obligation 
                                        of the derivatives 
                                        clearing organization.
                    ``(H) Rule enforcement.--Each derivatives 
                clearing organization shall--
                            ``(i) maintain adequate 
                        arrangements and resources for--
                                    ``(I) the effective 
                                monitoring and enforcement of 
                                compliance with the rules of 
                                the derivatives clearing 
                                organization; and
                                    ``(II) the resolution of 
                                disputes;
                            ``(ii) have the authority and 
                        ability to discipline, limit, suspend, 
                        or terminate the activities of a member 
                        or participant due to a violation by 
                        the member or participant of any rule 
                        of the derivatives clearing 
                        organization; and
                            ``(iii) report to the Commission 
                        regarding rule enforcement activities 
                        and sanctions imposed against members 
                        and participants as provided in clause 
                        (ii).
                    ``(I) System safeguards.--Each derivatives 
                clearing organization shall--
                            ``(i) establish and maintain a 
                        program of risk analysis and oversight 
                        to identify and minimize sources of 
                        operational risk through the 
                        development of appropriate controls and 
                        procedures, and automated systems, that 
                        are reliable, secure, and have adequate 
                        scalable capacity;
                            ``(ii) establish and maintain 
                        emergency procedures, backup 
                        facilities, and a plan for disaster 
                        recovery that allows for--
                                    ``(I) the timely recovery 
                                and resumption of operations of 
                                the derivatives clearing 
                                organization; and
                                    ``(II) the fulfillment of 
                                each obligation and 
                                responsibility of the 
                                derivatives clearing 
                                organization; and
                            ``(iii) periodically conduct tests 
                        to verify that the backup resources of 
                        the derivatives clearing organization 
                        are sufficient to ensure daily 
                        processing, clearing, and settlement.
                    ``(J) Reporting.--Each derivatives clearing 
                organization shall provide to the Commission 
                all information that the Commission determines 
                to be necessary to conduct oversight of the 
                derivatives clearing organization.
                    ``(K) Recordkeeping.--Each derivatives 
                clearing organization shall maintain records of 
                all activities related to the business of the 
                derivatives clearing organization as a 
                derivatives clearing organization--
                            ``(i) in a form and manner that is 
                        acceptable to the Commission; and
                            ``(ii) for a period of not less 
                        than 5 years.
                    ``(L) Public information.--
                            ``(i) In general.--Each derivatives 
                        clearing organization shall provide to 
                        market participants sufficient 
                        information to enable the market 
                        participants to identify and evaluate 
                        accurately the risks and costs 
                        associated with using the services of 
                        the derivatives clearing organization.
                            ``(ii) Availability of 
                        information.--Each derivatives clearing 
                        organization shall make information 
                        concerning the rules and operating and 
                        default procedures governing the 
                        clearing and settlement systems of the 
                        derivatives clearing organization 
                        available to market participants.
                            ``(iii) Public disclosure.--Each 
                        derivatives clearing organization shall 
                        disclose publicly and to the Commission 
                        information concerning--
                                    ``(I) the terms and 
                                conditions of each contract, 
                                agreement, and transaction 
                                cleared and settled by the 
                                derivatives clearing 
                                organization;
                                    ``(II) each clearing and 
                                other fee that the derivatives 
                                clearing organization charges 
                                the members and participants of 
                                the derivatives clearing 
                                organization;
                                    ``(III) the margin-setting 
                                methodology, and the size and 
                                composition, of the financial 
                                resource package of the 
                                derivatives clearing 
                                organization;
                                    ``(IV) daily settlement 
                                prices, volume, and open 
                                interest for each contract 
                                settled or cleared by the 
                                derivatives clearing 
                                organization; and
                                    ``(V) any other matter 
                                relevant to participation in 
                                the settlement and clearing 
                                activities of the derivatives 
                                clearing organization.
                    ``(M) Information-sharing.--Each 
                derivatives clearing organization shall--
                            ``(i) enter into, and abide by the 
                        terms of, each appropriate and 
                        applicable domestic and international 
                        information-sharing agreement; and
                            ``(ii) use relevant information 
                        obtained from each agreement described 
                        in clause (i) in carrying out the risk 
                        management program of the derivatives 
                        clearing organization.
                    ``(N) Antitrust considerations.--Unless 
                necessary or appropriate to achieve the 
                purposes of this Act, a derivatives clearing 
                organization shall not--
                            ``(i) adopt any rule or take any 
                        action that results in any unreasonable 
                        restraint of trade; or
                            ``(ii) impose any material 
                        anticompetitive burden.
                    ``(O) Governance fitness standards.--
                            ``(i) Governance arrangements.--
                        Each derivatives clearing organization 
                        shall establish governance arrangements 
                        that are transparent--
                                    ``(I) to fulfill public 
                                interest requirements; and
                                    ``(II) to permit the 
                                consideration of the views of 
                                owners and participants.
                            ``(ii) Fitness standards.--Each 
                        derivatives clearing organization shall 
                        establish and enforce appropriate 
                        fitness standards for--
                                    ``(I) directors;
                                    ``(II) members of any 
                                disciplinary committee;
                                    ``(III) members of the 
                                derivatives clearing 
                                organization;
                                    ``(IV) any other individual 
                                or entity with direct access to 
                                the settlement or clearing 
                                activities of the derivatives 
                                clearing organization; and
                                    ``(V) any party affiliated 
                                with any individual or entity 
                                described in this clause.
                    ``(P) Conflicts of interest.--Each 
                derivatives clearing organization shall--
                            ``(i) establish and enforce rules 
                        to minimize conflicts of interest in 
                        the decision-making process of the 
                        derivatives clearing organization; and
                            ``(ii) establish a process for 
                        resolving conflicts of interest 
                        described in clause (i).
                    ``(Q) Composition of governing boards.--
                Each derivatives clearing organization shall 
                ensure that the composition of the governing 
                board or committee of the derivatives clearing 
                organization includes market participants.
                    ``(R) Legal risk.--Each derivatives 
                clearing organization shall have a well-
                founded, transparent, and enforceable legal 
                framework for each aspect of the activities of 
                the derivatives clearing organization.''.
    (d) Conflicts of Interest.--The Commodity Futures Trading 
Commission shall adopt rules mitigating conflicts of interest 
in connection with the conduct of business by a swap dealer or 
a major swap participant with a derivatives clearing 
organization, board of trade, or a swap execution facility that 
clears or trades swaps in which the swap dealer or major swap 
participant has a material debt or material equity investment.
    (e) Reporting Requirements.--Section 5b of the Commodity 
Exchange Act (7 U.S.C. 7a-1) (as amended by subsection (b)) is 
amended by adding at the end the following:
    ``(k) Reporting Requirements.--
            ``(1) Duty of derivatives clearing organizations.--
        Each derivatives clearing organization that clears 
        swaps shall provide to the Commission all information 
        that is determined by the Commission to be necessary to 
        perform each responsibility of the Commission under 
        this Act.
            ``(2) Data collection and maintenance 
        requirements.--The Commission shall adopt data 
        collection and maintenance requirements for swaps 
        cleared by derivatives clearing organizations that are 
        comparable to the corresponding requirements for--
                    ``(A) swaps data reported to swap data 
                repositories; and
                    ``(B) swaps traded on swap execution 
                facilities.
            ``(3) Reports on security-based swap agreements to 
        be shared with the securities and exchange 
        commission.--
                    ``(A) In general.--A derivatives clearing 
                organization that clears security-based swap 
                agreements (as defined in section 1a(47)(A)(v)) 
                shall, upon request, open to inspection and 
                examination to the Securities and Exchange 
                Commission all books and records relating to 
                such security-based swap agreements, consistent 
                with the confidentiality and disclosure 
                requirements of section 8.
                    ``(B) Jurisdiction.--Nothing in this 
                paragraph shall affect the exclusive 
                jurisdiction of the Commission to prescribe 
                recordkeeping and reporting requirements for a 
                derivatives clearing organization that is 
                registered with the Commission.
            ``(4) Information sharing.--Subject to section 8, 
        and upon request, the Commission shall share 
        information collected under paragraph (2) with--
                    ``(A) the Board;
                    ``(B) the Securities and Exchange 
                Commission;
                    ``(C) each appropriate prudential 
                regulator;
                    ``(D) the Financial Stability Oversight 
                Council;
                    ``(E) the Department of Justice; and
                    ``(F) any other person that the Commission 
                determines to be appropriate, including--
                            ``(i) foreign financial supervisors 
                        (including foreign futures 
                        authorities);
                            ``(ii) foreign central banks; and
                            ``(iii) foreign ministries.
            ``(5) Confidentiality and indemnification 
        agreement.--Before the Commission may share information 
        with any entity described in paragraph (4)--
                    ``(A) the Commission shall receive a 
                written agreement from each entity stating that 
                the entity shall abide by the confidentiality 
                requirements described in section 8 relating to 
                the information on swap transactions that is 
                provided; and
                    ``(B) each entity shall agree to indemnify 
                the Commission for any expenses arising from 
                litigation relating to the information provided 
                under section 8.
            ``(6) Public information.--Each derivatives 
        clearing organization that clears swaps shall provide 
        to the Commission (including any designee of the 
        Commission) information under paragraph (2) in such 
        form and at such frequency as is required by the 
        Commission to comply with the public reporting 
        requirements contained in section 2(a)(13).''.
    (f) Public Disclosure.--Section 8(e) of the Commodity 
Exchange Act (7 U.S.C. 12(e)) is amended in the last sentence--
            (1) by inserting ``, central bank and ministries,'' 
        after ``department'' each place it appears; and
            (2) by striking ``. is a party.'' and inserting ``, 
        is a party.''.
    (g) Legal Certainty for Identified Banking Products.--
            (1) Repeals.--The Legal Certainty for Bank Products 
        Act of 2000 (7 U.S.C. 27 et seq.) is amended--
                    (A) by striking sections 404 and 407 (7 
                U.S.C. 27b, 27e);
                    (B) in section 402 (7 U.S.C. 27), by 
                striking subsection (d); and
                    (C) in section 408 (7 U.S.C. 27f)--
                            (i) in subsection (c)--
                                    (I) by striking ``in the 
                                case'' and all that follows 
                                through ``a hybrid'' and 
                                inserting ``in the case of a 
                                hybrid'';
                                    (II) by striking ``; or'' 
                                and inserting a period; and
                                    (III) by striking paragraph 
                                (2);
                            (ii) by striking subsection (b); 
                        and
                            (iii) by redesignating subsection 
                        (c) as subsection (b).
            (2) Legal certainty for bank products act of 
        2000.--Section 403 of the Legal Certainty for Bank 
        Products Act of 2000 (7 U.S.C. 27a) is amended to read 
        as follows:

``SEC. 403. EXCLUSION OF IDENTIFIED BANKING PRODUCT.

    ``(a) Exclusion.--Except as provided in subsection (b) or 
(c)--
            ``(1) the Commodity Exchange Act (7 U.S.C. 1 et 
        seq.) shall not apply to, and the Commodity Futures 
        Trading Commission shall not exercise regulatory 
        authority under the Commodity Exchange Act (7 U.S.C. 1 
        et seq.) with respect to, an identified banking 
        product; and
            ``(2) the definitions of `security-based swap' in 
        section 3(a)(68) of the Securities Exchange Act of 1934 
        and `security-based swap agreement' in section 
        1a(47)(A)(v) of the Commodity Exchange Act and section 
        3(a)(78) of the Securities Exchange Act of 1934 do not 
        include any identified bank product.
    ``(b) Exception.--An appropriate Federal banking agency may 
except an identified banking product of a bank under its 
regulatory jurisdiction from the exclusion in subsection (a) if 
the agency determines, in consultation with the Commodity 
Futures Trading Commission and the Securities and Exchange 
Commission, that the product--
            ``(1) would meet the definition of a `swap' under 
        section 1a(47) of the Commodity Exchange Act (7 U.S.C. 
        1a) or a `security-based swap' under that section 
        3(a)(68) of the Securities Exchange Act of 1934; and
            ``(2) has become known to the trade as a swap or 
        security-based swap, or otherwise has been structured 
        as an identified banking product for the purpose of 
        evading the provisions of the Commodity Exchange Act (7 
        U.S.C. 1 et seq.), the Securities Act of 1933 (15 
        U.S.C. 77a et seq.), or the Securities Exchange Act of 
        1934 (15 U.S.C. 78a et seq.).
    ``(c) Exception.--The exclusions in subsection (a) shall 
not apply to an identified bank product that--
            ``(1) is a product of a bank that is not under the 
        regulatory jurisdiction of an appropriate Federal 
        banking agency;
            ``(2) meets the definition of swap in section 
        1a(47) of the Commodity Exchange Act or security-based 
        swap in section 3(a)(68) of the Securities Exchange Act 
        of 1934; and
            ``(3) has become known to the trade as a swap or 
        security-based swap, or otherwise has been structured 
        as an identified banking product for the purpose of 
        evading the provisions of the Commodity Exchange Act (7 
        U.S.C. 1 et seq.), the Securities Act of 1933 (15 
        U.S.C. 77a et seq.), or the Securities Exchange Act of 
        1934 (15 U.S.C. 78a et seq.).''.
    (h) Reducing Clearing Systemic Risk.--Section 5b(f)(1) of 
the Commodity Exchange Act (7 U.S.C. 7a-1(F)(i)) is amended by 
adding at the end the following: ``In order to minimize 
systemic risk, under no circumstances shall a derivatives 
clearing organization be compelled to accept the counterparty 
credit risk of another clearing organization.''.

SEC. 726. RULEMAKING ON CONFLICT OF INTEREST.

    (a) In General.--In order to mitigate conflicts of 
interest, not later than 180 days after the date of enactment 
of the Wall Street Transparency and Accountability Act of 2010, 
the Commodity Futures Trading Commission shall adopt rules 
which may include numerical limits on the control of, or the 
voting rights with respect to, any derivatives clearing 
organization that clears swaps, or swap execution facility or 
board of trade designated as a contract market that posts swaps 
or makes swaps available for trading, by a bank holding company 
(as defined in section 2 of the Bank Holding Company Act of 
1956 (12 U.S.C. 1841)) with total consolidated assets of 
$50,000,000,000 or more, a nonbank financial company (as 
defined in section 102) supervised by the Board, an affiliate 
of such a bank holding company or nonbank financial company, a 
swap dealer, major swap participant, or associated person of a 
swap dealer or major swap participant.
    (b) Purposes.--The Commission shall adopt rules if it 
determines, after the review described in subsection (a), that 
such rules are necessary or appropriate to improve the 
governance of, or to mitigate systemic risk, promote 
competition, or mitigate conflicts of interest in connection 
with a swap dealer or major swap participant's conduct of 
business with, a derivatives clearing organization, contract 
market, or swap execution facility that clears or posts swaps 
or makes swaps available for trading and in which such swap 
dealer or major swap participant has a material debt or equity 
investment.
    (c) Considerations.--In adopting rules pursuant to this 
section, the Commodity Futures Trading Commission shall 
consider any conflicts of interest arising from the amount of 
equity owned by a single investor, the ability to vote, cause 
the vote of, or withhold votes entitled to be cast on any 
matters by the holders of the ownership interest, and the 
governance arrangements of any derivatives clearing 
organization that clears swaps, or swap execution facility or 
board of trade designated as a contract market that posts swaps 
or makes swaps available for trading.

SEC. 727. PUBLIC REPORTING OF SWAP TRANSACTION DATA.

    Section 2(a) of the Commodity Exchange Act (7 U.S.C. 2(a)) 
is amended by adding at the end the following:
            ``(13) Public availability of swap transaction 
        data.--
                    ``(A) Definition of real-time public 
                reporting.--In this paragraph, the term `real-
                time public reporting' means to report data 
                relating to a swap transaction, including price 
                and volume, as soon as technologically 
                practicable after the time at which the swap 
                transaction has been executed.
                    ``(B) Purpose.--The purpose of this section 
                is to authorize the Commission to make swap 
                transaction and pricing data available to the 
                public in such form and at such times as the 
                Commission determines appropriate to enhance 
                price discovery.
                    ``(C) General rule.--The Commission is 
                authorized and required to provide by rule for 
                the public availability of swap transaction and 
                pricing data as follows:
                            ``(i) With respect to those swaps 
                        that are subject to the mandatory 
                        clearing requirement described in 
                        subsection (h)(1) (including those 
                        swaps that are excepted from the 
                        requirement pursuant to subsection 
                        (h)(7)), the Commission shall require 
                        real-time public reporting for such 
                        transactions.
                            ``(ii) With respect to those swaps 
                        that are not subject to the mandatory 
                        clearing requirement described in 
                        subsection (h)(1), but are cleared at a 
                        registered derivatives clearing 
                        organization, the Commission shall 
                        require real-time public reporting for 
                        such transactions.
                            ``(iii) With respect to swaps that 
                        are not cleared at a registered 
                        derivatives clearing organization and 
                        which are reported to a swap data 
                        repository or the Commission under 
                        subsection (h)(6), the Commission shall 
                        require real-time public reporting for 
                        such transactions, in a manner that 
                        does not disclose the business 
                        transactions and market positions of 
                        any person.
                            ``(iv) With respect to swaps that 
                        are determined to be required to be 
                        cleared under subsection (h)(2) but are 
                        not cleared, the Commission shall 
                        require real-time public reporting for 
                        such transactions.
                    ``(D) Registered entities and public 
                reporting.--The Commission may require 
                registered entities to publicly disseminate the 
                swap transaction and pricing data required to 
                be reported under this paragraph.
                    ``(E) Rulemaking required.--With respect to 
                the rule providing for the public availability 
                of transaction and pricing data for swaps 
                described in clauses (i) and (ii) of 
                subparagraph (C), the rule promulgated by the 
                Commission shall contain provisions--
                            ``(i) to ensure such information 
                        does not identify the participants;
                            ``(ii) to specify the criteria for 
                        determining what constitutes a large 
                        notional swap transaction (block trade) 
                        for particular markets and contracts;
                            ``(iii) to specify the appropriate 
                        time delay for reporting large notional 
                        swap transactions (block trades) to the 
                        public; and
                            ``(iv) that take into account 
                        whether the public disclosure will 
                        materially reduce market liquidity.
                    ``(F) Timeliness of reporting.--Parties to 
                a swap (including agents of the parties to a 
                swap) shall be responsible for reporting swap 
                transaction information to the appropriate 
                registered entity in a timely manner as may be 
                prescribed by the Commission.
                    ``(G) Reporting of swaps to registered swap 
                data repositories.--Each swap (whether cleared 
                or uncleared) shall be reported to a registered 
                swap data repository.
            ``(14) Semiannual and annual public reporting of 
        aggregate swap data.--
                    ``(A) In general.--In accordance with 
                subparagraph (B), the Commission shall issue a 
                written report on a semiannual and annual basis 
                to make available to the public information 
                relating to--
                            ``(i) the trading and clearing in 
                        the major swap categories; and
                            ``(ii) the market participants and 
                        developments in new products.
                    ``(B) Use; consultation.--In preparing a 
                report under subparagraph (A), the Commission 
                shall--
                            ``(i) use information from swap 
                        data repositories and derivatives 
                        clearing organizations; and
                            ``(ii) consult with the Office of 
                        the Comptroller of the Currency, the 
                        Bank for International Settlements, and 
                        such other regulatory bodies as may be 
                        necessary.
                    ``(C) Authority of the commission.--The 
                Commission may, by rule, regulation, or order, 
                delegate the public reporting responsibilities 
                of the Commission under this paragraph in 
                accordance with such terms and conditions as 
                the Commission determines to be appropriate and 
                in the public interest.''.

SEC. 728. SWAP DATA REPOSITORIES.

    The Commodity Exchange Act is amended by inserting after 
section 20 (7 U.S.C. 24) the following:

``SEC. 21. SWAP DATA REPOSITORIES.

    ``(a) Registration Requirement.--
            ``(1) Requirement; authority of derivatives 
        clearing organization.--
                    ``(A) In general.--It shall be unlawful for 
                any person, unless registered with the 
                Commission, directly or indirectly to make use 
                of the mails or any means or instrumentality of 
                interstate commerce to perform the functions of 
                a swap data repository.
                    ``(B) Registration of derivatives clearing 
                organizations.--A derivatives clearing 
                organization may register as a swap data 
                repository.
            ``(2) Inspection and examination.--Each registered 
        swap data repository shall be subject to inspection and 
        examination by any representative of the Commission.
            ``(3) Compliance with core principles.--
                    ``(A) In general.--To be registered, and 
                maintain registration, as a swap data 
                repository, the swap data repository shall 
                comply with--
                            ``(i) the requirements and core 
                        principles described in this section; 
                        and
                            ``(ii) any requirement that the 
                        Commission may impose by rule or 
                        regulation pursuant to section 8a(5).
                    ``(B) Reasonable discretion of swap data 
                repository.--Unless otherwise determined by the 
                Commission by rule or regulation, a swap data 
                repository described in subparagraph (A) shall 
                have reasonable discretion in establishing the 
                manner in which the swap data repository 
                complies with the core principles described in 
                this section.
    ``(b) Standard Setting.--
            ``(1) Data identification.--
                    ``(A) In general.--In accordance with 
                subparagraph (B), the Commission shall 
                prescribe standards that specify the data 
                elements for each swap that shall be collected 
                and maintained by each registered swap data 
                repository.
                    ``(B) Requirement.--In carrying out 
                subparagraph (A), the Commission shall 
                prescribe consistent data element standards 
                applicable to registered entities and reporting 
                counterparties.
            ``(2) Data collection and maintenance.--The 
        Commission shall prescribe data collection and data 
        maintenance standards for swap data repositories.
            ``(3) Comparability.--The standards prescribed by 
        the Commission under this subsection shall be 
        comparable to the data standards imposed by the 
        Commission on derivatives clearing organizations in 
        connection with their clearing of swaps.
    ``(c) Duties.--A swap data repository shall--
            ``(1) accept data prescribed by the Commission for 
        each swap under subsection (b);
            ``(2) confirm with both counterparties to the swap 
        the accuracy of the data that was submitted;
            ``(3) maintain the data described in paragraph (1) 
        in such form, in such manner, and for such period as 
        may be required by the Commission;
            ``(4)(A) provide direct electronic access to the 
        Commission (or any designee of the Commission, 
        including another registered entity); and
            ``(B) provide the information described in 
        paragraph (1) in such form and at such frequency as the 
        Commission may require to comply with the public 
        reporting requirements contained in section 2(a)(13);
            ``(5) at the direction of the Commission, establish 
        automated systems for monitoring, screening, and 
        analyzing swap data, including compliance and frequency 
        of end user clearing exemption claims by individual and 
        affiliated entities;
            ``(6) maintain the privacy of any and all swap 
        transaction information that the swap data repository 
        receives from a swap dealer, counterparty, or any other 
        registered entity; and
            ``(7) on a confidential basis pursuant to section 
        8, upon request, and after notifying the Commission of 
        the request, make available all data obtained by the 
        swap data repository, including individual counterparty 
        trade and position data, to--
                    ``(A) each appropriate prudential 
                regulator;
                    ``(B) the Financial Stability Oversight 
                Council;
                    ``(C) the Securities and Exchange 
                Commission;
                    ``(D) the Department of Justice; and
                    ``(E) any other person that the Commission 
                determines to be appropriate, including--
                            ``(i) foreign financial supervisors 
                        (including foreign futures 
                        authorities);
                            ``(ii) foreign central banks; and
                            ``(iii) foreign ministries; and
            ``(8) establish and maintain emergency procedures, 
        backup facilities, and a plan for disaster recovery 
        that allows for the timely recovery and resumption of 
        operations and the fulfillment of the responsibilities 
        and obligations of the organization.
    ``(d) Confidentiality and Indemnification Agreement.--
Before the swap data repository may share information with any 
entity described in subsection (c)(7)--
            ``(1) the swap data repository shall receive a 
        written agreement from each entity stating that the 
        entity shall abide by the confidentiality requirements 
        described in section 8 relating to the information on 
        swap transactions that is provided; and
            ``(2) each entity shall agree to indemnify the swap 
        data repository and the Commission for any expenses 
        arising from litigation relating to the information 
        provided under section 8.
    ``(e) Designation of Chief Compliance Officer.--
            ``(1) In general.--Each swap data repository shall 
        designate an individual to serve as a chief compliance 
        officer.
            ``(2) Duties.--The chief compliance officer shall--
                    ``(A) report directly to the board or to 
                the senior officer of the swap data repository;
                    ``(B) review the compliance of the swap 
                data repository with respect to the 
                requirements and core principles described in 
                this section;
                    ``(C) in consultation with the board of the 
                swap data repository, a body performing a 
                function similar to the board of the swap data 
                repository, or the senior officer of the swap 
                data repository, resolve any conflicts of 
                interest that may arise;
                    ``(D) be responsible for administering each 
                policy and procedure that is required to be 
                established pursuant to this section;
                    ``(E) ensure compliance with this Act 
                (including regulations) relating to agreements, 
                contracts, or transactions, including each rule 
                prescribed by the Commission under this 
                section;
                    ``(F) establish procedures for the 
                remediation of noncompliance issues identified 
                by the chief compliance officer through any--
                            ``(i) compliance office review;
                            ``(ii) look-back;
                            ``(iii) internal or external audit 
                        finding;
                            ``(iv) self-reported error; or
                            ``(v) validated complaint; and
                    ``(G) establish and follow appropriate 
                procedures for the handling, management 
                response, remediation, retesting, and closing 
                of noncompliance issues.
            ``(3) Annual reports.--
                    ``(A) In general.--In accordance with rules 
                prescribed by the Commission, the chief 
                compliance officer shall annually prepare and 
                sign a report that contains a description of--
                            ``(i) the compliance of the swap 
                        data repository of the chief compliance 
                        officer with respect to this Act 
                        (including regulations); and
                            ``(ii) each policy and procedure of 
                        the swap data repository of the chief 
                        compliance officer (including the code 
                        of ethics and conflict of interest 
                        policies of the swap data repository).
                    ``(B) Requirements.--A compliance report 
                under subparagraph (A) shall--
                            ``(i) accompany each appropriate 
                        financial report of the swap data 
                        repository that is required to be 
                        furnished to the Commission pursuant to 
                        this section; and
                            ``(ii) include a certification 
                        that, under penalty of law, the 
                        compliance report is accurate and 
                        complete.
    ``(f) Core Principles Applicable To Swap Data 
Repositories.--
            ``(1) Antitrust considerations.--Unless necessary 
        or appropriate to achieve the purposes of this Act, a 
        swap data repository shall not--
                    ``(A) adopt any rule or take any action 
                that results in any unreasonable restraint of 
                trade; or
                    ``(B) impose any material anticompetitive 
                burden on the trading, clearing, or reporting 
                of transactions.
            ``(2) Governance arrangements.--Each swap data 
        repository shall establish governance arrangements that 
        are transparent--
                    ``(A) to fulfill public interest 
                requirements; and
                    ``(B) to support the objectives of the 
                Federal Government, owners, and participants.
            ``(3) Conflicts of interest.--Each swap data 
        repository shall--
                    ``(A) establish and enforce rules to 
                minimize conflicts of interest in the decision-
                making process of the swap data repository; and
                    ``(B) establish a process for resolving 
                conflicts of interest described in subparagraph 
                (A).
            ``(4) Additional duties developed by commission.--
                    ``(A) In general.--The Commission may 
                develop 1 or more additional duties applicable 
                to swap data repositories.
                    ``(B) Consideration of evolving 
                standards.--In developing additional duties 
                under subparagraph (A), the Commission may take 
                into consideration any evolving standard of the 
                United States or the international community.
                    ``(C) Additional duties for commission 
                designees.--The Commission shall establish 
                additional duties for any registrant described 
                in section 1a(48) in order to minimize 
                conflicts of interest, protect data, ensure 
                compliance, and guarantee the safety and 
                security of the swap data repository.
    ``(g) Required Registration for Swap Data Repositories.--
Any person that is required to be registered as a swap data 
repository under this section shall register with the 
Commission regardless of whether that person is also licensed 
as a bank or registered with the Securities and Exchange 
Commission as a swap data repository.
    ``(h) Rules.--The Commission shall adopt rules governing 
persons that are registered under this section.''.

SEC. 729. REPORTING AND RECORDKEEPING.

    The Commodity Exchange Act is amended by inserting after 
section 4q (7 U.S.C. 6o-1) the following:

``SEC. 4R. REPORTING AND RECORDKEEPING FOR UNCLEARED SWAPS.

    ``(a) Required Reporting of Swaps Not Accepted by Any 
Derivatives Clearing Organization.--
            ``(1) In general.--Each swap that is not accepted 
        for clearing by any derivatives clearing organization 
        shall be reported to--
                    ``(A) a swap data repository described in 
                section 21; or
                    ``(B) in the case in which there is no swap 
                data repository that would accept the swap, to 
                the Commission pursuant to this section within 
                such time period as the Commission may by rule 
                or regulation prescribe.
            ``(2) Transition rule for preenactment swaps.--
                    ``(A) Swaps entered into before the date of 
                enactment of the wall street transparency and 
                accountability act of 2010.--Each swap entered 
                into before the date of enactment of the Wall 
                Street Transparency and Accountability Act of 
                2010, the terms of which have not expired as of 
                the date of enactment of that Act, shall be 
                reported to a registered swap data repository 
                or the Commission by a date that is not later 
                than--
                            ``(i) 30 days after issuance of the 
                        interim final rule; or
                            ``(ii) such other period as the 
                        Commission determines to be 
                        appropriate.
                    ``(B) Commission rulemaking.--The 
                Commission shall promulgate an interim final 
                rule within 90 days of the date of enactment of 
                this section providing for the reporting of 
                each swap entered into before the date of 
                enactment as referenced in subparagraph (A).
                    ``(C) Effective date.--The reporting 
                provisions described in this section shall be 
                effective upon the enactment of this section.
            ``(3) Reporting obligations.--
                    ``(A) Swaps in which only 1 counterparty is 
                a swap dealer or major swap participant.--With 
                respect to a swap in which only 1 counterparty 
                is a swap dealer or major swap participant, the 
                swap dealer or major swap participant shall 
                report the swap as required under paragraphs 
                (1) and (2).
                    ``(B) Swaps in which 1 counterparty is a 
                swap dealer and the other a major swap 
                participant.--With respect to a swap in which 1 
                counterparty is a swap dealer and the other a 
                major swap participant, the swap dealer shall 
                report the swap as required under paragraphs 
                (1) and (2).
                    ``(C) Other swaps.--With respect to any 
                other swap not described in subparagraph (A) or 
                (B), the counterparties to the swap shall 
                select a counterparty to report the swap as 
                required under paragraphs (1) and (2).
    ``(b) Duties of Certain Individuals.--Any individual or 
entity that enters into a swap shall meet each requirement 
described in subsection (c) if the individual or entity did 
not--
            ``(1) clear the swap in accordance with section 
        2(h)(1); or
            ``(2) have the data regarding the swap accepted by 
        a swap data repository in accordance with rules 
        (including timeframes) adopted by the Commission under 
        section 21.
    ``(c) Requirements.--An individual or entity described in 
subsection (b) shall--
            ``(1) upon written request from the Commission, 
        provide reports regarding the swaps held by the 
        individual or entity to the Commission in such form and 
        in such manner as the Commission may request; and
            ``(2) maintain books and records pertaining to the 
        swaps held by the individual or entity in such form, in 
        such manner, and for such period as the Commission may 
        require, which shall be open to inspection by--
                    ``(A) any representative of the Commission;
                    ``(B) an appropriate prudential regulator;
                    ``(C) the Securities and Exchange 
                Commission;
                    ``(D) the Financial Stability Oversight 
                Council; and
                    ``(E) the Department of Justice.
    ``(d) Identical Data.--In prescribing rules under this 
section, the Commission shall require individuals and entities 
described in subsection (b) to submit to the Commission a 
report that contains data that is not less comprehensive than 
the data required to be collected by swap data repositories 
under section 21.''.

SEC. 730. LARGE SWAP TRADER REPORTING.

    The Commodity Exchange Act (7 U.S.C. 1 et seq.) is amended 
by adding after section 4s (as added by section 731) the 
following:

``SEC. 4T. LARGE SWAP TRADER REPORTING.

    ``(a) Prohibition.--
            ``(1) In general.--Except as provided in paragraph 
        (2), it shall be unlawful for any person to enter into 
        any swap that the Commission determines to perform a 
        significant price discovery function with respect to 
        registered entities if--
                    ``(A) the person directly or indirectly 
                enters into the swap during any 1 day in an 
                amount equal to or in excess of such amount as 
                shall be established periodically by the 
                Commission; and
                    ``(B) the person directly or indirectly has 
                or obtains a position in the swap equal to or 
                in excess of such amount as shall be 
                established periodically by the Commission.
            ``(2) Exception.--Paragraph (1) shall not apply 
        if--
                    ``(A) the person files or causes to be 
                filed with the properly designated officer of 
                the Commission such reports regarding any 
                transactions or positions described in 
                subparagraphs (A) and (B) of paragraph (1) as 
                the Commission may require by rule or 
                regulation; and
                    ``(B) in accordance with the rules and 
                regulations of the Commission, the person keeps 
                books and records of all such swaps and any 
                transactions and positions in any related 
                commodity traded on or subject to the rules of 
                any designated contract market or swap 
                execution facility, and of cash or spot 
                transactions in, inventories of, and purchase 
                and sale commitments of, such a commodity.
    ``(b) Requirements.--
            ``(1) In general.--Books and records described in 
        subsection (a)(2)(B) shall--
                    ``(A) show such complete details concerning 
                all transactions and positions as the 
                Commission may prescribe by rule or regulation;
                    ``(B) be open at all times to inspection 
                and examination by any representative of the 
                Commission; and
                    ``(C) be open at all times to inspection 
                and examination by the Securities and Exchange 
                Commission, to the extent such books and 
                records relate to transactions in swaps (as 
                that term is defined in section 1a(47)(A)(v)), 
                and consistent with the confidentiality and 
                disclosure requirements of section 8.
            ``(2) Jurisdiction.--Nothing in paragraph (1) shall 
        affect the exclusive jurisdiction of the Commission to 
        prescribe recordkeeping and reporting requirements for 
        large swap traders under this section.
    ``(c) Applicability.--For purposes of this section, the 
swaps, futures, and cash or spot transactions and positions of 
any person shall include the swaps, futures, and cash or spot 
transactions and positions of any persons directly or 
indirectly controlled by the person.
    ``(d) Significant Price Discovery Function.--In making a 
determination as to whether a swap performs or affects a 
significant price discovery function with respect to registered 
entities, the Commission shall consider the factors described 
in section 4a(a)(3).''.

SEC. 731. REGISTRATION AND REGULATION OF SWAP DEALERS AND MAJOR SWAP 
                    PARTICIPANTS.

    The Commodity Exchange Act (7 U.S.C. 1 et seq.) is amended 
by inserting after section 4r (as added by section 729) the 
following:

``SEC. 4S. REGISTRATION AND REGULATION OF SWAP DEALERS AND MAJOR SWAP 
                    PARTICIPANTS.

    ``(a) Registration.--
            ``(1) Swap dealers.--It shall be unlawful for any 
        person to act as a swap dealer unless the person is 
        registered as a swap dealer with the Commission.
            ``(2) Major swap participants.--It shall be 
        unlawful for any person to act as a major swap 
        participant unless the person is registered as a major 
        swap participant with the Commission.
    ``(b) Requirements.--
            ``(1) In general.--A person shall register as a 
        swap dealer or major swap participant by filing a 
        registration application with the Commission.
            ``(2) Contents.--
                    ``(A) In general.--The application shall be 
                made in such form and manner as prescribed by 
                the Commission, and shall contain such 
                information, as the Commission considers 
                necessary concerning the business in which the 
                applicant is or will be engaged.
                    ``(B) Continual reporting.--A person that 
                is registered as a swap dealer or major swap 
                participant shall continue to submit to the 
                Commission reports that contain such 
                information pertaining to the business of the 
                person as the Commission may require.
            ``(3) Expiration.--Each registration under this 
        section shall expire at such time as the Commission may 
        prescribe by rule or regulation.
            ``(4) Rules.--Except as provided in subsections (d) 
        and (e), the Commission may prescribe rules applicable 
        to swap dealers and major swap participants, including 
        rules that limit the activities of swap dealers and 
        major swap participants.
            ``(5) Transition.--Rules under this section shall 
        provide for the registration of swap dealers and major 
        swap participants not later than 1 year after the date 
        of enactment of the Wall Street Transparency and 
        Accountability Act of 2010.
            ``(6) Statutory disqualification.--Except to the 
        extent otherwise specifically provided by rule, 
        regulation, or order, it shall be unlawful for a swap 
        dealer or a major swap participant to permit any person 
        associated with a swap dealer or a major swap 
        participant who is subject to a statutory 
        disqualification to effect or be involved in effecting 
        swaps on behalf of the swap dealer or major swap 
        participant, if the swap dealer or major swap 
        participant knew, or in the exercise of reasonable care 
        should have known, of the statutory disqualification.
    ``(c) Dual Registration.--
            ``(1) Swap dealer.--Any person that is required to 
        be registered as a swap dealer under this section shall 
        register with the Commission regardless of whether the 
        person also is a depository institution or is 
        registered with the Securities and Exchange Commission 
        as a security-based swap dealer.
            ``(2) Major swap participant.--Any person that is 
        required to be registered as a major swap participant 
        under this section shall register with the Commission 
        regardless of whether the person also is a depository 
        institution or is registered with the Securities and 
        Exchange Commission as a major security-based swap 
        participant.
    ``(d) Rulemakings.--
            ``(1) In general.--The Commission shall adopt rules 
        for persons that are registered as swap dealers or 
        major swap participants under this section.
            ``(2) Exception for prudential requirements.--
                    ``(A) In general.--The Commission may not 
                prescribe rules imposing prudential 
                requirements on swap dealers or major swap 
                participants for which there is a prudential 
                regulator.
                    ``(B) Applicability.--Subparagraph (A) does 
                not limit the authority of the Commission to 
                prescribe rules as directed under this section.
    ``(e) Capital and Margin Requirements.--
            ``(1) In general.--
                    ``(A) Swap dealers and major swap 
                participants that are banks.--Each registered 
                swap dealer and major swap participant for 
                which there is a prudential regulator shall 
                meet such minimum capital requirements and 
                minimum initial and variation margin 
                requirements as the prudential regulator shall 
                by rule or regulation prescribe under paragraph 
                (2)(A).
                    ``(B) Swap dealers and major swap 
                participants that are not banks.--Each 
                registered swap dealer and major swap 
                participant for which there is not a prudential 
                regulator shall meet such minimum capital 
                requirements and minimum initial and variation 
                margin requirements as the Commission shall by 
                rule or regulation prescribe under paragraph 
                (2)(B).
            ``(2) Rules.--
                    ``(A) Swap dealers and major swap 
                participants that are banks.--The prudential 
                regulators, in consultation with the Commission 
                and the Securities and Exchange Commission, 
                shall jointly adopt rules for swap dealers and 
                major swap participants, with respect to their 
                activities as a swap dealer or major swap 
                participant, for which there is a prudential 
                regulator imposing--
                            ``(i) capital requirements; and
                            ``(ii) both initial and variation 
                        margin requirements on all swaps that 
                        are not cleared by a registered 
                        derivatives clearing organization.
                    ``(B) Swap dealers and major swap 
                participants that are not banks.--The 
                Commission shall adopt rules for swap dealers 
                and major swap participants, with respect to 
                their activities as a swap dealer or major swap 
                participant, for which there is not a 
                prudential regulator imposing--
                            ``(i) capital requirements; and
                            ``(ii) both initial and variation 
                        margin requirements on all swaps that 
                        are not cleared by a registered 
                        derivatives clearing organization.
                    ``(C) Capital.--In setting capital 
                requirements for a person that is designated as 
                a swap dealer or a major swap participant for a 
                single type or single class or category of swap 
                or activities, the prudential regulator and the 
                Commission shall take into account the risks 
                associated with other types of swaps or classes 
                of swaps or categories of swaps engaged in and 
                the other activities conducted by that person 
                that are not otherwise subject to regulation 
                applicable to that person by virtue of the 
                status of the person as a swap dealer or a 
                major swap participant.
            ``(3) Standards for capital and margin.--
                    ``(A) In general.--To offset the greater 
                risk to the swap dealer or major swap 
                participant and the financial system arising 
                from the use of swaps that are not cleared, the 
                requirements imposed under paragraph (2) 
                shall--
                            ``(i) help ensure the safety and 
                        soundness of the swap dealer or major 
                        swap participant; and
                            ``(ii) be appropriate for the risk 
                        associated with the non-cleared swaps 
                        held as a swap dealer or major swap 
                        participant.
                    ``(B) Rule of construction.--
                            ``(i) In general.--Nothing in this 
                        section shall limit, or be construed to 
                        limit, the authority--
                                    ``(I) of the Commission to 
                                set financial responsibility 
                                rules for a futures commission 
                                merchant or introducing broker 
                                registered pursuant to section 
                                4f(a) (except for section 
                                4f(a)(3)) in accordance with 
                                section 4f(b); or
                                    ``(II) of the Securities 
                                and Exchange Commission to set 
                                financial responsibility rules 
                                for a broker or dealer 
                                registered pursuant to section 
                                15(b) of the Securities 
                                Exchange Act of 1934 (15 U.S.C. 
                                78o(b)) (except for section 
                                15(b)(11) of that Act (15 
                                U.S.C. 78o(b)(11)) in 
                                accordance with section 
                                15(c)(3) of the Securities 
                                Exchange Act of 1934 (15 U.S.C. 
                                78o(c)(3)).
                            ``(ii) Futures commission merchants 
                        and other dealers.--A futures 
                        commission merchant, introducing 
                        broker, broker, or dealer shall 
                        maintain sufficient capital to comply 
                        with the stricter of any applicable 
                        capital requirements to which such 
                        futures commission merchant, 
                        introducing broker, broker, or dealer 
                        is subject to under this Act or the 
                        Securities Exchange Act of 1934 (15 
                        U.S.C. 78a et seq.).
                    ``(C) Margin requirements.--In prescribing 
                margin requirements under this subsection, the 
                prudential regulator with respect to swap 
                dealers and major swap participants for which 
                it is the prudential regulator and the 
                Commission with respect to swap dealers and 
                major swap participants for which there is no 
                prudential regulator shall permit the use of 
                noncash collateral, as the regulator or the 
                Commission determines to be consistent with--
                            ``(i) preserving the financial 
                        integrity of markets trading swaps; and
                            ``(ii) preserving the stability of 
                        the United States financial system.
                    ``(D) Comparability of capital and margin 
                requirements.--
                            ``(i) In general.--The prudential 
                        regulators, the Commission, and the 
                        Securities and Exchange Commission 
                        shall periodically (but not less 
                        frequently than annually) consult on 
                        minimum capital requirements and 
                        minimum initial and variation margin 
                        requirements.
                            ``(ii) Comparability.--The entities 
                        described in clause (i) shall, to the 
                        maximum extent practicable, establish 
                        and maintain comparable minimum capital 
                        requirements and minimum initial and 
                        variation margin requirements, 
                        including the use of non cash 
                        collateral, for--
                                    ``(I) swap dealers; and
                                    ``(II) major swap 
                                participants.
    ``(f) Reporting and Recordkeeping.--
            ``(1) In general.--Each registered swap dealer and 
        major swap participant--
                    ``(A) shall make such reports as are 
                required by the Commission by rule or 
                regulation regarding the transactions and 
                positions and financial condition of the 
                registered swap dealer or major swap 
                participant;
                    ``(B)(i) for which there is a prudential 
                regulator, shall keep books and records of all 
                activities related to the business as a swap 
                dealer or major swap participant in such form 
                and manner and for such period as may be 
                prescribed by the Commission by rule or 
                regulation; and
                    ``(ii) for which there is no prudential 
                regulator, shall keep books and records in such 
                form and manner and for such period as may be 
                prescribed by the Commission by rule or 
                regulation;
                    ``(C) shall keep books and records 
                described in subparagraph (B) open to 
                inspection and examination by any 
                representative of the Commission; and
                    ``(D) shall keep any such books and records 
                relating to swaps defined in section 
                1a(47)(A)(v) open to inspection and examination 
                by the Securities and Exchange Commission.
            ``(2) Rules.--The Commission shall adopt rules 
        governing reporting and recordkeeping for swap dealers 
        and major swap participants.
    ``(g) Daily Trading Records.--
            ``(1) In general.--Each registered swap dealer and 
        major swap participant shall maintain daily trading 
        records of the swaps of the registered swap dealer and 
        major swap participant and all related records 
        (including related cash or forward transactions) and 
        recorded communications, including electronic mail, 
        instant messages, and recordings of telephone calls, 
        for such period as may be required by the Commission by 
        rule or regulation.
            ``(2) Information requirements.--The daily trading 
        records shall include such information as the 
        Commission shall require by rule or regulation.
            ``(3) Counterparty records.--Each registered swap 
        dealer and major swap participant shall maintain daily 
        trading records for each counterparty in a manner and 
        form that is identifiable with each swap transaction.
            ``(4) Audit trail.--Each registered swap dealer and 
        major swap participant shall maintain a complete audit 
        trail for conducting comprehensive and accurate trade 
        reconstructions.
            ``(5) Rules.--The Commission shall adopt rules 
        governing daily trading records for swap dealers and 
        major swap participants.
    ``(h) Business Conduct Standards.--
            ``(1) In general.--Each registered swap dealer and 
        major swap participant shall conform with such business 
        conduct standards as prescribed in paragraph (3) and as 
        may be prescribed by the Commission by rule or 
        regulation that relate to--
                    ``(A) fraud, manipulation, and other 
                abusive practices involving swaps (including 
                swaps that are offered but not entered into);
                    ``(B) diligent supervision of the business 
                of the registered swap dealer and major swap 
                participant;
                    ``(C) adherence to all applicable position 
                limits; and
                    ``(D) such other matters as the Commission 
                determines to be appropriate.
            ``(2) Responsibilities with respect to special 
        entities.--
                    ``(A) Advising special entities.--A swap 
                dealer or major swap participant that acts as 
                an advisor to a special entity regarding a swap 
                shall comply with the requirements of 
                subparagraph (4) with respect to such Special 
                Entity.
                    ``(B) Entering of swaps with respect to 
                special entities.--A swap dealer that enters 
                into or offers to enter into swap with a 
                Special Entity shall comply with the 
                requirements of subparagraph (5) with respect 
                to such Special Entity.
                    ``(C) Special entity defined.--For purposes 
                of this subsection, the term `special entity' 
                means--
                            ``(i) a Federal agency;
                            ``(ii) a State, State agency, city, 
                        county, municipality, or other 
                        political subdivision of a State;
                            ``(iii) any employee benefit plan, 
                        as defined in section 3 of the Employee 
                        Retirement Income Security Act of 1974 
                        (29 U.S.C. 1002);
                            ``(iv) any governmental plan, as 
                        defined in section 3 of the Employee 
                        Retirement Income Security Act of 1974 
                        (29 U.S.C. 1002); or
                            ``(v) any endowment, including an 
                        endowment that is an organization 
                        described in section 501(c)(3) of the 
                        Internal Revenue Code of 1986.
            ``(3) Business conduct requirements.--Business 
        conduct requirements adopted by the Commission shall--
                    ``(A) establish a duty for a swap dealer or 
                major swap participant to verify that any 
                counterparty meets the eligibility standards 
                for an eligible contract participant;
                    ``(B) require disclosure by the swap dealer 
                or major swap participant to any counterparty 
                to the transaction (other than a swap dealer, 
                major swap participant, security-based swap 
                dealer, or major security-based swap 
                participant) of--
                            ``(i) information about the 
                        material risks and characteristics of 
                        the swap;
                            ``(ii) any material incentives or 
                        conflicts of interest that the swap 
                        dealer or major swap participant may 
                        have in connection with the swap; and
                            ``(iii)(I) for cleared swaps, upon 
                        the request of the counterparty, 
                        receipt of the daily mark of the 
                        transaction from the appropriate 
                        derivatives clearing organization; and
                            ``(II) for uncleared swaps, receipt 
                        of the daily mark of the transaction 
                        from the swap dealer or the major swap 
                        participant;
                    ``(C) establish a duty for a swap dealer or 
                major swap participant to communicate in a fair 
                and balanced manner based on principles of fair 
                dealing and good faith; and
                    ``(D) establish such other standards and 
                requirements as the Commission may determine 
                are appropriate in the public interest, for the 
                protection of investors, or otherwise in 
                furtherance of the purposes of this Act.
            ``(4) Special requirements for swap dealers acting 
        as advisors.--
                    ``(A) In general.--It shall be unlawful for 
                a swap dealer or major swap participant--
                            ``(i) to employ any device, scheme, 
                        or artifice to defraud any Special 
                        Entity or prospective customer who is a 
                        Special Entity;
                            ``(ii) to engage in any 
                        transaction, practice, or course of 
                        business that operates as a fraud or 
                        deceit on any Special Entity or 
                        prospective customer who is a Special 
                        Entity; or
                            ``(iii) to engage in any act, 
                        practice, or course of business that is 
                        fraudulent, deceptive or manipulative.
                    ``(B) Duty.--Any swap dealer that acts as 
                an advisor to a Special Entity shall have a 
                duty to act in the best interests of the 
                Special Entity.
                    ``(C) Reasonable efforts.--Any swap dealer 
                that acts as an advisor to a Special Entity 
                shall make reasonable efforts to obtain such 
                information as is necessary to make a 
                reasonable determination that any swap 
                recommended by the swap dealer is in the best 
                interests of the Special Entity, including 
                information relating to--
                            ``(i) the financial status of the 
                        Special Entity;
                            ``(ii) the tax status of the 
                        Special Entity;
                            ``(iii) the investment or financing 
                        objectives of the Special Entity; and
                            ``(iv) any other information that 
                        the Commission may prescribe by rule or 
                        regulation.
            ``(5) Special requirements for swap dealers as 
        counterparties to special entities.--
                    ``(A) Any swap dealer or major swap 
                participant that offers to enter or enters into 
                a swap with a Special Entity shall--
                            ``(i) comply with any duty 
                        established by the Commission for a 
                        swap dealer or major swap participant, 
                        with respect to a counterparty that is 
                        an eligible contract participant within 
                        the meaning of subclause (I) or (II) of 
                        clause (vii) of section 1a(18) of this 
                        Act, that requires the swap dealer or 
                        major swap participant to have a 
                        reasonable basis to believe that the 
                        counterparty that is a Special Entity 
                        has an independent representative 
                        that--
                                    ``(I) has sufficient 
                                knowledge to evaluate the 
                                transaction and risks;
                                    ``(II) is not subject to a 
                                statutory disqualification;
                                    ``(III) is independent of 
                                the swap dealer or major swap 
                                participant;
                                    ``(IV) undertakes a duty to 
                                act in the best interests of 
                                the counterparty it represents;
                                    ``(V) makes appropriate 
                                disclosures;
                                    ``(VI) will provide written 
                                representations to the Special 
                                Entity regarding fair pricing 
                                and the appropriateness of the 
                                transaction; and
                                    ``(VII) in the case of 
                                employee benefit plans subject 
                                to the Employee Retirement 
                                Income Security act of 1974, is 
                                a fiduciary as defined in 
                                section 3 of that Act (29 
                                U.S.C. 1002); and
                            ``(ii) before the initiation of the 
                        transaction, disclose to the Special 
                        Entity in writing the capacity in which 
                        the swap dealer is acting; and
                    ``(B) the Commission may establish such 
                other standards and requirements as the 
                Commission may determine are appropriate in the 
                public interest, for the protection of 
                investors, or otherwise in furtherance of the 
                purposes of this Act.
            ``(6) Rules.--The Commission shall prescribe rules 
        under this subsection governing business conduct 
        standards for swap dealers and major swap participants.
            ``(7) Applicability.--This section shall not apply 
        with respect to a transaction that is--
                    ``(A) initiated by a Special Entity on an 
                exchange or swap execution facility; and
                    ``(B) one in which the swap dealer or major 
                swap participant does not know the identity of 
                the counterparty to the transaction.
    ``(i) Documentation Standards.--
            ``(1) In general.--Each registered swap dealer and 
        major swap participant shall conform with such 
        standards as may be prescribed by the Commission by 
        rule or regulation that relate to timely and accurate 
        confirmation, processing, netting, documentation, and 
        valuation of all swaps.
            ``(2) Rules.--The Commission shall adopt rules 
        governing documentation standards for swap dealers and 
        major swap participants.
    ``(j) Duties.--Each registered swap dealer and major swap 
participant at all times shall comply with the following 
requirements:
            ``(1) Monitoring of trading.--The swap dealer or 
        major swap participant shall monitor its trading in 
        swaps to prevent violations of applicable position 
        limits.
            ``(2) Risk management procedures.--The swap dealer 
        or major swap participant shall establish robust and 
        professional risk management systems adequate for 
        managing the day-to-day business of the swap dealer or 
        major swap participant.
            ``(3) Disclosure of general information.--The swap 
        dealer or major swap participant shall disclose to the 
        Commission and to the prudential regulator for the swap 
        dealer or major swap participant, as applicable, 
        information concerning--
                    ``(A) terms and conditions of its swaps;
                    ``(B) swap trading operations, mechanisms, 
                and practices;
                    ``(C) financial integrity protections 
                relating to swaps; and
                    ``(D) other information relevant to its 
                trading in swaps.
            ``(4) Ability to obtain information.--The swap 
        dealer or major swap participant shall--
                    ``(A) establish and enforce internal 
                systems and procedures to obtain any necessary 
                information to perform any of the functions 
                described in this section; and
                    ``(B) provide the information to the 
                Commission and to the prudential regulator for 
                the swap dealer or major swap participant, as 
                applicable, on request.
            ``(5) Conflicts of interest.--The swap dealer and 
        major swap participant shall implement conflict-of-
        interest systems and procedures that--
                    ``(A) establish structural and 
                institutional safeguards to ensure that the 
                activities of any person within the firm 
                relating to research or analysis of the price 
                or market for any commodity or swap or acting 
                in a role of providing clearing activities or 
                making determinations as to accepting clearing 
                customers are separated by appropriate 
                informational partitions within the firm from 
                the review, pressure, or oversight of persons 
                whose involvement in pricing, trading, or 
                clearing activities might potentially bias 
                their judgment or supervision and contravene 
                the core principles of open access and the 
                business conduct standards described in this 
                Act; and
                    ``(B) address such other issues as the 
                Commission determines to be appropriate.
            ``(6) Antitrust considerations.--Unless necessary 
        or appropriate to achieve the purposes of this Act, a 
        swap dealer or major swap participant shall not--
                    ``(A) adopt any process or take any action 
                that results in any unreasonable restraint of 
                trade; or
                    ``(B) impose any material anticompetitive 
                burden on trading or clearing.
            ``(7) Rules.--The Commission shall prescribe rules 
        under this subsection governing duties of swap dealers 
        and major swap participants.
    ``(k) Designation of Chief Compliance Officer.--
            ``(1) In general.--Each swap dealer and major swap 
        participant shall designate an individual to serve as a 
        chief compliance officer.
            ``(2) Duties.--The chief compliance officer shall--
                    ``(A) report directly to the board or to 
                the senior officer of the swap dealer or major 
                swap participant;
                    ``(B) review the compliance of the swap 
                dealer or major swap participant with respect 
                to the swap dealer and major swap participant 
                requirements described in this section;
                    ``(C) in consultation with the board of 
                directors, a body performing a function similar 
                to the board, or the senior officer of the 
                organization, resolve any conflicts of interest 
                that may arise;
                    ``(D) be responsible for administering each 
                policy and procedure that is required to be 
                established pursuant to this section;
                    ``(E) ensure compliance with this Act 
                (including regulations) relating to swaps, 
                including each rule prescribed by the 
                Commission under this section;
                    ``(F) establish procedures for the 
                remediation of noncompliance issues identified 
                by the chief compliance officer through any--
                            ``(i) compliance office review;
                            ``(ii) look-back;
                            ``(iii) internal or external audit 
                        finding;
                            ``(iv) self-reported error; or
                            ``(v) validated complaint; and
                    ``(G) establish and follow appropriate 
                procedures for the handling, management 
                response, remediation, retesting, and closing 
                of noncompliance issues.
            ``(3) Annual reports.--
                    ``(A) In general.--In accordance with rules 
                prescribed by the Commission, the chief 
                compliance officer shall annually prepare and 
                sign a report that contains a description of--
                            ``(i) the compliance of the swap 
                        dealer or major swap participant with 
                        respect to this Act (including 
                        regulations); and
                            ``(ii) each policy and procedure of 
                        the swap dealer or major swap 
                        participant of the chief compliance 
                        officer (including the code of ethics 
                        and conflict of interest policies).
                    ``(B) Requirements.--A compliance report 
                under subparagraph (A) shall--
                            ``(i) accompany each appropriate 
                        financial report of the swap dealer or 
                        major swap participant that is required 
                        to be furnished to the Commission 
                        pursuant to this section; and
                            ``(ii) include a certification 
                        that, under penalty of law, the 
                        compliance report is accurate and 
                        complete.''.

SEC. 732. CONFLICTS OF INTEREST.

    Section 4d of the Commodity Exchange Act (7 U.S.C. 6d) is 
amended--
            (1) by redesignating subsection (c) as subsection 
        (e); and
            (2) by inserting after subsection (b) the 
        following:
    ``(c) Conflicts of Interest.--The Commission shall require 
that futures commission merchants and introducing brokers 
implement conflict-of-interest systems and procedures that--
            ``(1) establish structural and institutional 
        safeguards to ensure that the activities of any person 
        within the firm relating to research or analysis of the 
        price or market for any commodity are separated by 
        appropriate informational partitions within the firm 
        from the review, pressure, or oversight of persons 
        whose involvement in trading or clearing activities 
        might potentially bias the judgment or supervision of 
        the persons; and
            ``(2) address such other issues as the Commission 
        determines to be appropriate.
    ``(d) Designation of Chief Compliance Officer.--Each 
futures commission merchant shall designate an individual to 
serve as its Chief Compliance Officer and perform such duties 
and responsibilities as shall be set forth in regulations to be 
adopted by the Commission or rules to be adopted by a futures 
association registered under section 17.''.

SEC. 733. SWAP EXECUTION FACILITIES.

    The Commodity Exchange Act is amended by inserting after 
section 5g (7 U.S.C. 7b-2) the following:

``SEC. 5H. SWAP EXECUTION FACILITIES.

    ``(a) Registration.--
            ``(1) In general.--No person may operate a facility 
        for the trading or processing of swaps unless the 
        facility is registered as a swap execution facility or 
        as a designated contract market under this section.
            ``(2) Dual registration.--Any person that is 
        registered as a swap execution facility under this 
        section shall register with the Commission regardless 
        of whether the person also is registered with the 
        Securities and Exchange Commission as a swap execution 
        facility.
    ``(b) Trading and Trade Processing.--
            ``(1) In general.--Except as specified in paragraph 
        (2), a swap execution facility that is registered under 
        subsection (a) may--
                    ``(A) make available for trading any swap; 
                and
                    ``(B) facilitate trade processing of any 
                swap.
            ``(2) Agricultural swaps.--A swap execution 
        facility may not list for trading or confirm the 
        execution of any swap in an agricultural commodity (as 
        defined by the Commission) except pursuant to a rule or 
        regulation of the Commission allowing the swap under 
        such terms and conditions as the Commission shall 
        prescribe.
    ``(c) Identification of Facility Used To Trade Swaps by 
Contract Markets.--A board of trade that operates a contract 
market shall, to the extent that the board of trade also 
operates a swap execution facility and uses the same electronic 
trade execution system for listing and executing trades of 
swaps on or through the contract market and the swap execution 
facility, identify whether the electronic trading of such swaps 
is taking place on or through the contract market or the swap 
execution facility.
    ``(d) Rule-writing.--
            ``(1) The Securities and Exchange Commission and 
        Commodity Futures Trading Commission may promulgate 
        rules defining the universe of swaps that can be 
        executed on a swap execution facility. These rules 
        shall take into account the price and nonprice 
        requirements of the counterparties to a swap and the 
        goal of this section as set forth in subsection (e).
            ``(2) For all swaps that are not required to be 
        executed through a swap execution facility as defined 
        in paragraph (1), such trades may be executed through 
        any other available means of interstate commerce.
            ``(3) The Securities and Exchange Commission and 
        Commodity Futures Trading Commission shall update these 
        rules as necessary to account for technological and 
        other innovation.
    ``(e) Rule of Construction.--The goal of this section is to 
promote the trading of swaps on swap execution facilities and 
to promote pre-trade price transparency in the swaps market.
    ``(f) Core Principles for Swap Execution Facilities.--
            ``(1) Compliance with core principles.--
                    ``(A) In general.--To be registered, and 
                maintain registration, as a swap execution 
                facility, the swap execution facility shall 
                comply with--
                            ``(i) the core principles described 
                        in this subsection; and
                            ``(ii) any requirement that the 
                        Commission may impose by rule or 
                        regulation pursuant to section 8a(5).
                    ``(B) Reasonable discretion of swap 
                execution facility.--Unless otherwise 
                determined by the Commission by rule or 
                regulation, a swap execution facility described 
                in subparagraph (A) shall have reasonable 
                discretion in establishing the manner in which 
                the swap execution facility complies with the 
                core principles described in this subsection.
            ``(2) Compliance with rules.--A swap execution 
        facility shall--
                    ``(A) establish and enforce compliance with 
                any rule of the swap execution facility, 
                including--
                            ``(i) the terms and conditions of 
                        the swaps traded or processed on or 
                        through the swap execution facility; 
                        and
                            ``(ii) any limitation on access to 
                        the swap execution facility;
                    ``(B) establish and enforce trading, trade 
                processing, and participation rules that will 
                deter abuses and have the capacity to detect, 
                investigate, and enforce those rules, including 
                means--
                            ``(i) to provide market 
                        participants with impartial access to 
                        the market; and
                            ``(ii) to capture information that 
                        may be used in establishing whether 
                        rule violations have occurred;
                    ``(C) establish rules governing the 
                operation of the facility, including rules 
                specifying trading procedures to be used in 
                entering and executing orders traded or posted 
                on the facility, including block trades; and
                    ``(D) provide by its rules that when a swap 
                dealer or major swap participant enters into or 
                facilitates a swap that is subject to the 
                mandatory clearing requirement of section 2(h), 
                the swap dealer or major swap participant shall 
                be responsible for compliance with the 
                mandatory trading requirement under section 
                2(h)(8).
            ``(3) Swaps not readily susceptible to 
        manipulation.--The swap execution facility shall permit 
        trading only in swaps that are not readily susceptible 
        to manipulation.
            ``(4) Monitoring of trading and trade processing.--
        The swap execution facility shall--
                    ``(A) establish and enforce rules or terms 
                and conditions defining, or specifications 
                detailing--
                            ``(i) trading procedures to be used 
                        in entering and executing orders traded 
                        on or through the facilities of the 
                        swap execution facility; and
                            ``(ii) procedures for trade 
                        processing of swaps on or through the 
                        facilities of the swap execution 
                        facility; and
                    ``(B) monitor trading in swaps to prevent 
                manipulation, price distortion, and disruptions 
                of the delivery or cash settlement process 
                through surveillance, compliance, and 
                disciplinary practices and procedures, 
                including methods for conducting real-time 
                monitoring of trading and comprehensive and 
                accurate trade reconstructions.
            ``(5) Ability to obtain information.--The swap 
        execution facility shall--
                    ``(A) establish and enforce rules that will 
                allow the facility to obtain any necessary 
                information to perform any of the functions 
                described in this section;
                    ``(B) provide the information to the 
                Commission on request; and
                    ``(C) have the capacity to carry out such 
                international information-sharing agreements as 
                the Commission may require.
            ``(6) Position limits or accountability.--
                    ``(A) In general.--To reduce the potential 
                threat of market manipulation or congestion, 
                especially during trading in the delivery 
                month, a swap execution facility that is a 
                trading facility shall adopt for each of the 
                contracts of the facility, as is necessary and 
                appropriate, position limitations or position 
                accountability for speculators.
                    ``(B) Position limits.--For any contract 
                that is subject to a position limitation 
                established by the Commission pursuant to 
                section 4a(a), the swap execution facility 
                shall--
                            ``(i) set its position limitation 
                        at a level no higher than the 
                        Commission limitation; and
                            ``(ii) monitor positions 
                        established on or through the swap 
                        execution facility for compliance with 
                        the limit set by the Commission and the 
                        limit, if any, set by the swap 
                        execution facility.
            ``(7) Financial integrity of transactions.--The 
        swap execution facility shall establish and enforce 
        rules and procedures for ensuring the financial 
        integrity of swaps entered on or through the facilities 
        of the swap execution facility, including the clearance 
        and settlement of the swaps pursuant to section 
        2(h)(1).
            ``(8) Emergency authority.--The swap execution 
        facility shall adopt rules to provide for the exercise 
        of emergency authority, in consultation or cooperation 
        with the Commission, as is necessary and appropriate, 
        including the authority to liquidate or transfer open 
        positions in any swap or to suspend or curtail trading 
        in a swap.
            ``(9) Timely publication of trading information.--
                    ``(A) In general.--The swap execution 
                facility shall make public timely information 
                on price, trading volume, and other trading 
                data on swaps to the extent prescribed by the 
                Commission.
                    ``(B) Capacity of swap execution 
                facility.--The swap execution facility shall be 
                required to have the capacity to electronically 
                capture and transmit trade information with 
                respect to transactions executed on the 
                facility.
            ``(10) Recordkeeping and reporting.--
                    ``(A) In general.--A swap execution 
                facility shall--
                            ``(i) maintain records of all 
                        activities relating to the business of 
                        the facility, including a complete 
                        audit trail, in a form and manner 
                        acceptable to the Commission for a 
                        period of 5 years;
                            ``(ii) report to the Commission, in 
                        a form and manner acceptable to the 
                        Commission, such information as the 
                        Commission determines to be necessary 
                        or appropriate for the Commission to 
                        perform the duties of the Commission 
                        under this Act; and
                            ``(iii) shall keep any such records 
                        relating to swaps defined in section 
                        1a(47)(A)(v) open to inspection and 
                        examination by the Securities and 
                        Exchange Commission.''
                    ``(B) Requirements.--The Commission shall 
                adopt data collection and reporting 
                requirements for swap execution facilities that 
                are comparable to corresponding requirements 
                for derivatives clearing organizations and swap 
                data repositories.
            ``(11) Antitrust considerations.--Unless necessary 
        or appropriate to achieve the purposes of this Act, the 
        swap execution facility shall not--
                    ``(A) adopt any rules or take any actions 
                that result in any unreasonable restraint of 
                trade; or
                    ``(B) impose any material anticompetitive 
                burden on trading or clearing.
            ``(12) Conflicts of interest.--The swap execution 
        facility shall--
                    ``(A) establish and enforce rules to 
                minimize conflicts of interest in its decision-
                making process; and
                    ``(B) establish a process for resolving the 
                conflicts of interest.
            ``(13) Financial resources.--
                    ``(A) In general.--The swap execution 
                facility shall have adequate financial, 
                operational, and managerial resources to 
                discharge each responsibility of the swap 
                execution facility.
                    ``(B) Determination of resource adequacy.--
                The financial resources of a swap execution 
                facility shall be considered to be adequate if 
                the value of the financial resources exceeds 
                the total amount that would enable the swap 
                execution facility to cover the operating costs 
                of the swap execution facility for a 1-year 
                period, as calculated on a rolling basis.
            ``(14) System safeguards.--The swap execution 
        facility shall--
                    ``(A) establish and maintain a program of 
                risk analysis and oversight to identify and 
                minimize sources of operational risk, through 
                the development of appropriate controls and 
                procedures, and automated systems, that--
                            ``(i) are reliable and secure; and
                            ``(ii) have adequate scalable 
                        capacity;
                    ``(B) establish and maintain emergency 
                procedures, backup facilities, and a plan for 
                disaster recovery that allow for--
                            ``(i) the timely recovery and 
                        resumption of operations; and
                            ``(ii) the fulfillment of the 
                        responsibilities and obligations of the 
                        swap execution facility; and
                    ``(C) periodically conduct tests to verify 
                that the backup resources of the swap execution 
                facility are sufficient to ensure continued--
                            ``(i) order processing and trade 
                        matching;
                            ``(ii) price reporting;
                            ``(iii) market surveillance and
                            ``(iv) maintenance of a 
                        comprehensive and accurate audit trail.
            ``(15) Designation of chief compliance officer.--
                    ``(A) In general.--Each swap execution 
                facility shall designate an individual to serve 
                as a chief compliance officer.
                    ``(B) Duties.--The chief compliance officer 
                shall--
                            ``(i) report directly to the board 
                        or to the senior officer of the 
                        facility;
                            ``(ii) review compliance with the 
                        core principles in this subsection;
                            ``(iii) in consultation with the 
                        board of the facility, a body 
                        performing a function similar to that 
                        of a board, or the senior officer of 
                        the facility, resolve any conflicts of 
                        interest that may arise;
                            ``(iv) be responsible for 
                        establishing and administering the 
                        policies and procedures required to be 
                        established pursuant to this section;
                            ``(v) ensure compliance with this 
                        Act and the rules and regulations 
                        issued under this Act, including rules 
                        prescribed by the Commission pursuant 
                        to this section; and
                            ``(vi) establish procedures for the 
                        remediation of noncompliance issues 
                        found during compliance office reviews, 
                        look backs, internal or external audit 
                        findings, self-reported errors, or 
                        through validated complaints.
                    ``(C) Requirements for procedures.--In 
                establishing procedures under subparagraph 
                (B)(vi), the chief compliance officer shall 
                design the procedures to establish the 
                handling, management response, remediation, 
                retesting, and closing of noncompliance issues.
                    ``(D) Annual reports.--
                            ``(i) In general.--In accordance 
                        with rules prescribed by the 
                        Commission, the chief compliance 
                        officer shall annually prepare and sign 
                        a report that contains a description 
                        of--
                                    ``(I) the compliance of the 
                                swap execution facility with 
                                this Act; and
                                    ``(II) the policies and 
                                procedures, including the code 
                                of ethics and conflict of 
                                interest policies, of the swap 
                                execution facility.
                            ``(ii) Requirements.--The chief 
                        compliance officer shall--
                                    ``(I) submit each report 
                                described in clause (i) with 
                                the appropriate financial 
                                report of the swap execution 
                                facility that is required to be 
                                submitted to the Commission 
                                pursuant to this section; and
                                    ``(II) include in the 
                                report a certification that, 
                                under penalty of law, the 
                                report is accurate and 
                                complete.
    ``(g) Exemptions.--The Commission may exempt, conditionally 
or unconditionally, a swap execution facility from registration 
under this section if the Commission finds that the facility is 
subject to comparable, comprehensive supervision and regulation 
on a consolidated basis by the Securities and Exchange 
Commission, a prudential regulator, or the appropriate 
governmental authorities in the home country of the facility.
    ``(h) Rules.--The Commission shall prescribe rules 
governing the regulation of alternative swap execution 
facilities under this section.''.

SEC. 734. DERIVATIVES TRANSACTION EXECUTION FACILITIES AND EXEMPT 
                    BOARDS OF TRADE.

    (a) In General.--Sections 5a and 5d of the Commodity 
Exchange Act (7 U.S.C. 7a, 7a-3) are repealed.
    (b) Conforming Amendments.--
            (1) Section 2 of the Commodity Exchange Act (7 
        U.S.C. 2) is amended--
                    (A) in subsection (a)(1)(A), in the first 
                sentence, by striking ``or 5a''; and
                    (B) in paragraph (2) of subsection (g) (as 
                redesignated by section 723(a)(1)(B)), by 
                striking ``section 5a of this Act'' and all 
                that follows through ``5d of this Act'' and 
                inserting ``section 5b of this Act''.
            (2) Section 6(g)(1)(A) of the Securities Exchange 
        Act of 1934 (15 U.S.C. 78f(g)(1)(A)) is amended--
                    (A) by striking ``that--'' and all that 
                follows through ``(i) has been designated'' and 
                inserting ``that has been designated'';
                    (B) by striking ``; or'' and inserting ``; 
                and'' and
                    (C) by striking clause (ii).
    (c) Ability to Petition Commission.--
            (1) In general.--Prior to the final effective dates 
        in this title, a person may petition the Commodity 
        Futures Trading Commission to remain subject to the 
        provisions of section 5d of the Commodity Exchange Act, 
        as such provisions existed prior to the effective date 
        of this subtitle.
            (2) Consideration of petition.--The Commodity 
        Futures Trading Commission shall consider any petition 
        submitted under paragraph (1) in a prompt manner and 
        may allow a person to continue operating subject to the 
        provisions of section 5d of the Commodity Exchange Act 
        for up to 1 year after the effective date of this 
        subtitle.

SEC. 735. DESIGNATED CONTRACT MARKETS.

    (a) Criteria for Designation.--Section 5 of the Commodity 
Exchange Act (7 U.S.C. 7) is amended by striking subsection 
(b).
    (b) Core Principles for Contract Markets.--Section 5 of the 
Commodity Exchange Act (7 U.S.C. 7) is amended by striking 
subsection (d) and inserting the following:
    ``(d) Core Principles for Contract Markets.--
            ``(1) Designation as contract market.--
                    ``(A) In general.--To be designated, and 
                maintain a designation, as a contract market, a 
                board of trade shall comply with--
                            ``(i) any core principle described 
                        in this subsection; and
                            ``(ii) any requirement that the 
                        Commission may impose by rule or 
                        regulation pursuant to section 8a(5).
                    ``(B) Reasonable discretion of contract 
                market.--Unless otherwise determined by the 
                Commission by rule or regulation, a board of 
                trade described in subparagraph (A) shall have 
                reasonable discretion in establishing the 
                manner in which the board of trade complies 
                with the core principles described in this 
                subsection.
            ``(2) Compliance with rules.--
                    ``(A) In general.--The board of trade shall 
                establish, monitor, and enforce compliance with 
                the rules of the contract market, including--
                            ``(i) access requirements;
                            ``(ii) the terms and conditions of 
                        any contracts to be traded on the 
                        contract market; and
                            ``(iii) rules prohibiting abusive 
                        trade practices on the contract market.
                    ``(B) Capacity of contract market.--The 
                board of trade shall have the capacity to 
                detect, investigate, and apply appropriate 
                sanctions to any person that violates any rule 
                of the contract market.
                    ``(C) Requirement of rules.--The rules of 
                the contract market shall provide the board of 
                trade with the ability and authority to obtain 
                any necessary information to perform any 
                function described in this subsection, 
                including the capacity to carry out such 
                international information-sharing agreements as 
                the Commission may require.
            ``(3) Contracts not readily subject to 
        manipulation.--The board of trade shall list on the 
        contract market only contracts that are not readily 
        susceptible to manipulation.
            ``(4) Prevention of market disruption.--The board 
        of trade shall have the capacity and responsibility to 
        prevent manipulation, price distortion, and disruptions 
        of the delivery or cash-settlement process through 
        market surveillance, compliance, and enforcement 
        practices and procedures, including--
                    ``(A) methods for conducting real-time 
                monitoring of trading; and
                    ``(B) comprehensive and accurate trade 
                reconstructions.
            ``(5) Position limitations or accountability.--
                    ``(A) In general.--To reduce the potential 
                threat of market manipulation or congestion 
                (especially during trading in the delivery 
                month), the board of trade shall adopt for each 
                contract of the board of trade, as is necessary 
                and appropriate, position limitations or 
                position accountability for speculators.
                    ``(B) Maximum allowable position 
                limitation.--For any contract that is subject 
                to a position limitation established by the 
                Commission pursuant to section 4a(a), the board 
                of trade shall set the position limitation of 
                the board of trade at a level not higher than 
                the position limitation established by the 
                Commission.
            ``(6) Emergency authority.--The board of trade, in 
        consultation or cooperation with the Commission, shall 
        adopt rules to provide for the exercise of emergency 
        authority, as is necessary and appropriate, including 
        the authority--
                    ``(A) to liquidate or transfer open 
                positions in any contract;
                    ``(B) to suspend or curtail trading in any 
                contract; and
                    ``(C) to require market participants in any 
                contract to meet special margin requirements.
            ``(7) Availability of general information.--The 
        board of trade shall make available to market 
        authorities, market participants, and the public 
        accurate information concerning--
                    ``(A) the terms and conditions of the 
                contracts of the contract market; and
                    ``(B)(i) the rules, regulations, and 
                mechanisms for executing transactions on or 
                through the facilities of the contract market; 
                and
                    ``(ii) the rules and specifications 
                describing the operation of the contract 
                market's--
                            ``(I) electronic matching platform; 
                        or
                            ``(II) trade execution facility.
            ``(8) Daily publication of trading information.--
        The board of trade shall make public daily information 
        on settlement prices, volume, open interest, and 
        opening and closing ranges for actively traded 
        contracts on the contract market.
            ``(9) Execution of transactions.--
                    ``(A) In general.--The board of trade shall 
                provide a competitive, open, and efficient 
                market and mechanism for executing transactions 
                that protects the price discovery process of 
                trading in the centralized market of the board 
                of trade.
                    ``(B) Rules.--The rules of the board of 
                trade may authorize, for bona fide business 
                purposes--
                            ``(i) transfer trades or office 
                        trades;
                            ``(ii) an exchange of--
                                    ``(I) futures in connection 
                                with a cash commodity 
                                transaction;
                                    ``(II) futures for cash 
                                commodities; or
                                    ``(III) futures for swaps; 
                                or
                            ``(iii) a futures commission 
                        merchant, acting as principal or agent, 
                        to enter into or confirm the execution 
                        of a contract for the purchase or sale 
                        of a commodity for future delivery if 
                        the contract is reported, recorded, or 
                        cleared in accordance with the rules of 
                        the contract market or a derivatives 
                        clearing organization.
            ``(10) Trade information.--The board of trade shall 
        maintain rules and procedures to provide for the 
        recording and safe storage of all identifying trade 
        information in a manner that enables the contract 
        market to use the information--
                    ``(A) to assist in the prevention of 
                customer and market abuses; and
                    ``(B) to provide evidence of any violations 
                of the rules of the contract market.
            ``(11) Financial integrity of transactions.--The 
        board of trade shall establish and enforce--
                    ``(A) rules and procedures for ensuring the 
                financial integrity of transactions entered 
                into on or through the facilities of the 
                contract market (including the clearance and 
                settlement of the transactions with a 
                derivatives clearing organization); and
                    ``(B) rules to ensure--
                            ``(i) the financial integrity of 
                        any--
                                    ``(I) futures commission 
                                merchant; and
                                    ``(II) introducing broker; 
                                and
                            ``(ii) the protection of customer 
                        funds.
            ``(12) Protection of markets and market 
        participants.--The board of trade shall establish and 
        enforce rules--
                    ``(A) to protect markets and market 
                participants from abusive practices committed 
                by any party, including abusive practices 
                committed by a party acting as an agent for a 
                participant; and
                    ``(B) to promote fair and equitable trading 
                on the contract market.
            ``(13) Disciplinary procedures.--The board of trade 
        shall establish and enforce disciplinary procedures 
        that authorize the board of trade to discipline, 
        suspend, or expel members or market participants that 
        violate the rules of the board of trade, or similar 
        methods for performing the same functions, including 
        delegation of the functions to third parties.
            ``(14) Dispute resolution.--The board of trade 
        shall establish and enforce rules regarding, and 
        provide facilities for alternative dispute resolution 
        as appropriate for, market participants and any market 
        intermediaries.
            ``(15) Governance fitness standards.--The board of 
        trade shall establish and enforce appropriate fitness 
        standards for directors, members of any disciplinary 
        committee, members of the contract market, and any 
        other person with direct access to the facility 
        (including any party affiliated with any person 
        described in this paragraph).
            ``(16) Conflicts of interest.--The board of trade 
        shall establish and enforce rules--
                    ``(A) to minimize conflicts of interest in 
                the decision-making process of the contract 
                market; and
                    ``(B) to establish a process for resolving 
                conflicts of interest described in subparagraph 
                (A).
            ``(17) Composition of governing boards of contract 
        markets.--The governance arrangements of the board of 
        trade shall be designed to permit consideration of the 
        views of market participants.
            ``(18) Recordkeeping.--The board of trade shall 
        maintain records of all activities relating to the 
        business of the contract market--
                    ``(A) in a form and manner that is 
                acceptable to the Commission; and
                    ``(B) for a period of at least 5 years.
            ``(19) Antitrust considerations.--Unless necessary 
        or appropriate to achieve the purposes of this Act, the 
        board of trade shall not--
                    ``(A) adopt any rule or taking any action 
                that results in any unreasonable restraint of 
                trade; or
                    ``(B) impose any material anticompetitive 
                burden on trading on the contract market.
            ``(20) System safeguards.--The board of trade 
        shall--
                    ``(A) establish and maintain a program of 
                risk analysis and oversight to identify and 
                minimize sources of operational risk, through 
                the development of appropriate controls and 
                procedures, and the development of automated 
                systems, that are reliable, secure, and have 
                adequate scalable capacity;
                    ``(B) establish and maintain emergency 
                procedures, backup facilities, and a plan for 
                disaster recovery that allow for the timely 
                recovery and resumption of operations and the 
                fulfillment of the responsibilities and 
                obligations of the board of trade; and
                    ``(C) periodically conduct tests to verify 
                that backup resources are sufficient to ensure 
                continued order processing and trade matching, 
                price reporting, market surveillance, and 
                maintenance of a comprehensive and accurate 
                audit trail.
            ``(21) Financial resources.--
                    ``(A) In general.--The board of trade shall 
                have adequate financial, operational, and 
                managerial resources to discharge each 
                responsibility of the board of trade.
                    ``(B) Determination of adequacy.--The 
                financial resources of the board of trade shall 
                be considered to be adequate if the value of 
                the financial resources exceeds the total 
                amount that would enable the contract market to 
                cover the operating costs of the contract 
                market for a 1-year period, as calculated on a 
                rolling basis.
            ``(22) Diversity of board of directors.--The board 
        of trade, if a publicly traded company, shall endeavor 
        to recruit individuals to serve on the board of 
        directors and the other decision-making bodies (as 
        determined by the Commission) of the board of trade 
        from among, and to have the composition of the bodies 
        reflect, a broad and culturally diverse pool of 
        qualified candidates.
            ``(23) Securities and exchange commission.--The 
        board of trade shall keep any such records relating to 
        swaps defined in section 1a(47)(A)(v) open to 
        inspection and examination by the Securities and 
        Exchange Commission.''.

SEC. 736. MARGIN.

    Section 8a(7) of the Commodity Exchange Act (7 U.S.C. 
12a(7)) is amended--
            (1) in subparagraph (C), by striking ``, excepting 
        the setting of levels of margin'';
            (2) by redesignating subparagraphs (D) through (F) 
        as subparagraphs (E) through (G), respectively; and
            (3) by inserting after subparagraph (C) the 
        following:
                    ``(D) margin requirements, provided that 
                the rules, regulations, or orders shall--
                            ``(i) be limited to protecting the 
                        financial integrity of the derivatives 
                        clearing organization;
                            ``(ii) be designed for risk 
                        management purposes to protect the 
                        financial integrity of transactions; 
                        and
                            ``(iii) not set specific margin 
                        amounts;''.

SEC. 737. POSITION LIMITS.

    (a) Aggregate Position Limits.--Section 4a(a) of the 
Commodity Exchange Act (7 U.S.C. 6a(a)) is amended--
            (1) by inserting after ``(a)'' the following:
            ``(1) In general.--'';
            (2) in the first sentence, by striking ``on 
        electronic trading facilities with respect to a 
        significant price discovery contract'' and inserting 
        ``swaps that perform or affect a significant price 
        discovery function with respect to registered 
        entities'';
            (3) in the second sentence--
                    (A) by inserting ``, including any group or 
                class of traders,'' after ``held by any 
                person''; and
                    (B) by striking ``on an electronic trading 
                facility with respect to a significant price 
                discovery contract,'' and inserting ``swaps 
                traded on or subject to the rules of a 
                designated contract market or a swap execution 
                facility, or swaps not traded on or subject to 
                the rules of a designated contract market or a 
                swap execution facility that performs a 
                significant price discovery function with 
                respect to a registered entity,''; and
            (4) by adding at the end the following:
            ``(2) Establishment of limitations.--
                    ``(A) In general.--In accordance with the 
                standards set forth in paragraph (1) of this 
                subsection and consistent with the good faith 
                exception cited in subsection (b)(2), with 
                respect to physical commodities other than 
                excluded commodities as defined by the 
                Commission, the Commission shall by rule, 
                regulation, or order establish limits on the 
                amount of positions, as appropriate, other than 
                bona fide hedge positions, that may be held by 
                any person with respect to contracts of sale 
                for future delivery or with respect to options 
                on the contracts or commodities traded on or 
                subject to the rules of a designated contract 
                market.
                    ``(B) Timing.--
                            ``(i) Exempt commodities.--For 
                        exempt commodities, the limits required 
                        under subparagraph (A) shall be 
                        established within 180 days after the 
                        date of the enactment of this 
                        paragraph.
                            ``(ii) Agricultural commodities.--
                        For agricultural commodities, the 
                        limits required under subparagraph (A) 
                        shall be established within 270 days 
                        after the date of the enactment of this 
                        paragraph.
                    ``(C) Goal.--In establishing the limits 
                required under subparagraph (A), the Commission 
                shall strive to ensure that trading on foreign 
                boards of trade in the same commodity will be 
                subject to comparable limits and that any 
                limits to be imposed by the Commission will not 
                cause price discovery in the commodity to shift 
                to trading on the foreign boards of trade.
            ``(3) Specific limitations.--In establishing the 
        limits required in paragraph (2), the Commission, as 
        appropriate, shall set limits--
                    ``(A) on the number of positions that may 
                be held by any person for the spot month, each 
                other month, and the aggregate number of 
                positions that may be held by any person for 
                all months; and
                    ``(B) to the maximum extent practicable, in 
                its discretion--
                            ``(i) to diminish, eliminate, or 
                        prevent excessive speculation as 
                        described under this section;
                            ``(ii) to deter and prevent market 
                        manipulation, squeezes, and corners;
                            ``(iii) to ensure sufficient market 
                        liquidity for bona fide hedgers; and
                            ``(iv) to ensure that the price 
                        discovery function of the underlying 
                        market is not disrupted.
            ``(4) Significant price discovery function.--In 
        making a determination whether a swap performs or 
        affects a significant price discovery function with 
        respect to regulated markets, the Commission shall 
        consider, as appropriate:
                    ``(A) Price linkage.--The extent to which 
                the swap uses or otherwise relies on a daily or 
                final settlement price, or other major price 
                parameter, of another contract traded on a 
                regulated market based upon the same underlying 
                commodity, to value a position, transfer or 
                convert a position, financially settle a 
                position, or close out a position.
                    ``(B) Arbitrage.--The extent to which the 
                price for the swap is sufficiently related to 
                the price of another contract traded on a 
                regulated market based upon the same underlying 
                commodity so as to permit market participants 
                to effectively arbitrage between the markets by 
                simultaneously maintaining positions or 
                executing trades in the swaps on a frequent and 
                recurring basis.
                    ``(C) Material price reference.--The extent 
                to which, on a frequent and recurring basis, 
                bids, offers, or transactions in a contract 
                traded on a regulated market are directly based 
                on, or are determined by referencing, the price 
                generated by the swap.
                    ``(D) Material liquidity.--The extent to 
                which the volume of swaps being traded in the 
                commodity is sufficient to have a material 
                effect on another contract traded on a 
                regulated market.
                    ``(E) Other material factors.--Such other 
                material factors as the Commission specifies by 
                rule or regulation as relevant to determine 
                whether a swap serves a significant price 
                discovery function with respect to a regulated 
                market.
            ``(5) Economically equivalent contracts.--
                    ``(A) Notwithstanding any other provision 
                of this section, the Commission shall establish 
                limits on the amount of positions, including 
                aggregate position limits, as appropriate, 
                other than bona fide hedge positions, that may 
                be held by any person with respect to swaps 
                that are economically equivalent to contracts 
                of sale for future delivery or to options on 
                the contracts or commodities traded on or 
                subject to the rules of a designated contract 
                market subject to paragraph (2).
                    ``(B) In establishing limits pursuant to 
                subparagraph (A), the Commission shall--
                            ``(i) develop the limits 
                        concurrently with limits established 
                        under paragraph (2), and the limits 
                        shall have similar requirements as 
                        under paragraph (3)(B); and
                            ``(ii) establish the limits 
                        simultaneously with limits established 
                        under paragraph (2).
            ``(6) Aggregate position limits.--The Commission 
        shall, by rule or regulation, establish limits 
        (including related hedge exemption provisions) on the 
        aggregate number or amount of positions in contracts 
        based upon the same underlying commodity (as defined by 
        the Commission) that may be held by any person, 
        including any group or class of traders, for each month 
        across--
                    ``(A) contracts listed by designated 
                contract markets;
                    ``(B) with respect to an agreement 
                contract, or transaction that settles against 
                any price (including the daily or final 
                settlement price) of 1 or more contracts listed 
                for trading on a registered entity, contracts 
                traded on a foreign board of trade that 
                provides members or other participants located 
                in the United States with direct access to its 
                electronic trading and order matching system; 
                and
                    ``(C) swap contracts that perform or affect 
                a significant price discovery function with 
                respect to regulated entities.
            ``(7) Exemptions.--The Commission, by rule, 
        regulation, or order, may exempt, conditionally or 
        unconditionally, any person or class of persons, any 
        swap or class of swaps, any contract of sale of a 
        commodity for future delivery or class of such 
        contracts, any option or class of options, or any 
        transaction or class of transactions from any 
        requirement it may establish under this section with 
        respect to position limits.''.
    (b) Conforming Amendments.--Section 4a(b) of the Commodity 
Exchange Act (7 U.S.C. 6a(b)) is amended--
            (1) in paragraph (1), by striking ``or derivatives 
        transaction execution facility or facilities or 
        electronic trading facility'' and inserting ``or swap 
        execution facility or facilities''; and
            (2) in paragraph (2), by striking ``or derivatives 
        transaction execution facility or facilities or 
        electronic trading facility'' and inserting ``or swap 
        execution facility''.
    (c) Bona Fide Hedging Transaction.--Section 4a(c) of the 
Commodity Exchange Act is amended--
            (1) by inserting ``(1)'' after ``(c)''; and
            (2) by adding at the end the following:
            ``(2) For the purposes of implementation of 
        subsection (a)(2) for contracts of sale for future 
        delivery or options on the contracts or commodities, 
        the Commission shall define what constitutes a bona 
        fide hedging transaction or position as a transaction 
        or position that--
                    ``(A)(i) represents a substitute for 
                transactions made or to be made or positions 
                taken or to be taken at a later time in a 
                physical marketing channel;
                    ``(ii) is economically appropriate to the 
                reduction of risks in the conduct and 
                management of a commercial enterprise; and
                    ``(iii) arises from the potential change in 
                the value of--
                            ``(I) assets that a person owns, 
                        produces, manufactures, processes, or 
                        merchandises or anticipates owning, 
                        producing, manufacturing, processing, 
                        or merchandising;
                            ``(II) liabilities that a person 
                        owns or anticipates incurring; or
                            ``(III) services that a person 
                        provides, purchases, or anticipates 
                        providing or purchasing; or
                    ``(B) reduces risks attendant to a position 
                resulting from a swap that--
                            ``(i) was executed opposite a 
                        counterparty for which the transaction 
                        would qualify as a bona fide hedging 
                        transaction pursuant to subparagraph 
                        (A); or
                            ``(ii) meets the requirements of 
                        subparagraph (A).''.
    (d) Effective Date.--This section and the amendments made 
by this section shall become effective on the date of the 
enactment of this section.

SEC. 738. FOREIGN BOARDS OF TRADE.

    (a) In General.--Section 4(b) of the Commodity Exchange Act 
(7 U.S.C. 6(b)) is amended--
            (1) in the first sentence, by striking ``The 
        Commission'' and inserting the following:
            ``(2) Persons located in the united states.--
                    ``(A) In general.--The Commission'';
            (2) in the second sentence, by striking ``Such 
        rules and regulations'' and inserting the following:
                    ``(B) Different requirements.--Rules and 
                regulations described in subparagraph (A)'';
            (3) in the third sentence--
                    (A) by striking ``No rule or regulation'' 
                and inserting the following:
                    ``(C) Prohibition.--Except as provided in 
                paragraphs (1) and (2), no rule or 
                regulation'';
                    (B) by striking ``that (1) requires'' and 
                inserting the following: ``that--
                            ``(i) requires''; and
                    (C) by striking ``market, or (2) governs'' 
                and inserting the following: ``market; or
                            ``(ii) governs''; and
            (4) by inserting before paragraph (2) (as 
        designated by paragraph (1)) the following:
            ``(1) Foreign boards of trade.--
                    ``(A) Registration.--The Commission may 
                adopt rules and regulations requiring 
                registration with the Commission for a foreign 
                board of trade that provides the members of the 
                foreign board of trade or other participants 
                located in the United States with direct access 
                to the electronic trading and order matching 
                system of the foreign board of trade, including 
                rules and regulations prescribing procedures 
                and requirements applicable to the registration 
                of such foreign boards of trade. For purposes 
                of this paragraph, `direct access' refers to an 
                explicit grant of authority by a foreign board 
                of trade to an identified member or other 
                participant located in the United States to 
                enter trades directly into the trade matching 
                system of the foreign board of trade. In 
                adopting such rules and regulations, the 
                commission shall consider--
                            ``(i) whether any such foreign 
                        board of trade is subject to 
                        comparable, comprehensive supervision 
                        and regulation by the appropriate 
                        governmental authorities in the foreign 
                        board of trade's home country; and
                            ``(ii) any previous commission 
                        findings that the foreign board of 
                        trade is subject to comparable 
                        comprehensive supervision and 
                        regulation by the appropriate 
                        government authorities in the foreign 
                        board of trade's home country.
                    ``(B) Linked contracts.--The Commission may 
                not permit a foreign board of trade to provide 
                to the members of the foreign board of trade or 
                other participants located in the United States 
                direct access to the electronic trading and 
                order-matching system of the foreign board of 
                trade with respect to an agreement, contract, 
                or transaction that settles against any price 
                (including the daily or final settlement price) 
                of 1 or more contracts listed for trading on a 
                registered entity, unless the Commission 
                determines that--
                            ``(i) the foreign board of trade 
                        makes public daily trading information 
                        regarding the agreement, contract, or 
                        transaction that is comparable to the 
                        daily trading information published by 
                        the registered entity for the 1 or more 
                        contracts against which the agreement, 
                        contract, or transaction traded on the 
                        foreign board of trade settles; and
                            ``(ii) the foreign board of trade 
                        (or the foreign futures authority that 
                        oversees the foreign board of trade)--
                                    ``(I) adopts position 
                                limits (including related hedge 
                                exemption provisions) for the 
                                agreement, contract, or 
                                transaction that are comparable 
                                to the position limits 
                                (including related hedge 
                                exemption provisions) adopted 
                                by the registered entity for 
                                the 1 or more contracts against 
                                which the agreement, contract, 
                                or transaction traded on the 
                                foreign board of trade settles;
                                    ``(II) has the authority to 
                                require or direct market 
                                participants to limit, reduce, 
                                or liquidate any position the 
                                foreign board of trade (or the 
                                foreign futures authority that 
                                oversees the foreign board of 
                                trade) determines to be 
                                necessary to prevent or reduce 
                                the threat of price 
                                manipulation, excessive 
                                speculation as described in 
                                section 4a, price distortion, 
                                or disruption of delivery or 
                                the cash settlement process;
                                    ``(III) agrees to promptly 
                                notify the Commission, with 
                                regard to the agreement, 
                                contract, or transaction that 
                                settles against any price 
                                (including the daily or final 
                                settlement price) of 1 or more 
                                contracts listed for trading on 
                                a registered entity, of any 
                                change regarding--
                                            ``(aa) the 
                                        information that the 
                                        foreign board of trade 
                                        will make publicly 
                                        available;
                                            ``(bb) the position 
                                        limits that the foreign 
                                        board of trade or 
                                        foreign futures 
                                        authority will adopt 
                                        and enforce;
                                            ``(cc) the position 
                                        reductions required to 
                                        prevent manipulation, 
                                        excessive speculation 
                                        as described in section 
                                        4a, price distortion, 
                                        or disruption of 
                                        delivery or the cash 
                                        settlement process; and
                                            ``(dd) any other 
                                        area of interest 
                                        expressed by the 
                                        Commission to the 
                                        foreign board of trade 
                                        or foreign futures 
                                        authority;
                                    ``(IV) provides information 
                                to the Commission regarding 
                                large trader positions in the 
                                agreement, contract, or 
                                transaction that is comparable 
                                to the large trader position 
                                information collected by the 
                                Commission for the 1 or more 
                                contracts against which the 
                                agreement, contract, or 
                                transaction traded on the 
                                foreign board of trade settles; 
                                and
                                    ``(V) provides the 
                                Commission such information as 
                                is necessary to publish reports 
                                on aggregate trader positions 
                                for the agreement, contract, or 
                                transaction traded on the 
                                foreign board of trade that are 
                                comparable to such reports on 
                                aggregate trader positions for 
                                the 1 or more contracts against 
                                which the agreement, contract, 
                                or transaction traded on the 
                                foreign board of trade settles.
                    ``(C) Existing foreign boards of trade.--
                Subparagraphs (A) and (B) shall not be 
                effective with respect to any foreign board of 
                trade to which, prior to the date of enactment 
                of this paragraph, the Commission granted 
                direct access permission until the date that is 
                180 days after that date of enactment.''.
    (b) Liability of Registered Persons Trading on a Foreign 
Board of Trade.--Section 4 of the Commodity Exchange Act (7 
U.S.C. 6) is amended--
            (1) in subsection (a), in the matter preceding 
        paragraph (1), by inserting ``or by subsection (e)'' 
        after ``Unless exempted by the Commission pursuant to 
        subsection (c)''; and
            (2) by adding at the end the following:
    ``(e) Liability of Registered Persons Trading on a Foreign 
Board of Trade.--
            ``(1) In general.--A person registered with the 
        Commission, or exempt from registration by the 
        Commission, under this Act may not be found to have 
        violated subsection (a) with respect to a transaction 
        in, or in connection with, a contract of sale of a 
        commodity for future delivery if the person--
                    ``(A) has reason to believe that the 
                transaction and the contract is made on or 
                subject to the rules of a foreign board of 
                trade that is--
                            ``(i) legally organized under the 
                        laws of a foreign country;
                            ``(ii) authorized to act as a board 
                        of trade by a foreign futures 
                        authority; and
                            ``(iii) subject to regulation by 
                        the foreign futures authority; and
                    ``(B) has not been determined by the 
                Commission to be operating in violation of 
                subsection (a).
            ``(2) Rule of construction.--Nothing in this 
        subsection shall be construed as implying or creating 
        any presumption that a board of trade, exchange, or 
        market is located outside the United States, or its 
        territories or possessions, for purposes of subsection 
        (a).''.
    (c) Contract Enforcement for Foreign Futures Contracts.--
Section 22(a) of the Commodity Exchange Act (7 U.S.C. 25(a)) 
(as amended by section 739) is amended by adding at the end the 
following:
    ``(6) Contract Enforcement for Foreign Futures Contracts.--
A contract of sale of a commodity for future delivery traded or 
executed on or through the facilities of a board of trade, 
exchange, or market located outside the United States for 
purposes of section 4(a) shall not be void, voidable, or 
unenforceable, and a party to such a contract shall not be 
entitled to rescind or recover any payment made with respect to 
the contract, based on the failure of the foreign board of 
trade to comply with any provision of this Act.''.

SEC. 739. LEGAL CERTAINTY FOR SWAPS.

    Section 22(a) of the Commodity Exchange Act (7 U.S.C. 
25(a)) is amended by striking paragraph (4) and inserting the 
following:
    ``(4) Contract Enforcement Between Eligible 
Counterparties.--
            ``(A) In general.--No hybrid instrument sold to any 
        investor shall be void, voidable, or unenforceable, and 
        no party to a hybrid instrument shall be entitled to 
        rescind, or recover any payment made with respect to, 
        the hybrid instrument under this section or any other 
        provision of Federal or State law, based solely on the 
        failure of the hybrid instrument to comply with the 
        terms or conditions of section 2(f) or regulations of 
        the Commission.
            ``(B) Swaps.--No agreement, contract, or 
        transaction between eligible contract participants or 
        persons reasonably believed to be eligible contract 
        participants shall be void, voidable, or unenforceable, 
        and no party to such agreement, contract, or 
        transaction shall be entitled to rescind, or recover 
        any payment made with respect to, the agreement, 
        contract, or transaction under this section or any 
        other provision of Federal or State law, based solely 
        on the failure of the agreement, contract, or 
        transaction--
                    ``(i) to meet the definition of a swap 
                under section 1a; or
                    ``(ii) to be cleared in accordance with 
                section 2(h)(1).
    ``(5) Legal Certainty for Long-term Swaps Entered Into 
Before the Date of Enactment of the Wall Street Transparency 
and Accountability Act of 2010.--
            ``(A) Effect on swaps.--Unless specifically 
        reserved in the applicable swap, neither the enactment 
        of the Wall Street Transparency and Accountability Act 
        of 2010, nor any requirement under that Act or an 
        amendment made by that Act, shall constitute a 
        termination event, force majeure, illegality, increased 
        costs, regulatory change, or similar event under a swap 
        (including any related credit support arrangement) that 
        would permit a party to terminate, renegotiate, modify, 
        amend, or supplement 1 or more transactions under the 
        swap.
            ``(B) Position limits.--Any position limit 
        established under the Wall Street Transparency and 
        Accountability Act of 2010 shall not apply to a 
        position acquired in good faith prior to the effective 
        date of any rule, regulation, or order under the Act 
        that establishes the position limit; provided, however, 
        that such positions shall be attributed to the trader 
        if the trader's position is increased after the 
        effective date of such position limit rule, regulation, 
        or order.''.

SEC. 740. MULTILATERAL CLEARING ORGANIZATIONS.

    Sections 408 and 409 of the Federal Deposit Insurance 
Corporation Improvement Act of 1991 (12 U.S.C. 4421, 4422) are 
repealed.

SEC. 741. ENFORCEMENT.

    (a) Enforcement Authority.--The Commodity Exchange Act is 
amended by inserting after section 4b (7 U.S.C. 6b) the 
following:

``SEC. 4B-1. ENFORCEMENT AUTHORITY.

    ``(a) Commodity Futures Trading Commission.--Except as 
provided in subsections (b), (c), and (d), the Commission shall 
have exclusive authority to enforce the provisions of subtitle 
A of the Wall Street Transparency and Accountability Act of 
2010 with respect to any person.
    ``(b) Prudential Regulators.--The prudential regulators 
shall have exclusive authority to enforce the provisions of 
section 4s(e) with respect to swap dealers or major swap 
participants for which they are the prudential regulator.
    ``(c) Referrals.--
            ``(1) Prudential regulators.--If the prudential 
        regulator for a swap dealer or major swap participant 
        has cause to believe that the swap dealer or major swap 
        participant, or any affiliate or division of the swap 
        dealer or major swap participant, may have engaged in 
        conduct that constitutes a violation of the 
        nonprudential requirements of this Act (including 
        section 4s or rules adopted by the Commission under 
        that section), the prudential regulator may promptly 
        notify the Commission in a written report that 
        includes--
                    ``(A) a request that the Commission 
                initiate an enforcement proceeding under this 
                Act; and
                    ``(B) an explanation of the facts and 
                circumstances that led to the preparation of 
                the written report.
            ``(2) Commission.--If the Commission has cause to 
        believe that a swap dealer or major swap participant 
        that has a prudential regulator may have engaged in 
        conduct that constitutes a violation of any prudential 
        requirement of section 4s or rules adopted by the 
        Commission under that section, the Commission may 
        notify the prudential regulator of the conduct in a 
        written report that includes--
                    ``(A) a request that the prudential 
                regulator initiate an enforcement proceeding 
                under this Act or any other Federal law 
                (including regulations); and
                    ``(B) an explanation of the concerns of the 
                Commission, and a description of the facts and 
                circumstances, that led to the preparation of 
                the written report.
    ``(d) Backstop Enforcement Authority.--
            ``(1) Initiation of enforcement proceeding by 
        prudential regulator.--If the Commission does not 
        initiate an enforcement proceeding before the end of 
        the 90-day period beginning on the date on which the 
        Commission receives a written report under subsection 
        (c)(1), the prudential regulator may initiate an 
        enforcement proceeding.
            ``(2) Initiation of enforcement proceeding by 
        commission.--If the prudential regulator does not 
        initiate an enforcement proceeding before the end of 
        the 90-day period beginning on the date on which the 
        prudential regulator receives a written report under 
        subsection (c)(2), the Commission may initiate an 
        enforcement proceeding.''.
    (b) Conforming Amendments.--
            (1) Section 4b of the Commodity Exchange Act (7 
        U.S.C. 6b) is amended--
                    (A) in subsection (a)(2), by striking ``or 
                other agreement, contract, or transaction 
                subject to paragraphs (1) and (2) of section 
                5a(g),'' and inserting ``or swap,'';
                    (B) in subsection (b), by striking ``or 
                other agreement, contract or transaction 
                subject to paragraphs (1) and (2) of section 
                5a(g),'' and inserting ``or swap,''; and
                    (C) by adding at the end the following:
    ``(e) It shall be unlawful for any person, directly or 
indirectly, by the use of any means or instrumentality of 
interstate commerce, or of the mails, or of any facility of any 
registered entity, in or in connection with any order to make, 
or the making of, any contract of sale of any commodity for 
future delivery (or option on such a contract), or any swap, on 
a group or index of securities (or any interest therein or 
based on the value thereof)--
            ``(1) to employ any device, scheme, or artifice to 
        defraud;
            ``(2) to make any untrue statement of a material 
        fact or to omit to state a material fact necessary in 
        order to make the statements made, in the light of the 
        circumstances under which they were made, not 
        misleading; or
            ``(3) to engage in any act, practice, or course of 
        business which operates or would operate as a fraud or 
        deceit upon any person.''.
            (2) Section 4c(a)(1) of the Commodity Exchange Act 
        (7 U.S.C. 6c(a)(1)) is amended by inserting ``or swap'' 
        before ``if the transaction is used or may be used''.
            (3) Section 6(c) of the Commodity Exchange Act (7 
        U.S.C. 9) is amended in the first sentence by inserting 
        ``or of any swap,'' before ``or has willfully made''.
            (4) Section 6(d) of the Commodity Exchange Act (7 
        U.S.C. 13b) is amended in the first sentence, in the 
        matter preceding the proviso, by inserting ``or of any 
        swap,'' before ``or otherwise is violating''.
            (5) Section 6c(a) of the Commodity Exchange Act (7 
        U.S.C. 13a-1(a)) is amended in the matter preceding the 
        proviso by inserting ``or any swap'' after ``commodity 
        for future delivery''.
            (6) Section 9 of the Commodity Exchange Act (7 
        U.S.C. 13) is amended--
                    (A) in subsection (a)--
                            (i) in paragraph (2), by inserting 
                        ``or of any swap,'' before ``or to 
                        corner''; and
                            (ii) in paragraph (4), by inserting 
                        ``swap data repository,'' before ``or 
                        futures association'' and
                    (B) in subsection (e)(1)--
                            (i) by inserting ``swap data 
                        repository,'' before ``or registered 
                        futures association''; and
                            (ii) by inserting ``, or swaps,'' 
                        before ``on the basis''.
            (7) Section 9(a) of the Commodity Exchange Act (7 
        U.S.C. 13(a)) is amended by adding at the end the 
        following:
            ``(6) Any person to abuse the end user clearing 
        exemption under section 2(h)(4), as determined by the 
        Commission.''.
            (8) Section 2(c)(2)(B) of the Commodity Exchange 
        Act (7 U.S.C. 2(c)(2)(B)) is amended--
                    (A) by striking ``(dd),'' each place it 
                appears;
                    (B) in clause (iii), by inserting ``, and 
                accounts or pooled investment vehicles 
                described in clause (vi),'' before ``shall be 
                subject to''; and
                    (C) by adding at the end the following:
                            ``(vi) This Act applies to, and the 
                        Commission shall have jurisdiction 
                        over, an account or pooled investment 
                        vehicle that is offered for the purpose 
                        of trading, or that trades, any 
                        agreement, contract, or transaction in 
                        foreign currency described in clause 
                        (i).''.
            (9) Section 2(c)(2)(C) of the Commodity Exchange 
        Act (7 U.S.C. 2(c)(2)(C)) is amended--
                    (A) by striking ``(dd),'' each place it 
                appears;
                    (B) in clause (ii)(I), by inserting ``, and 
                accounts or pooled investment vehicles 
                described in clause (vii),'' before ``shall be 
                subject to''; and
                    (C) by adding at the end the following:
                            ``(vii) This Act applies to, and 
                        the Commission shall have jurisdiction 
                        over, an account or pooled investment 
                        vehicle that is offered for the purpose 
                        of trading, or that trades, any 
                        agreement, contract, or transaction in 
                        foreign currency described in clause 
                        (i).''.
            (10) Section 1a(19)(A)(iv)(II) of the Commodity 
        Exchange Act (7 U.S.C. 1a(19)(A)(iv)(II)) (as 
        redesignated by section 721(a)(1)) is amended by 
        inserting before the semicolon at the end the 
        following: ``provided, however, that for purposes of 
        section 2(c)(2)(B)(vi) and section 2(c)(2)(C)(vii), the 
        term `eligible contract participant' shall not include 
        a commodity pool in which any participant is not 
        otherwise an eligible contract participant''.
            (11) Section 6(e) of the Commodity Exchange Act (7 
        U.S.C. 9a) is amended by adding at the end the 
        following:
            ``(4) Any designated clearing organization that 
        knowingly or recklessly evades or participates in or 
        facilitates an evasion of the requirements of section 
        2(h) shall be liable for a civil money penalty in twice 
        the amount otherwise available for a violation of 
        section 2(h).
            ``(5) Any swap dealer or major swap participant 
        that knowingly or recklessly evades or participates in 
        or facilitates an evasion of the requirements of 
        section 2(h) shall be liable for a civil money penalty 
        in twice the amount otherwise available for a violation 
        of section 2(h).''.
    (c) Savings Clause.--Notwithstanding any other provision of 
this title, nothing in this subtitle shall be construed as 
divesting any appropriate Federal banking agency of any 
authority it may have to establish or enforce, with respect to 
a person for which such agency is the appropriate Federal 
banking agency, prudential or other standards pursuant to 
authority granted by Federal law other than this title.

SEC. 742. RETAIL COMMODITY TRANSACTIONS.

    (a) In General.--Section 2(c) of the Commodity Exchange Act 
(7 U.S.C. 2(c)) is amended--
            (1) in paragraph (1), by striking ``5a (to the 
        extent provided in section 5a(g)), 5b, 5d, or 
        12(e)(2)(B))'' and inserting ``, 5b, or 12(e)(2)(B))''; 
        and
            (2) in paragraph (2), by adding at the end the 
        following:
                    ``(D) Retail commodity transactions.--
                            ``(i) Applicability.--Except as 
                        provided in clause (ii), this 
                        subparagraph shall apply to any 
                        agreement, contract, or transaction in 
                        any commodity that is--
                                    ``(I) entered into with, or 
                                offered to (even if not entered 
                                into with), a person that is 
                                not an eligible contract 
                                participant or eligible 
                                commercial entity; and
                                    ``(II) entered into, or 
                                offered (even if not entered 
                                into), on a leveraged or 
                                margined basis, or financed by 
                                the offeror, the counterparty, 
                                or a person acting in concert 
                                with the offeror or 
                                counterparty on a similar 
                                basis.
                            ``(ii) Exceptions.--This 
                        subparagraph shall not apply to--
                                    ``(I) an agreement, 
                                contract, or transaction 
                                described in paragraph (1) or 
                                subparagraphs (A), (B), or (C), 
                                including any agreement, 
                                contract, or transaction 
                                specifically excluded from 
                                subparagraph (A), (B), or (C);
                                    ``(II) any security;
                                    ``(III) a contract of sale 
                                that--
                                            ``(aa) results in 
                                        actual delivery within 
                                        28 days or such other 
                                        longer period as the 
                                        Commission may 
                                        determine by rule or 
                                        regulation based upon 
                                        the typical commercial 
                                        practice in cash or 
                                        spot markets for the 
                                        commodity involved; or
                                            ``(bb) creates an 
                                        enforceable obligation 
                                        to deliver between a 
                                        seller and a buyer that 
                                        have the ability to 
                                        deliver and accept 
                                        delivery, respectively, 
                                        in connection with the 
                                        line of business of the 
                                        seller and buyer; or
                                    ``(IV) an agreement, 
                                contract, or transaction that 
                                is listed on a national 
                                securities exchange registered 
                                under section 6(a) of the 
                                Securities Exchange Act of 1934 
                                (15 U.S.C. 78f(a)); or
                                    ``(V) an identified banking 
                                product, as defined in section 
                                402(b) of the Legal Certainty 
                                for Bank Products Act of 2000 
                                (7 U.S.C. 27(b)).
                            ``(iii) Enforcement.--Sections 
                        4(a), 4(b), and 4b apply to any 
                        agreement, contract, or transaction 
                        described in clause (i), as if the 
                        agreement, contract, or transaction was 
                        a contract of sale of a commodity for 
                        future delivery.
                            ``(iv) Eligible commercial 
                        entity.--For purposes of this 
                        subparagraph, an agricultural producer, 
                        packer, or handler shall be considered 
                        to be an eligible commercial entity for 
                        any agreement, contract, or transaction 
                        for a commodity in connection with the 
                        line of business of the agricultural 
                        producer, packer, or handler.''.
    (b) Gramm-Leach-Bliley Act.--Section 206(a) of the Gramm-
Leach-Bliley Act (Public Law 106-102; 15 U.S.C. 78c note) is 
amended, in the matter preceding paragraph (1), by striking 
``For purposes of'' and inserting ``Except as provided in 
subsection (e), for purposes of''.
    (c) Conforming Amendments Relating to Retail Foreign 
Exchange Transactions.--
            (1) Section 2(c)(2)(B)(i)(II) of the Commodity 
        Exchange Act (7 U.S.C. 2(c)(2)(B)(i)(II)) is amended--
                    (A) in item (aa), by inserting ``United 
                States'' before ``financial institution'';
                    (B) by striking items (dd) and (ff);
                    (C) by redesignating items (ee) and (gg) as 
                items (dd) and (ff), respectively; and
                    (D) in item (dd) (as so redesignated), by 
                striking the semicolon and inserting ``; or''.
            (2) Section 2(c)(2) of the Commodity Exchange Act 
        (7 U.S.C. 2(c)(2)) (as amended by subsection (a)(2)) is 
        amended by adding at the end the following:
                    ``(E) Prohibition.--
                            ``(i) Definition of federal 
                        regulatory agency.--In this 
                        subparagraph, the term `Federal 
                        regulatory agency' means--
                                    ``(I) the Commission;
                                    ``(II) the Securities and 
                                Exchange Commission;
                                    ``(III) an appropriate 
                                Federal banking agency;
                                    ``(IV) the National Credit 
                                Union Association; and
                                    ``(V) the Farm Credit 
                                Administration.
                            ``(ii) Prohibition.--
                                    ``(I) In general.--Except 
                                as provided in subclause (II), 
                                a person described in 
                                subparagraph (B)(i)(II) for 
                                which there is a Federal 
                                regulatory agency shall not 
                                offer to, or enter into with, a 
                                person that is not an eligible 
                                contract participant, any 
                                agreement, contract, or 
                                transaction in foreign currency 
                                described in subparagraph 
                                (B)(i)(I) except pursuant to a 
                                rule or regulation of a Federal 
                                regulatory agency allowing the 
                                agreement, contract, or 
                                transaction under such terms 
                                and conditions as the Federal 
                                regulatory agency shall 
                                prescribe.
                                    ``(II) Effective date.--
                                With regard to persons 
                                described in subparagraph 
                                (B)(i)(II) for which a Federal 
                                regulatory agency has issued a 
                                proposed rule concerning 
                                agreements, contracts, or 
                                transactions in foreign 
                                currency described in 
                                subparagraph (B)(i)(I) prior to 
                                the date of enactment of this 
                                subclause, subclause (I) shall 
                                take effect 90 days after the 
                                date of enactment of this 
                                subclause.
                            ``(iii) Requirements of rules and 
                        regulations.--
                                    ``(I) In general.--The 
                                rules and regulations described 
                                in clause (ii) shall prescribe 
                                appropriate requirements with 
                                respect to--
                                            ``(aa) disclosure;
                                            ``(bb) 
                                        recordkeeping;
                                            ``(cc) capital and 
                                        margin;
                                            ``(dd) reporting;
                                            ``(ee) business 
                                        conduct;
                                            ``(ff) 
                                        documentation; and
                                            ``(gg) such other 
                                        standards or 
                                        requirements as the 
                                        Federal regulatory 
                                        agency shall determine 
                                        to be necessary.
                                    ``(II) Treatment.--The 
                                rules or regulations described 
                                in clause (ii) shall treat all 
                                agreements, contracts, and 
                                transactions in foreign 
                                currency described in 
                                subparagraph (B)(i)(I), and all 
                                agreements, contracts, and 
                                transactions in foreign 
                                currency that are functionally 
                                or economically similar to 
                                agreements, contracts, or 
                                transactions described in 
                                subparagraph (B)(i)(I), 
                                similarly.''.

SEC. 743. OTHER AUTHORITY.

    Unless otherwise provided by the amendments made by this 
subtitle, the amendments made by this subtitle do not divest 
any appropriate Federal banking agency, the Commodity Futures 
Trading Commission, the Securities and Exchange Commission, or 
other Federal or State agency of any authority derived from any 
other applicable law.

SEC. 744. RESTITUTION REMEDIES.

    Section 6c(d) of the Commodity Exchange Act (7 U.S.C. 13a-
1(d)) is amended by adding at the end the following:
            ``(3) Equitable remedies.--In any action brought 
        under this section, the Commission may seek, and the 
        court may impose, on a proper showing, on any person 
        found in the action to have committed any violation, 
        equitable remedies including--
                    ``(A) restitution to persons who have 
                sustained losses proximately caused by such 
                violation (in the amount of such losses); and
                    ``(B) disgorgement of gains received in 
                connection with such violation.''.

SEC. 745. ENHANCED COMPLIANCE BY REGISTERED ENTITIES.

    (a) Effect of Interpretation.--Section 5c(a) of the 
Commodity Exchange Act (7 U.S.C. 7a-2(a)) is amended by 
striking paragraph (2) and inserting the following:
            ``(2) Effect of interpretation.--An interpretation 
        issued under paragraph (1) may provide the exclusive 
        means for complying with each section described in 
        paragraph (1).''.
    (b) New Contracts, New Rules, and Rule Amendments.--Section 
5c of the Commodity Exchange Act (7 U.S.C. 7a-2) is amended by 
striking subsection (c) and inserting the following:
    ``(c) New Contracts, New Rules, and Rule Amendments.--
            ``(1) In general.--A registered entity may elect to 
        list for trading or accept for clearing any new 
        contract, or other instrument, or may elect to approve 
        and implement any new rule or rule amendment, by 
        providing to the Commission (and the Secretary of the 
        Treasury, in the case of a contract of sale of a 
        government security for future delivery (or option on 
        such a contract) or a rule or rule amendment 
        specifically related to such a contract) a written 
        certification that the new contract or instrument or 
        clearing of the new contract or instrument, new rule, 
        or rule amendment complies with this Act (including 
        regulations under this Act).
            ``(2) Rule review.--The new rule or rule amendment 
        described in paragraph (1) shall become effective, 
        pursuant to the certification of the registered entity 
        and notice of such certification to its members (in a 
        manner to be determined by the Commission), on the date 
        that is 10 business days after the date on which the 
        Commission receives the certification (or such shorter 
        period as determined by the Commission by rule or 
        regulation) unless the Commission notifies the 
        registered entity within such time that it is staying 
        the certification because there exist novel or complex 
        issues that require additional time to analyze, an 
        inadequate explanation by the submitting registered 
        entity, or a potential inconsistency with this Act 
        (including regulations under this Act).
            ``(3) Stay of certification for rules.--
                    ``(A) A notification by the Commission 
                pursuant to paragraph (2) shall stay the 
                certification of the new rule or rule amendment 
                for up to an additional 90 days from the date 
                of the notification.
                    ``(B) A rule or rule amendment subject to a 
                stay pursuant to subparagraph (A) shall become 
                effective, pursuant to the certification of the 
                registered entity, at the expiration of the 
                period described in subparagraph (A) unless the 
                Commission--
                            ``(i) withdraws the stay prior to 
                        that time; or
                            ``(ii) notifies the registered 
                        entity during such period that it 
                        objects to the proposed certification 
                        on the grounds that it is inconsistent 
                        with this Act (including regulations 
                        under this Act).
                    ``(C) The Commission shall provide a not 
                less than 30-day public comment period, within 
                the 90-day period in which the stay is in 
                effect as described in subparagraph (A), 
                whenever the Commission reviews a rule or rule 
                amendment pursuant to a notification by the 
                Commission under this paragraph.
            ``(4) Prior approval.--
                    ``(A) In general.--A registered entity may 
                request that the Commission grant prior 
                approval to any new contract or other 
                instrument, new rule, or rule amendment.
                    ``(B) Prior approval required.--
                Notwithstanding any other provision of this 
                section, a designated contract market shall 
                submit to the Commission for prior approval 
                each rule amendment that materially changes the 
                terms and conditions, as determined by the 
                Commission, in any contract of sale for future 
                delivery of a commodity specifically enumerated 
                in section 1a(10) (or any option thereon) 
                traded through its facilities if the rule 
                amendment applies to contracts and delivery 
                months which have already been listed for 
                trading and have open interest.
                    ``(C) Deadline.--If prior approval is 
                requested under subparagraph (A), the 
                Commission shall take final action on the 
                request not later than 90 days after submission 
                of the request, unless the person submitting 
                the request agrees to an extension of the time 
                limitation established under this subparagraph.
            ``(5) Approval.--
                    ``(A) Rules.--The Commission shall approve 
                a new rule, or rule amendment, of a registered 
                entity unless the Commission finds that the new 
                rule, or rule amendment, is inconsistent with 
                this subtitle (including regulations).
                    ``(B) Contracts and instruments.--The 
                Commission shall approve a new contract or 
                other instrument unless the Commission finds 
                that the new contract or other instrument would 
                violate this Act (including regulations).
                    ``(C) Special rule for review and approval 
                of event contracts and swaps contracts.--
                            ``(i) Event contracts.--In 
                        connection with the listing of 
                        agreements, contracts, transactions, or 
                        swaps in excluded commodities that are 
                        based upon the occurrence, extent of an 
                        occurrence, or contingency (other than 
                        a change in the price, rate, value, or 
                        levels of a commodity described in 
                        section 1a(2)(i)), by a designated 
                        contract market or swap execution 
                        facility, the Commission may determine 
                        that such agreements, contracts, or 
                        transactions are contrary to the public 
                        interest if the agreements, contracts, 
                        or transactions involve--
                                    ``(I) activity that is 
                                unlawful under any Federal or 
                                State law;
                                    ``(II) terrorism;
                                    ``(III) assassination;
                                    ``(IV) war;
                                    ``(V) gaming; or
                                    ``(VI) other similar 
                                activity determined by the 
                                Commission, by rule or 
                                regulation, to be contrary to 
                                the public interest.
                            ``(ii) Prohibition.--No agreement, 
                        contract, or transaction determined by 
                        the Commission to be contrary to the 
                        public interest under clause (i) may be 
                        listed or made available for clearing 
                        or trading on or through a registered 
                        entity.
                            ``(iii) Swaps contracts.--
                                    ``(I) In general.--In 
                                connection with the listing of 
                                a swap for clearing by a 
                                derivatives clearing 
                                organization, the Commission 
                                shall determine, upon request 
                                or on its own motion, the 
                                initial eligibility, or the 
                                continuing qualification, of a 
                                derivatives clearing 
                                organization to clear such a 
                                swap under those criteria, 
                                conditions, or rules that the 
                                Commission, in its discretion, 
                                determines.
                                    ``(II) Requirements.--Any 
                                such criteria, conditions, or 
                                rules shall consider--
                                            ``(aa) the 
                                        financial integrity of 
                                        the derivatives 
                                        clearing organization; 
                                        and
                                            ``(bb) any other 
                                        factors which the 
                                        Commission determines 
                                        may be appropriate.
                            ``(iv) Deadline.--The Commission 
                        shall take final action under clauses 
                        (i) and (ii) in not later than 90 days 
                        from the commencement of its review 
                        unless the party seeking to offer the 
                        contract or swap agrees to an extension 
                        of this time limitation.''.
    (c) Violation of Core Principles.--Section 5c of the 
Commodity Exchange Act (7 U.S.C. 7a-2) is amended by striking 
subsection (d).

SEC. 746. INSIDER TRADING.

    Section 4c(a) of the Commodity Exchange Act (7 U.S.C. 
6c(a)) is amended by adding at the end the following:
            ``(3) Contract of sale.--It shall be unlawful for 
        any employee or agent of any department or agency of 
        the Federal Government who, by virtue of the employment 
        or position of the employee or agent, acquires 
        information that may affect or tend to affect the price 
        of any commodity in interstate commerce, or for future 
        delivery, or any swap, and which information has not 
        been disseminated by the department or agency of the 
        Federal Government holding or creating the information 
        in a manner which makes it generally available to the 
        trading public, or disclosed in a criminal, civil, or 
        administrative hearing, or in a congressional, 
        administrative, or Government Accountability Office 
        report, hearing, audit, or investigation, to use the 
        information in his personal capacity and for personal 
        gain to enter into, or offer to enter into--
                    ``(A) a contract of sale of a commodity for 
                future delivery (or option on such a contract);
                    ``(B) an option (other than an option 
                executed or traded on a national securities 
                exchange registered pursuant to section 6(a) of 
                the Securities Exchange Act of 1934 (15 U.S.C. 
                78f(a)); or
                    ``(C) a swap.''
            ``(4) Nonpublic information.--
                    ``(A) Imparting of nonpublic information.--
                It shall be unlawful for any employee or agent 
                of any department or agency of the Federal 
                government who, by virtue of the employment or 
                position of the employee or agent, acquires 
                information that may affect or tend to affect 
                the price of any commodity in interstate 
                commerce, or for future delivery, or any swap, 
                and which information has not been disseminated 
                by the department or agency of the Federal 
                Government holding or creating the information 
                in a manner which makes it generally available 
                to the trading public, or disclosed in a 
                criminal, civil, or administrative hearing, or 
                in a congressional, administrative, or 
                Government Accountability Office report, 
                hearing, audit, or investigation, to use the 
                information in his personal capacity and for 
                personal gain to enter into, or offer to enter 
                into--
                            ``(i) a contract of sale of a 
                        commodity for future delivery (or 
                        option on such a contract);
                            ``(ii) an option (other than an 
                        option executed or traded on a national 
                        securities exchange registered pursuant 
                        to section 6(a) of the Securities 
                        Exchange Act of 1934 (15 U.S.C. 
                        78f(a)); or
                            ``(iii) a swap.
                    ``(B) Knowing use.--It shall be unlawful 
                for any person who receives information 
                imparted by any employee or agent of any 
                department or agency of the Federal Government 
                as described in subparagraph (A) to knowingly 
                use such information to enter into, or offer to 
                enter into--
                            ``(i) a contract of sale of a 
                        commodity for future delivery (or 
                        option on such a contract);
                            ``(ii) an option (other than an 
                        option executed or traded on a national 
                        securities exchange registered pursuant 
                        to section 6(a) of the Securities 
                        Exchange Act of 1934 (15 U.S.C. 
                        78f(a)); or
                            ``(iii) a swap.
                    ``(C) Theft of nonpublic information.--It 
                shall be unlawful for any person to steal, 
                convert, or misappropriate, by any means 
                whatsoever, information held or created by any 
                department or agency of the Federal Government 
                that may affect or tend to affect the price of 
                any commodity in interstate commerce, or for 
                future delivery, or any swap, where such person 
                knows, or acts in reckless disregard of the 
                fact, that such information has not been 
                disseminated by the department or agency of the 
                Federal Government holding or creating the 
                information in a manner which makes it 
                generally available to the trading public, or 
                disclosed in a criminal, civil, or 
                administrative hearing, or in a congressional, 
                administrative, or Government Accountability 
                Office report, hearing, audit, or 
                investigation, and to use such information, or 
                to impart such information with the intent to 
                assist another person, directly or indirectly, 
                to use such information to enter into, or offer 
                to enter into--
                            ``(i) a contract of sale of a 
                        commodity for future delivery (or 
                        option on such a contract);
                            ``(ii) an option (other than an 
                        option executed or traded on a national 
                        securities exchange registered pursuant 
                        to section 6(a) of the Securities 
                        Exchange Act of 1934 (15 U.S.C. 
                        78f(a)); or
                            ``(iii) a swap, provided, however, 
                        that nothing in this subparagraph shall 
                        preclude a person that has provided 
                        information concerning, or generated 
                        by, the person, its operations or 
                        activities, to any employee or agent of 
                        any department or agency of the Federal 
                        Government, voluntarily or as required 
                        by law, from using such information to 
                        enter into, or offer to enter into, a 
                        contract of sale, option, or swap 
                        described in clauses (i), (ii), or 
                        (iii).''.

SEC. 747. ANTIDISRUPTIVE PRACTICES AUTHORITY.

    Section 4c(a) of the Commodity Exchange Act (7 U.S.C. 
6c(a)) (as amended by section 746) is amended by adding at the 
end the following:
            ``(5) Disruptive practices.--It shall be unlawful 
        for any person to engage in any trading, practice, or 
        conduct on or subject to the rules of a registered 
        entity that--
                    ``(A) violates bids or offers;
                    ``(B) demonstrates intentional or reckless 
                disregard for the orderly execution of 
                transactions during the closing period; or
                    ``(C) is, is of the character of, or is 
                commonly known to the trade as, `spoofing' 
                (bidding or offering with the intent to cancel 
                the bid or offer before execution).
            ``(6) Rulemaking authority.--The Commission may 
        make and promulgate such rules and regulations as, in 
        the judgment of the Commission, are reasonably 
        necessary to prohibit the trading practices described 
        in paragraph (5) and any other trading practice that is 
        disruptive of fair and equitable trading.
            ``(7) Use of swaps to defraud.--It shall be 
        unlawful for any person to enter into a swap knowing, 
        or acting in reckless disregard of the fact, that its 
        counterparty will use the swap as part of a device, 
        scheme, or artifice to defraud any third party.''.

SEC. 748. COMMODITY WHISTLEBLOWER INCENTIVES AND PROTECTION.

    The Commodity Exchange Act (7 U.S.C. 1 et seq.) is amended 
by adding at the end the following:

``SEC. 23. COMMODITY WHISTLEBLOWER INCENTIVES AND PROTECTION.

    ``(a) Definitions.--In this section:
            ``(1) Covered judicial or administrative action.--
        The term `covered judicial or administrative action' 
        means any judicial or administrative action brought by 
        the Commission under this Act that results in monetary 
        sanctions exceeding $1,000,000.
            ``(2) Fund.--The term `Fund' means the Commodity 
        Futures Trading Commission Customer Protection Fund 
        established under subsection (g).
            ``(3) Monetary sanctions.--The term `monetary 
        sanctions', when used with respect to any judicial or 
        administrative action means--
                    ``(A) any monies, including penalties, 
                disgorgement, restitution, and interest ordered 
                to be paid; and
                    ``(B) any monies deposited into a 
                disgorgement fund or other fund pursuant to 
                section 308(b) of the Sarbanes-Oxley Act of 
                2002 (15 U.S.C. 7246(b)), as a result of such 
                action or any settlement of such action.
            ``(4) Original information.--The term `original 
        information' means information that--
                    ``(A) is derived from the independent 
                knowledge or analysis of a whistleblower;
                    ``(B) is not known to the Commission from 
                any other source, unless the whistleblower is 
                the original source of the information; and
                    ``(C) is not exclusively derived from an 
                allegation made in a judicial or administrative 
                hearing, in a governmental report, hearing, 
                audit, or investigation, or from the news 
                media, unless the whistleblower is a source of 
                the information.
            ``(5) Related action.--The term `related action', 
        when used with respect to any judicial or 
        administrative action brought by the Commission under 
        this Act, means any judicial or administrative action 
        brought by an entity described in subclauses (I) 
        through (VI) of subsection (h)(2)(C) that is based upon 
        the original information provided by a whistleblower 
        pursuant to subsection (a) that led to the successful 
        enforcement of the Commission action.
            ``(6) Successful resolution.--The term `successful 
        resolution', when used with respect to any judicial or 
        administrative action brought by the Commission under 
        this Act, includes any settlement of such action.
            ``(7) Whistleblower.--The term `whistleblower' 
        means any individual, or 2 or more individuals acting 
        jointly, who provides information relating to a 
        violation of this Act to the Commission, in a manner 
        established by rule or regulation by the Commission.
    ``(b) Awards.--
            ``(1) In general.--In any covered judicial or 
        administrative action, or related action, the 
        Commission, under regulations prescribed by the 
        Commission and subject to subsection (c), shall pay an 
        award or awards to 1 or more whistleblowers who 
        voluntarily provided original information to the 
        Commission that led to the successful enforcement of 
        the covered judicial or administrative action, or 
        related action, in an aggregate amount equal to--
                    ``(A) not less than 10 percent, in total, 
                of what has been collected of the monetary 
                sanctions imposed in the action or related 
                actions; and
                    ``(B) not more than 30 percent, in total, 
                of what has been collected of the monetary 
                sanctions imposed in the action or related 
                actions.
            ``(2) Payment of awards.--Any amount paid under 
        paragraph (1) shall be paid from the Fund.
    ``(c) Determination of Amount of Award; Denial of Award.--
            ``(1) Determination of amount of award.--
                    ``(A) Discretion.--The determination of the 
                amount of an award made under subsection (b) 
                shall be in the discretion of the Commission.
                    ``(B) Criteria.--In determining the amount 
                of an award made under subsection (b), the 
                Commission--
                            ``(i) shall take into 
                        consideration--
                                    ``(I) the significance of 
                                the information provided by the 
                                whistleblower to the success of 
                                the covered judicial or 
                                administrative action;
                                    ``(II) the degree of 
                                assistance provided by the 
                                whistleblower and any legal 
                                representative of the 
                                whistleblower in a covered 
                                judicial or administrative 
                                action;
                                    ``(III) the programmatic 
                                interest of the Commission in 
                                deterring violations of the Act 
                                (including regulations under 
                                the Act) by making awards to 
                                whistleblowers who provide 
                                information that leads to the 
                                successful enforcement of such 
                                laws; and
                                    ``(IV) such additional 
                                relevant factors as the 
                                Commission may establish by 
                                rule or regulation; and
                            ``(ii) shall not take into 
                        consideration the balance of the Fund.
            ``(2) Denial of award.--No award under subsection 
        (b) shall be made--
                    ``(A) to any whistleblower who is, or was 
                at the time the whistleblower acquired the 
                original information submitted to the 
                Commission, a member, officer, or employee of--
                            ``(i) an appropriate regulatory 
                        agency;
                            ``(ii) the Department of Justice;
                            ``(iii) a registered entity;
                            ``(iv) a registered futures 
                        association;
                            ``(v) a self-regulatory 
                        organization as defined in section 3(a) 
                        of the Securities Exchange Act of 1934 
                        (15 U.S.C. 78c(a)); or
                            ``(vi) a law enforcement 
                        organization;
                    ``(B) to any whistleblower who is convicted 
                of a criminal violation related to the judicial 
                or administrative action for which the 
                whistleblower otherwise could receive an award 
                under this section;
                    ``(C) to any whistleblower who submits 
                information to the Commission that is based on 
                the facts underlying the covered action 
                submitted previously by another whistleblower;
                    ``(D) to any whistleblower who fails to 
                submit information to the Commission in such 
                form as the Commission may, by rule or 
                regulation, require.
    ``(d) Representation.--
            ``(1) Permitted representation.--Any whistleblower 
        who makes a claim for an award under subsection (b) may 
        be represented by counsel.
            ``(2) Required representation.--
                    ``(A) In general.--Any whistleblower who 
                anonymously makes a claim for an award under 
                subsection (b) shall be represented by counsel 
                if the whistleblower submits the information 
                upon which the claim is based.
                    ``(B) Disclosure of identity.--Prior to the 
                payment of an award, a whistleblower shall 
                disclose the identity of the whistleblower and 
                provide such other information as the 
                Commission may require, directly or through 
                counsel for the whistleblower.
    ``(e) No Contract Necessary.--No contract with the 
Commission is necessary for any whistleblower to receive an 
award under subsection (b), unless otherwise required by the 
Commission, by rule or regulation.
    ``(f) Appeals.--
            ``(1) In general.--Any determination made under 
        this section, including whether, to whom, or in what 
        amount to make awards, shall be in the discretion of 
        the Commission.
            ``(2) Appeals.--Any determination described in 
        paragraph (1) may be appealed to the appropriate court 
        of appeals of the United States not more than 30 days 
        after the determination is issued by the Commission.
            ``(3) Review.--The court shall review the 
        determination made by the Commission in accordance with 
        section 7064 of title 5, United States Code.
    ``(g) Commodity Futures Trading Commission Customer 
Protection Fund.--
            ``(1) Establishment.--There is established in the 
        Treasury of the United States a revolving fund to be 
        known as the `Commodity Futures Trading Commission 
        Customer Protection Fund'.
            ``(2) Use of fund.--The Fund shall be available to 
        the Commission, without further appropriation or fiscal 
        year limitation, for--
                    ``(A) the payment of awards to 
                whistleblowers as provided in subsection (a); 
                and
                    ``(B) the funding of customer education 
                initiatives designed to help customers protect 
                themselves against fraud or other violations of 
                this Act, or the rules and regulations 
                thereunder.
            ``(3) Deposits and credits.--There shall be 
        deposited into or credited to the Fund:
                    ``(A) Monetary sanctions.--Any monetary 
                sanctions collected by the Commission in any 
                covered judicial or administrative action that 
                is not otherwise distributed to victims of a 
                violation of this Act or the rules and 
                regulations thereunder underlying such action, 
                unless the balance of the Fund at the time the 
                monetary judgment is collected exceeds 
                $100,000,000.
                    ``(B) Additional amounts.--If the amounts 
                deposited into or credited to the Fund under 
                subparagraph (A) are not sufficient to satisfy 
                an award made under subsection (b), there shall 
                be deposited into or credited to the Fund an 
                amount equal to the unsatisfied portion of the 
                award from any monetary sanction collected by 
                the Commission in any judicial or 
                administrative action brought by the Commission 
                under this Act that is based on information 
                provided by a whistleblower.
                    ``(C) Investment income.--All income from 
                investments made under paragraph (4).
            ``(4) Investments.--
                    ``(A) Amounts in fund may be invested.--The 
                Commission may request the Secretary of the 
                Treasury to invest the portion of the Fund that 
                is not, in the Commission's judgment, required 
                to meet the current needs of the Fund.
                    ``(B) Eligible investments.--Investments 
                shall be made by the Secretary of the Treasury 
                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 Fund as 
                determined by the Commission.
                    ``(C) Interest and proceeds credited.--The 
                interest on, and the proceeds from the sale or 
                redemption of, any obligations held in the Fund 
                shall be credited to, and form a part of, the 
                Fund.
            ``(5) Reports to congress.--Not later than October 
        30 of each year, the Commission shall transmit to the 
        Committee on Agriculture, Nutrition, and Forestry of 
        the Senate, and the Committee on Agriculture of the 
        House of Representatives a report on--
                    ``(A) the Commission's whistleblower award 
                program under this section, including a 
                description of the number of awards granted and 
                the types of cases in which awards were granted 
                during the preceding fiscal year;
                    ``(B) customer education initiatives 
                described in paragraph (2)(B) that were funded 
                by the Fund during the preceding fiscal year;
                    ``(C) the balance of the Fund at the 
                beginning of the preceding fiscal year;
                    ``(D) the amounts deposited into or 
                credited to the Fund during the preceding 
                fiscal year;
                    ``(E) the amount of earnings on investments 
                of amounts in the Fund during the preceding 
                fiscal year;
                    ``(F) the amount paid from the Fund during 
                the preceding fiscal year to whistleblowers 
                pursuant to subsection (b);
                    ``(G) the amount paid from the Fund during 
                the preceding fiscal year for customer 
                education initiatives described in paragraph 
                (2)(B);
                    ``(H) the balance of the Fund at the end of 
                the preceding fiscal year; and
                    ``(I) a complete set of audited financial 
                statements, including a balance sheet, income 
                statement, and cash flow analysis.
    ``(h) Protection of Whistleblowers.--
            ``(1) Prohibition against retaliation.--
                    ``(A) In general.--No employer may 
                discharge, demote, suspend, threaten, harass, 
                directly or indirectly, or in any other manner 
                discriminate against, a whistleblower in the 
                terms and conditions of employment because of 
                any lawful act done by the whistleblower--
                            ``(i) in providing information to 
                        the Commission in accordance with 
                        subsection (b); or
                            ``(ii) in assisting in any 
                        investigation or judicial or 
                        administrative action of the Commission 
                        based upon or related to such 
                        information.
                    ``(B) Enforcement.--
                            ``(i) Cause of action.--An 
                        individual who alleges discharge or 
                        other discrimination in violation of 
                        subparagraph (A) may bring an action 
                        under this subsection in the 
                        appropriate district court of the 
                        United States for the relief provided 
                        in subparagraph (C), unless the 
                        individual who is alleging discharge or 
                        other discrimination in violation of 
                        subparagraph (A) is an employee of the 
                        Federal Government, in which case the 
                        individual shall only bring an action 
                        under section 1221 of title 5, United 
                        States Code.
                            ``(ii) Subpoenas.--A subpoena 
                        requiring the attendance of a witness 
                        at a trial or hearing conducted under 
                        this subsection may be served at any 
                        place in the United States.
                            ``(iii) Statute of limitations.--An 
                        action under this subsection may not be 
                        brought more than 2 years after the 
                        date on which the violation reported in 
                        subparagraph (A) is committed.
                    ``(C) Relief.--Relief for an individual 
                prevailing in an action brought under 
                subparagraph (B) shall include--
                            ``(i) reinstatement with the same 
                        seniority status that the individual 
                        would have had, but for the 
                        discrimination;
                            ``(ii) the amount of back pay 
                        otherwise owed to the individual, with 
                        interest; and
                            ``(iii) compensation for any 
                        special damages sustained as a result 
                        of the discharge or discrimination, 
                        including litigation costs, expert 
                        witness fees, and reasonable attorney's 
                        fees.
            ``(2) Confidentiality.--
                    ``(A) In general.--Except as provided in 
                subparagraphs (B) and (C), the Commission, and 
                any officer or employee of the Commission, 
                shall not disclose any information, including 
                information provided by a whistleblower to the 
                Commission, which could reasonably be expected 
                to reveal the identity of a whistleblower, 
                except in accordance with the provisions of 
                section 552a of title 5, United States Code, 
                unless and until required to be disclosed to a 
                defendant or respondent in connection with a 
                public proceeding instituted by the Commission 
                or any entity described in subparagraph (C). 
                For purposes of section 552 of title 5, United 
                States Code, this paragraph shall be considered 
                a statute described in subsection (b)(3)(B) of 
                such section 552.
                    ``(B) Effect.--Nothing in this paragraph is 
                intended to limit the ability of the Attorney 
                General to present such evidence to a grand 
                jury or to share such evidence with potential 
                witnesses or defendants in the course of an 
                ongoing criminal investigation.
                    ``(C) Availability to government 
                agencies.--
                            ``(i) In general.--Without the loss 
                        of its status as confidential in the 
                        hands of the Commission, all 
                        information referred to in subparagraph 
                        (A) may, in the discretion of the 
                        Commission, when determined by the 
                        Commission to be necessary or 
                        appropriate to accomplish the purposes 
                        of this Act and protect customers and 
                        in accordance with clause (ii), be made 
                        available to--
                                    ``(I) the Department of 
                                Justice;
                                    ``(II) an appropriate 
                                department or agency of the 
                                Federal Government, acting 
                                within the scope of its 
                                jurisdiction;
                                    ``(III) a registered 
                                entity, registered futures 
                                association, or self-regulatory 
                                organization as defined in 
                                section 3(a) of the Securities 
                                Exchange Act of 1934 (15 U.S.C. 
                                78c(a));
                                    ``(IV) a State attorney 
                                general in connection with any 
                                criminal investigation;
                                    ``(V) an appropriate 
                                department or agency of any 
                                State, acting within the scope 
                                of its jurisdiction; and
                                    ``(VI) a foreign futures 
                                authority.
                            ``(ii) Maintenance of 
                        information.--Each of the entities, 
                        agencies, or persons described in 
                        clause (i) shall maintain information 
                        described in that clause as 
                        confidential, in accordance with the 
                        requirements in subparagraph (A).
                            ``(iii) Study on impact of foia 
                        exemption on commodity futures trading 
                        commission.--
                                    ``(I) Study.--The Inspector 
                                General of the Commission shall 
                                conduct a study--
                                            ``(aa) on whether 
                                        the exemption under 
                                        section 552(b)(3) of 
                                        title 5, United States 
                                        Code (known as the 
                                        Freedom of Information 
                                        Act) established in 
                                        paragraph (2)(A) aids 
                                        whistleblowers in 
                                        disclosing information 
                                        to the Commission;
                                            ``(bb) on what 
                                        impact the exemption 
                                        has had on the public's 
                                        ability to access 
                                        information about the 
                                        Commission's regulation 
                                        of commodity futures 
                                        and option markets; and
                                            ``(cc) to make any 
                                        recommendations on 
                                        whether the Commission 
                                        should continue to use 
                                        the exemption.
                                    ``(II) Report.--Not later 
                                than 30 months after the date 
                                of enactment of this clause, 
                                the Inspector General shall--
                                            ``(aa) submit a 
                                        report on the findings 
                                        of the study required 
                                        under this clause to 
                                        the Committee on 
                                        Banking, Housing, and 
                                        Urban Affairs of the 
                                        Senate and the 
                                        Committee on Financial 
                                        Services of the House 
                                        of Representatives; and
                                            ``(bb) make the 
                                        report available to the 
                                        public through 
                                        publication of a report 
                                        on the website of the 
                                        Commission.
            ``(3) Rights retained.--Nothing in this section 
        shall be deemed to diminish the rights, privileges, or 
        remedies of any whistleblower under any Federal or 
        State law, or under any collective bargaining 
        agreement.
    ``(i) Rulemaking Authority.--The Commission shall have the 
authority to issue such rules and regulations as may be 
necessary or appropriate to implement the provisions of this 
section consistent with the purposes of this section.
    ``(j) Implementing Rules.--The Commission shall issue final 
rules or regulations implementing the provisions of this 
section not later than 270 days after the date of enactment of 
the Wall Street Transparency and Accountability Act of 2010.
    ``(k) Original Information.--Information submitted to the 
Commission by a whistleblower in accordance with rules or 
regulations implementing this section shall not lose its status 
as original information solely because the whistleblower 
submitted such information prior to the effective date of such 
rules or regulations, provided such information was submitted 
after the date of enactment of the Wall Street Transparency and 
Accountability Act of 2010.
    ``(l) Awards.--A whistleblower may receive an award 
pursuant to this section regardless of whether any violation of 
a provision of this Act, or a rule or regulation thereunder, 
underlying the judicial or administrative action upon which the 
award is based occurred prior to the date of enactment of the 
Wall Street Transparency and Accountability Act of 2010.
    ``(m) Provision of False Information.--A whistleblower who 
knowingly and willfully makes any false, fictitious, or 
fraudulent statement or representation, or who makes or uses 
any false writing or document knowing the same to contain any 
false, fictitious, or fraudulent statement or entry, shall not 
be entitled to an award under this section and shall be subject 
to prosecution under section 1001 of title 18, United States 
Code.
    ``(n) Nonenforceability of Certain Provisions Waiving 
Rights and Remedies or Requiring Arbitration of Disputes.--
            ``(1) Waiver of rights and remedies.--The rights 
        and remedies provided for in this section may not be 
        waived by any agreement, policy form, or condition of 
        employment including by a predispute arbitration 
        agreement.
            ``(2) Predispute arbitration agreements.--No 
        predispute arbitration agreement shall be valid or 
        enforceable, if the agreement requires arbitration of a 
        dispute arising under this section.''.

SEC. 749. CONFORMING AMENDMENTS.

    (a) Section 4d of the Commodity Exchange Act (7 U.S.C. 6d) 
(as amended by section 724) is amended--
            (1) in subsection (a)--
                    (A) in the matter preceding paragraph (1)--
                            (i) by striking ``engage as'' and 
                        inserting ``be a''; and
                            (ii) by striking ``or introducing 
                        broker'' and all that follows through 
                        ``or derivatives transaction execution 
                        facility'';
                    (B) in paragraph (1), by striking ``or 
                introducing broker''; and
                    (C) in paragraph (2), by striking ``if a 
                futures commission merchant,''; and
            (2) by adding at the end the following:
    ``(g) It shall be unlawful for any person to be an 
introducing broker unless such person shall have registered 
under this Act with the Commission as an introducing broker and 
such registration shall not have expired nor been suspended nor 
revoked.''.
    (b) Section 4m(3) of the Commodity Exchange Act (7 U.S.C. 
6m(3)) is amended--
            (1) by striking ``(3) Subsection (1) of this 
        section'' and inserting the following:
    ``(3) Exception.--
            ``(A) In general.--Paragraph (1)''; and
            (2) by striking ``to any investment trust'' and all 
        that follows through the period at the end and 
        inserting the following: ``to any commodity pool that 
        is engaged primarily in trading commodity interests.
            ``(B) Engaged primarily.--For purposes of 
        subparagraph (A), a commodity trading advisor or a 
        commodity pool shall be considered to be `engaged 
        primarily' in the business of being a commodity trading 
        advisor or commodity pool if it is or holds itself out 
        to the public as being engaged primarily, or proposes 
        to engage primarily, in the business of advising on 
        commodity interests or investing, reinvesting, owning, 
        holding, or trading in commodity interests, 
        respectively.
            ``(C) Commodity interests.--For purposes of this 
        paragraph, commodity interests shall include contracts 
        of sale of a commodity for future delivery, options on 
        such contracts, security futures, swaps, leverage 
        contracts, foreign exchange, spot and forward contracts 
        on physical commodities, and any monies held in an 
        account used for trading commodity interests.''.
    (c) Section 5c of the Commodity Exchange Act (7 U.S.C. 7a-
2) is amended--
            (1) in subsection (a)(1)--
                    (A) by striking ``, 5a(d),''; and
                    (B) by striking ``and section (2)(h)(7) 
                with respect to significant price discovery 
                contracts,''; and
            (2) in subsection (f)(1), by striking ``section 
        4d(c) of this Act'' and inserting ``section 4d(e)''.
    (d) Section 5e of the Commodity Exchange Act (7 U.S.C. 7b) 
is amended by striking ``or revocation of the right of an 
electronic trading facility to rely on the exemption set forth 
in section 2(h)(3) with respect to a significant price 
discovery contract,''.
    (e) Section 6(b) of the Commodity Exchange Act (7 U.S.C. 
8(b)) is amended in the first sentence by striking ``, or to 
revoke the right of an electronic trading facility to rely on 
the exemption set forth in section 2(h)(3) with respect to a 
significant price discovery contract,''.
    (f) Section 12(e)(2)(B) of the Commodity Exchange Act (7 
U.S.C. 16(e)(2)(B)) is amended--
            (1) by striking ``section 2(c), 2(d), 2(f), or 2(g) 
        of this Act'' and inserting ``section 2(c) or 2(f) of 
        this Act''; and
            (2) by striking ``2(h) or''.
    (g) Section 17(r)(1) of the Commodity Exchange Act (7 
U.S.C. 21(r)(1)) is amended by striking ``section 4d(c) of this 
Act'' and inserting ``section 4d(e)''.
    (h) Section 22 of the Commodity Exchange Act is amended--
            (1) in subsection (a)(1)(B), by--
                    (A) inserting ``or any swap'' after 
                ``commodity)''; and
                    (B) inserting ``or any swap'' after ``such 
                contract'';
            (2) in subsection (a)(1)(C), by adding at the end 
        the following:
                            ``(iv) a swap; or''; and
            (3) in subsection (b)(1)(A), by striking ``section 
        2(h)(7) or sections 5 through 5c'' and inserting 
        ``section 5, 5b, 5c, 5h, or 21''.
    (i) Section 408(2)(C) of the Federal Deposit Insurance 
Corporation Improvement Act of 1991 (12 U.S.C. 4421(2)(C)) is 
amended--
            (1) by striking ``section 2(c), 2(d), 2(f), or 
        (2)(g) of such Act'' and inserting ``section 2(c), 
        2(f), or 2(i) of that Act''; and
            (2) by striking ``2(h) or''.

SEC. 750. STUDY ON OVERSIGHT OF CARBON MARKETS.

    (a) Interagency Working Group.--There is established to 
carry out this section an interagency working group (referred 
to in this section as the ``interagency group'') composed of 
the following members or designees:
            (1) The Chairman of the Commodity Futures Trading 
        Commission (referred to in this section as the 
        ``Commission''), who shall serve as Chairman of the 
        interagency group.
            (2) The Secretary of Agriculture.
            (3) The Secretary of the Treasury.
            (4) The Chairman of the Securities and Exchange 
        Commission.
            (5) The Administrator of the Environmental 
        Protection Agency.
            (6) The Chairman of the Federal Energy Regulatory 
        Commission.
            (7) The Commissioner of the Federal Trade 
        Commission.
            (8) The Administrator of the Energy Information 
        Administration.
    (b) Administrative Support.--The Commission shall provide 
the interagency group such administrative support services as 
are necessary to enable the interagency group to carry out the 
functions of the interagency group under this section.
    (c) Consultation.--In carrying out this section, the 
interagency group shall consult with representatives of 
exchanges, clearinghouses, self-regulatory bodies, major carbon 
market participants, consumers, and the general public, as the 
interagency group determines to be appropriate.
    (d) Study.--The interagency group shall conduct a study on 
the oversight of existing and prospective carbon markets to 
ensure an efficient, secure, and transparent carbon market, 
including oversight of spot markets and derivative markets.
    (e) Report.--Not later than 180 days after the date of 
enactment of this Act, the interagency group shall submit to 
Congress a report on the results of the study conducted under 
subsection (b), including recommendations for the oversight of 
existing and prospective carbon markets to ensure an efficient, 
secure, and transparent carbon market, including oversight of 
spot markets and derivative markets.

SEC. 751. ENERGY AND ENVIRONMENTAL MARKETS ADVISORY COMMITTEE.

    Section 2(a) of the Commodity Exchange Act (7 U.S.C. 2(a)) 
(as amended by section 727) is amended by adding at the end the 
following:
            ``(15) Energy and environmental markets advisory 
        committee.--
                    ``(A) Establishment.--
                            ``(i) In general.--An Energy and 
                        Environmental Markets Advisory 
                        Committee is hereby established.
                            ``(ii) Membership.--The Committee 
                        shall have 9 members.
                            ``(iii) Activities.--The 
                        Committee's objectives and scope of 
                        activities shall be--
                                    ``(I) to conduct public 
                                meetings;
                                    ``(II) to submit reports 
                                and recommendations to the 
                                Commission (including 
                                dissenting or minority views, 
                                if any); and
                                    ``(III) otherwise to serve 
                                as a vehicle for discussion and 
                                communication on matters of 
                                concern to exchanges, firms, 
                                end users, and regulators 
                                regarding energy and 
                                environmental markets and their 
                                regulation by the Commission.
                    ``(B) Requirements.--
                            ``(i) In general.--The Committee 
                        shall hold public meetings at such 
                        intervals as are necessary to carry out 
                        the functions of the Committee, but not 
                        less frequently than 2 times per year.
                            ``(ii) Members.--Members shall be 
                        appointed to 3-year terms, but may be 
                        removed for cause by vote of the 
                        Commission.
                    ``(C) Appointment.--The Commission shall 
                appoint members with a wide diversity of 
                opinion and who represent a broad spectrum of 
                interests, including hedgers and consumers.
                    ``(D) Reimbursement.--Members shall be 
                entitled to per diem and travel expense 
                reimbursement by the Commission.
                    ``(E) FACA.--The Committee shall not be 
                subject to the Federal Advisory Committee Act 
                (5 U.S.C. App.).''.

SEC. 752. INTERNATIONAL HARMONIZATION.

    (a) In order to promote effective and consistent global 
regulation of swaps and security-based swaps, the Commodity 
Futures Trading Commission, the Securities and Exchange 
Commission, and the prudential regulators (as that term is 
defined in section 1a(39) of the Commodity Exchange Act), as 
appropriate, shall consult and coordinate with foreign 
regulatory authorities on the establishment of consistent 
international standards with respect to the regulation 
(including fees) of swaps, security-based swaps, swap entities, 
and security-based swap entities and may agree to such 
information-sharing arrangements as may be deemed to be 
necessary or appropriate in the public interest or for the 
protection of investors, swap counterparties, and security-
based swap counterparties.
    (b) In order to promote effective and consistent global 
regulation of contracts of sale of a commodity for future 
delivery and options on such contracts, the Commodity Futures 
Trading Commission shall consult and coordinate with foreign 
regulatory authorities on the establishment of consistent 
international standards with respect to the regulation of 
contracts of sale of a commodity for future delivery and 
options on such contracts, and may agree to such information-
sharing arrangements as may be deemed necessary or appropriate 
in the public interest for the protection of users of contracts 
of sale of a commodity for future delivery.

SEC. 753. ANTI-MANIPULATION AUTHORITY.

    (a) Prohibition Regarding Manipulation and False 
Information.--Subsection (c) of section 6 of the Commodity 
Exchange Act (7 U.S.C. 9, 15) is amended to read as follows:
    ``(c) Prohibition Regarding Manipulation and False 
Information.--
            ``(1) Prohibition against manipulation.--It shall 
        be unlawful for any person, directly or indirectly, to 
        use or employ, or attempt to use or employ, in 
        connection with any swap, or a contract of sale of any 
        commodity in interstate commerce, or for future 
        delivery on or subject to the rules of any registered 
        entity, any manipulative or deceptive device or 
        contrivance, in contravention of such rules and 
        regulations as the Commission shall promulgate by not 
        later than 1 year after the date of enactment of the 
        Dodd-Frank Wall Street Reform and Consumer Protection 
        Act, provided no rule or regulation promulgated by the 
        Commission shall require any person to disclose to 
        another person nonpublic information that may be 
        material to the market price, rate, or level of the 
        commodity transaction, except as necessary to make any 
        statement made to the other person in or in connection 
        with the transaction not misleading in any material 
        respect.
                    ``(A) Special provision for manipulation by 
                false reporting.--Unlawful manipulation for 
                purposes of this paragraph shall include, but 
                not be limited to, delivering, or causing to be 
                delivered for transmission through the mails or 
                interstate commerce, by any means of 
                communication whatsoever, a false or misleading 
                or inaccurate report concerning crop or market 
                information or conditions that affect or tend 
                to affect the price of any commodity in 
                interstate commerce, knowing, or acting in 
                reckless disregard of the fact that such report 
                is false, misleading or inaccurate.
                    ``(B) Effect on other law.--Nothing in this 
                paragraph shall affect, or be construed to 
                affect, the applicability of section 9(a)(2).
                    ``(C) Good faith mistakes.--Mistakenly 
                transmitting, in good faith, false or 
                misleading or inaccurate information to a price 
                reporting service would not be sufficient to 
                violate subsection (c)(1)(A).
            ``(2) Prohibition regarding false information.--It 
        shall be unlawful for any person to make any false or 
        misleading statement of a material fact to the 
        Commission, including in any registration application 
        or any report filed with the Commission under this Act, 
        or any other information relating to a swap, or a 
        contract of sale of a commodity, in interstate 
        commerce, or for future delivery on or subject to the 
        rules of any registered entity, or to omit to state in 
        any such statement any material fact that is necessary 
        to make any statement of a material fact made not 
        misleading in any material respect, if the person knew, 
        or reasonably should have known, the statement to be 
        false or misleading.
            ``(3) Other manipulation.--In addition to the 
        prohibition in paragraph (1), it shall be unlawful for 
        any person, directly or indirectly, to manipulate or 
        attempt to manipulate the price of any swap, or of any 
        commodity in interstate commerce, or for future 
        delivery on or subject to the rules of any registered 
        entity.
            ``(4) Enforcement.--
                    ``(A) Authority of commission.--If the 
                Commission has reason to believe that any 
                person (other than a registered entity) is 
                violating or has violated this subsection, or 
                any other provision of this Act (including any 
                rule, regulation, or order of the Commission 
                promulgated in accordance with this subsection 
                or any other provision of this Act), the 
                Commission may serve upon the person a 
                complaint.
                    ``(B) Contents of complaint.--A complaint 
                under subparagraph (A) shall--
                            ``(i) contain a description of the 
                        charges against the person that is the 
                        subject of the complaint; and
                            ``(ii) have attached or contain a 
                        notice of hearing that specifies the 
                        date and location of the hearing 
                        regarding the complaint.
                    ``(C) Hearing.--A hearing described in 
                subparagraph (B)(ii)--
                            ``(i) shall be held not later than 
                        3 days after service of the complaint 
                        described in subparagraph (A);
                            ``(ii) shall require the person to 
                        show cause regarding why--
                                    ``(I) an order should not 
                                be made--
                                            ``(aa) to prohibit 
                                        the person from trading 
                                        on, or subject to the 
                                        rules of, any 
                                        registered entity; and
                                            ``(bb) to direct 
                                        all registered entities 
                                        to refuse all 
                                        privileges to the 
                                        person until further 
                                        notice of the 
                                        Commission; and
                                    ``(II) the registration of 
                                the person, if registered with 
                                the Commission in any capacity, 
                                should not be suspended or 
                                revoked; and
                            ``(iii) may be held before--
                                    ``(I) the Commission; or
                                    ``(II) an administrative 
                                law judge designated by the 
                                Commission, under which the 
                                administrative law judge shall 
                                ensure that all evidence is 
                                recorded in written form and 
                                submitted to the Commission.
            ``(5) Subpoena.--For the purpose of securing 
        effective enforcement of the provisions of this Act, 
        for the purpose of any investigation or proceeding 
        under this Act, and for the purpose of any action taken 
        under section 12(f), any member of the Commission or 
        any Administrative Law Judge or other officer 
        designated by the Commission (except as provided in 
        paragraph (7)) may administer oaths and affirmations, 
        subpoena witnesses, compel their attendance, take 
        evidence, and require the production of any books, 
        papers, correspondence, memoranda, or other records 
        that the Commission deems relevant or material to the 
        inquiry.
            ``(6) Witnesses.--The attendance of witnesses and 
        the production of any such records may be required from 
        any place in the United States, any State, or any 
        foreign country or jurisdiction at any designated place 
        of hearing.
            ``(7) Service.--A subpoena issued under this 
        section may be served upon any person who is not to be 
        found within the territorial jurisdiction of any court 
        of the United States in such manner as the Federal 
        Rules of Civil Procedure prescribe for service of 
        process in a foreign country, except that a subpoena to 
        be served on a person who is not to be found within the 
        territorial jurisdiction of any court of the United 
        States may be issued only on the prior approval of the 
        Commission.
            ``(8) Refusal to obey.--In case of contumacy by, or 
        refusal to obey a subpoena issued to, any person, the 
        Commission may invoke the aid of any court of the 
        United States within the jurisdiction in which the 
        investigation or proceeding is conducted, or where such 
        person resides or transacts business, in requiring the 
        attendance and testimony of witnesses and the 
        production of books, papers, correspondence, memoranda, 
        and other records. Such court may issue an order 
        requiring such person to appear before the Commission 
        or member or Administrative Law Judge or other officer 
        designated by the Commission, there to produce records, 
        if so ordered, or to give testimony touching the matter 
        under investigation or in question.
            ``(9) Failure to obey.--Any failure to obey such 
        order of the court may be punished by the court as a 
        contempt thereof. All process in any such case may be 
        served in the judicial district wherein such person is 
        an inhabitant or transacts business or wherever such 
        person may be found.
            ``(10) Evidence.--On the receipt of evidence under 
        paragraph (4)(C)(iii), the Commission may--
                    ``(A) prohibit the person that is the 
                subject of the hearing from trading on, or 
                subject to the rules of, any registered entity 
                and require all registered entities to refuse 
                the person all privileges on the registered 
                entities for such period as the Commission may 
                require in the order;
                    ``(B) if the person is registered with the 
                Commission in any capacity, suspend, for a 
                period not to exceed 180 days, or revoke, the 
                registration of the person;
                    ``(C) assess such person--
                            ``(i) a civil penalty of not more 
                        than an amount equal to the greater 
                        of--
                                    ``(I) $140,000; or
                                    ``(II) triple the monetary 
                                gain to such person for each 
                                such violation; or
                            ``(ii) in any case of manipulation 
                        or attempted manipulation in violation 
                        of this subsection or section 9(a)(2), 
                        a civil penalty of not more than an 
                        amount equal to the greater of--
                                    ``(I) $1,000,000; or
                                    ``(II) triple the monetary 
                                gain to the person for each 
                                such violation; and
                    ``(D) require restitution to customers of 
                damages proximately caused by violations of the 
                person.
            ``(11) Orders.--
                    ``(A) Notice.--The Commission shall provide 
                to a person described in paragraph (10) and the 
                appropriate governing board of the registered 
                entity notice of the order described in 
                paragraph (10) by--
                            ``(i) registered mail;
                            ``(ii) certified mail; or
                            ``(iii) personal delivery.
                    ``(B) Review.--
                            ``(i) In general.--A person 
                        described in paragraph (10) may obtain 
                        a review of the order or such other 
                        equitable relief as determined to be 
                        appropriate by a court described in 
                        clause (ii).
                            ``(ii) Petition.--To obtain a 
                        review or other relief under clause 
                        (i), a person may, not later than 15 
                        days after notice is given to the 
                        person under clause (i), file a written 
                        petition to set aside the order with 
                        the United States Court of Appeals--
                                    ``(I) for the circuit in 
                                which the petitioner carries 
                                out the business of the 
                                petitioner; or
                                    ``(II) in the case of an 
                                order denying registration, the 
                                circuit in which the principal 
                                place of business of the 
                                petitioner is located, as 
                                listed on the application for 
                                registration of the petitioner.
                    ``(C) Procedure.--
                            ``(i) Duty of clerk of appropriate 
                        court.--The clerk of the appropriate 
                        court under subparagraph (B)(ii) shall 
                        transmit to the Commission a copy of a 
                        petition filed under subparagraph 
                        (B)(ii).
                            ``(ii) Duty of commission.--In 
                        accordance with section 2112 of title 
                        28, United States Code, the Commission 
                        shall file in the appropriate court 
                        described in subparagraph (B)(ii) the 
                        record theretofore made.
                            ``(iii) Jurisdiction of appropriate 
                        court.--Upon the filing of a petition 
                        under subparagraph (B)(ii), the 
                        appropriate court described in 
                        subparagraph (B)(ii) may affirm, set 
                        aside, or modify the order of the 
                        Commission.''.
    (b) Cease and Desist Orders, Fines.--Section 6(d) of the 
Commodity Exchange Act (7 U.S.C. 13b) is amended to read as 
follows:
    ``(d) If any person (other than a registered entity), is 
violating or has violated subsection (c) or any other 
provisions of this Act or of the rules, regulations, or orders 
of the Commission thereunder, the Commission may, upon notice 
and hearing, and subject to appeal as in other cases provided 
for in subsection (c), make and enter an order directing that 
such person shall cease and desist therefrom and, if such 
person thereafter and after the lapse of the period allowed for 
appeal of such order or after the affirmance of such order, 
shall knowingly fail or refuse to obey or comply with such 
order, such person, upon conviction thereof, shall be fined not 
more than the higher of $140,000 or triple the monetary gain to 
such person, or imprisoned for not more than 1 year, or both, 
except that if such knowing failure or refusal to obey or 
comply with such order involves any offense within subsection 
(a) or (b) of section 9, such person, upon conviction thereof, 
shall be subject to the penalties of said subsection (a) or 
(b):  Provided, That any such cease and desist order under this 
subsection against any respondent in any case of manipulation 
shall be issued only in conjunction with an order issued 
against such respondent under subsection (c).''.
    (c) Manipulations; Private Rights of Action.--Section 
22(a)(1) of the Commodity Exchange Act (7 U.S.C. 25(a)(1)) is 
amended by striking subparagraph (D) and inserting the 
following:
            ``(D) who purchased or sold a contract referred to 
        in subparagraph (B) hereof or swap if the violation 
        constitutes--
                    ``(i) the use or employment of, or an 
                attempt to use or employ, in connection with a 
                swap, or a contract of sale of a commodity, in 
                interstate commerce, or for future delivery on 
                or subject to the rules of any registered 
                entity, any manipulative device or contrivance 
                in contravention of such rules and regulations 
                as the Commission shall promulgate by not later 
                than 1 year after the date of enactment of the 
                Dodd-Frank Wall Street Reform and Consumer 
                Protection Act; or
                    ``(ii) a manipulation of the price of any 
                such contract or swap or the price of the 
                commodity underlying such contract or swap.''.
    (d) Effective Date.--
            (1) The amendments made by this section shall take 
        effect on the date on which the final rule promulgated 
        by the Commodity Futures Trading Commission pursuant to 
        this Act takes effect.
            (2) Paragraph (1) shall not preclude the Commission 
        from undertaking prior to the effective date any 
        rulemaking necessary to implement the amendments 
        contained in this section.

SEC. 754. EFFECTIVE DATE.

    Unless otherwise provided in this title, the provisions of 
this subtitle shall take effect on the later of 360 days after 
the date of the enactment of this subtitle or, to the extent a 
provision of this subtitle requires a rulemaking, not less than 
60 days after publication of the final rule or regulation 
implementing such provision of this subtitle.

         Subtitle B--Regulation of Security-Based Swap Markets

SEC. 761. DEFINITIONS UNDER THE SECURITIES EXCHANGE ACT OF 1934.

    (a) Definitions.--Section 3(a) of the Securities Exchange 
Act of 1934 (15 U.S.C. 78c(a)) is amended--
            (1) in subparagraphs (A) and (B) of paragraph (5), 
        by inserting ``(not including security-based swaps, 
        other than security-based swaps with or for persons 
        that are not eligible contract participants)'' after 
        ``securities'' each place that term appears;
            (2) in paragraph (10), by inserting ``security-
        based swap,'' after ``security future,'';
            (3) in paragraph (13), by adding at the end the 
        following: ``For security-based swaps, such terms 
        include the execution, termination (prior to its 
        scheduled maturity date), assignment, exchange, or 
        similar transfer or conveyance of, or extinguishing of 
        rights or obligations under, a security-based swap, as 
        the context may require.'';
            (4) in paragraph (14), by adding at the end the 
        following: ``For security-based swaps, such terms 
        include the execution, termination (prior to its 
        scheduled maturity date), assignment, exchange, or 
        similar transfer or conveyance of, or extinguishing of 
        rights or obligations under, a security-based swap, as 
        the context may require.'';
            (5) in paragraph (39)--
                    (A) in subparagraph (B)(i)--
                            (i) in subclause (I), by striking 
                        ``or government securities dealer'' and 
                        inserting ``government securities 
                        dealer, security-based swap dealer, or 
                        major security-based swap 
                        participant''; and
                            (ii) in subclause (II), by 
                        inserting ``security-based swap dealer, 
                        major security-based swap 
                        participant,'' after ``government 
                        securities dealer,'';
                    (B) in subparagraph (C), by striking ``or 
                government securities dealer'' and inserting 
                ``government securities dealer, security-based 
                swap dealer, or major security-based swap 
                participant''; and
                    (C) in subparagraph (D), by inserting 
                ``security-based swap dealer, major security-
                based swap participant,'' after ``government 
                securities dealer,''; and
            (6) by adding at the end the following:
            ``(65) Eligible contract participant.--The term 
        `eligible contract participant' has the same meaning as 
        in section 1a of the Commodity Exchange Act (7 U.S.C. 
        1a).
            ``(66) Major swap participant.--The term `major 
        swap participant' has the same meaning as in section 1a 
        of the Commodity Exchange Act (7 U.S.C. 1a).
            ``(67) Major security-based swap participant.--
                    ``(A) In general.--The term `major 
                security-based swap participant' means any 
                person--
                            ``(i) who is not a security-based 
                        swap dealer; and
                            ``(ii)(I) who maintains a 
                        substantial position in security-based 
                        swaps for any of the major security-
                        based swap categories, as such 
                        categories are determined by the 
                        Commission, excluding both positions 
                        held for hedging or mitigating 
                        commercial risk and positions 
                        maintained by any employee benefit plan 
                        (or any contract held by such a plan) 
                        as defined in paragraphs (3) and (32) 
                        of section 3 of the Employee Retirement 
                        Income Security Act of 1974 (29 U.S.C. 
                        1002) for the primary purpose of 
                        hedging or mitigating any risk directly 
                        associated with the operation of the 
                        plan;
                            ``(II) whose outstanding security-
                        based swaps create substantial 
                        counterparty exposure that could have 
                        serious adverse effects on the 
                        financial stability of the United 
                        States banking system or financial 
                        markets; or
                            ``(III) that is a financial entity 
                        that--
                                    ``(aa) is highly leveraged 
                                relative to the amount of 
                                capital such entity holds and 
                                that is not subject to capital 
                                requirements established by an 
                                appropriate Federal banking 
                                agency; and
                                    ``(bb) maintains a 
                                substantial position in 
                                outstanding security-based 
                                swaps in any major security-
                                based swap category, as such 
                                categories are determined by 
                                the Commission.
                    ``(B) Definition of substantial position.--
                For purposes of subparagraph (A), the 
                Commission shall define, by rule or regulation, 
                the term `substantial position' at the 
                threshold that the Commission determines to be 
                prudent for the effective monitoring, 
                management, and oversight of entities that are 
                systemically important or can significantly 
                impact the financial system of the United 
                States. In setting the definition under this 
                subparagraph, the Commission shall consider the 
                person's relative position in uncleared as 
                opposed to cleared security-based swaps and may 
                take into consideration the value and quality 
                of collateral held against counterparty 
                exposures.
                    ``(C) Scope of designation.--For purposes 
                of subparagraph (A), a person may be designated 
                as a major security-based swap participant for 
                1 or more categories of security-based swaps 
                without being classified as a major security-
                based swap participant for all classes of 
                security-based swaps.
            ``(68) Security-based swap.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), the term `security-based 
                swap' means any agreement, contract, or 
                transaction that--
                            ``(i) is a swap, as that term is 
                        defined under section 1a of the 
                        Commodity Exchange Act (without regard 
                        to paragraph (47)(B)(x) of such 
                        section); and
                            ``(ii) is based on--
                                    ``(I) an index that is a 
                                narrow-based security index, 
                                including any interest therein 
                                or on the value thereof;
                                    ``(II) a single security or 
                                loan, including any interest 
                                therein or on the value 
                                thereof; or
                                    ``(III) the occurrence, 
                                nonoccurrence, or extent of the 
                                occurrence of an event relating 
                                to a single issuer of a 
                                security or the issuers of 
                                securities in a narrow-based 
                                security index, provided that 
                                such event directly affects the 
                                financial statements, financial 
                                condition, or financial 
                                obligations of the issuer.
                    ``(B) Rule of construction regarding master 
                agreements.--The term `security-based swap' 
                shall be construed to include a master 
                agreement that provides for an agreement, 
                contract, or transaction that is a security-
                based swap pursuant to subparagraph (A), 
                together with all supplements to any such 
                master agreement, without regard to whether the 
                master agreement contains an agreement, 
                contract, or transaction that is not a 
                security-based swap pursuant to subparagraph 
                (A), except that the master agreement shall be 
                considered to be a security-based swap only 
                with respect to each agreement, contract, or 
                transaction under the master agreement that is 
                a security-based swap pursuant to subparagraph 
                (A).
                    ``(C) Exclusions.--The term `security-based 
                swap' does not include any agreement, contract, 
                or transaction that meets the definition of a 
                security-based swap only because such 
                agreement, contract, or transaction references, 
                is based upon, or settles through the transfer, 
                delivery, or receipt of an exempted security 
                under paragraph (12), as in effect on the date 
                of enactment of the Futures Trading Act of 1982 
                (other than any municipal security as defined 
                in paragraph (29) as in effect on the date of 
                enactment of the Futures Trading Act of 1982), 
                unless such agreement, contract, or transaction 
                is of the character of, or is commonly known in 
                the trade as, a put, call, or other option.
                    ``(D) Mixed swap.--The term `security-based 
                swap' includes any agreement, contract, or 
                transaction that is as described in 
                subparagraph (A) and also is based on the value 
                of 1 or more interest or other rates, 
                currencies, commodities, instruments of 
                indebtedness, indices, quantitative measures, 
                other financial or economic interest or 
                property of any kind (other than a single 
                security or a narrow-based security index), or 
                the occurrence, non-occurrence, or the extent 
                of the occurrence of an event or contingency 
                associated with a potential financial, 
                economic, or commercial consequence (other than 
                an event described in subparagraph 
                (A)(ii)(III)).
                    ``(E) Rule of construction regarding use of 
                the term index.--The term `index' means an 
                index or group of securities, including any 
                interest therein or based on the value thereof.
            ``(69) Swap.--The term `swap' has the same meaning 
        as in section 1a of the Commodity Exchange Act (7 
        U.S.C. 1a).
            ``(70) Person associated with a security-based swap 
        dealer or major security-based swap participant.--
                    ``(A) In general.--The term `person 
                associated with a security-based swap dealer or 
                major security-based swap participant' or 
                `associated person of a security-based swap 
                dealer or major security-based swap 
                participant' means--
                            ``(i) any partner, officer, 
                        director, or branch manager of such 
                        security-based swap dealer or major 
                        security-based swap participant (or any 
                        person occupying a similar status or 
                        performing similar functions);
                            ``(ii) any person directly or 
                        indirectly controlling, controlled by, 
                        or under common control with such 
                        security-based swap dealer or major 
                        security-based swap participant; or
                            ``(iii) any employee of such 
                        security-based swap dealer or major 
                        security-based swap participant.
                    ``(B) Exclusion.--Other than for purposes 
                of section 15F(l)(2), the term `person 
                associated with a security-based swap dealer or 
                major security-based swap participant' or 
                `associated person of a security-based swap 
                dealer or major security-based swap 
                participant' does not include any person 
                associated with a security-based swap dealer or 
                major security-based swap participant whose 
                functions are solely clerical or ministerial.
            ``(71) Security-based swap dealer.--
                    ``(A) In general.--The term `security-based 
                swap dealer' means any person who--
                            ``(i) holds themself out as a 
                        dealer in security-based swaps;
                            ``(ii) makes a market in security-
                        based swaps;
                            ``(iii) regularly enters into 
                        security-based swaps with 
                        counterparties as an ordinary course of 
                        business for its own account; or
                            ``(iv) engages in any activity 
                        causing it to be commonly known in the 
                        trade as a dealer or market maker in 
                        security-based swaps.
                    ``(B) Designation by type or class.--A 
                person may be designated as a security-based 
                swap dealer for a single type or single class 
                or category of security-based swap or 
                activities and considered not to be a security-
                based swap dealer for other types, classes, or 
                categories of security-based swaps or 
                activities.
                    ``(C) Exception.--The term `security-based 
                swap dealer' does not include a person that 
                enters into security-based swaps for such 
                person's own account, either individually or in 
                a fiduciary capacity, but not as a part of 
                regular business.
                    ``(D) De minimis exception.--The Commission 
                shall exempt from designation as a security-
                based swap dealer an entity that engages in a 
                de minimis quantity of security-based swap 
                dealing in connection with transactions with or 
                on behalf of its customers. The Commission 
                shall promulgate regulations to establish 
                factors with respect to the making of any 
                determination to exempt.
            ``(72) Appropriate federal banking agency.--The 
        term `appropriate Federal banking agency' has the same 
        meaning as in section 3(q) of the Federal Deposit 
        Insurance Act (12 U.S.C. 1813(q)).
            ``(73) Board.--The term `Board' means the Board of 
        Governors of the Federal Reserve System.
            ``(74) Prudential regulator.--The term `prudential 
        regulator' has the same meaning as in section 1a of the 
        Commodity Exchange Act (7 U.S.C. 1a).
            ``(75) Security-based swap data repository.--The 
        term `security-based swap data repository' means any 
        person that collects and maintains information or 
        records with respect to transactions or positions in, 
        or the terms and conditions of, security-based swaps 
        entered into by third parties for the purpose of 
        providing a centralized recordkeeping facility for 
        security-based swaps.
            ``(76) Swap dealer.--The term `swap dealer' has the 
        same meaning as in section 1a of the Commodity Exchange 
        Act (7 U.S.C. 1a).
            ``(77) Security-based swap execution facility.--The 
        term `security-based swap execution facility' means a 
        trading system or platform in which multiple 
        participants have the ability to execute or trade 
        security-based swaps by accepting bids and offers made 
        by multiple participants in the facility or system, 
        through any means of interstate commerce, including any 
        trading facility, that--
                    ``(A) facilitates the execution of 
                security-based swaps between persons; and
                    ``(B) is not a national securities 
                exchange.
            ``(78) Security-based swap agreement.--
                    ``(A) In general.--For purposes of sections 
                9, 10, 16, 20, and 21A of this Act, and section 
                17 of the Securities Act of 1933 (15 U.S.C. 
                77q), the term `security-based swap agreement' 
                means a swap agreement as defined in section 
                206A of the Gramm-Leach-Bliley Act (15 U.S.C. 
                78c note) of which a material term is based on 
                the price, yield, value, or volatility of any 
                security or any group or index of securities, 
                or any interest therein.
                    ``(B) Exclusions.--The term `security-based 
                swap agreement' does not include any security-
                based swap.''.
    (b) Authority To Further Define Terms.--The Securities and 
Exchange Commission may, by rule, further define--
            (1) the term ``commercial risk'';
            (2) any other term included in an amendment to the 
        Securities Exchange Act of 1934 (15 U.S.C. 78c(a)) made 
        by this subtitle; and
            (3) the terms ``security-based swap'', ``security-
        based swap dealer'', ``major security-based swap 
        participant'', and ``eligible contract participant'', 
        with regard to security-based swaps (as such terms are 
        defined in the amendments made by subsection (a)) for 
        the purpose of including transactions and entities that 
        have been structured to evade this subtitle or the 
        amendments made by this subtitle.

SEC. 762. REPEAL OF PROHIBITION ON REGULATION OF SECURITY-BASED SWAP 
                    AGREEMENTS.

    (a) Repeal.--Sections 206B and 206C of the Gramm-Leach-
Bliley Act (Public Law 106-102; 15 U.S.C. 78c note) are 
repealed.
    (b) Conforming Amendments to Gramm-Leach-Bliley.--Section 
206A(a) of the Gramm-Leach-Bliley Act (15 U.S.C. 78c note) is 
amended in the material preceding paragraph (1), by striking 
``Except as'' and all that follows through ``that--'' and 
inserting the following: ``Except as provided in subsection 
(b), as used in this section, the term `swap agreement' means 
any agreement, contract, or transaction 
that--''.
    (c) Conforming Amendments to the Securities Act of 1933.--
            (1) Section 2A of the Securities Act of 1933 (15 
        U.S.C. 77b-1) is amended--
                    (A) by striking subsection (a) and 
                reserving that subsection; and
                    (B) by striking ``(as defined in section 
                206B of the Gramm-Leach-Bliley Act)'' each 
                place that such term appears and inserting 
                ``(as defined in section 3(a)(78) of the 
                Securities Exchange Act of 1934)''.
            (2) Section 17 of the Securities Act of 1933 (15 
        U.S.C. 77q) is amended--
                    (A) in subsection (a)--
                            (i) by inserting ``(including 
                        security-based swaps)'' after 
                        ``securities''; and
                            (ii) by striking ``(as defined in 
                        section 206B of the Gramm-Leach-Bliley 
                        Act)'' and inserting ``(as defined in 
                        section 3(a)(78) of the Securities 
                        Exchange Act)''; and
                    (B) in subsection (d), by striking ``206B 
                of the Gramm-Leach-Bliley Act'' and inserting 
                ``3(a)(78) of the Securities Exchange Act of 
                1934''.
    (d) Conforming Amendments to the Securities Exchange Act of 
1934.--The Securities Exchange Act of 1934 (15 U.S.C. 78a et 
seq.) is amended--
            (1) in section 3A (15 U.S.C. 78c-1)--
                    (A) by striking subsection (a) and 
                reserving that subsection; and
                    (B) by striking ``(as defined in section 
                206B of the Gramm-Leach-Bliley Act)'' each 
                place that the term appears;
            (2) in section 9 (15 U.S.C. 78i)--
                    (A) in subsection (a), by striking 
                paragraphs (2) through (5) and inserting the 
                following:
    ``(2) To effect, alone or with 1 or more other persons, a 
series of transactions in any security registered on a national 
securities exchange, any security not so registered, or in 
connection with any security-based swap or security-based swap 
agreement with respect to such security creating actual or 
apparent active trading in such security, or raising or 
depressing the price of such security, for the purpose of 
inducing the purchase or sale of such security by others.
    ``(3) If a dealer, broker, security-based swap dealer, 
major security-based swap participant, or other person selling 
or offering for sale or purchasing or offering to purchase the 
security, a security-based swap, or a security-based swap 
agreement with respect to such security, to induce the purchase 
or sale of any security registered on a national securities 
exchange, any security not so registered, any security-based 
swap, or any security-based swap agreement with respect to such 
security by the circulation or dissemination in the ordinary 
course of business of information to the effect that the price 
of any such security will or is likely to rise or fall because 
of market operations of any 1 or more persons conducted for the 
purpose of raising or depressing the price of such security.
    ``(4) If a dealer, broker, security-based swap dealer, 
major security-based swap participant, or other person selling 
or offering for sale or purchasing or offering to purchase the 
security, a security-based swap, or security-based swap 
agreement with respect to such security, to make, regarding any 
security registered on a national securities exchange, any 
security not so registered, any security-based swap, or any 
security-based swap agreement with respect to such security, 
for the purpose of inducing the purchase or sale of such 
security, such security-based swap, or such security-based swap 
agreement any statement which was at the time and in the light 
of the circumstances under which it was made, false or 
misleading with respect to any material fact, and which that 
person knew or had reasonable ground to believe was so false or 
misleading.
    ``(5) For a consideration, received directly or indirectly 
from a broker, dealer, security-based swap dealer, major 
security-based swap participant, or other person selling or 
offering for sale or purchasing or offering to purchase the 
security, a security-based swap, or security-based swap 
agreement with respect to such security, to induce the purchase 
of any security registered on a national securities exchange, 
any security not so registered, any security-based swap, or any 
security-based swap agreement with respect to such security by 
the circulation or dissemination of information to the effect 
that the price of any such security will or is likely to rise 
or fall because of the market operations of any 1 or more 
persons conducted for the purpose of raising or depressing the 
price of such security.''; and
                    (B) in subsection (i), by striking ``(as 
                defined in section 206B of the Gramm-Leach-
                Bliley Act)'';
            (3) in section 10 (15 U.S.C. 78j)--
                    (A) in subsection (b), by striking ``(as 
                defined in section 206B of the Gramm-Leach-
                Bliley Act),'' each place that term appears; 
                and
                    (B) in the matter following subsection (b), 
                by striking ``(as defined in section 206B of 
                the Gramm-Leach-Bliley Act), in each place that 
                such terms appear'';
            (4) in section 15 (15 U.S.C. 78o)--
                    (A) in subsection (c)(1)(A), by striking 
                ``(as defined in section 206B of the Gramm-
                Leach-Bliley Act),'';
                    (B) in subparagraphs (B) and (C) of 
                subsection (c)(1), by striking ``(as defined in 
                section 206B of the Gramm-Leach-Bliley Act)'' 
                each place that term appears;
                    (C) by redesignating subsection (i), as 
                added by section 303(f) of the Commodity 
                Futures Modernization Act of 2000 (Public Law 
                106-554; 114 Stat. 2763A-455), as subsection 
                (j); and
                    (D) in subsection (j), as redesignated by 
                subparagraph (C), by striking ``(as defined in 
                section 206B of the Gramm-Leach-Bliley Act)'';
            (5) in section 16 (15 U.S.C. 78p)--
                    (A) in subsection (a)(2)(C), by striking 
                ``(as defined in section 206(b) of the Gramm-
                Leach-Bliley Act (15 U.S.C. 78c note))'';
                    (B) in subsection (a)(3)(B), by inserting 
                ``or security-based swaps'' after ``security-
                based swap agreement'';
                    (C) in the first sentence of subsection 
                (b), by striking ``(as defined in section 206B 
                of the Gramm-Leach-Bliley Act)'';
                    (D) in the third sentence of subsection 
                (b), by striking ``(as defined in section 206B 
                of the Gramm-Leach Bliley Act)'' and inserting 
                ``or a security-based swap''; and
                    (E) in subsection (g), by striking ``(as 
                defined in section 206B of the Gramm-Leach-
                Bliley Act)'';
            (6) in section 20 (15 U.S.C. 78t),
                    (A) in subsection (d), by striking ``(as 
                defined in section 206B of the Gramm-Leach-
                Bliley Act)''; and
                    (B) in subsection (f), by striking ``(as 
                defined in section 206B of the Gramm-Leach-
                Bliley Act)''; and
            (7) in section 21A (15 U.S.C. 78u-1)--
                    (A) in subsection (a)(1), by striking ``(as 
                defined in section 206B of the Gramm-Leach-
                Bliley Act)''; and
                    (B) in subsection (g), by striking ``(as 
                defined in section 206B of the Gramm-Leach-
                Bliley Act)''.

SEC. 763. AMENDMENTS TO THE SECURITIES EXCHANGE ACT OF 1934.

    (a) Clearing for Security-based Swaps.--The Securities 
Exchange Act of 1934 (15 U.S.C. 78a et seq.) is amended by 
inserting after section 3B (as added by section 717 of this 
Act):

``SEC. 3C. CLEARING FOR SECURITY-BASED SWAPS.

    ``(a) In General.--
            ``(1) Standard for clearing.--It shall be unlawful 
        for any person to engage in a security-based swap 
        unless that person submits such security-based swap for 
        clearing to a clearing agency that is registered under 
        this Act or a clearing agency that is exempt from 
        registration under this Act if the security-based swap 
        is required to be cleared.
            ``(2) Open access.--The rules of a clearing agency 
        described in paragraph (1) shall--
                    ``(A) prescribe that all security-based 
                swaps submitted to the clearing agency with the 
                same terms and conditions are economically 
                equivalent within the clearing agency and may 
                be offset with each other within the clearing 
                agency; and
                    ``(B) provide for non-discriminatory 
                clearing of a security-based swap executed 
                bilaterally or on or through the rules of an 
                unaffiliated national securities exchange or 
                security-based swap execution facility.
    ``(b) Commission Review.--
            ``(1) Commission-initiated review.--
                    ``(A) The Commission on an ongoing basis 
                shall review each security-based swap, or any 
                group, category, type, or class of security-
                based swaps to make a determination that such 
                security-based swap, or group, category, type, 
                or class of security-based swaps should be 
                required to be cleared.
                    ``(B) The Commission shall provide at least 
                a 30-day public comment period regarding any 
                determination under subparagraph (A).
            ``(2) Swap submissions.--
                    ``(A) A clearing agency shall submit to the 
                Commission each security-based swap, or any 
                group, category, type, or class of security-
                based swaps that it plans to accept for 
                clearing and provide notice to its members (in 
                a manner to be determined by the Commission) of 
                such submission.
                    ``(B) Any security-based swap or group, 
                category, type, or class of security-based 
                swaps listed for clearing by a clearing agency 
                as of the date of enactment of this subsection 
                shall be considered submitted to the 
                Commission.
                    ``(C) The Commission shall--
                            ``(i) make available to the public 
                        any submission received under 
                        subparagraphs (A) and (B);
                            ``(ii) review each submission made 
                        under subparagraphs (A) and (B), and 
                        determine whether the security-based 
                        swap, or group, category, type, or 
                        class of security-based swaps, 
                        described in the submission is required 
                        to be cleared; and
                            ``(iii) provide at least a 30-day 
                        public comment period regarding its 
                        determination whether the clearing 
                        requirement under subsection (a)(1) 
                        shall apply to the submission.
            ``(3) Deadline.--The Commission shall make its 
        determination under paragraph (2)(C) not later than 90 
        days after receiving a submission made under paragraphs 
        (2)(A) and (2)(B), unless the submitting clearing 
        agency agrees to an extension for the time limitation 
        established under this paragraph.
            ``(4) Determination.--
                    ``(A) In reviewing a submission made under 
                paragraph (2), the Commission shall review 
                whether the submission is consistent with 
                section 17A.
                    ``(B) In reviewing a security-based swap, 
                group of security-based swaps or class of 
                security-based swaps pursuant to paragraph (1) 
                or a submission made under paragraph (2), the 
                Commission shall take into account the 
                following factors:
                            ``(i) The existence of significant 
                        outstanding notional exposures, trading 
                        liquidity and adequate pricing data.
                            ``(ii) The availability of rule 
                        framework, capacity, operational 
                        expertise and resources, and credit 
                        support infrastructure to clear the 
                        contract on terms that are consistent 
                        with the material terms and trading 
                        conventions on which the contract is 
                        then traded.
                            ``(iii) The effect on the 
                        mitigation of systemic risk, taking 
                        into account the size of the market for 
                        such contract and the resources of the 
                        clearing agency available to clear the 
                        contract.
                            ``(iv) The effect on competition, 
                        including appropriate fees and charges 
                        applied to clearing.
                            ``(v) The existence of reasonable 
                        legal certainty in the event of the 
                        insolvency of the relevant clearing 
                        agency or 1 or more of its clearing 
                        members with regard to the treatment of 
                        customer and security-based swap 
                        counterparty positions, funds, and 
                        property.
                    ``(C) In making a determination under 
                subsection (b)(1) or paragraph (2)(C) that the 
                clearing requirement shall apply, the 
                Commission may require such terms and 
                conditions to the requirement as the Commission 
                determines to be appropriate.
            ``(5) Rules.--Not later than 1 year after the date 
        of the enactment of this section, the Commission shall 
        adopt rules for a clearing agency's submission for 
        review, pursuant to this subsection, of a security-
        based swap, or a group, category, type, or class of 
        security-based swaps, that it seeks to accept for 
        clearing. Nothing in this paragraph limits the 
        Commission from making a determination under paragraph 
        (2)(C) for security-based swaps described in paragraph 
        (2)(B).
    ``(c) Stay of Clearing Requirement.--
            ``(1) In general.--After making a determination 
        pursuant to subsection (b)(2), the Commission, on 
        application of a counterparty to a security-based swap 
        or on its own initiative, may stay the clearing 
        requirement of subsection (a)(1) until the Commission 
        completes a review of the terms of the security-based 
        swap (or the group, category, type, or class of 
        security-based swaps) and the clearing arrangement.
            ``(2) Deadline.--The Commission shall complete a 
        review undertaken pursuant to paragraph (1) not later 
        than 90 days after issuance of the stay, unless the 
        clearing agency that clears the security-based swap, or 
        group, category, type, or class of security-based 
        swaps, agrees to an extension of the time limitation 
        established under this paragraph.
            ``(3) Determination.--Upon completion of the review 
        undertaken pursuant to paragraph (1), the Commission 
        may--
                    ``(A) determine, unconditionally or subject 
                to such terms and conditions as the Commission 
                determines to be appropriate, that the 
                security-based swap, or group, category, type, 
                or class of security-based swaps, must be 
                cleared pursuant to this subsection if it finds 
                that such clearing is consistent with 
                subsection (b)(4); or
                    ``(B) determine that the clearing 
                requirement of subsection (a)(1) shall not 
                apply to the security-based swap, or group, 
                category, type, or class of security-based 
                swaps.
            ``(4) Rules.--Not later than 1 year after the date 
        of the enactment of this section, the Commission shall 
        adopt rules for reviewing, pursuant to this subsection, 
        a clearing agency's clearing of a security-based swap, 
        or a group, category, type, or class of security-based 
        swaps, that it has accepted for clearing.
    ``(d) Prevention of Evasion.--
            ``(1) In general.--The Commission shall prescribe 
        rules under this section (and issue interpretations of 
        rules prescribed under this section), as determined by 
        the Commission to be necessary to prevent evasions of 
        the mandatory clearing requirements under this Act.
            ``(2) Duty of commission to investigate and take 
        certain actions.--To the extent the Commission finds 
        that a particular security-based swap or any group, 
        category, type, or class of security-based swaps that 
        would otherwise be subject to mandatory clearing but no 
        clearing agency has listed the security-based swap or 
        the group, category, type, or class of security-based 
        swaps for clearing, the Commission shall--
                    ``(A) investigate the relevant facts and 
                circumstances;
                    ``(B) within 30 days issue a public report 
                containing the results of the investigation; 
                and
                    ``(C) take such actions as the Commission 
                determines to be necessary and in the public 
                interest, which may include requiring the 
                retaining of adequate margin or capital by 
                parties to the security-based swap or the 
                group, category, type, or class of security-
                based swaps.
            ``(3) Effect on authority.--Nothing in this 
        subsection--
                    ``(A) authorizes the Commission to adopt 
                rules requiring a clearing agency to list for 
                clearing a security-based swap or any group, 
                category, type, or class of security-based 
                swaps if the clearing of the security-based 
                swap or the group, category, type, or class of 
                security-based swaps would threaten the 
                financial integrity of the clearing agency; and
                    ``(B) affects the authority of the 
                Commission to enforce the open access 
                provisions of subsection (a)(2) with respect to 
                a security-based swap or the group, category, 
                type, or class of security-based swaps that is 
                listed for clearing by a clearing agency.
    ``(e) Reporting Transition Rules.--Rules adopted by the 
Commission under this section shall provide for the reporting 
of data, as follows:
            ``(1) Security-based swaps entered into before the 
        date of the enactment of this section shall be reported 
        to a registered security-based swap data repository or 
        the Commission no later than 180 days after the 
        effective date of this section.
            ``(2) Security-based swaps entered into on or after 
        such date of enactment shall be reported to a 
        registered security-based swap data repository or the 
        Commission no later than the later of--
                    ``(A) 90 days after such effective date; or
                    ``(B) such other time after entering into 
                the security-based swap as the Commission may 
                prescribe by rule or regulation.
    ``(f) Clearing Transition Rules.--
            ``(1) Security-based swaps entered into before the 
        date of the enactment of this section are exempt from 
        the clearing requirements of this subsection if 
        reported pursuant to subsection (e)(1).
            ``(2) Security-based swaps entered into before 
        application of the clearing requirement pursuant to 
        this section are exempt from the clearing requirements 
        of this section if reported pursuant to subsection 
        (e)(2).
    ``(g) Exceptions.--
            ``(1) In general.--The requirements of subsection 
        (a)(1) shall not apply to a security-based swap if 1 of 
        the counterparties to the security-based swap--
                    ``(A) is not a financial entity;
                    ``(B) is using security-based swaps to 
                hedge or mitigate commercial risk; and
                    ``(C) notifies the Commission, in a manner 
                set forth by the Commission, how it generally 
                meets its financial obligations associated with 
                entering into non-cleared security-based swaps.
            ``(2) Option to clear.--The application of the 
        clearing exception in paragraph (1) is solely at the 
        discretion of the counterparty to the security-based 
        swap that meets the conditions of subparagraphs (A) 
        through (C) of paragraph (1).
            ``(3) Financial entity definition.--
                    ``(A) In general.--For the purposes of this 
                subsection, the term `financial entity' means--
                            ``(i) a swap dealer;
                            ``(ii) a security-based swap 
                        dealer;
                            ``(iii) a major swap participant;
                            ``(iv) a major security-based swap 
                        participant;
                            ``(v) a commodity pool as defined 
                        in section 1a(10) of the Commodity 
                        Exchange Act;
                            ``(vi) a private fund as defined in 
                        section 202(a) of the Investment 
                        Advisers Act of 1940 (15 U.S.C. 80-b-
                        2(a));
                            ``(vii) an employee benefit plan as 
                        defined in paragraphs (3) and (32) of 
                        section 3 of the Employee Retirement 
                        Income Security Act of 1974 (29 U.S.C. 
                        1002);
                            ``(viii) a person predominantly 
                        engaged in activities that are in the 
                        business of banking or financial in 
                        nature, as defined in section 4(k) of 
                        the Bank Holding Company Act of 1956.
                    ``(B) Exclusion.--The Commission shall 
                consider whether to exempt small banks, savings 
                associations, farm credit system institutions, 
                and credit unions, including--
                            ``(i) depository institutions with 
                        total assets of $10,000,000,000 or 
                        less;
                            ``(ii) farm credit system 
                        institutions with total assets of 
                        $10,000,000,000 or less; or
                            ``(iii) credit unions with total 
                        assets of $10,000,000,000 or less.
            ``(4) Treatment of affiliates.--
                    ``(A) In general.--An affiliate of a person 
                that qualifies for an exception under this 
                subsection (including affiliate entities 
                predominantly engaged in providing financing 
                for the purchase of the merchandise or 
                manufactured goods of the person) may qualify 
                for the exception only if the affiliate, acting 
                on behalf of the person and as an agent, uses 
                the security-based swap to hedge or mitigate 
                the commercial risk of the person or other 
                affiliate of the person that is not a financial 
                entity.
                    ``(B) Prohibition relating to certain 
                affiliates.--The exception in subparagraph (A) 
                shall not apply if the affiliate is--
                            ``(i) a swap dealer;
                            ``(ii) a security-based swap 
                        dealer;
                            ``(iii) a major swap participant;
                            ``(iv) a major security-based swap 
                        participant;
                            ``(v) an issuer that would be an 
                        investment company, as defined in 
                        section 3 of the Investment Company Act 
                        of 1940 (15 U.S.C. 80a-3), but for 
                        paragraph (1) or (7) of subsection (c) 
                        of that Act (15 U.S.C. 80a-3(c));
                            ``(vi) a commodity pool; or
                            ``(vii) a bank holding company with 
                        over $50,000,000,000 in consolidated 
                        assets.
                    ``(C) Transition rule for affiliates.--An 
                affiliate, subsidiary, or a wholly owned entity 
                of a person that qualifies for an exception 
                under subparagraph (A) and is predominantly 
                engaged in providing financing for the purchase 
                or lease of merchandise or manufactured goods 
                of the person shall be exempt from the margin 
                requirement described in section 15F(e) and the 
                clearing requirement described in subsection 
                (a) with regard to security-based swaps entered 
                into to mitigate the risk of the financing 
                activities for not less than a 2-year period 
                beginning on the date of enactment of this 
                subparagraph.
            ``(5) Election of counterparty.--
                    ``(A) Security-based swaps required to be 
                cleared.--With respect to any security-based 
                swap that is subject to the mandatory clearing 
                requirement under subsection (a) and entered 
                into by a security-based swap dealer or a major 
                security-based swap participant with a 
                counterparty that is not a swap dealer, major 
                swap participant, security-based swap dealer, 
                or major security-based swap participant, the 
                counterparty shall have the sole right to 
                select the clearing agency at which the 
                security-based swap will be cleared.
                    ``(B) Security-based swaps not required to 
                be cleared.--With respect to any security-based 
                swap that is not subject to the mandatory 
                clearing requirement under subsection (a) and 
                entered into by a security-based swap dealer or 
                a major security-based swap participant with a 
                counterparty that is not a swap dealer, major 
                swap participant, security-based swap dealer, 
                or major security-based swap participant, the 
                counterparty--
                            ``(i) may elect to require clearing 
                        of the security-based swap; and
                            ``(ii) shall have the sole right to 
                        select the clearing agency at which the 
                        security-based swap will be cleared.
            ``(6) Abuse of exception.--The Commission may 
        prescribe such rules or issue interpretations of the 
        rules as the Commission determines to be necessary to 
        prevent abuse of the exceptions described in this 
        subsection. The Commission may also request information 
        from those persons claiming the clearing exception as 
        necessary to prevent abuse of the exceptions described 
        in this subsection.
    ``(h) Trade Execution.--
            ``(1) In general.--With respect to transactions 
        involving security-based swaps subject to the clearing 
        requirement of subsection (a)(1), counterparties 
        shall--
                    ``(A) execute the transaction on an 
                exchange; or
                    ``(B) execute the transaction on a 
                security-based swap execution facility 
                registered under section 3D or a security-based 
                swap execution facility that is exempt from 
                registration under section 3D(e).
            ``(2) Exception.--The requirements of subparagraphs 
        (A) and (B) of paragraph (1) shall not apply if no 
        exchange or security-based swap execution facility 
        makes the security-based swap available to trade or for 
        security-based swap transactions subject to the 
        clearing exception under subsection (g).
    ``(i) Board Approval.--Exemptions from the requirements of 
this section to clear a security-based swap or execute a 
security-based swap through a national securities exchange or 
security-based swap execution facility shall be available to a 
counterparty that is an issuer of securities that are 
registered under section 12 or that is required to file reports 
pursuant to section 15(d), only if an appropriate committee of 
the issuer's board or governing body has reviewed and approved 
the issuer's decision to enter into security-based swaps that 
are subject to such exemptions.
    ``(j) Designation of Chief Compliance Officer.--
            ``(1) In general.--Each registered clearing agency 
        shall designate an individual to serve as a chief 
        compliance officer.
            ``(2) Duties.--The chief compliance officer shall--
                    ``(A) report directly to the board or to 
                the senior officer of the clearing agency;
                    ``(B) in consultation with its board, a 
                body performing a function similar thereto, or 
                the senior officer of the registered clearing 
                agency, resolve any conflicts of interest that 
                may arise;
                    ``(C) be responsible for administering each 
                policy and procedure that is required to be 
                established pursuant to this section;
                    ``(D) ensure compliance with this title 
                (including regulations issued under this title) 
                relating to agreements, contracts, or 
                transactions, including each rule prescribed by 
                the Commission under this section;
                    ``(E) establish procedures for the 
                remediation of noncompliance issues identified 
                by the compliance officer through any--
                            ``(i) compliance office review;
                            ``(ii) look-back;
                            ``(iii) internal or external audit 
                        finding;
                            ``(iv) self-reported error; or
                            ``(v) validated complaint; and
                    ``(F) establish and follow appropriate 
                procedures for the handling, management 
                response, remediation, retesting, and closing 
                of noncompliance issues.
            ``(3) Annual reports.--
                    ``(A) In general.--In accordance with rules 
                prescribed by the Commission, the chief 
                compliance officer shall annually prepare and 
                sign a report that contains a description of--
                            ``(i) the compliance of the 
                        registered clearing agency or security-
                        based swap execution facility of the 
                        compliance officer with respect to this 
                        title (including regulations under this 
                        title); and
                            ``(ii) each policy and procedure of 
                        the registered clearing agency of the 
                        compliance officer (including the code 
                        of ethics and conflict of interest 
                        policies of the registered clearing 
                        agency).
                    ``(B) Requirements.--A compliance report 
                under subparagraph (A) shall--
                            ``(i) accompany each appropriate 
                        financial report of the registered 
                        clearing agency that is required to be 
                        furnished to the Commission pursuant to 
                        this section; and
                            ``(ii) include a certification 
                        that, under penalty of law, the 
                        compliance report is accurate and 
                        complete.''.
    (b) Clearing Agency Requirements.--Section 17A of the 
Securities Exchange Act of 1934 (15 U.S.C. 78q-1) is amended by 
adding at the end the following:
    ``(g) Registration Requirement.--It shall be unlawful for a 
clearing agency, unless registered with the Commission, 
directly or indirectly to make use of the mails or any means or 
instrumentality of interstate commerce to perform the functions 
of a clearing agency with respect to a security-based swap.
    ``(h) Voluntary Registration.--A person that clears 
agreements, contracts, or transactions that are not required to 
be cleared under this title may register with the Commission as 
a clearing agency.
    ``(i) Standards for Clearing Agencies Clearing Security-
based Swap Transactions.--To be registered and to maintain 
registration as a clearing agency that clears security-based 
swap transactions, a clearing agency shall comply with such 
standards as the Commission may establish by rule. In 
establishing any such standards, and in the exercise of its 
oversight of such a clearing agency pursuant to this title, the 
Commission may conform such standards or oversight to reflect 
evolving United States and international standards. Except 
where the Commission determines otherwise by rule or 
regulation, a clearing agency shall have reasonable discretion 
in establishing the manner in which it complies with any such 
standards.
    ``(j) Rules.--The Commission shall adopt rules governing 
persons that are registered as clearing agencies for security-
based swaps under this title.
    ``(k) Exemptions.--The Commission may exempt, conditionally 
or unconditionally, a clearing agency from registration under 
this section for the clearing of security-based swaps if the 
Commission determines that the clearing agency is subject to 
comparable, comprehensive supervision and regulation by the 
Commodity Futures Trading Commission or the appropriate 
government authorities in the home country of the agency. Such 
conditions may include, but are not limited to, requiring that 
the clearing agency be available for inspection by the 
Commission and make available all information requested by the 
Commission.
    ``(l) Existing Depository Institutions and Derivative 
Clearing Organizations.--
            ``(1) In general.--A depository institution or 
        derivative clearing organization registered with the 
        Commodity Futures Trading Commission under the 
        Commodity Exchange Act that is required to be 
        registered as a clearing agency under this section is 
        deemed to be registered under this section solely for 
        the purpose of clearing security-based swaps to the 
        extent that, before the date of enactment of this 
        subsection--
                    ``(A) the depository institution cleared 
                swaps as a multilateral clearing organization; 
                or
                    ``(B) the derivative clearing organization 
                cleared swaps pursuant to an exemption from 
                registration as a clearing agency.
            ``(2) Conversion of depository institutions.--A 
        depository institution to which this subsection applies 
        may, by the vote of the shareholders owning not less 
        than 51 percent of the voting interests of the 
        depository institution, be converted into a State 
        corporation, partnership, limited liability company, or 
        similar legal form pursuant to a plan of conversion, if 
        the conversion is not in contravention of applicable 
        State law.
            ``(3) Sharing of information.--The Commodity 
        Futures Trading Commission shall make available to the 
        Commission, upon request, all information determined to 
        be relevant by the Commodity Futures Trading Commission 
        regarding a derivatives clearing organization deemed to 
        be registered with the Commission under paragraph (1).
    ``(m) Modification of Core Principles.--The Commission may 
conform the core principles established in this section to 
reflect evolving United States and international standards.''.
    (c) Security-based Swap Execution Facilities.--The 
Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.) is 
amended by inserting after section 3C (as added by subsection 
(a) of this section) the following:

``SEC. 3D. SECURITY-BASED SWAP EXECUTION FACILITIES.

    ``(a) Registration.--
            ``(1) In general.--No person may operate a facility 
        for the trading or processing of security-based swaps, 
        unless the facility is registered as a security-based 
        swap execution facility or as a national securities 
        exchange under this section.
            ``(2) Dual registration.--Any person that is 
        registered as a security-based swap execution facility 
        under this section shall register with the Commission 
        regardless of whether the person also is registered 
        with the Commodity Futures Trading Commission as a swap 
        execution facility.
    ``(b) Trading and Trade Processing.--A security-based swap 
execution facility that is registered under subsection (a) 
may--
            ``(1) make available for trading any security-based 
        swap; and
            ``(2) facilitate trade processing of any security-
        based swap.
    ``(c) Identification of Facility Used To Trade Security-
based Swaps by National Securities Exchanges.--A national 
securities exchange shall, to the extent that the exchange also 
operates a security-based swap execution facility and uses the 
same electronic trade execution system for listing and 
executing trades of security-based swaps on or through the 
exchange and the facility, identify whether electronic trading 
of such security-based swaps is taking place on or through the 
national securities exchange or the security-based swap 
execution facility.
    ``(d) Core Principles for Security-based Swap Execution 
Facilities.--
            ``(1) Compliance with core principles.--
                    ``(A) In general.--To be registered, and 
                maintain registration, as a security-based swap 
                execution facility, the security-based swap 
                execution facility shall comply with--
                            ``(i) the core principles described 
                        in this subsection; and
                            ``(ii) any requirement that the 
                        Commission may impose by rule or 
                        regulation.
                    ``(B) Reasonable discretion of security-
                based swap execution facility.--Unless 
                otherwise determined by the Commission, by rule 
                or regulation, a security-based swap execution 
                facility described in subparagraph (A) shall 
                have reasonable discretion in establishing the 
                manner in which it complies with the core 
                principles described in this subsection.
            ``(2) Compliance with rules.--A security-based swap 
        execution facility shall--
                    ``(A) establish and enforce compliance with 
                any rule established by such security-based 
                swap execution facility, including--
                            ``(i) the terms and conditions of 
                        the security-based swaps traded or 
                        processed on or through the facility; 
                        and
                            ``(ii) any limitation on access to 
                        the facility;
                    ``(B) establish and enforce trading, trade 
                processing, and participation rules that will 
                deter abuses and have the capacity to detect, 
                investigate, and enforce those rules, including 
                means--
                            ``(i) to provide market 
                        participants with impartial access to 
                        the market; and
                            ``(ii) to capture information that 
                        may be used in establishing whether 
                        rule violations have occurred; and
                    ``(C) establish rules governing the 
                operation of the facility, including rules 
                specifying trading procedures to be used in 
                entering and executing orders traded or posted 
                on the facility, including block trades.
            ``(3) Security-based swaps not readily susceptible 
        to manipulation.--The security-based swap execution 
        facility shall permit trading only in security-based 
        swaps that are not readily susceptible to manipulation.
            ``(4) Monitoring of trading and trade processing.--
        The security-based swap execution facility shall--
                    ``(A) establish and enforce rules or terms 
                and conditions defining, or specifications 
                detailing--
                            ``(i) trading procedures to be used 
                        in entering and executing orders traded 
                        on or through the facilities of the 
                        security-based swap execution facility; 
                        and
                            ``(ii) procedures for trade 
                        processing of security-based swaps on 
                        or through the facilities of the 
                        security-based swap execution facility; 
                        and
                    ``(B) monitor trading in security-based 
                swaps to prevent manipulation, price 
                distortion, and disruptions of the delivery or 
                cash settlement process through surveillance, 
                compliance, and disciplinary practices and 
                procedures, including methods for conducting 
                real-time monitoring of trading and 
                comprehensive and accurate trade 
                reconstructions.
            ``(5) Ability to obtain information.--The security-
        based swap execution facility shall--
                    ``(A) establish and enforce rules that will 
                allow the facility to obtain any necessary 
                information to perform any of the functions 
                described in this subsection;
                    ``(B) provide the information to the 
                Commission on request; and
                    ``(C) have the capacity to carry out such 
                international information-sharing agreements as 
                the Commission may require.
            ``(6) Financial integrity of transactions.--The 
        security-based swap execution facility shall establish 
        and enforce rules and procedures for ensuring the 
        financial integrity of security-based swaps entered on 
        or through the facilities of the security-based swap 
        execution facility, including the clearance and 
        settlement of security-based swaps pursuant to section 
        3C(a)(1).
            ``(7) Emergency authority.--The security-based swap 
        execution facility shall adopt rules to provide for the 
        exercise of emergency authority, in consultation or 
        cooperation with the Commission, as is necessary and 
        appropriate, including the authority to liquidate or 
        transfer open positions in any security-based swap or 
        to suspend or curtail trading in a security-based swap.
            ``(8) Timely publication of trading information.--
                    ``(A) In general.--The security-based swap 
                execution facility shall make public timely 
                information on price, trading volume, and other 
                trading data on security-based swaps to the 
                extent prescribed by the Commission.
                    ``(B) Capacity of security-based swap 
                execution facility.--The security-based swap 
                execution facility shall be required to have 
                the capacity to electronically capture and 
                transmit and disseminate trade information with 
                respect to transactions executed on or through 
                the facility.
            ``(9) Recordkeeping and reporting.--
                    ``(A) In general.--A security-based swap 
                execution facility shall--
                            ``(i) maintain records of all 
                        activities relating to the business of 
                        the facility, including a complete 
                        audit trail, in a form and manner 
                        acceptable to the Commission for a 
                        period of 5 years; and
                            ``(ii) report to the Commission, in 
                        a form and manner acceptable to the 
                        Commission, such information as the 
                        Commission determines to be necessary 
                        or appropriate for the Commission to 
                        perform the duties of the Commission 
                        under this title.
                    ``(B) Requirements.--The Commission shall 
                adopt data collection and reporting 
                requirements for security-based swap execution 
                facilities that are comparable to corresponding 
                requirements for clearing agencies and 
                security-based swap data repositories.
            ``(10) Antitrust considerations.--Unless necessary 
        or appropriate to achieve the purposes of this title, 
        the security-based swap execution facility shall not--
                    ``(A) adopt any rules or taking any actions 
                that result in any unreasonable restraint of 
                trade; or
                    ``(B) impose any material anticompetitive 
                burden on trading or clearing.
            ``(11) Conflicts of interest.--The security-based 
        swap execution facility shall--
                    ``(A) establish and enforce rules to 
                minimize conflicts of interest in its decision-
                making process; and
                    ``(B) establish a process for resolving the 
                conflicts of interest.
            ``(12) Financial resources.--
                    ``(A) In general.--The security-based swap 
                execution facility shall have adequate 
                financial, operational, and managerial 
                resources to discharge each responsibility of 
                the security-based swap execution facility, as 
                determined by the Commission.
                    ``(B) Determination of resource adequacy.--
                The financial resources of a security-based 
                swap execution facility shall be considered to 
                be adequate if the value of the financial 
                resources--
                            ``(i) enables the organization to 
                        meet its financial obligations to its 
                        members and participants 
                        notwithstanding a default by the member 
                        or participant creating the largest 
                        financial exposure for that 
                        organization in extreme but plausible 
                        market conditions; and
                            ``(ii) exceeds the total amount 
                        that would enable the security-based 
                        swap execution facility to cover the 
                        operating costs of the security-based 
                        swap execution facility for a 1-year 
                        period, as calculated on a rolling 
                        basis.
            ``(13) System safeguards.--The security-based swap 
        execution facility shall--
                    ``(A) establish and maintain a program of 
                risk analysis and oversight to identify and 
                minimize sources of operational risk, through 
                the development of appropriate controls and 
                procedures, and automated systems, that--
                            ``(i) are reliable and secure; and
                            ``(ii) have adequate scalable 
                        capacity;
                    ``(B) establish and maintain emergency 
                procedures, backup facilities, and a plan for 
                disaster recovery that allow for--
                            ``(i) the timely recovery and 
                        resumption of operations; and
                            ``(ii) the fulfillment of the 
                        responsibilities and obligations of the 
                        security-based swap execution facility; 
                        and
                    ``(C) periodically conduct tests to verify 
                that the backup resources of the security-based 
                swap execution facility are sufficient to 
                ensure continued--
                            ``(i) order processing and trade 
                        matching;
                            ``(ii) price reporting;
                            ``(iii) market surveillance; and
                            ``(iv) maintenance of a 
                        comprehensive and accurate audit trail.
            ``(14) Designation of chief compliance officer.--
                    ``(A) In general.--Each security-based swap 
                execution facility shall designate an 
                individual to serve as a chief compliance 
                officer.
                    ``(B) Duties.--The chief compliance officer 
                shall--
                            ``(i) report directly to the board 
                        or to the senior officer of the 
                        facility;
                            ``(ii) review compliance with the 
                        core principles in this subsection;
                            ``(iii) in consultation with the 
                        board of the facility, a body 
                        performing a function similar to that 
                        of a board, or the senior officer of 
                        the facility, resolve any conflicts of 
                        interest that may arise;
                            ``(iv) be responsible for 
                        establishing and administering the 
                        policies and procedures required to be 
                        established pursuant to this section;
                            ``(v) ensure compliance with this 
                        title and the rules and regulations 
                        issued under this title, including 
                        rules prescribed by the Commission 
                        pursuant to this section;
                            ``(vi) establish procedures for the 
                        remediation of noncompliance issues 
                        found during--
                                    ``(I) compliance office 
                                reviews;
                                    ``(II) look backs;
                                    ``(III) internal or 
                                external audit findings;
                                    ``(IV) self-reported 
                                errors; or
                                    ``(V) through validated 
                                complaints; and
                            ``(vii) establish and follow 
                        appropriate procedures for the 
                        handling, management response, 
                        remediation, retesting, and closing of 
                        noncompliance issues.
                    ``(C) Annual reports.--
                            ``(i) In general.--In accordance 
                        with rules prescribed by the 
                        Commission, the chief compliance 
                        officer shall annually prepare and sign 
                        a report that contains a description 
                        of--
                                    ``(I) the compliance of the 
                                security-based swap execution 
                                facility with this title; and
                                    ``(II) the policies and 
                                procedures, including the code 
                                of ethics and conflict of 
                                interest policies, of the 
                                security-based security-based 
                                swap execution facility.
                            ``(ii) Requirements.--The chief 
                        compliance officer shall--
                                    ``(I) submit each report 
                                described in clause (i) with 
                                the appropriate financial 
                                report of the security-based 
                                swap execution facility that is 
                                required to be submitted to the 
                                Commission pursuant to this 
                                section; and
                                    ``(II) include in the 
                                report a certification that, 
                                under penalty of law, the 
                                report is accurate and 
                                complete.
    ``(e) Exemptions.--The Commission may exempt, conditionally 
or unconditionally, a security-based swap execution facility 
from registration under this section if the Commission finds 
that the facility is subject to comparable, comprehensive 
supervision and regulation on a consolidated basis by the 
Commodity Futures Trading Commission.
    ``(f) Rules.--The Commission shall prescribe rules 
governing the regulation of security-based swap execution 
facilities under this section.''.
    (d) Segregation of Assets Held as Collateral in Security-
based Swap Transactions.--The Securities Exchange Act of 1934 
(15 U.S.C. 78a et seq.) is amended by inserting after section 
3D (as added by subsection (b)) the following:

``SEC. 3E. SEGREGATION OF ASSETS HELD AS COLLATERAL IN SECURITY-BASED 
                    SWAP TRANSACTIONS.

    ``(a) Registration Requirement.--It shall be unlawful for 
any person to accept any money, securities, or property (or to 
extend any credit in lieu of money, securities, or property) 
from, for, or on behalf of a security-based swaps customer to 
margin, guarantee, or secure a security-based swap cleared by 
or through a clearing agency (including money, securities, or 
property accruing to the customer as the result of such a 
security-based swap), unless the person shall have registered 
under this title with the Commission as a broker, dealer, or 
security-based swap dealer, and the registration shall not have 
expired nor been suspended nor revoked.
    ``(b) Cleared Security-based Swaps.--
            ``(1) Segregation required.--A broker, dealer, or 
        security-based swap dealer shall treat and deal with 
        all money, securities, and property of any security-
        based swaps customer received to margin, guarantee, or 
        secure a security-based swap cleared by or though a 
        clearing agency (including money, securities, or 
        property accruing to the security-based swaps customer 
        as the result of such a security-based swap) as 
        belonging to the security-based swaps customer.
            ``(2) Commingling prohibited.--Money, securities, 
        and property of a security-based swaps customer 
        described in paragraph (1) shall be separately 
        accounted for and shall not be commingled with the 
        funds of the broker, dealer, or security-based swap 
        dealer or be used to margin, secure, or guarantee any 
        trades or contracts of any security-based swaps 
        customer or person other than the person for whom the 
        same are held.
    ``(c) Exceptions.--
            ``(1) Use of funds.--
                    ``(A) In general.--Notwithstanding 
                subsection (b), money, securities, and property 
                of a security-based swaps customer of a broker, 
                dealer, or security-based swap dealer described 
                in subsection (b) may, for convenience, be 
                commingled and deposited in the same 1 or more 
                accounts with any bank or trust company or with 
                a clearing agency.
                    ``(B) Withdrawal.--Notwithstanding 
                subsection (b), such share of the money, 
                securities, and property described in 
                subparagraph (A) as in the normal course of 
                business shall be necessary to margin, 
                guarantee, secure, transfer, adjust, or settle 
                a cleared security-based swap with a clearing 
                agency, or with any member of the clearing 
                agency, may be withdrawn and applied to such 
                purposes, including the payment of commissions, 
                brokerage, interest, taxes, storage, and other 
                charges, lawfully accruing in connection with 
                the cleared security-based swap.
            ``(2) Commission action.--Notwithstanding 
        subsection (b), in accordance with such terms and 
        conditions as the Commission may prescribe by rule, 
        regulation, or order, any money, securities, or 
        property of the security-based swaps customer of a 
        broker, dealer, or security-based swap dealer described 
        in subsection (b) may be commingled and deposited as 
        provided in this section with any other money, 
        securities, or property received by the broker, dealer, 
        or security-based swap dealer and required by the 
        Commission to be separately accounted for and treated 
        and dealt with as belonging to the security-based swaps 
        customer of the broker, dealer, or security-based swap 
        dealer.
    ``(d) Permitted Investments.--Money described in subsection 
(b) may be invested in obligations of the United States, in 
general obligations of any State or of any political 
subdivision of a State, and in obligations fully guaranteed as 
to principal and interest by the United States, or in any other 
investment that the Commission may by rule or regulation 
prescribe, and such investments shall be made in accordance 
with such rules and regulations and subject to such conditions 
as the Commission may prescribe.
    ``(e) Prohibition.--It shall be unlawful for any person, 
including any clearing agency and any depository institution, 
that has received any money, securities, or property for 
deposit in a separate account or accounts as provided in 
subsection (b) to hold, dispose of, or use any such money, 
securities, or property as belonging to the depositing broker, 
dealer, or security-based swap dealer or any person other than 
the swaps customer of the broker, dealer, or security-based 
swap dealer.
    ``(f) Segregation Requirements for Uncleared Security-based 
Swaps.--
            ``(1) Segregation of assets held as collateral in 
        uncleared security-based swap transactions.--
                    ``(A) Notification.--A security-based swap 
                dealer or major security-based swap participant 
                shall be required to notify the counterparty of 
                the security-based swap dealer or major 
                security-based swap participant at the 
                beginning of a security-based swap transaction 
                that the counterparty has the right to require 
                segregation of the funds of other property 
                supplied to margin, guarantee, or secure the 
                obligations of the counterparty.
                    ``(B) Segregation and maintenance of 
                funds.--At the request of a counterparty to a 
                security-based swap that provides funds or 
                other property to a security-based swap dealer 
                or major security-based swap participant to 
                margin, guarantee, or secure the obligations of 
                the counterparty, the security-based swap 
                dealer or major security-based swap participant 
                shall--
                            ``(i) segregate the funds or other 
                        property for the benefit of the 
                        counterparty; and
                            ``(ii) in accordance with such 
                        rules and regulations as the Commission 
                        may promulgate, maintain the funds or 
                        other property in a segregated account 
                        separate from the assets and other 
                        interests of the security-based swap 
                        dealer or major security-based swap 
                        participant.
            ``(2) Applicability.--The requirements described in 
        paragraph (1) shall--
                    ``(A) apply only to a security-based swap 
                between a counterparty and a security-based 
                swap dealer or major security-based swap 
                participant that is not submitted for clearing 
                to a clearing agency; and
                    ``(B)(i) not apply to variation margin 
                payments; or
                    ``(ii) not preclude any commercial 
                arrangement regarding--
                            ``(I) the investment of segregated 
                        funds or other property that may only 
                        be invested in such investments as the 
                        Commission may permit by rule or 
                        regulation; and
                            ``(II) the related allocation of 
                        gains and losses resulting from any 
                        investment of the segregated funds or 
                        other property.
            ``(3) Use of independent third-party custodians.--
        The segregated account described in paragraph (1) shall 
        be--
                    ``(A) carried by an independent third-party 
                custodian; and
                    ``(B) designated as a segregated account 
                for and on behalf of the counterparty.
            ``(4) Reporting requirement.--If the counterparty 
        does not choose to require segregation of the funds or 
        other property supplied to margin, guarantee, or secure 
        the obligations of the counterparty, the security-based 
        swap dealer or major security-based swap participant 
        shall report to the counterparty of the security-based 
        swap dealer or major security-based swap participant on 
        a quarterly basis that the back office procedures of 
        the security-based swap dealer or major security-based 
        swap participant relating to margin and collateral 
        requirements are in compliance with the agreement of 
        the counterparties.
    ``(g) Bankruptcy.--A security-based swap, as defined in 
section 3(a)(68) shall be considered to be a security as such 
term is used in section 101(53A)(B) and subchapter III of title 
11, United States Code. An account that holds a security-based 
swap, other than a portfolio margining account referred to in 
section 15(c)(3)(C) shall be considered to be a securities 
account, as that term is defined in section 741 of title 11, 
United States Code. The definitions of the terms `purchase' and 
`sale' in section 3(a)(13) and (14) shall be applied to the 
terms `purchase' and `sale', as used in section 741 of title 
11, United States Code. The term `customer', as defined in 
section 741 of title 11, United States Code, excludes any 
person, to the extent that such person has a claim based on any 
open repurchase agreement, open reverse repurchase agreement, 
stock borrowed agreement, non-cleared option, or non-cleared 
security-based swap except to the extent of any margin 
delivered to or by the customer with respect to which there is 
a customer protection requirement under section 15(c)(3) or a 
segregation requirement.''.
    (e) Trading in Security-based Swaps.--Section 6 of the 
Securities Exchange Act of 1934 (15 U.S.C. 78f) is amended by 
adding at the end the following:
    ``(l) Security-based Swaps.--It shall be unlawful for any 
person to effect a transaction in a security-based swap with or 
for a person that is not an eligible contract participant, 
unless such transaction is effected on a national securities 
exchange registered pursuant to subsection (b).''.
    (f) Additions of Security-based Swaps to Certain 
Enforcement Provisions.--Section 9(b) of the Securities 
Exchange Act of 1934 (15 U.S.C. 78i(b)) is amended by striking 
paragraphs (1) through (3) and inserting the following:
            ``(1) any transaction in connection with any 
        security whereby any party to such transaction 
        acquires--
                    ``(A) any put, call, straddle, or other 
                option or privilege of buying the security from 
                or selling the security to another without 
                being bound to do so;
                    ``(B) any security futures product on the 
                security; or
                    ``(C) any security-based swap involving the 
                security or the issuer of the security;
            ``(2) any transaction in connection with any 
        security with relation to which such person has, 
        directly or indirectly, any interest in any--
                    ``(A) such put, call, straddle, option, or 
                privilege;
                    ``(B) such security futures product; or
                    ``(C) such security-based swap; or
            ``(3) any transaction in any security for the 
        account of any person who such person has reason to 
        believe has, and who actually has, directly or 
        indirectly, any interest in any--
                    ``(A) such put, call, straddle, option, or 
                privilege;
                    ``(B) such security futures product with 
                relation to such security; or
                    ``(C) any security-based swap involving 
                such security or the issuer of such 
                security.''.
    (g) Rulemaking Authority To Prevent Fraud, Manipulation and 
Deceptive Conduct in Security-based Swaps.--Section 9 of the 
Securities Exchange Act of 1934 (15 U.S.C. 78i) is amended by 
adding at the end the following:
    ``(j) It shall be unlawful for any person, directly or 
indirectly, by the use of any means or instrumentality of 
interstate commerce or of the mails, or of any facility of any 
national securities exchange, to effect any transaction in, or 
to induce or attempt to induce the purchase or sale of, any 
security-based swap, in connection with which such person 
engages in any fraudulent, deceptive, or manipulative act or 
practice, makes any fictitious quotation, or engages in any 
transaction, practice, or course of business which operates as 
a fraud or deceit upon any person. The Commission shall, for 
the purposes of this subsection, by rules and regulations 
define, and prescribe means reasonably designed to prevent, 
such transactions, acts, practices, and courses of business as 
are fraudulent, deceptive, or manipulative, and such quotations 
as are fictitious.''.
    (h) Position Limits and Position Accountability for 
Security-based Swaps.--The Securities Exchange Act of 1934 is 
amended by inserting after section 10A (15 U.S.C. 78j-1) the 
following:

``SEC. 10B. POSITION LIMITS AND POSITION ACCOUNTABILITY FOR SECURITY-
                    BASED SWAPS AND LARGE TRADER REPORTING.

    ``(a) Position Limits.--As a means reasonably designed to 
prevent fraud and manipulation, the Commission shall, by rule 
or regulation, as necessary or appropriate in the public 
interest or for the protection of investors, establish limits 
(including related hedge exemption provisions) on the size of 
positions in any security-based swap that may be held by any 
person. In establishing such limits, the Commission may require 
any person to aggregate positions in--
            ``(1) any security-based swap and any security or 
        loan or group of securities or loans on which such 
        security-based swap is based, which such security-based 
        swap references, or to which such security-based swap 
        is related as described in paragraph (68) of section 
        3(a), and any other instrument relating to such 
        security or loan or group or index of securities or 
        loans; or
            ``(2) any security-based swap and--
                    ``(A) any security or group or index of 
                securities, the price, yield, value, or 
                volatility of which, or of which any interest 
                therein, is the basis for a material term of 
                such security-based swap as described in 
                paragraph (68) of section 3(a); and
                    ``(B) any other instrument relating to the 
                same security or group or index of securities 
                described under subparagraph (A).
    ``(b) Exemptions.--The Commission, by rule, regulation, or 
order, may conditionally or unconditionally exempt any person 
or class of persons, any security-based swap or class of 
security-based swaps, or any transaction or class of 
transactions from any requirement the Commission may establish 
under this section with respect to position limits.
    ``(c) SRO Rules.--
            ``(1) In general.--As a means reasonably designed 
        to prevent fraud or manipulation, the Commission, by 
        rule, regulation, or order, as necessary or appropriate 
        in the public interest, for the protection of 
        investors, or otherwise in furtherance of the purposes 
        of this title, may direct a self-regulatory 
        organization--
                    ``(A) to adopt rules regarding the size of 
                positions in any security-based swap that may 
                be held by--
                            ``(i) any member of such self-
                        regulatory organization; or
                            ``(ii) any person for whom a member 
                        of such self-regulatory organization 
                        effects transactions in such security-
                        based swap; and
                    ``(B) to adopt rules reasonably designed to 
                ensure compliance with requirements prescribed 
                by the Commission under this subsection.
            ``(2) Requirement to aggregate positions.--In 
        establishing the limits under paragraph (1), the self-
        regulatory organization may require such member or 
        person to aggregate positions in--
                    ``(A) any security-based swap and any 
                security or loan or group or narrow-based 
                security index of securities or loans on which 
                such security-based swap is based, which such 
                security-based swap references, or to which 
                such security-based swap is related as 
                described in section 3(a)(68), and any other 
                instrument relating to such security or loan or 
                group or narrow-based security index of 
                securities or loans; or
                    ``(B)(i) any security-based swap; and
                    ``(ii) any security-based swap and any 
                other instrument relating to the same security 
                or group or narrow-based security index of 
                securities.
    ``(d) Large Trader Reporting.--The Commission, by rule or 
regulation, may require any person that effects transactions 
for such person's own account or the account of others in any 
securities-based swap or uncleared security-based swap and any 
security or loan or group or narrow-based security index of 
securities or loans as set forth in paragraphs (1) and (2) of 
subsection (a) under this section to report such information as 
the Commission may prescribe regarding any position or 
positions in any security-based swap or uncleared security-
based swap and any security or loan or group or narrow-based 
security index of securities or loans and any other instrument 
relating to such security or loan or group or narrow-based 
security index of securities or loans as set forth in 
paragraphs (1) and (2) of subsection (a) under this section.''.
    (i) Public Reporting and Repositories for Security-based 
Swaps.--Section 13 of the Securities Exchange Act of 1934 (15 
U.S.C. 78m) is amended by adding at the end the following:
    ``(m) Public Availability of Security-based Swap 
Transaction Data.--
            ``(1) In general.--
                    ``(A) Definition of real-time public 
                reporting.--In this paragraph, the term `real-
                time public reporting' means to report data 
                relating to a security-based swap transaction, 
                including price and volume, as soon as 
                technologically practicable after the time at 
                which the security-based swap transaction has 
                been executed.
                    ``(B) Purpose.--The purpose of this 
                subsection is to authorize the Commission to 
                make security-based swap transaction and 
                pricing data available to the public in such 
                form and at such times as the Commission 
                determines appropriate to enhance price 
                discovery.
                    ``(C) General rule.--The Commission is 
                authorized to provide by rule for the public 
                availability of security-based swap 
                transaction, volume, and pricing data as 
                follows:
                            ``(i) With respect to those 
                        security-based swaps that are subject 
                        to the mandatory clearing requirement 
                        described in section 3C(a)(1) 
                        (including those security-based swaps 
                        that are excepted from the requirement 
                        pursuant to section 3C(g)), the 
                        Commission shall require real-time 
                        public reporting for such transactions.
                            ``(ii) With respect to those 
                        security-based swaps that are not 
                        subject to the mandatory clearing 
                        requirement described in section 
                        3C(a)(1), but are cleared at a 
                        registered clearing agency, the 
                        Commission shall require real-time 
                        public reporting for such transactions.
                            ``(iii) With respect to security-
                        based swaps that are not cleared at a 
                        registered clearing agency and which 
                        are reported to a security-based swap 
                        data repository or the Commission under 
                        section 3C(a)(6), the Commission shall 
                        require real-time public reporting for 
                        such transactions, in a manner that 
                        does not disclose the business 
                        transactions and market positions of 
                        any person.
                            ``(iv) With respect to security-
                        based swaps that are determined to be 
                        required to be cleared under section 
                        3C(b) but are not cleared, the 
                        Commission shall require real-time 
                        public reporting for such transactions.
                    ``(D) Registered entities and public 
                reporting.--The Commission may require 
                registered entities to publicly disseminate the 
                security-based swap transaction and pricing 
                data required to be reported under this 
                paragraph.
                    ``(E) Rulemaking required.--With respect to 
                the rule providing for the public availability 
                of transaction and pricing data for security-
                based swaps described in clauses (i) and (ii) 
                of subparagraph (C), the rule promulgated by 
                the Commission shall contain provisions--
                            ``(i) to ensure such information 
                        does not identify the participants;
                            ``(ii) to specify the criteria for 
                        determining what constitutes a large 
                        notional security-based swap 
                        transaction (block trade) for 
                        particular markets and contracts;
                            ``(iii) to specify the appropriate 
                        time delay for reporting large notional 
                        security-based swap transactions (block 
                        trades) to the public; and
                            ``(iv) that take into account 
                        whether the public disclosure will 
                        materially reduce market liquidity.
                    ``(F) Timeliness of reporting.--Parties to 
                a security-based swap (including agents of the 
                parties to a security-based swap) shall be 
                responsible for reporting security-based swap 
                transaction information to the appropriate 
                registered entity in a timely manner as may be 
                prescribed by the Commission.
                    ``(G) Reporting of swaps to registered 
                security-based swap data repositories.--Each 
                security-based swap (whether cleared or 
                uncleared) shall be reported to a registered 
                security-based swap data repository.
                    ``(H) Registration of clearing agencies.--A 
                clearing agency may register as a security-
                based swap data repository.
            ``(2) Semiannual and annual public reporting of 
        aggregate security-based swap data.--
                    ``(A) In general.--In accordance with 
                subparagraph (B), the Commission shall issue a 
                written report on a semiannual and annual basis 
                to make available to the public information 
                relating to--
                            ``(i) the trading and clearing in 
                        the major security-based swap 
                        categories; and
                            ``(ii) the market participants and 
                        developments in new products.
                    ``(B) Use; consultation.--In preparing a 
                report under subparagraph (A), the Commission 
                shall--
                            ``(i) use information from 
                        security-based swap data repositories 
                        and clearing agencies; and
                            ``(ii) consult with the Office of 
                        the Comptroller of the Currency, the 
                        Bank for International Settlements, and 
                        such other regulatory bodies as may be 
                        necessary.
                    ``(C) Authority of commission.--The 
                Commission may, by rule, regulation, or order, 
                delegate the public reporting responsibilities 
                of the Commission under this paragraph in 
                accordance with such terms and conditions as 
                the Commission determines to be appropriate and 
                in the public interest.
    ``(n) Security-based Swap Data Repositories.--
            ``(1) Registration requirement.--It shall be 
        unlawful for any person, unless registered with the 
        Commission, directly or indirectly, to make use of the 
        mails or any means or instrumentality of interstate 
        commerce to perform the functions of a security-based 
        swap data repository.
            ``(2) Inspection and examination.--Each registered 
        security-based swap data repository shall be subject to 
        inspection and examination by any representative of the 
        Commission.
            ``(3) Compliance with core principles.--
                    ``(A) In general.--To be registered, and 
                maintain registration, as a security-based swap 
                data repository, the security-based swap data 
                repository shall comply with--
                            ``(i) the requirements and core 
                        principles described in this 
                        subsection; and
                            ``(ii) any requirement that the 
                        Commission may impose by rule or 
                        regulation.
                    ``(B) Reasonable discretion of security-
                based swap data repository.--Unless otherwise 
                determined by the Commission, by rule or 
                regulation, a security-based swap data 
                repository described in subparagraph (A) shall 
                have reasonable discretion in establishing the 
                manner in which the security-based swap data 
                repository complies with the core principles 
                described in this subsection.
            ``(4) Standard setting.--
                    ``(A) Data identification.--
                            ``(i) In general.--In accordance 
                        with clause (ii), the Commission shall 
                        prescribe standards that specify the 
                        data elements for each security-based 
                        swap that shall be collected and 
                        maintained by each registered security-
                        based swap data repository.
                            ``(ii) Requirement.--In carrying 
                        out clause (i), the Commission shall 
                        prescribe consistent data element 
                        standards applicable to registered 
                        entities and reporting counterparties.
                    ``(B) Data collection and maintenance.--The 
                Commission shall prescribe data collection and 
                data maintenance standards for security-based 
                swap data repositories.
                    ``(C) Comparability.--The standards 
                prescribed by the Commission under this 
                subsection shall be comparable to the data 
                standards imposed by the Commission on clearing 
                agencies in connection with their clearing of 
                security-based swaps.
            ``(5) Duties.--A security-based swap data 
        repository shall--
                    ``(A) accept data prescribed by the 
                Commission for each security-based swap under 
                subsection (b);
                    ``(B) confirm with both counterparties to 
                the security-based swap the accuracy of the 
                data that was submitted;
                    ``(C) maintain the data described in 
                subparagraph (A) in such form, in such manner, 
                and for such period as may be required by the 
                Commission;
                    ``(D)(i) provide direct electronic access 
                to the Commission (or any designee of the 
                Commission, including another registered 
                entity); and
                    ``(ii) provide the information described in 
                subparagraph (A) in such form and at such 
                frequency as the Commission may require to 
                comply with the public reporting requirements 
                set forth in subsection (m);
                    ``(E) at the direction of the Commission, 
                establish automated systems for monitoring, 
                screening, and analyzing security-based swap 
                data;
                    ``(F) maintain the privacy of any and all 
                security-based swap transaction information 
                that the security-based swap data repository 
                receives from a security-based swap dealer, 
                counterparty, or any other registered entity; 
                and
                    ``(G) on a confidential basis pursuant to 
                section 24, upon request, and after notifying 
                the Commission of the request, make available 
                all data obtained by the security-based swap 
                data repository, including individual 
                counterparty trade and position data, to--
                            ``(i) each appropriate prudential 
                        regulator;
                            ``(ii) the Financial Stability 
                        Oversight Council;
                            ``(iii) the Commodity Futures 
                        Trading Commission;
                            ``(iv) the Department of Justice; 
                        and
                            ``(v) any other person that the 
                        Commission determines to be 
                        appropriate, including--
                                    ``(I) foreign financial 
                                supervisors (including foreign 
                                futures authorities);
                                    ``(II) foreign central 
                                banks; and
                                    ``(III) foreign ministries.
                    ``(H) Confidentiality and indemnification 
                agreement.--Before the security-based swap data 
                repository may share information with any 
                entity described in subparagraph (G)--
                            ``(i) the security-based swap data 
                        repository shall receive a written 
                        agreement from each entity stating that 
                        the entity shall abide by the 
                        confidentiality requirements described 
                        in section 24 relating to the 
                        information on security-based swap 
                        transactions that is provided; and
                            ``(ii) each entity shall agree to 
                        indemnify the security-based swap data 
                        repository and the Commission for any 
                        expenses arising from litigation 
                        relating to the information provided 
                        under section 24.
            ``(6) Designation of chief compliance officer.--
                    ``(A) In general.--Each security-based swap 
                data repository shall designate an individual 
                to serve as a chief compliance officer.
                    ``(B) Duties.--The chief compliance officer 
                shall--
                            ``(i) report directly to the board 
                        or to the senior officer of the 
                        security-based swap data repository;
                            ``(ii) review the compliance of the 
                        security-based swap data repository 
                        with respect to the requirements and 
                        core principles described in this 
                        subsection;
                            ``(iii) in consultation with the 
                        board of the security-based swap data 
                        repository, a body performing a 
                        function similar to the board of the 
                        security-based swap data repository, or 
                        the senior officer of the security-
                        based swap data repository, resolve any 
                        conflicts of interest that may arise;
                            ``(iv) be responsible for 
                        administering each policy and procedure 
                        that is required to be established 
                        pursuant to this section;
                            ``(v) ensure compliance with this 
                        title (including regulations) relating 
                        to agreements, contracts, or 
                        transactions, including each rule 
                        prescribed by the Commission under this 
                        section;
                            ``(vi) establish procedures for the 
                        remediation of noncompliance issues 
                        identified by the chief compliance 
                        officer through any--
                                    ``(I) compliance office 
                                review;
                                    ``(II) look-back;
                                    ``(III) internal or 
                                external audit finding;
                                    ``(IV) self-reported error; 
                                or
                                    ``(V) validated complaint; 
                                and
                            ``(vii) establish and follow 
                        appropriate procedures for the 
                        handling, management response, 
                        remediation, retesting, and closing of 
                        noncompliance issues.
                    ``(C) Annual reports.--
                            ``(i) In general.--In accordance 
                        with rules prescribed by the 
                        Commission, the chief compliance 
                        officer shall annually prepare and sign 
                        a report that contains a description 
                        of--
                                    ``(I) the compliance of the 
                                security-based swap data 
                                repository of the chief 
                                compliance officer with respect 
                                to this title (including 
                                regulations); and
                                    ``(II) each policy and 
                                procedure of the security-based 
                                swap data repository of the 
                                chief compliance officer 
                                (including the code of ethics 
                                and conflict of interest 
                                policies of the security-based 
                                swap data repository).
                            ``(ii) Requirements.--A compliance 
                        report under clause (i) shall--
                                    ``(I) accompany each 
                                appropriate financial report of 
                                the security-based swap data 
                                repository that is required to 
                                be furnished to the Commission 
                                pursuant to this section; and
                                    ``(II) include a 
                                certification that, under 
                                penalty of law, the compliance 
                                report is accurate and 
                                complete.
            ``(7) Core principles applicable to security-based 
        swap data repositories.--
                    ``(A) Antitrust considerations.--Unless 
                necessary or appropriate to achieve the 
                purposes of this title, the swap data 
                repository shall not--
                            ``(i) adopt any rule or take any 
                        action that results in any unreasonable 
                        restraint of trade; or
                            ``(ii) impose any material 
                        anticompetitive burden on the trading, 
                        clearing, or reporting of transactions.
                    ``(B) Governance arrangements.--Each 
                security-based swap data repository shall 
                establish governance arrangements that are 
                transparent--
                            ``(i) to fulfill public interest 
                        requirements; and
                            ``(ii) to support the objectives of 
                        the Federal Government, owners, and 
                        participants.
                    ``(C) Conflicts of interest.--Each 
                security-based swap data repository shall--
                            ``(i) establish and enforce rules 
                        to minimize conflicts of interest in 
                        the decision-making process of the 
                        security-based swap data repository; 
                        and
                            ``(ii) establish a process for 
                        resolving any conflicts of interest 
                        described in clause (i).
                    ``(D) Additional duties developed by 
                commission.--
                            ``(i) In general.--The Commission 
                        may develop 1 or more additional duties 
                        applicable to security-based swap data 
                        repositories.
                            ``(ii) Consideration of evolving 
                        standards.--In developing additional 
                        duties under subparagraph (A), the 
                        Commission may take into consideration 
                        any evolving standard of the United 
                        States or the international community.
                            ``(iii) Additional duties for 
                        commission designees.--The Commission 
                        shall establish additional duties for 
                        any registrant described in section 
                        13(m)(2)(C) in order to minimize 
                        conflicts of interest, protect data, 
                        ensure compliance, and guarantee the 
                        safety and security of the security-
                        based swap data repository.
            ``(8) Required registration for security-based swap 
        data repositories.--Any person that is required to be 
        registered as a security-based swap data repository 
        under this subsection shall register with the 
        Commission, regardless of whether that person is also 
        licensed under the Commodity Exchange Act as a swap 
        data repository.
            ``(9) Rules.--The Commission shall adopt rules 
        governing persons that are registered under this 
        subsection.''.

SEC. 764. REGISTRATION AND REGULATION OF SECURITY-BASED SWAP DEALERS 
                    AND MAJOR SECURITY-BASED SWAP PARTICIPANTS.

    (a) In General.--The Securities Exchange Act of 1934 (15 
U.S.C. 78a et seq.) is amended by inserting after section 15E 
(15 U.S.C. 78o-7) the following:

``SEC. 15F. REGISTRATION AND REGULATION OF SECURITY-BASED SWAP DEALERS 
                    AND MAJOR SECURITY-BASED SWAP PARTICIPANTS.

    ``(a) Registration.--
            ``(1) Security-based swap dealers.--It shall be 
        unlawful for any person to act as a security-based swap 
        dealer unless the person is registered as a security-
        based swap dealer with the Commission.
            ``(2) Major security-based swap participants.--It 
        shall be unlawful for any person to act as a major 
        security-based swap participant unless the person is 
        registered as a major security-based swap participant 
        with the Commission.
    ``(b) Requirements.--
            ``(1) In general.--A person shall register as a 
        security-based swap dealer or major security-based swap 
        participant by filing a registration application with 
        the Commission.
            ``(2) Contents.--
                    ``(A) In general.--The application shall be 
                made in such form and manner as prescribed by 
                the Commission, and shall contain such 
                information, as the Commission considers 
                necessary concerning the business in which the 
                applicant is or will be engaged.
                    ``(B) Continual reporting.--A person that 
                is registered as a security-based swap dealer 
                or major security-based swap participant shall 
                continue to submit to the Commission reports 
                that contain such information pertaining to the 
                business of the person as the Commission may 
                require.
            ``(3) Expiration.--Each registration under this 
        section shall expire at such time as the Commission may 
        prescribe by rule or regulation.
            ``(4) Rules.--Except as provided in subsections (d) 
        and (e), the Commission may prescribe rules applicable 
        to security-based swap dealers and major security-based 
        swap participants, including rules that limit the 
        activities of non-bank security-based swap dealers and 
        major security-based swap participants.
            ``(5) Transition.--Not later than 1 year after the 
        date of enactment of the Wall Street Transparency and 
        Accountability Act of 2010, the Commission shall issue 
        rules under this section to provide for the 
        registration of security-based swap dealers and major 
        security-based swap participants.
            ``(6) Statutory disqualification.--Except to the 
        extent otherwise specifically provided by rule, 
        regulation, or order of the Commission, it shall be 
        unlawful for a security-based swap dealer or a major 
        security-based swap participant to permit any person 
        associated with a security-based swap dealer or a major 
        security-based swap participant who is subject to a 
        statutory disqualification to effect or be involved in 
        effecting security-based swaps on behalf of the 
        security-based swap dealer or major security-based swap 
        participant, if the security-based swap dealer or major 
        security-based swap participant knew, or in the 
        exercise of reasonable care should have known, of the 
        statutory disqualification.
    ``(c) Dual Registration.--
            ``(1) Security-based swap dealer.--Any person that 
        is required to be registered as a security-based swap 
        dealer under this section shall register with the 
        Commission, regardless of whether the person also is 
        registered with the Commodity Futures Trading 
        Commission as a swap dealer.
            ``(2) Major security-based swap participant.--Any 
        person that is required to be registered as a major 
        security-based swap participant under this section 
        shall register with the Commission, regardless of 
        whether the person also is registered with the 
        Commodity Futures Trading Commission as a major swap 
        participant.
    ``(d) Rulemaking.--
            ``(1) In general.--The Commission shall adopt rules 
        for persons that are registered as security-based swap 
        dealers or major security-based swap participants under 
        this section.
            ``(2) Exception for prudential requirements.--
                    ``(A) In general.--The Commission may not 
                prescribe rules imposing prudential 
                requirements on security-based swap dealers or 
                major security-based swap participants for 
                which there is a prudential regulator.
                    ``(B) Applicability.--Subparagraph (A) does 
                not limit the authority of the Commission to 
                prescribe rules as directed under this section.
    ``(e) Capital and Margin Requirements.--
            ``(1) In general.--
                    ``(A) Security-based swap dealers and major 
                security-based swap participants that are 
                banks.--Each registered security-based swap 
                dealer and major security-based swap 
                participant for which there is not a prudential 
                regulator shall meet such minimum capital 
                requirements and minimum initial and variation 
                margin requirements as the prudential regulator 
                shall by rule or regulation prescribe under 
                paragraph (2)(A).
                    ``(B) Security-based swap dealers and major 
                security-based swap participants that are not 
                banks.--Each registered security-based swap 
                dealer and major security-based swap 
                participant for which there is not a prudential 
                regulator shall meet such minimum capital 
                requirements and minimum initial and variation 
                margin requirements as the Commission shall by 
                rule or regulation prescribe under paragraph 
                (2)(B).
            ``(2) Rules.--
                    ``(A) Security-based swap dealers and major 
                security-based swap participants that are 
                banks.--The prudential regulators, in 
                consultation with the Commission and the 
                Commodity Futures Trading Commission, shall 
                adopt rules for security-based swap dealers and 
                major security-based swap participants, with 
                respect to their activities as a swap dealer or 
                major swap participant, for which there is a 
                prudential regulator imposing--
                            ``(i) capital requirements; and
                            ``(ii) both initial and variation 
                        margin requirements on all security-
                        based swaps that are not cleared by a 
                        registered clearing agency.
                    ``(B) Security-based swap dealers and major 
                security-based swap participants that are not 
                banks.--The Commission shall adopt rules for 
                security-based swap dealers and major security-
                based swap participants, with respect to their 
                activities as a swap dealer or major swap 
                participant, for which there is not a 
                prudential regulator imposing--
                            ``(i) capital requirements; and
                            ``(ii) both initial and variation 
                        margin requirements on all swaps that 
                        are not cleared by a registered 
                        clearing agency.
                    ``(C) Capital.--In setting capital 
                requirements for a person that is designated as 
                a security-based swap dealer or a major 
                security-based swap participant for a single 
                type or single class or category of security-
                based swap or activities, the prudential 
                regulator and the Commission shall take into 
                account the risks associated with other types 
                of security-based swaps or classes of security-
                based swaps or categories of security-based 
                swaps engaged in and the other activities 
                conducted by that person that are not otherwise 
                subject to regulation applicable to that person 
                by virtue of the status of the person.
            ``(3) Standards for capital and margin.--
                    ``(A) In general.--To offset the greater 
                risk to the security-based swap dealer or major 
                security-based swap participant and the 
                financial system arising from the use of 
                security-based swaps that are not cleared, the 
                requirements imposed under paragraph (2) 
                shall--
                            ``(i) help ensure the safety and 
                        soundness of the security-based swap 
                        dealer or major security-based swap 
                        participant; and
                            ``(ii) be appropriate for the risk 
                        associated with the non-cleared 
                        security-based swaps held as a 
                        security-based swap dealer or major 
                        security-based swap participant.
                    ``(B) Rule of construction.--
                            ``(i) In general.--Nothing in this 
                        section shall limit, or be construed to 
                        limit, the authority--
                                    ``(I) of the Commission to 
                                set financial responsibility 
                                rules for a broker or dealer 
                                registered pursuant to section 
                                15(b) (except for section 
                                15(b)(11) thereof) in 
                                accordance with section 
                                15(c)(3); or
                                    ``(II) of the Commodity 
                                Futures Trading Commission to 
                                set financial responsibility 
                                rules for a futures commission 
                                merchant or introducing broker 
                                registered pursuant to section 
                                4f(a) of the Commodity Exchange 
                                Act (except for section 
                                4f(a)(3) thereof) in accordance 
                                with section 4f(b) of the 
                                Commodity Exchange Act.
                            ``(ii) Futures commission merchants 
                        and other dealers.--A futures 
                        commission merchant, introducing 
                        broker, broker, or dealer shall 
                        maintain sufficient capital to comply 
                        with the stricter of any applicable 
                        capital requirements to which such 
                        futures commission merchant, 
                        introducing broker, broker, or dealer 
                        is subject to under this title or the 
                        Commodity Exchange Act.
                    ``(C) Margin requirements.--In prescribing 
                margin requirements under this subsection, the 
                prudential regulator with respect to security-
                based swap dealers and major security-based 
                swap participants that are depository 
                institutions, and the Commission with respect 
                to security-based swap dealers and major 
                security-based swap participants that are not 
                depository institutions shall permit the use of 
                noncash collateral, as the regulator or the 
                Commission determines to be consistent with--
                            ``(i) preserving the financial 
                        integrity of markets trading security-
                        based swaps; and
                            ``(ii) preserving the stability of 
                        the United States financial system.
                    ``(D) Comparability of capital and margin 
                requirements.--
                            ``(i) In general.--The prudential 
                        regulators, the Commission, and the 
                        Securities and Exchange Commission 
                        shall periodically (but not less 
                        frequently than annually) consult on 
                        minimum capital requirements and 
                        minimum initial and variation margin 
                        requirements.
                            ``(ii) Comparability.--The entities 
                        described in clause (i) shall, to the 
                        maximum extent practicable, establish 
                        and maintain comparable minimum capital 
                        requirements and minimum initial and 
                        variation margin requirements, 
                        including the use of noncash 
                        collateral, for--
                                    ``(I) security-based swap 
                                dealers; and
                                    ``(II) major security-based 
                                swap participants.
    ``(f) Reporting and Recordkeeping.--
            ``(1) In general.--Each registered security-based 
        swap dealer and major security-based swap participant--
                    ``(A) shall make such reports as are 
                required by the Commission, by rule or 
                regulation, regarding the transactions and 
                positions and financial condition of the 
                registered security-based swap dealer or major 
                security-based swap participant;
                    ``(B)(i) for which there is a prudential 
                regulator, shall keep books and records of all 
                activities related to the business as a 
                security-based swap dealer or major security-
                based swap participant in such form and manner 
                and for such period as may be prescribed by the 
                Commission by rule or regulation; and
                    ``(ii) for which there is no prudential 
                regulator, shall keep books and records in such 
                form and manner and for such period as may be 
                prescribed by the Commission by rule or 
                regulation; and
                    ``(C) shall keep books and records 
                described in subparagraph (B) open to 
                inspection and examination by any 
                representative of the Commission.
            ``(2) Rules.--The Commission shall adopt rules 
        governing reporting and recordkeeping for security-
        based swap dealers and major security-based swap 
        participants.
    ``(g) Daily Trading Records.--
            ``(1) In general.--Each registered security-based 
        swap dealer and major security-based swap participant 
        shall maintain daily trading records of the security-
        based swaps of the registered security-based swap 
        dealer and major security-based swap participant and 
        all related records (including related cash or forward 
        transactions) and recorded communications, including 
        electronic mail, instant messages, and recordings of 
        telephone calls, for such period as may be required by 
        the Commission by rule or regulation.
            ``(2) Information requirements.--The daily trading 
        records shall include such information as the 
        Commission shall require by rule or regulation.
            ``(3) Counterparty records.--Each registered 
        security-based swap dealer and major security-based 
        swap participant shall maintain daily trading records 
        for each counterparty in a manner and form that is 
        identifiable with each security-based swap transaction.
            ``(4) Audit trail.--Each registered security-based 
        swap dealer and major security-based swap participant 
        shall maintain a complete audit trail for conducting 
        comprehensive and accurate trade reconstructions.
            ``(5) Rules.--The Commission shall adopt rules 
        governing daily trading records for security-based swap 
        dealers and major security-based swap participants.
    ``(h) Business Conduct Standards.--
            ``(1) In general.--Each registered security-based 
        swap dealer and major security-based swap participant 
        shall conform with such business conduct standards as 
        prescribed in paragraph (3) and as may be prescribed by 
        the Commission by rule or regulation that relate to--
                    ``(A) fraud, manipulation, and other 
                abusive practices involving security-based 
                swaps (including security-based swaps that are 
                offered but not entered into);
                    ``(B) diligent supervision of the business 
                of the registered security-based swap dealer 
                and major security-based swap participant;
                    ``(C) adherence to all applicable position 
                limits; and
                    ``(D) such other matters as the Commission 
                determines to be appropriate.
            ``(2) Responsibilities with respect to special 
        entities.--
                    ``(A) Advising special entities.--A 
                security-based swap dealer or major security-
                based swap participant that acts as an advisor 
                to special entity regarding a security-based 
                swap shall comply with the requirements of 
                paragraph (4) with respect to such special 
                entity.
                    ``(B) Entering of security-based swaps with 
                respect to special entities.--A security-based 
                swap dealer that enters into or offers to enter 
                into security-based swap with a special entity 
                shall comply with the requirements of paragraph 
                (5) with respect to such special entity.
                    ``(C) Special entity defined.--For purposes 
                of this subsection, the term `special entity' 
                means--
                            ``(i) a Federal agency;
                            ``(ii) a State, State agency, city, 
                        county, municipality, or other 
                        political subdivision of a State or;
                            ``(iii) any employee benefit plan, 
                        as defined in section 3 of the Employee 
                        Retirement Income Security Act of 1974 
                        (29 U.S.C. 1002);
                            ``(iv) any governmental plan, as 
                        defined in section 3 of the Employee 
                        Retirement Income Security Act of 1974 
                        (29 U.S.C. 1002); or
                            ``(v) any endowment, including an 
                        endowment that is an organization 
                        described in section 501(c)(3) of the 
                        Internal Revenue Code of 1986.
            ``(3) Business conduct requirements.--Business 
        conduct requirements adopted by the Commission shall--
                    ``(A) establish a duty for a security-based 
                swap dealer or major security-based swap 
                participant to verify that any counterparty 
                meets the eligibility standards for an eligible 
                contract participant;
                    ``(B) require disclosure by the security-
                based swap dealer or major security-based swap 
                participant to any counterparty to the 
                transaction (other than a security-based swap 
                dealer, major security-based swap participant, 
                security-based swap dealer, or major security-
                based swap participant) of--
                            ``(i) information about the 
                        material risks and characteristics of 
                        the security-based swap;
                            ``(ii) any material incentives or 
                        conflicts of interest that the 
                        security-based swap dealer or major 
                        security-based swap participant may 
                        have in connection with the security-
                        based swap; and
                            ``(iii)(I) for cleared security-
                        based swaps, upon the request of the 
                        counterparty, receipt of the daily mark 
                        of the transaction from the appropriate 
                        derivatives clearing organization; and
                            ``(II) for uncleared security-based 
                        swaps, receipt of the daily mark of the 
                        transaction from the security-based 
                        swap dealer or the major security-based 
                        swap participant;
                    ``(C) establish a duty for a security-based 
                swap dealer or major security-based swap 
                participant to communicate in a fair and 
                balanced manner based on principles of fair 
                dealing and good faith; and
                    ``(D) establish such other standards and 
                requirements as the Commission may determine 
                are appropriate in the public interest, for the 
                protection of investors, or otherwise in 
                furtherance of the purposes of this Act.
            ``(4) Special requirements for security-based swap 
        dealers acting as advisors.--
                    ``(A) In general.--It shall be unlawful for 
                a security-based swap dealer or major security-
                based swap participant--
                            ``(i) to employ any device, scheme, 
                        or artifice to defraud any special 
                        entity or prospective customer who is a 
                        special entity;
                            ``(ii) to engage in any 
                        transaction, practice, or course of 
                        business that operates as a fraud or 
                        deceit on any special entity or 
                        prospective customer who is a special 
                        entity; or
                            ``(iii) to engage in any act, 
                        practice, or course of business that is 
                        fraudulent, deceptive, or manipulative.
                    ``(B) Duty.--Any security-based swap dealer 
                that acts as an advisor to a special entity 
                shall have a duty to act in the best interests 
                of the special entity.
                    ``(C) Reasonable efforts.--Any security-
                based swap dealer that acts as an advisor to a 
                special entity shall make reasonable efforts to 
                obtain such information as is necessary to make 
                a reasonable determination that any security-
                based swap recommended by the security-based 
                swap dealer is in the best interests of the 
                special entity, including information relating 
                to--
                            ``(i) the financial status of the 
                        special entity;
                            ``(ii) the tax status of the 
                        special entity;
                            ``(iii) the investment or financing 
                        objectives of the special entity; and
                            ``(iv) any other information that 
                        the Commission may prescribe by rule or 
                        regulation.
            ``(5) Special requirements for security-based swap 
        dealers as counterparties to special entities.--
                    ``(A) In general.--Any security-based swap 
                dealer or major security-based swap participant 
                that offers to or enters into a security-based 
                swap with a special entity shall--
                            ``(i) comply with any duty 
                        established by the Commission for a 
                        security-based swap dealer or major 
                        security-based swap participant, with 
                        respect to a counterparty that is an 
                        eligible contract participant within 
                        the meaning of subclause (I) or (II) of 
                        clause (vii) of section 1a(18) of the 
                        Commodity Exchange Act, that requires 
                        the security-based swap dealer or major 
                        security-based swap participant to have 
                        a reasonable basis to believe that the 
                        counterparty that is a special entity 
                        has an independent representative 
                        that--
                                    ``(I) has sufficient 
                                knowledge to evaluate the 
                                transaction and risks;
                                    ``(II) is not subject to a 
                                statutory disqualification;
                                    ``(III) is independent of 
                                the security-based swap dealer 
                                or major security-based swap 
                                participant;
                                    ``(IV) undertakes a duty to 
                                act in the best interests of 
                                the counterparty it represents;
                                    ``(V) makes appropriate 
                                disclosures;
                                    ``(VI) will provide written 
                                representations to the special 
                                entity regarding fair pricing 
                                and the appropriateness of the 
                                transaction; and
                                    ``(VII) in the case of 
                                employee benefit plans subject 
                                to the Employee Retirement 
                                Income Security Act of 1974, is 
                                a fiduciary as defined in 
                                section 3 of that Act (29 
                                U.S.C. 1002); and
                            ``(ii) before the initiation of the 
                        transaction, disclose to the special 
                        entity in writing the capacity in which 
                        the security-based swap dealer is 
                        acting.
                    ``(B) Commission authority.--The Commission 
                may establish such other standards and 
                requirements under this paragraph as the 
                Commission may determine are appropriate in the 
                public interest, for the protection of 
                investors, or otherwise in furtherance of the 
                purposes of this Act.
            ``(6) Rules.--The Commission shall prescribe rules 
        under this subsection governing business conduct 
        standards for security-based swap dealers and major 
        security-based swap participants.
            ``(7) Applicability.--This subsection shall not 
        apply with respect to a transaction that is--
                    ``(A) initiated by a special entity on an 
                exchange or security-based swaps execution 
                facility; and
                    ``(B) the security-based swap dealer or 
                major security-based swap participant does not 
                know the identity of the counterparty to the 
                transaction.''
    ``(i) Documentation Standards.--
            ``(1) In general.--Each registered security-based 
        swap dealer and major security-based swap participant 
        shall conform with such standards as may be prescribed 
        by the Commission, by rule or regulation, that relate 
        to timely and accurate confirmation, processing, 
        netting, documentation, and valuation of all security-
        based swaps.
            ``(2) Rules.--The Commission shall adopt rules 
        governing documentation standards for security-based 
        swap dealers and major security-based swap 
        participants.
    ``(j) Duties.--Each registered security-based swap dealer 
and major security-based swap participant shall, at all times, 
comply with the following requirements:
            ``(1) Monitoring of trading.--The security-based 
        swap dealer or major security-based swap participant 
        shall monitor its trading in security-based swaps to 
        prevent violations of applicable position limits.
            ``(2) Risk management procedures.--The security-
        based swap dealer or major security-based swap 
        participant shall establish robust and professional 
        risk management systems adequate for managing the day-
        to-day business of the security-based swap dealer or 
        major security-based swap participant.
            ``(3) Disclosure of general information.--The 
        security-based swap dealer or major security-based swap 
        participant shall disclose to the Commission and to the 
        prudential regulator for the security-based swap dealer 
        or major security-based swap participant, as 
        applicable, information concerning--
                    ``(A) terms and conditions of its security-
                based swaps;
                    ``(B) security-based swap trading 
                operations, mechanisms, and practices;
                    ``(C) financial integrity protections 
                relating to security-based swaps; and
                    ``(D) other information relevant to its 
                trading in security-based swaps.
            ``(4) Ability to obtain information.--The security-
        based swap dealer or major security-based swap 
        participant shall--
                    ``(A) establish and enforce internal 
                systems and procedures to obtain any necessary 
                information to perform any of the functions 
                described in this section; and
                    ``(B) provide the information to the 
                Commission and to the prudential regulator for 
                the security-based swap dealer or major 
                security-based swap participant, as applicable, 
                on request.
            ``(5) Conflicts of interest.--The security-based 
        swap dealer and major security-based swap participant 
        shall implement conflict-of-interest systems and 
        procedures that--
                    ``(A) establish structural and 
                institutional safeguards to ensure that the 
                activities of any person within the firm 
                relating to research or analysis of the price 
                or market for any security-based swap or acting 
                in a role of providing clearing activities or 
                making determinations as to accepting clearing 
                customers are separated by appropriate 
                informational partitions within the firm from 
                the review, pressure, or oversight of persons 
                whose involvement in pricing, trading, or 
                clearing activities might potentially bias 
                their judgment or supervision and contravene 
                the core principles of open access and the 
                business conduct standards described in this 
                title; and
                    ``(B) address such other issues as the 
                Commission determines to be appropriate.
            ``(6) Antitrust considerations.--Unless necessary 
        or appropriate to achieve the purposes of this title, 
        the security-based swap dealer or major security-based 
        swap participant shall not--
                    ``(A) adopt any process or take any action 
                that results in any unreasonable restraint of 
                trade; or
                    ``(B) impose any material anticompetitive 
                burden on trading or clearing.
            ``(7) Rules.--The Commission shall prescribe rules 
        under this subsection governing duties of security-
        based swap dealers and major security-based swap 
        participants.
    ``(k) Designation of Chief Compliance Officer.--
            ``(1) In general.--Each security-based swap dealer 
        and major security-based swap participant shall 
        designate an individual to serve as a chief compliance 
        officer.
            ``(2) Duties.--The chief compliance officer shall--
                    ``(A) report directly to the board or to 
                the senior officer of the security-based swap 
                dealer or major security-based swap 
                participant;
                    ``(B) review the compliance of the 
                security-based swap dealer or major security-
                based swap participant with respect to the 
                security-based swap dealer and major security-
                based swap participant requirements described 
                in this section;
                    ``(C) in consultation with the board of 
                directors, a body performing a function similar 
                to the board, or the senior officer of the 
                organization, resolve any conflicts of interest 
                that may arise;
                    ``(D) be responsible for administering each 
                policy and procedure that is required to be 
                established pursuant to this section;
                    ``(E) ensure compliance with this title 
                (including regulations) relating to security-
                based swaps, including each rule prescribed by 
                the Commission under this section;
                    ``(F) establish procedures for the 
                remediation of noncompliance issues identified 
                by the chief compliance officer through any--
                            ``(i) compliance office review;
                            ``(ii) look-back;
                            ``(iii) internal or external audit 
                        finding;
                            ``(iv) self-reported error; or
                            ``(v) validated complaint; and
                    ``(G) establish and follow appropriate 
                procedures for the handling, management 
                response, remediation, retesting, and closing 
                of noncompliance issues.
            ``(3) Annual reports.--
                    ``(A) In general.--In accordance with rules 
                prescribed by the Commission, the chief 
                compliance officer shall annually prepare and 
                sign a report that contains a description of--
                            ``(i) the compliance of the 
                        security-based swap dealer or major 
                        swap participant with respect to this 
                        title (including regulations); and
                            ``(ii) each policy and procedure of 
                        the security-based swap dealer or major 
                        security-based swap participant of the 
                        chief compliance officer (including the 
                        code of ethics and conflict of interest 
                        policies).
                    ``(B) Requirements.--A compliance report 
                under subparagraph (A) shall--
                            ``(i) accompany each appropriate 
                        financial report of the security-based 
                        swap dealer or major security-based 
                        swap participant that is required to be 
                        furnished to the Commission pursuant to 
                        this section; and
                            ``(ii) include a certification 
                        that, under penalty of law, the 
                        compliance report is accurate and 
                        complete.
    ``(l) Enforcement and Administrative Proceeding 
Authority.--
            ``(1) Primary enforcement authority.--
                    ``(A) Securities and exchange commission.--
                Except as provided in subparagraph (B), (C), or 
                (D), the Commission shall have primary 
                authority to enforce subtitle B, and the 
                amendments made by subtitle B of the Wall 
                Street Transparency and Accountability Act of 
                2010, with respect to any person.
                    ``(B) Prudential regulators.--The 
                prudential regulators shall have exclusive 
                authority to enforce the provisions of 
                subsection (e) and other prudential 
                requirements of this title (including risk 
                management standards), with respect to 
                security-based swap dealers or major security-
                based swap participants for which they are the 
                prudential regulator.
                    ``(C) Referral.--
                            ``(i) Violations of nonprudential 
                        requirements.--If the appropriate 
                        Federal banking agency for security-
                        based swap dealers or major security-
                        based swap participants that are 
                        depository institutions has cause to 
                        believe that such security-based swap 
                        dealer or major security-based swap 
                        participant may have engaged in conduct 
                        that constitutes a violation of the 
                        nonprudential requirements of this 
                        section or rules adopted by the 
                        Commission thereunder, the agency may 
                        recommend in writing to the Commission 
                        that the Commission initiate an 
                        enforcement proceeding as authorized 
                        under this title. The recommendation 
                        shall be accompanied by a written 
                        explanation of the concerns giving rise 
                        to the recommendation.
                            ``(ii) Violations of prudential 
                        requirements.--If the Commission has 
                        cause to believe that a securities-
                        based swap dealer or major securities-
                        based swap participant that has a 
                        prudential regulator may have engaged 
                        in conduct that constitute a violation 
                        of the prudential requirements of 
                        subsection (e) or rules adopted 
                        thereunder, the Commission may 
                        recommend in writing to the prudential 
                        regulator that the prudential regulator 
                        initiate an enforcement proceeding as 
                        authorized under this title. The 
                        recommendation shall be accompanied by 
                        a written explanation of the concerns 
                        giving rise to the recommendation.
                    ``(D) Backstop enforcement authority.--
                            ``(i) Initiation of enforcement 
                        proceeding by prudential regulator.--If 
                        the Commission does not initiate an 
                        enforcement proceeding before the end 
                        of the 90-day period beginning on the 
                        date on which the Commission receives a 
                        written report under subsection (C)(i), 
                        the prudential regulator may initiate 
                        an enforcement proceeding.
                            ``(ii) Initiation of enforcement 
                        proceeding by commission.--If the 
                        prudential regulator does not initiate 
                        an enforcement proceeding before the 
                        end of the 90-day period beginning on 
                        the date on which the prudential 
                        regulator receives a written report 
                        under subsection (C)(ii), the 
                        Commission may initiate an enforcement 
                        proceeding.
            ``(2) Censure, denial, suspension; notice and 
        hearing.--The Commission, by order, shall censure, 
        place limitations on the activities, functions, or 
        operations of, or revoke the registration of any 
        security-based swap dealer or major security-based swap 
        participant that has registered with the Commission 
        pursuant to subsection (b) if the Commission finds, on 
        the record after notice and opportunity for hearing, 
        that such censure, placing of limitations, or 
        revocation is in the public interest and that such 
        security-based swap dealer or major security-based swap 
        participant, or any person associated with such 
        security-based swap dealer or major security-based swap 
        participant effecting or involved in effecting 
        transactions in security-based swaps on behalf of such 
        security-based swap dealer or major security-based swap 
        participant, whether prior or subsequent to becoming so 
        associated--
                    ``(A) has committed or omitted any act, or 
                is subject to an order or finding, enumerated 
                in subparagraph (A), (D), or (E) of paragraph 
                (4) of section 15(b);
                    ``(B) has been convicted of any offense 
                specified in subparagraph (B) of such paragraph 
                (4) within 10 years of the commencement of the 
                proceedings under this subsection;
                    ``(C) is enjoined from any action, conduct, 
                or practice specified in subparagraph (C) of 
                such paragraph (4);
                    ``(D) is subject to an order or a final 
                order specified in subparagraph (F) or (H), 
                respectively, of such paragraph (4); or
                    ``(E) has been found by a foreign financial 
                regulatory authority to have committed or 
                omitted any act, or violated any foreign 
                statute or regulation, enumerated in 
                subparagraph (G) of such paragraph (4).
            ``(3) Associated persons.--With respect to any 
        person who is associated, who is seeking to become 
        associated, or, at the time of the alleged misconduct, 
        who was associated or was seeking to become associated 
        with a security-based swap dealer or major security-
        based swap participant for the purpose of effecting or 
        being involved in effecting security-based swaps on 
        behalf of such security-based swap dealer or major 
        security-based swap participant, the Commission, by 
        order, shall censure, place limitations on the 
        activities or functions of such person, or suspend for 
        a period not exceeding 12 months, or bar such person 
        from being associated with a security-based swap dealer 
        or major security-based swap participant, if the 
        Commission finds, on the record after notice and 
        opportunity for a hearing, that such censure, placing 
        of limitations, suspension, or bar is in the public 
        interest and that such person--
                    ``(A) has committed or omitted any act, or 
                is subject to an order or finding, enumerated 
                in subparagraph (A), (D), or (E) of paragraph 
                (4) of section 15(b);
                    ``(B) has been convicted of any offense 
                specified in subparagraph (B) of such paragraph 
                (4) within 10 years of the commencement of the 
                proceedings under this subsection;
                    ``(C) is enjoined from any action, conduct, 
                or practice specified in subparagraph (C) of 
                such paragraph (4);
                    ``(D) is subject to an order or a final 
                order specified in subparagraph (F) or (H), 
                respectively, of such paragraph (4); or
                    ``(E) has been found by a foreign financial 
                regulatory authority to have committed or 
                omitted any act, or violated any foreign 
                statute or regulation, enumerated in 
                subparagraph (G) of such paragraph (4).
            ``(4) Unlawful conduct.--It shall be unlawful--
                    ``(A) for any person as to whom an order 
                under paragraph (3) is in effect, without the 
                consent of the Commission, willfully to become, 
                or to be, associated with a security-based swap 
                dealer or major security-based swap participant 
                in contravention of such order; or
                    ``(B) for any security-based swap dealer or 
                major security-based swap participant to permit 
                such a person, without the consent of the 
                Commission, to become or remain a person 
                associated with the security-based swap dealer 
                or major security-based swap participant in 
                contravention of such order, if such security-
                based swap dealer or major security-based swap 
                participant knew, or in the exercise of 
                reasonable care should have known, of such 
                order.''.
    (b) Savings Clause.--Notwithstanding any other provision of 
this title, nothing in this subtitle shall be construed as 
divesting any appropriate Federal banking agency of any 
authority it may have to establish or enforce, with respect to 
a person for which such agency is the appropriate Federal 
banking agency, prudential or other standards pursuant to 
authority by Federal law other than this title.

SEC. 765. RULEMAKING ON CONFLICT OF INTEREST.

    (a) In General.--In order to mitigate conflicts of 
interest, not later than 180 days after the date of enactment 
of the Wall Street Transparency and Accountability Act of 2010, 
the Securities and Exchange Commission shall adopt rules which 
may include numerical limits on the control of, or the voting 
rights with respect to, any clearing agency that clears 
security-based swaps, or on the control of any security-based 
swap execution facility or national securities exchange that 
posts or makes available for trading security-based swaps, by a 
bank holding company (as defined in section 2 of the Bank 
Holding Company Act of 1956 (12 U.S.C. 1841)) with total 
consolidated assets of $50,000,000,000 or more, a nonbank 
financial company (as defined in section 102) supervised by the 
Board of Governors of the Federal Reserve System, affiliate of 
such a bank holding company or nonbank financial company, a 
security-based swap dealer, major security-based swap 
participant, or person associated with a security-based swap 
dealer or major security-based swap participant.
    (b) Purposes.--The Securities and Exchange Commission shall 
adopt rules if the Commission determines, after the review 
described in subsection (a), that such rules are necessary or 
appropriate to improve the governance of, or to mitigate 
systemic risk, promote competition, or mitigate conflicts of 
interest in connection with a security-based swap dealer or 
major security-based swap participant's conduct of business 
with, a clearing agency, national securities exchange, or 
security-based swap execution facility that clears, posts, or 
makes available for trading security-based swaps and in which 
such security-based swap dealer or major security-based swap 
participant has a material debt or equity investment.
    (c) Considerations.--In adopting rules pursuant to this 
section, the Securities and Exchange Commission shall consider 
any conflicts of interest arising from the amount of equity 
owned by a single investor, the ability to vote, cause the vote 
of, or withhold votes entitled to be cast on any matters by the 
holders of the ownership interest, and the governance 
arrangements of any derivatives clearing organization that 
clears swaps, or swap execution facility or board of trade 
designated as a contract market that posts swaps or makes swaps 
available for trading.

SEC. 766. REPORTING AND RECORDKEEPING.

    (a) In General.--The Securities Exchange Act of 1934 (15 
U.S.C. 78a et seq.) is amended by inserting after section 13 
the following:

``SEC. 13A. REPORTING AND RECORDKEEPING FOR CERTAIN SECURITY-BASED 
                    SWAPS.

    ``(a) Required Reporting of Security-based Swaps Not 
Accepted by Any Clearing Agency or Derivatives Clearing 
Organization.--
            ``(1) In general.--Each security-based swap that is 
        not accepted for clearing by any clearing agency or 
        derivatives clearing organization shall be reported 
        to--
                    ``(A) a security-based swap data repository 
                described in section 13(n); or
                    ``(B) in the case in which there is no 
                security-based swap data repository that would 
                accept the security-based swap, to the 
                Commission pursuant to this section within such 
                time period as the Commission may by rule or 
                regulation prescribe.
            ``(2) Transition rule for preenactment security-
        based swaps.--
                    ``(A) Security-based swaps entered into 
                before the date of enactment of the wall street 
                transparency and accountability act of 2010.--
                Each security-based swap entered into before 
                the date of enactment of the Wall Street 
                Transparency and Accountability Act of 2010, 
                the terms of which have not expired as of the 
                date of enactment of that Act, shall be 
                reported to a registered security-based swap 
                data repository or the Commission by a date 
                that is not later than--
                            ``(i) 30 days after issuance of the 
                        interim final rule; or
                            ``(ii) such other period as the 
                        Commission determines to be 
                        appropriate.
                    ``(B) Commission rulemaking.--The 
                Commission shall promulgate an interim final 
                rule within 90 days of the date of enactment of 
                this section providing for the reporting of 
                each security-based swap entered into before 
                the date of enactment as referenced in 
                subparagraph (A).
                    ``(C) Effective date.--The reporting 
                provisions described in this section shall be 
                effective upon the date of the enactment of 
                this section.
            ``(3) Reporting obligations.--
                    ``(A) Security-based swaps in which only 1 
                counterparty is a security-based swap dealer or 
                major security-based swap participant.--With 
                respect to a security-based swap in which only 
                1 counterparty is a security-based swap dealer 
                or major security-based swap participant, the 
                security-based swap dealer or major security-
                based swap participant shall report the 
                security-based swap as required under 
                paragraphs (1) and (2).
                    ``(B) Security-based swaps in which 1 
                counterparty is a security-based swap dealer 
                and the other a major security-based swap 
                participant.--With respect to a security-based 
                swap in which 1 counterparty is a security-
                based swap dealer and the other a major 
                security-based swap participant, the security-
                based swap dealer shall report the security-
                based swap as required under paragraphs (1) and 
                (2).
                    ``(C) Other security-based swaps.--With 
                respect to any other security-based swap not 
                described in subparagraph (A) or (B), the 
                counterparties to the security-based swap shall 
                select a counterparty to report the security-
                based swap as required under paragraphs (1) and 
                (2).
    ``(b) Duties of Certain Individuals.--Any individual or 
entity that enters into a security-based swap shall meet each 
requirement described in subsection (c) if the individual or 
entity did not--
            ``(1) clear the security-based swap in accordance 
        with section 3C(a)(1); or
            ``(2) have the data regarding the security-based 
        swap accepted by a security-based swap data repository 
        in accordance with rules (including timeframes) adopted 
        by the Commission under this title.
    ``(c) Requirements.--An individual or entity described in 
subsection (b) shall--
            ``(1) upon written request from the Commission, 
        provide reports regarding the security-based swaps held 
        by the individual or entity to the Commission in such 
        form and in such manner as the Commission may request; 
        and
            ``(2) maintain books and records pertaining to the 
        security-based swaps held by the individual or entity 
        in such form, in such manner, and for such period as 
        the Commission may require, which shall be open to 
        inspection by--
                    ``(A) any representative of the Commission;
                    ``(B) an appropriate prudential regulator;
                    ``(C) the Commodity Futures Trading 
                Commission;
                    ``(D) the Financial Stability Oversight 
                Council; and
                    ``(E) the Department of Justice.
    ``(d) Identical Data.--In prescribing rules under this 
section, the Commission shall require individuals and entities 
described in subsection (b) to submit to the Commission a 
report that contains data that is not less comprehensive than 
the data required to be collected by security-based swap data 
repositories under this title.''.
    (b) Beneficial Ownership Reporting.--Section 13 of the 
Securities Exchange Act of 1934 (15 U.S.C. 78m) is amended--
            (1) in subsection (d)(1), by inserting ``or 
        otherwise becomes or is deemed to become a beneficial 
        owner of any of the foregoing upon the purchase or sale 
        of a security-based swap that the Commission may define 
        by rule, and'' after ``Alaska Native Claims Settlement 
        Act,''; and
            (2) in subsection (g)(1), by inserting ``or 
        otherwise becomes or is deemed to become a beneficial 
        owner of any security of a class described in 
        subsection (d)(1) upon the purchase or sale of a 
        security-based swap that the Commission may define by 
        rule'' after ``subsection (d)(1) of this section''.
    (c) Reports by Institutional Investment Managers.--Section 
13(f)(1) of the Securities Exchange Act of 1934 (15 U.S.C. 
78m(f)(1)) is amended by inserting ``or otherwise becomes or is 
deemed to become a beneficial owner of any security of a class 
described in subsection (d)(1) upon the purchase or sale of a 
security-based swap that the Commission may define by rule,'' 
after ``subsection (d)(1) of this section''.
    (d) Administrative Proceeding Authority.--Section 15(b)(4) 
of the Securities Exchange Act of 1934 (15 U.S.C. 78o(b)(4)) is 
amended--
            (1) in subparagraph (C), by inserting ``security-
        based swap dealer, major security-based swap 
        participant,'' after ``government securities dealer,''; 
        and
            (2) in subparagraph (F), by striking ``broker or 
        dealer'' and inserting ``broker, dealer, security-based 
        swap dealer, or a major security-based swap 
        participant''.
    (e) Security-based Swap Beneficial Ownership.--Section 13 
of the Securities Exchange Act of 1934 (15 U.S.C. 78m) is 
amended by adding at the end the following:
    ``(o) Beneficial Ownership.--For purposes of this section 
and section 16, a person shall be deemed to acquire beneficial 
ownership of an equity security based on the purchase or sale 
of a security-based swap, only to the extent that the 
Commission, by rule, determines after consultation with the 
prudential regulators and the Secretary of the Treasury, that 
the purchase or sale of the security-based swap, or class of 
security-based swap, provides incidents of ownership comparable 
to direct ownership of the equity security, and that it is 
necessary to achieve the purposes of this section that the 
purchase or sale of the security-based swaps, or class of 
security-based swap, be deemed the acquisition of beneficial 
ownership of the equity security.''.

SEC. 767. STATE GAMING AND BUCKET SHOP LAWS.

    Section 28(a) of the Securities Exchange Act of 1934 (15 
U.S.C. 78bb(a)) is amended to read as follows:
    ``(a) Limitation on Judgments.--
            ``(1) In general.--No person permitted to maintain 
        a suit for damages under the provisions of this title 
        shall recover, through satisfaction of judgment in 1 or 
        more actions, a total amount in excess of the actual 
        damages to that person on account of the act complained 
        of. Except as otherwise specifically provided in this 
        title, nothing in this title shall affect the 
        jurisdiction of the securities commission (or any 
        agency or officer performing like functions) of any 
        State over any security or any person insofar as it 
        does not conflict with the provisions of this title or 
        the rules and regulations under this title.
            ``(2) Rule of construction.--Except as provided in 
        subsection (f), the rights and remedies provided by 
        this title shall be in addition to any and all other 
        rights and remedies that may exist at law or in equity.
            ``(3) State bucket shop laws.--No State law which 
        prohibits or regulates the making or promoting of 
        wagering or gaming contracts, or the operation of 
        `bucket shops' or other similar or related activities, 
        shall invalidate--
                    ``(A) any put, call, straddle, option, 
                privilege, or other security subject to this 
                title (except any security that has a pari-
                mutuel payout or otherwise is determined by the 
                Commission, acting by rule, regulation, or 
                order, to be appropriately subject to such 
                laws), or apply to any activity which is 
                incidental or related to the offer, purchase, 
                sale, exercise, settlement, or closeout of any 
                such security;
                    ``(B) any security-based swap between 
                eligible contract participants; or
                    ``(C) any security-based swap effected on a 
                national securities exchange registered 
                pursuant to section 6(b).
            ``(4) Other state provisions.--No provision of 
        State law regarding the offer, sale, or distribution of 
        securities shall apply to any transaction in a 
        security-based swap or a security futures product, 
        except that this paragraph may not be construed as 
        limiting any State antifraud law of general 
        applicability. A security-based swap may not be 
        regulated as an insurance contract under any provision 
        of State law.''.

SEC. 768. AMENDMENTS TO THE SECURITIES ACT OF 1933; TREATMENT OF 
                    SECURITY-BASED SWAPS.

    (a) Definitions.--Section 2(a) of the Securities Act of 
1933 (15 U.S.C. 77b(a)) is amended--
            (1) in paragraph (1), by inserting ``security-based 
        swap,'' after ``security future,'';
            (2) in paragraph (3), by adding at the end the 
        following: ``Any offer or sale of a security-based swap 
        by or on behalf of the issuer of the securities upon 
        which such security-based swap is based or is 
        referenced, an affiliate of the issuer, or an 
        underwriter, shall constitute a contract for sale of, 
        sale of, offer for sale, or offer to sell such 
        securities.''; and
            (3) by adding at the end the following:
            ``(17) The terms `swap' and `security-based swap' 
        have the same meanings as in section 1a of the 
        Commodity Exchange Act (7 U.S.C. 1a).
            ``(18) The terms `purchase' or `sale' of a 
        security-based swap shall be deemed to mean the 
        execution, termination (prior to its scheduled maturity 
        date), assignment, exchange, or similar transfer or 
        conveyance of, or extinguishing of rights or 
        obligations under, a security-based swap, as the 
        context may require.''.
    (b) Registration of Security-based Swaps.--Section 5 of the 
Securities Act of 1933 (15 U.S.C. 77e) is amended by adding at 
the end the following:
    ``(d) Notwithstanding the provisions of section 3 or 4, 
unless a registration statement meeting the requirements of 
section 10(a) is in effect as to a security-based swap, it 
shall be unlawful for any person, directly or indirectly, to 
make use of any means or instruments of transportation or 
communication in interstate commerce or of the mails to offer 
to sell, offer to buy or purchase or sell a security-based swap 
to any person who is not an eligible contract participant as 
defined in section 1a(18) of the Commodity Exchange Act (7 
U.S.C. 1a(18)).''.

SEC. 769. DEFINITIONS UNDER THE INVESTMENT COMPANY ACT OF 1940.

    Section 2(a) of the Investment Company Act of 1940 (15 
U.S.C. 80a-2) is amended by adding at the end the following:
            ``(54) The terms `commodity pool', `commodity pool 
        operator', `commodity trading advisor', `major swap 
        participant', `swap', `swap dealer', and `swap 
        execution facility' have the same meanings as in 
        section 1a of the Commodity Exchange Act (7 U.S.C. 
        1a).''.

SEC. 770. DEFINITIONS UNDER THE INVESTMENT ADVISERS ACT OF 1940.

    Section 202(a) of the Investment Advisers Act of 1940 (15 
U.S.C. 80b-2) is amended by adding at the end the following:
            ``(29) The terms `commodity pool', `commodity pool 
        operator', `commodity trading advisor', `major swap 
        participant', `swap', `swap dealer', and `swap 
        execution facility' have the same meanings as in 
        section 1a of the Commodity Exchange Act (7 U.S.C. 
        1a).''.

SEC. 771. OTHER AUTHORITY.

    Unless otherwise provided by its terms, this subtitle does 
not divest any appropriate Federal banking agency, the 
Securities and Exchange Commission, the Commodity Futures 
Trading Commission, or any other Federal or State agency, of 
any authority derived from any other provision of applicable 
law.

SEC. 772. JURISDICTION.

    (a) In General.--Section 36 of the Securities Exchange Act 
of 1934 (15 U.S.C. 78mm) is amended by adding at the end the 
following:
    ``(c) Derivatives.--Unless the Commission is expressly 
authorized by any provision described in this subsection to 
grant exemptions, the Commission shall not grant exemptions, 
with respect to amendments made by subtitle B of the Wall 
Street Transparency and Accountability Act of 2010, with 
respect to paragraphs (65), (66), (68), (69), (70), (71), (72), 
(73), (74), (75), (76), and (79) of section 3(a), and sections 
10B(a), 10B(b), 10B(c), 13A, 15F, 17A(g), 17A(h), 17A(i), 
17A(j), 17A(k), and 17A(l); provided that the Commission shall 
have exemptive authority under this title with respect to 
security-based swaps as to the same matters that the Commodity 
Futures Trading Commission has under the Wall Street 
Transparency and Accountability Act of 2010 with respect to 
swaps, including under section 4(c) of the Commodity Exchange 
Act.''.
    (b) Rule of Construction.--Section 30 of the Securities 
Exchange Act of 1934 (15 U.S.C. 78dd) is amended by adding at 
the end the following:
    ``(c) Rule of Construction.--No provision of this title 
that was added by the Wall Street Transparency and 
Accountability Act of 2010, or any rule or regulation 
thereunder, shall apply to any person insofar as such person 
transacts a business in security-based swaps without the 
jurisdiction of the United States, unless such person transacts 
such business in contravention of such rules and regulations as 
the Commission may prescribe as necessary or appropriate to 
prevent the evasion of any provision of this title that was 
added by the Wall Street Transparency and Accountability Act of 
2010. This subsection shall not be construed to limit the 
jurisdiction of the Commission under any provision of this 
title, as in effect prior to the date of enactment of the Wall 
Street Transparency and Accountability Act of 2010.''.

SEC. 773. CIVIL PENALTIES.

    Section 21B of the Securities Exchange Act of 1934 (15 
U.S.C. 78p-2) is amended by adding at the end the following:
    ``(f) Security-based Swaps.--
            ``(1) Clearing agency.--Any clearing agency that 
        knowingly or recklessly evades or participates in or 
        facilitates an evasion of the requirements of section 
        3C shall be liable for a civil money penalty in twice 
        the amount otherwise available for a violation of 
        section 3C.
            ``(2) Security-based swap dealer or major security-
        based swap participant.--Any security-based swap dealer 
        or major security-based swap participant that knowingly 
        or recklessly evades or participates in or facilitates 
        an evasion of the requirements of section 3C shall be 
        liable for a civil money penalty in twice the amount 
        otherwise available for a violation of section 3C.''.

SEC. 774. EFFECTIVE DATE.

    Unless otherwise provided, the provisions of this subtitle 
shall take effect on the later of 360 days after the date of 
the enactment of this subtitle or, to the extent a provision of 
this subtitle requires a rulemaking, not less than 60 days 
after publication of the final rule or regulation implementing 
such provision of this subtitle.

       TITLE VIII--PAYMENT, CLEARING, AND SETTLEMENT SUPERVISION

SEC. 801. SHORT TITLE.

    This title may be cited as the ``Payment, Clearing, and 
Settlement Supervision Act of 2010''.

SEC. 802. FINDINGS AND PURPOSES.

    (a) Findings.--Congress finds the following:
            (1) The proper functioning of the financial markets 
        is dependent upon safe and efficient arrangements for 
        the clearing and settlement of payment, securities, and 
        other financial transactions.
            (2) Financial market utilities that conduct or 
        support multilateral payment, clearing, or settlement 
        activities may reduce risks for their participants and 
        the broader financial system, but such utilities may 
        also concentrate and create new risks and thus must be 
        well designed and operated in a safe and sound manner.
            (3) Payment, clearing, and settlement activities 
        conducted by financial institutions also present 
        important risks to the participating financial 
        institutions and to the financial system.
            (4) Enhancements to the regulation and supervision 
        of systemically important financial market utilities 
        and the conduct of systemically important payment, 
        clearing, and settlement activities by financial 
        institutions are necessary--
                    (A) to provide consistency;
                    (B) to promote robust risk management and 
                safety and soundness;
                    (C) to reduce systemic risks; and
                    (D) to support the stability of the broader 
                financial system.
    (b) Purpose.--The purpose of this title is to mitigate 
systemic risk in the financial system and promote financial 
stability by--
            (1) authorizing the Board of Governors to promote 
        uniform standards for the--
                    (A) management of risks by systemically 
                important financial market utilities; and
                    (B) conduct of systemically important 
                payment, clearing, and settlement activities by 
                financial institutions;
            (2) providing the Board of Governors an enhanced 
        role in the supervision of risk management standards 
        for systemically important financial market utilities;
            (3) strengthening the liquidity of systemically 
        important financial market utilities; and
            (4) providing the Board of Governors an enhanced 
        role in the supervision of risk management standards 
        for systemically important payment, clearing, and 
        settlement activities by financial institutions.

SEC. 803. DEFINITIONS.

    In this title, the following definitions shall apply:
            (1) Appropriate financial regulator.--The term 
        ``appropriate financial regulator'' means--
                    (A) the primary financial regulatory 
                agency, as defined in section 2 of this Act;
                    (B) the National Credit Union 
                Administration, with respect to any insured 
                credit union under the Federal Credit Union Act 
                (12 U.S.C. 1751 et seq.); and
                    (C) the Board of Governors, with respect to 
                organizations operating under section 25A of 
                the Federal Reserve Act (12 U.S.C. 611), and 
                any other financial institution engaged in a 
                designated activity.
            (2) Designated activity.--The term ``designated 
        activity'' means a payment, clearing, or settlement 
        activity that the Council has designated as 
        systemically important under section 804.
            (3) Designated clearing entity.--The term 
        ``designated clearing entity'' means a designated 
        financial market utility that is a derivatives clearing 
        organization registered under section 5b of the 
        Commodity Exchange Act (7 U.S.C. 7a-1) or a clearing 
        agency registered with the Securities and Exchange 
        Commission under section 17A of the Securities Exchange 
        Act of 1934 (15 U.S.C. 78q-1).
            (4) Designated financial market utility.--The term 
        ``designated financial market utility'' means a 
        financial market utility that the Council has 
        designated as systemically important under section 804.
            (5) Financial institution.--
                    (A) In general.--The term ``financial 
                institution'' means--
                            (i) a depository institution, as 
                        defined in section 3 of the Federal 
                        Deposit Insurance Act (12 U.S.C. 1813);
                            (ii) a branch or agency of a 
                        foreign bank, as defined in section 
                        1(b) of the International Banking Act 
                        of 1978 (12 U.S.C. 3101);
                            (iii) an organization operating 
                        under section 25 or 25A of the Federal 
                        Reserve Act (12 U.S.C. 601-604a and 611 
                        through 631);
                            (iv) a credit union, as defined in 
                        section 101 of the Federal Credit Union 
                        Act (12 U.S.C. 1752);
                            (v) a broker or dealer, as defined 
                        in section 3 of the Securities Exchange 
                        Act of 1934 (15 U.S.C. 78c);
                            (vi) an investment company, as 
                        defined in section 3 of the Investment 
                        Company Act of 1940 (15 U.S.C. 80a-3);
                            (vii) an insurance company, as 
                        defined in section 2 of the Investment 
                        Company Act of 1940 (15 U.S.C. 80a-2);
                            (viii) an investment adviser, as 
                        defined in section 202 of the 
                        Investment Advisers Act of 1940 (15 
                        U.S.C. 80b-2);
                            (ix) a futures commission merchant, 
                        commodity trading advisor, or commodity 
                        pool operator, as defined in section 1a 
                        of the Commodity Exchange Act (7 U.S.C. 
                        1a); and
                            (x) any company engaged in 
                        activities that are financial in nature 
                        or incidental to a financial activity, 
                        as described in section 4 of the Bank 
                        Holding Company Act of 1956 (12 U.S.C. 
                        1843(k)).
                    (B) Exclusions.--The term ``financial 
                institution'' does not include designated 
                contract markets, registered futures 
                associations, swap data repositories, and swap 
                execution facilities registered under the 
                Commodity Exchange Act (7 U.S.C. 1 et seq.), or 
                national securities exchanges, national 
                securities associations, alternative trading 
                systems, securities information processors 
                solely with respect to the activities of the 
                entity as a securities information processor, 
                security-based swap data repositories, and swap 
                execution facilities registered under the 
                Securities Exchange Act of 1934 (15 U.S.C. 78a 
                et seq.), or designated clearing entities, 
                provided that the exclusions in this 
                subparagraph apply only with respect to the 
                activities that require the entity to be so 
                registered.
            (6) Financial market utility.--
                    (A) Inclusion.--The term ``financial market 
                utility'' means any person that manages or 
                operates a multilateral system for the purpose 
                of transferring, clearing, or settling 
                payments, securities, or other financial 
                transactions among financial institutions or 
                between financial institutions and the person.
                    (B) Exclusions.--The term ``financial 
                market utility'' does not include--
                            (i) designated contract markets, 
                        registered futures associations, swap 
                        data repositories, and swap execution 
                        facilities registered under the 
                        Commodity Exchange Act (7 U.S.C. 1 et 
                        seq.), or national securities 
                        exchanges, national securities 
                        associations, alternative trading 
                        systems, security-based swap data 
                        repositories, and swap execution 
                        facilities registered under the 
                        Securities Exchange Act of 1934 (15 
                        U.S.C. 78a et seq.), solely by reason 
                        of their providing facilities for 
                        comparison of data respecting the terms 
                        of settlement of securities or futures 
                        transactions effected on such exchange 
                        or by means of any electronic system 
                        operated or controlled by such 
                        entities, provided that the exclusions 
                        in this clause apply only with respect 
                        to the activities that require the 
                        entity to be so registered; and
                            (ii) any broker, dealer, transfer 
                        agent, or investment company, or any 
                        futures commission merchant, 
                        introducing broker, commodity trading 
                        advisor, or commodity pool operator, 
                        solely by reason of functions performed 
                        by such institution as part of 
                        brokerage, dealing, transfer agency, or 
                        investment company activities, or 
                        solely by reason of acting on behalf of 
                        a financial market utility or a 
                        participant therein in connection with 
                        the furnishing by the financial market 
                        utility of services to its participants 
                        or the use of services of the financial 
                        market utility by its participants, 
                        provided that services performed by 
                        such institution do not constitute 
                        critical risk management or processing 
                        functions of the financial market 
                        utility.
            (7) Payment, clearing, or settlement activity.--
                    (A) In general.--The term ``payment, 
                clearing, or settlement activity'' means an 
                activity carried out by 1 or more financial 
                institutions to facilitate the completion of 
                financial transactions, but shall not include 
                any offer or sale of a security under the 
                Securities Act of 1933 (15 U.S.C. 77a et seq.), 
                or any quotation, order entry, negotiation, or 
                other pre-trade activity or execution activity.
                    (B) Financial transaction.--For the 
                purposes of subparagraph (A), the term 
                ``financial transaction'' includes--
                            (i) funds transfers;
                            (ii) securities contracts;
                            (iii) contracts of sale of a 
                        commodity for future delivery;
                            (iv) forward contracts;
                            (v) repurchase agreements;
                            (vi) swaps;
                            (vii) security-based swaps;
                            (viii) swap agreements;
                            (ix) security-based swap 
                        agreements;
                            (x) foreign exchange contracts;
                            (xi) financial derivatives 
                        contracts; and
                            (xii) any similar transaction that 
                        the Council determines to be a 
                        financial transaction for purposes of 
                        this title.
                    (C) Included activities.--When conducted 
                with respect to a financial transaction, 
                payment, clearing, and settlement activities 
                may include--
                            (i) the calculation and 
                        communication of unsettled financial 
                        transactions between counterparties;
                            (ii) the netting of transactions;
                            (iii) provision and maintenance of 
                        trade, contract, or instrument 
                        information;
                            (iv) the management of risks and 
                        activities associated with continuing 
                        financial transactions;
                            (v) transmittal and storage of 
                        payment instructions;
                            (vi) the movement of funds;
                            (vii) the final settlement of 
                        financial transactions; and
                            (viii) other similar functions that 
                        the Council may determine.
                    (D) Exclusion.--Payment, clearing, and 
                settlement activities shall not include public 
                reporting of swap transaction data under 
                section 727 or 763(i) of the Wall Street 
                Transparency and Accountability Act of 2010.
            (8) Supervisory agency.--
                    (A) In general.--The term ``Supervisory 
                Agency'' means the Federal agency that has 
                primary jurisdiction over a designated 
                financial market utility under Federal banking, 
                securities, or commodity futures laws, as 
                follows:
                            (i) The Securities and Exchange 
                        Commission, with respect to a 
                        designated financial market utility 
                        that is a clearing agency registered 
                        with the Securities and Exchange 
                        Commission.
                            (ii) The Commodity Futures Trading 
                        Commission, with respect to a 
                        designated financial market utility 
                        that is a derivatives clearing 
                        organization registered with the 
                        Commodity Futures Trading Commission.
                            (iii) The appropriate Federal 
                        banking agency, with respect to a 
                        designated financial market utility 
                        that is an institution described in 
                        section 3(q) of the Federal Deposit 
                        Insurance Act.
                            (iv) The Board of Governors, with 
                        respect to a designated financial 
                        market utility that is otherwise not 
                        subject to the jurisdiction of any 
                        agency listed in clauses (i), (ii), and 
                        (iii).
                    (B) Multiple agency jurisdiction.--If a 
                designated financial market utility is subject 
                to the jurisdictional supervision of more than 
                1 agency listed in subparagraph (A), then such 
                agencies should agree on 1 agency to act as the 
                Supervisory Agency, and if such agencies cannot 
                agree on which agency has primary jurisdiction, 
                the Council shall decide which agency is the 
                Supervisory Agency for purposes of this title.
            (9) Systemically important and systemic 
        importance.--The terms ``systemically important'' and 
        ``systemic importance'' mean a situation where the 
        failure of or a disruption to the functioning of a 
        financial market utility or the conduct of a payment, 
        clearing, or settlement activity could create, or 
        increase, the risk of significant liquidity or credit 
        problems spreading among financial institutions or 
        markets and thereby threaten the stability of the 
        financial system of the United States.

SEC. 804. DESIGNATION OF SYSTEMIC IMPORTANCE.

    (a) Designation.--
            (1) Financial stability oversight council.--The 
        Council, on a nondelegable basis and by a vote of not 
        fewer than \2/3\ of members then serving, including an 
        affirmative vote by the Chairperson of the Council, 
        shall designate those financial market utilities or 
        payment, clearing, or settlement activities that the 
        Council determines are, or are likely to become, 
        systemically important.
            (2) Considerations.--In determining whether a 
        financial market utility or payment, clearing, or 
        settlement activity is, or is likely to become, 
        systemically important, the Council shall take into 
        consideration the following:
                    (A) The aggregate monetary value of 
                transactions processed by the financial market 
                utility or carried out through the payment, 
                clearing, or settlement activity.
                    (B) The aggregate exposure of the financial 
                market utility or a financial institution 
                engaged in payment, clearing, or settlement 
                activities to its counterparties.
                    (C) The relationship, interdependencies, or 
                other interactions of the financial market 
                utility or payment, clearing, or settlement 
                activity with other financial market utilities 
                or payment, clearing, or settlement activities.
                    (D) The effect that the failure of or a 
                disruption to the financial market utility or 
                payment, clearing, or settlement activity would 
                have on critical markets, financial 
                institutions, or the broader financial system.
                    (E) Any other factors that the Council 
                deems appropriate.
    (b) Rescission of Designation.--
            (1) In general.--The Council, on a nondelegable 
        basis and by a vote of not fewer than \2/3\ of members 
        then serving, including an affirmative vote by the 
        Chairperson of the Council, shall rescind a designation 
        of systemic importance for a designated financial 
        market utility or designated activity if the Council 
        determines that the utility or activity no longer meets 
        the standards for systemic importance.
            (2) Effect of rescission.--Upon rescission, the 
        financial market utility or financial institutions 
        conducting the activity will no longer be subject to 
        the provisions of this title or any rules or orders 
        prescribed under this title.
    (c) Consultation and Notice and Opportunity for Hearing.--
            (1) Consultation.--Before making any determination 
        under subsection (a) or (b), the Council shall consult 
        with the relevant Supervisory Agency and the Board of 
        Governors.
            (2) Advance notice and opportunity for hearing.--
                    (A) In general.--Before making any 
                determination under subsection (a) or (b), the 
                Council shall provide the financial market 
                utility or, in the case of a payment, clearing, 
                or settlement activity, financial institutions 
                with advance notice of the proposed 
                determination of the Council.
                    (B) Notice in federal register.--The 
                Council shall provide such advance notice to 
                financial institutions by publishing a notice 
                in the Federal Register.
                    (C) Requests for hearing.--Within 30 days 
                from the date of any notice of the proposed 
                determination of the Council, the financial 
                market utility or, in the case of a payment, 
                clearing, or settlement activity, a financial 
                institution engaged in the designated activity 
                may request, in writing, an opportunity for a 
                written or oral hearing before the Council to 
                demonstrate that the proposed designation or 
                rescission of designation is not supported by 
                substantial evidence.
                    (D) Written submissions.--Upon receipt of a 
                timely request, the Council shall fix a time, 
                not more than 30 days after receipt of the 
                request, unless extended at the request of the 
                financial market utility or financial 
                institution, and place at which the financial 
                market utility or financial institution may 
                appear, personally or through counsel, to 
                submit written materials, or, at the sole 
                discretion of the Council, oral testimony or 
                oral argument.
            (3) Emergency exception.--
                    (A) Waiver or modification by vote of the 
                council.--The Council may waive or modify the 
                requirements of paragraph (2) if the Council 
                determines, by an affirmative vote of not fewer 
                than \2/3\ of members then serving, including 
                an affirmative vote by the Chairperson of the 
                Council, that the waiver or modification is 
                necessary to prevent or mitigate an immediate 
                threat to the financial system posed by the 
                financial market utility or the payment, 
                clearing, or settlement activity.
                    (B) Notice of waiver or modification.--The 
                Council shall provide notice of the waiver or 
                modification to the financial market utility 
                concerned or, in the case of a payment, 
                clearing, or settlement activity, to financial 
                institutions, as soon as practicable, which 
                shall be no later than 24 hours after the 
                waiver or modification in the case of a 
                financial market utility and 3 business days in 
                the case of financial institutions. The Council 
                shall provide the notice to financial 
                institutions by posting a notice on the website 
                of the Council and by publishing a notice in 
                the Federal Register.
    (d) Notification of Final Determination.--
            (1) After hearing.--Within 60 days of any hearing 
        under subsection (c)(2), the Council shall notify the 
        financial market utility or financial institutions of 
        the final determination of the Council in writing, 
        which shall include findings of fact upon which the 
        determination of the Council is based.
            (2) When no hearing requested.--If the Council does 
        not receive a timely request for a hearing under 
        subsection (c)(2), the Council shall notify the 
        financial market utility or financial institutions of 
        the final determination of the Council in writing not 
        later than 30 days after the expiration of the date by 
        which a financial market utility or a financial 
        institution could have requested a hearing. All notices 
        to financial institutions under this subsection shall 
        be published in the Federal Register.
    (e) Extension of Time Periods.--The Council may extend the 
time periods established in subsections (c) and (d) as the 
Council determines to be necessary or appropriate.

SEC. 805. STANDARDS FOR SYSTEMICALLY IMPORTANT FINANCIAL MARKET 
                    UTILITIES AND PAYMENT, CLEARING, OR SETTLEMENT 
                    ACTIVITIES.

    (a) Authority to Prescribe Standards.--
            (1) Board of governors.--Except as provided in 
        paragraph (2), the Board of Governors, by rule or 
        order, and in consultation with the Council and the 
        Supervisory Agencies, shall prescribe risk management 
        standards, taking into consideration relevant 
        international standards and existing prudential 
        requirements, governing--
                    (A) the operations related to the payment, 
                clearing, and settlement activities of 
                designated financial market utilities; and
                    (B) the conduct of designated activities by 
                financial institutions.
            (2) Special procedures for designated clearing 
        entities and designated activities of certain financial 
        institutions.--
                    (A) CFTC and commission.--The Commodity 
                Futures Trading Commission and the Commission 
                may each prescribe regulations, in consultation 
                with the Council and the Board of Governors, 
                containing risk management standards, taking 
                into consideration relevant international 
                standards and existing prudential requirements, 
                for those designated clearing entities and 
                financial institutions engaged in designated 
                activities for which each is the Supervisory 
                Agency or the appropriate financial regulator, 
                governing--
                            (i) the operations related to 
                        payment, clearing, and settlement 
                        activities of such designated clearing 
                        entities; and
                            (ii) the conduct of designated 
                        activities by such financial 
                        institutions.
                    (B) Review and determination.--The Board of 
                Governors may determine that existing 
                prudential requirements of the Commodity 
                Futures Trading Commission, the Commission, or 
                both (including requirements prescribed 
                pursuant to subparagraph (A)) with respect to 
                designated clearing entities and financial 
                institutions engaged in designated activities 
                for which the Commission or the Commodity 
                Futures Trading Commission is the Supervisory 
                Agency or the appropriate financial regulator 
                are insufficient to prevent or mitigate 
                significant liquidity, credit, operational, or 
                other risks to the financial markets or to the 
                financial stability of the United States.
                    (C) Written determination.--Any 
                determination by the Board of Governors under 
                subparagraph (B) shall be provided in writing 
                to the Commodity Futures Trading Commission or 
                the Commission, as applicable, and the Council, 
                and shall explain why existing prudential 
                requirements, considered as a whole, are 
                insufficient to ensure that the operations and 
                activities of the designated clearing entities 
                or the activities of financial institutions 
                described in subparagraph (B) will not pose 
                significant liquidity, credit, operational, or 
                other risks to the financial markets or to the 
                financial stability of the United States. The 
                Board of Governors' determination shall contain 
                a detailed analysis supporting its findings and 
                identify the specific prudential requirements 
                that are insufficient.
                    (D) CFTC and commission response.--The 
                Commodity Futures Trading Commission or the 
                Commission, as applicable, shall within 60 days 
                either object to the Board of Governors' 
                determination with a detailed analysis as to 
                why existing prudential requirements are 
                sufficient, or submit an explanation to the 
                Council and the Board of Governors describing 
                the actions to be taken in response to the 
                Board of Governors' determination.
                    (E) Authorization.--Upon an affirmative 
                vote by not fewer than \2/3\ of members then 
                serving on the Council, the Council shall 
                either find that the response submitted under 
                subparagraph (D) is sufficient, or require the 
                Commodity Futures Trading Commission, or the 
                Commission, as applicable, to prescribe such 
                risk management standards as the Council 
                determines is necessary to address the specific 
                prudential requirements that are determined to 
                be insufficient.''
    (b) Objectives and Principles.--The objectives and 
principles for the risk management standards prescribed under 
subsection (a) shall be to--
            (1) promote robust risk management;
            (2) promote safety and soundness;
            (3) reduce systemic risks; and
            (4) support the stability of the broader financial 
        system.
    (c) Scope.--The standards prescribed under subsection (a) 
may address areas such as--
            (1) risk management policies and procedures;
            (2) margin and collateral requirements;
            (3) participant or counterparty default policies 
        and procedures;
            (4) the ability to complete timely clearing and 
        settlement of financial transactions;
            (5) capital and financial resource requirements for 
        designated financial market utilities; and
            (6) other areas that are necessary to achieve the 
        objectives and principles in subsection (b).
    (d) Limitation on Scope.--Except as provided in subsections 
(e) and (f) of section 807, nothing in this title shall be 
construed to permit the Council or the Board of Governors to 
take any action or exercise any authority granted to the 
Commodity Futures Trading Commission under section 2(h) of the 
Commodity Exchange Act or the Securities and Exchange 
Commission under section 3C(a) of the Securities Exchange Act 
of 1934, including--
            (1) the approval of, disapproval of, or stay of the 
        clearing requirement for any group, category, type, or 
        class of swaps that a designated clearing entity may 
        accept for clearing;
            (2) the determination that any group, category, 
        type, or class of swaps shall be subject to the 
        mandatory clearing requirement of section 2(h)(1) of 
        the Commodity Exchange Act or section 3C(a)(1) of the 
        Securities Exchange Act of 1934;
            (3) the determination that any person is exempt 
        from the mandatory clearing requirement of section 
        2(h)(1) of the Commodity Exchange Act or section 
        3C(a)(1) of the Securities Exchange Act of 1934; or
            (4) any authority granted to the Commodity Futures 
        Trading Commission or the Securities and Exchange 
        Commission with respect to transaction reporting or 
        trade execution.
    (e) Threshold Level.--The standards prescribed under 
subsection (a) governing the conduct of designated activities 
by financial institutions shall, where appropriate, establish a 
threshold as to the level or significance of engagement in the 
activity at which a financial institution will become subject 
to the standards with respect to that activity.
    (f) Compliance Required.--Designated financial market 
utilities and financial institutions subject to the standards 
prescribed under subsection (a) for a designated activity shall 
conduct their operations in compliance with the applicable risk 
management standards.

SEC. 806. OPERATIONS OF DESIGNATED FINANCIAL MARKET UTILITIES.

    (a) Federal Reserve Account and Services.--The Board of 
Governors may authorize a Federal Reserve Bank to establish and 
maintain an account for a designated financial market utility 
and provide the services listed in section 11A(b) of the 
Federal Reserve Act (12 U.S.C. 248a(b)) and deposit accounts 
under the first undesignated paragraph of section 13 of the 
Federal Reserve Act (12 U.S.C. 342) to the designated financial 
market utility that the Federal Reserve Bank is authorized 
under the Federal Reserve Act to provide to a depository 
institution, subject to any applicable rules, orders, 
standards, or guidelines prescribed by the Board of Governors.
    (b) Advances.--The Board of Governors may authorize a 
Federal Reserve bank under section 10B of the Federal Reserve 
Act (12 U.S.C. 347b) to provide to a designated financial 
market utility discount and borrowing privileges only in 
unusual or exigent circumstances, upon the affirmative vote of 
a majority of the Board of Governors then serving (or such 
other number in accordance with the provisions of section 
11(r)(2) of the Federal Reserve Act (12 U.S.C. 248(r)(2)) after 
consultation with the Secretary, and upon a showing by the 
designated financial market utility that it is unable to secure 
adequate credit accommodations from other banking institutions. 
All such discounts and borrowing privileges shall be subject to 
such other limitations, restrictions, and regulations as the 
Board of Governors may prescribe. Access to discount and 
borrowing privileges under section 10B of the Federal Reserve 
Act as authorized in this section does not require a designated 
financial market utility to be or become a bank or bank holding 
company.
    (c) Earnings on Federal Reserve Balances.--A Federal 
Reserve Bank may pay earnings on balances maintained by or on 
behalf of a designated financial market utility in the same 
manner and to the same extent as the Federal Reserve Bank may 
pay earnings to a depository institution under the Federal 
Reserve Act, subject to any applicable rules, orders, 
standards, or guidelines prescribed by the Board of Governors.
    (d) Reserve Requirements.--The Board of Governors may 
exempt a designated financial market utility from, or modify 
any, reserve requirements under section 19 of the Federal 
Reserve Act (12 U.S.C. 461) applicable to a designated 
financial market utility.
    (e) Changes to Rules, Procedures, or Operations.--
            (1) Advance notice.--
                    (A) Advance notice of proposed changes 
                required.--A designated financial market 
                utility shall provide notice 60 days in advance 
                notice to its Supervisory Agency of any 
                proposed change to its rules, procedures, or 
                operations that could, as defined in rules of 
                each Supervisory Agency, materially affect, the 
                nature or level of risks presented by the 
                designated financial market utility.
                    (B) Terms and standards prescribed by the 
                supervisory agencies.--Each Supervisory Agency, 
                in consultation with the Board of Governors, 
                shall prescribe regulations that define and 
                describe the standards for determining when 
                notice is required to be provided under 
                subparagraph (A).
                    (C) Contents of notice.--The notice of a 
                proposed change shall describe--
                            (i) the nature of the change and 
                        expected effects on risks to the 
                        designated financial market utility, 
                        its participants, or the market; and
                            (ii) how the designated financial 
                        market utility plans to manage any 
                        identified risks.
                    (D) Additional information.--The 
                Supervisory Agency may require a designated 
                financial market utility to provide any 
                information necessary to assess the effect the 
                proposed change would have on the nature or 
                level of risks associated with the designated 
                financial market utility's payment, clearing, 
                or settlement activities and the sufficiency of 
                any proposed risk management techniques.
                    (E) Notice of objection.--The Supervisory 
                Agency shall notify the designated financial 
                market utility of any objection regarding the 
                proposed change within 60 days from the later 
                of--
                            (i) the date that the notice of the 
                        proposed change is received; or
                            (ii) the date any further 
                        information requested for consideration 
                        of the notice is received.
                    (F) Change not allowed if objection.--A 
                designated financial market utility shall not 
                implement a change to which the Supervisory 
                Agency has an objection.
                    (G) Change allowed if no objection within 
                60 days.--A designated financial market utility 
                may implement a change if it has not received 
                an objection to the proposed change within 60 
                days of the later of--
                            (i) the date that the Supervisory 
                        Agency receives the notice of proposed 
                        change; or
                            (ii) the date the Supervisory 
                        Agency receives any further information 
                        it requests for consideration of the 
                        notice.
                    (H) Review extension for novel or complex 
                issues.--The Supervisory Agency may, during the 
                60-day review period, extend the review period 
                for an additional 60 days for proposed changes 
                that raise novel or complex issues, subject to 
                the Supervisory Agency providing the designated 
                financial market utility with prompt written 
                notice of the extension. Any extension under 
                this subparagraph will extend the time periods 
                under subparagraphs (E) and (G).
                    (I) Change allowed earlier if notified of 
                no objection.--A designated financial market 
                utility may implement a change in less than 60 
                days from the date of receipt of the notice of 
                proposed change by the Supervisory Agency, or 
                the date the Supervisory Agency receives any 
                further information it requested, if the 
                Supervisory Agency notifies the designated 
                financial market utility in writing that it 
                does not object to the proposed change and 
                authorizes the designated financial market 
                utility to implement the change on an earlier 
                date, subject to any conditions imposed by the 
                Supervisory Agency.
            (2) Emergency changes.--
                    (A) In general.--A designated financial 
                market utility may implement a change that 
                would otherwise require advance notice under 
                this subsection if it determines that--
                            (i) an emergency exists; and
                            (ii) immediate implementation of 
                        the change is necessary for the 
                        designated financial market utility to 
                        continue to provide its services in a 
                        safe and sound manner.
                    (B) Notice required within 24 hours.--The 
                designated financial market utility shall 
                provide notice of any such emergency change to 
                its Supervisory Agency, as soon as practicable, 
                which shall be no later than 24 hours after 
                implementation of the change.
                    (C) Contents of emergency notice.--In 
                addition to the information required for 
                changes requiring advance notice, the notice of 
                an emergency change shall describe--
                            (i) the nature of the emergency; 
                        and
                            (ii) the reason the change was 
                        necessary for the designated financial 
                        market utility to continue to provide 
                        its services in a safe and sound 
                        manner.
                    (D) Modification or rescission of change 
                may be required.--The Supervisory Agency may 
                require modification or rescission of the 
                change if it finds that the change is not 
                consistent with the purposes of this Act or any 
                applicable rules, orders, or standards 
                prescribed under section 805(a).
            (3) Copying the board of governors.--The 
        Supervisory Agency shall provide the Board of Governors 
        concurrently with a complete copy of any notice, 
        request, or other information it issues, submits, or 
        receives under this subsection.
            (4) Consultation with board of governors.--Before 
        taking any action on, or completing its review of, a 
        change proposed by a designated financial market 
        utility, the Supervisory Agency shall consult with the 
        Board of Governors.

SEC. 807. EXAMINATION OF AND ENFORCEMENT ACTIONS AGAINST DESIGNATED 
                    FINANCIAL MARKET UTILITIES.

    (a) Examination.--Notwithstanding any other provision of 
law and subject to subsection (d), the Supervisory Agency shall 
conduct examinations of a designated financial market utility 
at least once annually in order to determine the following:
            (1) The nature of the operations of, and the risks 
        borne by, the designated financial market utility.
            (2) The financial and operational risks presented 
        by the designated financial market utility to financial 
        institutions, critical markets, or the broader 
        financial system.
            (3) The resources and capabilities of the 
        designated financial market utility to monitor and 
        control such risks.
            (4) The safety and soundness of the designated 
        financial market utility.
            (5) The designated financial market utility's 
        compliance with--
                    (A) this title; and
                    (B) the rules and orders prescribed under 
                this title.
    (b) Service Providers.--Whenever a service integral to the 
operation of a designated financial market utility is performed 
for the designated financial market utility by another entity, 
whether an affiliate or non-affiliate and whether on or off the 
premises of the designated financial market utility, the 
Supervisory Agency may examine whether the provision of that 
service is in compliance with applicable law, rules, orders, 
and standards to the same extent as if the designated financial 
market utility were performing the service on its own premises.
    (c) Enforcement.--For purposes of enforcing the provisions 
of this title, a designated financial market utility shall be 
subject to, and the appropriate Supervisory Agency shall have 
authority under the provisions of subsections (b) through (n) 
of section 8 of the Federal Deposit Insurance Act (12 U.S.C. 
1818) in the same manner and to the same extent as if the 
designated financial market utility was an insured depository 
institution and the Supervisory Agency was the appropriate 
Federal banking agency for such insured depository institution.
    (d) Board of Governors Involvement in Examinations.--
            (1) Board of governors consultation on examination 
        planning.--The Supervisory Agency shall consult 
        annually with the Board of Governors regarding the 
        scope and methodology of any examination conducted 
        under subsections (a) and (b). The Supervisory Agency 
        shall lead all examinations conducted under subsections 
        (a) and (b)
            (2) Board of governors participation in 
        examination.--The Board of Governors may, in its 
        discretion, participate in any examination led by a 
        Supervisory Agency and conducted under subsections (a) 
        and (b).
    (e) Board of Governors Enforcement Recommendations.--
            (1) Recommendation.--The Board of Governors may, 
        after consulting with the Council and the Supervisory 
        Agency, at any time recommend to the Supervisory Agency 
        that such agency take enforcement action against a 
        designated financial market utility in order to prevent 
        or mitigate significant liquidity, credit, operational, 
        or other risks to the financial markets or to the 
        financial stability of the United States. Any such 
        recommendation for enforcement action shall provide a 
        detailed analysis supporting the recommendation of the 
        Board of Governors.
            (2) Consideration.--The Supervisory Agency shall 
        consider the recommendation of the Board of Governors 
        and submit a response to the Board of Governors within 
        60 days.
            (3) Binding arbitration.--If the Supervisory Agency 
        rejects, in whole or in part, the recommendation of the 
        Board of Governors, the Board of Governors may refer 
        the recommendation to the Council for a binding 
        decision on whether an enforcement action is warranted.
            (4) Enforcement action.--Upon an affirmative vote 
        by a majority of the Council in favor of the Board of 
        Governors' recommendation under paragraph (3), the 
        Council may require the Supervisory Agency to--
                    (A) exercise the enforcement authority 
                referenced in subsection (c); and
                    (B) take enforcement action against the 
                designated financial market utility.
    (f) Emergency Enforcement Actions by the Board of 
Governors.--
            (1) Imminent risk of substantial harm.--The Board 
        of Governors may, after consulting with the Supervisory 
        Agency and upon an affirmative vote by a majority the 
        Council, take enforcement action against a designated 
        financial market utility if the Board of Governors has 
        reasonable cause to conclude that--
                    (A) either--
                            (i) an action engaged in, or 
                        contemplated by, a designated financial 
                        market utility (including any change 
                        proposed by the designated financial 
                        market utility to its rules, 
                        procedures, or operations that would 
                        otherwise be subject to section 806(e)) 
                        poses an imminent risk of substantial 
                        harm to financial institutions, 
                        critical markets, or the broader 
                        financial system of the United States; 
                        or
                            (ii) the condition of a designated 
                        financial market utility poses an 
                        imminent risk of substantial harm to 
                        financial institutions, critical 
                        markets, or the broader financial 
                        system; and
                    (B) the imminent risk of substantial harm 
                precludes the Board of Governors' use of the 
                procedures in subsection (e).
            (2) Enforcement authority.--For purposes of taking 
        enforcement action under paragraph (1), a designated 
        financial market utility shall be subject to, and the 
        Board of Governors shall have authority under the 
        provisions of subsections (b) through (n) of section 8 
        of the Federal Deposit Insurance Act (12 U.S.C. 1818) 
        in the same manner and to the same extent as if the 
        designated financial market utility was an insured 
        depository institution and the Board of Governors was 
        the appropriate Federal banking agency for such insured 
        depository institution.

SEC. 808. EXAMINATION OF AND ENFORCEMENT ACTIONS AGAINST FINANCIAL 
                    INSTITUTIONS SUBJECT TO STANDARDS FOR DESIGNATED 
                    ACTIVITIES.

    (a) Examination.--The appropriate financial regulator is 
authorized to examine a financial institution subject to the 
standards prescribed under section 805(a) for a designated 
activity in order to determine the following:
            (1) The nature and scope of the designated 
        activities engaged in by the financial institution.
            (2) The financial and operational risks the 
        designated activities engaged in by the financial 
        institution may pose to the safety and soundness of the 
        financial institution.
            (3) The financial and operational risks the 
        designated activities engaged in by the financial 
        institution may pose to other financial institutions, 
        critical markets, or the broader financial system.
            (4) The resources available to and the capabilities 
        of the financial institution to monitor and control the 
        risks described in paragraphs (2) and (3).
            (5) The financial institution's compliance with 
        this title and the rules and orders prescribed under 
        section 805(a).
    (b) Enforcement.--For purposes of enforcing the provisions 
of this title, and the rules and orders prescribed under this 
section, a financial institution subject to the standards 
prescribed under section 805(a) for a designated activity shall 
be subject to, and the appropriate financial regulator shall 
have authority under the provisions of subsections (b) through 
(n) of section 8 of the Federal Deposit Insurance Act (12 
U.S.C. 1818) in the same manner and to the same extent as if 
the financial institution was an insured depository institution 
and the appropriate financial regulator was the appropriate 
Federal banking agency for such insured depository institution.
    (c) Technical Assistance.--The Board of Governors shall 
consult with and provide such technical assistance as may be 
required by the appropriate financial regulators to ensure that 
the rules and orders prescribed under this title are 
interpreted and applied in as consistent and uniform a manner 
as practicable.
    (d) Delegation.--
            (1) Examination.--
                    (A) Request to board of governors.--The 
                appropriate financial regulator may request the 
                Board of Governors to conduct or participate in 
                an examination of a financial institution 
                subject to the standards prescribed under 
                section 805(a) for a designated activity in 
                order to assess the compliance of such 
                financial institution with--
                            (i) this title; or
                            (ii) the rules or orders prescribed 
                        under this title.
                    (B) Examination by board of governors.--
                Upon receipt of an appropriate written request, 
                the Board of Governors will conduct the 
                examination under such terms and conditions to 
                which the Board of Governors and the 
                appropriate financial regulator mutually agree.
            (2) Enforcement.--
                    (A) Request to board of governors.--The 
                appropriate financial regulator may request the 
                Board of Governors to enforce this title or the 
                rules or orders prescribed under this title 
                against a financial institution that is subject 
                to the standards prescribed under section 
                805(a) for a designated activity.
                    (B) Enforcement by board of governors.--
                Upon receipt of an appropriate written request, 
                the Board of Governors shall determine whether 
                an enforcement action is warranted, and, if so, 
                it shall enforce compliance with this title or 
                the rules or orders prescribed under this title 
                and, if so, the financial institution shall be 
                subject to, and the Board of Governors shall 
                have authority under the provisions of 
                subsections (b) through (n) of section 8 of the 
                Federal Deposit Insurance Act (12 U.S.C. 1818) 
                in the same manner and to the same extent as if 
                the financial institution was an insured 
                depository institution and the Board of 
                Governors was the appropriate Federal banking 
                agency for such insured depository institution.
    (e) Back-up Authority of the Board of Governors.--
            (1) Examination and enforcement.--Notwithstanding 
        any other provision of law, the Board of Governors 
        may--
                    (A) conduct an examination of the type 
                described in subsection (a) of any financial 
                institution that is subject to the standards 
                prescribed under section 805(a) for a 
                designated activity; and
                    (B) enforce the provisions of this title or 
                any rules or orders prescribed under this title 
                against any financial institution that is 
                subject to the standards prescribed under 
                section 805(a) for a designated activity.
            (2) Limitations.--
                    (A) Examination.--The Board of Governors 
                may exercise the authority described in 
                paragraph (1)(A) only if the Board of Governors 
                has--
                            (i) reasonable cause to believe 
                        that a financial institution is not in 
                        compliance with this title or the rules 
                        or orders prescribed under this title 
                        with respect to a designated activity;
                            (ii) notified, in writing, the 
                        appropriate financial regulator and the 
                        Council of its belief under clause (i) 
                        with supporting documentation included;
                            (iii) requested the appropriate 
                        financial regulator to conduct a prompt 
                        examination of the financial 
                        institution;
                            (iv) either--
                                    (I) not been afforded a 
                                reasonable opportunity to 
                                participate in an examination 
                                of the financial institution by 
                                the appropriate financial 
                                regulator within 30 days after 
                                the date of the Board's 
                                notification under clause (ii); 
                                or
                                    (II) reasonable cause to 
                                believe that the financial 
                                institution's noncompliance 
                                with this title or the rules or 
                                orders prescribed under this 
                                title poses a substantial risk 
                                to other financial 
                                institutions, critical markets, 
                                or the broader financial 
                                system, subject to the Board of 
                                Governors affording the 
                                appropriate financial regulator 
                                a reasonable opportunity to 
                                participate in the examination; 
                                and
                            (v) obtained the approval of the 
                        Council upon an affirmative vote by a 
                        majority of the Council.
                    (B) Enforcement.--The Board of Governors 
                may exercise the authority described in 
                paragraph (1)(B) only if the Board of Governors 
                has--
                            (i) reasonable cause to believe 
                        that a financial institution is not in 
                        compliance with this title or the rules 
                        or orders prescribed under this title 
                        with respect to a designated activity;
                            (ii) notified, in writing, the 
                        appropriate financial regulator and the 
                        Council of its belief under clause (i) 
                        with supporting documentation included 
                        and with a recommendation that the 
                        appropriate financial regulator take 1 
                        or more specific enforcement actions 
                        against the financial institution;
                            (iii) either--
                                    (I) not been notified, in 
                                writing, by the appropriate 
                                financial regulator of the 
                                commencement of an enforcement 
                                action recommended by the Board 
                                of Governors against the 
                                financial institution within 60 
                                days from the date of the 
                                notification under clause (ii); 
                                or
                                    (II) reasonable cause to 
                                believe that the financial 
                                institution's noncompliance 
                                with this title or the rules or 
                                orders prescribed under this 
                                title poses significant 
                                liquidity, credit, operational, 
                                or other risks to the financial 
                                markets or to the financial 
                                stability of the United States, 
                                subject to the Board of 
                                Governors notifying the 
                                appropriate financial regulator 
                                of the Board's enforcement 
                                action; and
                            (iv) obtained the approval of the 
                        Council upon an affirmative vote by a 
                        majority of the Council.
            (3) Enforcement provisions.--For purposes of taking 
        enforcement action under paragraph (1), the financial 
        institution shall be subject to, and the Board of 
        Governors shall have authority under the provisions of 
        subsections (b) through (n) of section 8 of the Federal 
        Deposit Insurance Act (12 U.S.C. 1818) in the same 
        manner and to the same extent as if the financial 
        institution was an insured depository institution and 
        the Board of Governors was the appropriate Federal 
        banking agency for such insured depository institution.

SEC. 809. REQUESTS FOR INFORMATION, REPORTS, OR RECORDS.

    (a) Information To Assess Systemic Importance.--
            (1) Financial market utilities.--The Council is 
        authorized to require any financial market utility to 
        submit such information as the Council may require for 
        the sole purpose of assessing whether that financial 
        market utility is systemically important, but only if 
        the Council has reasonable cause to believe that the 
        financial market utility meets the standards for 
        systemic importance set forth in section 804.
            (2) Financial institutions engaged in payment, 
        clearing, or settlement activities.--The Council is 
        authorized to require any financial institution to 
        submit such information as the Council may require for 
        the sole purpose of assessing whether any payment, 
        clearing, or settlement activity engaged in or 
        supported by a financial institution is systemically 
        important, but only if the Council has reasonable cause 
        to believe that the activity meets the standards for 
        systemic importance set forth in section 804.
    (b) Reporting After Designation.--
            (1) Designated financial market utilities.--The 
        Board of Governors and the Council may each require a 
        designated financial market utility to submit reports 
        or data to the Board of Governors and the Council in 
        such frequency and form as deemed necessary by the 
        Board of Governors or the Council in order to assess 
        the safety and soundness of the utility and the 
        systemic risk that the utility's operations pose to the 
        financial system.
            (2) Financial institutions subject to standards for 
        designated activities.--The Board of Governors and the 
        Council may each require 1 or more financial 
        institutions subject to the standards prescribed under 
        section 805(a) for a designated activity to submit, in 
        such frequency and form as deemed necessary by the 
        Board of Governors or the Council, reports and data to 
        the Board of Governors and the Council solely with 
        respect to the conduct of the designated activity and 
        solely to assess whether--
                    (A) the rules, orders, or standards 
                prescribed under section 805(a) with respect to 
                the designated activity appropriately address 
                the risks to the financial system presented by 
                such activity; and
                    (B) the financial institutions are in 
                compliance with this title and the rules and 
                orders prescribed under section 805(a) with 
                respect to the designated activity.
            (3) Limitation.--The Board of Governors may, upon 
        an affirmative vote by a majority of the Council, 
        prescribe regulations under this section that impose a 
        recordkeeping or reporting requirement on designated 
        clearing entities or financial institutions engaged in 
        designated activities that are subject to standards 
        that have been prescribed under section 805(a)(2).
    (c) Coordination With Appropriate Federal Supervisory 
Agency.--
            (1) Advance coordination.--Before requesting any 
        material information from, or imposing reporting or 
        recordkeeping requirements on, any financial market 
        utility or any financial institution engaged in a 
        payment, clearing, or settlement activity, the Board of 
        Governors or the Council shall coordinate with the 
        Supervisory Agency for a financial market utility or 
        the appropriate financial regulator for a financial 
        institution to determine if the information is 
        available from or may be obtained by the agency in the 
        form, format, or detail required by the Board of 
        Governors or the Council.
            (2) Supervisory reports.--Notwithstanding any other 
        provision of law, the Supervisory Agency, the 
        appropriate financial regulator, and the Board of 
        Governors are authorized to disclose to each other and 
        the Council copies of its examination reports or 
        similar reports regarding any financial market utility 
        or any financial institution engaged in payment, 
        clearing, or settlement activities.
    (d) Timing of Response From Appropriate Federal Supervisory 
Agency.--If the information, report, records, or data requested 
by the Board of Governors or the Council under subsection 
(c)(1) are not provided in full by the Supervisory Agency or 
the appropriate financial regulator in less than 15 days after 
the date on which the material is requested, the Board of 
Governors or the Council may request the information or impose 
recordkeeping or reporting requirements directly on such 
persons as provided in subsections (a) and (b) with notice to 
the agency.
    (e) Sharing of Information.--
            (1) Material concerns.--Notwithstanding any other 
        provision of law, the Board of Governors, the Council, 
        the appropriate financial regulator, and any 
        Supervisory Agency are authorized to--
                    (A) promptly notify each other of material 
                concerns about a designated financial market 
                utility or any financial institution engaged in 
                designated activities; and
                    (B) share appropriate reports, information, 
                or data relating to such concerns.
            (2) Other information.--Notwithstanding any other 
        provision of law, the Board of Governors, the Council, 
        the appropriate financial regulator, or any Supervisory 
        Agency may, under such terms and conditions as it deems 
        appropriate, provide confidential supervisory 
        information and other information obtained under this 
        title to each other, and to the Secretary, Federal 
        Reserve Banks, State financial institution supervisory 
        agencies, foreign financial supervisors, foreign 
        central banks, and foreign finance ministries, subject 
        to reasonable assurances of confidentiality, provided, 
        however, that no person or entity receiving information 
        pursuant to this section may disseminate such 
        information to entities or persons other than those 
        listed in this paragraph without complying with 
        applicable law, including section 8 of the Commodity 
        Exchange Act (7 U.S.C. 12).
    (f) Privilege Maintained.--The Board of Governors, the 
Council, the appropriate financial regulator, and any 
Supervisory Agency providing reports or data under this section 
shall not be deemed to have waived any privilege applicable to 
those reports or data, or any portion thereof, by providing the 
reports or data to the other party or by permitting the reports 
or data, or any copies thereof, to be used by the other party.
    (g) Disclosure Exemption.--Information obtained by the 
Board of Governors, the Supervisory Agencies, or the Council 
under this section and any materials prepared by the Board of 
Governors, the Supervisory Agencies, or the Council regarding 
their assessment of the systemic importance of financial market 
utilities or any payment, clearing, or settlement activities 
engaged in by financial institutions, and in connection with 
their supervision of designated financial market utilities and 
designated activities, shall be confidential supervisory 
information exempt from disclosure under section 552 of title 
5, United States Code. For purposes of such section 552, this 
subsection shall be considered a statute described in 
subsection (b)(3) of such section 552.

SEC. 810. RULEMAKING.

    The Board of Governors, the Supervisory Agencies, and the 
Council are authorized to prescribe such rules and issue such 
orders as may be necessary to administer and carry out their 
respective authorities and duties granted under this title and 
prevent evasions thereof.

SEC. 811. OTHER AUTHORITY.

    Unless otherwise provided by its terms, this title does not 
divest any appropriate financial regulator, any Supervisory 
Agency, or any other Federal or State agency, of any authority 
derived from any other applicable law, except that any 
standards prescribed by the Board of Governors under section 
805 shall supersede any less stringent requirements established 
under other authority to the extent of any conflict.

SEC. 812. CONSULTATION.

    (a) CFTC.--The Commodity Futures Trading Commission shall 
consult with the Board of Governors--
            (1) prior to exercising its authorities under 
        sections 2(h)(2)(C), 2(h)(3)(A), 2(h)(3)(C), 
        2(h)(4)(A), and 2(h)(4)(B) of the Commodity Exchange 
        Act, as amended by the Wall Street Transparency and 
        Accountability Act of 2010;
            (2) with respect to any rule or rule amendment of a 
        derivatives clearing organization for which a stay of 
        certification has been issued under section 745(b)(3) 
        of the Wall Street Transparency and Accountability Act 
        of 2010; and
            (3) prior to exercising its rulemaking authorities 
        under section 728 of the Wall Street Transparency and 
        Accountability Act of 2010.
    (b) SEC.--The Commission shall consult with the Board of 
Governors--
            (1) prior to exercising its authorities under 
        sections 3C(a)(2)(C), 3C(a)(3)(A), 3C(a)(3)(C), 
        3C(a)(4)(A), and 3C(a)(4)(B) of the Securities Exchange 
        Act of 1934, as amended by the Wall Street Transparency 
        and Accountability Act of 2010;
            (2) with respect to any proposed rule change of a 
        clearing agency for which an extension of the time for 
        review has been designated under section 19(b)(2) of 
        the Securities Exchange Act of 1934; and
            (3) prior to exercising its rulemaking authorities 
        under section 13(n) of the Securities Exchange Act of 
        1934, as added by section 763(i) of the Wall Street 
        Transparency and Accountability Act of 2010.

SEC. 813. COMMON FRAMEWORK FOR DESIGNATED CLEARING ENTITY RISK 
                    MANAGEMENT.

    The Commodity Futures Trading Commission and the Commission 
shall coordinate with the Board of Governors to jointly develop 
risk management supervision programs for designated clearing 
entities. Not later than 1 year after the date of enactment of 
this Act, the Commodity Futures Trading Commission, the 
Commission, and the Board of Governors shall submit a joint 
report to the Committee on Banking, Housing, and Urban Affairs 
and the Committee on Agriculture, Nutrition, and Forestry of 
the Senate, and the Committee on Financial Services and the 
Committee on Agriculture of the House of Representatives 
recommendations for--
            (1) improving consistency in the designated 
        clearing entity oversight programs of the Commission 
        and the Commodity Futures Trading Commission;
            (2) promoting robust risk management by designated 
        clearing entities;
            (3) promoting robust risk management oversight by 
        regulators of designated clearing entities; and
            (4) improving regulators' ability to monitor the 
        potential effects of designated clearing entity risk 
        management on the stability of the financial system of 
        the United States.

SEC. 814. EFFECTIVE DATE.

    This title is effective as of the date of enactment of this 
Act.

 TITLE IX--INVESTOR PROTECTIONS AND IMPROVEMENTS TO THE REGULATION OF 
                               SECURITIES

SEC. 901. SHORT TITLE.

    This title may be cited as the ``Investor Protection and 
Securities Reform Act of 2010''.

               Subtitle A--Increasing Investor Protection

SEC. 911. INVESTOR ADVISORY COMMITTEE ESTABLISHED.

    Title I of the Securities Exchange Act of 1934 (15 U.S.C. 
78a et seq.) is amended by adding at the end the following:

``SEC. 39. INVESTOR ADVISORY COMMITTEE.

    ``(a) Establishment and Purpose.--
            ``(1) Establishment.--There is established within 
        the Commission the Investor Advisory Committee 
        (referred to in this section as the `Committee').
            ``(2) Purpose.--The Committee shall--
                    ``(A) advise and consult with the 
                Commission on--
                            ``(i) regulatory priorities of the 
                        Commission;
                            ``(ii) issues relating to the 
                        regulation of securities products, 
                        trading strategies, and fee structures, 
                        and the effectiveness of disclosure;
                            ``(iii) initiatives to protect 
                        investor interest; and
                            ``(iv) initiatives to promote 
                        investor confidence and the integrity 
                        of the securities marketplace; and
                    ``(B) submit to the Commission such 
                findings and recommendations as the Committee 
                determines are appropriate, including 
                recommendations for proposed legislative 
                changes.
    ``(b) Membership.--
            ``(1) In general.--The members of the Committee 
        shall be--
                    ``(A) the Investor Advocate;
                    ``(B) a representative of State securities 
                commissions;
                    ``(C) a representative of the interests of 
                senior citizens; and
                    ``(D) not fewer than 10, and not more than 
                20, members appointed by the Commission, from 
                among individuals who--
                            ``(i) represent the interests of 
                        individual equity and debt investors, 
                        including investors in mutual funds;
                            ``(ii) represent the interests of 
                        institutional investors, including the 
                        interests of pension funds and 
                        registered investment companies;
                            ``(iii) are knowledgeable about 
                        investment issues and decisions; and
                            ``(iv) have reputations of 
                        integrity.
            ``(2) Term.--Each member of the Committee appointed 
        under paragraph (1)(B) shall serve for a term of 4 
        years.
            ``(3) Members not commission employees.--Members 
        appointed under paragraph (1)(B) shall not be deemed to 
        be employees or agents of the Commission solely because 
        of membership on the Committee.
    ``(c) Chairman; Vice Chairman; Secretary; Assistant 
Secretary.--
            ``(1) In general.--The members of the Committee 
        shall elect, from among the members of the Committee--
                    ``(A) a chairman, who may not be employed 
                by an issuer;
                    ``(B) a vice chairman, who may not be 
                employed by an issuer;
                    ``(C) a secretary; and
                    ``(D) an assistant secretary.
            ``(2) Term.--Each member elected under paragraph 
        (1) shall serve for a term of 3 years in the capacity 
        for which the member was elected under paragraph (1).
    ``(d) Meetings.--
            ``(1) Frequency of meetings.--The Committee shall 
        meet--
                    ``(A) not less frequently than twice 
                annually, at the call of the chairman of the 
                Committee; and
                    ``(B) from time to time, at the call of the 
                Commission.
            ``(2) Notice.--The chairman of the Committee shall 
        give the members of the Committee written notice of 
        each meeting, not later than 2 weeks before the date of 
        the meeting.
    ``(e) Compensation and Travel Expenses.--Each member of the 
Committee who is not a full-time employee of the United States 
shall--
            ``(1) be entitled to receive compensation at a rate 
        not to exceed the daily equivalent of the annual rate 
        of basic pay in effect for a position at level V of the 
        Executive Schedule under section 5316 of title 5, 
        United States Code, for each day during which the 
        member is engaged in the actual performance of the 
        duties of the Committee; and
            ``(2) while away from the home or regular place of 
        business of the member in the performance of services 
        for the Committee, be allowed travel expenses, 
        including per diem in lieu of subsistence, in the same 
        manner as persons employed intermittently in the 
        Government service are allowed expenses under section 
        5703(b) of title 5, United States Code.
    ``(f) Staff.--The Commission shall make available to the 
Committee such staff as the chairman of the Committee 
determines are necessary to carry out this section.
    ``(g) Review by Commission.--The Commission shall--
            ``(1) review the findings and recommendations of 
        the Committee; and
            ``(2) each time the Committee submits a finding or 
        recommendation to the Commission, promptly issue a 
        public statement--
                    ``(A) assessing the finding or 
                recommendation of the Committee; and
                    ``(B) disclosing the action, if any, the 
                Commission intends to take with respect to the 
                finding or recommendation.
    ``(h) Committee Findings.--Nothing in this section shall 
require the Commission to agree to or act upon any finding or 
recommendation of the Committee.
    ``(i) Federal Advisory Committee Act.--The Federal Advisory 
Committee Act (5 U.S.C. App.) shall not apply with respect to 
the Committee and its activities.
    ``(j) Authorization of Appropriations.--There is authorized 
to be appropriated to the Commission such sums as are necessary 
to carry out this section.''.

SEC. 912. CLARIFICATION OF AUTHORITY OF THE COMMISSION TO ENGAGE IN 
                    INVESTOR TESTING.

    Section 19 of the Securities Act of 1933 (15 U.S.C. 77s) is 
amended by adding at the end the following:
    ``(e) Evaluation of Rules or Programs.--For the purpose of 
evaluating any rule or program of the Commission issued or 
carried out under any provision of the securities laws, as 
defined in section 3 of the Securities Exchange Act of 1934 (15 
U.S.C. 78c), and the purposes of considering, proposing, 
adopting, or engaging in any such rule or program or developing 
new rules or programs, the Commission may--
            ``(1) gather information from and communicate with 
        investors or other members of the public;
            ``(2) engage in such temporary investor testing 
        programs as the Commission determines are in the public 
        interest or would protect investors; and
            ``(3) consult with academics and consultants, as 
        necessary to carry out this subsection.
    ``(f) Rule of Construction.--For purposes of the Paperwork 
Reduction Act (44 U.S.C. 3501 et seq.), any action taken under 
subsection (e) shall not be construed to be a collection of 
information.''.

SEC. 913. STUDY AND RULEMAKING REGARDING OBLIGATIONS OF BROKERS, 
                    DEALERS, AND INVESTMENT ADVISERS.

    (a) Definition.--For purposes of this section, the term 
``retail customer'' means a natural person, or the legal 
representative of such natural person, who--
            (1) receives personalized investment advice about 
        securities from a broker or dealer or investment 
        adviser; and
            (2) uses such advice primarily for personal, 
        family, or household purposes.
    (b) Study.--The Commission shall conduct a study to 
evaluate--
            (1) the effectiveness of existing legal or 
        regulatory standards of care for brokers, dealers, 
        investment advisers, persons associated with brokers or 
        dealers, and persons associated with investment 
        advisers for providing personalized investment advice 
        and recommendations about securities to retail 
        customers imposed by the Commission and a national 
        securities association, and other Federal and State 
        legal or regulatory standards; and
            (2) whether there are legal or regulatory gaps, 
        shortcomings, or overlaps in legal or regulatory 
        standards in the protection of retail customers 
        relating to the standards of care for brokers, dealers, 
        investment advisers, persons associated with brokers or 
        dealers, and persons associated with investment 
        advisers for providing personalized investment advice 
        about securities to retail customers that should be 
        addressed by rule or statute.
    (c) Considerations.--In conducting the study required under 
subsection (b), the Commission shall consider--
            (1) the effectiveness of existing legal or 
        regulatory standards of care for brokers, dealers, 
        investment advisers, persons associated with brokers or 
        dealers, and persons associated with investment 
        advisers for providing personalized investment advice 
        and recommendations about securities to retail 
        customers imposed by the Commission and a national 
        securities association, and other Federal and State 
        legal or regulatory standards;
            (2) whether there are legal or regulatory gaps, 
        shortcomings, or overlaps in legal or regulatory 
        standards in the protection of retail customers 
        relating to the standards of care for brokers, dealers, 
        investment advisers, persons associated with brokers or 
        dealers, and persons associated with investment 
        advisers for providing personalized investment advice 
        about securities to retail customers that should be 
        addressed by rule or statute;
            (3) whether retail customers understand that there 
        are different standards of care applicable to brokers, 
        dealers, investment advisers, persons associated with 
        brokers or dealers, and persons associated with 
        investment advisers in the provision of personalized 
        investment advice about securities to retail customers;
            (4) whether the existence of different standards of 
        care applicable to brokers, dealers, investment 
        advisers, persons associated with brokers or dealers, 
        and persons associated with investment advisers is a 
        source of confusion for retail customers regarding the 
        quality of personalized investment advice that retail 
        customers receive;
            (5) the regulatory, examination, and enforcement 
        resources devoted to, and activities of, the 
        Commission, the States, and a national securities 
        association to enforce the standards of care for 
        brokers, dealers, investment advisers, persons 
        associated with brokers or dealers, and persons 
        associated with investment advisers when providing 
        personalized investment advice and recommendations 
        about securities to retail customers, including--
                    (A) the effectiveness of the examinations 
                of brokers, dealers, and investment advisers in 
                determining compliance with regulations;
                    (B) the frequency of the examinations; and
                    (C) the length of time of the examinations;
            (6) the substantive differences in the regulation 
        of brokers, dealers, and investment advisers, when 
        providing personalized investment advice and 
        recommendations about securities to retail customers;
            (7) the specific instances related to the provision 
        of personalized investment advice about securities in 
        which--
                    (A) the regulation and oversight of 
                investment advisers provide greater protection 
                to retail customers than the regulation and 
                oversight of brokers and dealers; and
                    (B) the regulation and oversight of brokers 
                and dealers provide greater protection to 
                retail customers than the regulation and 
                oversight of investment advisers;
            (8) the existing legal or regulatory standards of 
        State securities regulators and other regulators 
        intended to protect retail customers;
            (9) the potential impact on retail customers, 
        including the potential impact on access of retail 
        customers to the range of products and services offered 
        by brokers and dealers, of imposing upon brokers, 
        dealers, and persons associated with brokers or 
        dealers--
                    (A) the standard of care applied under the 
                Investment Advisers Act of 1940 (15 U.S.C. 80b-
                1 et seq.) for providing personalized 
                investment advice about securities to retail 
                customers of investment advisers, as 
                interpreted by the Commission and the courts; 
                and
                    (B) other requirements of the Investment 
                Advisers Act of 1940 (15 U.S.C. 80b-1 et seq.);
            (10) the potential impact of eliminating the broker 
        and dealer exclusion from the definition of 
        ``investment adviser'' under section 202(a)(11)(C) of 
        the Investment Advisers Act of 1940 (15 U.S.C. 80b-
        2(a)(11)(C)), in terms of--
                    (A) the impact and potential benefits and 
                harm to retail customers that could result from 
                such a change, including any potential impact 
                on access to personalized investment advice and 
                recommendations about securities to retail 
                customers or the availability of such advice 
                and recommendations;
                    (B) the number of additional entities and 
                individuals that would be required to register 
                under, or become subject to, the Investment 
                Advisers Act of 1940 (15 U.S.C. 80b-1 et seq.), 
                and the additional requirements to which 
                brokers, dealers, and persons associated with 
                brokers and dealers would become subject, 
                including--
                            (i) any potential additional 
                        associated person licensing, 
                        registration, and examination 
                        requirements; and
                            (ii) the additional costs, if any, 
                        to the additional entities and 
                        individuals; and
                    (C) the impact on Commission and State 
                resources to--
                            (i) conduct examinations of 
                        registered investment advisers and the 
                        representatives of registered 
                        investment advisers, including the 
                        impact on the examination cycle; and
                            (ii) enforce the standard of care 
                        and other applicable requirements 
                        imposed under the Investment Advisers 
                        Act of 1940 (15 U.S.C. 80b-1 et seq.);
            (11) the varying level of services provided by 
        brokers, dealers, investment advisers, persons 
        associated with brokers or dealers, and persons 
        associated with investment advisers to retail customers 
        and the varying scope and terms of retail customer 
        relationships of brokers, dealers, investment advisers, 
        persons associated with brokers or dealers, and persons 
        associated with investment advisers with such retail 
        customers;
            (12) the potential impact upon retail customers 
        that could result from potential changes in the 
        regulatory requirements or legal standards of care 
        affecting brokers, dealers, investment advisers, 
        persons associated with brokers or dealers, and persons 
        associated with investment advisers relating to their 
        obligations to retail customers regarding the provision 
        of investment advice, including any potential impact 
        on--
                    (A) protection from fraud;
                    (B) access to personalized investment 
                advice, and recommendations about securities to 
                retail customers; or
                    (C) the availability of such advice and 
                recommendations;
            (13) the potential additional costs and expenses 
        to--
                    (A) retail customers regarding and the 
                potential impact on the profitability of their 
                investment decisions; and
                    (B) brokers, dealers, and investment 
                advisers resulting from potential changes in 
                the regulatory requirements or legal standards 
                affecting brokers, dealers, investment 
                advisers, persons associated with brokers or 
                dealers, and persons associated with investment 
                advisers relating to their obligations, 
                including duty of care, to retail customers; 
                and
            (14) any other consideration that the Commission 
        considers necessary and appropriate in determining 
        whether to conduct a rulemaking under subsection (f).
    (d) Report.--
            (1) In general.--Not later than 6 months after the 
        date of enactment of this Act, the Commission shall 
        submit a report on the study required under subsection 
        (b) 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.
            (2) Content requirements.--The report required 
        under paragraph (1) shall describe the findings, 
        conclusions, and recommendations of the Commission from 
        the study required under subsection (b), including--
                    (A) a description of the considerations, 
                analysis, and public and industry input that 
                the Commission considered, as required under 
                subsection (b), to make such findings, 
                conclusions, and policy recommendations; and
                    (B) an analysis of whether any identified 
                legal or regulatory gaps, shortcomings, or 
                overlap in legal or regulatory standards in the 
                protection of retail customers relating to the 
                standards of care for brokers, dealers, 
                investment advisers, persons associated with 
                brokers or dealers, and persons associated with 
                investment advisers for providing personalized 
                investment advice about securities to retail 
                customers.
    (e) Public Comment.--The Commission shall seek and consider 
public input, comments, and data in order to prepare the report 
required under subsection (d).
    (f) Rulemaking.--The Commission may commence a rulemaking, 
as necessary or appropriate in the public interest and for the 
protection of retail customers (and such other customers as the 
Commission may by rule provide), to address the legal or 
regulatory standards of care for brokers, dealers, investment 
advisers, persons associated with brokers or dealers, and 
persons associated with investment advisers for providing 
personalized investment advice about securities to such retail 
customers. The Commission shall consider the findings 
conclusions, and recommendations of the study required under 
subsection (b).
    (g) Authority to Establish a Fiduciary Duty for Brokers and 
Dealers.--
            (1) Securities exchange act of 1934.--Section 15 of 
        the Securities Exchange Act of 1934 (15 U.S.C. 78o) is 
        amended by adding at the end the following:
    ``(k) Standard of Conduct.--
            ``(1) In general.--Notwithstanding any other 
        provision of this Act or the Investment Advisers Act of 
        1940, the Commission may promulgate rules to provide 
        that, with respect to a broker or dealer, when 
        providing personalized investment advice about 
        securities to a retail customer (and such other 
        customers as the Commission may by rule provide), the 
        standard of conduct for such broker or dealer with 
        respect to such customer shall be the same as the 
        standard of conduct applicable to an investment adviser 
        under section 211 of the Investment Advisers Act of 
        1940. The receipt of compensation based on commission 
        or other standard compensation for the sale of 
        securities shall not, in and of itself, be considered a 
        violation of such standard applied to a broker or 
        dealer. Nothing in this section shall require a broker 
        or dealer or registered representative to have a 
        continuing duty of care or loyalty to the customer 
        after providing personalized investment advice about 
        securities.
            ``(2) Disclosure of range of products offered.--
        Where a broker or dealer sells only proprietary or 
        other limited range of products, as determined by the 
        Commission, the Commission may by rule require that 
        such broker or dealer provide notice to each retail 
        customer and obtain the consent or acknowledgment of 
        the customer. The sale of only proprietary or other 
        limited range of products by a broker or dealer shall 
        not, in and of itself, be considered a violation of the 
        standard set forth in paragraph (1).
    ``(l) Other Matters.--The Commission shall--
            ``(1) facilitate the provision of simple and clear 
        disclosures to investors regarding the terms of their 
        relationships with brokers, dealers, and investment 
        advisers, including any material conflicts of interest; 
        and
            ``(2) examine and, where appropriate, promulgate 
        rules prohibiting or restricting certain sales 
        practices, conflicts of interest, and compensation 
        schemes for brokers, dealers, and investment advisers 
        that the Commission deems contrary to the public 
        interest and the protection of investors.''.
            (2) Investment advisers act of 1940.--Section 211 
        of the Investment Advisers Act of 1940 is further 
        amended by adding at the end the following new 
        subsections:
    ``(g) Standard of Conduct.--
            ``(1) In general.--The Commission may promulgate 
        rules to provide that the standard of conduct for all 
        brokers, dealers, and investment advisers, when 
        providing personalized investment advice about 
        securities to retail customers (and such other 
        customers as the Commission may by rule provide), shall 
        be to act in the best interest of the customer without 
        regard to the financial or other interest of the 
        broker, dealer, or investment adviser providing the 
        advice. In accordance with such rules, any material 
        conflicts of interest shall be disclosed and may be 
        consented to by the customer. Such rules shall provide 
        that such standard of conduct shall be no less 
        stringent than the standard applicable to investment 
        advisers under sections 206(1) and (2) of this Act when 
        providing personalized investment advice about 
        securities, except the Commission shall not ascribe a 
        meaning to the term `customer' that would include an 
        investor in a private fund managed by an investment 
        adviser, where such private fund has entered into an 
        advisory contract with such adviser. The receipt of 
        compensation based on commission or fees shall not, in 
        and of itself, be considered a violation of such 
        standard applied to a broker, dealer, or investment 
        adviser.
            ``(2) Retail customer defined.--For purposes of 
        this subsection, the term `retail customer' means a 
        natural person, or the legal representative of such 
        natural person, who--
                    ``(A) receives personalized investment 
                advice about securities from a broker, dealer, 
                or investment adviser; and
                    ``(B) uses such advice primarily for 
                personal, family, or household purposes.
    ``(h) Other Matters.--The Commission shall--
            ``(1) facilitate the provision of simple and clear 
        disclosures to investors regarding the terms of their 
        relationships with brokers, dealers, and investment 
        advisers, including any material conflicts of interest; 
        and
            ``(2) examine and, where appropriate, promulgate 
        rules prohibiting or restricting certain sales 
        practices, conflicts of interest, and compensation 
        schemes for brokers, dealers, and investment advisers 
        that the Commission deems contrary to the public 
        interest and the protection of investors.''.
    (h) Harmonization of Enforcement.--
            (1) Securities exchange act of 1934.--Section 15 of 
        the Securities Exchange Act of 1934, as amended by 
        subsection (g)(1), is further amended by adding at the 
        end the following new subsection:
    ``(m) Harmonization of Enforcement.--The enforcement 
authority of the Commission with respect to violations of the 
standard of conduct applicable to a broker or dealer providing 
personalized investment advice about securities to a retail 
customer shall include--
            ``(1) the enforcement authority of the Commission 
        with respect to such violations provided under this 
        Act; and
            ``(2) the enforcement authority of the Commission 
        with respect to violations of the standard of conduct 
        applicable to an investment adviser under the 
        Investment Advisers Act of 1940, including the 
        authority to impose sanctions for such violations, and
the Commission shall seek to prosecute and sanction violators 
of the standard of conduct applicable to a broker or dealer 
providing personalized investment advice about securities to a 
retail customer under this Act to same extent as the Commission 
prosecutes and sanctions violators of the standard of conduct 
applicable to an investment advisor under the Investment 
Advisers Act of 1940.''.
            (2) Investment advisers act of 1940.--Section 211 
        of the Investment Advisers Act of 1940, as amended by 
        subsection (g)(2), is further amended by adding at the 
        end the following new subsection:
    ``(i) Harmonization of Enforcement.--The enforcement 
authority of the Commission with respect to violations of the 
standard of conduct applicable to an investment adviser shall 
include--
            ``(1) the enforcement authority of the Commission 
        with respect to such violations provided under this 
        Act; and
            ``(2) the enforcement authority of the Commission 
        with respect to violations of the standard of conduct 
        applicable to a broker or dealer providing personalized 
        investment advice about securities to a retail customer 
        under the Securities Exchange Act of 1934, including 
        the authority to impose sanctions for such violations, 
        and
the Commission shall seek to prosecute and sanction violators 
of the standard of conduct applicable to an investment adviser 
under this Act to same extent as the Commission prosecutes and 
sanctions violators of the standard of conduct applicable to a 
broker or dealer providing personalized investment advice about 
securities to a retail customer under the Securities Exchange 
Act of 1934.''.

SEC. 914. STUDY ON ENHANCING INVESTMENT ADVISER EXAMINATIONS.

    (a) Study Required.--
            (1) In general.--The Commission shall review and 
        analyze the need for enhanced examination and 
        enforcement resources for investment advisers.
            (2) Areas of consideration.--The study required by 
        this subsection shall examine--
                    (A) the number and frequency of 
                examinations of investment advisers by the 
                Commission over the 5 years preceding the date 
                of the enactment of this subtitle;
                    (B) the extent to which having Congress 
                authorize the Commission to designate one or 
                more self-regulatory organizations to augment 
                the Commission's efforts in overseeing 
                investment advisers would improve the frequency 
                of examinations of investment advisers; and
                    (C) current and potential approaches to 
                examining the investment advisory activities of 
                dually registered broker-dealers and investment 
                advisers or affiliated broker-dealers and 
                investment advisers.
    (b) Report Required.--The Commission shall report its 
findings to the Committee on Financial Services of the House of 
Representatives and the Committee on Banking, Housing, and 
Urban Affairs of the Senate, not later than 180 days after the 
date of enactment of this subtitle, and shall use such findings 
to revise its rules and regulations, as necessary. The report 
shall include a discussion of regulatory or legislative steps 
that are recommended or that may be necessary to address 
concerns identified in the study.

SEC. 915. OFFICE OF THE INVESTOR ADVOCATE.

    Section 4 of the Securities Exchange Act of 1934 (15 U.S.C. 
78d) is amended by adding at the end the following:
    ``(g) Office of the Investor Advocate.--
            ``(1) Office established.--There is established 
        within the Commission the Office of the Investor 
        Advocate (in this subsection referred to as the 
        `Office').
            ``(2) Investor advocate.--
                    ``(A) In general.--The head of the Office 
                shall be the Investor Advocate, who shall--
                            ``(i) report directly to the 
                        Chairman; and
                            ``(ii) be appointed by the 
                        Chairman, in consultation with the 
                        Commission, from among individuals 
                        having experience in advocating for the 
                        interests of investors in securities 
                        and investor protection issues, from 
                        the perspective of investors.
                    ``(B) Compensation.--The annual rate of pay 
                for the Investor Advocate shall be equal to the 
                highest rate of annual pay for other senior 
                executives who report to the Chairman of the 
                Commission.
                    ``(C) Limitation on service.--An individual 
                who serves as the Investor Advocate may not be 
                employed by the Commission--
                            ``(i) during the 2-year period 
                        ending on the date of appointment as 
                        Investor Advocate; or
                            ``(ii) during the 5-year period 
                        beginning on the date on which the 
                        person ceases to serve as the Investor 
                        Advocate.
            ``(3) Staff of office.--The Investor Advocate, 
        after consultation with the Chairman of the Commission, 
        may retain or employ independent counsel, research 
        staff, and service staff, as the Investor Advocate 
        deems necessary to carry out the functions, powers, and 
        duties of the Office.
            ``(4) Functions of the investor advocate.--The 
        Investor Advocate shall--
                    ``(A) assist retail investors in resolving 
                significant problems such investors may have 
                with the Commission or with self-regulatory 
                organizations;
                    ``(B) identify areas in which investors 
                would benefit from changes in the regulations 
                of the Commission or the rules of self-
                regulatory organizations;
                    ``(C) identify problems that investors have 
                with financial service providers and investment 
                products;
                    ``(D) analyze the potential impact on 
                investors of--
                            ``(i) proposed regulations of the 
                        Commission; and
                            ``(ii) proposed rules of self-
                        regulatory organizations registered 
                        under this title; and
                    ``(E) to the extent practicable, propose to 
                the Commission changes in the regulations or 
                orders of the Commission and to Congress any 
                legislative, administrative, or personnel 
                changes that may be appropriate to mitigate 
                problems identified under this paragraph and to 
                promote the interests of investors.
            ``(5) Access to documents.--The Commission shall 
        ensure that the Investor Advocate has full access to 
        the documents of the Commission and any self-regulatory 
        organization, as necessary to carry out the functions 
        of the Office.
            ``(6) Annual reports.--
                    ``(A) Report on objectives.--
                            ``(i) In general.--Not later than 
                        June 30 of each year after 2010, the 
                        Investor Advocate 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 a report on 
                        the objectives of the Investor Advocate 
                        for the following fiscal year.
                            ``(ii) Contents.--Each report 
                        required under clause (i) shall contain 
                        full and substantive analysis and 
                        explanation.
                    ``(B) Report on activities.--
                            ``(i) In general.--Not later than 
                        December 31 of each year after 2010, 
                        the Investor Advocate 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 a report on 
                        the activities of the Investor Advocate 
                        during the immediately preceding fiscal 
                        year.
                            ``(ii) Contents.--Each report 
                        required under clause (i) shall 
                        include--
                                    ``(I) appropriate 
                                statistical information and 
                                full and substantive analysis;
                                    ``(II) information on steps 
                                that the Investor Advocate has 
                                taken during the reporting 
                                period to improve investor 
                                services and the responsiveness 
                                of the Commission and self-
                                regulatory organizations to 
                                investor concerns;
                                    ``(III) a summary of the 
                                most serious problems 
                                encountered by investors during 
                                the reporting period;
                                    ``(IV) an inventory of the 
                                items described in subclause 
                                (III) that includes--
                                            ``(aa) 
                                        identification of any 
                                        action taken by the 
                                        Commission or the self-
                                        regulatory organization 
                                        and the result of such 
                                        action;
                                            ``(bb) the length 
                                        of time that each item 
                                        has remained on such 
                                        inventory; and
                                            ``(cc) for items on 
                                        which no action has 
                                        been taken, the reasons 
                                        for inaction, and an 
                                        identification of any 
                                        official who is 
                                        responsible for such 
                                        action;
                                    ``(V) recommendations for 
                                such administrative and 
                                legislative actions as may be 
                                appropriate to resolve problems 
                                encountered by investors; and
                                    ``(VI) any other 
                                information, as determined 
                                appropriate by the Investor 
                                Advocate.
                            ``(iii) Independence.--Each report 
                        required under this paragraph shall be 
                        provided directly to the Committees 
                        listed in clause (i) without any prior 
                        review or comment from the Commission, 
                        any commissioner, any other officer or 
                        employee of the Commission, or the 
                        Office of Management and Budget.
                            ``(iv) Confidentiality.--No report 
                        required under clause (i) may contain 
                        confidential information.
            ``(7) Regulations.--The Commission shall, by 
        regulation, establish procedures requiring a formal 
        response to all recommendations submitted to the 
        Commission by the Investor Advocate, not later than 3 
        months after the date of such submission.''.

SEC. 916. STREAMLINING OF FILING PROCEDURES FOR SELF-REGULATORY 
                    ORGANIZATIONS.

    (a) Filing Procedures.--Section 19(b) of the Securities 
Exchange Act of 1934 (15 U.S.C. 78s(b)) is amended by striking 
paragraph (2) (including the undesignated matter immediately 
following subparagraph (B)) and inserting the following:
            ``(2) Approval process.--
                    ``(A) Approval process established.--
                            ``(i) In general.--Except as 
                        provided in clause (ii), not later than 
                        45 days after the date of publication 
                        of a proposed rule change under 
                        paragraph (1), the Commission shall--
                                    ``(I) by order, approve or 
                                disapprove the proposed rule 
                                change; or
                                    ``(II) institute 
                                proceedings under subparagraph 
                                (B) to determine whether the 
                                proposed rule change should be 
                                disapproved.
                            ``(ii) Extension of time period.--
                        The Commission may extend the period 
                        established under clause (i) by not 
                        more than an additional 45 days, if--
                                    ``(I) the Commission 
                                determines that a longer period 
                                is appropriate and publishes 
                                the reasons for such 
                                determination; or
                                    ``(II) the self-regulatory 
                                organization that filed the 
                                proposed rule change consents 
                                to the longer period.
                    ``(B) Proceedings.--
                            ``(i) Notice and hearing.--If the 
                        Commission does not approve or 
                        disapprove a proposed rule change under 
                        subparagraph (A), the Commission shall 
                        provide to the self-regulatory 
                        organization that filed the proposed 
                        rule change--
                                    ``(I) notice of the grounds 
                                for disapproval under 
                                consideration; and
                                    ``(II) opportunity for 
                                hearing, to be concluded not 
                                later than 180 days after the 
                                date of publication of notice 
                                of the filing of the proposed 
                                rule change.
                            ``(ii) Order of approval or 
                        disapproval.--
                                    ``(I) In general.--Except 
                                as provided in subclause (II), 
                                not later than 180 days after 
                                the date of publication under 
                                paragraph (1), the Commission 
                                shall issue an order approving 
                                or disapproving the proposed 
                                rule change.
                                    ``(II) Extension of time 
                                period.--The Commission may 
                                extend the period for issuance 
                                under clause (I) by not more 
                                than 60 days, if--
                                            ``(aa) the 
                                        Commission determines 
                                        that a longer period is 
                                        appropriate and 
                                        publishes the reasons 
                                        for such determination; 
                                        or
                                            ``(bb) the self-
                                        regulatory organization 
                                        that filed the proposed 
                                        rule change consents to 
                                        the longer period.
                    ``(C) Standards for approval and 
                disapproval.--
                            ``(i) Approval.--The Commission 
                        shall approve a proposed rule change of 
                        a self-regulatory organization if it 
                        finds that such proposed rule change is 
                        consistent with the requirements of 
                        this title and the rules and 
                        regulations issued under this title 
                        that are applicable to such 
                        organization.
                            ``(ii) Disapproval.--The Commission 
                        shall disapprove a proposed rule change 
                        of a self-regulatory organization if it 
                        does not make a finding described in 
                        clause (i).
                            ``(iii) Time for approval.--The 
                        Commission may not approve a proposed 
                        rule change earlier than 30 days after 
                        the date of publication under paragraph 
                        (1), unless the Commission finds good 
                        cause for so doing and publishes the 
                        reason for the finding.
                    ``(D) Result of failure to institute or 
                conclude proceedings.--A proposed rule change 
                shall be deemed to have been approved by the 
                Commission, if--
                            ``(i) the Commission does not 
                        approve or disapprove the proposed rule 
                        change or begin proceedings under 
                        subparagraph (B) within the period 
                        described in subparagraph (A); or
                            ``(ii) the Commission does not 
                        issue an order approving or 
                        disapproving the proposed rule change 
                        under subparagraph (B) within the 
                        period described in subparagraph 
                        (B)(ii).
                    ``(E) Publication date based on federal 
                register publishing.--For purposes of this 
                paragraph, if, after filing a proposed rule 
                change with the Commission pursuant to 
                paragraph (1), a self-regulatory organization 
                publishes a notice of the filing of such 
                proposed rule change, together with the 
                substantive terms of such proposed rule change, 
                on a publicly accessible website, the 
                Commission shall thereafter send the notice to 
                the Federal Register for publication thereof 
                under paragraph (1) within 15 days of the date 
                on which such website publication is made. If 
                the Commission fails to send the notice for 
                publication thereof within such 15 day period, 
                then the date of publication shall be deemed to 
                be the date on which such website publication 
                was made.
                    ``(F) Rulemaking.--
                            ``(i) In general.--Not later than 
                        180 days after the date of enactment of 
                        the Investor Protection and Securities 
                        Reform Act of 2010, after consultation 
                        with other regulatory agencies, the 
                        Commission shall promulgate rules 
                        setting forth the procedural 
                        requirements of the proceedings 
                        required under this paragraph.
                            ``(ii) Notice and comment not 
                        required.--The rules promulgated by the 
                        Commission under clause (i) are not 
                        required to include republication of 
                        proposed rule changes or solicitation 
                        of public comment.''.
    (b) Clarification of Filing Date.--
            (1) Rule of construction.--Section 19(b) of the 
        Securities Exchange Act of 1934 (15 U.S.C. 78s(b)) is 
        amended by adding at the end the following:
            ``(10) Rule of construction relating to filing date 
        of proposed rule changes.--
                    ``(A) In general.--For purposes of this 
                subsection, the date of filing of a proposed 
                rule change shall be deemed to be the date on 
                which the Commission receives the proposed rule 
                change.
                    ``(B) Exception.--A proposed rule change 
                has not been received by the Commission for 
                purposes of subparagraph (A) if, not later than 
                7 business days after the date of receipt by 
                the Commission, the Commission notifies the 
                self-regulatory organization that such proposed 
                rule change does not comply with the rules of 
                the Commission relating to the required form of 
                a proposed rule change, except that if the 
                Commission determines that the proposed rule 
                change is unusually lengthy and is complex or 
                raises novel regulatory issues, the Commission 
                shall inform the self-regulatory organization 
                of such determination not later than 7 business 
                days after the date of receipt by the 
                Commission and, for the purposes of 
                subparagraph (A), a proposed rule change has 
                not been received by the Commission, if, not 
                later than 21 days after the date of receipt by 
                the Commission, the Commission notifies the 
                self-regulatory organization that such proposed 
                rule change does not comply with the rules of 
                the Commission relating to the required form of 
                a proposed rule change.''.
            (2) Publication.--Section 19(b)(1) of the 
        Securities Exchange Act of 1934 (15 U.S.C. 78s(b)(1)) 
        is amended by striking ``upon'' and inserting ``as soon 
        as practicable after the date of''.
    (c) Effective Date of Proposed Rules.--Section 19(b)(3) of 
the Securities Exchange Act of 1934 (15 U.S.C. 78s(b)(3)) is 
amended--
            (1) in subparagraph (A)--
                    (A) by striking ``may take effect'' and 
                inserting ``shall take effect''; and
                    (B) by inserting ``on any person, whether 
                or not the person is a member of the self-
                regulatory organization'' after ``charge 
                imposed by the self-regulatory organization''; 
                and
            (2) in subparagraph (C)--
                    (A) by amending the second sentence to read 
                as follows: ``At any time within the 60-day 
                period beginning on the date of filing of such 
                a proposed rule change in accordance with the 
                provisions of paragraph (1), the Commission 
                summarily may temporarily suspend the change in 
                the rules of the self-regulatory organization 
                made thereby, if it appears to the Commission 
                that such action is necessary or appropriate in 
                the public interest, for the protection of 
                investors, or otherwise in furtherance of the 
                purposes of this title.'';
                    (B) by inserting after the second sentence 
                the following: ``If the Commission takes such 
                action, the Commission shall institute 
                proceedings under paragraph (2)(B) to determine 
                whether the proposed rule should be approved or 
                disapproved.''; and
                    (C) in the third sentence, by striking 
                ``the preceding sentence'' and inserting ``this 
                subparagraph''.
    (d) Conforming Change.--Section 19(b)(4)(D) of the 
Securities Exchange Act of 1934 (15 U.S.C. 78s(b)(4)(D)) is 
amended to read as follows:
                    ``(D)(i) The Commission shall order the 
                temporary suspension of any change in the rules 
                of a clearing agency made by a proposed rule 
                change that has taken effect under paragraph 
                (3), if the appropriate regulatory agency for 
                the clearing agency notifies the Commission not 
                later than 30 days after the date on which the 
                proposed rule change was filed of--
                            ``(I) the determination by the 
                        appropriate regulatory agency that the 
                        rules of such clearing agency, as so 
                        changed, may be inconsistent with the 
                        safeguarding of securities or funds in 
                        the custody or control of such clearing 
                        agency or for which it is responsible; 
                        and
                            ``(II) the reasons for the 
                        determination described in subclause 
                        (I).
                    ``(ii) If the Commission takes action under 
                clause (i), the Commission shall institute 
                proceedings under paragraph (2)(B) to determine 
                if the proposed rule change should be approved 
                or disapproved.''.

SEC. 917. STUDY REGARDING FINANCIAL LITERACY AMONG INVESTORS.

    (a) In General.--The Commission shall conduct a study to 
identify--
            (1) the existing level of financial literacy among 
        retail investors, including subgroups of investors 
        identified by the Commission;
            (2) methods to improve the timing, content, and 
        format of disclosures to investors with respect to 
        financial intermediaries, investment products, and 
        investment services;
            (3) the most useful and understandable relevant 
        information that retail investors need to make informed 
        financial decisions before engaging a financial 
        intermediary or purchasing an investment product or 
        service that is typically sold to retail investors, 
        including shares of open-end companies, as that term is 
        defined in section 5 of the Investment Company Act of 
        1940 (15 U.S.C. 80a-5) that are registered under 
        section 8 of that Act;
            (4) methods to increase the transparency of 
        expenses and conflicts of interests in transactions 
        involving investment services and products, including 
        shares of open-end companies described in paragraph 
        (3);
            (5) the most effective existing private and public 
        efforts to educate investors; and
            (6) in consultation with the Financial Literacy and 
        Education Commission, a strategy (including, to the 
        extent practicable, measurable goals and objectives) to 
        increase the financial literacy of investors in order 
        to bring about a positive change in investor behavior.
    (b) Report.--Not later than 2 years after the date of 
enactment of this Act, the Commission shall submit a report on 
the study required under subsection (a) to--
            (1) the Committee on Banking, Housing, and Urban 
        Affairs of the Senate; and
            (2) the Committee on Financial Services of the 
        House of Representatives.

SEC. 918. STUDY REGARDING MUTUAL FUND ADVERTISING.

    (a) In General.--The Comptroller General of the United 
States shall conduct a study on mutual fund advertising to 
identify--
            (1) existing and proposed regulatory requirements 
        for open-end investment company advertisements;
            (2) current marketing practices for the sale of 
        open-end investment company shares, including the use 
        of past performance data, funds that have merged, and 
        incubator funds;
            (3) the impact of such advertising on consumers; 
        and
            (4) recommendations to improve investor protections 
        in mutual fund advertising and additional information 
        necessary to ensure that investors can make informed 
        financial decisions when purchasing shares.
    (b) Report.--Not later than 18 months 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 subsection (a) to--
            (1) the Committee on Banking, Housing, and Urban 
        Affairs of the United States Senate; and
            (2) the Committee on Financial Services of the 
        House of Representatives.

SEC. 919. CLARIFICATION OF COMMISSION AUTHORITY TO REQUIRE INVESTOR 
                    DISCLOSURES BEFORE PURCHASE OF INVESTMENT PRODUCTS 
                    AND SERVICES.

    Section 15 of the Securities Exchange Act of 1934 (15 
U.S.C. 78o) is amended by adding at the end the following:
    ``(n) Disclosures to Retail Investors.--
            ``(1) In general.--Notwithstanding any other 
        provision of the securities laws, the Commission may 
        issue rules designating documents or information that 
        shall be provided by a broker or dealer to a retail 
        investor before the purchase of an investment product 
        or service by the retail investor.
            ``(2) Considerations.--In developing any rules 
        under paragraph (1), the Commission shall consider 
        whether the rules will promote investor protection, 
        efficiency, competition, and capital formation.
            ``(3) Form and contents of documents and 
        information.--Any documents or information designated 
        under a rule promulgated under paragraph (1) shall--
                    ``(A) be in a summary format; and
                    ``(B) contain clear and concise information 
                about--
                            ``(i) investment objectives, 
                        strategies, costs, and risks; and
                            ``(ii) any compensation or other 
                        financial incentive received by a 
                        broker, dealer, or other intermediary 
                        in connection with the purchase of 
                        retail investment products.''.

SEC. 919A. STUDY ON CONFLICTS OF INTEREST.

    (a) In General.--The Comptroller General of the United 
States shall conduct a study--
            (1) to identify and examine potential conflicts of 
        interest that exist between the staffs of the 
        investment banking and equity and fixed income 
        securities analyst functions within the same firm; and
            (2) to make recommendations to Congress designed to 
        protect investors in light of such conflicts.
    (b) Considerations.--In conducting the study under 
subsection (a), the Comptroller General shall--
            (1) consider--
                    (A) the potential for investor harm 
                resulting from conflicts, including 
                consideration of the forms of misconduct 
                engaged in by the several securities firms and 
                individuals that entered into the Global 
                Analyst Research Settlements in 2003 (also 
                known as the ``Global Settlement'');
                    (B) the nature and benefits of the 
                undertakings to which those firms agreed in 
                enforcement proceedings, including firewalls 
                between research and investment banking, 
                separate reporting lines, dedicated legal and 
                compliance staffs, allocation of budget, 
                physical separation, compensation, employee 
                performance evaluations, coverage decisions, 
                limitations on soliciting investment banking 
                business, disclosures, transparency, and other 
                measures;
                    (C) whether any such undertakings should be 
                codified and applied permanently to securities 
                firms, or whether the Commission should adopt 
                rules applying any such undertakings to 
                securities firms; and
                    (D) whether to recommend regulatory or 
                legislative measures designed to mitigate 
                possible adverse consequences to investors 
                arising from the conflicts of interest or to 
                enhance investor protection or confidence in 
                the integrity of the securities markets; and
            (2) consult with State attorneys general, State 
        securities officials, the Commission, the Financial 
        Industry Regulatory Authority (``FINRA''), NYSE 
        Regulation, investor advocates, brokers, dealers, 
        retail investors, institutional investors, and 
        academics.
    (c) Report.--The Comptroller General shall submit a report 
on the results of the study required by this section to the 
Committee on Banking, Housing, and Urban Affairs of the Senate 
and the Committee on Financial Services of the House of 
Representatives, not later than 18 months after the date of 
enactment of this Act.

SEC. 919B. STUDY ON IMPROVED INVESTOR ACCESS TO INFORMATION ON 
                    INVESTMENT ADVISERS AND BROKER-DEALERS.

    (a) Study.--
            (1) In general.--Not later than 6 months after the 
        date of enactment of this Act, the Commission shall 
        complete a study, including recommendations of ways to 
        improve the access of investors to registration 
        information (including disciplinary actions, 
        regulatory, judicial, and arbitration proceedings, and 
        other information) about registered and previously 
        registered investment advisers, associated persons of 
        investment advisers, brokers and dealers and their 
        associated persons on the existing Central Registration 
        Depository and Investment Adviser Registration 
        Depository systems, as well as identify additional 
        information that should be made publicly available.
            (2) Contents.--The study required by subsection (a) 
        shall include an analysis of the advantages and 
        disadvantages of further centralizing access to the 
        information contained in the 2 systems, including--
                    (A) identification of those data pertinent 
                to investors; and
                    (B) the identification of the method and 
                format for displaying and publishing such data 
                to enhance accessibility by and utility to 
                investors.
    (b) Implementation.--Not later than 18 months after the 
date of completion of the study required by subsection (a), the 
Commission shall implement any recommendations of the study.

SEC. 919C. STUDY ON FINANCIAL PLANNERS AND THE USE OF FINANCIAL 
                    DESIGNATIONS.

    (a) In General.--The Comptroller General of the United 
States shall conduct a study to evaluate--
            (1) the effectiveness of State and Federal 
        regulations to protect investors and other consumers 
        from individuals who hold themselves out as financial 
        planners through the use of misleading titles, 
        designations, or marketing materials;
            (2) current State and Federal oversight structure 
        and regulations for financial planners; and
            (3) legal or regulatory gaps in the regulation of 
        financial planners and other individuals who provide or 
        offer to provide financial planning services to 
        consumers.
    (b) Considerations.--In conducting the study required under 
subsection (a), the Comptroller General shall consider--
            (1) the role of financial planners in providing 
        advice regarding the management of financial resources, 
        including investment planning, income tax planning, 
        education planning, retirement planning, estate 
        planning, and risk management;
            (2) whether current regulations at the State and 
        Federal level provide adequate ethical and professional 
        standards for financial planners;
            (3) the possible risk posed to investors and other 
        consumers by individuals who hold themselves out as 
        financial planners or as otherwise providing financial 
        planning services in connection with the sale of 
        financial products, including insurance and securities;
            (4) the possible risk posed to investors and other 
        consumers by individuals who otherwise use titles, 
        designations, or marketing materials in a misleading 
        way in connection with the delivery of financial 
        advice;
            (6) the ability of investors and other consumers to 
        understand licensing requirements and standards of care 
        that apply to individuals who hold themselves out as 
        financial planners or as otherwise providing financial 
        planning services;
            (7) the possible benefits to investors and other 
        consumers of regulation and professional oversight of 
        financial planners; and
            (8) any other consideration that the Comptroller 
        General deems necessary or appropriate to effectively 
        execute the study required under subsection (a).
    (c) Recommendations.--In providing recommendations for the 
appropriate regulation of financial planners and other 
individuals who provide or offer to provide financial planning 
services, in order to protect investors and other consumers of 
financial planning services, the Comptroller General shall 
consider--
            (1) the appropriate structure for regulation of 
        financial planners and individuals providing financial 
        planning services; and
            (2) the appropriate scope of the regulations needed 
        to protect investors and other consumers, including but 
        not limited to the need to establish competency 
        standards, practice standards, ethical guidelines, 
        disciplinary authority, and transparency to investors 
        and other consumers.
    (d) Report.--
            (1) In general.--Not later than 180 days after the 
        date of enactment of this Act, the Comptroller General 
        shall submit a report on the study required under 
        subsection (a) to--
                    (A) the Committee on Banking, Housing, and 
                Urban Affairs of the Senate;
                    (B) the Special Committee on Aging of the 
                Senate; and
                    (C) the Committee on Financial Services of 
                the House of Representatives.
            (2) Content requirements.--The report required 
        under paragraph (1) shall describe the findings and 
        determinations made by the Comptroller General in 
        carrying out the study required under subsection (a), 
        including a description of the considerations, 
        analysis, and government, public, industry, nonprofit 
        and consumer input that the Comptroller General 
        considered to make such findings, conclusions, and 
        legislative, regulatory, or other recommendations.

SEC. 919D. OMBUDSMAN.

    Section 4(g) of the Securities Exchange Act of 1934, as 
added by section 914, is amended by adding at the end the 
following:
            ``(8) Ombudsman.--
                    ``(A) Appointment.--Not later than 180 days 
                after the date on which the first Investor 
                Advocate is appointed under paragraph 
                (2)(A)(i), the Investor Advocate shall appoint 
                an Ombudsman, who shall report directly to the 
                Investor Advocate.
                    ``(B) Duties.--The Ombudsman appointed 
                under subparagraph (A) shall--
                            ``(i) act as a liaison between the 
                        Commission and any retail investor in 
                        resolving problems that retail 
                        investors may have with the Commission 
                        or with self-regulatory organizations;
                            ``(ii) review and make 
                        recommendations regarding policies and 
                        procedures to encourage persons to 
                        present questions to the Investor 
                        Advocate regarding compliance with the 
                        securities laws; and
                            ``(iii) establish safeguards to 
                        maintain the confidentiality of 
                        communications between the persons 
                        described in clause (ii) and the 
                        Ombudsman.
                    ``(C) Limitation.--In carrying out the 
                duties of the Ombudsman under subparagraph (B), 
                the Ombudsman shall utilize personnel of the 
                Commission to the extent practicable. Nothing 
                in this paragraph shall be construed as 
                replacing, altering, or diminishing the 
                activities of any ombudsman or similar office 
                of any other agency.
                    ``(D) Report.--The Ombudsman shall submit a 
                semiannual report to the Investor Advocate that 
                describes the activities and evaluates the 
                effectiveness of the Ombudsman during the 
                preceding year. The Investor Advocate shall 
                include the reports required under this section 
                in the reports required to be submitted by the 
                Inspector Advocate under paragraph (6).''.

       Subtitle B--Increasing Regulatory Enforcement and Remedies

SEC. 921. AUTHORITY TO RESTRICT MANDATORY PRE-DISPUTE ARBITRATION.

    (a) Amendment to Securities Exchange Act of 1934.--Section 
15 of the Securities Exchange Act of 1934 (15 U.S.C. 78o), as 
amended by this title, is further amended by adding at the end 
the following new subsection:
    ``(o) Authority to Restrict Mandatory Pre-dispute 
Arbitration.--The Commission, by rule, may prohibit, or impose 
conditions or limitations on the use of, agreements that 
require customers or clients of any broker, dealer, or 
municipal securities dealer to arbitrate any future dispute 
between them arising under the Federal securities laws, the 
rules and regulations thereunder, or the rules of a self-
regulatory organization if it finds that such prohibition, 
imposition of conditions, or limitations are in the public 
interest and for the protection of investors.''.
    (b) Amendment to Investment Advisers Act of 1940.--Section 
205 of the Investment Advisers Act of 1940 (15 U.S.C. 80b-5) is 
amended by adding at the end the following new subsection:
    ``(f) Authority to Restrict Mandatory Pre-dispute 
Arbitration.--The Commission, by rule, may prohibit, or impose 
conditions or limitations on the use of, agreements that 
require customers or clients of any investment adviser to 
arbitrate any future dispute between them arising under the 
Federal securities laws, the rules and regulations thereunder, 
or the rules of a self-regulatory organization if it finds that 
such prohibition, imposition of conditions, or limitations are 
in the public interest and for the protection of investors.''.

SEC. 922. WHISTLEBLOWER PROTECTION.

    (a) In General.--The Securities Exchange Act of 1934 (15 
U.S.C. 78a et seq.) is amended by inserting after section 21E 
the following:

``SEC. 21F. SECURITIES WHISTLEBLOWER INCENTIVES AND PROTECTION.

    ``(a) Definitions.--In this section the following 
definitions shall apply:
            ``(1) Covered judicial or administrative action.--
        The term `covered judicial or administrative action' 
        means any judicial or administrative action brought by 
        the Commission under the securities laws that results 
        in monetary sanctions exceeding $1,000,000.
            ``(2) Fund.--The term `Fund' means the Securities 
        and Exchange Commission Investor Protection Fund.
            ``(3) Original information.--The term `original 
        information' means information that--
                    ``(A) is derived from the independent 
                knowledge or analysis of a whistleblower;
                    ``(B) is not known to the Commission from 
                any other source, unless the whistleblower is 
                the original source of the information; and
                    ``(C) is not exclusively derived from an 
                allegation made in a judicial or administrative 
                hearing, in a governmental report, hearing, 
                audit, or investigation, or from the news 
                media, unless the whistleblower is a source of 
                the information.
            ``(4) Monetary sanctions.--The term `monetary 
        sanctions', when used with respect to any judicial or 
        administrative action, means--
                    ``(A) any monies, including penalties, 
                disgorgement, and interest, ordered to be paid; 
                and
                    ``(B) any monies deposited into a 
                disgorgement fund or other fund pursuant to 
                section 308(b) of the Sarbanes-Oxley Act of 
                2002 (15 U.S.C. 7246(b)), as a result of such 
                action or any settlement of such action.
            ``(5) Related action.--The term `related action', 
        when used with respect to any judicial or 
        administrative action brought by the Commission under 
        the securities laws, means any judicial or 
        administrative action brought by an entity described in 
        subclauses (I) through (IV) of subsection (h)(2)(D)(i) 
        that is based upon the original information provided by 
        a whistleblower pursuant to subsection (a) that led to 
        the successful enforcement of the Commission action.
            ``(6) Whistleblower.--The term `whistleblower' 
        means any individual who provides, or 2 or more 
        individuals acting jointly who provide, information 
        relating to a violation of the securities laws to the 
        Commission, in a manner established, by rule or 
        regulation, by the Commission.
    ``(b) Awards.--
            ``(1) In general.--In any covered judicial or 
        administrative action, or related action, the 
        Commission, under regulations prescribed by the 
        Commission and subject to subsection (c), shall pay an 
        award or awards to 1 or more whistleblowers who 
        voluntarily provided original information to the 
        Commission that led to the successful enforcement of 
        the covered judicial or administrative action, or 
        related action, in an aggregate amount equal to--
                    ``(A) not less than 10 percent, in total, 
                of what has been collected of the monetary 
                sanctions imposed in the action or related 
                actions; and
                    ``(B) not more than 30 percent, in total, 
                of what has been collected of the monetary 
                sanctions imposed in the action or related 
                actions.
            ``(2) Payment of awards.--Any amount paid under 
        paragraph (1) shall be paid from the Fund.
    ``(c) Determination of Amount of Award; Denial of Award.--
            ``(1) Determination of amount of award.--
                    ``(A) Discretion.--The determination of the 
                amount of an award made under subsection (b) 
                shall be in the discretion of the Commission.
                    ``(B) Criteria.--In determining the amount 
                of an award made under subsection (b), the 
                Commission--
                            ``(i) shall take into 
                        consideration--
                                    ``(I) the significance of 
                                the information provided by the 
                                whistleblower to the success of 
                                the covered judicial or 
                                administrative action;
                                    ``(II) the degree of 
                                assistance provided by the 
                                whistleblower and any legal 
                                representative of the 
                                whistleblower in a covered 
                                judicial or administrative 
                                action;
                                    ``(III) the programmatic 
                                interest of the Commission in 
                                deterring violations of the 
                                securities laws by making 
                                awards to whistleblowers who 
                                provide information that lead 
                                to the successful enforcement 
                                of such laws; and
                                    ``(IV) such additional 
                                relevant factors as the 
                                Commission may establish by 
                                rule or regulation; and
                            ``(ii) shall not take into 
                        consideration the balance of the Fund.
            ``(2) Denial of award.--No award under subsection 
        (b) shall be made--
                    ``(A) to any whistleblower who is, or was 
                at the time the whistleblower acquired the 
                original information submitted to the 
                Commission, a member, officer, or employee of--
                            ``(i) an appropriate regulatory 
                        agency;
                            ``(ii) the Department of Justice;
                            ``(iii) a self-regulatory 
                        organization;
                            ``(iv) the Public Company 
                        Accounting Oversight Board; or
                            ``(v) a law enforcement 
                        organization;
                    ``(B) to any whistleblower who is convicted 
                of a criminal violation related to the judicial 
                or administrative action for which the 
                whistleblower otherwise could receive an award 
                under this section;
                    ``(C) to any whistleblower who gains the 
                information through the performance of an audit 
                of financial statements required under the 
                securities laws and for whom such submission 
                would be contrary to the requirements of 
                section 10A of the Securities Exchange Act of 
                1934 (15 U.S.C. 78j-1); or
                    ``(D) to any whistleblower who fails to 
                submit information to the Commission in such 
                form as the Commission may, by rule, require.
    ``(d) Representation.--
            ``(1) Permitted representation.--Any whistleblower 
        who makes a claim for an award under subsection (b) may 
        be represented by counsel.
            ``(2) Required representation.--
                    ``(A) In general.--Any whistleblower who 
                anonymously makes a claim for an award under 
                subsection (b) shall be represented by counsel 
                if the whistleblower anonymously submits the 
                information upon which the claim is based.
                    ``(B) Disclosure of identity.--Prior to the 
                payment of an award, a whistleblower shall 
                disclose the identity of the whistleblower and 
                provide such other information as the 
                Commission may require, directly or through 
                counsel for the whistleblower.
    ``(e) No Contract Necessary.--No contract with the 
Commission is necessary for any whistleblower to receive an 
award under subsection (b), unless otherwise required by the 
Commission by rule or regulation.
    ``(f) Appeals.--Any determination made under this section, 
including whether, to whom, or in what amount to make awards, 
shall be in the discretion of the Commission. Any such 
determination, except the determination of the amount of an 
award if the award was made in accordance with subsection (b), 
may be appealed to the appropriate court of appeals of the 
United States not more than 30 days after the determination is 
issued by the Commission. The court shall review the 
determination made by the Commission in accordance with section 
706 of title 5, United States Code.
    ``(g) Investor Protection Fund.--
            ``(1) Fund established.--There is established in 
        the Treasury of the United States a fund to be known as 
        the `Securities and Exchange Commission Investor 
        Protection Fund'.
            ``(2) Use of fund.--The Fund shall be available to 
        the Commission, without further appropriation or fiscal 
        year limitation, for--
                    ``(A) paying awards to whistleblowers as 
                provided in subsection (b); and
                    ``(B) funding the activities of the 
                Inspector General of the Commission under 
                section 4(i).
            ``(3) Deposits and credits.--
                    ``(A)  In general.--There shall be 
                deposited into or credited to the Fund an 
                amount equal to--
                            ``(i) any monetary sanction 
                        collected by the Commission in any 
                        judicial or administrative action 
                        brought by the Commission under the 
                        securities laws that is not added to a 
                        disgorgement fund or other fund under 
                        section 308 of the Sarbanes-Oxley Act 
                        of 2002 (15 U.S.C. 7246) or otherwise 
                        distributed to victims of a violation 
                        of the securities laws, or the rules 
                        and regulations thereunder, underlying 
                        such action, unless the balance of the 
                        Fund at the time the monetary sanction 
                        is collected exceeds $300,000,000;
                            ``(ii) any monetary sanction added 
                        to a disgorgement fund or other fund 
                        under section 308 of the Sarbanes-Oxley 
                        Act of 2002 (15 U.S.C. 7246) that is 
                        not distributed to the victims for whom 
                        the Fund was established, unless the 
                        balance of the disgorgement fund at the 
                        time the determination is made not to 
                        distribute the monetary sanction to 
                        such victims exceeds $200,000,000; and
                            ``(iii) all income from investments 
                        made under paragraph (4).
                    ``(B) Additional amounts.--If the amounts 
                deposited into or credited to the Fund under 
                subparagraph (A) are not sufficient to satisfy 
                an award made under subsection (b), there shall 
                be deposited into or credited to the Fund an 
                amount equal to the unsatisfied portion of the 
                award from any monetary sanction collected by 
                the Commission in the covered judicial or 
                administrative action on which the award is 
                based.
            ``(4) Investments.--
                    ``(A) Amounts in fund may be invested.--The 
                Commission may request the Secretary of the 
                Treasury to invest the portion of the Fund that 
                is not, in the discretion of the Commission, 
                required to meet the current needs of the Fund.
                    ``(B) Eligible investments.--Investments 
                shall be made by the Secretary of the Treasury 
                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 Fund as 
                determined by the Commission on the record.
                    ``(C) Interest and proceeds credited.--The 
                interest on, and the proceeds from the sale or 
                redemption of, any obligations held in the Fund 
                shall be credited to the Fund.
            ``(5) Reports to congress.--Not later than October 
        30 of each fiscal year beginning after the date of 
        enactment of this subsection, the Commission 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 a report on--
                    ``(A) the whistleblower award program, 
                established under this section, including--
                            ``(i) a description of the number 
                        of awards granted; and
                            ``(ii) the types of cases in which 
                        awards were granted during the 
                        preceding fiscal year;
                    ``(B) the balance of the Fund at the 
                beginning of the preceding fiscal year;
                    ``(C) the amounts deposited into or 
                credited to the Fund during the preceding 
                fiscal year;
                    ``(D) the amount of earnings on investments 
                made under paragraph (4) during the preceding 
                fiscal year;
                    ``(E) the amount paid from the Fund during 
                the preceding fiscal year to whistleblowers 
                pursuant to subsection (b);
                    ``(F) the balance of the Fund at the end of 
                the preceding fiscal year; and
                    ``(G) a complete set of audited financial 
                statements, including--
                            ``(i) a balance sheet;
                            ``(ii) income statement; and
                            ``(iii) cash flow analysis.
    ``(h) Protection of Whistleblowers.--
            ``(1) Prohibition against retaliation.--
                    ``(A) In general.--No employer may 
                discharge, demote, suspend, threaten, harass, 
                directly or indirectly, or in any other manner 
                discriminate against, a whistleblower in the 
                terms and conditions of employment because of 
                any lawful act done by the whistleblower--
                            ``(i) in providing information to 
                        the Commission in accordance with this 
                        section;
                            ``(ii) in initiating, testifying 
                        in, or assisting in any investigation 
                        or judicial or administrative action of 
                        the Commission based upon or related to 
                        such information; or
                            ``(iii) in making disclosures that 
                        are required or protected under the 
                        Sarbanes-Oxley Act of 2002 (15 U.S.C. 
                        7201 et seq.), the Securities Exchange 
                        Act of 1934 (15 U.S.C. 78a et seq.), 
                        including section 10A(m) of such Act 
                        (15 U.S.C. 78f(m)), section 1513(e) of 
                        title 18, United States Code, and any 
                        other law, rule, or regulation subject 
                        to the jurisdiction of the Commission.
                    ``(B) Enforcement.--
                            ``(i) Cause of action.--An 
                        individual who alleges discharge or 
                        other discrimination in violation of 
                        subparagraph (A) may bring an action 
                        under this subsection in the 
                        appropriate district court of the 
                        United States for the relief provided 
                        in subparagraph (C).
                            ``(ii) Subpoenas.--A subpoena 
                        requiring the attendance of a witness 
                        at a trial or hearing conducted under 
                        this section may be served at any place 
                        in the United States.
                            ``(iii) Statute of limitations.--
                                    ``(I) In general.--An 
                                action under this subsection 
                                may not be brought--
                                            ``(aa) more than 6 
                                        years after the date on 
                                        which the violation of 
                                        subparagraph (A) 
                                        occurred; or
                                            ``(bb) more than 3 
                                        years after the date 
                                        when facts material to 
                                        the right of action are 
                                        known or reasonably 
                                        should have been known 
                                        by the employee 
                                        alleging a violation of 
                                        subparagraph (A).
                                    ``(II) Required action 
                                within 10 years.--
                                Notwithstanding subclause (I), 
                                an action under this subsection 
                                may not in any circumstance be 
                                brought more than 10 years 
                                after the date on which the 
                                violation occurs.
                    ``(C) Relief.--Relief for an individual 
                prevailing in an action brought under 
                subparagraph (B) shall include--
                            ``(i) reinstatement with the same 
                        seniority status that the individual 
                        would have had, but for the 
                        discrimination;
                            ``(ii) 2 times the amount of back 
                        pay otherwise owed to the individual, 
                        with interest; and
                            ``(iii) compensation for litigation 
                        costs, expert witness fees, and 
                        reasonable attorneys' fees.
            ``(2) Confidentiality.--
                    ``(A) In general.--Except as provided in 
                subparagraphs (B) and (C), the Commission and 
                any officer or employee of the Commission shall 
                not disclose any information, including 
                information provided by a whistleblower to the 
                Commission, which could reasonably be expected 
                to reveal the identity of a whistleblower, 
                except in accordance with the provisions of 
                section 552a of title 5, United States Code, 
                unless and until required to be disclosed to a 
                defendant or respondent in connection with a 
                public proceeding instituted by the Commission 
                or any entity described in subparagraph (C). 
                For purposes of section 552 of title 5, United 
                States Code, this paragraph shall be considered 
                a statute described in subsection (b)(3)(B) of 
                such section.
                    ``(B) Exempted statute.--For purposes of 
                section 552 of title 5, United States Code, 
                this paragraph shall be considered a statute 
                described in subsection (b)(3)(B) of such 
                section 552.
                    ``(C) Rule of construction.--Nothing in 
                this section is intended to limit, or shall be 
                construed to limit, the ability of the Attorney 
                General to present such evidence to a grand 
                jury or to share such evidence with potential 
                witnesses or defendants in the course of an 
                ongoing criminal investigation.
                    ``(D) Availability to government 
                agencies.--
                            ``(i) In general.--Without the loss 
                        of its status as confidential in the 
                        hands of the Commission, all 
                        information referred to in subparagraph 
                        (A) may, in the discretion of the 
                        Commission, when determined by the 
                        Commission to be necessary to 
                        accomplish the purposes of this Act and 
                        to protect investors, be made available 
                        to--
                                    ``(I) the Attorney General 
                                of the United States;
                                    ``(II) an appropriate 
                                regulatory authority;
                                    ``(III) a self-regulatory 
                                organization;
                                    ``(IV) a State attorney 
                                general in connection with any 
                                criminal investigation;
                                    ``(V) any appropriate State 
                                regulatory authority;
                                    ``(VI) the Public Company 
                                Accounting Oversight Board;
                                    ``(VII) a foreign 
                                securities authority; and
                                    ``(VIII) a foreign law 
                                enforcement authority.
                            ``(ii) Confidentiality.--
                                    ``(I) In general.--Each of 
                                the entities described in 
                                subclauses (I) through (VI) of 
                                clause (i) shall maintain such 
                                information as confidential in 
                                accordance with the 
                                requirements established under 
                                subparagraph (A).
                                    ``(II) Foreign 
                                authorities.--Each of the 
                                entities described in 
                                subclauses (VII) and (VIII) of 
                                clause (i) shall maintain such 
                                information in accordance with 
                                such assurances of 
                                confidentiality as the 
                                Commission determines 
                                appropriate.
            ``(3) Rights retained.--Nothing in this section 
        shall be deemed to diminish the rights, privileges, or 
        remedies of any whistleblower under any Federal or 
        State law, or under any collective bargaining 
        agreement.
    ``(i) Provision of False Information.--A whistleblower 
shall not be entitled to an award under this section if the 
whistleblower--
            ``(1) knowingly and willfully makes any false, 
        fictitious, or fraudulent statement or representation; 
        or
            ``(2) uses any false writing or document knowing 
        the writing or document contains any false, fictitious, 
        or fraudulent statement or entry.
    ``(j) Rulemaking Authority.--The Commission shall have the 
authority to issue such rules and regulations as may be 
necessary or appropriate to implement the provisions of this 
section consistent with the purposes of this section.''.
    (b) Protection for Employees of Nationally Recognized 
Statistical Rating Organizations.--Section 1514A(a) of title 
18, United States Code, is amended--
            (1) by inserting ``or nationally recognized 
        statistical rating organization (as defined in section 
        3(a) of the Securities Exchange Act of 1934 (15 U.S.C. 
        78c),'' after ``78o(d)),''; and
            (2) by inserting ``or nationally recognized 
        statistical rating organization'' after ``such 
        company''.
    (c) Section 1514A of Title 18, United States Code.--
            (1) Statute of limitations; jury trial.--Section 
        1514A(b)(2) of title 18, United States Code, is 
        amended--
                    (A) in subparagraph (D)--
                            (i) by striking ``90'' and 
                        inserting ``180''; and
                            (ii) by striking the period at the 
                        end and inserting ``, or after the date 
                        on which the employee became aware of 
                        the violation.''; and
                    (B) by adding at the end the following:
                    ``(E) Jury trial.--A party to an action 
                brought under paragraph (1)(B) shall be 
                entitled to trial by jury.''.
            (2) Private securities litigation witnesses; 
        nonenforceability; information.--Section 1514A of title 
        18, United States Code, is amended by adding at the end 
        the following:
    ``(e) Nonenforceability of Certain Provisions Waiving 
Rights and Remedies or Requiring Arbitration of Disputes.--
            ``(1) Waiver of rights and remedies.--The rights 
        and remedies provided for in this section may not be 
        waived by any agreement, policy form, or condition of 
        employment, including by a predispute arbitration 
        agreement.
            ``(2) Predispute arbitration agreements.--No 
        predispute arbitration agreement shall be valid or 
        enforceable, if the agreement requires arbitration of a 
        dispute arising under this section.''.
    (d) Study of Whistleblower Protection Program.--
            (1) Study.--The Inspector General of the Commission 
        shall conduct a study of the whistleblower protections 
        established under the amendments made by this section, 
        including--
                    (A) whether the final rules and regulation 
                issued under the amendments made by this 
                section have made the whistleblower protection 
                program (referred to in this subsection as the 
                ``program'') clearly defined and user-friendly;
                    (B) whether the program is promoted on the 
                website of the Commission and has been widely 
                publicized;
                    (C) whether the Commission is prompt in--
                            (i) responding to--
                                    (I) information provided by 
                                whistleblowers; and
                                    (II) applications for 
                                awards filed by whistleblowers;
                            (ii) updating whistleblowers about 
                        the status of their applications; and
                            (iii) otherwise communicating with 
                        the interested parties;
                    (D) whether the minimum and maximum reward 
                levels are adequate to entice whistleblowers to 
                come forward with information and whether the 
                reward levels are so high as to encourage 
                illegitimate whistleblower claims;
                    (E) whether the appeals process has been 
                unduly burdensome for the Commission;
                    (F) whether the funding mechanism for the 
                Investor Protection Fund is adequate;
                    (G) whether, in the interest of protecting 
                investors and identifying and preventing fraud, 
                it would be useful for Congress to consider 
                empowering whistleblowers or other individuals, 
                who have already attempted to pursue the case 
                through the Commission, to have a private right 
                of action to bring suit based on the facts of 
                the same case, on behalf of the Government and 
                themselves, against persons who have committee 
                securities fraud;
                    (H)(i) whether the exemption under section 
                552(b)(3) of title 5 (known as the Freedom of 
                Information Act) established in section 
                21F(h)(2)(A) of the Securities Exchange Act of 
                1934, as added by this Act, aids whistleblowers 
                in disclosing information to the Commission;
                    (ii) what impact the exemption described in 
                clause (i) has had on the ability of the public 
                to access information about the regulation and 
                enforcement by the Commission of securities; 
                and
                    (iii) any recommendations on whether the 
                exemption described in clause (i) should remain 
                in effect; and
                    (I) such other matters as the Inspector 
                General deems appropriate.
            (2) Report.--Not later than 30 months after the 
        date of enactment of this Act, the Inspector General 
        shall--
                    (A) submit a report on the findings of the 
                study required under paragraph (1) to the 
                Committee on Banking, Housing, and Urban 
                Affairs of the Senate and the Committee on 
                Financial Services of the House; and
                    (B) make the report described in 
                subparagraph (A) available to the public 
                through publication of the report on the 
                website of the Commission.

SEC. 923. CONFORMING AMENDMENTS FOR WHISTLEBLOWER PROTECTION.

    (a) In General.--
            (1) Securities act of 1933.--Section 20(d)(3)(A) of 
        the Securities Act of 1933 (15 U.S.C. 77t(d)(3)(A)) is 
        amended by inserting ``and section 21F of the 
        Securities Exchange Act of 1934'' after ``the Sarbanes-
        Oxley Act of 2002''.
            (2) Investment company act of 1940.--Section 
        42(e)(3)(A) of the Investment Company Act of 1940 (15 
        U.S.C. 80a-41(e)(3)(A)) is amended by inserting ``and 
        section 21F of the Securities Exchange Act of 1934'' 
        after ``the Sarbanes-Oxley Act of 2002''.
            (3) Investment advisers act of 1940.--Section 
        209(e)(3)(A) of the Investment Advisers Act of 1940 (15 
        U.S.C. 80b-9(e)(3)(A)) is amended by inserting ``and 
        section 21F of the Securities Exchange Act of 1934'' 
        after ``the Sarbanes-Oxley Act of 2002''.
    (b) Securities Exchange Act.--
            (1) Section 21.--Section 21(d)(3)(C)(i) of the 
        Securities Exchange Act of 1934 (15 U.S.C. 
        78u(d)(3)(C)(i)) is amended by inserting ``and section 
        21F of this title'' after ``the Sarbanes-Oxley Act of 
        2002''.
            (2) Section 21a.--Section 21A of the Securities 
        Exchange Act of 1934 (15 U.S.C. 78u-1) is amended--
                    (A) in subsection (d)(1) by--
                            (i) striking ``(subject to 
                        subsection (e))''; and
                            (ii) inserting ``and section 21F of 
                        this title'' after ``the Sarbanes-Oxley 
                        Act of 2002'';
                    (B) by striking subsection (e); and
                    (C) by redesignating subsections (f) and 
                (g) as subsections (e) and (f), respectively.

SEC. 924. IMPLEMENTATION AND TRANSITION PROVISIONS FOR WHISTLEBLOWER 
                    PROTECTION.

    (a) Implementing Rules.--The Commission shall issue final 
regulations implementing the provisions of section 21F of the 
Securities Exchange Act of 1934, as added by this subtitle, not 
later than 270 days after the date of enactment of this Act.
    (b) Original Information.--Information provided to the 
Commission in writing by a whistleblower shall not lose the 
status of original information (as defined in section 21F(a)(3) 
of the Securities Exchange Act of 1934, as added by this 
subtitle) solely because the whistleblower provided the 
information prior to the effective date of the regulations, if 
the information is provided by the whistleblower after the date 
of enactment of this subtitle.
    (c) Awards.--A whistleblower may receive an award pursuant 
to section 21F of the Securities Exchange Act of 1934, as added 
by this subtitle, regardless of whether any violation of a 
provision of the securities laws, or a rule or regulation 
thereunder, underlying the judicial or administrative action 
upon which the award is based, occurred prior to the date of 
enactment of this subtitle.
    (d) Administration and Enforcement.--The Securities and 
Exchange Commission shall establish a separate office within 
the Commission to administer and enforce the provisions of 
section 21F of the Securities Exchange Act of 1934 (as added by 
section 922(a)). Such office shall report annually to the 
Committee on Banking, Housing, and Urban Affairs of the Senate 
and the Committee on Financial Services of the House of 
Representatives on its activities, whistleblower complaints, 
and the response of the Commission to such complaints.

SEC. 925. COLLATERAL BARS.

    (a) Securities Exchange Act of 1934.--
            (1) Section 15.--Section 15(b)(6)(A) of the 
        Securities Exchange Act of 1934 (15 U.S.C. 
        78o(b)(6)(A)) is amended by striking ``12 months, or 
        bar such person from being associated with a broker or 
        dealer,'' and inserting ``12 months, or bar any such 
        person from being associated with a broker, dealer, 
        investment adviser, municipal securities dealer, 
        municipal advisor, transfer agent, or nationally 
        recognized statistical rating organization,''.
            (2) Section 15b.--Section 15B(c)(4) of the 
        Securities Exchange Act of 1934 (15 U.S.C. 78o-4(c)(4)) 
        is amended by striking ``twelve months or bar any such 
        person from being associated with a municipal 
        securities dealer,'' and inserting ``12 months or bar 
        any such person from being associated with a broker, 
        dealer, investment adviser, municipal securities 
        dealer, municipal advisor, transfer agent, or 
        nationally recognized statistical rating 
        organization,''.
            (3) Section 17a.--Section 17A(c)(4)(C) of the 
        Securities Exchange Act of 1934 (15 U.S.C. 78q-
        1(c)(4)(C)) is amended by striking ``twelve months or 
        bar any such person from being associated with the 
        transfer agent,'' and inserting ``12 months or bar any 
        such person from being associated with any transfer 
        agent, broker, dealer, investment adviser, municipal 
        securities dealer, municipal advisor, or nationally 
        recognized statistical rating organization,''.
    (b) Investment Advisers Act of 1940.--Section 203(f) of the 
Investment Advisers Act of 1940 (15 U.S.C. 80b-3(f)) is amended 
by striking ``twelve months or bar any such person from being 
associated with an investment adviser,'' and inserting ``12 
months or bar any such person from being associated with an 
investment adviser, broker, dealer, municipal securities 
dealer, municipal advisor, transfer agent, or nationally 
recognized statistical rating organization,''.

SEC. 926. DISQUALIFYING FELONS AND OTHER ``BAD ACTORS'' FROM REGULATION 
                    D OFFERINGS.

    Not later than 1 year after the date of enactment of this 
Act, the Commission shall issue rules for the disqualification 
of offerings and sales of securities made under section 230.506 
of title 17, Code of Federal Regulations, that--
            (1) are substantially similar to the provisions of 
        section 230.262 of title 17, Code of Federal 
        Regulations, or any successor thereto; and
            (2) disqualify any offering or sale of securities 
        by a person that--
                    (A) is subject to a final order of a State 
                securities commission (or an agency or officer 
                of a State performing like functions), a State 
                authority that supervises or examines banks, 
                savings associations, or credit unions, a State 
                insurance commission (or an agency or officer 
                of a State performing like functions), an 
                appropriate Federal banking agency, or the 
                National Credit Union Administration, that--
                            (i) bars the person from--
                                    (I) association with an 
                                entity regulated by such 
                                commission, authority, agency, 
                                or officer;
                                    (II) engaging in the 
                                business of securities, 
                                insurance, or banking; or
                                    (III) engaging in savings 
                                association or credit union 
                                activities; or
                            (ii) constitutes a final order 
                        based on a violation of any law or 
                        regulation that prohibits fraudulent, 
                        manipulative, or deceptive conduct 
                        within the 10-year period ending on the 
                        date of the filing of the offer or 
                        sale; or
                    (B) has been convicted of any felony or 
                misdemeanor in connection with the purchase or 
                sale of any security or involving the making of 
                any false filing with the Commission.

SEC. 927. EQUAL TREATMENT OF SELF-REGULATORY ORGANIZATION RULES.

    Section 29(a) of the Securities Exchange Act of 1934 (15 
U.S.C. 78cc(a)) is amended by striking ``an exchange required 
thereby'' and inserting ``a self-regulatory organization,''.

SEC. 928. CLARIFICATION THAT SECTION 205 OF THE INVESTMENT ADVISERS ACT 
                    OF 1940 DOES NOT APPLY TO STATE-REGISTERED 
                    ADVISERS.

    Section 205(a) of the Investment Advisers Act of 1940 (15 
U.S.C. 80b-5(a)) is amended, in the matter preceding paragraph 
(1)--
            (1) by striking ``, unless exempt from registration 
        pursuant to section 203(b),'' and inserting 
        ``registered or required to be registered with the 
        Commission'';
            (2) by striking ``make use of the mails or any 
        means or instrumentality of interstate commerce, 
        directly or indirectly, to''; and
            (3) by striking ``to'' after ``in any way''.

SEC. 929. UNLAWFUL MARGIN LENDING.

    Section 7(c)(1)(A) of the Securities Exchange Act of 1934 
(15 U.S.C. 78g(c)(1)(A)) is amended by striking ``; and'' and 
inserting ``; or''.

SEC. 929A. PROTECTION FOR EMPLOYEES OF SUBSIDIARIES AND AFFILIATES OF 
                    PUBLICLY TRADED COMPANIES.

    Section 1514A of title 18, United States Code, is amended 
by inserting ``including any subsidiary or affiliate whose 
financial information is included in the consolidated financial 
statements of such company'' after ``the Securities Exchange 
Act of 1934 (15 U.S.C. 78o(d))''.

SEC. 929B. FAIR FUND AMENDMENTS.

    Section 308 of the Sarbanes-Oxley Act of 2002 (15 U.S.C. 
7246(a)) is amended--
            (1) by striking subsection (a) and inserting the 
        following:
    ``(a) Civil Penalties To Be Used for the Relief of 
Victims.--If, in any judicial or administrative action brought 
by the Commission under the securities laws, the Commission 
obtains a civil penalty against any person for a violation of 
such laws, or such person agrees, in settlement of any such 
action, to such civil penalty, the amount of such civil penalty 
shall, on the motion or at the direction of the Commission, be 
added to and become part of a disgorgement fund or other fund 
established for the benefit of the victims of such 
violation.'';
            (2) in subsection (b)--
                    (A) by striking ``for a disgorgement fund 
                described in subsection (a)'' and inserting 
                ``for a disgorgement fund or other fund 
                described in subsection (a)''; and
                    (B) by striking ``in the disgorgement 
                fund'' and inserting ``in such fund''; and
            (3) by striking subsection (e).

SEC. 929C. INCREASING THE BORROWING LIMIT ON TREASURY LOANS.

    Section 4(h) of the Securities Investor Protection Act of 
1970 (15 U.S.C. 78ddd(h)) is amended in the first sentence, by 
striking ``$1,000,000,000'' and inserting ``$2,500,000,000''.

SEC. 929D. LOST AND STOLEN SECURITIES.

    Section 17(f)(1) of the Securities Exchange Act of 1934 (15 
U.S.C. 78q(f)(1)) is amended--
            (1) in subparagraph (A), by striking ``missing, 
        lost, counterfeit, or stolen securities'' and inserting 
        ``securities that are missing, lost, counterfeit, 
        stolen, or cancelled''; and
            (2) in subparagraph (B), by striking ``or stolen'' 
        and inserting ``stolen, cancelled, or reported in such 
        other manner as the Commission, by rule, may 
        prescribe''.

SEC. 929E. NATIONWIDE SERVICE OF SUBPOENAS.

    (a) Securities Act of 1933.--Section 22(a) of the 
Securities Act of 1933 (15 U.S.C. 77v(a)) is amended by 
inserting after the second sentence the following: ``In any 
action or proceeding instituted by the Commission under this 
title in a United States district court for any judicial 
district, a subpoena issued to compel the attendance of a 
witness or the production of documents or tangible things (or 
both) at a hearing or trial may be served at any place within 
the United States. Rule 45(c)(3)(A)(ii) of the Federal Rules of 
Civil Procedure shall not apply to a subpoena issued under the 
preceding sentence.''.
    (b) Securities Exchange Act of 1934.--Section 27 of the 
Securities Exchange Act of 1934 (15 U.S.C. 78aa) is amended by 
inserting after the third sentence the following: ``In any 
action or proceeding instituted by the Commission under this 
title in a United States district court for any judicial 
district, a subpoena issued to compel the attendance of a 
witness or the production of documents or tangible things (or 
both) at a hearing or trial may be served at any place within 
the United States. Rule 45(c)(3)(A)(ii) of the Federal Rules of 
Civil Procedure shall not apply to a subpoena issued under the 
preceding sentence.''.
    (c) Investment Company Act of 1940.--Section 44 of the 
Investment Company Act of 1940 (15 U.S.C. 80a-43) is amended by 
inserting after the fourth sentence the following: ``In any 
action or proceeding instituted by the Commission under this 
title in a United States district court for any judicial 
district, a subpoena issued to compel the attendance of a 
witness or the production of documents or tangible things (or 
both) at a hearing or trial may be served at any place within 
the United States. Rule 45(c)(3)(A)(ii) of the Federal Rules of 
Civil Procedure shall not apply to a subpoena issued under the 
preceding sentence.''.
    (d) Investment Advisers Act of 1940.--Section 214 of the 
Investment Advisers Act of 1940 (15 U.S.C. 80b-14) is amended 
by inserting after the third sentence the following: ``In any 
action or proceeding instituted by the Commission under this 
title in a United States district court for any judicial 
district, a subpoena issued to compel the attendance of a 
witness or the production of documents or tangible things (or 
both) at a hearing or trial may be served at any place within 
the United States. Rule 45(c)(3)(A)(ii) of the Federal Rules of 
Civil Procedure shall not apply to a subpoena issued under the 
preceding sentence.''.

SEC. 929F. FORMERLY ASSOCIATED PERSONS.

    (a) Member or Employee of the Municipal Securities 
Rulemaking Board.--Section 15B(c)(8) of the Securities Exchange 
Act of 1934 (15 U.S.C. 78o-4(c)(8)) is amended by striking 
``any member or employee'' and inserting ``any person who is, 
or at the time of the alleged violation or abuse was, a member 
or employee''.
    (b) Person Associated With a Government Securities Broker 
or Dealer.--Section 15C(c) of the Securities Exchange Act of 
1934 (15 U.S.C. 78o-5(c)) is amended--
            (1) in paragraph (1)(C), by striking ``any person 
        associated, or seeking to become associated,'' and 
        inserting ``any person who is, or at the time of the 
        alleged misconduct was, associated or seeking to become 
        associated''; and
            (2) in paragraph (2)--
                    (A) in subparagraph (A), by inserting ``, 
                seeking to become associated, or, at the time 
                of the alleged misconduct, associated or 
                seeking to become associated'' after ``any 
                person associated''; and
                    (B) in subparagraph (B), by inserting ``, 
                seeking to become associated, or, at the time 
                of the alleged misconduct, associated or 
                seeking to become associated'' after ``any 
                person associated''.
    (c) Person Associated With a Member of a National 
Securities Exchange or Registered Securities Association.--
Section 21(a)(1) of the Securities Exchange Act of 1934 (15 
U.S.C. 78u(a)(1)) is amended, in the first sentence, by 
inserting ``, or, as to any act or practice, or omission to 
act, while associated with a member, formerly associated'' 
after ``member or a person associated''.
    (d) Participant of a Registered Clearing Agency.--Section 
21(a)(1) of the Securities Exchange Act of 1934 (15 U.S.C. 
78u(a)(1)) is amended, in the first sentence, by inserting 
``or, as to any act or practice, or omission to act, while a 
participant, was a participant,'' after ``in which such person 
is a participant,''.
    (e) Officer or Director of a Self-regulatory 
Organization.--Section 19(h)(4) of the Securities Exchange Act 
of 1934 (15 U.S.C. 78s(h)(4)) is amended--
            (1) by striking ``any officer or director'' and 
        inserting ``any person who is, or at the time of the 
        alleged misconduct was, an officer or director''; and
            (2) by striking ``such officer or director'' and 
        inserting ``such person''.
    (f) Officer or Director of an Investment Company.--Section 
36(a) of the Investment Company Act of 1940 (15 U.S.C. 80a-
35(a)) is amended--
            (1) by striking ``a person serving or acting'' and 
        inserting ``a person who is, or at the time of the 
        alleged misconduct was, serving or acting''; and
            (2) by striking ``such person so serves or acts'' 
        and inserting ``such person so serves or acts, or at 
        the time of the alleged misconduct, so served or 
        acted''.
    (g) Person Associated With a Public Accounting Firm.--
            (1) Sarbanes-oxley act of 2002 amendment.--Section 
        2(a)(9) of the Sarbanes-Oxley Act of 2002 (15 U.S.C. 
        7201(9)) is amended by adding at the end the following:
                    ``(C) Investigative and enforcement 
                authority.--For purposes of sections 3(c), 
                101(c), 105, and 107(c) and the rules of the 
                Board and Commission issued thereunder, except 
                to the extent specifically excepted by such 
                rules, the terms defined in subparagraph (A) 
                shall include any person associated, seeking to 
                become associated, or formerly associated with 
                a public accounting firm, except that--
                            ``(i) the authority to conduct an 
                        investigation of such person under 
                        section 105(b) shall apply only with 
                        respect to any act or practice, or 
                        omission to act, by the person while 
                        such person was associated or seeking 
                        to become associated with a registered 
                        public accounting firm; and
                            ``(ii) the authority to commence a 
                        disciplinary proceeding under section 
                        105(c)(1), or impose sanctions under 
                        section 105(c)(4), against such person 
                        shall apply only with respect to--
                                    ``(I) conduct occurring 
                                while such person was 
                                associated or seeking to become 
                                associated with a registered 
                                public accounting firm; or
                                    ``(II) non-cooperation, as 
                                described in section 105(b)(3), 
                                with respect to a demand in a 
                                Board investigation for 
                                testimony, documents, or other 
                                information relating to a 
                                period when such person was 
                                associated or seeking to become 
                                associated with a registered 
                                public accounting firm.''.
            (2) Securities exchange act of 1934 amendment.--
        Section 21(a)(1) of the Securities Exchange Act of 1934 
        (15 U.S.C. 78u(a)(1)) is amended by striking ``or a 
        person associated with such a firm'' and inserting ``, 
        a person associated with such a firm, or, as to any 
        act, practice, or omission to act, while associated 
        with such firm, a person formerly associated with such 
        a firm''.
    (h) Supervisory Personnel of an Audit Firm.--Section 
105(c)(6) of the Sarbanes-Oxley Act of 2002 (15 U.S.C. 
7215(c)(6)) is amended--
            (1) in subparagraph (A), by striking ``the 
        supervisory personnel'' and inserting ``any person who 
        is, or at the time of the alleged failure reasonably to 
        supervise was, a supervisory person''; and
            (2) in subparagraph (B)--
                    (A) by striking ``No associated person'' 
                and inserting ``No current or former 
                supervisory person''; and
                    (B) by striking ``any other person'' and 
                inserting ``any associated person''.
    (i) Member of the Public Company Accounting Oversight 
Board.--Section 107(d)(3) of the Sarbanes-Oxley Act of 2002 (15 
U.S.C. 7217(d)(3)) is amended by striking ``any member'' and 
inserting ``any person who is, or at the time of the alleged 
misconduct was, a member''.

SEC. 929G. STREAMLINED HIRING AUTHORITY FOR MARKET SPECIALISTS.

    (a) Appointment Authority.--Section 3114 of title 5, United 
States Code, is amended by striking the section heading and all 
that follows through the end of subsection (a) and inserting 
the following:

``Sec. 3114. Appointment of candidates to certain positions in the 
                    competitive service by the Securities and Exchange 
                    Commission

    ``(a) Applicability.--This section applies with respect to 
any position of accountant, economist, and securities 
compliance examiner at the Commission that is in the 
competitive service, and any position at the Commission in the 
competitive service that requires specialized knowledge of 
financial and capital market formation or regulation, financial 
market structures or surveillance, or information 
technology.''.
    (b) Clerical Amendment.--The table of sections for chapter 
31 of title 5, United States Code, is amended by striking the 
item relating to section 3114 and inserting the following:

``3114. Appointment of candidates to positions in the competitive 
          service by the Securities and Exchange Commission.''.

    (c) Pay Authority.--The Commission may set the rate of pay 
for experts and consultants appointed under the authority of 
section 3109 of title 5, United States Code, in the same manner 
in which it sets the rate of pay for employees of the 
Commission.

SEC. 929H. SIPC REFORMS.

    (a) Increasing the Cash Limit of Protection.--Section 9 of 
the Securities Investor Protection Act of 1970 (15 U.S.C. 
78fff-3) is amended--
            (1) in subsection (a)(1), by striking ``$100,000 
        for each such customer'' and inserting ``the standard 
        maximum cash advance amount for each such customer, as 
        determined in accordance with subsection (d)''; and
            (2) by adding the following new subsections:
    ``(d) Standard Maximum Cash Advance Amount Defined.--For 
purposes of this section, the term `standard maximum cash 
advance amount' means $250,000, as such amount may be adjusted 
after December 31, 2010, as provided under subsection (e).
    ``(e) Inflation Adjustment.--
            ``(1) In general.--Not later than January 1, 2011, 
        and every 5 years thereafter, and subject to the 
        approval of the Commission as provided under section 
        3(e)(2), the Board of Directors of SIPC shall determine 
        whether an inflation adjustment to the standard maximum 
        cash advance amount is appropriate. If the Board of 
        Directors of SIPC determines such an adjustment is 
        appropriate, then the standard maximum cash advance 
        amount shall be an amount equal to--
                    ``(A) $250,000 multiplied by--
                    ``(B) the ratio of the annual value of the 
                Personal Consumption Expenditures Chain-Type 
                Price Index (or any successor index thereto), 
                published by the Department of Commerce, for 
                the calendar year preceding the year in which 
                such determination is made, to the published 
                annual value of such index for the calendar 
                year preceding the year in which this 
                subsection was enacted.
        The index values used in calculations under this 
        paragraph shall be, as of the date of the calculation, 
        the values most recently published by the Department of 
        Commerce.
            ``(2) Rounding.--If the standard maximum cash 
        advance amount determined under paragraph (1) for any 
        period is not a multiple of $10,000, the amount so 
        determined shall be rounded down to the nearest 
        $10,000.
            ``(3) Publication and report to the congress.--Not 
        later than April 5 of any calendar year in which a 
        determination is required to be made under paragraph 
        (1)--
                    ``(A) the Commission shall publish in the 
                Federal Register the standard maximum cash 
                advance amount; and
                    ``(B) the Board of Directors of SIPC shall 
                submit a report to the Congress stating the 
                standard maximum cash advance amount.
            ``(4) Implementation period.--Any adjustment to the 
        standard maximum cash advance amount shall take effect 
        on January 1 of the year immediately succeeding the 
        calendar year in which such adjustment is made.
            ``(5) Inflation adjustment considerations.--In 
        making any determination under paragraph (1) to 
        increase the standard maximum cash advance amount, the 
        Board of Directors of SIPC shall consider--
                    ``(A) the overall state of the fund and the 
                economic conditions affecting members of SIPC;
                    ``(B) the potential problems affecting 
                members of SIPC; and
                    ``(C) such other factors as the Board of 
                Directors of SIPC may determine appropriate.''.
    (b) Liquidation of a Carrying Broker-dealer.--Section 
5(a)(3) of the Securities Investor Protection Act of 1970 (15 
U.S.C. 78eee(a)(3)) is amended--
            (1) by striking the undesignated matter immediately 
        following subparagraph (B);
            (2) in subparagraph (A), by striking ``any member 
        of SIPC'' and inserting ``the member'';
            (3) in subparagraph (B), by striking the comma at 
        the end and inserting a period;
            (4) by striking ``If SIPC'' and inserting the 
        following:
                    ``(A) In general.--SIPC may, upon notice to 
                a member of SIPC, file an application for a 
                protective decree with any court of competent 
                jurisdiction specified in section 21(e) or 27 
                of the Securities Exchange Act of 1934, except 
                that no such application shall be filed with 
                respect to a member, the only customers of 
                which are persons whose claims could not be 
                satisfied by SIPC advances pursuant to section 
                9, if SIPC''; and
            (5) by adding at the end the following:
                    ``(B) Consent required.--No member of SIPC 
                that has a customer may enter into an 
                insolvency, receivership, or bankruptcy 
                proceeding, under Federal or State law, without 
                the specific consent of SIPC, except as 
                provided in title II of the Dodd-Frank Wall 
                Street Reform and Consumer Protection Act.''.

SEC. 929I. PROTECTING CONFIDENTIALITY OF MATERIALS SUBMITTED TO THE 
                    COMMISSION.

    (a) Securities Exchange Act of 1934.--Section 24 of the 
Securities Exchange Act of 1934 (15 U.S.C. 78x) is amended--
            (1) in subsection (d), by striking ``subsection 
        (e)'' and inserting ``subsection (f)'';
            (2) by redesignating subsection (e) as subsection 
        (f); and
            (3) by inserting after subsection (d) the 
        following:
    ``(e) Records Obtained From Registered Persons.--
            ``(1) In general.--Except as provided in subsection 
        (f), the Commission shall not be compelled to disclose 
        records or information obtained pursuant to section 
        17(b), or records or information based upon or derived 
        from such records or information, if such records or 
        information have been obtained by the Commission for 
        use in furtherance of the purposes of this title, 
        including surveillance, risk assessments, or other 
        regulatory and oversight activities.
            ``(2) Treatment of information.--For purposes of 
        section 552 of title 5, United States Code, this 
        subsection shall be considered a statute described in 
        subsection (b)(3)(B) of such section 552. Collection of 
        information pursuant to section 17 shall be an 
        administrative action involving an agency against 
        specific individuals or agencies pursuant to section 
        3518(c)(1) of title 44, United States Code.''.
    (b) Investment Company Act of 1940.--Section 31 of the 
Investment Company Act of 1940 (15 U.S.C. 80a-30) is amended--
            (1) by striking subsection (c) and inserting the 
        following:
    ``(c) Limitations on Disclosure by Commission.--
Notwithstanding any other provision of law, the Commission 
shall not be compelled to disclose any records or information 
provided to the Commission under this section, or records or 
information based upon or derived from such records or 
information, if such records or information have been obtained 
by the Commission for use in furtherance of the purposes of 
this title, including surveillance, risk assessments, or other 
regulatory and oversight activities. Nothing in this subsection 
authorizes the Commission to withhold information from the 
Congress or prevent the Commission from complying with a 
request for information from any other Federal department or 
agency requesting the information for purposes within the scope 
of jurisdiction of that department or agency, or complying with 
an order of a court of the United States in an action brought 
by the United States or the Commission. For purposes of section 
552 of title 5, United States Code, this section shall be 
considered a statute described in subsection (b)(3)(B) of such 
section 552. Collection of information pursuant to section 31 
shall be an administrative action involving an agency against 
specific individuals or agencies pursuant to section 3518(c)(1) 
of title 44, United States Code.'';
            (2) by striking subsection (d); and
            (3) by redesignating subsections (e) and (f) as 
        subsections (d) and (e), respectively.
    (c) Investment Advisers Act of 1940.--Section 210 of the 
Investment Advisers Act of 1940 (15 U.S.C. 80b-10) is amended 
by adding at the end the following:
    ``(d) Limitations on Disclosure by the Commission.--
Notwithstanding any other provision of law, the Commission 
shall not be compelled to disclose any records or information 
provided to the Commission under section 204, or records or 
information based upon or derived from such records or 
information, if such records or information have been obtained 
by the Commission for use in furtherance of the purposes of 
this title, including surveillance, risk assessments, or other 
regulatory and oversight activities. Nothing in this subsection 
authorizes the Commission to withhold information from the 
Congress or prevent the Commission from complying with a 
request for information from any other Federal department or 
agency requesting the information for purposes within the scope 
of jurisdiction of that department or agency, or complying with 
an order of a court of the United States in an action brought 
by the United States or the Commission. For purposes of section 
552 of title 5, United States Code, this subsection shall be 
considered a statute described in subsection (b)(3)(B) of such 
section 552. Collection of information pursuant to section 204 
shall be an administrative action involving an agency against 
specific individuals or agencies pursuant to section 3518(c)(1) 
of title 44, United States Code.''.

SEC. 929J. EXPANSION OF AUDIT INFORMATION TO BE PRODUCED AND EXCHANGED.

    Section 106 of the Sarbanes-Oxley Act of 2002 (15 U.S.C. 
7216) is amended--
            (1) by striking subsection (b) and inserting the 
        following:
    ``(b) Production of Documents.--
            ``(1) Production by foreign firms.--If a foreign 
        public accounting firm performs material services upon 
        which a registered public accounting firm relies in the 
        conduct of an audit or interim review, issues an audit 
        report, performs audit work, or conducts interim 
        reviews, the foreign public accounting firm shall--
                    ``(A) produce the audit work papers of the 
                foreign public accounting firm and all other 
                documents of the firm related to any such audit 
                work or interim review to the Commission or the 
                Board, upon request of the Commission or the 
                Board; and
                    ``(B) be subject to the jurisdiction of the 
                courts of the United States for purposes of 
                enforcement of any request for such documents.
            ``(2) Other production.--Any registered public 
        accounting firm that relies, in whole or in part, on 
        the work of a foreign public accounting firm in issuing 
        an audit report, performing audit work, or conducting 
        an interim review, shall--
                    ``(A) produce the audit work papers of the 
                foreign public accounting firm and all other 
                documents related to any such work in response 
                to a request for production by the Commission 
                or the Board; and
                    ``(B) secure the agreement of any foreign 
                public accounting firm to such production, as a 
                condition of the reliance by the registered 
                public accounting firm on the work of that 
                foreign public accounting firm.'';
            (2) by redesignating subsection (d) as subsection 
        (g); and
            (3) by inserting after subsection (c) the 
        following:
    ``(d) Service of Requests or Process.--
            ``(1) In general.--Any foreign public accounting 
        firm that performs work for a domestic registered 
        public accounting firm shall furnish to the domestic 
        registered public accounting firm a written irrevocable 
        consent and power of attorney that designates the 
        domestic registered public accounting firm as an agent 
        upon whom may be served any request by the Commission 
        or the Board under this section or upon whom may be 
        served any process, pleadings, or other papers in any 
        action brought to enforce this section.
            ``(2) Specific audit work.--Any foreign public 
        accounting firm that performs material services upon 
        which a registered public accounting firm relies in the 
        conduct of an audit or interim review, issues an audit 
        report, performs audit work, or, performs interim 
        reviews, shall designate to the Commission or the Board 
        an agent in the United States upon whom may be served 
        any request by the Commission or the Board under this 
        section or upon whom may be served any process, 
        pleading, or other papers in any action brought to 
        enforce this section.
    ``(e) Sanctions.--A willful refusal to comply, in whole in 
or in part, with any request by the Commission or the Board 
under this section, shall be deemed a violation of this Act.
    ``(f) Other Means of Satisfying Production Obligations.--
Notwithstanding any other provisions of this section, the staff 
of the Commission or the Board may allow a foreign public 
accounting firm that is subject to this section to meet 
production obligations under this section through alternate 
means, such as through foreign counterparts of the Commission 
or the Board.''.

SEC. 929K. SHARING PRIVILEGED INFORMATION WITH OTHER AUTHORITIES.

    Section 24 of the Securities Exchange Act of 1934 (15 
U.S.C. 78x) is amended--
            (1) in subsection (d), as amended by subsection 
        (d)(1)(A), by striking ``subsection (f)'' and inserting 
        ``subsection (g)'';
            (2) in subsection (e), as added by subsection 
        (d)(1)(C), by striking ``subsection (f)'' and inserting 
        ``subsection (g)'';
            (3) by redesignating subsection (f) as subsection 
        (g); and
            (4) by inserting after subsection (e) the 
        following:
    ``(f) Sharing Privileged Information With Other 
Authorities.--
            ``(1) Privileged information provided by the 
        commission.--The Commission shall not be deemed to have 
        waived any privilege applicable to any information by 
        transferring that information to or permitting that 
        information to be used by--
                    ``(A) any agency (as defined in section 6 
                of title 18, United States Code);
                    ``(B) the Public Company Accounting 
                Oversight Board;
                    ``(C) any self-regulatory organization;
                    ``(D) any foreign securities authority;
                    ``(E) any foreign law enforcement 
                authority; or
                    ``(F) any State securities or law 
                enforcement authority.
            ``(2) Nondisclosure of privileged information 
        provided to the commission.--The Commission shall not 
        be compelled to disclose privileged information 
        obtained from any foreign securities authority, or 
        foreign law enforcement authority, if the authority has 
        in good faith determined and represented to the 
        Commission that the information is privileged.
            ``(3) Nonwaiver of privileged information provided 
        to the commission.--
                    ``(A) In general.--Federal agencies, State 
                securities and law enforcement authorities, 
                self-regulatory organizations, and the Public 
                Company Accounting Oversight Board shall not be 
                deemed to have waived any privilege applicable 
                to any information by transferring that 
                information to or permitting that information 
                to be used by the Commission.
                    ``(B) Exception.--The provisions of 
                subparagraph (A) shall not apply to a self-
                regulatory organization or the Public Company 
                Accounting Oversight Board with respect to 
                information used by the Commission in an action 
                against such organization.
            ``(4) Definitions.--For purposes of this 
        subsection--
                    ``(A) the term `privilege' includes any 
                work-product privilege, attorney-client 
                privilege, governmental privilege, or other 
                privilege recognized under Federal, State, or 
                foreign law;
                    ``(B) the term `foreign law enforcement 
                authority' means any foreign authority that is 
                empowered under foreign law to detect, 
                investigate or prosecute potential violations 
                of law; and
                    ``(C) the term `State securities or law 
                enforcement authority' means the authority of 
                any State or territory that is empowered under 
                State or territory law to detect, investigate, 
                or prosecute potential violations of law.''.

SEC. 929L. ENHANCED APPLICATION OF ANTIFRAUD PROVISIONS.

    The Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.) 
is amended--
            (1) in section 9--
                    (A) by striking ``registered on a national 
                securities exchange'' each place that term 
                appears and inserting ``other than a government 
                security'';
                    (B) in subsection (b), by striking ``by use 
                of any facility of a national securities 
                exchange,''; and
                    (C) in subsection (c), by inserting after 
                ``unlawful for any'' the following: ``broker, 
                dealer, or'';
            (2) in section 10(a)(1), by striking ``registered 
        on a national securities exchange'' and inserting 
        ``other than a government security''; and
            (3) in section 15(c)(1)(A), by striking ``otherwise 
        than on a national securities exchange of which it is a 
        member''.

SEC. 929M. AIDING AND ABETTING AUTHORITY UNDER THE SECURITIES ACT AND 
                    THE INVESTMENT COMPANY ACT.

    (a) Under the Securities Act of 1933.--Section 15 of the 
Securities Act of 1933 (15 U.S.C. 77o) is amended--
            (1) by striking ``Every person who'' and inserting 
        ``(a) Controlling Persons.--Every person who''; and
            (2) by adding at the end the following:
    ``(b) Prosecution of Persons Who Aid and Abet Violations.--
For purposes of any action brought by the Commission under 
subparagraph (b) or (d) of section 20, any person that 
knowingly or recklessly provides substantial assistance to 
another person in violation of a provision of this Act, or of 
any rule or regulation issued under this Act, shall be deemed 
to be in violation of such provision to the same extent as the 
person to whom such assistance is provided.''.
    (b) Under the Investment Company Act of 1940.--Section 48 
of the Investment Company Act of 1940 (15 U.S.C. 80a-48) is 
amended by redesignating subsection (b) as subsection (c) and 
inserting after subsection (a) the following:
    ``(b) For purposes of any action brought by the Commission 
under subsection (d) or (e) of section 42, any person that 
knowingly or recklessly provides substantial assistance to 
another person in violation of a provision of this Act, or of 
any rule or regulation issued under this Act, shall be deemed 
to be in violation of such provision to the same extent as the 
person to whom such assistance is provided.''.

SEC. 929N. AUTHORITY TO IMPOSE PENALTIES FOR AIDING AND ABETTING 
                    VIOLATIONS OF THE INVESTMENT ADVISERS ACT.

    Section 209 of the Investment Advisers Act of 1940 (15 
U.S.C. 80b-9) is amended by inserting at the end the following 
new subsection:
    ``(f) Aiding and Abetting.--For purposes of any action 
brought by the Commission under subsection (e), any person that 
knowingly or recklessly has aided, abetted, counseled, 
commanded, induced, or procured a violation of any provision of 
this Act, or of any rule, regulation, or order hereunder, shall 
be deemed to be in violation of such provision, rule, 
regulation, or order to the same extent as the person that 
committed such violation.''.

SEC. 929O. AIDING AND ABETTING STANDARD OF KNOWLEDGE SATISFIED BY 
                    RECKLESSNESS.

    Section 20(e) of the Securities Exchange Act of 1934 (15 
U.S.C. 78t(e)) is amended by inserting ``or recklessly'' after 
``knowingly''.

SEC. 929P. STRENGTHENING ENFORCEMENT BY THE COMMISSION.

    (a) Authority to Impose Civil Penalties in Cease and Desist 
Proceedings.--
            (1) Under the securities act of 1933.--Section 8A 
        of the Securities Act of 1933 (15 U.S.C. 77h-1) is 
        amended by adding at the end the following new 
        subsection:
    ``(g) Authority to Impose Money Penalties.--
            ``(1) Grounds.--In any cease-and-desist proceeding 
        under subsection (a), the Commission may impose a civil 
        penalty on a person if the Commission finds, on the 
        record, after notice and opportunity for hearing, 
        that--
                    ``(A) such person--
                            ``(i) is violating or has violated 
                        any provision of this title, or any 
                        rule or regulation issued under this 
                        title; or
                            ``(ii) is or was a cause of the 
                        violation of any provision of this 
                        title, or any rule or regulation 
                        thereunder; and
                    ``(B) such penalty is in the public 
                interest.
            ``(2) Maximum amount of penalty.--
                    ``(A) First tier.--The maximum amount of a 
                penalty for each act or omission described in 
                paragraph (1) shall be $7,500 for a natural 
                person or $75,000 for any other person.
                    ``(B) Second tier.--Notwithstanding 
                subparagraph (A), the maximum amount of penalty 
                for each such act or omission shall be $75,000 
                for a natural person or $375,000 for any other 
                person, if the act or omission described in 
                paragraph (1) involved fraud, deceit, 
                manipulation, or deliberate or reckless 
                disregard of a regulatory requirement.
                    ``(C) Third tier.--Notwithstanding 
                subparagraphs (A) and (B), the maximum amount 
                of penalty for each such act or omission shall 
                be $150,000 for a natural person or $725,000 
                for any other person, if--
                            ``(i) the act or omission described 
                        in paragraph (1) involved fraud, 
                        deceit, manipulation, or deliberate or 
                        reckless disregard of a regulatory 
                        requirement; and
                            ``(ii) such act or omission 
                        directly or indirectly resulted in--
                                    ``(I) substantial losses or 
                                created a significant risk of 
                                substantial losses to other 
                                persons; or
                                    ``(II) substantial 
                                pecuniary gain to the person 
                                who committed the act or 
                                omission.
            ``(3) Evidence concerning ability to pay.--In any 
        proceeding in which the Commission may impose a penalty 
        under this section, a respondent may present evidence 
        of the ability of the respondent to pay such penalty. 
        The Commission may, in its discretion, consider such 
        evidence in determining whether such penalty is in the 
        public interest. Such evidence may relate to the extent 
        of the ability of the respondent to continue in 
        business and the collectability of a penalty, taking 
        into account any other claims of the United States or 
        third parties upon the assets of the respondent and the 
        amount of the assets of the respondent.''.
            (2) Under the securities exchange act of 1934.--
        Section 21B(a) of the Securities Exchange Act of 1934 
        (15 U.S.C. 78u-2(a)) is amended--
                    (A) by striking the matter following 
                paragraph (4);
                    (B) in the matter preceding paragraph (1), 
                by inserting after ``opportunity for hearing,'' 
                the following: ``that such penalty is in the 
                public interest and'';
                    (C) by redesignating paragraphs (1) through 
                (4) as subparagraphs (A) through (D), 
                respectively, and adjusting the margins 
                accordingly;
                    (D) by striking ``In any proceeding'' and 
                inserting the following:
            ``(1) In general.--In any proceeding''; and
                    (E) by adding at the end the following:
            ``(2) Cease-and-desist proceedings.--In any 
        proceeding instituted under section 21C against any 
        person, the Commission may impose a civil penalty, if 
        the Commission finds, on the record after notice and 
        opportunity for hearing, that such person--
                    ``(A) is violating or has violated any 
                provision of this title, or any rule or 
                regulation issued under this title; or
                    ``(B) is or was a cause of the violation of 
                any provision of this title, or any rule or 
                regulation issued under this title.''.
            (3) Under the investment company act of 1940.--
        Section 9(d)(1) of the Investment Company Act of 1940 
        (15 U.S.C. 80a-9(d)(1)) is amended--
                    (A) by striking the matter following 
                subparagraph (C);
                    (B) in the matter preceding subparagraph 
                (A), by inserting after ``opportunity for 
                hearing,'' the following: ``that such penalty 
                is in the public interest, and'';
                    (C) by redesignating subparagraphs (A) 
                through (C) as clauses (i) through (iii), 
                respectively, and adjusting the margins 
                accordingly;
                    (D) by striking ``In any proceeding'' and 
                inserting the following:
                    ``(A) In general.--In any proceeding''; and
                    (E) by adding at the end the following:
                    ``(B) Cease-and-desist proceedings.--In any 
                proceeding instituted pursuant to subsection 
                (f) against any person, the Commission may 
                impose a civil penalty if the Commission finds, 
                on the record, after notice and opportunity for 
                hearing, that such person--
                            ``(i) is violating or has violated 
                        any provision of this title, or any 
                        rule or regulation issued under this 
                        title; or
                            ``(ii) is or was a cause of the 
                        violation of any provision of this 
                        title, or any rule or regulation issued 
                        under this title.''.
            (4) Under the investment advisers act of 1940.--
        Section 203(i)(1) of the Investment Advisers Act of 
        1940 (15 U.S.C. 80b-3(i)(1)) is amended--
                    (A) by striking the matter following 
                subparagraph (D);
                    (B) in the matter preceding subparagraph 
                (A), by inserting after ``opportunity for 
                hearing,'' the following: ``that such penalty 
                is in the public interest and'';
                    (C) by redesignating subparagraphs (A) 
                through (D) as clauses (i) through (iv), 
                respectively, and adjusting the margins 
                accordingly;
                    (D) by striking ``In any proceeding'' and 
                inserting the following:
                    ``(A) In general.--In any proceeding''; and
                    (E) by adding at the end the following new 
                subparagraph:
                    ``(B) Cease-and-desist proceedings.--In any 
                proceeding instituted pursuant to subsection 
                (k) against any person, the Commission may 
                impose a civil penalty if the Commission finds, 
                on the record, after notice and opportunity for 
                hearing, that such person--
                            ``(i) is violating or has violated 
                        any provision of this title, or any 
                        rule or regulation issued under this 
                        title; or
                            ``(ii) is or was a cause of the 
                        violation of any provision of this 
                        title, or any rule or regulation issued 
                        under this title.''.
    (b) Extraterritorial Jurisdiction of the Antifraud 
Provisions of the Federal Securities Laws.--
            (1) Under the securities act of 1933.--Section 22 
        of the Securities Act of 1933 (15 U.S.C. 77v(a)) is 
        amended by adding at the end the following new 
        subsection:
    ``(c) Extraterritorial Jurisdiction.--The district courts 
of the United States and the United States courts of any 
Territory shall have jurisdiction of an action or proceeding 
brought or instituted by the Commission or the United States 
alleging a violation of section 17(a) involving--
            ``(1) conduct within the United States that 
        constitutes significant steps in furtherance of the 
        violation, even if the securities transaction occurs 
        outside the United States and involves only foreign 
        investors; or
            ``(2) conduct occurring outside the United States 
        that has a foreseeable substantial effect within the 
        United States.''.
            (2) Under the securities exchange act of 1934.--
        Section 27 of the Securities Exchange Act of 1934 (15 
        U.S.C. 78aa) is amended--
                    (A) by striking ``The district'' and 
                inserting the following:
    ``(a) In General.--The district''; and
                    (B) by adding at the end the following new 
                subsection:
    ``(b) Extraterritorial Jurisdiction.--The district courts 
of the United States and the United States courts of any 
Territory shall have jurisdiction of an action or proceeding 
brought or instituted by the Commission or the United States 
alleging a violation of the antifraud provisions of this title 
involving--
            ``(1) conduct within the United States that 
        constitutes significant steps in furtherance of the 
        violation, even if the securities transaction occurs 
        outside the United States and involves only foreign 
        investors; or
            ``(2) conduct occurring outside the United States 
        that has a foreseeable substantial effect within the 
        United States.''.
            (3) Under the investment advisers act of 1940.--
        Section 214 of the Investment Advisers Act of 1940 (15 
        U.S.C. 80b-14) is amended--
                    (A) by striking ``The district'' and 
                inserting the following:
    ``(a) In General.--The district''; and
                    (B) by adding at the end the following new 
                subsection:
    ``(b) Extraterritorial Jurisdiction.--The district courts 
of the United States and the United States courts of any 
Territory shall have jurisdiction of an action or proceeding 
brought or instituted by the Commission or the United States 
alleging a violation of section 206 involving--
            ``(1) conduct within the United States that 
        constitutes significant steps in furtherance of the 
        violation, even if the violation is committed by a 
        foreign adviser and involves only foreign investors; or
            ``(2) conduct occurring outside the United States 
        that has a foreseeable substantial effect within the 
        United States.''.
    (c) Control Person Liability Under the Securities Exchange 
Act of 1934.--Section 20(a) of the Securities Exchange Act of 
1934 (15 U.S.C. 78t(a)) is amended by inserting after 
``controlled person is liable'' the following: ``(including to 
the Commission in any action brought under paragraph (1) or (3) 
of section 21(d))''.

SEC. 929Q. REVISION TO RECORDKEEPING RULE.

    (a) Investment Company Act of 1940 Amendments.--Section 31 
of the Investment Company Act of 1940 (15 U.S.C. 80a-30) is 
amended--
            (1) in subsection (a)(1), by adding at the end the 
        following: ``Each person having custody or use of the 
        securities, deposits, or credits of a registered 
        investment company shall maintain and preserve all 
        records that relate to the custody or use by such 
        person of the securities, deposits, or credits of the 
        registered investment company for such period or 
        periods as the Commission, by rule or regulation, may 
        prescribe, as necessary or appropriate in the public 
        interest or for the protection of investors.''; and
            (2) in subsection (b), by adding at the end the 
        following:
            ``(4) Records of persons with custody or use.--
                    ``(A) In general.--Records of persons 
                having custody or use of the securities, 
                deposits, or credits of a registered investment 
                company that relate to such custody or use, are 
                subject at any time, or from time to time, to 
                such reasonable periodic, special, or other 
                examinations and other information and document 
                requests by representatives of the Commission, 
                as the Commission deems necessary or 
                appropriate in the public interest or for the 
                protection of investors.
                    ``(B) Certain persons subject to other 
                regulation.--Any person that is subject to 
                regulation and examination by a Federal 
                financial institution regulatory agency (as 
                such term is defined under section 212(c)(2) of 
                title 18, United States Code) may satisfy any 
                examination request, information request, or 
                document request described under subparagraph 
                (A), by providing to the Commission a detailed 
                listing, in writing, of the securities, 
                deposits, or credits of the registered 
                investment company within the custody or use of 
                such person.''.
    (b) Investment Advisers Act of 1940 Amendment.--Section 204 
of the Investment Advisers Act of 1940 (15 U.S.C. 80b-4) is 
amended by adding at the end the following new subsection:
    ``(d) Records of Persons With Custody or Use.--
            ``(1) In general.--Records of persons having 
        custody or use of the securities, deposits, or credits 
        of a client, that relate to such custody or use, are 
        subject at any time, or from time to time, to such 
        reasonable periodic, special, or other examinations and 
        other information and document requests by 
        representatives of the Commission, as the Commission 
        deems necessary or appropriate in the public interest 
        or for the protection of investors.
            ``(2) Certain persons subject to other 
        regulation.--Any person that is subject to regulation 
        and examination by a Federal financial institution 
        regulatory agency (as such term is defined under 
        section 212(c)(2) of title 18, United States Code) may 
        satisfy any examination request, information request, 
        or document request described under paragraph (1), by 
        providing the Commission with a detailed listing, in 
        writing, of the securities, deposits, or credits of the 
        client within the custody or use of such person.''.

SEC. 929R. BENEFICIAL OWNERSHIP AND SHORT-SWING PROFIT REPORTING.

    (a) Beneficial Ownership Reporting.--Section 13 of the 
Securities Exchange Act of 1934 (15 U.S.C. 78m) is amended--
            (1) in subsection (d)(1)--
                    (A) by inserting after ``within ten days 
                after such acquisition'' the following: ``or 
                within such shorter time as the Commission may 
                establish by rule''; and
                    (B) by striking ``send to the issuer of the 
                security at its principal executive office, by 
                registered or certified mail, send to each 
                exchange where the security is traded, and'';
            (2) in subsection (d)(2)--
                    (A) by striking ``in the statements to the 
                issuer and the exchange, and''; and
                    (B) by striking ``shall be transmitted to 
                the issuer and the exchange and'';
            (3) in subsection (g)(1), by striking ``shall send 
        to the issuer of the security and''; and
            (4) in subsection (g)(2)--
                    (A) by striking ``sent to the issuer and''; 
                and
                    (B) by striking ``shall be transmitted to 
                the issuer and''.
    (b) Short-swing Profit Reporting.--Section 16(a) of the 
Securities Exchange Act of 1934 (15 U.S.C. 78p(a)) is amended--
            (1) in paragraph (1), by striking ``(and, if such 
        security is registered on a national securities 
        exchange, also with the exchange)''; and
            (2) in paragraph (2)(B), by inserting after 
        ``officer'' the following: ``, or within such shorter 
        time as the Commission may establish by rule''.

SEC. 929S. FINGERPRINTING.

    Section 17(f)(2) of the Securities Exchange Act of 1934 (15 
U.S.C. 78q(f)(2)) is amended--
            (1) in the first sentence, by striking ``and 
        registered clearing agency,'' and inserting 
        ``registered clearing agency, registered securities 
        information processor, national securities exchange, 
        and national securities association''; and
            (2) in the second sentence, by striking ``or 
        clearing agency,'' and inserting ``clearing agency, 
        securities information processor, national securities 
        exchange, or national securities association,''.

SEC. 929T. EQUAL TREATMENT OF SELF-REGULATORY ORGANIZATION RULES.

    Section 29(a) of the Securities Exchange Act of 1934 (15 
U.S.C. 78cc(a)) is amended by striking ``an exchange required 
thereby'' and inserting ``a self-regulatory organization,''.

SEC. 929U. DEADLINE FOR COMPLETING EXAMINATIONS, INSPECTIONS AND 
                    ENFORCEMENT ACTIONS.

    The Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.) 
is amended by inserting after section 4D the following new 
section:

``SEC. 4E. DEADLINE FOR COMPLETING ENFORCEMENT INVESTIGATIONS AND 
                    COMPLIANCE EXAMINATIONS AND INSPECTIONS.

    ``(a) Enforcement Investigations.--
            ``(1) In general.--Not later than 180 days after 
        the date on which Commission staff provide a written 
        Wells notification to any person, the Commission staff 
        shall either file an action against such person or 
        provide notice to the Director of the Division of 
        Enforcement of its intent to not file an action.
            ``(2) Exceptions for certain complex actions.--
        Notwithstanding paragraph (1), if the Director of the 
        Division of Enforcement of the Commission or the 
        Director's designee determines that a particular 
        enforcement investigation is sufficiently complex such 
        that a determination regarding the filing of an action 
        against a person cannot be completed within the 
        deadline specified in paragraph (1), the Director of 
        the Division of Enforcement of the Commission or the 
        Director's designee may, after providing notice to the 
        Chairman of the Commission, extend such deadline as 
        needed for one additional 180-day period. If after the 
        additional 180-day period the Director of the Division 
        of Enforcement of the Commission or the Director's 
        designee determines that a particular enforcement 
        investigation is sufficiently complex such that a 
        determination regarding the filing of an action against 
        a person cannot be completed within the additional 180-
        day period, the Director of the Division of Enforcement 
        of the Commission or the Director's designee may, after 
        providing notice to and receiving approval of the 
        Commission, extend such deadline as needed for one or 
        more additional successive 180-day periods.
    ``(b) Compliance Examinations and Inspections.--
            ``(1) In general.--Not later than 180 days after 
        the date on which Commission staff completes the on-
        site portion of its compliance examination or 
        inspection or receives all records requested from the 
        entity being examined or inspected, whichever is later, 
        Commission staff shall provide the entity being 
        examined or inspected with written notification 
        indicating either that the examination or inspection 
        has concluded, has concluded without findings, or that 
        the staff requests the entity undertake corrective 
        action.
            ``(2) Exception for certain complex actions.--
        Notwithstanding paragraph (1), if the head of any 
        division or office within the Commission responsible 
        for compliance examinations and inspections or his 
        designee determines that a particular compliance 
        examination or inspection is sufficiently complex such 
        that a determination regarding concluding the 
        examination or inspection, or regarding the staff 
        requests the entity undertake corrective action, cannot 
        be completed within the deadline specified in paragraph 
        (1), the head of any division or office within the 
        Commission responsible for compliance examinations and 
        inspections or his designee may, after providing notice 
        to the Chairman of the Commission, extend such deadline 
        as needed for one additional 180-day period.''.

SEC. 929V. SECURITY INVESTOR PROTECTION ACT AMENDMENTS.

    (a) Increasing the Minimum Assessment Paid by SIPC 
Members.--Section 4(d)(1)(C) of the Securities Investor 
Protection Act of 1970 (15 U.S.C. 78ddd(d)(1)(C)) is amended by 
striking ``$150 per annum'' and inserting the following: ``0.02 
percent of the gross revenues from the securities business of 
such member of SIPC''.
    (b) Increasing the Fine for Prohibited Acts Under SIPA.--
Section 14(c) of the Securities Investor Protection Act of 1970 
(15 U.S.C. 78jjj(c)) is amended--
            (1) in paragraph (1), by striking ``$50,000'' and 
        inserting ``$250,000''; and
            (2) in paragraph (2), by striking ``$50,000'' and 
        inserting ``$250,000''.
    (c) Penalty for Misrepresentation of SIPC Membership or 
Protection.--Section 14 of the Securities Investor Protection 
Act of 1970 (15 U.S.C. 78jjj) is amended by adding at the end 
the following new subsection:
    ``(d) Misrepresentation of SIPC Membership or Protection.--
            ``(1) In general.--Any person who falsely 
        represents by any means (including, without limitation, 
        through the Internet or any other medium of mass 
        communication), with actual knowledge of the falsity of 
        the representation and with an intent to deceive or 
        cause injury to another, that such person, or another 
        person, is a member of SIPC or that any person or 
        account is protected or is eligible for protection 
        under this Act or by SIPC, shall be liable for any 
        damages caused thereby and shall be fined not more than 
        $250,000 or imprisoned for not more than 5 years.
            ``(2) Injunctions.--Any court having jurisdiction 
        of a civil action arising under this Act may grant 
        temporary injunctions and final injunctions on such 
        terms as the court deems reasonable to prevent or 
        restrain any violation of paragraph (1). Any such 
        injunction may be served anywhere in the United States 
        on the person enjoined, shall be operative throughout 
        the United States, and shall be enforceable, by 
        proceedings in contempt or otherwise, by any United 
        States court having jurisdiction over that person. The 
        clerk of the court granting the injunction shall, when 
        requested by any other court in which enforcement of 
        the injunction is sought, transmit promptly to the 
        other court a certified copy of all papers in the case 
        on file in such clerk's office.''.

SEC. 929W. NOTICE TO MISSING SECURITY HOLDERS.

    Section 17A of the Securities Exchange Act of 1934 (15 
U.S.C. 78q-1) is amended by adding at the end the following new 
subsection:
    ``(g) Due Diligence for the Delivery of Dividends, 
Interest, and Other Valuable Property Rights.--
            ``(1) Revision of rules required.--The Commission 
        shall revise its regulations in section 240.17Ad-17 of 
        title 17, Code of Federal Regulations, as in effect on 
        December 8, 1997, to extend the application of such 
        section to brokers and dealers and to provide for the 
        following:
                    ``(A) A requirement that the paying agent 
                provide a single written notification to each 
                missing security holder that the missing 
                security holder has been sent a check that has 
                not yet been negotiated. The written 
                notification may be sent along with a check or 
                other mailing subsequently sent to the missing 
                security holder but must be provided no later 
                than 7 months after the sending of the not yet 
                negotiated check.
                    ``(B) An exclusion for paying agents from 
                the notification requirements when the value of 
                the not yet negotiated check is less than $25.
                    ``(C) A provision clarifying that the 
                requirements described in subparagraph (A) 
                shall have no effect on State escheatment laws.
                    ``(D) For purposes of such revised 
                regulations--
                            ``(i) a security holder shall be 
                        considered a `missing security holder' 
                        if a check is sent to the security 
                        holder and the check is not negotiated 
                        before the earlier of the paying agent 
                        sending the next regularly scheduled 
                        check or the elapsing of 6 months after 
                        the sending of the not yet negotiated 
                        check; and
                            ``(ii) the term `paying agent' 
                        includes any issuer, transfer agent, 
                        broker, dealer, investment adviser, 
                        indenture trustee, custodian, or any 
                        other person that accepts payments from 
                        the issuer of a security and 
                        distributes the payments to the holders 
                        of the security.
            ``(2) Rulemaking.--The Commission shall adopt such 
        rules, regulations, and orders necessary to implement 
        this subsection no later than 1 year after the date of 
        enactment of this subsection. In proposing such rules, 
        the Commission shall seek to minimize disruptions to 
        current systems used by or on behalf of paying agents 
        to process payment to account holders and avoid 
        requiring multiple paying agents to send written 
        notification to a missing security holder regarding the 
        same not yet negotiated check.''.

SEC. 929X. SHORT SALE REFORMS.

    (a) Short Sale Disclosure.--Section 13(f) of the Securities 
Exchange Act of 1934 (15 U.S.C. 78m(f)) is amended by 
redesignating paragraphs (2), (3), (4), and (5) as paragraphs 
(3), (4), (5), and (6), respectively, and inserting after 
paragraph (1) the following:
            ``(2) The Commission shall prescribe rules 
        providing for the public disclosure of the name of the 
        issuer and the title, class, CUSIP number, aggregate 
        amount of the number of short sales of each security, 
        and any additional information determined by the 
        Commission following the end of the reporting period. 
        At a minimum, such public disclosure shall occur every 
        month.''.
    (b) Short Selling Enforcement.--Section 9 of the Securities 
Exchange Act of 1934 (15 U.S.C. 78i) is amended--
            (1) by redesignating subsections (d), (e), (f), 
        (g), (h), and (i) as subsections (e), (f), (g), (h), 
        (i), and (j), respectively; and
            (2) inserting after subsection (c), the following 
        new subsection:
    ``(d) Transactions Relating to Short Sales of Securities.--
It shall be unlawful for any person, directly or indirectly, by 
the use of the mails or any means or instrumentality of 
interstate commerce, or of any facility of any national 
securities exchange, or for any member of a national securities 
exchange to effect, alone or with one or more other persons, a 
manipulative short sale of any security. The Commission shall 
issue such other rules as are necessary or appropriate to 
ensure that the appropriate enforcement options and remedies 
are available for violations of this subsection in the public 
interest or for the protection of investors.''.
    (c) Investor Notification.--Section 15 of the Securities 
Exchange Act of 1934 (15 U.S.C. 78o) is amended--
            (1) by redesignating subsections (e), (f), (g), 
        (h), and (i) as subsections (f), (g), (h), (i), and 
        (j), respectively; and
            (2) inserting after subsection (d) the following 
        new subsection:
    ``(e) Notices to Customers Regarding Securities Lending.--
Every registered broker or dealer shall provide notice to its 
customers that they may elect not to allow their fully paid 
securities to be used in connection with short sales. If a 
broker or dealer uses a customer's securities in connection 
with short sales, the broker or dealer shall provide notice to 
its customer that the broker or dealer may receive compensation 
in connection with lending the customer's securities. The 
Commission, by rule, as it deems necessary or appropriate in 
the public interest and for the protection of investors, may 
prescribe the form, content, time, and manner of delivery of 
any notice required under this paragraph.''.

SEC. 929Y. STUDY ON EXTRATERRITORIAL PRIVATE RIGHTS OF ACTION.

    (a) In General.--The Securities and Exchange Commission of 
the United States shall solicit public comment and thereafter 
conduct a study to determine the extent to which private rights 
of action under the antifraud provisions of the Securities and 
Exchange Act of 1934 (15 U.S.C. 78u-4) should be extended to 
cover--
            (1) conduct within the United States that 
        constitutes a significant step in the furtherance of 
        the violation, even if the securities transaction 
        occurs outside the United States and involves only 
        foreign investors; and
            (2) conduct occurring outside the United States 
        that has a foreseeable substantial effect within the 
        United States.
    (b) Contents.--The study shall consider and analyze, among 
other things--
            (1) the scope of such a private right of action, 
        including whether it should extend to all private 
        actors or whether it should be more limited to extend 
        just to institutional investors or otherwise;
            (2) what implications such a private right of 
        action would have on international comity;
            (3) the economic costs and benefits of extending a 
        private right of action for transnational securities 
        frauds; and
            (4) whether a narrower extraterritorial standard 
        should be adopted.
    (c) Report.--A report of the study shall be submitted and 
recommendations made to the Committee on Banking, Housing, and 
Urban Affairs of the Senate and the Committee on Financial 
Services of the House not later than 18 months after the date 
of enactment of this Act.

SEC. 929Z. GAO STUDY ON SECURITIES LITIGATION.

    (a) Study.--The Comptroller General of the United States 
shall conduct a study on the impact of authorizing a private 
right of action against any person who aids or abets another 
person in violation of the securities laws. To the extent 
feasible, this study shall include--
            (1) a review of the role of secondary actors in 
        companies issuance of securities;
            (2) the courts interpretation of the scope of 
        liability for secondary actors under Federal securities 
        laws after January 14, 2008; and
            (3) the types of lawsuits decided under the Private 
        Securities Litigation Act of 1995.
    (b) Report.--Not later than 1 year after the date of 
enactment of this Act, the Comptroller General shall submit a 
report to Congress on the findings of the study required under 
subsection (a).

  Subtitle C--Improvements to the Regulation of Credit Rating Agencies

SEC. 931. FINDINGS.

    Congress finds the following:
            (1) Because of the systemic importance of credit 
        ratings and the reliance placed on credit ratings by 
        individual and institutional investors and financial 
        regulators, the activities and performances of credit 
        rating agencies, including nationally recognized 
        statistical rating organizations, are matters of 
        national public interest, as credit rating agencies are 
        central to capital formation, investor confidence, and 
        the efficient performance of the United States economy.
            (2) Credit rating agencies, including nationally 
        recognized statistical rating organizations, play a 
        critical ``gatekeeper'' role in the debt market that is 
        functionally similar to that of securities analysts, 
        who evaluate the quality of securities in the equity 
        market, and auditors, who review the financial 
        statements of firms. Such role justifies a similar 
        level of public oversight and accountability.
            (3) Because credit rating agencies perform 
        evaluative and analytical services on behalf of 
        clients, much as other financial ``gatekeepers'' do, 
        the activities of credit rating agencies are 
        fundamentally commercial in character and should be 
        subject to the same standards of liability and 
        oversight as apply to auditors, securities analysts, 
        and investment bankers.
            (4) In certain activities, particularly in advising 
        arrangers of structured financial products on potential 
        ratings of such products, credit rating agencies face 
        conflicts of interest that need to be carefully 
        monitored and that therefore should be addressed 
        explicitly in legislation in order to give clearer 
        authority to the Securities and Exchange Commission.
            (5) In the recent financial crisis, the ratings on 
        structured financial products have proven to be 
        inaccurate. This inaccuracy contributed significantly 
        to the mismanagement of risks by financial institutions 
        and investors, which in turn adversely impacted the 
        health of the economy in the United States and around 
        the world. Such inaccuracy necessitates increased 
        accountability on the part of credit rating agencies.

SEC. 932. ENHANCED REGULATION, ACCOUNTABILITY, AND TRANSPARENCY OF 
                    NATIONALLY RECOGNIZED STATISTICAL RATING 
                    ORGANIZATIONS.

    (a) In General.--Section 15E of the Securities Exchange Act 
of 1934 (15 U.S.C. 78o-7) is amended--
            (1) in subsection (b)--
                    (A) in paragraph (1)(A), by striking 
                ``furnished'' and inserting ``filed'' and by 
                striking ``furnishing'' and inserting 
                ``filing'';
                    (B) in paragraph (1)(B), by striking 
                ``furnishing'' and inserting ``filing''; and
                    (C) in the first sentence of paragraph (2), 
                by striking ``furnish to'' and inserting ``file 
                with'';
            (2) in subsection (c)--
                    (A) in paragraph (2)--
                            (i) in the second sentence, by 
                        inserting ``any other provision of this 
                        section, or'' after 
                        ``Notwithstanding''; and
                            (ii) by inserting after the period 
                        at the end the following: ``Nothing in 
                        this paragraph may be construed to 
                        afford a defense against any action or 
                        proceeding brought by the Commission to 
                        enforce the antifraud provisions of the 
                        securities laws.''; and
                    (B) by adding at the end the following:
            ``(3) Internal controls over processes for 
        determining credit ratings.--
                    ``(A) In general.--Each nationally 
                recognized statistical rating organization 
                shall establish, maintain, enforce, and 
                document an effective internal control 
                structure governing the implementation of and 
                adherence to policies, procedures, and 
                methodologies for determining credit ratings, 
                taking into consideration such factors as the 
                Commission may prescribe, by rule.
                    ``(B) Attestation requirement.--The 
                Commission shall prescribe rules requiring each 
                nationally recognized statistical rating 
                organization to submit to the Commission an 
                annual internal controls report, which shall 
                contain--
                            ``(i) a description of the 
                        responsibility of the management of the 
                        nationally recognized statistical 
                        rating organization in establishing and 
                        maintaining an effective internal 
                        control structure under subparagraph 
                        (A);
                            ``(ii) an assessment of the 
                        effectiveness of the internal control 
                        structure of the nationally recognized 
                        statistical rating organization; and
                            ``(iii) the attestation of the 
                        chief executive officer, or equivalent 
                        individual, of the nationally 
                        recognized statistical rating 
                        organization.'';
            (3) in subsection (d)--
                    (A) by inserting after ``or revoke the 
                registration of any nationally recognized 
                statistical rating organization'' the 
                following: ``, or with respect to any person 
                who is associated with, who is seeking to 
                become associated with, or, at the time of the 
                alleged misconduct, who was associated or was 
                seeking to become associated with a nationally 
                recognized statistical rating organization, the 
                Commission, by order, shall censure, place 
                limitations on the activities or functions of 
                such person, suspend for a period not exceeding 
                1 year, or bar such person from being 
                associated with a nationally recognized 
                statistical rating organization,'';
                    (B) by inserting ``bar'' after ``placing of 
                limitations, suspension,'';
                    (C) in paragraph (2), by striking 
                ``furnished to'' and inserting ``filed with'';
                    (D) in paragraph (2), by redesignating 
                subparagraphs (A) and (B) as clauses (i) and 
                (ii), respectively, and adjusting the clause 
                margins accordingly;
                    (E) by redesignating paragraphs (1) through 
                (5) as subparagraphs (A) through (E), 
                respectively, and adjusting the subparagraph 
                margins accordingly;
                    (F) in the matter preceding subparagraph 
                (A), as so redesignated, by striking ``The 
                Commission'' and inserting the following:
            ``(1) In general.--The Commission'';
                    (G) in subparagraph (D), as so 
                redesignated--
                            (i) by striking ``furnish'' and 
                        inserting ``file''; and
                            (ii) by striking ``or'' at the end.
                    (H) in subparagraph (E), as so 
                redesignated, by striking the period at the end 
                and inserting a semicolon; and
                    (I) by adding at the end the following:
                    ``(F) has failed reasonably to supervise, 
                with a view to preventing a violation of the 
                securities laws, an individual who commits such 
                a violation, if the individual is subject to 
                the supervision of that person.
            ``(2) Suspension or revocation for particular class 
        of securities.--
                    ``(A) In general.--The Commission may 
                temporarily suspend or permanently revoke the 
                registration of a nationally recognized 
                statistical rating organization with respect to 
                a particular class or subclass of securities, 
                if the Commission finds, on the record after 
                notice and opportunity for hearing, that the 
                nationally recognized statistical rating 
                organization does not have adequate financial 
                and managerial resources to consistently 
                produce credit ratings with integrity.
                    ``(B) Considerations.--In making any 
                determination under subparagraph (A), the 
                Commission shall consider--
                            ``(i) whether the nationally 
                        recognized statistical rating 
                        organization has failed over a 
                        sustained period of time, as determined 
                        by the Commission, to produce ratings 
                        that are accurate for that class or 
                        subclass of securities; and
                            ``(ii) such other factors as the 
                        Commission may determine.'';
            (4) in subsection (h), by adding at the end the 
        following:
            ``(3) Separation of ratings from sales and 
        marketing.--
                    ``(A) Rules required.--The Commission shall 
                issue rules to prevent the sales and marketing 
                considerations of a nationally recognized 
                statistical rating organization from 
                influencing the production of ratings by the 
                nationally recognized statistical rating 
                organization.
                    ``(B) Contents of rules.--The rules issued 
                under subparagraph (A) shall provide for--
                            ``(i) exceptions for small 
                        nationally recognized statistical 
                        rating organizations with respect to 
                        which the Commission determines that 
                        the separation of the production of 
                        ratings and sales and marketing 
                        activities is not appropriate; and
                            ``(ii) suspension or revocation of 
                        the registration of a nationally 
                        recognized statistical rating 
                        organization, if the Commission finds, 
                        on the record, after notice and 
                        opportunity for a hearing, that--
                                    ``(I) the nationally 
                                recognized statistical rating 
                                organization has committed a 
                                violation of a rule issued 
                                under this subsection; and
                                    ``(II) the violation of a 
                                rule issued under this 
                                subsection affected a rating.
            ``(4) Look-back requirement.--
                    ``(A) Review by the nationally recognized 
                statistical rating organization.--Each 
                nationally recognized statistical rating 
                organization shall establish, maintain, and 
                enforce policies and procedures reasonably 
                designed to ensure that, in any case in which 
                an employee of a person subject to a credit 
                rating of the nationally recognized statistical 
                rating organization or the issuer, underwriter, 
                or sponsor of a security or money market 
                instrument subject to a credit rating of the 
                nationally recognized statistical rating 
                organization was employed by the nationally 
                recognized statistical rating organization and 
                participated in any capacity in determining 
                credit ratings for the person or the securities 
                or money market instruments during the 1-year 
                period preceding the date an action was taken 
                with respect to the credit rating, the 
                nationally recognized statistical rating 
                organization shall--
                            ``(i) conduct a review to determine 
                        whether any conflicts of interest of 
                        the employee influenced the credit 
                        rating; and
                            ``(ii) take action to revise the 
                        rating if appropriate, in accordance 
                        with such rules as the Commission shall 
                        prescribe.
                    ``(B) Review by commission.--
                            ``(i) In general.--The Commission 
                        shall conduct periodic reviews of the 
                        policies described in subparagraph (A) 
                        and the implementation of the policies 
                        at each nationally recognized 
                        statistical rating organization to 
                        ensure they are reasonably designed and 
                        implemented to most effectively 
                        eliminate conflicts of interest.
                            ``(ii) Timing of reviews.--The 
                        Commission shall review the code of 
                        ethics and conflict of interest policy 
                        of each nationally recognized 
                        statistical rating organization--
                                    ``(I) not less frequently 
                                than annually; and
                                    ``(II) whenever such 
                                policies are materially 
                                modified or amended.
            ``(5) Report to commission on certain employment 
        transitions.--
                    ``(A) Report required.--Each nationally 
                recognized statistical rating organization 
                shall report to the Commission any case such 
                organization knows or can reasonably be 
                expected to know where a person associated with 
                such organization within the previous 5 years 
                obtains employment with any obligor, issuer, 
                underwriter, or sponsor of a security or money 
                market instrument for which the organization 
                issued a credit rating during the 12-month 
                period prior to such employment, if such 
                employee--
                            ``(i) was a senior officer of such 
                        organization;
                            ``(ii) participated in any capacity 
                        in determining credit ratings for such 
                        obligor, issuer, underwriter, or 
                        sponsor; or
                            ``(iii) supervised an employee 
                        described in clause (ii).
                    ``(B) Public disclosure.--Upon receiving 
                such a report, the Commission shall make such 
                information publicly available.'';
            (5) in subsection (j)--
                    (A) by striking ``Each'' and inserting the 
                following:
            ``(1) In general.--Each''; and
                    (B) by adding at the end the following:
            ``(2) Limitations.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), an individual designated 
                under paragraph (1) may not, while serving in 
                the designated capacity--
                            ``(i) perform credit ratings;
                            ``(ii) participate in the 
                        development of ratings methodologies or 
                        models;
                            ``(iii) perform marketing or sales 
                        functions; or
                            ``(iv) participate in establishing 
                        compensation levels, other than for 
                        employees working for that individual.
                    ``(B) Exception.--The Commission may exempt 
                a small nationally recognized statistical 
                rating organization from the limitations under 
                this paragraph, if the Commission finds that 
                compliance with such limitations would impose 
                an unreasonable burden on the nationally 
                recognized statistical rating organization.
            ``(3) Other duties.--Each individual designated 
        under paragraph (1) shall establish procedures for the 
        receipt, retention, and treatment of--
                    ``(A) complaints regarding credit ratings, 
                models, methodologies, and compliance with the 
                securities laws and the policies and procedures 
                developed under this section; and
                    ``(B) confidential, anonymous complaints by 
                employees or users of credit ratings.
            ``(4) Compensation.--The compensation of each 
        compliance officer appointed under paragraph (1) shall 
        not be linked to the financial performance of the 
        nationally recognized statistical rating organization 
        and shall be arranged so as to ensure the independence 
        of the officer's judgment.
            ``(5) Annual reports required.--
                    ``(A) Annual reports required.--Each 
                individual designated under paragraph (1) shall 
                submit to the nationally recognized statistical 
                rating organization an annual report on the 
                compliance of the nationally recognized 
                statistical rating organization with the 
                securities laws and the policies and procedures 
                of the nationally recognized statistical rating 
                organization that includes--
                            ``(i) a description of any material 
                        changes to the code of ethics and 
                        conflict of interest policies of the 
                        nationally recognized statistical 
                        rating organization; and
                            ``(ii) a certification that the 
                        report is accurate and complete.
                    ``(B) Submission of reports to the 
                commission.--Each nationally recognized 
                statistical rating organization shall file the 
                reports required under subparagraph (A) 
                together with the financial report that is 
                required to be submitted to the Commission 
                under this section.'';
            (6) in subsection (k), by striking ``furnish to'' 
        and inserting ``file with'';
            (7) in subsection (l)(2)(A)(i), by striking 
        ``furnished'' and inserting ``filed''; and
            (8) by striking subsection (p) and inserting the 
        following:
    ``(p) Regulation of Nationally Recognized Statistical 
Rating Organizations.--
            ``(1) Establishment of office of credit ratings.--
                    ``(A) Office established.--The Commission 
                shall establish within the Commission an Office 
                of Credit Ratings (referred to in this 
                subsection as the `Office') to administer the 
                rules of the Commission--
                            ``(i) with respect to the practices 
                        of nationally recognized statistical 
                        rating organizations in determining 
                        ratings, for the protection of users of 
                        credit ratings and in the public 
                        interest;
                            ``(ii) to promote accuracy in 
                        credit ratings issued by nationally 
                        recognized statistical rating 
                        organizations; and
                            ``(iii) to ensure that such ratings 
                        are not unduly influenced by conflicts 
                        of interest.
                    ``(B) Director of the office.--The head of 
                the Office shall be the Director, who shall 
                report to the Chairman.
            ``(2) Staffing.--The Office established under this 
        subsection shall be staffed sufficiently to carry out 
        fully the requirements of this section. The staff shall 
        include persons with knowledge of and expertise in 
        corporate, municipal, and structured debt finance.
            ``(3) Commission examinations.--
                    ``(A) Annual examinations required.--The 
                Office shall conduct an examination of each 
                nationally recognized statistical rating 
                organization at least annually.
                    ``(B) Conduct of examinations.--Each 
                examination under subparagraph (A) shall 
                include a review of--
                            ``(i) whether the nationally 
                        recognized statistical rating 
                        organization conducts business in 
                        accordance with the policies, 
                        procedures, and rating methodologies of 
                        the nationally recognized statistical 
                        rating organization;
                            ``(ii) the management of conflicts 
                        of interest by the nationally 
                        recognized statistical rating 
                        organization;
                            ``(iii) implementation of ethics 
                        policies by the nationally recognized 
                        statistical rating organization;
                            ``(iv) the internal supervisory 
                        controls of the nationally recognized 
                        statistical rating organization;
                            ``(v) the governance of the 
                        nationally recognized statistical 
                        rating organization;
                            ``(vi) the activities of the 
                        individual designated by the nationally 
                        recognized statistical rating 
                        organization under subsection (j)(1);
                            ``(vii) the processing of 
                        complaints by the nationally recognized 
                        statistical rating organization; and
                            ``(viii) the policies of the 
                        nationally recognized statistical 
                        rating organization governing the post-
                        employment activities of former staff 
                        of the nationally recognized 
                        statistical rating organization.
                    ``(C) Inspection reports.--The Commission 
                shall make available to the public, in an 
                easily understandable format, an annual report 
                summarizing--
                            ``(i) the essential findings of all 
                        examinations conducted under 
                        subparagraph (A), as deemed appropriate 
                        by the Commission;
                            ``(ii) the responses by the 
                        nationally recognized statistical 
                        rating organizations to any material 
                        regulatory deficiencies identified by 
                        the Commission under clause (i); and
                            ``(iii) whether the nationally 
                        recognized statistical rating 
                        organizations have appropriately 
                        addressed the recommendations of the 
                        Commission contained in previous 
                        reports under this subparagraph.
            ``(4) Rulemaking authority.--The Commission shall--
                    ``(A) establish, by rule, fines, and other 
                penalties applicable to any nationally 
                recognized statistical rating organization that 
                violates the requirements of this section and 
                the rules thereunder; and
                    ``(B) issue such rules as may be necessary 
                to carry out this section.
    ``(q) Transparency of Ratings Performance.--
            ``(1) Rulemaking required.--The Commission shall, 
        by rule, require that each nationally recognized 
        statistical rating organization publicly disclose 
        information on the initial credit ratings determined by 
        the nationally recognized statistical rating 
        organization for each type of obligor, security, and 
        money market instrument, and any subsequent changes to 
        such credit ratings, for the purpose of allowing users 
        of credit ratings to evaluate the accuracy of ratings 
        and compare the performance of ratings by different 
        nationally recognized statistical rating organizations.
            ``(2) Content.--The rules of the Commission under 
        this subsection shall require, at a minimum, 
        disclosures that--
                    ``(A) are comparable among nationally 
                recognized statistical rating organizations, to 
                allow users of credit ratings to compare the 
                performance of credit ratings across nationally 
                recognized statistical rating organizations;
                    ``(B) are clear and informative for 
                investors having a wide range of sophistication 
                who use or might use credit ratings;
                    ``(C) include performance information over 
                a range of years and for a variety of types of 
                credit ratings, including for credit ratings 
                withdrawn by the nationally recognized 
                statistical rating organization;
                    ``(D) are published and made freely 
                available by the nationally recognized 
                statistical rating organization, on an easily 
                accessible portion of its website, and in 
                writing, when requested;
                    ``(E) are appropriate to the business model 
                of a nationally recognized statistical rating 
                organization; and
                    ``(F) each nationally recognized 
                statistical rating organization include an 
                attestation with any credit rating it issues 
                affirming that no part of the rating was 
                influenced by any other business activities, 
                that the rating was based solely on the merits 
                of the instruments being rated, and that such 
                rating was an independent evaluation of the 
                risks and merits of the instrument.
    ``(r) Credit Ratings Methodologies.--The Commission shall 
prescribe rules, for the protection of investors and in the 
public interest, with respect to the procedures and 
methodologies, including qualitative and quantitative data and 
models, used by nationally recognized statistical rating 
organizations that require each nationally recognized 
statistical rating organization--
            ``(1) to ensure that credit ratings are determined 
        using procedures and methodologies, including 
        qualitative and quantitative data and models, that 
        are--
                    ``(A) approved by the board of the 
                nationally recognized statistical rating 
                organization, a body performing a function 
                similar to that of a board; and
                    ``(B) in accordance with the policies and 
                procedures of the nationally recognized 
                statistical rating organization for the 
                development and modification of credit rating 
                procedures and methodologies;
            ``(2) to ensure that when material changes to 
        credit rating procedures and methodologies (including 
        changes to qualitative and quantitative data and 
        models) are made, that--
                    ``(A) the changes are applied consistently 
                to all credit ratings to which the changed 
                procedures and methodologies apply;
                    ``(B) to the extent that changes are made 
                to credit rating surveillance procedures and 
                methodologies, the changes are applied to then-
                current credit ratings by the nationally 
                recognized statistical rating organization 
                within a reasonable time period determined by 
                the Commission, by rule; and
                    ``(C) the nationally recognized statistical 
                rating organization publicly discloses the 
                reason for the change; and
            ``(3) to notify users of credit ratings--
                    ``(A) of the version of a procedure or 
                methodology, including the qualitative 
                methodology or quantitative inputs, used with 
                respect to a particular credit rating;
                    ``(B) when a material change is made to a 
                procedure or methodology, including to a 
                qualitative model or quantitative inputs;
                    ``(C) when a significant error is 
                identified in a procedure or methodology, 
                including a qualitative or quantitative model, 
                that may result in credit rating actions; and
                    ``(D) of the likelihood of a material 
                change described in subparagraph (B) resulting 
                in a change in current credit ratings.
    ``(s) Transparency of Credit Rating Methodologies and 
Information Reviewed.--
            ``(1) Form for disclosures.--The Commission shall 
        require, by rule, each nationally recognized 
        statistical rating organization to prescribe a form to 
        accompany the publication of each credit rating that 
        discloses--
                    ``(A) information relating to--
                            ``(i) the assumptions underlying 
                        the credit rating procedures and 
                        methodologies;
                            ``(ii) the data that was relied on 
                        to determine the credit rating; and
                            ``(iii) if applicable, how the 
                        nationally recognized statistical 
                        rating organization used servicer or 
                        remittance reports, and with what 
                        frequency, to conduct surveillance of 
                        the credit rating; and
                    ``(B) information that can be used by 
                investors and other users of credit ratings to 
                better understand credit ratings in each class 
                of credit rating issued by the nationally 
                recognized statistical rating organization.
            ``(2) Format.--The form developed under paragraph 
        (1) shall--
                    ``(A) be easy to use and helpful for users 
                of credit ratings to understand the information 
                contained in the report;
                    ``(B) require the nationally recognized 
                statistical rating organization to provide the 
                content described in paragraph (3)(B) in a 
                manner that is directly comparable across types 
                of securities; and
                    ``(C) be made readily available to users of 
                credit ratings, in electronic or paper form, as 
                the Commission may, by rule, determine.
            ``(3) Content of form.--
                    ``(A) Qualitative content.--Each nationally 
                recognized statistical rating organization 
                shall disclose on the form developed under 
                paragraph (1)--
                            ``(i) the credit ratings produced 
                        by the nationally recognized 
                        statistical rating organization;
                            ``(ii) the main assumptions and 
                        principles used in constructing 
                        procedures and methodologies, including 
                        qualitative methodologies and 
                        quantitative inputs and assumptions 
                        about the correlation of defaults 
                        across underlying assets used in rating 
                        structured products;
                            ``(iii) the potential limitations 
                        of the credit ratings, and the types of 
                        risks excluded from the credit ratings 
                        that the nationally recognized 
                        statistical rating organization does 
                        not comment on, including liquidity, 
                        market, and other risks;
                            ``(iv) information on the 
                        uncertainty of the credit rating, 
                        including--
                                    ``(I) information on the 
                                reliability, accuracy, and 
                                quality of the data relied on 
                                in determining the credit 
                                rating; and
                                    ``(II) a statement relating 
                                to the extent to which data 
                                essential to the determination 
                                of the credit rating were 
                                reliable or limited, 
                                including--
                                            ``(aa) any limits 
                                        on the scope of 
                                        historical data; and
                                            ``(bb) any limits 
                                        in accessibility to 
                                        certain documents or 
                                        other types of 
                                        information that would 
                                        have better informed 
                                        the credit rating;
                            ``(v) whether and to what extent 
                        third party due diligence services have 
                        been used by the nationally recognized 
                        statistical rating organization, a 
                        description of the information that 
                        such third party reviewed in conducting 
                        due diligence services, and a 
                        description of the findings or 
                        conclusions of such third party;
                            ``(vi) a description of the data 
                        about any obligor, issuer, security, or 
                        money market instrument that were 
                        relied upon for the purpose of 
                        determining the credit rating;
                            ``(vii) a statement containing an 
                        overall assessment of the quality of 
                        information available and considered in 
                        producing a rating for an obligor, 
                        security, or money market instrument, 
                        in relation to the quality of 
                        information available to the nationally 
                        recognized statistical rating 
                        organization in rating similar 
                        issuances;
                            ``(viii) information relating to 
                        conflicts of interest of the nationally 
                        recognized statistical rating 
                        organization; and
                            ``(ix) such additional information 
                        as the Commission may require.
                    ``(B) Quantitative content.--Each 
                nationally recognized statistical rating 
                organization shall disclose on the form 
                developed under this subsection--
                            ``(i) an explanation or measure of 
                        the potential volatility of the credit 
                        rating, including--
                                    ``(I) any factors that 
                                might lead to a change in the 
                                credit ratings; and
                                    ``(II) the magnitude of the 
                                change that a user can expect 
                                under different market 
                                conditions;
                            ``(ii) information on the content 
                        of the rating, including--
                                    ``(I) the historical 
                                performance of the rating; and
                                    ``(II) the expected 
                                probability of default and the 
                                expected loss in the event of 
                                default;
                            ``(iii) information on the 
                        sensitivity of the rating to 
                        assumptions made by the nationally 
                        recognized statistical rating 
                        organization, including--
                                    ``(I) 5 assumptions made in 
                                the ratings process that, 
                                without accounting for any 
                                other factor, would have the 
                                greatest impact on a rating if 
                                the assumptions were proven 
                                false or inaccurate; and
                                    ``(II) an analysis, using 
                                specific examples, of how each 
                                of the 5 assumptions identified 
                                under subclause (I) impacts a 
                                rating;
                            ``(iv) such additional information 
                        as may be required by the Commission.
            ``(4) Due diligence services for asset-backed 
        securities.--
                    ``(A) Findings.--The issuer or underwriter 
                of any asset-backed security shall make 
                publicly available the findings and conclusions 
                of any third-party due diligence report 
                obtained by the issuer or underwriter.
                    ``(B) Certification required.--In any case 
                in which third-party due diligence services are 
                employed by a nationally recognized statistical 
                rating organization, an issuer, or an 
                underwriter, the person providing the due 
                diligence services shall provide to any 
                nationally recognized statistical rating 
                organization that produces a rating to which 
                such services relate, written certification, as 
                provided in subparagraph (C).
                    ``(C) Format and content.--The Commission 
                shall establish the appropriate format and 
                content for the written certifications required 
                under subparagraph (B), to ensure that 
                providers of due diligence services have 
                conducted a thorough review of data, 
                documentation, and other relevant information 
                necessary for a nationally recognized 
                statistical rating organization to provide an 
                accurate rating.
                    ``(D) Disclosure of certification.--The 
                Commission shall adopt rules requiring a 
                nationally recognized statistical rating 
                organization, at the time at which the 
                nationally recognized statistical rating 
                organization produces a rating, to disclose the 
                certification described in subparagraph (B) to 
                the public in a manner that allows the public 
                to determine the adequacy and level of due 
                diligence services provided by a third party.
    ``(t) Corporate Governance, Organization, and Management of 
Conflicts of Interest.--
            ``(1) Board of directors.--Each nationally 
        recognized statistical rating organization shall have a 
        board of directors.
            ``(2) Independent directors.--
                    ``(A) In general.--At least \1/2\ of the 
                board of directors, but not fewer than 2 of the 
                members thereof, shall be independent of the 
                nationally recognized statistical rating 
                agency. A portion of the independent directors 
                shall include users of ratings from a 
                nationally recognized statistical rating 
                organization.
                    ``(B) Independence determination.--In order 
                to be considered independent for purposes of 
                this subsection, a member of the board of 
                directors of a nationally recognized 
                statistical rating organization--
                            ``(i) may not, other than in his or 
                        her capacity as a member of the board 
                        of directors or any committee thereof--
                                    ``(I) accept any 
                                consulting, advisory, or other 
                                compensatory fee from the 
                                nationally recognized 
                                statistical rating 
                                organization; or
                                    ``(II) be a person 
                                associated with the nationally 
                                recognized statistical rating 
                                organization or with any 
                                affiliated company thereof; and
                            ``(ii) shall be disqualified from 
                        any deliberation involving a specific 
                        rating in which the independent board 
                        member has a financial interest in the 
                        outcome of the rating.
                    ``(C) Compensation and term.--The 
                compensation of the independent members of the 
                board of directors of a nationally recognized 
                statistical rating organization shall not be 
                linked to the business performance of the 
                nationally recognized statistical rating 
                organization, and shall be arranged so as to 
                ensure the independence of their judgment. The 
                term of office of the independent directors 
                shall be for a pre-agreed fixed period, not to 
                exceed 5 years, and shall not be renewable.
            ``(3) Duties of board of directors.--In addition to 
        the overall responsibilities of the board of directors, 
        the board shall oversee--
                    ``(A) the establishment, maintenance, and 
                enforcement of policies and procedures for 
                determining credit ratings;
                    ``(B) the establishment, maintenance, and 
                enforcement of policies and procedures to 
                address, manage, and disclose any conflicts of 
                interest;
                    ``(C) the effectiveness of the internal 
                control system with respect to policies and 
                procedures for determining credit ratings; and
                    ``(D) the compensation and promotion 
                policies and practices of the nationally 
                recognized statistical rating organization.
            ``(4) Treatment of nrsro subsidiaries.--If a 
        nationally recognized statistical rating organization 
        is a subsidiary of a parent entity, the board of the 
        directors of the parent entity may satisfy the 
        requirements of this subsection by assigning to a 
        committee of such board of directors the duties under 
        paragraph (3), if--
                    ``(A) at least \1/2\ of the members of the 
                committee (including the chairperson of the 
                committee) are independent, as defined in this 
                section; and
                    ``(B) at least 1 member of the committee is 
                a user of ratings from a nationally recognized 
                statistical rating organization.
            ``(5) Exception authority.--If the Commission finds 
        that compliance with the provisions of this subsection 
        present an unreasonable burden on a small nationally 
        recognized statistical rating organization, the 
        Commission may permit the nationally recognized 
        statistical rating organization to delegate such 
        responsibilities to a committee that includes at least 
        one individual who is a user of ratings of a nationally 
        recognized statistical rating organization.''.
    (b) Conforming Amendment.--Section 3(a)(62) of the 
Securities Exchange Act of 1934 (15 U.S.C. 78c(a)(62)) is 
amended by striking subparagraph (A) and redesignating 
subparagraphs (B) and (C) as subparagraphs (A) and (B), 
respectively.

SEC. 933. STATE OF MIND IN PRIVATE ACTIONS.

    (a) Accountability.--Section 15E(m) of the Securities 
Exchange Act of 1934 (15 U.S.C. 78o-7(m)) is amended to read as 
follows:
    ``(m) Accountability.--
            ``(1) In general.--The enforcement and penalty 
        provisions of this title shall apply to statements made 
        by a credit rating agency in the same manner and to the 
        same extent as such provisions apply to statements made 
        by a registered public accounting firm or a securities 
        analyst under the securities laws, and such statements 
        shall not be deemed forward-looking statements for the 
        purposes of section 21E.
            ``(2) Rulemaking.--The Commission shall issue such 
        rules as may be necessary to carry out this 
        subsection.''.
    (b) State of Mind.--Section 21D(b)(2) of the Securities 
Exchange Act of 1934 (15 U.S.C. 78u-4(b)(2)) is amended--
            (1) by striking ``In any'' and inserting the 
        following:
                    ``(A) In general.--Except as provided in 
                subparagraph (B), in any''; and
            (2) by adding at the end the following:
                    ``(B) Exception.--In the case of an action 
                for money damages brought against a credit 
                rating agency or a controlling person under 
                this title, it shall be sufficient, for 
                purposes of pleading any required state of mind 
                in relation to such action, that the complaint 
                state with particularity facts giving rise to a 
                strong inference that the credit rating agency 
                knowingly or recklessly failed--
                            ``(i) to conduct a reasonable 
                        investigation of the rated security 
                        with respect to the factual elements 
                        relied upon by its own methodology for 
                        evaluating credit risk; or
                            ``(ii) to obtain reasonable 
                        verification of such factual elements 
                        (which verification may be based on a 
                        sampling technique that does not amount 
                        to an audit) from other sources that 
                        the credit rating agency considered to 
                        be competent and that were independent 
                        of the issuer and underwriter.''.

SEC. 934. REFERRING TIPS TO LAW ENFORCEMENT OR REGULATORY AUTHORITIES.

    Section 15E of the Securities Exchange Act of 1934 (15 
U.S.C. 78o-7), as amended by this subtitle, is amended by 
adding at the end the following:
    ``(u) Duty To Report Tips Alleging Material Violations of 
Law.--
            ``(1) Duty to report.--Each nationally recognized 
        statistical rating organization shall refer to the 
        appropriate law enforcement or regulatory authorities 
        any information that the nationally recognized 
        statistical rating organization receives from a third 
        party and finds credible that alleges that an issuer of 
        securities rated by the nationally recognized 
        statistical rating organization has committed or is 
        committing a material violation of law that has not 
        been adjudicated by a Federal or State court.
            ``(2) Rule of construction.--Nothing in paragraph 
        (1) may be construed to require a nationally recognized 
        statistical rating organization to verify the accuracy 
        of the information described in paragraph (1).''.

SEC. 935. CONSIDERATION OF INFORMATION FROM SOURCES OTHER THAN THE 
                    ISSUER IN RATING DECISIONS.

    Section 15E of the Securities Exchange Act of 1934 (15 
U.S.C. 78o-7), as amended by this subtitle, is amended by 
adding at the end the following:
    ``(v) Information From Sources Other Than the Issuer.--In 
producing a credit rating, a nationally recognized statistical 
rating organization shall consider information about an issuer 
that the nationally recognized statistical rating organization 
has, or receives from a source other than the issuer or 
underwriter, that the nationally recognized statistical rating 
organization finds credible and potentially significant to a 
rating decision.''.

SEC. 936. QUALIFICATION STANDARDS FOR CREDIT RATING ANALYSTS.

    Not later than 1 year after the date of enactment of this 
Act, the Commission shall issue rules that are reasonably 
designed to ensure that any person employed by a nationally 
recognized statistical rating organization to perform credit 
ratings--
            (1) meets standards of training, experience, and 
        competence necessary to produce accurate ratings for 
        the categories of issuers whose securities the person 
        rates; and
            (2) is tested for knowledge of the credit rating 
        process.

SEC. 937. TIMING OF REGULATIONS.

    Unless otherwise specifically provided in this subtitle, 
the Commission shall issue final regulations, as required by 
this subtitle and the amendments made by this subtitle, not 
later than 1 year after the date of enactment of this Act.

SEC. 938. UNIVERSAL RATINGS SYMBOLS.

    (a) Rulemaking.--The Commission shall require, by rule, 
each nationally recognized statistical rating organization to 
establish, maintain, and enforce written policies and 
procedures that--
            (1) assess the probability that an issuer of a 
        security or money market instrument will default, fail 
        to make timely payments, or otherwise not make payments 
        to investors in accordance with the terms of the 
        security or money market instrument;
            (2) clearly define and disclose the meaning of any 
        symbol used by the nationally recognized statistical 
        rating organization to denote a credit rating; and
            (3) apply any symbol described in paragraph (2) in 
        a manner that is consistent for all types of securities 
        and money market instruments for which the symbol is 
        used.
    (b) Rule of Construction.--Nothing in this section shall 
prohibit a nationally recognized statistical rating 
organization from using distinct sets of symbols to denote 
credit ratings for different types of securities or money 
market instruments.

SEC. 939. REMOVAL OF STATUTORY REFERENCES TO CREDIT RATINGS.

    (a) Federal Deposit Insurance Act.--The Federal Deposit 
Insurance Act (12 U.S.C. 1811 et seq.) is amended--
            (1) in section 7(b)(1)(E)(i), by striking ``credit 
        rating entities, and other private economic'' and 
        insert ``private economic, credit,'';
            (2) in section 28(d)--
                    (A) in the subsection heading, by striking 
                ``Not of Investment Grade'';
                    (B) in paragraph (1), by striking ``not of 
                investment grade'' and inserting ``that does 
                not meet standards of credit-worthiness as 
                established by the Corporation'';
                    (C) in paragraph (2), by striking ``not of 
                investment grade'';
                    (D) by striking paragraph (3);
                    (E) by redesignating paragraph (4) as 
                paragraph (3); and
                    (F) in paragraph (3), as so redesignated--
                            (i) by striking subparagraph (A);
                            (ii) by redesignating subparagraphs 
                        (B) and (C) as subparagraphs (A) and 
                        (B), respectively; and
                            (iii) in subparagraph (B), as so 
                        redesignated, by striking ``not of 
                        investment grade'' and inserting ``that 
                        does not meet standards of credit-
                        worthiness as established by the 
                        Corporation''; and
            (3) in section 28(e)--
                    (A) in the subsection heading, by striking 
                ``Not of Investment Grade'';
                    (B) in paragraph (1), by striking ``not of 
                investment grade'' and inserting ``that does 
                not meet standards of credit-worthiness as 
                established by the Corporation''; and
                    (C) in paragraphs (2) and (3), by striking 
                ``not of investment grade'' each place that it 
                appears and inserting ``that does not meet 
                standards of credit-worthiness established by 
                the Corporation''.
    (b) Federal Housing Enterprises Financial Safety and 
Soundness Act of 1992.--Section 1319 of the Federal Housing 
Enterprises Financial Safety and Soundness Act of 1992 (12 
U.S.C. 4519) is amended by striking ``that is a nationally 
recognized statistical rating organization, as such term is 
defined in section 3(a) of the Securities Exchange Act of 
1934,''.
    (c) Investment Company Act of 1940.--Section 
6(a)(5)(A)(iv)(I) Investment Company Act of 1940 (15 U.S.C. 
80a-6(a)(5)(A)(iv)(I)) is amended by striking ``is rated 
investment grade by not less than 1 nationally recognized 
statistical rating organization'' and inserting ``meets such 
standards of credit-worthiness as the Commission shall adopt''.
    (d) Revised Statutes.--Section 5136A of title LXII of the 
Revised Statutes of the United States (12 U.S.C. 24a) is 
amended--
            (1) in subsection (a)(2)(E), by striking ``any 
        applicable rating'' and inserting ``standards of 
        credit-worthiness established by the Comptroller of the 
        Currency'';
            (2) in the heading for subsection (a)(3) by 
        striking ``Rating or Comparable Requirement'' and 
        inserting ``Requirement'';
            (3) subsection (a)(3), by amending subparagraph (A) 
        to read as follows:
                    ``(A) In general.--A national bank meets 
                the requirements of this paragraph if the bank 
                is one of the 100 largest insured banks and has 
                not fewer than 1 issue of outstanding debt that 
                meets standards of credit-worthiness or other 
                criteria as the Secretary of the Treasury and 
                the Board of Governors of the Federal Reserve 
                System may jointly establish.''.
            (4) in the heading for subsection (f), by striking 
        ``Maintain Public Rating or'' and inserting ``Meet 
        Standards of Credit-worthiness''; and
            (5) in subsection (f)(1), by striking ``any 
        applicable rating'' and inserting ``standards of 
        credit-worthiness established by the Comptroller of the 
        Currency''.
    (e) Securities Exchange Act of 1934.--Section 3(a) 
Securities Exchange Act of 1934 (15 U.S.C. 78a(3)(a)) is 
amended--
            (1) in paragraph (41), by striking ``is rated in 
        one of the two highest rating categories by at least 
        one nationally recognized statistical rating 
        organization'' and inserting ``meets standards of 
        credit-worthiness as established by the Commission''; 
        and
            (2) in paragraph (53)(A), by striking ``is rated in 
        1 of the 4 highest rating categories by at least 1 
        nationally recognized statistical rating organization'' 
        and inserting ``meets standards of credit-worthiness as 
        established by the Commission''.
    (f) World Bank Discussions.--Section 3(a)(6) of the 
amendment in the nature of a substitute to the text of H.R. 
4645, as ordered reported from the Committee on Banking, 
Finance and Urban Affairs on September 22, 1988, as enacted 
into law by section 555 of Public Law 100-461, (22 U.S.C. 
286hh(a)(6)), is amended by striking ``credit rating'' and 
inserting ``credit-worthiness''.
    (g) Effective Date.--The amendments made by this section 
shall take effect 2 years after the date of enactment of this 
Act.
    (h) Study and Report.--
            (1) In general.--Commission shall undertake a study 
        on the feasability and desirability of--
                    (A) standardizing credit ratings 
                terminology, so that all credit rating agencies 
                issue credit ratings using identical terms;
                    (B) standardizing the market stress 
                conditions under which ratings are evaluated;
                    (C) requiring a quantitative correspondence 
                between credit ratings and a range of default 
                probabilities and loss expectations under 
                standardized conditions of economic stress; and
                    (D) standardizing credit rating terminology 
                across asset classes, so that named ratings 
                correspond to a standard range of default 
                probabilities and expected losses independent 
                of asset class and issuing entity.
            (2) Report.--Not later than 1 year after the date 
        of enactment of this Act, the Commission shall submit 
        to Congress a report containing the findings of the 
        study under paragraph (1) and the recommendations, if 
        any, of the Commission with respect to the study.

SEC. 939A. REVIEW OF RELIANCE ON RATINGS.

    (a) Agency Review.--Not later than 1 year after the date of 
the enactment of this subtitle, each Federal agency shall, to 
the extent applicable, review--
            (1) any regulation issued by such agency that 
        requires the use of an assessment of the credit-
        worthiness of a security or money market instrument; 
        and
            (2) any references to or requirements in such 
        regulations regarding credit ratings.
    (b) Modifications Required.--Each such agency shall modify 
any such regulations identified by the review conducted under 
subsection (a) to remove any reference to or requirement of 
reliance on credit ratings and to substitute in such 
regulations such standard of credit-worthiness as each 
respective agency shall determine as appropriate for such 
regulations. In making such determination, such agencies shall 
seek to establish, to the extent feasible, uniform standards of 
credit-worthiness for use by each such agency, taking into 
account the entities regulated by each such agency and the 
purposes for which such entities would rely on such standards 
of credit-worthiness.
    (c) Report.--Upon conclusion of the review required under 
subsection (a), each Federal agency shall transmit a report to 
Congress containing a description of any modification of any 
regulation such agency made pursuant to subsection (b).

SEC. 939B. ELIMINATION OF EXEMPTION FROM FAIR DISCLOSURE RULE.

    Not later than 90 days after the date of enactment of this 
subtitle, the Securities Exchange Commission shall revise 
Regulation FD (17 C.F.R. 243.100) to remove from such 
regulation the exemption for entities whose primary business is 
the issuance of credit ratings (17 C.F.R. 243.100(b)(2)(iii)).

SEC. 939C. SECURITIES AND EXCHANGE COMMISSION STUDY ON STRENGTHENING 
                    CREDIT RATING AGENCY INDEPENDENCE.

    (a) Study.--The Commission shall conduct a study of--
            (1) the independence of nationally recognized 
        statistical rating organizations; and
            (2) how the independence of nationally recognized 
        statistical rating organizations affects the ratings 
        issued by the nationally recognized statistical rating 
        organizations.
    (b) Subjects for Evaluation.--In conducting the study under 
subsection (a), the Commission shall evaluate--
            (1) the management of conflicts of interest raised 
        by a nationally recognized statistical rating 
        organization providing other services, including risk 
        management advisory services, ancillary assistance, or 
        consulting services;
            (2) the potential impact of rules prohibiting a 
        nationally recognized statistical rating organization 
        that provides a rating to an issuer from providing 
        other services to the issuer; and
            (3) any other issue relating to nationally 
        recognized statistical rating organizations, as the 
        Chairman of the Commission determines is appropriate.
    (c) Report.--Not later than 3 years after the date of 
enactment of this Act, the Chairman of the Commission 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 a report on the results of the study 
conducted under subsection (a), including recommendations, if 
any, for improving the integrity of ratings issued by 
nationally recognized statistical rating organizations.

SEC. 939D. GOVERNMENT ACCOUNTABILITY OFFICE STUDY ON ALTERNATIVE 
                    BUSINESS MODELS.

    (a) Study.--The Comptroller General of the United States 
shall conduct a study on alternative means for compensating 
nationally recognized statistical rating organizations in order 
to create incentives for nationally recognized statistical 
rating organizations to provide more accurate credit ratings, 
including any statutory changes that would be required to 
facilitate the use of an alternative means of compensation.
    (b) Report.--Not later than 18 months after the date of 
enactment of this Act, the Comptroller General 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 a report on the results of the study conducted 
under subsection (a), including recommendations, if any, for 
providing incentives to credit rating agencies to improve the 
credit rating process.

SEC. 939E. GOVERNMENT ACCOUNTABILITY OFFICE STUDY ON THE CREATION OF AN 
                    INDEPENDENT PROFESSIONAL ANALYST ORGANIZATION.

    (a) Study.--The Comptroller General of the United States 
shall conduct a study on the feasibility and merits of creating 
an independent professional organization for rating analysts 
employed by nationally recognized statistical rating 
organizations that would be responsible for--
            (1) establishing independent standards for 
        governing the profession of rating analysts;
            (2) establishing a code of ethical conduct; and
            (3) overseeing the profession of rating analysts.
    (b) Report.--Not later than 1 year after the date of 
publication of the rules issued by the Commission pursuant to 
section 936, the Comptroller General 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 a report on the results of the study conducted 
under subsection (a).

SEC. 939F. STUDY AND RULEMAKING ON ASSIGNED CREDIT RATINGS.

    (a) Definition.--In this section, the term ``structured 
finance product'' means an asset-backed security, as defined in 
section 3(a)(77) of the Securities Exchange Act of 1934, as 
added by section 941, and any structured product based on an 
asset-backed security, as determined by the Commission, by 
rule.
    (b) Study.--The Commission shall carry out a study of--
            (1) the credit rating process for structured 
        finance products and the conflicts of interest 
        associated with the issuer-pay and the subscriber-pay 
        models;
            (2) the feasibility of establishing a system in 
        which a public or private utility or a self-regulatory 
        organization assigns nationally recognized statistical 
        rating organizations to determine the credit ratings of 
        structured finance products, including--
                    (A) an assessment of potential mechanisms 
                for determining fees for the nationally 
                recognized statistical rating organizations;
                    (B) appropriate methods for paying fees to 
                the nationally recognized statistical rating 
                organizations;
                    (C) the extent to which the creation of 
                such a system would be viewed as the creation 
                of moral hazard by the Federal Government; and
                    (D) any constitutional or other issues 
                concerning the establishment of such a system;
            (3) the range of metrics that could be used to 
        determine the accuracy of credit ratings; and
            (4) alternative means for compensating nationally 
        recognized statistical rating organizations that would 
        create incentives for accurate credit ratings.
    (c) Report and Recommendation.--Not later than 24 months 
after the date of enactment of this Act, the Commission 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 a report that contains--
            (1) the findings of the study required under 
        subsection (b); and
            (2) any recommendations for regulatory or statutory 
        changes that the Commission determines should be made 
        to implement the findings of the study required under 
        subsection (b).
    (d) Rulemaking.--
            (1) Rulemaking.--After submission of the report 
        under subsection (c), the Commission shall, by rule, as 
        the Commission determines is necessary or appropriate 
        in the public interest or for the protection of 
        investors, establish a system for the assignment of 
        nationally recognized statistical rating organizations 
        to determine the initial credit ratings of structured 
        finance products, in a manner that prevents the issuer, 
        sponsor, or underwriter of the structured finance 
        product from selecting the nationally recognized 
        statistical rating organization that will determine the 
        initial credit ratings and monitor such credit ratings. 
        In issuing any rule under this paragraph, the 
        Commission shall give thorough consideration to the 
        provisions of section 15E(w) of the Securities Exchange 
        Act of 1934, as that provision would have been added by 
        section 939D of H.R. 4173 (111th Congress), as passed 
        by the Senate on May 20, 2010, and shall implement the 
        system described in such section 939D unless the 
        Commission determines that an alternative system would 
        better serve the public interest and the protection of 
        investors.
            (2) Rule of construction.--Nothing in this 
        subsection may be construed to limit or suspend any 
        other rulemaking authority of the Commission.

SEC. 939G. EFFECT OF RULE 436(G).

    Rule 436(g), promulgated by the Securities and Exchange 
Commission under the Securities Act of 1933, shall have no 
force or effect.

SEC. 939H. SENSE OF CONGRESS.

    It is the sense of Congress that the Securities and 
Exchange Commission should exercise the rulemaking authority of 
the Commission under section 15E(h)(2)(B) of the Securities 
Exchange Act of 1934 (15 U.S.C. 78o-7(h)(2)(B)) to prevent 
improper conflicts of interest arising from employees of 
nationally recognized statistical rating organizations 
providing services to issuers of securities that are unrelated 
to the issuance of credit ratings, including consulting, 
advisory, and other services.

  Subtitle D--Improvements to the Asset-Backed Securitization Process

SEC. 941. REGULATION OF CREDIT RISK RETENTION.

    (a) Definition of Asset-backed Security.--Section 3(a) of 
the Securities Exchange Act of 1934 (15 U.S.C. 78c(a)) is 
amended by adding at the end the following:
            ``(77) Asset-backed security.--The term `asset-
        backed security'--
                    ``(A) means a fixed-income or other 
                security collateralized by any type of self-
                liquidating financial asset (including a loan, 
                a lease, a mortgage, or a secured or unsecured 
                receivable) that allows the holder of the 
                security to receive payments that depend 
                primarily on cash flow from the asset, 
                including--
                            ``(i) a collateralized mortgage 
                        obligation;
                            ``(ii) a collateralized debt 
                        obligation;
                            ``(iii) a collateralized bond 
                        obligation;
                            ``(iv) a collateralized debt 
                        obligation of asset-backed securities;
                            ``(v) a collateralized debt 
                        obligation of collateralized debt 
                        obligations; and
                            ``(vi) a security that the 
                        Commission, by rule, determines to be 
                        an asset-backed security for purposes 
                        of this section; and
                    ``(B) does not include a security issued by 
                a finance subsidiary held by the parent company 
                or a company controlled by the parent company, 
                if none of the securities issued by the finance 
                subsidiary are held by an entity that is not 
                controlled by the parent company.''.
    (b) Credit Risk Retention.--The Securities Exchange Act of 
1934 (15 U.S.C. 78a et seq.) is amended by inserting after 
section 15F, as added by this Act, the following:

``SEC. 15G. CREDIT RISK RETENTION.

    ``(a) Definitions.--In this section--
            ``(1) the term `Federal banking agencies' means the 
        Office of the Comptroller of the Currency, the Board of 
        Governors of the Federal Reserve System, and the 
        Federal Deposit Insurance Corporation;
            ``(2) the term `insured depository institution' has 
        the same meaning as in section 3(c) of the Federal 
        Deposit Insurance Act (12 U.S.C. 1813(c));
            ``(3) the term `securitizer' means--
                    ``(A) an issuer of an asset-backed 
                security; or
                    ``(B) a person who organizes and initiates 
                an asset-backed securities transaction by 
                selling or transferring assets, either directly 
                or indirectly, including through an affiliate, 
                to the issuer; and
            ``(4) the term `originator' means a person who--
                    ``(A) through the extension of credit or 
                otherwise, creates a financial asset that 
                collateralizes an asset-backed security; and
                    ``(B) sells an asset directly or indirectly 
                to a securitizer.
    ``(b) Regulations Required.--
            ``(1) In general.--Not later than 270 days after 
        the date of enactment of this section, the Federal 
        banking agencies and the Commission shall jointly 
        prescribe regulations to require any securitizer to 
        retain an economic interest in a portion of the credit 
        risk for any asset that the securitizer, through the 
        issuance of an asset-backed security, transfers, sells, 
        or conveys to a third party.
            ``(2) Residential mortgages.--Not later than 270 
        days after the date of the enactment of this section, 
        the Federal banking agencies, the Commission, the 
        Secretary of Housing and Urban Development, and the 
        Federal Housing Finance Agency, shall jointly prescribe 
        regulations to require any securitizer to retain an 
        economic interest in a portion of the credit risk for 
        any residential mortgage asset that the securitizer, 
        through the issuance of an asset-backed security, 
        transfers, sells, or conveys to a third party.
    ``(c) Standards for Regulations.--
            ``(1) Standards.--The regulations prescribed under 
        subsection (b) shall--
                    ``(A) prohibit a securitizer from directly 
                or indirectly hedging or otherwise transferring 
                the credit risk that the securitizer is 
                required to retain with respect to an asset;
                    ``(B) require a securitizer to retain--
                            ``(i) not less than 5 percent of 
                        the credit risk for any asset--
                                    ``(I) that is not a 
                                qualified residential mortgage 
                                that is transferred, sold, or 
                                conveyed through the issuance 
                                of an asset-backed security by 
                                the securitizer; or
                                    ``(II) that is a qualified 
                                residential mortgage that is 
                                transferred, sold, or conveyed 
                                through the issuance of an 
                                asset-backed security by the 
                                securitizer, if 1 or more of 
                                the assets that collateralize 
                                the asset-backed security are 
                                not qualified residential 
                                mortgages; or
                            ``(ii) less than 5 percent of the 
                        credit risk for an asset that is not a 
                        qualified residential mortgage that is 
                        transferred, sold, or conveyed through 
                        the issuance of an asset-backed 
                        security by the securitizer, if the 
                        originator of the asset meets the 
                        underwriting standards prescribed under 
                        paragraph (2)(B);
                    ``(C) specify--
                            ``(i) the permissible forms of risk 
                        retention for purposes of this section;
                            ``(ii) the minimum duration of the 
                        risk retention required under this 
                        section; and
                            ``(iii) that a securitizer is not 
                        required to retain any part of the 
                        credit risk for an asset that is 
                        transferred, sold or conveyed through 
                        the issuance of an asset-backed 
                        security by the securitizer, if all of 
                        the assets that collateralize the 
                        asset-backed security are qualified 
                        residential mortgages;
                    ``(D) apply, regardless of whether the 
                securitizer is an insured depository 
                institution;
                    ``(E) with respect to a commercial 
                mortgage, specify the permissible types, forms, 
                and amounts of risk retention that would meet 
                the requirements of subparagraph (B), which in 
                the determination of the Federal banking 
                agencies and the Commission may include--
                            ``(i) retention of a specified 
                        amount or percentage of the total 
                        credit risk of the asset;
                            ``(ii) retention of the first-loss 
                        position by a third-party purchaser 
                        that specifically negotiates for the 
                        purchase of such first loss position, 
                        holds adequate financial resources to 
                        back losses, provides due diligence on 
                        all individual assets in the pool 
                        before the issuance of the asset-backed 
                        securities, and meets the same 
                        standards for risk retention as the 
                        Federal banking agencies and the 
                        Commission require of the securitizer;
                            ``(iii) a determination by the 
                        Federal banking agencies and the 
                        Commission that the underwriting 
                        standards and controls for the asset 
                        are adequate; and
                            ``(iv) provision of adequate 
                        representations and warranties and 
                        related enforcement mechanisms; and
                    ``(F) establish appropriate standards for 
                retention of an economic interest with respect 
                to collateralized debt obligations, securities 
                collateralized by collateralized debt 
                obligations, and similar instruments 
                collateralized by other asset-backed 
                securities; and
                    ``(G) provide for--
                            ``(i) a total or partial exemption 
                        of any securitization, as may be 
                        appropriate in the public interest and 
                        for the protection of investors;
                            ``(ii) a total or partial exemption 
                        for the securitization of an asset 
                        issued or guaranteed by the United 
                        States, or an agency of the United 
                        States, as the Federal banking agencies 
                        and the Commission jointly determine 
                        appropriate in the public interest and 
                        for the protection of investors, except 
                        that, for purposes of this clause, the 
                        Federal National Mortgage Association 
                        and the Federal Home Loan Mortgage 
                        Corporation are not agencies of the 
                        United States;
                            ``(iii) a total or partial 
                        exemption for any asset-backed security 
                        that is a security issued or guaranteed 
                        by any State of the United States, or 
                        by any political subdivision of a State 
                        or territory, or by any public 
                        instrumentality of a State or territory 
                        that is exempt from the registration 
                        requirements of the Securities Act of 
                        1933 by reason of section 3(a)(2) of 
                        that Act (15 U.S.C. 77c(a)(2)), or a 
                        security defined as a qualified 
                        scholarship funding bond in section 
                        150(d)(2) of the Internal Revenue Code 
                        of 1986, as may be appropriate in the 
                        public interest and for the protection 
                        of investors; and
                            ``(iv) the allocation of risk 
                        retention obligations between a 
                        securitizer and an originator in the 
                        case of a securitizer that purchases 
                        assets from an originator, as the 
                        Federal banking agencies and the 
                        Commission jointly determine 
                        appropriate.
            ``(2) Asset classes.--
                    ``(A) Asset classes.--The regulations 
                prescribed under subsection (b) shall establish 
                asset classes with separate rules for 
                securitizers of different classes of assets, 
                including residential mortgages, commercial 
                mortgages, commercial loans, auto loans, and 
                any other class of assets that the Federal 
                banking agencies and the Commission deem 
                appropriate.
                    ``(B) Contents.--For each asset class 
                established under subparagraph (A), the 
                regulations prescribed under subsection (b) 
                shall include underwriting standards 
                established by the Federal banking agencies 
                that specify the terms, conditions, and 
                characteristics of a loan within the asset 
                class that indicate a low credit risk with 
                respect to the loan.
    ``(d) Originators.--In determining how to allocate risk 
retention obligations between a securitizer and an originator 
under subsection (c)(1)(E)(iv), the Federal banking agencies 
and the Commission shall--
            ``(1) reduce the percentage of risk retention 
        obligations required of the securitizer by the 
        percentage of risk retention obligations required of 
        the originator; and
            ``(2) consider--
                    ``(A) whether the assets sold to the 
                securitizer have terms, conditions, and 
                characteristics that reflect low credit risk;
                    ``(B) whether the form or volume of 
                transactions in securitization markets creates 
                incentives for imprudent origination of the 
                type of loan or asset to be sold to the 
                securitizer; and
                    ``(C) the potential impact of the risk 
                retention obligations on the access of 
                consumers and businesses to credit on 
                reasonable terms, which may not include the 
                transfer of credit risk to a third party.
    ``(e) Exemptions, Exceptions, and Adjustments.--
            ``(1) In general.--The Federal banking agencies and 
        the Commission may jointly adopt or issue exemptions, 
        exceptions, or adjustments to the rules issued under 
        this section, including exemptions, exceptions, or 
        adjustments for classes of institutions or assets 
        relating to the risk retention requirement and the 
        prohibition on hedging under subsection (c)(1).
            ``(2) Applicable standards.--Any exemption, 
        exception, or adjustment adopted or issued by the 
        Federal banking agencies and the Commission under this 
        paragraph shall--
                    ``(A) help ensure high quality underwriting 
                standards for the securitizers and originators 
                of assets that are securitized or available for 
                securitization; and
                    ``(B) encourage appropriate risk management 
                practices by the securitizers and originators 
                of assets, improve the access of consumers and 
                businesses to credit on reasonable terms, or 
                otherwise be in the public interest and for the 
                protection of investors.
            ``(3) Certain institutions and programs exempt.--
                    ``(A) Farm credit system institutions.--
                Notwithstanding any other provision of this 
                section, the requirements of this section shall 
                not apply to any loan or other financial asset 
                made, insured, guaranteed, or purchased by any 
                institution that is subject to the supervision 
                of the Farm Credit Administration, including 
                the Federal Agricultural Mortgage Corporation.
                    ``(B) Other federal programs.--This section 
                shall not apply to any residential, 
                multifamily, or health care facility mortgage 
                loan asset, or securitization based directly or 
                indirectly on such an asset, which is insured 
                or guaranteed by the United States or an agency 
                of the United States. For purposes of this 
                subsection, the Federal National Mortgage 
                Association, the Federal Home Loan Mortgage 
                Corporation, and the Federal home loan banks 
                shall not be considered an agency of the United 
                States.
            ``(4) Exemption for qualified residential 
        mortgages.--
                    ``(A) In general.--The Federal banking 
                agencies, the Commission, the Secretary of 
                Housing and Urban Development, and the Director 
                of the Federal Housing Finance Agency shall 
                jointly issue regulations to exempt qualified 
                residential mortgages from the risk retention 
                requirements of this subsection.
                    ``(B) Qualified residential mortgage.--The 
                Federal banking agencies, the Commission, the 
                Secretary of Housing and Urban Development, and 
                the Director of the Federal Housing Finance 
                Agency shall jointly define the term `qualified 
                residential mortgage' for purposes of this 
                subsection, taking into consideration 
                underwriting and product features that 
                historical loan performance data indicate 
                result in a lower risk of default, such as--
                            ``(i) documentation and 
                        verification of the financial resources 
                        relied upon to qualify the mortgagor;
                            ``(ii) standards with respect to--
                                    ``(I) the residual income 
                                of the mortgagor after all 
                                monthly obligations;
                                    ``(II) the ratio of the 
                                housing payments of the 
                                mortgagor to the monthly income 
                                of the mortgagor;
                                    ``(III) the ratio of total 
                                monthly installment payments of 
                                the mortgagor to the income of 
                                the mortgagor;
                            ``(iii) mitigating the potential 
                        for payment shock on adjustable rate 
                        mortgages through product features and 
                        underwriting standards;
                            ``(iv) mortgage guarantee insurance 
                        or other types of insurance or credit 
                        enhancement obtained at the time of 
                        origination, to the extent such 
                        insurance or credit enhancement reduces 
                        the risk of default; and
                            ``(v) prohibiting or restricting 
                        the use of balloon payments, negative 
                        amortization, prepayment penalties, 
                        interest-only payments, and other 
                        features that have been demonstrated to 
                        exhibit a higher risk of borrower 
                        default.
                    ``(C) Limitation on definition.--The 
                Federal banking agencies, the Commission, the 
                Secretary of Housing and Urban Development, and 
                the Director of the Federal Housing Finance 
                Agency in defining the term `qualified 
                residential mortgage', as required by 
                subparagraph (B), shall define that term to be 
                no broader than the definition `qualified 
                mortgage' as the term is defined under section 
                129C(c)(2) of the Truth in Lending Act, as 
                amended by the Consumer Financial Protection 
                Act of 2010, and regulations adopted 
                thereunder.
            ``(5) Condition for qualified residential mortgage 
        exemption.--The regulations issued under paragraph (4) 
        shall provide that an asset-backed security that is 
        collateralized by tranches of other asset-backed 
        securities shall not be exempt from the risk retention 
        requirements of this subsection.
            ``(6) Certification.--The Commission shall require 
        an issuer to certify, for each issuance of an asset-
        backed security collateralized exclusively by qualified 
        residential mortgages, that the issuer has evaluated 
        the effectiveness of the internal supervisory controls 
        of the issuer with respect to the process for ensuring 
        that all assets that collateralize the asset-backed 
        security are qualified residential mortgages.
    ``(f) Enforcement.--The regulations issued under this 
section shall be enforced by--
            ``(1) the appropriate Federal banking agency, with 
        respect to any securitizer that is an insured 
        depository institution; and
            ``(2) the Commission, with respect to any 
        securitizer that is not an insured depository 
        institution.
    ``(g) Authority of Commission.--The authority of the 
Commission under this section shall be in addition to the 
authority of the Commission to otherwise enforce the securities 
laws.
    ``(h) Authority to Coordinate on Rulemaking.--The 
Chairperson of the Financial Stability Oversight Council shall 
coordinate all joint rulemaking required under this section.
    ``(i) Effective Date of Regulations.--The regulations 
issued under this section shall become effective--
            ``(1) with respect to securitizers and originators 
        of asset-backed securities backed by residential 
        mortgages, 1 year after the date on which final rules 
        under this section are published in the Federal 
        Register; and
            ``(2) with respect to securitizers and originators 
        of all other classes of asset-backed securities, 2 
        years after the date on which final rules under this 
        section are published in the Federal Register.''.
    (c) Study on Risk Retention.--
            (1) Study.--The Board of Governors of the Federal 
        Reserve System, in coordination and consultation with 
        the Comptroller of the Currency, the Director of the 
        Office of Thrift Supervision, the Chairperson of the 
        Federal Deposit Insurance Corporation, and the 
        Securities and Exchange Commission shall conduct a 
        study of the combined impact on each individual class 
        of asset-backed security established under section 
        15G(c)(2) of the Securities Exchange Act of 1934, as 
        added by subsection (b), of--
                    (A) the new credit risk retention 
                requirements contained in the amendment made by 
                subsection (b), including the effect credit 
                risk retention requirements have on increasing 
                the market for Federally subsidized loans; and
                    (B) the Financial Accounting Statements 166 
                and 167 issued by the Financial Accounting 
                Standards Board.
            (2) Report.--Not later than 90 days after the date 
        of enactment of this Act, the Board of Governors of the 
        Federal Reserve System shall submit to Congress a 
        report on the study conducted under paragraph (1). Such 
        report shall include statutory and regulatory 
        recommendations for eliminating any negative impacts on 
        the continued viability of the asset-backed 
        securitization markets and on the availability of 
        credit for new lending identified by the study 
        conducted under paragraph (1).

SEC. 942. DISCLOSURES AND REPORTING FOR ASSET-BACKED SECURITIES.

    (a) Securities Exchange Act of 1934.--Section 15(d) of the 
Securities Exchange Act of 1934 (15 U.S.C. 78o(d)) is amended--
            (1) by striking ``(d) Each'' and inserting the 
        following:
    ``(d) Supplementary and Periodic Information.--
            ``(1) In general.--Each'';
            (2) in the third sentence, by inserting after 
        ``securities of each class'' the following: ``, other 
        than any class of asset-backed securities,''; and
            (3) by adding at the end the following:
            ``(2) Asset-backed securities.--
                    ``(A) Suspension of duty to file.--The 
                Commission may, by rule or regulation, provide 
                for the suspension or termination of the duty 
                to file under this subsection for any class of 
                asset-backed security, on such terms and 
                conditions and for such period or periods as 
                the Commission deems necessary or appropriate 
                in the public interest or for the protection of 
                investors.
                    ``(B) Classification of issuers.--The 
                Commission may, for purposes of this 
                subsection, classify issuers and prescribe 
                requirements appropriate for each class of 
                issuers of asset-backed securities.''.
    (b) Securities Act of 1933.--Section 7 of the Securities 
Act of 1933 (15 U.S.C. 77g) is amended by adding at the end the 
following:
    ``(c) Disclosure Requirements.--
            ``(1) In general.--The Commission shall adopt 
        regulations under this subsection requiring each issuer 
        of an asset-backed security to disclose, for each 
        tranche or class of security, information regarding the 
        assets backing that security.
            ``(2) Content of regulations.--In adopting 
        regulations under this subsection, the Commission 
        shall--
                    ``(A) set standards for the format of the 
                data provided by issuers of an asset-backed 
                security, which shall, to the extent feasible, 
                facilitate comparison of such data across 
                securities in similar types of asset classes; 
                and
                    ``(B) require issuers of asset-backed 
                securities, at a minimum, to disclose asset-
                level or loan-level data, if such data are 
                necessary for investors to independently 
                perform due diligence, including--
                            ``(i) data having unique 
                        identifiers relating to loan brokers or 
                        originators;
                            ``(ii) the nature and extent of the 
                        compensation of the broker or 
                        originator of the assets backing the 
                        security; and
                            ``(iii) the amount of risk 
                        retention by the originator and the 
                        securitizer of such assets.''.

SEC. 943. REPRESENTATIONS AND WARRANTIES IN ASSET-BACKED OFFERINGS.

    Not later than 180 days after the date of enactment of this 
Act, the Securities and Exchange Commission shall prescribe 
regulations on the use of representations and warranties in the 
market for asset-backed securities (as that term is defined in 
section 3(a)(77) of the Securities Exchange Act of 1934, as 
added by this subtitle) that--
            (1) require each national recognized statistical 
        rating organization to include in any report 
        accompanying a credit rating a description of--
                    (A) the representations, warranties, and 
                enforcement mechanisms available to investors; 
                and
                    (B) how they differ from the 
                representations, warranties, and enforcement 
                mechanisms in issuances of similar securities; 
                and
            (2) require any securitizer (as that term is 
        defined in section 15G(a) of the Securities Exchange 
        Act of 1934, as added by this subtitle) to disclose 
        fulfilled and unfulfilled repurchase requests across 
        all trusts aggregated by the securitizer, so that 
        investors may identify asset originators with clear 
        underwriting deficiencies.

SEC. 944. EXEMPTED TRANSACTIONS UNDER THE SECURITIES ACT OF 1933.

    (a) Exemption Eliminated.--Section 4 of the Securities Act 
of 1933 (15 U.S.C. 77d) is amended--
            (1) by striking paragraph (5); and
            (2) by striking ``(6) transactions'' and inserting 
        the following:
            ``(5) transactions''.
    (b) Conforming Amendment.--Section 3(a)(4)(B)(vii)(I) of 
the Securities Exchange Act of 1934 (15 U.S.C. 
78c(a)(4)(B)(vii)(I)) is amended by striking ``4(6)'' and 
inserting ``4(5)''.

SEC. 945. DUE DILIGENCE ANALYSIS AND DISCLOSURE IN ASSET-BACKED 
                    SECURITIES ISSUES.

    Section 7 of the Securities Act of 1933 (15 U.S.C. 77g), as 
amended by this subtitle, is amended by adding at the end the 
following:
    ``(d) Registration Statement for Asset-backed Securities.--
Not later than 180 days after the date of enactment of this 
subsection, the Commission shall issue rules relating to the 
registration statement required to be filed by any issuer of an 
asset-backed security (as that term is defined in section 
3(a)(77) of the Securities Exchange Act of 1934) that require 
any issuer of an asset-backed security--
            ``(1) to perform a review of the assets underlying 
        the asset-backed security; and
            ``(2) to disclose the nature of the review under 
        paragraph (1).''.

SEC. 946. STUDY ON THE MACROECONOMIC EFFECTS OF RISK RETENTION 
                    REQUIREMENTS.

    (a) Study Required.--The Chairman of the Financial Services 
Oversight Council shall carry out a study on the macroeconomic 
effects of the risk retention requirements under this subtitle, 
and the amendments made by this subtitle, with emphasis placed 
on potential beneficial effects with respect to stabilizing the 
real estate market. Such study shall include--
            (1) an analysis of the effects of risk retention on 
        real estate asset price bubbles, including a 
        retrospective estimate of what fraction of real estate 
        losses may have been averted had such requirements been 
        in force in recent years;
            (2) an analysis of the feasibility of minimizing 
        real estate price bubbles by proactively adjusting the 
        percentage of risk retention that must be borne by 
        creditors and securitizers of real estate debt, as a 
        function of regional or national market conditions;
            (3) a comparable analysis for proactively adjusting 
        mortgage origination requirements;
            (4) an assessment of whether such proactive 
        adjustments should be made by an independent regulator, 
        or in a formulaic and transparent manner;
            (5) an assessment of whether such adjustments 
        should take place independently or in concert with 
        monetary policy; and
            (6) recommendations for implementation and enabling 
        legislation.
    (b) Report.--Not later than the end of the 180-day period 
beginning on the date of the enactment of this title, the 
Chairman of the Financial Services Oversight Council shall 
issue a report to the Congress containing any findings and 
determinations made in carrying out the study required under 
subsection (a).

         Subtitle E--Accountability and Executive Compensation

SEC. 951. SHAREHOLDER VOTE ON EXECUTIVE COMPENSATION DISCLOSURES.

    The Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.) 
is amended by inserting after section 14 (15 U.S.C. 78n) the 
following:

``SEC. 14A. SHAREHOLDER APPROVAL OF EXECUTIVE COMPENSATION.

    ``(a) Separate Resolution Required.--
            ``(1) In general.--Not less frequently than once 
        every 3 years, a proxy or consent or authorization for 
        an annual or other meeting of the shareholders for 
        which the proxy solicitation rules of the Commission 
        require compensation disclosure shall include a 
        separate resolution subject to shareholder vote to 
        approve the compensation of executives, as disclosed 
        pursuant to section 229.402 of title 17, Code of 
        Federal Regulations, or any successor thereto.
            ``(2) Frequency of vote.--Not less frequently than 
        once every 6 years, a proxy or consent or authorization 
        for an annual or other meeting of the shareholders for 
        which the proxy solicitation rules of the Commission 
        require compensation disclosure shall include a 
        separate resolution subject to shareholder vote to 
        determine whether votes on the resolutions required 
        under paragraph (1) will occur every 1, 2, or 3 years.
            ``(3) Effective date.--The proxy or consent or 
        authorization for the first annual or other meeting of 
        the shareholders occurring after the end of the 6-month 
        period beginning on the date of enactment of this 
        section shall include--
                    ``(A) the resolution described in paragraph 
                (1); and
                    ``(B) a separate resolution subject to 
                shareholder vote to determine whether votes on 
                the resolutions required under paragraph (1) 
                will occur every 1, 2, or 3 years.
    ``(b) Shareholder Approval of Golden Parachute 
Compensation.--
            ``(1) Disclosure.--In any proxy or consent 
        solicitation material (the solicitation of which is 
        subject to the rules of the Commission pursuant to 
        subsection (a)) for a meeting of the shareholders 
        occurring after the end of the 6-month period beginning 
        on the date of enactment of this section, at which 
        shareholders are asked to approve an acquisition, 
        merger, consolidation, or proposed sale or other 
        disposition of all or substantially all the assets of 
        an issuer, the person making such solicitation shall 
        disclose in the proxy or consent solicitation material, 
        in a clear and simple form in accordance with 
        regulations to be promulgated by the Commission, any 
        agreements or understandings that such person has with 
        any named executive officers of such issuer (or of the 
        acquiring issuer, if such issuer is not the acquiring 
        issuer) concerning any type of compensation (whether 
        present, deferred, or contingent) that is based on or 
        otherwise relates to the acquisition, merger, 
        consolidation, sale, or other disposition of all or 
        substantially all of the assets of the issuer and the 
        aggregate total of all such compensation that may (and 
        the conditions upon which it may) be paid or become 
        payable to or on behalf of such executive officer.
            ``(2) Shareholder approval.--Any proxy or consent 
        or authorization relating to the proxy or consent 
        solicitation material containing the disclosure 
        required by paragraph (1) shall include a separate 
        resolution subject to shareholder vote to approve such 
        agreements or understandings and compensation as 
        disclosed, unless such agreements or understandings 
        have been subject to a shareholder vote under 
        subsection (a).
    ``(c) Rule of Construction.--The shareholder vote referred 
to in subsections (a) and (b) shall not be binding on the 
issuer or the board of directors of an issuer, and may not be 
construed--
            ``(1) as overruling a decision by such issuer or 
        board of directors;
            ``(2) to create or imply any change to the 
        fiduciary duties of such issuer or board of directors;
            ``(3) to create or imply any additional fiduciary 
        duties for such issuer or board of directors; or
            ``(4) to restrict or limit the ability of 
        shareholders to make proposals for inclusion in proxy 
        materials related to executive compensation.
    ``(d) Disclosure of Votes.--Every institutional investment 
manager subject to section 13(f) shall report at least annually 
how it voted on any shareholder vote pursuant to subsections 
(a) and (b), unless such vote is otherwise required to be 
reported publicly by rule or regulation of the Commission.
    ``(e) Exemption.--The Commission may, by rule or order, 
exempt an issuer or class of issuers from the requirement under 
subsection (a) or (b). In determining whether to make an 
exemption under this subsection, the Commission shall take into 
account, among other considerations, whether the requirements 
under subsections (a) and (b) disproportionately burdens small 
issuers.''.

SEC. 952. COMPENSATION COMMITTEE INDEPENDENCE.

    (a) In General.--The Securities Exchange Act of 1934 (15 
U.S.C. 78 et seq.) is amended by inserting after section 10B, 
as added by section 753, the following:

``SEC. 10C. COMPENSATION COMMITTEES.

    ``(a) Independence of Compensation Committees.--
            ``(1) Listing standards.--The Commission shall, by 
        rule, direct the national securities exchanges and 
        national securities associations to prohibit the 
        listing of any equity security of an issuer, other than 
        an issuer that is a controlled company, limited 
        partnership, company in bankruptcy proceedings, open-
        ended management investment company that is registered 
        under the Investment Company Act of 1940, or a foreign 
        private issuer that provides annual disclosures to 
        shareholders of the reasons that the foreign private 
        issuer does not have an independent compensation 
        committee, that does not comply with the requirements 
        of this subsection.
            ``(2) Independence of compensation committees.--The 
        rules of the Commission under paragraph (1) shall 
        require that each member of the compensation committee 
        of the board of directors of an issuer be--
                    ``(A) a member of the board of directors of 
                the issuer; and
                    ``(B) independent.
            ``(3) Independence.--The rules of the Commission 
        under paragraph (1) shall require that, in determining 
        the definition of the term `independence' for purposes 
        of paragraph (2), the national securities exchanges and 
        the national securities associations shall consider 
        relevant factors, including--
                    ``(A) the source of compensation of a 
                member of the board of directors of an issuer, 
                including any consulting, advisory, or other 
                compensatory fee paid by the issuer to such 
                member of the board of directors; and
                    ``(B) whether a member of the board of 
                directors of an issuer is affiliated with the 
                issuer, a subsidiary of the issuer, or an 
                affiliate of a subsidiary of the issuer.
            ``(4) Exemption authority.--The rules of the 
        Commission under paragraph (1) shall permit a national 
        securities exchange or a national securities 
        association to exempt a particular relationship from 
        the requirements of paragraph (2), with respect to the 
        members of a compensation committee, as the national 
        securities exchange or national securities association 
        determines is appropriate, taking into consideration 
        the size of an issuer and any other relevant factors.
    ``(b) Independence of Compensation Consultants and Other 
Compensation Committee Advisers.--
            ``(1) In general.--The compensation committee of an 
        issuer may only select a compensation consultant, legal 
        counsel, or other adviser to the compensation committee 
        after taking into consideration the factors identified 
        by the Commission under paragraph (2).
            ``(2) Rules.--The Commission shall identify factors 
        that affect the independence of a compensation 
        consultant, legal counsel, or other adviser to a 
        compensation committee of an issuer. Such factors shall 
        be competitively neutral among categories of 
        consultants, legal counsel, or other advisers and 
        preserve the ability of compensation committees to 
        retain the services of members of any such category, 
        and shall include--
                    ``(A) the provision of other services to 
                the issuer by the person that employs the 
                compensation consultant, legal counsel, or 
                other adviser;
                    ``(B) the amount of fees received from the 
                issuer by the person that employs the 
                compensation consultant, legal counsel, or 
                other adviser, as a percentage of the total 
                revenue of the person that employs the 
                compensation consultant, legal counsel, or 
                other adviser;
                    ``(C) the policies and procedures of the 
                person that employs the compensation 
                consultant, legal counsel, or other adviser 
                that are designed to prevent conflicts of 
                interest;
                    ``(D) any business or personal relationship 
                of the compensation consultant, legal counsel, 
                or other adviser with a member of the 
                compensation committee; and
                    ``(E) any stock of the issuer owned by the 
                compensation consultant, legal counsel, or 
                other adviser.
    ``(c) Compensation Committee Authority Relating to 
Compensation Consultants.--
            ``(1) Authority to retain compensation 
        consultant.--
                    ``(A) In general.--The compensation 
                committee of an issuer, in its capacity as a 
                committee of the board of directors, may, in 
                its sole discretion, retain or obtain the 
                advice of a compensation consultant.
                    ``(B) Direct responsibility of compensation 
                committee.--The compensation committee of an 
                issuer shall be directly responsible for the 
                appointment, compensation, and oversight of the 
                work of a compensation consultant.
                    ``(C) Rule of construction.--This paragraph 
                may not be construed--
                            ``(i) to require the compensation 
                        committee to implement or act 
                        consistently with the advice or 
                        recommendations of the compensation 
                        consultant; or
                            ``(ii) to affect the ability or 
                        obligation of a compensation committee 
                        to exercise its own judgment in 
                        fulfillment of the duties of the 
                        compensation committee.
            ``(2) Disclosure.--In any proxy or consent 
        solicitation material for an annual meeting of the 
        shareholders (or a special meeting in lieu of the 
        annual meeting) occurring on or after the date that is 
        1 year after the date of enactment of this section, 
        each issuer shall disclose in the proxy or consent 
        material, in accordance with regulations of the 
        Commission, whether--
                    ``(A) the compensation committee of the 
                issuer retained or obtained the advice of a 
                compensation consultant; and
                    ``(B) the work of the compensation 
                consultant has raised any conflict of interest 
                and, if so, the nature of the conflict and how 
                the conflict is being addressed.
    ``(d) Authority To Engage Independent Legal Counsel and 
Other Advisers.--
            ``(1) In general.--The compensation committee of an 
        issuer, in its capacity as a committee of the board of 
        directors, may, in its sole discretion, retain and 
        obtain the advice of independent legal counsel and 
        other advisers.
            ``(2) Direct responsibility of compensation 
        committee.--The compensation committee of an issuer 
        shall be directly responsible for the appointment, 
        compensation, and oversight of the work of independent 
        legal counsel and other advisers.
            ``(3) Rule of construction.--This subsection may 
        not be construed--
                    ``(A) to require a compensation committee 
                to implement or act consistently with the 
                advice or recommendations of independent legal 
                counsel or other advisers under this 
                subsection; or
                    ``(B) to affect the ability or obligation 
                of a compensation committee to exercise its own 
                judgment in fulfillment of the duties of the 
                compensation committee.
    ``(e) Compensation of Compensation Consultants, Independent 
Legal Counsel, and Other Advisers.--Each issuer shall provide 
for appropriate funding, as determined by the compensation 
committee in its capacity as a committee of the board of 
directors, for payment of reasonable compensation--
            ``(1) to a compensation consultant; and
            ``(2) to independent legal counsel or any other 
        adviser to the compensation committee.
    ``(f) Commission Rules.--
            ``(1) In general.--Not later than 360 days after 
        the date of enactment of this section, the Commission 
        shall, by rule, direct the national securities 
        exchanges and national securities associations to 
        prohibit the listing of any security of an issuer that 
        is not in compliance with the requirements of this 
        section.
            ``(2) Opportunity to cure defects.--The rules of 
        the Commission under paragraph (1) shall provide for 
        appropriate procedures for an issuer to have a 
        reasonable opportunity to cure any defects that would 
        be the basis for the prohibition under paragraph (1), 
        before the imposition of such prohibition.
            ``(3) Exemption authority.--
                    ``(A) In general.--The rules of the 
                Commission under paragraph (1) shall permit a 
                national securities exchange or a national 
                securities association to exempt a category of 
                issuers from the requirements under this 
                section, as the national securities exchange or 
                the national securities association determines 
                is appropriate.
                    ``(B) Considerations.--In determining 
                appropriate exemptions under subparagraph (A), 
                the national securities exchange or the 
                national securities association shall take into 
                account the potential impact of the 
                requirements of this section on smaller 
                reporting issuers.
    ``(g) Controlled Company Exemption.--
            ``(1) In general.--This section shall not apply to 
        any controlled company.
            ``(2) Definition.--For purposes of this section, 
        the term `controlled company' means an issuer--
                    ``(A) that is listed on a national 
                securities exchange or by a national securities 
                association; and
                    ``(B) that holds an election for the board 
                of directors of the issuer in which more than 
                50 percent of the voting power is held by an 
                individual, a group, or another issuer.''.
    (b) Study and Report.--
            (1) Study.--The Securities and Exchange Commission 
        shall conduct a study and review of the use of 
        compensation consultants and the effects of such use.
            (2) Report.--Not later than 2 years after the date 
        of the enactment of this Act, the Commission shall 
        submit a report to Congress on the results of the study 
        and review required by this subsection.

SEC. 953. EXECUTIVE COMPENSATION DISCLOSURES.

    (a) Disclosure of Pay Versus Performance.--Section 14 of 
the Securities Exchange Act of 1934 (15 U.S.C. 78n), as amended 
by this title, is amended by adding at the end the following:
    ``(i) Disclosure of Pay Versus Performance.--The Commission 
shall, by rule, require each issuer to disclose in any proxy or 
consent solicitation material for an annual meeting of the 
shareholders of the issuer a clear description of any 
compensation required to be disclosed by the issuer under 
section 229.402 of title 17, Code of Federal Regulations (or 
any successor thereto), including information that shows the 
relationship between executive compensation actually paid and 
the financial performance of the issuer, taking into account 
any change in the value of the shares of stock and dividends of 
the issuer and any distributions. The disclosure under this 
subsection may include a graphic representation of the 
information required to be disclosed.''.
    (b) Additional Disclosure Requirements.--
            (1) In general.--The Commission shall amend section 
        229.402 of title 17, Code of Federal Regulations, to 
        require each issuer to disclose in any filing of the 
        issuer described in section 229.10(a) of title 17, Code 
        of Federal Regulations (or any successor thereto)--
                    (A) the median of the annual total 
                compensation of all employees of the issuer, 
                except the chief executive officer (or any 
                equivalent position) of the issuer;
                    (B) the annual total compensation of the 
                chief executive officer (or any equivalent 
                position) of the issuer; and
                    (C) the ratio of the amount described in 
                subparagraph (A) to the amount described in 
                subparagraph (B).
            (2) Total compensation.--For purposes of this 
        subsection, the total compensation of an employee of an 
        issuer shall be determined in accordance with section 
        229.402(c)(2)(x) of title 17, Code of Federal 
        Regulations, as in effect on the day before the date of 
        enactment of this Act.

SEC. 954. RECOVERY OF ERRONEOUSLY AWARDED COMPENSATION.

    The Securities Exchange Act of 1934 is amended by inserting 
after section 10C, as added by section 952, the following:

``SEC. 10D. RECOVERY OF ERRONEOUSLY AWARDED COMPENSATION POLICY.

    ``(a) Listing Standards.--The Commission shall, by rule, 
direct the national securities exchanges and national 
securities associations to prohibit the listing of any security 
of an issuer that does not comply with the requirements of this 
section.
    ``(b) Recovery of Funds.--The rules of the Commission under 
subsection (a) shall require each issuer to develop and 
implement a policy providing--
            ``(1) for disclosure of the policy of the issuer on 
        incentive-based compensation that is based on financial 
        information required to be reported under the 
        securities laws; and
            ``(2) that, in the event that the issuer is 
        required to prepare an accounting restatement due to 
        the material noncompliance of the issuer with any 
        financial reporting requirement under the securities 
        laws, the issuer will recover from any current or 
        former executive officer of the issuer who received 
        incentive-based compensation (including stock options 
        awarded as compensation) during the 3-year period 
        preceding the date on which the issuer is required to 
        prepare an accounting restatement, based on the 
        erroneous data, in excess of what would have been paid 
        to the executive officer under the accounting 
        restatement.''.

SEC. 955. DISCLOSURE REGARDING EMPLOYEE AND DIRECTOR HEDGING.

    Section 14 of the Securities Exchange Act of 1934 (15 
U.S.C. 78n), as amended by this title, is amended by adding at 
the end the following:
    ``(j) Disclosure of Hedging by Employees and Directors.--
The Commission shall, by rule, require each issuer to disclose 
in any proxy or consent solicitation material for an annual 
meeting of the shareholders of the issuer whether any employee 
or member of the board of directors of the issuer, or any 
designee of such employee or member, is permitted to purchase 
financial instruments (including prepaid variable forward 
contracts, equity swaps, collars, and exchange funds) that are 
designed to hedge or offset any decrease in the market value of 
equity securities--
            ``(1) granted to the employee or member of the 
        board of directors by the issuer as part of the 
        compensation of the employee or member of the board of 
        directors; or
            ``(2) held, directly or indirectly, by the employee 
        or member of the board of directors.''.

SEC. 956. ENHANCED COMPENSATION STRUCTURE REPORTING.

    (a) Enhanced Disclosure and Reporting of Compensation 
Arrangements.--
            (1) In general.--Not later than 9 months after the 
        date of enactment of this title, the appropriate 
        Federal regulators jointly shall prescribe regulations 
        or guidelines to require each covered financial 
        institution to disclose to the appropriate Federal 
        regulator the structures of all incentive-based 
        compensation arrangements offered by such covered 
        financial institutions sufficient to determine whether 
        the compensation structure--
                    (A) provides an executive officer, 
                employee, director, or principal shareholder of 
                the covered financial institution with 
                excessive compensation, fees, or benefits; or
                    (B) could lead to material financial loss 
                to the covered financial institution.
            (2) Rules of construction.--Nothing in this section 
        shall be construed as requiring the reporting of the 
        actual compensation of particular individuals. Nothing 
        in this section shall be construed to require a covered 
        financial institution that does not have an incentive-
        based payment arrangement to make the disclosures 
        required under this subsection.
    (b) Prohibition on Certain Compensation Arrangements.--Not 
later than 9 months after the date of enactment of this title, 
the appropriate Federal regulators shall jointly prescribe 
regulations or guidelines that prohibit any types of incentive-
based payment arrangement, or any feature of any such 
arrangement, that the regulators determine encourages 
inappropriate risks by covered financial institutions--
            (1) by providing an executive officer, employee, 
        director, or principal shareholder of the covered 
        financial institution with excessive compensation, 
        fees, or benefits; or
            (2) that could lead to material financial loss to 
        the covered financial institution.
    (c) Standards.--The appropriate Federal regulators shall--
            (1) ensure that any standards for compensation 
        established under subsections (a) or (b) are comparable 
        to the standards established under section of the 
        Federal Deposit Insurance Act (12 U.S.C. 2 1831p-1) for 
        insured depository institutions; and
            (2) in establishing such standards under such 
        subsections, take into consideration the compensation 
        standards described in section 39(c) of the Federal 
        Deposit Insurance Act (12 U.S.C. 1831p-9 1(c)).
    (d) Enforcement.--The provisions of this section and the 
regulations issued under this section shall be enforced under 
section 505 of the Gramm-Leach-Bliley Act and, for purposes of 
such section, a violation of this section or such regulations 
shall be treated as a violation of subtitle A of title V of 
such Act.
    (e) Definitions.--As used in this section--
            (1) the term ``appropriate Federal regulator'' 
        means the Board of Governors of the Federal Reserve 
        System, the Office of 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 Securities and Exchange Commission, the 
        Federal Housing Finance Agency; and
            (2) the term ``covered financial institution'' 
        means--
                    (A) a depository institution or depository 
                institution holding company, as such terms are 
                defined in section 3 of the Federal Deposit 
                Insurance Act (12 U.S.C. 1813);
                    (B) a broker-dealer registered under 
                section 15 of the Securities Exchange Act of 
                1934 (15 U.S.C. 78o);
                    (C) a credit union, as described in section 
                19(b)(1)(A)(iv) of the Federal Reserve Act;
                    (D) an investment advisor, as such term is 
                defined in section 202(a)(11) of the Investment 
                Advisers Act of 1940 (15 U.S.C. 80b-2(a)(11));
                    (E) the Federal National Mortgage 
                Association;
                    (F) the Federal Home Loan Mortgage 
                Corporation; and
                    (G) any other financial institution that 
                the appropriate Federal regulators, jointly, by 
                rule, determine should be treated as a covered 
                financial institution for purposes of this 
                section.
    (f) Exemption for Certain Financial Institutions.--The 
requirements of this section shall not apply to covered 
financial institutions with assets of less than $1,000,000,000.

SEC. 957. VOTING BY BROKERS.

    Section 6(b) of the Securities Exchange Act of 1934 (15 
U.S.C. 78f(b)) is amended--
            (1) in paragraph (9)--
                    (A) in subparagraph (A), by redesignating 
                clauses (i) through (v) as subclauses (I) 
                through (V), respectively, and adjusting the 
                margins accordingly;
                    (B) by redesignating subparagraphs (A) 
                through (D) as clauses (i) through (iv), 
                respectively, and adjusting the margins 
                accordingly;
                    (C) by inserting ``(A)'' after ``(9)''; and
                    (D) in the matter immediately following 
                clause (iv), as so redesignated, by striking 
                ``As used'' and inserting the following:
            ``(B) As used''.
            (2) by adding at the end the following:
            ``(10)(A) The rules of the exchange prohibit any 
        member that is not the beneficial owner of a security 
        registered under section 12 from granting a proxy to 
        vote the security in connection with a shareholder vote 
        described in subparagraph (B), unless the beneficial 
        owner of the security has instructed the member to vote 
        the proxy in accordance with the voting instructions of 
        the beneficial owner.
            ``(B) A shareholder vote described in this 
        subparagraph is a shareholder vote with respect to the 
        election of a member of the board of directors of an 
        issuer, executive compensation, or any other 
        significant matter, as determined by the Commission, by 
        rule, and does not include a vote with respect to the 
        uncontested election of a member of the board of 
        directors of any investment company registered under 
        the Investment Company Act of 1940 (15 U.S.C. 80b-1 et 
        seq.).
            ``(C) Nothing in this paragraph shall be construed 
        to prohibit a national securities exchange from 
        prohibiting a member that is not the beneficial owner 
        of a security registered under section 12 from granting 
        a proxy to vote the security in connection with a 
        shareholder vote not described in subparagraph (A).''.

   Subtitle F--Improvements to the Management of the Securities and 
                          Exchange Commission

SEC. 961. REPORT AND CERTIFICATION OF INTERNAL SUPERVISORY CONTROLS.

    (a) Annual Reports and Certification.--Not later than 90 
days after the end of each fiscal year, the Commission shall 
submit a report to the Committee on Banking, Housing, and Urban 
Affairs of the Senate and the Committee on Financial Services 
of the House of Representatives on the conduct by the 
Commission of examinations of registered entities, enforcement 
investigations, and review of corporate financial securities 
filings.
    (b) Contents of Reports.--Each report under subsection (a) 
shall contain--
            (1) an assessment, as of the end of the most recent 
        fiscal year, of the effectiveness of--
                    (A) the internal supervisory controls of 
                the Commission; and
                    (B) the procedures of the Commission 
                applicable to the staff of the Commission who 
                perform examinations of registered entities, 
                enforcement investigations, and reviews of 
                corporate financial securities filings;
            (2) a certification that the Commission has 
        adequate internal supervisory controls to carry out the 
        duties of the Commission described in paragraph (1)(B); 
        and
            (3) a summary by the Comptroller General of the 
        United States of the review carried out under 
        subsection (d).
    (c) Certification.--
            (1) Signature.--The certification under subsection 
        (b)(2) shall be signed by the Director of the Division 
        of Enforcement, the Director of the Division of 
        Corporation Finance, and the Director of the Office of 
        Compliance Inspections and Examinations (or the head of 
        any successor division or office).
            (2) Content of certification.--Each individual 
        described in paragraph (1) shall certify that the 
        individual--
                    (A) is directly responsible for 
                establishing and maintaining the internal 
                supervisory controls of the Division or Office 
                of which the individual is the head;
                    (B) is knowledgeable about the internal 
                supervisory controls of the Division or Office 
                of which the individual is the head;
                    (C) has evaluated the effectiveness of the 
                internal supervisory controls during the 90-day 
                period ending on the final day of the fiscal 
                year to which the report relates; and
                    (D) has disclosed to the Commission any 
                significant deficiencies in the design or 
                operation of internal supervisory controls that 
                could adversely affect the ability of the 
                Division or Office to consistently conduct 
                inspections, or investigations, or reviews of 
                filings with professional competence and 
                integrity.
    (d) New Director or Acting Director.--Notwithstanding 
subsection (a), if the Director of the Division of Enforcement, 
the Director of the Division of Corporate Finance, or the 
Director of the Office of Compliance Inspections and 
Examinations has served as Director of the Division or Office 
for less than 90 days on the date on which a report is required 
to be submitted under subsection (a), the Commission may submit 
the report on the date on which the Director has served as 
Director for 90 days. If there is no Director of the Division 
of Enforcement, the Division of Corporate Finance, or the 
Office of Compliance Inspections and Examinations, on the date 
on which a report is required to be submitted under subsection 
(a), the Acting Director of the Division or Office may make the 
certification required under subsection (c).
    (e) Review by the Comptroller General.--
            (1) Report.--The Comptroller General of the United 
        States 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 a report that contains a review of the 
        adequacy and effectiveness of the internal supervisory 
        control structure and procedures described in 
        subsection (b)(1), not less frequently than once every 
        3 years, at a time to coincide with the publication of 
        the reports of the Commission under this section.
            (2) Authority to hire experts.--The Comptroller 
        General of the United States may hire independent 
        consultants with specialized expertise in any area 
        relevant to the duties of the Comptroller General 
        described in this section, in order to assist the 
        Comptroller General in carrying out such duties.

SEC. 962. TRIENNIAL REPORT ON PERSONNEL MANAGEMENT.

    (a) Triennial Report Required.--Once every 3 years, the 
Comptroller General of the United States shall submit a report 
to the Committee on Banking, Housing, and Urban Affairs of the 
Senate and the Committee on Financial Services of the House of 
Representatives on the quality of personnel management by the 
Commission.
    (b) Contents of Report.--Each report under subsection (a) 
shall include--
            (1) an evaluation of--
                    (A) the effectiveness of supervisors in 
                using the skills, talents, and motivation of 
                the employees of the Commission to achieve the 
                goals of the Commission;
                    (B) the criteria for promoting employees of 
                the Commission to supervisory positions;
                    (C) the fairness of the application of the 
                promotion criteria to the decisions of the 
                Commission;
                    (D) the competence of the professional 
                staff of the Commission;
                    (E) the efficiency of communication between 
                the units of the Commission regarding the work 
                of the Commission (including communication 
                between divisions and between subunits of a 
                division) and the efforts by the Commission to 
                promote such communication;
                    (F) the turnover within subunits of the 
                Commission, including the consideration of 
                supervisors whose subordinates have an 
                unusually high rate of turnover;
                    (G) whether there are excessive numbers of 
                low-level, mid-level, or senior-level managers;
                    (H) any initiatives of the Commission that 
                increase the competence of the staff of the 
                Commission;
                    (I) the actions taken by the Commission 
                regarding employees of the Commission who have 
                failed to perform their duties and 
                circumstances under which the Commission has 
                issued to employees a notice of termination; 
                and
                    (J) such other factors relating to the 
                management of the Commission as the Comptroller 
                General determines are appropriate;
            (2) an evaluation of any improvements made with 
        respect to the areas described in paragraph (1) since 
        the date of submission of the previous report; and
            (3) recommendations for how the Commission can use 
        the human resources of the Commission more effectively 
        and efficiently to carry out the mission of the 
        Commission.
    (c) Consultation.--In preparing the report under subsection 
(a), the Comptroller General shall consult with current 
employees of the Commission, retired employees and other former 
employees of the Commission, the Inspector General of the 
Commission, persons that have business before the Commission, 
any union representing the employees of the Commission, private 
management consultants, academics, and any other source that 
the Comptroller General deems appropriate.
    (d) Report by Commission.--Not later than 90 days after the 
date on which the Comptroller General submits each report under 
subsection (a), the Commission 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 
a report describing the actions taken by the Commission in 
response to the recommendations contained in the report under 
subsection (a).
    (e) Reimbursements for Cost of Reports.--
            (1) Reimbursements required.--The Commission shall 
        reimburse the Government Accountability Office for the 
        full cost of making the reports under this section, as 
        billed therefor by the Comptroller General.
            (2) Crediting and use of reimbursements.--Such 
        reimbursements shall--
                    (A) be credited to the appropriation 
                account ``Salaries and Expenses, Government 
                Accountability Office'' current when the 
                payment is received; and
                    (B) remain available until expended.
    (f) Authority to Hire Experts.--The Comptroller General of 
the United States may hire independent consultants with 
specialized expertise in any area relevant to the duties of the 
Comptroller General described in this section, in order to 
assist the Comptroller General in carrying out such duties.

SEC. 963. ANNUAL FINANCIAL CONTROLS AUDIT.

    (a) Reports of Commission.--
            (1) Annual reports required.--Not later than 6 
        months after the end of each fiscal year, the 
        Commission shall publish and submit to Congress a 
        report that--
                    (A) describes the responsibility of the 
                management of the Commission for establishing 
                and maintaining an adequate internal control 
                structure and procedures for financial 
                reporting; and
                    (B) contains an assessment of the 
                effectiveness of the internal control structure 
                and procedures for financial reporting of the 
                Commission during that fiscal year.
            (2) Attestation.--The reports required under 
        paragraph (1) shall be attested to by the Chairman and 
        chief financial officer of the Commission.
    (b) Report by Comptroller General.--
            (1) Report required.--Not later than 6 months after 
        the end of the first fiscal year after the date of 
        enactment of this Act, the Comptroller General of the 
        United States shall submit a report to Congress that 
        assesses--
                    (A) the effectiveness of the internal 
                control structure and procedures of the 
                Commission for financial reporting; and
                    (B) the assessment of the Commission under 
                subsection (a)(1)(B).
            (2) Attestation.--The Comptroller General shall 
        attest to, and report on, the assessment made by the 
        Commission under subsection (a).
    (c) Reimbursements for Cost of Reports.--
            (1) Reimbursements required.--The Commission shall 
        reimburse the Government Accountability Office for the 
        full cost of making the reports under subsection (b), 
        as billed therefor by the Comptroller General.
            (2) Crediting and use of reimbursements.--Such 
        reimbursements shall--
                    (A) be credited to the appropriation 
                account ``Salaries and Expenses, Government 
                Accountability Office'' current when the 
                payment is received; and
                    (B) remain available until expended.

SEC. 964. REPORT ON OVERSIGHT OF NATIONAL SECURITIES ASSOCIATIONS.

    (a) Report Required.--Not later than 2 years after the date 
of enactment of this Act, and every 3 years thereafter, the 
Comptroller General of the United States 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 a report that includes an evaluation of the 
oversight by the Commission of national securities associations 
registered under section 15A of the Securities Exchange Act of 
1934 (15 U.S.C. 78o-3) with respect to--
            (1) the governance of such national securities 
        associations, including the identification and 
        management of conflicts of interest by such national 
        securities associations, together with an analysis of 
        the impact of any conflicts of interest on the 
        regulatory enforcement or rulemaking by such national 
        securities associations;
            (2) the examinations carried out by the national 
        securities associations, including the expertise of the 
        examiners;
            (3) the executive compensation practices of such 
        national securities associations;
            (4) the arbitration services provided by the 
        national securities associations;
            (5) the review performed by national securities 
        associations of advertising by the members of the 
        national securities associations;
            (6) the cooperation with and assistance to State 
        securities administrators by the national securities 
        associations to promote investor protection;
            (7) how the funding of national securities 
        associations is used to support the mission of the 
        national securities associations, including--
                    (A) the methods of funding;
                    (B) the sufficiency of funds;
                    (C) how funds are invested by the national 
                securities association pending use; and
                    (D) the impact of the methods, sufficiency, 
                and investment of funds on regulatory 
                enforcement by the national securities 
                associations;
            (8) the policies regarding the employment of former 
        employees of national securities associations by 
        regulated entities;
            (9) the ongoing effectiveness of the rules of the 
        national securities associations in achieving the goals 
        of the rules;
            (10) the transparency of governance and activities 
        of the national securities associations; and
            (11) any other issue that has an impact, as 
        determined by the Comptroller General, on the 
        effectiveness of such national securities associations 
        in performing their mission and in dealing fairly with 
        investors and members;
    (b) Reimbursements for Cost of Reports.--
            (1) Reimbursements required.--The Commission shall 
        reimburse the Government Accountability Office for the 
        full cost of making the reports under subsection (a), 
        as billed therefor by the Comptroller General.
            (2) Crediting and use of reimbursements.--Such 
        reimbursements shall--
                    (A) be credited to the appropriation 
                account ``Salaries and Expenses, Government 
                Accountability Office'' current when the 
                payment is received; and
                    (B) remain available until expended.

SEC. 965. COMPLIANCE EXAMINERS.

    Section 4 of the Securities Exchange Act of 1934 (15 U.S.C. 
78d) is amended by adding at the end the following:
    ``(h) Examiners.--
            ``(1) Division of trading and markets.--The 
        Division of Trading and Markets of the Commission, or 
        any successor organizational unit, shall have a staff 
        of examiners who shall--
                    ``(A) perform compliance inspections and 
                examinations of entities under the jurisdiction 
                of that Division; and
                    ``(B) report to the Director of that 
                Division.
            ``(2) Division of investment management.--The 
        Division of Investment Management of the Commission, or 
        any successor organizational unit, shall have a staff 
        of examiners who shall--
                    ``(A) perform compliance inspections and 
                examinations of entities under the jurisdiction 
                of that Division; and
                    ``(B) report to the Director of that 
                Division.''.

SEC. 966. SUGGESTION PROGRAM FOR EMPLOYEES OF THE COMMISSION.

    The Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.) 
is amended by inserting after section 4C (15 U.S.C. 78d-3) the 
following:

``SEC. 4D. ADDITIONAL DUTIES OF INSPECTOR GENERAL.

    ``(a) Suggestion Submissions by Commission Employees.--
            ``(1) Hotline established.--The Inspector General 
        of the Commission shall establish and maintain a 
        telephone hotline or other electronic means for the 
        receipt of--
                    ``(A) suggestions by employees of the 
                Commission for improvements in the work 
                efficiency, effectiveness, and productivity, 
                and the use of the resources, of the 
                Commission; and
                    ``(B) allegations by employees of the 
                Commission of waste, abuse, misconduct, or 
                mismanagement within the Commission.
            ``(2) Confidentiality.--The Inspector General shall 
        maintain as confidential--
                    ``(A) the identity of any individual who 
                provides information by the means established 
                under paragraph (1), unless the individual 
                requests otherwise, in writing; and
                    ``(B) at the request of any such 
                individual, any specific information provided 
                by the individual.
    ``(b) Consideration of Reports.--The Inspector General 
shall consider any suggestions or allegations received by the 
means established under subsection (a)(1), and shall recommend 
appropriate action in relation to such suggestions or 
allegations.
    ``(c) Recognition.--The Inspector General may recognize any 
employee who makes a suggestion under subsection (a)(1) (or by 
other means) that would or does--
            ``(1) increase the work efficiency, effectiveness, 
        or productivity of the Commission; or
            ``(2) reduce waste, abuse, misconduct, or 
        mismanagement within the Commission.
    ``(d) Report.--The Inspector General of the Commission 
shall submit to Congress an annual report containing a 
description of--
            ``(1) the nature, number, and potential benefits of 
        any suggestions received under subsection (a);
            ``(2) the nature, number, and seriousness of any 
        allegations received under subsection (a);
            ``(3) any recommendations made or actions taken by 
        the Inspector General in response to substantiated 
        allegations received under subsection (a); and
            ``(4) any action the Commission has taken in 
        response to suggestions or allegations received under 
        subsection (a).
    ``(e) Funding.--The activities of the Inspector General 
under this subsection shall be funded by the Securities and 
Exchange Commission Investor Protection Fund established under 
section 21F.''.

SEC. 967. COMMISSION ORGANIZATIONAL STUDY AND REFORM.

    (a) Study Required.--
            (1) In general.--Not later than the end of the 90-
        day period beginning on the date of the enactment of 
        this subtitle, the Securities and Exchange Commission 
        (hereinafter in this section referred to as the 
        ``SEC'') shall hire an independent consultant of high 
        caliber and with expertise in organizational 
        restructuring and the operations of capital markets to 
        examine the internal operations, structure, funding, 
        and the need for comprehensive reform of the SEC, as 
        well as the SEC's relationship with and the reliance on 
        self-regulatory organizations and other entities 
        relevant to the regulation of securities and the 
        protection of securities investors that are under the 
        SEC's oversight.
            (2) Specific areas for study.--The study required 
        under paragraph (1) shall, at a minimum, include the 
        study of--
                    (A) the possible elimination of unnecessary 
                or redundant units at the SEC;
                    (B) improving communications between SEC 
                offices and divisions;
                    (C) the need to put in place a clear chain-
                of-command structure, particularly for 
                enforcement examinations and compliance 
                inspections;
                    (D) the effect of high-frequency trading 
                and other technological advances on the market 
                and what the SEC requires to monitor the effect 
                of such trading and advances on the market;
                    (E) the SEC's hiring authorities, workplace 
                policies, and personal practices, including--
                            (i) whether there is a need to 
                        further streamline hiring authorities 
                        for those who are not lawyers, 
                        accountants, compliance examiners, or 
                        economists;
                            (ii) whether there is a need for 
                        further pay reforms;
                            (iii) the diversity of skill sets 
                        of SEC employees and whether the 
                        present skill set diversity efficiently 
                        and effectively fosters the SEC's 
                        mission of investor protection; and
                            (iv) the application of civil 
                        service laws by the SEC;
                    (F) whether the SEC's oversight and 
                reliance on self-regulatory organizations 
                promotes efficient and effective governance for 
                the securities markets; and
                    (G) whether adjusting the SEC's reliance on 
                self-regulatory organizations is necessary to 
                promote more efficient and effective governance 
                for the securities markets.
    (b) Consultant Report.--Not later than the end of the 150-
day period after being retained, the independent consultant 
hired pursuant to subsection (a)(1) shall issue a report to the 
SEC and the Congress containing--
            (1) a detailed description of any findings and 
        conclusions made while carrying out the study required 
        under subsection (a)(1); and
            (2) recommendations for legislative, regulatory, or 
        administrative action that the consultant determines 
        appropriate to enable the SEC and other entities on 
        which the consultant reports to perform their 
        statutorily or otherwise mandated missions.
    (c) SEC Report.--Not later than the end of the 6-month 
period beginning on the date the consultant issues the report 
under subsection (b), and every 6 months thereafter during the 
2-year period following the date on which the consultant issues 
such report, the SEC shall issue a report to the Committee on 
Financial Services of the House of Representatives and the 
Committee on Banking, Housing, and Urban Affairs of the Senate 
describing the SEC's implementation of the regulatory and 
administrative recommendations contained in the consultant's 
report.

SEC. 968. STUDY ON SEC REVOLVING DOOR.

    (a) Government Accountability Office Study.--The 
Comptroller General of the United States shall conduct a study 
that will--
            (1) review the number of employees who leave the 
        Securities and Exchange Commission to work for 
        financial institutions regulated by such Commission;
            (2) determine how many employees who leave the 
        Securities and Exchange Commission worked on cases that 
        involved financial institutions regulated by such 
        Commission;
            (3) review the length of time employees work for 
        the Securities and Exchange Commission before leaving 
        to be employed by financial institutions regulated by 
        such Commission;
            (4) review existing internal controls and make 
        recommendations on strengthening such controls to 
        ensure that employees of the Securities and Exchange 
        Commission who are later employed by financial 
        institutions did not assist such institutions in 
        violating any rules or regulations of the Commission 
        during the course of their employment with such 
        Commission;
            (5) determine if greater post-employment 
        restrictions are necessary to prevent employees of the 
        Securities and Exchange Commission from being employed 
        by financial institutions after employment with such 
        Commission;
            (6) determine if the volume of employees of the 
        Securities and Exchange Commission who are later 
        employed by financial institutions has led to 
        inefficiencies in enforcement;
            (7) determine if employees of the Securities and 
        Exchange Commission who are later employed by financial 
        institutions assisted such institutions in 
        circumventing Federal rules and regulations while 
        employed by such Commission;
            (8) review any information that may address the 
        volume of employees of the Securities and Exchange 
        Commission who are later employed by financial 
        institutions, and make recommendations to Congress; and
            (9) review other additional issues as may be raised 
        during the course of the study conducted under this 
        subsection.
    (b) Report.--Not later than 1 year after the date of the 
enactment of this subtitle, the Comptroller General of the 
United States shall submit to the Committee on Financial 
Services of the House of Representatives and the Committee on 
Banking, Housing, and Urban Affairs of the Senate a report on 
the results of the study required by subsection (a).

             Subtitle G--Strengthening Corporate Governance

SEC. 971. PROXY ACCESS.

    (a) Proxy Access.--Section 14(a) of the Securities Exchange 
Act of 1934 (15 U.S.C. 78n(a)) is amended--
            (1) by inserting ``(1)'' after ``(a)''; and
            (2) by adding at the end the following:
    ``(2) The rules and regulations prescribed by the 
Commission under paragraph (1) may include--
            ``(A) a requirement that a solicitation of proxy, 
        consent, or authorization by (or on behalf of) an 
        issuer include a nominee submitted by a shareholder to 
        serve on the board of directors of the issuer; and
            ``(B) a requirement that an issuer follow a certain 
        procedure in relation to a solicitation described in 
        subparagraph (A).''.
    (b) Regulations.--The Commission may issue rules permitting 
the use by a shareholder of proxy solicitation materials 
supplied by an issuer of securities for the purpose of 
nominating individuals to membership on the board of directors 
of the issuer, under such terms and conditions as the 
Commission determines are in the interests of shareholders and 
for the protection of investors.
    (c) Exemptions.--The Commission may, by rule or order, 
exempt an issuer or class of issuers from the requirement made 
by this section or an amendment made by this section. In 
determining whether to make an exemption under this subsection, 
the Commission shall take into account, among other 
considerations, whether the requirement in the amendment made 
by subsection (a) disproportionately burdens small issuers.

SEC. 972. DISCLOSURES REGARDING CHAIRMAN AND CEO STRUCTURES.

    The Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.) 
is amended by inserting after section 14A, as added by this 
title, the following:

``SEC. 14B. CORPORATE GOVERNANCE.

    ``Not later than 180 days after the date of enactment of 
this subsection, the Commission shall issue rules that require 
an issuer to disclose in the annual proxy sent to investors the 
reasons why the issuer has chosen--
            ``(1) the same person to serve as chairman of the 
        board of directors and chief executive officer (or in 
        equivalent positions); or
            ``(2) different individuals to serve as chairman of 
        the board of directors and chief executive officer (or 
        in equivalent positions of the issuer).''.

                    Subtitle H--Municipal Securities

SEC. 975. REGULATION OF MUNICIPAL SECURITIES AND CHANGES TO THE BOARD 
                    OF THE MSRB.

    (a) Registration of Municipal Securities Dealers and 
Municipal Advisors.--Section 15B(a) of the Securities Exchange 
Act of 1934 (15 U.S.C. 78o-4(a)) is amended--
            (1) in paragraph (1)--
                    (A) by inserting ``(A)'' after ``(1)''; and
                    (B) by adding at the end the following:
                    ``(B) It shall be unlawful for a municipal 
                advisor to provide advice to or on behalf of a 
                municipal entity or obligated person with 
                respect to municipal financial products or the 
                issuance of municipal securities, or to 
                undertake a solicitation of a municipal entity 
                or obligated person, unless the municipal 
                advisor is registered in accordance with this 
                subsection.'';
            (2) in paragraph (2), by inserting ``or municipal 
        advisor'' after ``municipal securities dealer'' each 
        place that term appears;
            (3) in paragraph (3), by inserting ``or municipal 
        advisor'' after ``municipal securities dealer'' each 
        place that term appears;
            (4) in paragraph (4), by striking ``dealer, or 
        municipal securities dealer or class of brokers, 
        dealers, or municipal securities dealers'' and 
        inserting ``dealer, municipal securities dealer, or 
        municipal advisor, or class of brokers, dealers, 
        municipal securities dealers, or municipal advisors''; 
        and
            (5) by adding at the end the following:
            ``(5) No municipal advisor shall make use of the 
        mails or any means or instrumentality of interstate 
        commerce to provide advice to or on behalf of a 
        municipal entity or obligated person with respect to 
        municipal financial products, the issuance of municipal 
        securities, or to undertake a solicitation of a 
        municipal entity or obligated person, in connection 
        with which such municipal advisor engages in any 
        fraudulent, deceptive, or manipulative act or 
        practice.''.
    (b) Municipal Securities Rulemaking Board.--Section 15B(b) 
of the Securities Exchange Act of 1934 (15 U.S.C. 78o-4(b)) is 
amended--
            (1) in paragraph (1)--
                    (A) in the first sentence, by striking 
                ``Not later than'' and all that follows through 
                ``appointed by the Commission'' and inserting 
                ``The Municipal Securities Rulemaking Board 
                shall be composed of 15 members, or such other 
                number of members as specified by rules of the 
                Board pursuant to paragraph (2)(B),'';
                    (B) by striking the second sentence and 
                inserting the following: ``The members of the 
                Board shall serve as members for a term of 3 
                years or for such other terms as specified by 
                rules of the Board pursuant to paragraph 
                (2)(B), and shall consist of (A) 8 individuals 
                who are independent of any municipal securities 
                broker, municipal securities dealer, or 
                municipal advisor, at least 1 of whom shall be 
                representative of institutional or retail 
                investors in municipal securities, at least 1 
                of whom shall be representative of municipal 
                entities, and at least 1 of whom shall be a 
                member of the public with knowledge of or 
                experience in the municipal industry (which 
                members are hereinafter referred to as `public 
                representatives'); and (B) 7 individuals who 
                are associated with a broker, dealer, municipal 
                securities dealer, or municipal advisor, 
                including at least 1 individual who is 
                associated with and representative of brokers, 
                dealers, or municipal securities dealers that 
                are not banks or subsidiaries or departments or 
                divisions of banks (which members are 
                hereinafter referred to as `broker-dealer 
                representatives'), at least 1 individual who is 
                associated with and representative of municipal 
                securities dealers which are banks or 
                subsidiaries or departments or divisions of 
                banks (which members are hereinafter referred 
                to as `bank representatives'), and at least 1 
                individual who is associated with a municipal 
                advisor (which members are hereinafter referred 
                to as `advisor representatives' and, together 
                with the broker-dealer representatives and the 
                bank representatives, are referred to as 
                `regulated representatives'). Each member of 
                the board shall be knowledgeable of matters 
                related to the municipal securities markets.''; 
                and
                    (C) in the third sentence, by striking 
                ``initial'';
            (2) in paragraph (2)--
                    (A) in the matter preceding subparagraph 
                (A)--
                            (i) by inserting before the period 
                        at the end of the first sentence the 
                        following: ``and advice provided to or 
                        on behalf of municipal entities or 
                        obligated persons by brokers, dealers, 
                        municipal securities dealers, and 
                        municipal advisors with respect to 
                        municipal financial products, the 
                        issuance of municipal securities, and 
                        solicitations of municipal entities or 
                        obligated persons undertaken by 
                        brokers, dealers, municipal securities 
                        dealers, and municipal advisors''; and
                            (ii) by striking the second 
                        sentence;
                    (B) in subparagraph (A)--
                            (i) in the matter preceding clause 
                        (i)--
                                    (I) by inserting ``, and no 
                                broker, dealer, municipal 
                                securities dealer, or municipal 
                                advisor shall provide advice to 
                                or on behalf of a municipal 
                                entity or obligated person with 
                                respect to municipal financial 
                                products or the issuance of 
                                municipal securities,'' after 
                                ``sale of, any municipal 
                                security''; and
                                    (II) by inserting ``and 
                                municipal entities or obligated 
                                persons'' after ``protection of 
                                investors'';
                            (ii) in clause (i), by striking 
                        ``municipal securities brokers and 
                        municipal securities dealers'' each 
                        place that term appears and inserting 
                        ``municipal securities brokers, 
                        municipal securities dealers, and 
                        municipal advisors'';
                            (iii) in clause (ii), by adding 
                        ``and'' at the end;
                            (iv) in clause (iii), by striking 
                        ``; and'' and inserting a period; and
                            (v) by striking clause (iv);
                    (C) by amending subparagraph (B) to read as 
                follows:
            ``(B) establish fair procedures for the nomination 
        and election of members of the Board and assure fair 
        representation in such nominations and elections of 
        public representatives, broker dealer representatives, 
        bank representatives, and advisor representatives. Such 
        rules--
                    ``(i) shall provide that the number of 
                public representatives of the Board shall at 
                all times exceed the total number of regulated 
                representatives and that the membership shall 
                at all times be as evenly divided in number as 
                possible between public representatives and 
                regulated representatives;
                    ``(ii) shall specify the length or lengths 
                of terms members shall serve;
                    ``(iii) may increase the number of members 
                which shall constitute the whole Board, 
                provided that such number is an odd number; and
                    ``(iv) shall establish requirements 
                regarding the independence of public 
                representatives.''.
                    (D) in subparagraph (C)--
                            (i) by inserting ``and municipal 
                        financial products'' after ``municipal 
                        securities'' the first two times that 
                        term appears;
                            (ii) by inserting ``, municipal 
                        entities, obligated persons,'' before 
                        ``and the public interest'';
                            (iii) by striking ``between'' and 
                        inserting ``among'';
                            (iv) by striking ``issuers, 
                        municipal securities brokers, or 
                        municipal securities dealers, to fix'' 
                        and inserting ``municipal entities, 
                        obligated persons, municipal securities 
                        brokers, municipal securities dealers, 
                        or municipal advisors, to fix''; and
                            (v) by striking ``brokers or 
                        municipal securities dealers, to 
                        regulate'' and inserting ``brokers, 
                        municipal securities dealers, or 
                        municipal advisors, to regulate'';
                    (E) in subparagraph (D)--
                            (i) by inserting ``and advice 
                        concerning municipal financial 
                        products'' after ``transactions in 
                        municipal securities'';
                            (ii) by striking ``That no'' and 
                        inserting ``that no'';
                            (iii) by inserting ``municipal 
                        advisor,'' before ``or person 
                        associated''; and
                            (iv) by striking ``a municipal 
                        securities broker or municipal 
                        securities dealer may be compelled'' 
                        and inserting ``a municipal securities 
                        broker, municipal securities dealer, or 
                        municipal advisor may be compelled'';
                    (F) in subparagraph (E)--
                            (i) by striking ``municipal 
                        securities brokers and municipal 
                        securities dealers'' and inserting 
                        ``municipal securities brokers, 
                        municipal securities dealers, and 
                        municipal advisors''; and
                            (ii) by striking ``municipal 
                        securities broker or municipal 
                        securities dealer'' and inserting 
                        ``municipal securities broker, 
                        municipal securities dealer, or 
                        municipal advisor'';
                    (G) in subparagraph (G), by striking 
                ``municipal securities brokers and municipal 
                securities dealers'' and inserting ``municipal 
                securities brokers, municipal securities 
                dealers, and municipal advisors'';
                    (H) in subparagraph (J)--
                            (i) by striking ``municipal 
                        securities broker and each municipal 
                        securities dealer'' and inserting 
                        ``municipal securities broker, 
                        municipal securities dealer, and 
                        municipal advisor''; and
                            (ii) by striking the period at the 
                        end of the second sentence and 
                        inserting ``, which may include charges 
                        for failure to submit to the Board, or 
                        to any information system operated by 
                        the Board, within the prescribed 
                        timeframes, any items of information or 
                        documents required to be submitted 
                        under any rule issued by the Board.'';
                    (I) in subparagraph (K)--
                            (i) by inserting ``broker, dealer, 
                        or'' before ``municipal securities 
                        dealer'' each place that term appears; 
                        and
                            (ii) by striking ``municipal 
                        securities investment portfolio'' and 
                        inserting ``related account of a 
                        broker, dealer, or municipal securities 
                        dealer''; and
                    (J) by adding at the end the following:
                    ``(L) with respect to municipal advisors--
                            ``(i) prescribe means reasonably 
                        designed to prevent acts, practices, 
                        and courses of business as are not 
                        consistent with a municipal advisor's 
                        fiduciary duty to its clients;
                            ``(ii) provide continuing education 
                        requirements for municipal advisors;
                            ``(iii) provide professional 
                        standards; and
                            ``(iv) not impose a regulatory 
                        burden on small municipal advisors that 
                        is not necessary or appropriate in the 
                        public interest and for the protection 
                        of investors, municipal entities, and 
                        obligated persons, provided that there 
                        is robust protection of investors 
                        against fraud.'';
            (3) by redesignating paragraph (3) as paragraph 
        (7); and
            (4) by inserting after paragraph (2) the following:
            ``(3) The Board, in conjunction with or on behalf 
        of any Federal financial regulator or self-regulatory 
        organization, may--
                    ``(A) establish information systems; and
                    ``(B) assess such reasonable fees and 
                charges for the submission of information to, 
                or the receipt of information from, such 
                systems from any persons which systems may be 
                developed for the purposes of serving as a 
                repository of information from municipal market 
                participants or otherwise in furtherance of the 
                purposes of the Board, a Federal financial 
                regulator, or a self-regulatory organization, 
                except that the Board--
                            ``(i) may not charge a fee to 
                        municipal entities or obligated persons 
                        to submit documents or other 
                        information to the Board or charge a 
                        fee to any person to obtain, directly 
                        from the Internet site of the Board, 
                        documents or information submitted by 
                        municipal entities, obligated persons, 
                        brokers, dealers, municipal securities 
                        dealers, or municipal advisors, 
                        including documents submitted under the 
                        rules of the Board or the Commission; 
                        and
                            ``(ii) shall not be prohibited from 
                        charging commercially reasonable fees 
                        for automated subscription-based feeds 
                        or similar services, or for charging 
                        for other data or document-based 
                        services customized upon request of any 
                        person, made available to commercial 
                        enterprises, municipal securities 
                        market professionals, or the general 
                        public, whether delivered through the 
                        Internet or any other means, that 
                        contain all or part of the documents or 
                        information, subject to approval of the 
                        fees by the Commission under section 
                        19(b).
            ``(4) The Board may provide guidance and assistance 
        in the enforcement of, and examination for, compliance 
        with the rules of the Board to the Commission, a 
        registered securities association under section 15A, or 
        any other appropriate regulatory agency, as applicable.
            ``(5) The Board, the Commission, and a registered 
        securities association under section 15A, or the 
        designees of the Board, the Commission, or such 
        association, shall meet not less frequently than 2 
        times a year--
                    ``(A) to describe the work of the Board, 
                the Commission, and the registered securities 
                association involving the regulation of 
                municipal securities; and
                    ``(B) to share information about--
                            ``(i) the interpretation of the 
                        Board, the Commission, and the 
                        registered securities association of 
                        Board rules; and
                            ``(ii) examination and enforcement 
                        of compliance with Board rules.''.
    (c) Discipline of Brokers, Dealers, Municipal Securities 
Dealers and Municipal Advisors; Fiduciary Duty of Municipal 
Advisors.--Section 15B(c) of the Securities Exchange Act of 
1934 (15 U.S.C. 78o-4(c)) is amended--
            (1) in paragraph (1), by inserting ``, and no 
        broker, dealer, municipal securities dealer, or 
        municipal advisor shall make use of the mails or any 
        means or instrumentality of interstate commerce to 
        provide advice to or on behalf of a municipal entity or 
        obligated person with respect to municipal financial 
        products, the issuance of municipal securities, or to 
        undertake a solicitation of a municipal entity or 
        obligated person,'' after ``any municipal security'';
            (2) by adding at the end of paragraph (1) the 
        following: ``A municipal advisor and any person 
        associated with such municipal advisor shall be deemed 
        to have a fiduciary duty to any municipal entity for 
        whom such municipal advisor acts as a municipal 
        advisor, and no municipal advisor may engage in any 
        act, practice, or course of business which is not 
        consistent with a municipal advisor's fiduciary duty or 
        that is in contravention of any rule of the Board.''.
            (3) in paragraph (2), by inserting ``or municipal 
        advisor'' after ``municipal securities dealer'' each 
        place that term appears;
            (4) in paragraph (3)--
                    (A) by inserting ``or municipal entities or 
                obligated person'' after ``protection of 
                investors'' each place that term appears; and
                    (B) by inserting ``or municipal advisor'' 
                after ``municipal securities dealer'' each 
                place that term appears;
            (5) in paragraph (4), by inserting ``or municipal 
        advisor'' after ``municipal securities dealer or 
        obligated person'' each place that term appears;
            (6) in paragraph (6)(B), by inserting ``or 
        municipal entities or obligated person'' after 
        ``protection of investors'';
            (7) in paragraph (7)--
                    (A) in subparagraph (A)--
                            (i) in clause (i), by striking ``; 
                        and'' and inserting a semicolon;
                            (ii) in clause (ii), by striking 
                        the period and inserting ``; and''; and
                            (iii) by adding at the end the 
                        following:
                            ``(iii) the Commission, or its 
                        designee, in the case of municipal 
                        advisors.''.
                    (B) in subparagraph (B), by inserting ``or 
                municipal entities or obligated person'' after 
                ``protection of investors''; and
            (8) by adding at the end the following:
            ``(9)(A) Fines collected by the Commission for 
        violations of the rules of the Board shall be equally 
        divided between the Commission and the Board.
            ``(B) Fines collected by a registered securities 
        association under section 15A(7) with respect to 
        violations of the rules of the Board shall be accounted 
        for by such registered securities association 
        separately from other fines collected under section 
        15A(7) and shall be allocated between such registered 
        securities association and the Board, and such 
        allocation shall require the registered securities 
        association to pay to the Board \1/3\ of all fines 
        collected by the registered securities association 
        reasonably allocable to violations of the rules of the 
        Board, or such other portion of such fines as may be 
        directed by the Commission upon agreement between the 
        registered securities association and the Board.''.
    (d) Issuance of Municipal Securities.--Section 15B(d)(2) of 
the Securities Exchange Act of 1934 (15 U.S.C. 78o-4(d)) is 
amended--
            (1) by striking ``through a municipal securities 
        broker or municipal securities dealer or otherwise'' 
        and inserting ``through a municipal securities broker, 
        municipal securities dealer, municipal advisor, or 
        otherwise''; and
            (2) by inserting ``or municipal advisors'' before 
        ``to furnish''.
    (e) Definitions.--Section 15B of the Securities Exchange 
Act of 1934 (15 U.S.C. 78o-4) is amended by adding at the end 
the following:
    ``(e) Definitions.--For purposes of this section--
            ``(1) the term `Board' means the Municipal 
        Securities Rulemaking Board established under 
        subsection (b)(1);
            ``(2) the term `guaranteed investment contract' 
        includes any investment that has specified withdrawal 
        or reinvestment provisions and a specifically 
        negotiated or bid interest rate, and also includes any 
        agreement to supply investments on 2 or more future 
        dates, such as a forward supply contract;
            ``(3) the term `investment strategies' includes 
        plans or programs for the investment of the proceeds of 
        municipal securities that are not municipal 
        derivatives, guaranteed investment contracts, and the 
        recommendation of and brokerage of municipal escrow 
        investments;
            ``(4) the term `municipal advisor'--
                    ``(A) means a person (who is not a 
                municipal entity or an employee of a municipal 
                entity) that--
                            ``(i) provides advice to or on 
                        behalf of a municipal entity or 
                        obligated person with respect to 
                        municipal financial products or the 
                        issuance of municipal securities, 
                        including advice with respect to the 
                        structure, timing, terms, and other 
                        similar matters concerning such 
                        financial products or issues; or
                            ``(ii) undertakes a solicitation of 
                        a municipal entity;
                    ``(B) includes financial advisors, 
                guaranteed investment contract brokers, third-
                party marketers, placement agents, solicitors, 
                finders, and swap advisors, if such persons are 
                described in any of clauses (i) through (iii) 
                of subparagraph (A); and
                    ``(C) does not include a broker, dealer, or 
                municipal securities dealer serving as an 
                underwriter (as defined in section 2(a)(11) of 
                the Securities Act of 1933) (15 U.S.C. 
                77b(a)(11)), any investment adviser registered 
                under the Investment Advisers Act of 1940, or 
                persons associated with such investment 
                advisers who are providing investment advice, 
                any commodity trading advisor registered under 
                the Commodity Exchange Act or persons 
                associated with a commodity trading advisor who 
                are providing advice related to swaps, 
                attorneys offering legal advice or providing 
                services that are of a traditional legal 
                nature, or engineers providing engineering 
                advice;
            ``(5) the term `municipal financial product' means 
        municipal derivatives, guaranteed investment contracts, 
        and investment strategies;
            ``(6) the term `rules of the Board' means the rules 
        proposed and adopted by the Board under subsection 
        (b)(2);
            ``(7) the term `person associated with a municipal 
        advisor' or `associated person of an advisor' means--
                    ``(A) any partner, officer, director, or 
                branch manager of such municipal advisor (or 
                any person occupying a similar status or 
                performing similar functions);
                    ``(B) any other employee of such municipal 
                advisor who is engaged in the management, 
                direction, supervision, or performance of any 
                activities relating to the provision of advice 
                to or on behalf of a municipal entity or 
                obligated person with respect to municipal 
                financial products or the issuance of municipal 
                securities; and
                    ``(C) any person directly or indirectly 
                controlling, controlled by, or under common 
                control with such municipal advisor;
            ``(8) the term `municipal entity' means any State, 
        political subdivision of a State, or municipal 
        corporate instrumentality of a State, including--
                    ``(A) any agency, authority, or 
                instrumentality of the State, political 
                subdivision, or municipal corporate 
                instrumentality;
                    ``(B) any plan, program, or pool of assets 
                sponsored or established by the State, 
                political subdivision, or municipal corporate 
                instrumentality or any agency, authority, or 
                instrumentality thereof; and
                    ``(C) any other issuer of municipal 
                securities;
            ``(9) the term `solicitation of a municipal entity 
        or obligated person' means a direct or indirect 
        communication with a municipal entity or obligated 
        person made by a person, for direct or indirect 
        compensation, on behalf of a broker, dealer, municipal 
        securities dealer, municipal advisor, or investment 
        adviser (as defined in section 202 of the Investment 
        Advisers Act of 1940) that does not control, is not 
        controlled by, or is not under common control with the 
        person undertaking such solicitation for the purpose of 
        obtaining or retaining an engagement by a municipal 
        entity or obligated person of a broker, dealer, 
        municipal securities dealer, or municipal advisor for 
        or in connection with municipal financial products, the 
        issuance of municipal securities, or of an investment 
        adviser to provide investment advisory services to or 
        on behalf of a municipal entity; and
            ``(10) the term `obligated person' means any 
        person, including an issuer of municipal securities, 
        who is either generally or through an enterprise, fund, 
        or account of such person, committed by contract or 
        other arrangement to support the payment of all or part 
        of the obligations on the municipal securities to be 
        sold in an offering of municipal securities.''.
    (f) Registered Securities Association.--Section 15A(b) of 
the Securities Exchange Act of 1934 (15 U.S.C. 78o-3(b)) is 
amended by adding at the end the following:
            ``(15) The rules of the association provide that 
        the association shall--
                    ``(A) request guidance from the Municipal 
                Securities Rulemaking Board in interpretation 
                of the rules of the Municipal Securities 
                Rulemaking Board; and
                    ``(B) provide information to the Municipal 
                Securities Rulemaking Board about the 
                enforcement actions and examinations of the 
                association under section 15B(b)(2)(E), so that 
                the Municipal Securities Rulemaking Board may--
                            ``(i) assist in such enforcement 
                        actions and examinations; and
                            ``(ii) evaluate the ongoing 
                        effectiveness of the rules of the 
                        Board.''.
    (g) Registration and Regulation of Brokers and Dealers.--
Section 15 of the Securities Exchange Act of 1934 is amended--
            (1) in subsection (b)(4), by inserting ``municipal 
        advisor,'' after ``municipal securities dealer'' each 
        place that term appears; and
            (2) in subsection (c), by inserting ``broker, 
        dealer, or'' before ``municipal securities dealer'' 
        each place that term appears.
    (h) Accounts and Records, Reports, Examinations of 
Exchanges, Members, and Others.--Section 17(a)(1) of the 
Securities Exchange Act of 1934 is amended by inserting 
``municipal advisor,'' after ``municipal securities dealer''.
    (i) Effective Date.--This section, and the amendments made 
by this section, shall take effect on October 1, 2010.

SEC. 976. GOVERNMENT ACCOUNTABILITY OFFICE STUDY OF INCREASED 
                    DISCLOSURE TO INVESTORS.

    (a) Study.--The Comptroller General of the United States 
shall conduct a study and review of the disclosure required to 
be made by issuers of municipal securities.
    (b) Subjects for Evaluation.--In conducting the study under 
subsection (a), the Comptroller General of the United States 
shall--
            (1) broadly describe--
                    (A) the size of the municipal securities 
                markets and the issuers and investors; and
                    (B) the disclosures provided by issuers to 
                investors;
            (2) compare the amount, frequency, and quality of 
        disclosures that issuers of municipal securities are 
        required by law to provide for the benefit of municipal 
        securities holders, including the amount of and 
        frequency of disclosures actually provided by issuers 
        of municipal securities, with the amount of and 
        frequency of disclosures that issuers of corporate 
        securities provide for the benefit of corporate 
        securities holders, taking into account the differences 
        between issuers of municipal securities and issuers of 
        corporate securities;
            (3) evaluate the costs and benefits to various 
        types of issuers of municipal securities of requiring 
        issuers of municipal bonds to provide additional 
        financial disclosures for the benefit of investors;
            (4) evaluate the potential benefit to investors 
        from additional financial disclosures by issuers of 
        municipal bonds; and
            (5) make recommendations relating to disclosure 
        requirements for municipal issuers, including the 
        advisability of the repeal or retention of section 
        15B(d) of the Securities Exchange Act of 1934 (15 
        U.S.C. 78o-4(d)) (commonly known as the ``Tower 
        Amendment'').
    (c) Report.--Not later than 24 months after the date of 
enactment of this Act, the Comptroller General of the United 
States shall submit a report to Congress on the results of the 
study conducted under subsection (a), including recommendations 
for how to improve disclosure by issuers of municipal 
securities.

SEC. 977. GOVERNMENT ACCOUNTABILITY OFFICE STUDY ON THE MUNICIPAL 
                    SECURITIES MARKETS.

    (a) Study.--The Comptroller General of the United States 
shall conduct a study of the municipal securities markets.
    (b) Report.--Not later than 18 months after the date of 
enactment of this Act, the Comptroller General of the United 
States shall submit a report to the Committee on Banking, 
Housing, and Urban Affairs of the Senate, and the Committee on 
Financial Services of the House of Representatives, with copies 
to the Special Committee on Aging of the Senate and the 
Commission, on the results of the study conducted under 
subsection (a), including--
            (1) an analysis of the mechanisms for trading, 
        quality of trade executions, market transparency, trade 
        reporting, price discovery, settlement clearing, and 
        credit enhancements;
            (2) the needs of the markets and investors and the 
        impact of recent innovations;
            (3) recommendations for how to improve the 
        transparency, efficiency, fairness, and liquidity of 
        trading in the municipal securities markets, including 
        with reference to items listed in paragraph (1); and
            (4) potential uses of derivatives in the municipal 
        securities markets.
    (c) Responses.--Not later than 180 days after receipt of 
the report required under subsection (b), the Commission shall 
submit a response to the Committee on Banking, Housing, and 
Urban Affairs of the Senate, and the Committee on Financial 
Services of the House of Representatives, with a copy to the 
Special Committee on Aging of the Senate, stating the actions 
the Commission has taken in response to the recommendations 
contained in such report.

SEC. 978. FUNDING FOR GOVERNMENTAL ACCOUNTING STANDARDS BOARD.

    (a) Amendment to the Securities Act of 1933.--Section 19 of 
the Securities Act of 1933 (15 U.S.C. 77s), as amended by 
section 912, is further amended by adding at the end the 
following:
    ``(g) Funding for the GASB.--
            ``(1) In general.--The Commission may, subject to 
        the limitations imposed by section 15B of the 
        Securities Exchange Act of 1934 (15 U.S.C. 78o-4), 
        require a national securities association registered 
        under the Securities Exchange Act of 1934 to 
        establish--
                    ``(A) a reasonable annual accounting 
                support fee to adequately fund the annual 
                budget of the Governmental Accounting Standards 
                Board (referred to in this subsection as the 
                `GASB'); and
                    ``(B) rules and procedures, in consultation 
                with the principal organizations representing 
                State governors, legislators, local elected 
                officials, and State and local finance 
                officers, to provide for the equitable 
                allocation, assessment, and collection of the 
                accounting support fee established under 
                subparagraph (A) from the members of the 
                association, and the remittance of all such 
                accounting support fees to the Financial 
                Accounting Foundation.
            ``(2) Annual budget.--For purposes of this 
        subsection, the annual budget of the GASB is the annual 
        budget reviewed and approved according to the internal 
        procedures of the Financial Accounting Foundation.
            ``(3) Use of funds.--Any fees or funds collected 
        under this subsection shall be used to support the 
        efforts of the GASB to establish standards of financial 
        accounting and reporting recognized as generally 
        accepted accounting principles applicable to State and 
        local governments of the United States.
            ``(4) Limitation on fee.--The annual accounting 
        support fees collected under this subsection for a 
        fiscal year shall not exceed the recoverable annual 
        budgeted expenses of the GASB (which may include 
        operating expenses, capital, and accrued items).
            ``(5) Rules of construction.--
                    ``(A) Fees not public monies.--Accounting 
                support fees collected under this subsection 
                and other receipts of the GASB shall not be 
                considered public monies of the United States.
                    ``(B) Limitation on authority of the 
                commission.--Nothing in this subsection shall 
                be construed to--
                            ``(i) provide the Commission or any 
                        national securities association direct 
                        or indirect oversight of the budget or 
                        technical agenda of the GASB; or
                            ``(ii) affect the setting of 
                        generally accepted accounting 
                        principles by the GASB.
                    ``(C) Noninterference with states.--Nothing 
                in this subsection shall be construed to impair 
                or limit the authority of a State or local 
                government to establish accounting and 
                financial reporting standards.''
    (b) Study of Funding for Governmental Accounting Standards 
Board.--
            (1) Study.--The Comptroller General of the United 
        States shall conduct a study that evaluates--
                    (A) the role and importance of the 
                Governmental Accounting Standards Board in the 
                municipal securities markets; and
                    (B) the manner and the level at which the 
                Governmental Accounting Standards Board has 
                been funded.
            (2) Consultation.--In conducting the study required 
        under paragraph (1), the Comptroller General shall 
        consult with the principal organizations representing 
        State governors, legislators, local elected officials, 
        and State and local finance officers.
            (3) Report.--Not later than 180 days after the date 
        of enactment of this Act, the Comptroller General 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 a report on 
        the study required under paragraph (1).

SEC. 979. COMMISSION OFFICE OF MUNICIPAL SECURITIES.

    (a) In General.--There shall be in the Commission an Office 
of Municipal Securities, which shall--
            (1) administer the rules of the Commission with 
        respect to the practices of municipal securities 
        brokers and dealers, municipal securities advisors, 
        municipal securities investors, and municipal 
        securities issuers; and
            (2) coordinate with the Municipal Securities 
        Rulemaking Board for rulemaking and enforcement actions 
        as required by law.
    (b) Director of the Office.--The head of the Office of 
Municipal Securities shall be the Director, who shall report to 
the Chairman.
    (c) Staffing.--
            (1) In general.--The Office of Municipal Securities 
        shall be staffed sufficiently to carry out the 
        requirements of this section.
            (2) Requirement.--The staff of the Office of 
        Municipal Securities shall include individuals with 
        knowledge of and expertise in municipal finance.

   Subtitle I--Public Company Accounting Oversight Board, Portfolio 
                      Margining, and Other Matters

SEC. 981. AUTHORITY TO SHARE CERTAIN INFORMATION WITH FOREIGN 
                    AUTHORITIES.

    (a) Definition.--Section 2(a) of the Sarbanes-Oxley Act of 
2002 (15 U.S.C. 7201(a)) is amended by adding at the end the 
following:
            ``(17) Foreign auditor oversight authority.--The 
        term `foreign auditor oversight authority' means any 
        governmental body or other entity empowered by a 
        foreign government to conduct inspections of public 
        accounting firms or otherwise to administer or enforce 
        laws related to the regulation of public accounting 
        firms.''.
    (b) Availability to Share Information.--Section 105(b)(5) 
of the Sarbanes-Oxley Act of 2002 (15 U.S.C. 7215(b)(5)) is 
amended by adding at the end the following:
                    ``(C) Availability to foreign oversight 
                authorities.--Without the loss of its status as 
                confidential and privileged in the hands of the 
                Board, all information referred to in 
                subparagraph (A) that relates to a public 
                accounting firm that a foreign government has 
                empowered a foreign auditor oversight authority 
                to inspect or otherwise enforce laws with 
                respect to, may, at the discretion of the 
                Board, be made available to the foreign auditor 
                oversight authority, if--
                            ``(i) the Board finds that it is 
                        necessary to accomplish the purposes of 
                        this Act or to protect investors;
                            ``(ii) the foreign auditor 
                        oversight authority provides--
                                    ``(I) such assurances of 
                                confidentiality as the Board 
                                may request;
                                    ``(II) a description of the 
                                applicable information systems 
                                and controls of the foreign 
                                auditor oversight authority; 
                                and
                                    ``(III) a description of 
                                the laws and regulations of the 
                                foreign government of the 
                                foreign auditor oversight 
                                authority that are relevant to 
                                information access; and
                            ``(iii) the Board determines that 
                        it is appropriate to share such 
                        information.''.
    (c) Conforming Amendment.--Section 105(b)(5)(A) of the 
Sarbanes-Oxley Act of 2002 (15 U.S.C. 7215(b)(5)(A)) is amended 
by striking ``subparagraph (B)'' and inserting ``subparagraphs 
(B) and (C)''.

SEC. 982. OVERSIGHT OF BROKERS AND DEALERS.

    (a) Definitions.--
            (1) Definitions amended.--Title I of the Sarbanes-
        Oxley Act of 2002 (15 U.S.C. 7201 et seq.) is amended 
        by adding at the end the following new section:

``SEC. 110. DEFINITIONS.

    ``For the purposes of this title, the following definitions 
shall apply:
            ``(1) Audit.--The term `audit' means an examination 
        of the financial statements, reports, documents, 
        procedures, controls, or notices of any issuer, broker, 
        or dealer by an independent public accounting firm in 
        accordance with the rules of the Board or the 
        Commission, for the purpose of expressing an opinion on 
        the financial statements or providing an audit report.
            ``(2) Audit report.--The term `audit report' means 
        a document, report, notice, or other record--
                    ``(A) prepared following an audit performed 
                for purposes of compliance by an issuer, 
                broker, or dealer with the requirements of the 
                securities laws; and
                    ``(B) in which a public accounting firm 
                either--
                            ``(i) sets forth the opinion of 
                        that firm regarding a financial 
                        statement, report, notice, or other 
                        document, procedures, or controls; or
                            ``(ii) asserts that no such opinion 
                        can be expressed.
            ``(3) Broker.--The term `broker' means a broker (as 
        such term is defined in section 3(a)(4) of the 
        Securities Exchange Act of 1934 (15 U.S.C. 78c(a)(4))) 
        that is required to file a balance sheet, income 
        statement, or other financial statement under section 
        17(e)(1)(A) of such Act (15 U.S.C. 78q(e)(1)(A)), where 
        such balance sheet, income statement, or financial 
        statement is required to be certified by a registered 
        public accounting firm.
            ``(4) Dealer.--The term `dealer' means a dealer (as 
        such term is defined in section 3(a)(5) of the 
        Securities Exchange Act of 1934 (15 U.S.C. 78c(a)(5))) 
        that is required to file a balance sheet, income 
        statement, or other financial statement under section 
        17(e)(1)(A) of such Act (15 U.S.C. 78q(e)(1)(A)), where 
        such balance sheet, income statement, or financial 
        statement is required to be certified by a registered 
        public accounting firm.
            ``(5) Professional standards.--The term 
        `professional standards' means--
                    ``(A) accounting principles that are--
                            ``(i) established by the standard 
                        setting body described in section 19(b) 
                        of the Securities Act of 1933, as 
                        amended by this Act, or prescribed by 
                        the Commission under section 19(a) of 
                        that Act (15 U.S.C. 17a(s)) or section 
                        13(b) of the Securities Exchange Act of 
                        1934 (15 U.S.C. 78a(m)); and
                            ``(ii) relevant to audit reports 
                        for particular issuers, brokers, or 
                        dealers, or dealt with in the quality 
                        control system of a particular 
                        registered public accounting firm; and
                    ``(B) auditing standards, standards for 
                attestation engagements, quality control 
                policies and procedures, ethical and competency 
                standards, and independence standards 
                (including rules implementing title II) that 
                the Board or the Commission determines--
                            ``(i) relate to the preparation or 
                        issuance of audit reports for issuers, 
                        brokers, or dealers; and
                            ``(ii) are established or adopted 
                        by the Board under section 103(a), or 
                        are promulgated as rules of the 
                        Commission.
            ``(6) Self-regulatory organization.--The term 
        `self-regulatory organization' has the same meaning as 
        in section 3(a) of the Securities Exchange Act of 1934 
        (15 U.S.C. 78c(a)).''.
            (2) Conforming amendment.--Section 2(a) of the 
        Sarbanes-Oxley Act of 2002 (15 U.S.C. 7201(a)) is 
        amended in the matter preceding paragraph (1), by 
        striking ``In this'' and inserting ``Except as 
        otherwise specifically provided in this Act, in this''.
    (b) Establishment and Administration of the Public Company 
Accounting Oversight Board.--Section 101 of the Sarbanes-Oxley 
Act of 2002 (15 U.S.C. 7211) is amended--
            (1) by striking ``issuers'' each place that term 
        appears and inserting ``issuers, brokers, and 
        dealers''; and
            (2) in subsection (a)--
                    (A) by striking ``public companies'' and 
                inserting ``companies''; and
                    (B) by striking ``for companies the 
                securities of which are sold to, and held by 
                and for, public investors''.
    (c) Registration With the Board.--Section 102 of the 
Sarbanes-Oxley Act of 2002 (15 U.S.C. 7212) is amended--
            (1) in subsection (a)--
                    (A) by striking ``Beginning 180'' and all 
                that follows through ``101(d), it'' and 
                inserting ``It''; and
                    (B) by striking ``issuer'' and inserting 
                ``issuer, broker, or dealer'';
            (2) in subsection (b)--
                    (A) in paragraph (2)(A), by striking 
                ``issuers'' and inserting ``issuers, brokers, 
                and dealers''; and
                    (B) by striking ``issuer'' each place that 
                term appears and inserting ``issuer, broker, or 
                dealer''.
    (d) Auditing and Independence.--Section 103(a) of the 
Sarbanes-Oxley Act of 2002 (15 U.S.C. 7213(a)) is amended--
            (1) in paragraph (1), by striking ``and such ethics 
        standards'' and inserting ``such ethics standards, and 
        such independence standards'';
            (2) in paragraph (2)(A)(iii), by striking 
        ``describe in each audit report'' and inserting ``in 
        each audit report for an issuer, describe''; and
            (3) in paragraph (2)(B)(i), by striking ``issuers'' 
        and inserting ``issuers, brokers, and dealers''.
    (e) Inspections of Registered Public Accounting Firms.--
            (1) Amendments.--Section 104(a) of the Sarbanes-
        Oxley Act of 2002 (15 U.S.C. 7214(a)) is amended--
                    (A) by striking ``The Board shall'' and 
                inserting the following:
            ``(1) Inspections generally.--The Board shall''; 
        and
                    (B) by adding at the end the following:
            ``(2) Inspections of audit reports for brokers and 
        dealers.--
                    ``(A) The Board may, by rule, conduct and 
                require a program of inspection in accordance 
                with paragraph (1), on a basis to be determined 
                by the Board, of registered public accounting 
                firms that provide one or more audit reports 
                for a broker or dealer. The Board, in 
                establishing such a program, may allow for 
                differentiation among classes of brokers and 
                dealers, as appropriate.
                    ``(B) If the Board determines to establish 
                a program of inspection pursuant to 
                subparagraph (A), the Board shall consider in 
                establishing any inspection schedules whether 
                differing schedules would be appropriate with 
                respect to registered public accounting firms 
                that issue audit reports only for one or more 
                brokers or dealers that do not receive, handle, 
                or hold customer securities or cash or are not 
                a member of the Securities Investor Protection 
                Corporation.
                    ``(C) Any rules of the Board pursuant to 
                this paragraph shall be subject to prior 
                approval by the Commission pursuant to section 
                107(b) before the rules become effective, 
                including an opportunity for public notice and 
                comment.
                    ``(D) Notwithstanding anything to the 
                contrary in section 102 of this Act, a public 
                accounting firm shall not be required to 
                register with the Board if the public 
                accounting firm is exempt from the inspection 
                program which may be established by the Board 
                under subparagraph (A).''.
            (2) Conforming amendment.--Section 17(e)(1)(A) of 
        the Securities Exchange Act of 1934 (15 U.S.C. 
        78q(e)(1)(A)) is amended by striking ``registered 
        public accounting firm'' and inserting ``independent 
        public accounting firm, or by a registered public 
        accounting firm if the firm is required to be 
        registered under the Sarbanes-Oxley Act of 2002,''.
    (f) Investigations and Disciplinary Proceedings.--Section 
105(c)(7)(B) of the Sarbanes-Oxley Act of 2002 (15 U.S.C. 
7215(c)(7)(B)) is amended--
            (1) in the subparagraph heading, by inserting ``, 
        broker, or dealer'' after ``issuer'';
            (2) by striking ``any issuer'' each place that term 
        appears and inserting ``any issuer, broker, or 
        dealer''; and
            (3) by striking ``an issuer under this subsection'' 
        and inserting ``a registered public accounting firm 
        under this subsection''.
    (g) Foreign Public Accounting Firms.--Section 106(a) of the 
Sarbanes-Oxley Act of 2002 (15 U.S.C. 7216(a)) is amended--
            (1) in paragraph (1), by striking ``issuer'' and 
        inserting ``issuer, broker, or dealer''; and
            (2) in paragraph (2), by striking ``issuers'' and 
        inserting ``issuers, brokers, or dealers''.
    (h) Funding.--Section 109 of the Sarbanes-Oxley Act of 2002 
(15 U.S.C. 7219) is amended--
            (1) in subsection (c)(2), by striking ``subsection 
        (i)'' and inserting ``subsection (j)'';
            (2) in subsection (d)--
                    (A) in paragraph (2), by striking 
                ``allowing for differentiation among classes of 
                issuers, as appropriate'' and inserting ``and 
                among brokers and dealers, in accordance with 
                subsection (h), and allowing for 
                differentiation among classes of issuers, 
                brokers and dealers, as appropriate''; and
                    (B) by adding at the end the following:
            ``(3) Brokers and dealers.--The Board shall begin 
        the allocation, assessment, and collection of fees 
        under paragraph (2) with respect to brokers and dealers 
        with the payment of support fees to fund the first full 
        fiscal year beginning after the date of enactment of 
        the Investor Protection and Securities Reform Act of 
        2010.'';
            (3) by redesignating subsections (h), (i), and (j) 
        as subsections (i), (j), and (k), respectively; and
            (4) by inserting after subsection (g) the 
        following:
    ``(h) Allocation of Accounting Support Fees Among Brokers 
and Dealers.--
            ``(1) Obligation to pay.--Each broker or dealer 
        shall pay to the Board the annual accounting support 
        fee allocated to such broker or dealer under this 
        section.
            ``(2) Allocation.--Any amount due from a broker or 
        dealer (or from a particular class of brokers and 
        dealers) under this section shall be allocated among 
        brokers and dealers and payable by the broker or dealer 
        (or the brokers and dealers in the particular class, as 
        applicable).
            ``(3) Proportionality.--The amount due from a 
        broker or dealer shall be in proportion to the net 
        capital of the broker or dealer (before or after any 
        adjustments), compared to the total net capital of all 
        brokers and dealers (before or after any adjustments), 
        in accordance with rules issued by the Board.''.
    (i) Referral of Investigations to a Self-regulatory 
Organization.--Section 105(b)(4)(B) of the Sarbanes-Oxley Act 
of 2002 (15 U.S.C. 7215(b)(4)(B)) is amended--
            (1) by redesignating clauses (ii) and (iii) as 
        clauses (iii) and (iv), respectively; and
            (2) by inserting after clause (i) the following:
                            ``(ii) to a self-regulatory 
                        organization, in the case of an 
                        investigation that concerns an audit 
                        report for a broker or dealer that is 
                        under the jurisdiction of such self-
                        regulatory organization;''.
    (j) Use of Documents Related to an Inspection or 
Investigation.--Section 105(b)(5)(B)(ii) of the Sarbanes-Oxley 
Act of 2002 (15 U.S.C. 7215(b)(5)(B)(ii)) is amended--
            (1) in subclause (III), by striking ``and'' at the 
        end;
            (2) in subclause (IV), by striking the comma and 
        inserting ``; and''; and
            (3) by inserting after subclause (IV) the 
        following:
                                    ``(V) a self-regulatory 
                                organization, with respect to 
                                an audit report for a broker or 
                                dealer that is under the 
                                jurisdiction of such self-
                                regulatory organization,''.

SEC. 983. PORTFOLIO MARGINING.

    (a) Advances.--Section 9(a)(1) of the Securities Investor 
Protection Act of 1970 (15 U.S.C. 78fff3(a)(1)) is amended by 
inserting ``or options on commodity futures contracts'' after 
``claim for securities''.
    (b) Definitions.--Section 16 of the Securities Investor 
Protection Act of 1970 (15 U.S.C. 78lll) is amended--
            (1) by striking paragraph (2) and inserting the 
        following:
            ``(2) Customer.--
                    ``(A) In general.--The term `customer' of a 
                debtor means any person (including any person 
                with whom the debtor deals as principal or 
                agent) who has a claim on account of securities 
                received, acquired, or held by the debtor in 
                the ordinary course of its business as a broker 
                or dealer from or for the securities accounts 
                of such person for safekeeping, with a view to 
                sale, to cover consummated sales, pursuant to 
                purchases, as collateral, security, or for 
                purposes of effecting transfer.
                    ``(B) Included persons.--The term 
                `customer' includes--
                            ``(i) any person who has deposited 
                        cash with the debtor for the purpose of 
                        purchasing securities;
                            ``(ii) any person who has a claim 
                        against the debtor for cash, 
                        securities, futures contracts, or 
                        options on futures contracts received, 
                        acquired, or held in a portfolio 
                        margining account carried as a 
                        securities account pursuant to a 
                        portfolio margining program approved by 
                        the Commission; and
                            ``(iii) any person who has a claim 
                        against the debtor arising out of sales 
                        or conversions of such securities.
                    ``(C) Excluded persons.--The term 
                `customer' does not include any person, to the 
                extent that--
                            ``(i) the claim of such person 
                        arises out of transactions with a 
                        foreign subsidiary of a member of SIPC; 
                        or
                            ``(ii) such person has a claim for 
                        cash or securities which by contract, 
                        agreement, or understanding, or by 
                        operation of law, is part of the 
                        capital of the debtor, or is 
                        subordinated to the claims of any or 
                        all creditors of the debtor, 
                        notwithstanding that some ground exists 
                        for declaring such contract, agreement, 
                        or understanding void or voidable in a 
                        suit between the claimant and the 
                        debtor.'';
            (2) in paragraph (4)--
                    (A) in subparagraph (C), by striking 
                ``and'' at the end;
                    (B) by redesignating subparagraph (D) as 
                subparagraph (E); and
                    (C) by inserting after subparagraph (C) the 
                following:
                    ``(D) in the case of a portfolio margining 
                account of a customer that is carried as a 
                securities account pursuant to a portfolio 
                margining program approved by the Commission, a 
                futures contract or an option on a futures 
                contract received, acquired, or held by or for 
                the account of a debtor from or for such 
                portfolio margining account, and the proceeds 
                thereof; and'';
            (3) in paragraph (9), in the matter following 
        subparagraph (L), by inserting after ``Such term'' the 
        following: ``includes revenues earned by a broker or 
        dealer in connection with a transaction in the 
        portfolio margining account of a customer carried as 
        securities accounts pursuant to a portfolio margining 
        program approved by the Commission. Such term''; and
            (4) in paragraph (11)--
                    (A) in subparagraph (A)--
                            (i) by striking ``filing date, 
                        all'' and all that follows through the 
                        end of the subparagraph and inserting 
                        the following: ``filing date--
                            ``(i) all securities positions of 
                        such customer (other than customer name 
                        securities reclaimed by such customer); 
                        and
                            ``(ii) all positions in futures 
                        contracts and options on futures 
                        contracts held in a portfolio margining 
                        account carried as a securities account 
                        pursuant to a portfolio margining 
                        program approved by the Commission, 
                        including all property collateralizing 
                        such positions, to the extent that such 
                        property is not otherwise included 
                        herein; minus''; and
                    (B) in the matter following subparagraph 
                (C), by striking ``In determining'' and 
                inserting the following: ``A claim for a 
                commodity futures contract received, acquired, 
                or held in a portfolio margining account 
                pursuant to a portfolio margining program 
                approved by the Commission or a claim for a 
                security futures contract, shall be deemed to 
                be a claim with respect to such contract as of 
                the filing date, and such claim shall be 
                treated as a claim for cash. In determining''.

SEC. 984. LOAN OR BORROWING OF SECURITIES.

    (a) Rulemaking Authority.--Section 10 of the Securities 
Exchange Act of 1934 (15 U.S.C. 78j) is amended by adding at 
the end the following:
    ``(c)(1) To effect, accept, or facilitate a transaction 
involving the loan or borrowing of securities in contravention 
of such rules and regulations as the Commission may prescribe 
as necessary or appropriate in the public interest or for the 
protection of investors.
    ``(2) Nothing in paragraph (1) may be construed to limit 
the authority of the appropriate Federal banking agency (as 
defined in section 3(q) of the Federal Deposit Insurance Act 
(12 U.S.C. 1813(q))), the National Credit Union Administration, 
or any other Federal department or agency having a 
responsibility under Federal law to prescribe rules or 
regulations restricting transactions involving the loan or 
borrowing of securities in order to protect the safety and 
soundness of a financial institution or to protect the 
financial system from systemic risk.''.
    (b) Rulemaking Required.--Not later than 2 years after the 
date of enactment of this Act, the Commission shall promulgate 
rules that are designed to increase the transparency of 
information available to brokers, dealers, and investors, with 
respect to the loan or borrowing of securities.

SEC. 985. TECHNICAL CORRECTIONS TO FEDERAL SECURITIES LAWS.

    (a) Securities Act of 1933.--The Securities Act of 1933 (15 
U.S.C. 77a et seq.) is amended--
            (1) in section 3(a)(4) (15 U.S.C. 77c(a)(4)), by 
        striking ``individual;'' and inserting ``individual,'';
            (2) in section 18 (15 U.S.C. 77r)--
                    (A) in subsection (b)(1)(C), by striking 
                ``is a security'' and inserting ``a security''; 
                and
                    (B) in subsection (c)(2)(B)(i), by striking 
                ``State, or'' and inserting ``State or'';
            (3) in section 19(d)(6)(A) (15 U.S.C. 
        77s(d)(6)(A)), by striking ``in paragraph (1) of (3)'' 
        and inserting ``in paragraph (1) or (3)''; and
            (4) in section 27A(c)(1)(B)(ii) (15 U.S.C. 77z-
        2(c)(1)(B)(ii)), by striking ``business entity;'' and 
        inserting ``business entity,''.
    (b) Securities Exchange Act of 1934.--The Securities 
Exchange Act of 1934 (15 U.S.C. 78a et seq.) is amended--
            (1) in section 2 (15 U.S.C. 78b), by striking 
        ``affected'' and inserting ``effected'';
            (2) in section 3 (15 U.S.C. 78c)--
                    (A) in subsection (a)(55)(A), by striking 
                ``section 3(a)(12) of the Securities Exchange 
                Act of 1934'' and inserting ``section 3(a)(12) 
                of this title''; and
                    (B) in subsection (g), by striking 
                ``company, account person, or entity'' and 
                inserting ``company, account, person, or 
                entity'';
            (3) in section 10A(i)(1)(B) (15 U.S.C. 78j-
        1(i)(1)(B))--
                    (A) in the subparagraph heading, by 
                striking ``minimus'' and inserting ``minimis''; 
                and
                    (B) in clause (i), by striking ``nonaudit'' 
                and inserting ``non-audit'';
            (4) in section 13(b)(1) (15 U.S.C. 78m(b)(1)), by 
        striking ``earning statement'' and inserting ``earnings 
        statement'';
            (5) in section 15 (15 U.S.C. 78o)--
                    (A) in subsection (b)(1)--
                            (i) in subparagraph (B), by 
                        striking ``The order granting'' and all 
                        that follows through ``from such 
                        membership.''; and
                            (ii) in the undesignated matter 
                        immediately following subparagraph (B), 
                        by inserting after the first sentence 
                        the following: ``The order granting 
                        registration shall not be effective 
                        until such broker or dealer has become 
                        a member of a registered securities 
                        association, or until such broker or 
                        dealer has become a member of a 
                        national securities exchange, if such 
                        broker or dealer effects transactions 
                        solely on that exchange, unless the 
                        Commission has exempted such broker or 
                        dealer, by rule or order, from such 
                        membership.'';
            (6) in section 15C(a)(2) (15 U.S.C. 78o-5(a)(2))--
                    (A) by redesignating clauses (i) and (ii) 
                as subparagraphs (A) and (B), respectively, and 
                adjusting the subparagraph margins accordingly;
                    (B) in subparagraph (B), as so 
                redesignated, by striking ``The order 
                granting'' and all that follows through ``from 
                such membership.''; and
                    (C) in the matter following subparagraph 
                (B), as so redesignated, by inserting after the 
                first sentence the following: ``The order 
                granting registration shall not be effective 
                until such government securities broker or 
                government securities dealer has become a 
                member of a national securities exchange 
                registered under section 6 of this title, or a 
                securities association registered under section 
                15A of this title, unless the Commission has 
                exempted such government securities broker or 
                government securities dealer, by rule or order, 
                from such membership.'';
            (7) in section 17(b)(1)(B) (15 U.S.C. 
        78q(b)(1)(B)), by striking ``15A(k) gives'' and 
        inserting ``15A(k), give''; and
            (8) in section 21C(c)(2) (15 U.S.C. 78u-3(c)(2)), 
        by striking ``paragraph (1) subsection'' and inserting 
        ``Paragraph (1)''.
    (c) Trust Indenture Act of 1939.--The Trust Indenture Act 
of 1939 (15 U.S.C. 77aaa et seq.) is amended--
            (1) in section 304(b) (15 U.S.C. 77ddd(b)), by 
        striking ``section 2 of such Act'' and inserting 
        ``section 2(a) of such Act''; and
            (2) in section 317(a)(1) (15 U.S.C. 77qqq(a)(1)), 
        by striking ``, in the'' and inserting ``in the''.
    (d) Investment Company Act of 1940.--The Investment Company 
Act of 1940 (15 U.S.C. 80a-1 et seq.) is amended--
            (1) in section 2(a)(19) (15 U.S.C. 80a-2(a)(19)), 
        in the matter following subparagraph (B)(vii)--
                    (A) by striking ``clause (vi)'' each place 
                that term appears and inserting ``clause 
                (vii)''; and
                    (B) in each of subparagraphs (A)(vi) and 
                (B)(vi), by adding ``and'' at the end of 
                subclause (III);
            (2) in section 9(b)(4)(B) (15 U.S.C. 80a-
        9(b)(4)(B)), by adding ``or'' after the semicolon at 
        the end;
            (3) in section 12(d)(1)(J) (15 U.S.C. 80a-
        12(d)(1)(J)), by striking ``any provision of this 
        subsection'' and inserting ``any provision of this 
        paragraph'';
            (4) in section 17(f) (15 U.S.C. 80a-17(f))--
                    (A) in paragraph (4), by striking ``No such 
                member'' and inserting ``No member of a 
                national securities exchange''; and
                    (B) in paragraph (6), by striking ``company 
                may serve'' and inserting ``company, may 
                serve''; and
            (5) in section 61(a)(3)(B)(iii) (15 U.S.C. 80a-
        60(a)(3)(B)(iii))--
                    (A) by striking ``paragraph (1) of section 
                205'' and inserting ``section 205(a)(1)''; and
                    (B) by striking ``clause (A) or (B) of that 
                section'' and inserting ``paragraph (1) or (2) 
                of section 205(b)''.
    (e) Investment Advisers Act of 1940.--The Investment 
Advisers Act of 1940 (15 U.S.C. 80b-1 et seq.) is amended--
            (1) in section 203 (15 U.S.C. 80b-3)--
                    (A) in subsection (c)(1)(A), by striking 
                ``principal business office and'' and inserting 
                ``principal office, principal place of 
                business, and''; and
                    (B) in subsection (k)(4)(B), in the matter 
                following clause (ii), by striking ``principal 
                place of business'' and inserting ``principal 
                office or place of business'';
            (2) in section 206(3) (15 U.S.C. 80b-6(3)), by 
        adding ``or'' after the semicolon at the end;
            (3) in section 213(a) (15 U.S.C. 80b-13(a)), by 
        striking ``principal place of business'' and inserting 
        ``principal office or place of business''; and
            (4) in section 222 (15 U.S.C. 80b-18a), by striking 
        ``principal place of business'' each place that term 
        appears and inserting ``principal office and place of 
        business''.

SEC. 986. CONFORMING AMENDMENTS RELATING TO REPEAL OF THE PUBLIC 
                    UTILITY HOLDING COMPANY ACT OF 1935.

    (a) Securities Exchange Act of 1934.--The Securities 
Exchange Act of 1934 (15 U.S.C. 78 et seq.) is amended--
            (1) in section 3(a)(47) (15 U.S.C. 78c(a)(47)), by 
        striking ``the Public Utility Holding Company Act of 
        1935 (15 U.S.C. 79a et seq.),'';
            (2) in section 12(k) (15 U.S.C. 78l(k)), by 
        amending paragraph (7) to read as follows:    
            ``(7) Definition.--For purposes of this subsection, 
        the term `emergency' means--
                    ``(A) a major market disturbance 
                characterized by or constituting--
                            ``(i) sudden and excessive 
                        fluctuations of securities prices 
                        generally, or a substantial threat 
                        thereof, that threaten fair and orderly 
                        markets; or
                            ``(ii) a substantial disruption of 
                        the safe or efficient operation of the 
                        national system for clearance and 
                        settlement of transactions in 
                        securities, or a substantial threat 
                        thereof; or
                    ``(B) a major disturbance that 
                substantially disrupts, or threatens to 
                substantially disrupt--
                            ``(i) the functioning of securities 
                        markets, investment companies, or any 
                        other significant portion or segment of 
                        the securities markets; or
                            ``(ii) the transmission or 
                        processing of securities 
                        transactions.''; and
            (3) in section 21(h)(2) (15 U.S.C. 78u(h)(2)), by 
        striking ``section 18(c) of the Public Utility Holding 
        Company Act of 1935,''.
    (b) Trust Indenture Act of 1939.--The Trust Indenture Act 
of 1939 (15 U.S.C. 77aaa et seq.) is amended--
            (1) in section 303 (15 U.S.C. 77ccc), by striking 
        paragraph (17) and inserting the following:
            ``(17) The terms `Securities Act of 1933' and 
        `Securities Exchange Act of 1934' shall be deemed to 
        refer, respectively, to such Acts, as amended, whether 
        amended prior to or after the enactment of this 
        title.'';
            (2) in section 308 (15 U.S.C. 77hhh), by striking 
        ``Securities Act of 1933, the Securities Exchange Act 
        of 1934, or the Public Utility Holding Company Act of 
        1935'' each place that term appears and inserting 
        ``Securities Act of 1933 or the Securities Exchange Act 
        of 1934'';
            (3) in section 310 (15 U.S.C. 77jjj), by striking 
        subsection (c);
            (4) in section 311 (15 U.S.C. 77kkk), by striking 
        subsection (c);
            (5) in section 323(b) (15 U.S.C. 77www(b)), by 
        striking ``Securities Act of 1933, or the Securities 
        Exchange Act of 1934, or the Public Utility Holding 
        Company Act of 1935'' and inserting ``Securities Act of 
        1933 or the Securities Exchange Act of 1934''; and
            (6) in section 326 (15 U.S.C. 77zzz), by striking 
        ``Securities Act of 1933, or the Securities Exchange 
        Act of 1934, or the Public Utility Holding Company Act 
        of 1935,'' and inserting ``Securities Act of 1933 or 
        the Securities Exchange Act of 1934''.
    (c) Investment Company Act of 1940.--The Investment Company 
Act of 1940 (15 U.S.C. 80a-1 et seq.) is amended--
            (1) in section 2(a)(44) (15 U.S.C. 80a-2(a)(44)), 
        by striking ```Public Utility Holding Company Act of 
        1935','';
            (2) in section 3(c) (15 U.S.C. 80a-3(c)), by 
        striking paragraph (8) and inserting the following:
            ``(8) [Repealed]'';
            (3) in section 38(b) (15 U.S.C. 80a-37(b)), by 
        striking ``the Public Utility Holding Company Act of 
        1935,''; and
            (4) in section 50 (15 U.S.C. 80a-49), by striking 
        ``the Public Utility Holding Company Act of 1935,''.
    (d) Investment Advisers Act of 1940.--Section 202(a)(21) of 
the Investment Advisers Act of 1940 (15 U.S.C. 80b-2(a)(21)) is 
amended by striking ```Public Utility Holding Company Act of 
1935',''.

SEC. 987. AMENDMENT TO DEFINITION OF MATERIAL LOSS AND NONMATERIAL 
                    LOSSES TO THE DEPOSIT INSURANCE FUND FOR PURPOSES 
                    OF INSPECTOR GENERAL REVIEWS.

    (a) In General.--Section 38(k) of the Federal Deposit 
Insurance Act (U.S.C. 1831o(k)) is amended--
            (1) in paragraph (2), by striking subparagraph (B) 
        and inserting the following:
                    ``(B) Material loss defined.--The term 
                `material loss' means any estimated loss in 
                excess of--
                            ``(i) $200,000,000, if the loss 
                        occurs during the period beginning on 
                        January 1, 2010, and ending on December 
                        31, 2011;
                            ``(ii) $150,000,000, if the loss 
                        occurs during the period beginning on 
                        January 1, 2012, and ending on December 
                        31, 2013; and
                            ``(iii) $50,000,000, if the loss 
                        occurs on or after January 1, 2014, 
                        provided that if the inspector general 
                        of a Federal banking agency certifies 
                        to the Committee on Banking, Housing, 
                        and Urban Affairs of the Senate and the 
                        Committee on Financial Services of the 
                        House of Representatives that the 
                        number of projected failures of 
                        depository institutions that would 
                        require material loss reviews for the 
                        following 12 months will be greater 
                        than 30 and would hinder the 
                        effectiveness of its oversight 
                        functions, then the definition of 
                        `material loss' shall be $75,000,000 
                        for a duration of 1 year from the date 
                        of the certification.'';
            (2) in paragraph (4)(A) by striking ``the report'' 
        and inserting ``any report on losses required under 
        this subsection,'';
            (3) by striking paragraph (6);
            (4) by redesignating paragraph (5) as paragraph 
        (6); and
            (5) by inserting after paragraph (4) the following:
            ``(5) Losses that are not material.--
                    ``(A) Semiannual report.--For the 6-month 
                period ending on March 31, 2010, and each 6-
                month period thereafter, the Inspector General 
                of each Federal banking agency shall--
                            ``(i) identify losses that the 
                        Inspector General estimates have been 
                        incurred by the Deposit Insurance Fund 
                        during that 6-month period, with 
                        respect to the insured depository 
                        institutions supervised by the Federal 
                        banking agency;
                            ``(ii) for each loss incurred by 
                        the Deposit Insurance Fund that is not 
                        a material loss, determine--
                                    ``(I) the grounds 
                                identified by the Federal 
                                banking agency or State bank 
                                supervisor for appointing the 
                                Corporation as receiver under 
                                section 11(c)(5); and
                                    ``(II) whether any unusual 
                                circumstances exist that might 
                                warrant an in-depth review of 
                                the loss; and
                            ``(iii) prepare and submit a 
                        written report to the appropriate 
                        Federal banking agency and to Congress 
                        on the results of any determination by 
                        the Inspector General, including--
                                    ``(I) an identification of 
                                any loss that warrants an in-
                                depth review, together with the 
                                reasons why such review is 
                                warranted, or, if the Inspector 
                                General determines that no 
                                review is warranted, an 
                                explanation of such 
                                determination; and
                                    ``(II) for each loss 
                                identified under subclause (I) 
                                that warrants an in-depth 
                                review, the date by which such 
                                review, and a report on such 
                                review prepared in a manner 
                                consistent with reports under 
                                paragraph (1)(A), will be 
                                completed and submitted to the 
                                Federal banking agency and 
                                Congress.
                    ``(B) Deadline for semiannual report.--The 
                Inspector General of each Federal banking 
                agency shall--
                            ``(i) submit each report required 
                        under paragraph (A) expeditiously, and 
                        not later than 90 days after the end of 
                        the 6-month period covered by the 
                        report; and
                            ``(ii) provide a copy of the report 
                        required under paragraph (A) to any 
                        Member of Congress, upon request.''.
    (b) Technical and Conforming Amendment.--The heading for 
subsection (k) of section 38 of the Federal Deposit Insurance 
Act (U.S.C. 1831o(k)) is amended to read as follows:
    ``(k) Reviews Required When Deposit Insurance Fund Incurs 
Losses.--''.

SEC. 988. AMENDMENT TO DEFINITION OF MATERIAL LOSS AND NONMATERIAL 
                    LOSSES TO THE NATIONAL CREDIT UNION SHARE INSURANCE 
                    FUND FOR PURPOSES OF INSPECTOR GENERAL REVIEWS.

    (a) In General.--Section 216(j) of the Federal Credit Union 
Act (12 U.S.C. 1790d(j)) is amended to read as follows:
    ``(j) Reviews Required When Share Insurance Fund 
Experiences Losses.--
            ``(1) In general.--If the Fund incurs a material 
        loss with respect to an insured credit union, the 
        Inspector General of the Board shall--
                    ``(A) submit to the Board a written report 
                reviewing the supervision of the credit union 
                by the Administration (including the 
                implementation of this section by the 
                Administration), which shall include--
                            ``(i) a description of the reasons 
                        why the problems of the credit union 
                        resulted in a material loss to the 
                        Fund; and
                            ``(ii) recommendations for 
                        preventing any such loss in the future; 
                        and
                    ``(B) submit a copy of the report under 
                subparagraph (A) to--
                            ``(i) the Comptroller General of 
                        the United States;
                            ``(ii) the Corporation;
                            ``(iii) in the case of a report 
                        relating to a State credit union, the 
                        appropriate State supervisor; and
                            ``(iv) to any Member of Congress, 
                        upon request.
            ``(2) Material loss defined.--For purposes of 
        determining whether the Fund has incurred a material 
        loss with respect to an insured credit union, a loss is 
        material if it exceeds the sum of--
                    ``(A) $25,000,000; and
                    ``(B) an amount equal to 10 percent of the 
                total assets of the credit union on the date on 
                which the Board initiated assistance under 
                section 208 or was appointed liquidating agent.
            ``(3) Public disclosure required.--
                    ``(A) In general.--The Board shall disclose 
                a report under this subsection, upon request 
                under section 552 of title 5, United States 
                Code, without excising--
                            ``(i) any portion under section 
                        552(b)(5) of title 5, United States 
                        Code; or
                            ``(ii) any information about the 
                        insured credit union (other than trade 
                        secrets) under section 552(b)(8) of 
                        title 5, United States Code.
                    ``(B) Rule of construction.--Subparagraph 
                (A) may not be construed as requiring the 
                agency to disclose the name of any customer of 
                the insured credit union (other than an 
                institution-affiliated party), or information 
                from which the identity of such customer could 
                reasonably be ascertained.
            ``(4) Losses that are not material.--
                    ``(A) Semiannual report.--For the 6-month 
                period ending on March 31, 2010, and each 6-
                month period thereafter, the Inspector General 
                of the Board shall--
                            ``(i) identify any losses that the 
                        Inspector General estimates were 
                        incurred by the Fund during such 6-
                        month period, with respect to insured 
                        credit unions;
                            ``(ii) for each loss to the Fund 
                        that is not a material loss, 
                        determine--
                                    ``(I) the grounds 
                                identified by the Board or the 
                                State official having 
                                jurisdiction over a State 
                                credit union for appointing the 
                                Board as the liquidating agent 
                                for any Federal or State credit 
                                union; and
                                    ``(II) whether any unusual 
                                circumstances exist that might 
                                warrant an in-depth review of 
                                the loss; and
                            ``(iii) prepare and submit a 
                        written report to the Board and to 
                        Congress on the results of the 
                        determinations of the Inspector General 
                        that includes--
                                    ``(I) an identification of 
                                any loss that warrants an in-
                                depth review, and the reasons 
                                such review is warranted, or if 
                                the Inspector General 
                                determines that no review is 
                                warranted, an explanation of 
                                such determination; and
                                    ``(II) for each loss 
                                identified in subclause (I) 
                                that warrants an in-depth 
                                review, the date by which such 
                                review, and a report on the 
                                review prepared in a manner 
                                consistent with reports under 
                                paragraph (1)(A), will be 
                                completed.
                    ``(B) Deadline for semiannual report.--The 
                Inspector General of the Board shall--
                            ``(i) submit each report required 
                        under subparagraph (A) expeditiously, 
                        and not later than 90 days after the 
                        end of the 6-month period covered by 
                        the report; and
                            ``(ii) provide a copy of the report 
                        required under subparagraph (A) to any 
                        Member of Congress, upon request.
            ``(5) GAO review.--The Comptroller General of the 
        United States shall, under such conditions as the 
        Comptroller General determines to be appropriate--
                    ``(A) review each report made under 
                paragraph (1), including the extent to which 
                the Inspector General of the Board complied 
                with the requirements under section 8L of the 
                Inspector General Act of 1978 (5 U.S.C. App.) 
                with respect to each such report; and
                    ``(B) recommend improvements to the 
                supervision of insured credit unions (including 
                improvements relating to the implementation of 
                this section).''.

SEC. 989. GOVERNMENT ACCOUNTABILITY OFFICE STUDY ON PROPRIETARY 
                    TRADING.

    (a) Definitions.--In this section--
            (1) the term ``covered entity'' means--
                    (A) an insured depository institution, an 
                affiliate of an insured depository institution, 
                a bank holding company, a financial holding 
                company, or a subsidiary of a bank holding 
                company or a financial holding company, as 
                those terms are defined in the Bank Holding 
                Company Act of 1956 (12 U.S.C. 1841 et seq.); 
                and
                    (B) any other entity, as the Comptroller 
                General of the United States may determine; and
            (2) the term ``proprietary trading'' means the act 
        of a covered entity investing as a principal in 
        securities, commodities, derivatives, hedge funds, 
        private equity firms, or such other financial products 
        or entities as the Comptroller General may determine.
    (b) Study.--
            (1) In general.--The Comptroller General of the 
        United States shall conduct a study regarding the risks 
        and conflicts associated with proprietary trading by 
        and within covered entities, including an evaluation 
        of--
                    (A) whether proprietary trading presents a 
                material systemic risk to the stability of the 
                United States financial system, and if so, the 
                costs and benefits of options for mitigating 
                such systemic risk;
                    (B) whether proprietary trading presents 
                material risks to the safety and soundness of 
                the covered entities that engage in such 
                activities, and if so, the costs and benefits 
                of options for mitigating such risks;
                    (C) whether proprietary trading presents 
                material conflicts of interest between covered 
                entities that engage in proprietary trading and 
                the clients of the institutions who use the 
                firm to execute trades or who rely on the firm 
                to manage assets, and if so, the costs and 
                benefits of options for mitigating such 
                conflicts of interest;
                    (D) whether adequate disclosure regarding 
                the risks and conflicts of proprietary trading 
                is provided to the depositors, trading and 
                asset management clients, and investors of 
                covered entities that engage in proprietary 
                trading, and if not, the costs and benefits of 
                options for the improvement of such disclosure; 
                and
                    (E) whether the banking, securities, and 
                commodities regulators of institutions that 
                engage in proprietary trading have in place 
                adequate systems and controls to monitor and 
                contain any risks and conflicts of interest 
                related to proprietary trading, and if not, the 
                costs and benefits of options for the 
                improvement of such systems and controls.
            (2) Considerations.--In carrying out the study 
        required under paragraph (1), the Comptroller General 
        shall consider--
                    (A) current practice relating to 
                proprietary trading;
                    (B) the advisability of a complete ban on 
                proprietary trading;
                    (C) limitations on the scope of activities 
                that covered entities may engage in with 
                respect to proprietary trading;
                    (D) the advisability of additional capital 
                requirements for covered entities that engage 
                in proprietary trading;
                    (E) enhanced restrictions on transactions 
                between affiliates related to proprietary 
                trading;
                    (F) enhanced accounting disclosures 
                relating to proprietary trading;
                    (G) enhanced public disclosure relating to 
                proprietary trading; and
                    (H) any other options the Comptroller 
                General deems appropriate.
    (c) Report to Congress.--Not later than 15 months after the 
date of enactment of this Act, the Comptroller General shall 
submit a report to Congress on the results of the study 
conducted under subsection (b).
    (d) Access by Comptroller General.--For purposes of 
conducting the study required under subsection (b), the 
Comptroller General shall have access, upon request, to any 
information, data, schedules, books, accounts, financial 
records, reports, files, electronic communications, or other 
papers, things, or property belonging to or in use by a covered 
entity that engages in proprietary trading, and to the 
officers, directors, employees, independent public accountants, 
financial advisors, staff, and agents and representatives of a 
covered entity (as related to the activities of the agent or 
representative on behalf of the covered entity), at such 
reasonable times as the Comptroller General may request. The 
Comptroller General may make and retain copies of books, 
records, accounts, and other records, as the Comptroller 
General deems appropriate.
    (e) Confidentiality of Reports.--
            (1) In general.--Except as provided in paragraph 
        (2), the Comptroller General may not disclose 
        information regarding--
                    (A) any proprietary trading activity of a 
                covered entity, unless such information is 
                disclosed at a level of generality that does 
                not reveal the investment or trading position 
                or strategy of the covered entity for any 
                specific security, commodity, derivative, or 
                other investment or financial product; or
                    (B) any individual interviewed by the 
                Comptroller General for purposes of the study 
                under subsection (b), unless such information 
                is disclosed at a level of generality that does 
                not reveal--
                            (i) the name of or identifying 
                        details relating to such individual; or
                            (ii) in the case of an individual 
                        who is an employee of a third party 
                        that provides professional services to 
                        a covered entity believed to be engaged 
                        in proprietary trading, the name of or 
                        any identifying details relating to 
                        such third party.
            (2) Exceptions.--The Comptroller General may 
        disclose the information described in paragraph (1)--
                    (A) to a department, agency, or official of 
                the Federal Government, for official use, upon 
                request;
                    (B) to a committee of Congress, upon 
                request; and
                    (C) to a court, upon an order of such 
                court.

SEC. 989A. SENIOR INVESTOR PROTECTIONS.

    (a) Definitions.--As used in this section--
            (1) the term ``eligible entity'' means--
                    (A) a securities commission (or any agency 
                or office performing like functions) of a State 
                that the Office determines has adopted rules on 
                the appropriate use of designations in the 
                offer or sale of securities or the provision of 
                investment advice that meet or exceed the 
                minimum requirements of the NASAA Model Rule on 
                the Use of Senior-Specific Certifications and 
                Professional Designations (or any successor 
                thereto);
                    (B) the insurance commission (or any agency 
                or office performing like functions) of any 
                State that the Office determines has--
                            (i) adopted rules on the 
                        appropriate use of designations in the 
                        sale of insurance products that, to the 
                        extent practicable, conform to the 
                        minimum requirements of the National 
                        Association of Insurance Commissioners 
                        Model Regulation on the Use of Senior-
                        Specific Certifications and 
                        Professional Designations in the Sale 
                        of Life Insurance and Annuities (or any 
                        successor thereto); and
                            (ii) adopted rules with respect to 
                        fiduciary or suitability requirements 
                        in the sale of annuities that meet or 
                        exceed the minimum requirements 
                        established by the Suitability in 
                        Annuity Transactions Model Regulation 
                        of the National Association of 
                        Insurance Commissioners (or any 
                        successor thereto); or
                    (C) a consumer protection agency of any 
                State, if--
                            (i) the securities commission (or 
                        any agency or office performing like 
                        functions) of the State is eligible 
                        under subparagraph (A); or
                            (ii) the insurance commission (or 
                        any agency or office performing like 
                        functions) of the State is eligible 
                        under subparagraph (B);
            (2) the term ``financial product'' means a 
        security, an insurance product (including an insurance 
        product that pays a return, whether fixed or variable), 
        a bank product, and a loan product;
            (3) the term ``misleading designation''--
                    (A) means a certification, professional 
                designation, or other purported credential that 
                indicates or implies that a salesperson or 
                adviser has special certification or training 
                in advising or servicing seniors; and
                    (B) does not include a certification, 
                professional designation, license, or other 
                credential that--
                            (i) was issued by or obtained from 
                        an academic institution having regional 
                        accreditation;
                            (ii) meets the standards for 
                        certifications and professional 
                        designations outlined by the NASAA 
                        Model Rule on the Use of Senior-
                        Specific Certifications and 
                        Professional Designations (or any 
                        successor thereto) or by the Model 
                        Regulations on the Use of Senior-
                        Specific Certifications and 
                        Professional Designations in the Sale 
                        of Life Insurance and Annuities, 
                        adopted by the National Association of 
                        Insurance Commissioners (or any 
                        successor thereto); or
                            (iii) was issued by or obtained 
                        from a State;
            (4) the term ``misleading or fraudulent marketing'' 
        means the use of a misleading designation by a person 
        that sells to or advises a senior in connection with 
        the sale of a financial product;
            (5) the term ``NASAA'' means the North American 
        Securities Administrators Association;
            (6) the term ``Office'' means the Office of 
        Financial Literacy of the Bureau;
            (7) the term ``senior'' means any individual who 
        has attained the age of 62 years or older; and
            (8) the term ``State'' has the same meaning as in 
        section 3 of the Securities Exchange Act of 1934 (15 
        U.S.C. 78c(a)).
    (b) Grants to States for Enhanced Protection of Seniors 
From Being Misled by False Designations.--The Office shall 
establish a program under which the Office may make grants to 
States or eligible entities--
            (1) to hire staff to identify, investigate, and 
        prosecute (through civil, administrative, or criminal 
        enforcement actions) cases involving misleading or 
        fraudulent marketing;
            (2) to fund technology, equipment, and training for 
        regulators, prosecutors, and law enforcement officers, 
        in order to identify salespersons and advisers who 
        target seniors through the use of misleading 
        designations;
            (3) to fund technology, equipment, and training for 
        prosecutors to increase the successful prosecution of 
        salespersons and advisers who target seniors with the 
        use of misleading designations;
            (4) to provide educational materials and training 
        to regulators on the appropriateness of the use of 
        designations by salespersons and advisers in connection 
        with the sale and marketing of financial products;
            (5) to provide educational materials and training 
        to seniors to increase awareness and understanding of 
        misleading or fraudulent marketing;
            (6) to develop comprehensive plans to combat 
        misleading or fraudulent marketing of financial 
        products to seniors; and
            (7) to enhance provisions of State law to provide 
        protection for seniors against misleading or fraudulent 
        marketing.
    (c) Applications.--A State or eligible entity desiring a 
grant under this section shall submit an application to the 
Office, in such form and in such a manner as the Office may 
determine, that includes--
            (1) a proposal for activities to protect seniors 
        from misleading or fraudulent marketing that are 
        proposed to be funded using a grant under this section, 
        including--
                    (A) an identification of the scope of the 
                problem of misleading or fraudulent marketing 
                in the State;
                    (B) a description of how the proposed 
                activities would--
                            (i) protect seniors from misleading 
                        or fraudulent marketing in the sale of 
                        financial products, including by 
                        proactively identifying victims of 
                        misleading and fraudulent marketing who 
                        are seniors;
                            (ii) assist in the investigation 
                        and prosecution of those using 
                        misleading or fraudulent marketing; and
                            (iii) discourage and reduce cases 
                        of misleading or fraudulent marketing; 
                        and
                    (C) a description of how the proposed 
                activities would be coordinated with other 
                State efforts; and
            (2) any other information, as the Office determines 
        is appropriate.
    (d) Performance Objectives and Reporting Requirements.--The 
Office may establish such performance objectives and reporting 
requirements for States and eligible entities receiving a grant 
under this section as the Office determines are necessary to 
carry out and assess the effectiveness of the program under 
this section.
    (e) Maximum Amount.--The amount of a grant under this 
section may not exceed--
            (1) $500,000 for each of 3 consecutive fiscal 
        years, if the recipient is a State, or an eligible 
        entity of a State, that has adopted rules--
                    (A) on the appropriate use of designations 
                in the offer or sale of securities or 
                investment advice that meet or exceed the 
                minimum requirements of the NASAA Model Rule on 
                the Use of Senior-Specific Certifications and 
                Professional Designations (or any successor 
                thereto);
                    (B) on the appropriate use of designations 
                in the sale of insurance products that, to the 
                extent practicable, conform to the minimum 
                requirements of the National Association of 
                Insurance Commissioners Model Regulation on the 
                Use of Senior-Specific Certifications and 
                Professional Designations in the Sale of Life 
                Insurance and Annuities (or any successor 
                thereto); and
                    (C) with respect to fiduciary or 
                suitability requirements in the sale of 
                annuities that meet or exceed the minimum 
                requirements established by the Suitability in 
                Annuity Transactions Model Regulation of the 
                National Association of Insurance Commissioners 
                (or any successor thereto); and
            (2) $100,000 for each of 3 consecutive fiscal 
        years, if the recipient is a State, or an eligible 
        entity of a State, that has adopted--
                    (A) rules on the appropriate use of 
                designations in the offer or sale of securities 
                or investment advice that meet or exceed the 
                minimum requirements of the NASAA Model Rule on 
                the Use of Senior-Specific Certifications and 
                Professional Designations (or any successor 
                thereto); or
                    (B) rules--
                            (i) on the appropriate use of 
                        designations in the sale of insurance 
                        products that, to the extent 
                        practicable, conform to the minimum 
                        requirements of the National 
                        Association of Insurance Commissioners 
                        Model Regulation on the Use of Senior-
                        Specific Certifications and 
                        Professional Designations in the Sale 
                        of Life Insurance and Annuities (or any 
                        successor thereto); and
                            (ii) with respect to fiduciary or 
                        suitability requirements in the sale of 
                        annuities that meet or exceed the 
                        minimum requirements established by the 
                        Suitability in Annuity Transactions 
                        Model Regulation of the National 
                        Association of Insurance Commissioners 
                        (or any successor thereto).
    (f) Subgrants.--A State or eligible entity that receives a 
grant under this section may make a subgrant, as the State or 
eligible entity determines is necessary to carry out the 
activities funded using a grant under this section.
    (g) Reapplication.--A State or eligible entity that 
receives a grant under this section may reapply for a grant 
under this section, notwithstanding the limitations on grant 
amounts under subsection (e).
    (h) Authorization of Appropriations.--There are authorized 
to be appropriated to carry out this section, $8,000,000 for 
each of fiscal years 2011 through 2015.

SEC. 989B. DESIGNATED FEDERAL ENTITY INSPECTORS GENERAL INDEPENDENCE.

    Section 8G of the Inspector General Act of 1978 (5 U.S.C. 
App.) is amended--
            (1) in subsection (a)(4)--
                    (A) in the matter preceding subparagraph 
                (A), by inserting ``the board or commission of 
                the designated Federal entity, or in the event 
                the designated Federal entity does not have a 
                board or commission,'' after ``means'';
                    (B) in subparagraph (A), by striking 
                ``and'' after the semicolon; and
                    (C) by adding after subparagraph (B) the 
                following:
                    ``(C) with respect to the Federal Labor 
                Relations Authority, such term means the 
                members of the Authority (described under 
                section 7104 of title 5, United States Code);
                    ``(D) with respect to the National Archives 
                and Records Administration, such term means the 
                Archivist of the United States;
                    ``(E) with respect to the National Credit 
                Union Administration, such term means the 
                National Credit Union Administration Board 
                (described under section 102 of the Federal 
                Credit Union Act (12 U.S.C. 1752a));
                    ``(F) with respect to the National 
                Endowment of the Arts, such term means the 
                National Council on the Arts;
                    ``(G) with respect to the National 
                Endowment for the Humanities, such term means 
                the National Council on the Humanities; and
                    ``(H) with respect to the Peace Corps, such 
                term means the Director of the Peace Corps;''; 
                and
            (2) in subsection (h), by inserting ``if the 
        designated Federal entity is not a board or commission, 
        include'' after ``designated Federal entities and''.

SEC. 989C. STRENGTHENING INSPECTOR GENERAL ACCOUNTABILITY.

    Section 5(a) of the Inspector General Act of 1978 (5 U.S.C. 
App.) is amended--
            (1) in paragraph (12), by striking ``and'' after 
        the semicolon;
            (2) in paragraph (13), by striking the period and 
        inserting a semicolon; and
            (3) by adding at the end the following:
            ``(14)(A) an appendix containing the results of any 
        peer review conducted by another Office of Inspector 
        General during the reporting period; or
            ``(B) if no peer review was conducted within that 
        reporting period, a statement identifying the date of 
        the last peer review conducted by another Office of 
        Inspector General;
            ``(15) a list of any outstanding recommendations 
        from any peer review conducted by another Office of 
        Inspector General that have not been fully implemented, 
        including a statement describing the status of the 
        implementation and why implementation is not complete; 
        and
            ``(16) a list of any peer reviews conducted by the 
        Inspector General of another Office of the Inspector 
        General during the reporting period, including a list 
        of any outstanding recommendations made from any 
        previous peer review (including any peer review 
        conducted before the reporting period) that remain 
        outstanding or have not been fully implemented.''.

SEC. 989D. REMOVAL OF INSPECTORS GENERAL OF DESIGNATED FEDERAL 
                    ENTITIES.

    Section 8G(e) of the Inspector General Act of 1978 (5 
U.S.C. App.) is amended--
            (1) by redesignating the sentences following 
        ``(e)'' as paragraph (2); and
            (2) by striking ``(e)'' and inserting the 
        following:
    ``(e)(1) In the case of a designated Federal entity for 
which a board or commission is the head of the designated 
Federal entity, a removal under this subsection may only be 
made upon the written concurrence of a \2/3\ majority of the 
board or commission.''.

SEC. 989E. ADDITIONAL OVERSIGHT OF FINANCIAL REGULATORY SYSTEM.

    (a) Council of Inspectors General on Financial Oversight.--
            (1) Establishment and membership.--There is 
        established a Council of Inspectors General on 
        Financial Oversight (in this section referred to as the 
        ``Council of Inspectors General'') chaired by the 
        Inspector General of the Department of the Treasury and 
        composed of the inspectors general of the following:
                    (A) The Board of Governors of the Federal 
                Reserve System.
                    (B) The Commodity Futures Trading 
                Commission.
                    (C) The Department of Housing and Urban 
                Development.
                    (D) The Department of the Treasury.
                    (E) The Federal Deposit Insurance 
                Corporation.
                    (F) The Federal Housing Finance Agency.
                    (G) The National Credit Union 
                Administration.
                    (H) The Securities and Exchange Commission.
                    (I) The Troubled Asset Relief Program 
                (until the termination of the authority of the 
                Special Inspector General for such program 
                under section 121(k) of the Emergency Economic 
                Stabilization Act of 2008 (12 U.S.C. 5231(k))).
            (2) Duties.--
                    (A) Meetings.--The Council of Inspectors 
                General shall meet not less than once each 
                quarter, or more frequently if the chair 
                considers it appropriate, to facilitate the 
                sharing of information among inspectors general 
                and to discuss the ongoing work of each 
                inspector general who is a member of the 
                Council of Inspectors General, with a focus on 
                concerns that may apply to the broader 
                financial sector and ways to improve financial 
                oversight.
                    (B) Annual report.--Each year the Council 
                of Inspectors General shall submit to the 
                Council and to Congress a report including--
                            (i) for each inspector general who 
                        is a member of the Council of 
                        Inspectors General, a section within 
                        the exclusive editorial control of such 
                        inspector general that highlights the 
                        concerns and recommendations of such 
                        inspector general in such inspector 
                        general's ongoing and completed work, 
                        with a focus on issues that may apply 
                        to the broader financial sector; and
                            (ii) a summary of the general 
                        observations of the Council of 
                        Inspectors General based on the views 
                        expressed by each inspector general as 
                        required by clause (i), with a focus on 
                        measures that should be taken to 
                        improve financial oversight.
            (3) Working groups to evaluate council.--
                    (A) Convening a working group.--The Council 
                of Inspectors General may, by majority vote, 
                convene a Council of Inspectors General Working 
                Group to evaluate the effectiveness and 
                internal operations of the Council.
                    (B) Personnel and resources.--The 
                inspectors general who are members of the 
                Council of Inspectors General may detail staff 
                and resources to a Council of Inspectors 
                General Working Group established under this 
                paragraph to enable it to carry out its duties.
                    (C) Reports.--A Council of Inspectors 
                General Working Group established under this 
                paragraph shall submit regular reports to the 
                Council and to Congress on its evaluations 
                pursuant to this paragraph.
    (b) Response to Report by Council.--The Council shall 
respond to the concerns raised in the report of the Council of 
Inspectors General under subsection (a)(2)(B) for such year.

SEC. 989F. GAO STUDY OF PERSON TO PERSON LENDING.

    (a) Study.--
            (1) In general.--The Comptroller General of the 
        United States shall conduct a study of person to person 
        lending to determine the optimal Federal regulatory 
        structure.
            (2) Consultation.--In conducting the study required 
        under paragraph (1), the Comptroller General shall 
        consult with Federal banking agencies, the Commission, 
        consumer groups, outside experts, and the person to 
        person lending industry.
            (3) Content of study.--The study required under 
        paragraph (1) shall include an examination of--
                    (A) the regulatory structure as it exists 
                on the date of enactment of this Act, as 
                determined by the Commission, with particular 
                attention to--
                            (i) the application of the 
                        Securities Act of 1933 to person to 
                        person lending platforms;
                            (ii) the posting of consumer loan 
                        information on the EDGAR database of 
                        the Commission; and
                            (iii) the treatment of privately 
                        held person to person lending platforms 
                        as public companies;
                    (B) the State and other Federal regulators 
                responsible for the oversight and regulation of 
                person to person lending markets;
                    (C) any Federal, State, or local government 
                or private studies of person to person lending 
                completed or in progress on the date of 
                enactment of this Act;
                    (D) consumer privacy and data protections, 
                minimum credit standards, anti-money laundering 
                and risk management in the regulatory structure 
                as it exists on the date of enactment of this 
                Act, and whether additional or alternative 
                safeguards are needed; and
                    (E) the uses of person to person lending.
    (b) Report.--
            (1) In general.--Not later than 1 year after the 
        date of enactment of this Act, the Comptroller General 
        shall submit a report on the study required under 
        subsection (a) to the Committee on Banking, Housing, 
        and Urban Affairs of the Senate and the Committee on 
        Financial Services of the House of Representatives.
            (2) Content of report.--The report required under 
        paragraph (1) shall include alternative regulatory 
        options, including--
                    (A) the involvement of other Federal 
                agencies; and
                    (B) alternative approaches by the 
                Commission and recommendations on whether the 
                alternative approaches are effective.

SEC. 989G. EXEMPTION FOR NONACCELERATED FILERS.

    (a) Exemption.--Section 404 of the Sarbanes-Oxley Act of 
2002 is amended by adding at the end the following:
    ``(c) Exemption for Smaller Issuers.--Subsection (b) shall 
not apply with respect to any audit report prepared for an 
issuer that is neither a `large accelerated filer' nor an 
`accelerated filer' as those terms are defined in Rule 12b-2 of 
the Commission (17 C.F.R. 240.12b-2).''.
    (b) Study.--The Securities and Exchange Commission shall 
conduct a study to determine how the Commission could reduce 
the burden of complying with section 404(b) of the Sarbanes-
Oxley Act of 2002 for companies whose market capitalization is 
between $75,000,000 and $250,000,000 for the relevant reporting 
period while maintaining investor protections for such 
companies. The study shall also consider whether any such 
methods of reducing the compliance burden or a complete 
exemption for such companies from compliance with such section 
would encourage companies to list on exchanges in the United 
States in their initial public offerings. Not later than 9 
months after the date of the enactment of this subtitle, the 
Commission shall transmit a report of such study to Congress.

SEC. 989H. CORRECTIVE RESPONSES BY HEADS OF CERTAIN ESTABLISHMENTS TO 
                    DEFICIENCIES IDENTIFIED BY INSPECTORS GENERAL.

    The Chairman of the Board of Governors of the Federal 
Reserve System, the Chairman of the Commodity Futures Trading 
Commission, the Chairman of the National Credit Union 
Administration, the Director of the Pension Benefit Guaranty 
Corporation, and the Chairman of the Securities and Exchange 
Commission shall each--
            (1) take action to address deficiencies identified 
        by a report or investigation of the Inspector General 
        of the establishment concerned; or
            (2) certify to both Houses of Congress that no 
        action is necessary or appropriate in connection with a 
        deficiency described in paragraph (1).

SEC. 989I. GAO STUDY REGARDING EXEMPTION FOR SMALLER ISSUERS.

    (a) Study Regarding Exemption for Smaller Issuers.--The 
Comptroller General of the United States shall carry out a 
study on the impact of the amendments made by this Act to 
section 404(b) of the Sarbanes-Oxley Act of 2002 (15 U.S.C. 
7262(b)), which shall include an analysis of--
            (1) whether issuers that are exempt from such 
        section 404(b) have fewer or more restatements of 
        published accounting statements than issuers that are 
        required to comply with such section 404(b);
            (2) the cost of capital for issuers that are exempt 
        from such section 404(b) compared to the cost of 
        capital for issuers that are required to comply with 
        such section 404(b);
            (3) whether there is any difference in the 
        confidence of investors in the integrity of financial 
        statements of issuers that comply with such section 
        404(b) and issuers that are exempt from compliance with 
        such section 404(b);
            (4) whether issuers that do not receive the 
        attestation for internal controls required under such 
        section 404(b) should be required to disclose the lack 
        of such attestation to investors; and
            (5) the costs and benefits to issuers that are 
        exempt from such section 404(b) that voluntarily have 
        obtained the attestation of an independent auditor.
    (b) Report.--Not later than 3 years after the date of 
enactment of this Act, the Comptroller General 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 a report on the results of the study required 
under subsection (a).

SEC. 989J. FURTHER PROMOTING THE ADOPTION OF THE NAIC MODEL REGULATIONS 
                    THAT ENHANCE PROTECTION OF SENIORS AND OTHER 
                    CONSUMERS.

    (a) In General.--The Commission shall treat as exempt 
securities described under section 3(a)(8) of the Securities 
Act of 1933 (15 U.S.C. 77c(a)(8)) any insurance or endowment 
policy or annuity contract or optional annuity contract--
            (1) the value of which does not vary according to 
        the performance of a separate account;
            (2) that--
                    (A) satisfies standard nonforfeiture laws 
                or similar requirements of the applicable State 
                at the time of issue; or
                    (B) in the absence of applicable standard 
                nonforfeiture laws or requirements, satisfies 
                the Model Standard Nonforfeiture Law for Life 
                Insurance or Model Standard Nonforfeiture Law 
                for Individual Deferred Annuities, or any 
                successor model law, as published by the 
                National Association of Insurance 
                Commissioners; and
            (3) that is issued--
                    (A) on and after June 16, 2013, in a State, 
                or issued by an insurance company that is 
                domiciled in a State, that--
                            (i) adopts rules that govern 
                        suitability requirements in the sale of 
                        an insurance or endowment policy or 
                        annuity contract or optional annuity 
                        contract, which shall substantially 
                        meet or exceed the minimum requirements 
                        established by the Suitability in 
                        Annuity Transactions Model Regulation 
                        adopted by the National Association of 
                        Insurance Commissioners in March 2010; 
                        and
                            (ii) adopts rules that 
                        substantially meet or exceed the 
                        minimum requirements of any successor 
                        modifications to the model regulations 
                        described in subparagraph (A) within 5 
                        years of the adoption by the 
                        Association of any further successors 
                        thereto; or
                    (B) by an insurance company that adopts and 
                implements practices on a nationwide basis for 
                the sale of any insurance or endowment policy 
                or annuity contract or optional annuity 
                contract that meet or exceed the minimum 
                requirements established by the National 
                Association of Insurance Commissioners 
                Suitability in Annuity Transactions Model 
                Regulation (Model 275), and any successor 
                thereto, and is therefore subject to 
                examination by the State of domicile of the 
                insurance company, or by any other State where 
                the insurance company conducts sales of such 
                products, for the purpose of monitoring 
                compliance under this section.
    (b) Rule of Construction.--Nothing in this section shall be 
construed to affect whether any insurance or endowment policy 
or annuity contract or optional annuity contract that is not 
described in this section is or is not an exempt security under 
section 3(a)(8) of the Securities Act of 1933 (15 U.S.C. 
77c(a)(8)).

      Subtitle J--Securities and Exchange Commission Match Funding

SEC. 991. SECURITIES AND EXCHANGE COMMISSION MATCH FUNDING.

    (a) Match Funding Authority.--
            (1) Amendments.--Section 31 of the Securities 
        Exchange Act of 1934 (15 U.S.C. 78ee) is amended--
                    (A) by striking subsection (a) and 
                inserting the following:
    ``(a) Recovery of Costs of Annual Appropriation.--The 
Commission shall, in accordance with this section, collect 
transaction fees and assessments that are designed to recover 
the costs to the Government of the annual appropriation to the 
Commission by Congress.'';
                    (B) in subsection (e)(2), by striking 
                ``September 30'' and inserting ``September 
                25'';
                    (C) in subsection (g), by striking ``April 
                30 of the fiscal year preceding the fiscal year 
                to which such rate applies'' and inserting ``30 
                days after the date on which an Act making a 
                regular appropriation to the Commission for 
                such fiscal year is enacted'';
                    (D) by striking subsection (j) and 
                inserting the following:
    ``(j) Adjustments to Fee Rates.--
            ``(1) Annual adjustment.--Subject to subsections 
        (i)(1)(B) and (k), for each fiscal year, the Commission 
        shall by order adjust each of the rates applicable 
        under subsections (b) and (c) for such fiscal year to a 
        uniform adjusted rate that, when applied to the 
        baseline estimate of the aggregate dollar amount of 
        sales for such fiscal year, is reasonably likely to 
        produce aggregate fee collections under this section 
        (including assessments collected under subsection (d) 
        of this section) that are equal to the regular 
        appropriation to the Commission by Congress for such 
        fiscal year.
            ``(2) Mid-year adjustment.--Subject to subsections 
        (i)(1)(B) and (k), for each fiscal year, the Commission 
        shall determine, by March 1 of such fiscal year, 
        whether, based on the actual aggregate dollar volume of 
        sales during the first 5 months of such fiscal year, 
        the baseline estimate of the aggregate dollar volume of 
        sales used under paragraph (1) for such fiscal year is 
        reasonably likely to be 10 percent (or more) greater or 
        less than the actual aggregate dollar volume of sales 
        for such fiscal year. If the Commission so determines, 
        the Commission shall by order, no later than March 1, 
        adjust each of the rates applicable under subsections 
        (b) and (c) for such fiscal year to a uniform adjusted 
        rate that, when applied to the revised estimate of the 
        aggregate dollar amount of sales for the remainder of 
        such fiscal year, is reasonably likely to produce 
        aggregate fee collections under this section (including 
        fees collected during such five-month period and 
        assessments collected under subsection (d) of this 
        section) that are equal to the regular appropriation to 
        the Commission by Congress for such fiscal year. In 
        making such revised estimate, the Commission shall, 
        after consultation with the Congressional Budget Office 
        and the Office of Management and Budget, use the same 
        methodology required by subsection (l).
            ``(3) Review.--In exercising its authority under 
        this subsection, the Commission shall not be required 
        to comply with the provisions of section 553 of title 
        5, United States Code. An adjusted rate prescribed 
        under paragraph (1) or (2) and published under 
        subsection (g) shall not be subject to judicial review.
            ``(4) Effective date.--
                    ``(A) Annual adjustment.--Subject to 
                subsections (i)(1)(B) and (k), an adjusted rate 
                prescribed under paragraph (1) shall take 
                effect on the later of--
                            ``(i) the first day of the fiscal 
                        year to which such rate applies; or
                            ``(ii) 60 days after the date on 
                        which an Act making a regular 
                        appropriation to the Commission for 
                        such fiscal year is enacted.
                    ``(B) Mid-year adjustment.--An adjusted 
                rate prescribed under paragraph (2) shall take 
                effect on April 1 of the fiscal year to which 
                such rate applies.'';
                    (E) in subsection (k), by striking ``30 
                days'' and inserting ``60 days''; and
                    (F) in subsection (l), by striking 
                ``Definitions.--'' and all that follows through 
                ``sales.--The baseline'' and inserting 
                ``Baseline Estimate of the Aggregate Dollar 
                Amount of Sales.--The baseline''.
            (2) Effective date.--The amendments made by this 
        subsection shall take effect on the later of--
                    (A) October 1, 2011; or
                    (B) the date of enactment of an Act making 
                a regular appropriation to the Commission for 
                fiscal year 2012.
    (b) Amendments to Registration Fee Provisions.--
            (1) Section 6(b) of the securities act of 1933.--
        Section 6(b) of the Securities Act of 1933 (15 U.S.C. 
        77f(b)) is amended--
                    (A) by striking ``offsetting'' each place 
                that term appears and inserting ``fee'';
                    (B) by striking paragraphs (1), (3), (4), 
                (6), (8), and (9);
                    (C) by redesignating paragraph (2) as 
                paragraph (1);
                    (D) by redesignating paragraph (5) as 
                paragraph (2);
                    (E) by redesignating paragraph (7) as 
                paragraph (3);
                    (F) by redesignating paragraph (10) as 
                paragraph (5);
                    (G) by redesignating paragraph (11) as 
                paragraph (6);
                    (H) in paragraph (1), as so redesignated, 
                by striking ``paragraph (5) or (6).'' and 
                inserting ``paragraph (2).'';
                    (I) in paragraph (2), as so redesignated--
                            (i) by striking ``of the fiscal 
                        years 2003 through 2011'' and inserting 
                        ``fiscal year''; and
                            (ii) by striking ``paragraph (2)'' 
                        and inserting ``paragraph (1)'';
                    (J) by inserting after paragraph (3), as so 
                redesignated, the following:
            ``(4) Review and effective date.--In exercising its 
        authority under this subsection, the Commission shall 
        not be required to comply with the provisions of 
        section 553 of title 5, United States Code. An adjusted 
        rate prescribed under paragraph (2) and published under 
        paragraph (5) shall not be subject to judicial review. 
        An adjusted rate prescribed under paragraph (2) shall 
        take effect on the first day of the fiscal year to 
        which such rate applies.'';
                    (K) in paragraph (5), as redesignated, by 
                striking ``April 30'' and inserting ``August 
                31'';
                    (L) in paragraph (6), as so redesignated--
                            (i) by striking ``of the fiscal 
                        years 2002 through 2011'' and inserting 
                        ``fiscal year''; and
                            (ii) by inserting at the end of the 
                        table in subparagraph (A) the 
                        following:

``2012................................  $425,000,000
2013..................................  $455,000,000
2014..................................  $485,000,000
2015..................................  $515,000,000
2016..................................  $550,000,000
2017..................................  $585,000,000
2018..................................  $620,000,000
2019..................................  $660,000,000
2020..................................  $705,000,000
2021 and each fiscal year thereafter..  An amount that is equal to the
                                         target fee collection amount
                                         for the prior fiscal year,
                                         adjusted by the rate of
                                         inflation.''.
 

            (2) Section 13(e) of the securities exchange act of 
        1934.--Section 13(e) of the Securities Exchange Act of 
        1934 (15 U.S.C. 78m(e)) is amended--
                    (A) in paragraph (3), by striking 
                ``paragraphs (5) and (6)'' and inserting 
                ``paragraph (4)'';
                    (B) by striking paragraphs (4), (5), and 
                (6);
                    (C) by inserting after paragraph (3) the 
                following:
            ``(4) Annual adjustment.--For each fiscal year, the 
        Commission shall by order adjust the rate required by 
        paragraph (3) for such fiscal year to a rate that is 
        equal to the rate (expressed in dollars per million) 
        that is applicable under section 6(b) of the Securities 
        Act of 1933 for such fiscal year.
            ``(5) Fee collections.--Fees collected pursuant to 
        this subsection for fiscal year 2012 and each fiscal 
        year thereafter shall be deposited and credited as 
        general revenue of the Treasury and shall not be 
        available for obligation.
            ``(6) Effective date; publication.--In exercising 
        its authority under this subsection, the Commission 
        shall not be required to comply with the provisions of 
        section 553 of title 5, United States Code. An adjusted 
        rate prescribed under paragraph (4) shall be published 
        and take effect in accordance with section 6(b) of the 
        Securities Act of 1933 (15 U.S.C. 77f(b)).''; and
                    (D) by striking paragraphs (8), (9), and 
                (10).
            (3) Section 14(g) of the securities exchange act of 
        1934.--Section 14(g) of the Securities Exchange Act of 
        1934 (15 U.S.C. 78n(g)) is amended--
                    (A) in paragraph (1), by striking 
                ``paragraphs (5) and (6)'' each time that term 
                appears and inserting ``paragraph (4)'';
                    (B) in paragraph (3), by striking 
                ``paragraphs (5) and (6)'' and inserting 
                ``paragraph (4)'';
                    (C) by striking paragraphs (4), (5), and 
                (6);
                    (D) by inserting after paragraph (3) the 
                following:
            ``(4) Annual adjustment.--For each fiscal year, the 
        Commission shall by order adjust the rate required by 
        paragraphs (1) and (3) for such fiscal year to a rate 
        that is equal to the rate (expressed in dollars per 
        million) that is applicable under section 6(b) of the 
        Securities Act of 1933 (15 U.S.C. 77f(b)) for such 
        fiscal year.
            ``(5) Fee collection.--Fees collected pursuant to 
        this subsection for fiscal year 2012 and each fiscal 
        year thereafter shall be deposited and credited as 
        general revenue of the Treasury and shall not be 
        available for obligation.
            ``(6) Review; effective date; publication.--In 
        exercising its authority under this subsection, the 
        Commission shall not be required to comply with the 
        provisions of section 553 of title 5, United States 
        Code. An adjusted rate prescribed under paragraph (4) 
        shall be published and take effect in accordance with 
        section 6(b) of the Securities Act of 1933 (15 U.S.C. 
        77f(b)).'';
                    (E) by striking paragraphs (8), (9), and 
                (10); and
                    (F) by redesignating paragraph (11) as 
                paragraph (8).
            (4) Effective date.--The amendments made by this 
        subsection shall take effect on October 1, 2011, except 
        that for fiscal year 2012, the Commission shall publish 
        the rate established under section 6(b) of the 
        Securities Act of 1933 (15 U.S.C. 77f(b)), as amended 
        by this Act, on August 31, 2011.
    (c) Authorization of Appropriations.--Section 35 of the 
Securities Exchange Act of 1934 (15 U.S.C. 78kk) is amended to 
read as follows:

``SEC. 35. AUTHORIZATION OF APPROPRIATIONS.

    ``In addition to any other funds authorized to be 
appropriated to the Commission, there are authorized to be 
appropriated to carry out the functions, powers, and duties of 
the Commission--
            ``(1) for fiscal year 2011, $1,300,000,000;
            ``(2) for fiscal year 2012, $1,500,000,000;
            ``(3) for fiscal year 2013, $1,750,000,000;
            ``(4) for fiscal year 2014, $2,000,000,000; and
            ``(5) for fiscal year 2015, $2,250,000,000.''.
    (d) Transmittal of Budget Requests.--
            (1) Amendment.--Section 31 of the Securities 
        Exchange Act of 1934 (15 U.S.C. 78ee) is amended by 
        adding at the end the following:
    ``(m) Transmittal of Commission Budget Requests.--
            ``(1) Budget required.--For fiscal year 2012, and 
        each fiscal year thereafter, the Commission shall 
        prepare and submit a budget to the President. Whenever 
        the Commission submits a budget estimate or request to 
        the President or the Office of Management and Budget, 
        the Commission shall concurrently transmit copies of 
        the estimate or request to the Committee on 
        Appropriations of the Senate, the Committee on 
        Appropriations of the House of Representatives, the 
        Committee on Banking, Housing, and Urban Affairs of the 
        Senate, and the Committee on Financial Services of the 
        House of Representatives.
            ``(2) Submission to congress.--The President shall 
        submit each budget submitted under paragraph (1) to 
        Congress, in unaltered form, together with the annual 
        budget for the Administration submitted by the 
        President.
            ``(3) Contents.--The Commission shall include in 
        each budget submitted under paragraph (1)--
                    ``(A) an itemization of the amount of funds 
                necessary to carry out the functions of the 
                Commission.
                    ``(B) an amount to be designated as 
                contingency funding to be used by the 
                Commission to address unanticipated needs; and
                    ``(C) a designation of any activities of 
                the Commission for which multi-year budget 
                authority would be suitable.''.
            (2) Budget of the president.--For fiscal year 2012, 
        and each fiscal year thereafter, the annual budget for 
        the Administration submitted by the President to 
        Congress shall reflect the amendments made by this 
        section.
    (e) Securities and Exchange Commission Reserve Fund.--
            (1) Amendment.--Section 4 of the Securities 
        Exchange Act of 1934 (15 U.S.C. 78d), as amended by 
        this Act, is amended by adding at the end the 
        following:
    ``(i) Securities and Exchange Commission Reserve Fund.--
            ``(1) Reserve fund established.--There is 
        established in the Treasury of the United States a 
        separate fund, to be known as the `Securities and 
        Exchange Commission Reserve Fund' (referred to in this 
        subsection as the `Reserve Fund').
            ``(2) Reserve fund amounts.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), any registration fees 
                collected by the Commission under section 6(b) 
                of the Securities Act of 1933 (15 U.S.C. 
                77f(b)) or section 24(f) of the Investment 
                Company Act of 1940 (15 U.S.C. 80a-24(f)) shall 
                be deposited into the Reserve Fund.
                    ``(B) Limitations.--For any 1 fiscal year--
                            ``(i) the amount deposited in the 
                        Fund may not exceed $50,000,000; and
                            ``(ii) the balance in the Fund may 
                        not exceed $100,000,000.
                    ``(C) Excess fees.--Any amounts in excess 
                of the limitations described in subparagraph 
                (B) that the Commission collects from 
                registration fees under section 6(b) of the 
                Securities Act of 1933 (15 U.S.C. 77f(b)) or 
                section 24(f) of the Investment Company Act of 
                1940 (15 U.S.C. 80a-24(f)) shall be deposited 
                in the General Fund of the Treasury of the 
                United States and shall not be available for 
                obligation by the Commission.
            ``(3) Use of amounts in reserve fund.--The 
        Commission may obligate amounts in the Reserve Fund, 
        not to exceed a total of $100,000,000 in any 1 fiscal 
        year, as the Commission determines is necessary to 
        carry out the functions of the Commission. Any amounts 
        in the reserve fund shall remain available until 
        expended. Not later than 10 days after the date on 
        which the Commission obligates amounts under this 
        paragraph, the Commission shall notify Congress of the 
        date, amount, and purpose of the obligation.
            ``(4) Rule of construction.--Amounts collected and 
        deposited in the Reserve Fund shall not be construed to 
        be Government funds or appropriated monies and shall 
        not be subject to apportionment for the purpose of 
        chapter 15 of title 31, United States Code, or under 
        any other authority.''.
            (2) Effective date.--The amendment made by this 
        subsection shall take effect on October 1, 2011.

            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--
                    (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.
            (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));
                    (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;
                            (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--
                                    (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 engage 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--
                    (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 
        activities 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 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.
            (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.

          Subtitle A--Bureau of Consumer Financial Protection

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

    (a) Bureau Established.--There is established in the 
Federal Reserve System, an independent bureau to be known as 
the ``Bureau of Consumer Financial Protection'', which shall 
regulate the offering and provision of consumer financial 
products or services under the Federal consumer financial laws. 
The Bureau 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 Bureau.
    (b) Director and Deputy Director.--
            (1) In general.--There is established the position 
        of the Director, who shall serve as the head of the 
        Bureau.
            (2) Appointment.--Subject to paragraph (3), the 
        Director shall be appointed by the President, by and 
        with the advice and consent of the Senate.
            (3) Qualification.--The President shall nominate 
        the Director from among individuals who are citizens of 
        the United States.
            (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.
            (5) Deputy director.--There is established the 
        position of Deputy Director, who shall--
                    (A) be appointed by the Director; and
                    (B) serve as acting Director in the absence 
                or unavailability of the Director.
    (c) Term.--
            (1) In general.--The Director shall serve for a 
        term of 5 years.
            (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.
            (3) Removal for cause.--The President may remove 
        the Director for inefficiency, neglect of duty, or 
        malfeasance in office.
    (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.
    (e) Offices.--The principal office of the Bureau shall be 
in the District of Columbia. The Director may establish 
regional offices of the Bureau, 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 Bureau 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;
            (8) the distribution of business among personnel 
        appointed and supervised by the Director 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 Director of the Bureau 
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.
            (2) Autonomy.--Notwithstanding the authorities 
        granted to the Board of Governors under the Federal 
        Reserve Act, the Board of Governors may not--
                    (A) intervene in any matter or proceeding 
                before the Director, including examinations or 
                enforcement actions, unless otherwise 
                specifically provided by law;
                    (B) appoint, direct, or remove any officer 
                or employee of the Bureau; or
                    (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.
            (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.
            (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.
            (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.--
            (1) Appointment.--
                    (A) In general.--The Director 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 Director 
                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 
                        Director 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 
                        Director 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 Director.
                    (B) The Director shall at all times provide 
                compensation (including benefits) 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.--
                    (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 Director 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 Director 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 Director 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 
                Director 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--
                            (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 Director 
                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 Director 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 Director 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;
                    (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 Assistant Director of the Bureau for 
        Fair Lending and Equal Opportunity, who--
                    (A) shall be appointed by the Director; and
                    (B) shall carry out such duties as the 
                Director may delegate to such Assistant 
                Director.
    (d) Office of Financial Education.--
            (1) Establishment.--The Director 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
                    (B) working with the research unit 
                established by the Director 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 
        Director 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 Director of the Bureau 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 Director of the Bureau 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 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 Director 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 Director 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 Director 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 
        Director shall establish the Office of Financial 
        Protection for Older Americans, the functions of which 
        shall include activities designed to facilitate the 
        financial 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) Assistant director.--The Office of Financial 
        Protection for Older Americans (in this subsection 
        referred to as the ``Office'') shall be headed by an 
        assistant director.
            (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).

SEC. 1014. CONSUMER ADVISORY BOARD.

    (a) Establishment Required.--The Director 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 Director 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. Not 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 Director, 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 Director 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. 1015. COORDINATION.

    The Bureau shall coordinate with the Commission, the 
Commodity Futures Trading Commission, the Federal Trade 
Commission, and other Federal agencies and State regulators, as 
appropriate, to promote consistent regulatory treatment of 
consumer financial and investment products and services.

SEC. 1016. APPEARANCES BEFORE AND REPORTS TO CONGRESS.

    (a) Appearances Before Congress.--The Director of the 
Bureau 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--
            (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 Director 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 cost index 
                for total compensation for State and local 
                government 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 Director shall provide to the 
                Director of the Office of Management and Budget 
                copies of the financial operating plans and 
                forecasts of the Director, as prepared by the 
                Director 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 Director 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 
                Director 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 Director to consult with or 
                obtain the consent or approval of the Director 
                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 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 Director of the Bureau 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 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 
        Director, and shall remain available until expended, to 
        pay the expenses of the Bureau in carrying out its 
        duties and responsibilities. The compensation of the 
        Director 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 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 Director 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 
                Director 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 Director 
                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 
        Director 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 Director 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 Director, the financial condition and results of 
        operations of the Bureau, and the sources and 
        application of funds of the Bureau, including any funds 
        appropriated in accordance with this subsection.

SEC. 1018. EFFECTIVE DATE.

    This subtitle shall become effective on the date of 
enactment of this Act.

                Subtitle B--General Powers of the Bureau

SEC. 1021. PURPOSE, OBJECTIVES, AND FUNCTIONS.

    (a) Purpose.--The Bureau shall seek to implement and, where 
applicable, enforce Federal consumer financial law consistently 
for the purpose of ensuring that all consumers have access to 
markets for consumer financial products and services and that 
markets for consumer financial products and services are fair, 
transparent, and competitive.
    (b) Objectives.--The Bureau is authorized to exercise its 
authorities under Federal consumer financial law for the 
purposes of ensuring that, with respect to consumer financial 
products and services--
            (1) consumers are provided with timely and 
        understandable information to make responsible 
        decisions about financial transactions;
            (2) consumers are protected from unfair, deceptive, 
        or abusive acts and practices and from discrimination;
            (3) outdated, unnecessary, or unduly burdensome 
        regulations are regularly identified and addressed in 
        order to reduce unwarranted regulatory burdens;
            (4) Federal consumer financial law is enforced 
        consistently, without regard to the status of a person 
        as a depository institution, in order to promote fair 
        competition; and
            (5) markets for consumer financial products and 
        services operate transparently and efficiently to 
        facilitate access and innovation.
    (c) Functions.--The primary functions of the Bureau are--
            (1) conducting financial education programs;
            (2) collecting, investigating, and responding to 
        consumer complaints;
            (3) collecting, researching, monitoring, and 
        publishing information relevant to the functioning of 
        markets for consumer financial products and services to 
        identify risks to consumers and the proper functioning 
        of such markets;
            (4) subject to sections 1024 through 1026, 
        supervising covered persons for compliance with Federal 
        consumer financial law, and taking appropriate 
        enforcement action to address violations of Federal 
        consumer financial law;
            (5) issuing rules, orders, and guidance 
        implementing Federal consumer financial law; and
            (6) performing such support activities as may be 
        necessary or useful to facilitate the other functions 
        of the Bureau.

SEC. 1022. RULEMAKING AUTHORITY.

    (a) In General.--The Bureau is authorized to exercise its 
authorities under Federal consumer financial law to administer, 
enforce, and otherwise implement the provisions of Federal 
consumer financial law.
    (b) Rulemaking, Orders, and Guidance.--
            (1) General authority.--The Director may prescribe 
        rules and issue orders and guidance, as may be 
        necessary or appropriate to enable the Bureau to 
        administer and carry out the purposes and objectives of 
        the Federal consumer financial laws, and to prevent 
        evasions thereof.
            (2) Standards for rulemaking.--In prescribing a 
        rule under the Federal consumer financial laws--
                    (A) the Bureau shall consider--
                            (i) the potential benefits and 
                        costs to consumers and covered persons, 
                        including the potential reduction of 
                        access by consumers to consumer 
                        financial products or services 
                        resulting from such rule; and
                            (ii) the impact of proposed rules 
                        on covered persons, as described in 
                        section 1026, and the impact on 
                        consumers in rural areas;
                    (B) the Bureau shall consult with the 
                appropriate prudential regulators or other 
                Federal agencies prior to proposing a rule and 
                during the comment process regarding 
                consistency with prudential, market, or 
                systemic objectives administered by such 
                agencies; and
                    (C) if, during the consultation process 
                described in subparagraph (B), a prudential 
                regulator provides the Bureau with a written 
                objection to the proposed rule of the Bureau or 
                a portion thereof, the Bureau shall include in 
                the adopting release a description of the 
                objection and the basis for the Bureau 
                decision, if any, regarding such objection, 
                except that nothing in this clause shall be 
                construed as altering or limiting the 
                procedures under section 1023 that may apply to 
                any rule prescribed by the Bureau.
            (3) Exemptions.--
                    (A) In general.--The Bureau, by rule, may 
                conditionally or unconditionally exempt any 
                class of covered persons, service providers, or 
                consumer financial products or services, from 
                any provision of this title, or from any rule 
                issued under this title, as the Bureau 
                determines necessary or appropriate to carry 
                out the purposes and objectives of this title, 
                taking into consideration the factors in 
                subparagraph (B).
                    (B) Factors.--In issuing an exemption, as 
                permitted under subparagraph (A), the Bureau 
                shall, as appropriate, take into 
                consideration--
                            (i) the total assets of the class 
                        of covered persons;
                            (ii) the volume of transactions 
                        involving consumer financial products 
                        or services in which the class of 
                        covered persons engages; and
                            (iii) existing provisions of law 
                        which are applicable to the consumer 
                        financial product or service and the 
                        extent to which such provisions provide 
                        consumers with adequate protections.
            (4) Exclusive rulemaking authority.--
                    (A) In general.--Notwithstanding any other 
                provisions of Federal law and except as 
                provided in section 1061(b)(5), to the extent 
                that a provision of Federal consumer financial 
                law authorizes the Bureau and another Federal 
                agency to issue regulations under that 
                provision of law for purposes of assuring 
                compliance with Federal consumer financial law 
                and any regulations thereunder, the Bureau 
                shall have the exclusive authority to prescribe 
                rules subject to those provisions of law.
                    (B) Deference.--Notwithstanding any power 
                granted to any Federal agency or to the Council 
                under this title, and subject to section 
                1061(b)(5)(E), the deference that a court 
                affords to the Bureau with respect to a 
                determination by the Bureau regarding the 
                meaning or interpretation of any provision of a 
                Federal consumer financial law shall be applied 
                as if the Bureau were the only agency 
                authorized to apply, enforce, interpret, or 
                administer the provisions of such Federal 
                consumer financial law.
    (c) Monitoring.--
            (1) In general.--In order to support its rulemaking 
        and other functions, the Bureau shall monitor for risks 
        to consumers in the offering or provision of consumer 
        financial products or services, including developments 
        in markets for such products or services.
            (2) Considerations.--In allocating its resources to 
        perform the monitoring required by this section, the 
        Bureau may consider, among other factors--
                    (A) likely risks and costs to consumers 
                associated with buying or using a type of 
                consumer financial product or service;
                    (B) understanding by consumers of the risks 
                of a type of consumer financial product or 
                service;
                    (C) the legal protections applicable to the 
                offering or provision of a consumer financial 
                product or service, including the extent to 
                which the law is likely to adequately protect 
                consumers;
                    (D) rates of growth in the offering or 
                provision of a consumer financial product or 
                service;
                    (E) the extent, if any, to which the risks 
                of a consumer financial product or service may 
                disproportionately affect traditionally 
                underserved consumers; or
                    (F) the types, number, and other pertinent 
                characteristics of covered persons that offer 
                or provide the consumer financial product or 
                service.
            (3) Significant findings.--
                    (A) In general.--The Bureau shall publish 
                not fewer than 1 report of significant findings 
                of its monitoring required by this subsection 
                in each calendar year, beginning with the first 
                calendar year that begins at least 1 year after 
                the designated transfer date.
                    (B) Confidential information.--The Bureau 
                may make public such information obtained by 
                the Bureau under this section as is in the 
                public interest, through aggregated reports or 
                other appropriate formats designed to protect 
                confidential information in accordance with 
                paragraphs (4), (6), (8), and (9).
            (4) Collection of information.--
                    (A) In general.--In conducting any 
                monitoring or assessment required by this 
                section, the Bureau shall have the authority to 
                gather information from time to time regarding 
                the organization, business conduct, markets, 
                and activities of covered persons and service 
                providers.
                    (B) Methodology.--In order to gather 
                information described in subparagraph (A), the 
                Bureau may--
                            (i) gather and compile information 
                        from a variety of sources, including 
                        examination reports concerning covered 
                        persons or service providers, consumer 
                        complaints, voluntary surveys and 
                        voluntary interviews of consumers, 
                        surveys and interviews with covered 
                        persons and service providers, and 
                        review of available databases; and
                            (ii) require covered persons and 
                        service providers participating in 
                        consumer financial services markets to 
                        file with the Bureau, under oath or 
                        otherwise, in such form and within such 
                        reasonable period of time as the Bureau 
                        may prescribe by rule or order, annual 
                        or special reports, or answers in 
                        writing to specific questions, 
                        furnishing information described in 
                        paragraph (4), as necessary for the 
                        Bureau to fulfill the monitoring, 
                        assessment, and reporting 
                        responsibilities imposed by Congress.
                    (C) Limitation.--The Bureau may not use its 
                authorities under this paragraph to obtain 
                records from covered persons and service 
                providers participating in consumer financial 
                services markets for purposes of gathering or 
                analyzing the personally identifiable financial 
                information of consumers.
            (5) Limited information gathering.--In order to 
        assess whether a nondepository is a covered person, as 
        defined in section 1002, the Bureau may require such 
        nondepository to file with the Bureau, under oath or 
        otherwise, in such form and within such reasonable 
        period of time as the Bureau may prescribe by rule or 
        order, annual or special reports, or answers in writing 
        to specific questions.
            (6) Confidentiality rules.--
                    (A) Rulemaking.--The Bureau shall prescribe 
                rules regarding the confidential treatment of 
                information obtained from persons in connection 
                with the exercise of its authorities under 
                Federal consumer financial law.
                    (B) Access by the bureau to reports of 
                other regulators.--
                            (i) Examination and financial 
                        condition reports.--Upon providing 
                        reasonable assurances of 
                        confidentiality, the Bureau shall have 
                        access to any report of examination or 
                        financial condition made by a 
                        prudential regulator or other Federal 
                        agency having jurisdiction over a 
                        covered person or service provider, and 
                        to all revisions made to any such 
                        report.
                            (ii) Provision of other reports to 
                        the bureau.--In addition to the reports 
                        described in clause (i), a prudential 
                        regulator or other Federal agency 
                        having jurisdiction over a covered 
                        person or service provider may, in its 
                        discretion, furnish to the Bureau any 
                        other report or other confidential 
                        supervisory information concerning any 
                        insured depository institution, credit 
                        union, or other entity examined by such 
                        agency under authority of any provision 
                        of Federal law.
                    (C) Access by other regulators to reports 
                of the bureau.--
                            (i) Examination reports.--Upon 
                        providing reasonable assurances of 
                        confidentiality, a prudential 
                        regulator, a State regulator, or any 
                        other Federal agency having 
                        jurisdiction over a covered person or 
                        service provider shall have access to 
                        any report of examination made by the 
                        Bureau with respect to such person, and 
                        to all revisions made to any such 
                        report.
                            (ii) Provision of other reports to 
                        other regulators.--In addition to the 
                        reports described in clause (i), the 
                        Bureau may, in its discretion, furnish 
                        to a prudential regulator or other 
                        agency having jurisdiction over a 
                        covered person or service provider any 
                        other report or other confidential 
                        supervisory information concerning such 
                        person examined by the Bureau under the 
                        authority of any other provision of 
                        Federal law.
            (7) Registration.--
                    (A) In general.--The Bureau may prescribe 
                rules regarding registration requirements 
                applicable to a covered person, other than an 
                insured depository institution, insured credit 
                union, or related person.
                    (B) Registration information.--Subject to 
                rules prescribed by the Bureau, the Bureau may 
                publicly disclose registration information to 
                facilitate the ability of consumers to identify 
                covered persons that are registered with the 
                Bureau.
                    (C) Consultation with state agencies.--In 
                developing and implementing registration 
                requirements under this paragraph, the Bureau 
                shall consult with State agencies regarding 
                requirements or systems (including coordinated 
                or combined systems for registration), where 
                appropriate.
            (8) Privacy considerations.--In collecting 
        information from any person, publicly releasing 
        information held by the Bureau, or requiring covered 
        persons to publicly report information, the Bureau 
        shall take steps to ensure that proprietary, personal, 
        or confidential consumer information that is protected 
        from public disclosure under section 552(b) or 552a of 
        title 5, United States Code, or any other provision of 
        law, is not made public under this title.
            (9) Consumer privacy.--
                    (A) In general.--The Bureau may not obtain 
                from a covered person or service provider any 
                personally identifiable financial information 
                about a consumer from the financial records of 
                the covered person or service provider, 
                except--
                            (i) if the financial records are 
                        reasonably described in a request by 
                        the Bureau and the consumer provides 
                        written permission for the disclosure 
                        of such information by the covered 
                        person or service provider to the 
                        Bureau; or
                            (ii) as may be specifically 
                        permitted or required under other 
                        applicable provisions of law and in 
                        accordance with the Right to Financial 
                        Privacy Act of 1978 (12 U.S.C. 3401 et 
                        seq.).
                    (B) Treatment of covered person or service 
                provider.--With respect to the application of 
                any provision of the Right to Financial Privacy 
                Act of 1978, to a disclosure by a covered 
                person or service provider subject to this 
                subsection, the covered person or service 
                provider shall be treated as if it were a 
                ``financial institution'', as defined in 
                section 1101 of that Act (12 U.S.C. 3401).
    (d) Assessment of Significant Rules.--
            (1) In general.--The Bureau shall conduct an 
        assessment of each significant rule or order adopted by 
        the Bureau under Federal consumer financial law. The 
        assessment shall address, among other relevant factors, 
        the effectiveness of the rule or order in meeting the 
        purposes and objectives of this title and the specific 
        goals stated by the Bureau. The assessment shall 
        reflect available evidence and any data that the Bureau 
        reasonably may collect.
            (2) Reports.--The Bureau shall publish a report of 
        its assessment under this subsection not later than 5 
        years after the effective date of the subject rule or 
        order.
            (3) Public comment required.--Before publishing a 
        report of its assessment, the Bureau shall invite 
        public comment on recommendations for modifying, 
        expanding, or eliminating the newly adopted significant 
        rule or order.

SEC. 1023. REVIEW OF BUREAU REGULATIONS.

    (a) Review of Bureau Regulations.--On the petition of a 
member agency of the Council, the Council may set aside a final 
regulation prescribed by the Bureau, or any provision thereof, 
if the Council decides, in accordance with subsection (c), that 
the regulation or provision would put the safety and soundness 
of the United States banking system or the stability of the 
financial system of the United States at risk.
    (b) Petition.--
            (1) Procedure.--An agency represented by a member 
        of the Council may petition the Council, in writing, 
        and in accordance with rules prescribed pursuant to 
        subsection (f), to stay the effectiveness of, or set 
        aside, a regulation if the member agency filing the 
        petition--
                    (A) has in good faith attempted to work 
                with the Bureau to resolve concerns regarding 
                the effect of the rule on the safety and 
                soundness of the United States banking system 
                or the stability of the financial system of the 
                United States; and
                    (B) files the petition with the Council not 
                later than 10 days after the date on which the 
                regulation has been published in the Federal 
                Register.
            (2) Publication.--Any petition filed with the 
        Council under this section shall be published in the 
        Federal Register and transmitted contemporaneously with 
        filing to the Committee on Banking, Housing, and Urban 
        Affairs of the Senate and the Committee on Financial 
        Services of the House of Representatives.
    (c) Stays and Set Asides.--
            (1) Stay.--
                    (A) In general.--Upon the request of any 
                member agency, the Chairperson of the Council 
                may stay the effectiveness of a regulation for 
                the purpose of allowing appropriate 
                consideration of the petition by the Council.
                    (B) Expiration.--A stay issued under this 
                paragraph shall expire on the earlier of--
                            (i) 90 days after the date of 
                        filing of the petition under subsection 
                        (b); or
                            (ii) the date on which the Council 
                        makes a decision under paragraph (3).
            (2) No adverse inference.--After the expiration of 
        any stay imposed under this section, no inference shall 
        be drawn regarding the validity or enforceability of a 
        regulation which was the subject of the petition.
            (3) Vote.--
                    (A) In general.--The decision to issue a 
                stay of, or set aside, any regulation under 
                this section shall be made only with the 
                affirmative vote in accordance with 
                subparagraph (B) of \2/3\ of the members of the 
                Council then serving.
                    (B) Authorization to vote.--A member of the 
                Council may vote to stay the effectiveness of, 
                or set aside, a final regulation prescribed by 
                the Bureau only if the agency or department 
                represented by that member has--
                            (i) considered any relevant 
                        information provided by the agency 
                        submitting the petition and by the 
                        Bureau; and
                            (ii) made an official 
                        determination, at a public meeting 
                        where applicable, that the regulation 
                        which is the subject of the petition 
                        would put the safety and soundness of 
                        the United States banking system or the 
                        stability of the financial system of 
                        the United States at risk.
            (4) Decisions to set aside.--
                    (A) Effect of decision.--A decision by the 
                Council to set aside a regulation prescribed by 
                the Bureau, or provision thereof, shall render 
                such regulation, or provision thereof, 
                unenforceable.
                    (B) Timely action required.--The Council 
                may not issue a decision to set aside a 
                regulation, or provision thereof, which is the 
                subject of a petition under this section after 
                the expiration of the later of--
                            (i) 45 days following the date of 
                        filing of the petition, unless a stay 
                        is issued under paragraph (1); or
                            (ii) the expiration of a stay 
                        issued by the Council under this 
                        section.
                    (C) Separate authority.--The issuance of a 
                stay under this section does not affect the 
                authority of the Council to set aside a 
                regulation.
            (5) Dismissal due to inaction.--A petition under 
        this section shall be deemed dismissed if the Council 
        has not issued a decision to set aside a regulation, or 
        provision thereof, within the period for timely action 
        under paragraph (4)(B).
            (6) Publication of decision.--Any decision under 
        this subsection to issue a stay of, or set aside, a 
        regulation or provision thereof shall be published by 
        the Council in the Federal Register as soon as 
        practicable after the decision is made, with an 
        explanation of the reasons for the decision.
            (7) Rulemaking procedures inapplicable.--The notice 
        and comment procedures under section 553 of title 5, 
        United States Code, shall not apply to any decision 
        under this section of the Council to issue a stay of, 
        or set aside, a regulation.
            (8) Judicial review of decisions by the council.--A 
        decision by the Council to set aside a regulation 
        prescribed by the Bureau, or provision thereof, shall 
        be subject to review under chapter 7 of title 5, United 
        States Code.
    (d) Application of Other Law.--Nothing in this section 
shall be construed as altering, limiting, or restricting the 
application of any other provision of law, except as otherwise 
specifically provided in this section, including chapter 5 and 
chapter 7 of title 5, United States Code, to a regulation which 
is the subject of a petition filed under this section.
    (e) Savings Clause.--Nothing in this section shall be 
construed as limiting or restricting the Bureau from engaging 
in a rulemaking in accordance with applicable law.
    (f) Implementing Rules.--The Council shall prescribe 
procedural rules to implement this section.

SEC. 1024. SUPERVISION OF NONDEPOSITORY COVERED PERSONS.

    (a) Scope of Coverage.--
            (1) Applicability.--Notwithstanding any other 
        provision of this title, and except as provided in 
        paragraph (3), this section shall apply to any covered 
        person who--
                    (A) offers or provides origination, 
                brokerage, or servicing of loans secured by 
                real estate for use by consumers primarily for 
                personal, family, or household purposes, or 
                loan modification or foreclosure relief 
                services in connection with such loans;
                    (B) is a larger participant of a market for 
                other consumer financial products or services, 
                as defined by rule in accordance with paragraph 
                (2);
                    (C) the Bureau has reasonable cause to 
                determine, by order, after notice to the 
                covered person and a reasonable opportunity for 
                such covered person to respond, based on 
                complaints collected through the system under 
                section 1013(b)(3) or information from other 
                sources, that such covered person is engaging, 
                or has engaged, in conduct that poses risks to 
                consumers with regard to the offering or 
                provision of consumer financial products or 
                services;
                    (D) offers or provides to a consumer any 
                private education loan, as defined in section 
                140 of the Truth in Lending Act (15 U.S.C. 
                1650), notwithstanding section 1027(a)(2)(A) 
                and subject to section 1027(a)(2)(C); or
                    (E) offers or provides to a consumer a 
                payday loan.
            (2) Rulemaking to define covered persons subject to 
        this section.--The Bureau shall consult with the 
        Federal Trade Commission prior to issuing a rule, in 
        accordance with paragraph (1)(B), to define covered 
        persons subject to this section. The Bureau shall issue 
        its initial rule not later than 1 year after the 
        designated transfer date.
            (3) Rules of construction.--
                    (A) Certain persons excluded.--This section 
                shall not apply to persons described in section 
                1025(a) or 1026(a).
                    (B) Activity levels.--For purposes of 
                computing activity levels under paragraph (1) 
                or rules issued thereunder, activities of 
                affiliated companies (other than insured 
                depository institutions or insured credit 
                unions) shall be aggregated.
    (b) Supervision.--
            (1) In general.--The Bureau shall require reports 
        and conduct examinations on a periodic basis of persons 
        described in subsection (a)(1) for purposes of--
                    (A) assessing compliance with the 
                requirements of Federal consumer financial law;
                    (B) obtaining information about the 
                activities and compliance systems or procedures 
                of such person; and
                    (C) detecting and assessing risks to 
                consumers and to markets for consumer financial 
                products and services.
            (2) Risk-based supervision program.--The Bureau 
        shall exercise its authority under paragraph (1) in a 
        manner designed to ensure that such exercise, with 
        respect to persons described in subsection (a)(1), is 
        based on the assessment by the Bureau of the risks 
        posed to consumers in the relevant product markets and 
        geographic markets, and taking into consideration, as 
        applicable--
                    (A) the asset size of the covered person;
                    (B) the volume of transactions involving 
                consumer financial products or services in 
                which the covered person engages;
                    (C) the risks to consumers created by the 
                provision of such consumer financial products 
                or services;
                    (D) the extent to which such institutions 
                are subject to oversight by State authorities 
                for consumer protection; and
                    (E) any other factors that the Bureau 
                determines to be relevant to a class of covered 
                persons.
            (3) Coordination.--To minimize regulatory burden, 
        the Bureau shall coordinate its supervisory activities 
        with the supervisory activities conducted by prudential 
        regulators and the State bank regulatory authorities, 
        including establishing their respective schedules for 
        examining persons described in subsection (a)(1) and 
        requirements regarding reports to be submitted by such 
        persons.
            (4) Use of existing reports.--The Bureau shall, to 
        the fullest extent possible, use--
                    (A) reports pertaining to persons described 
                in subsection (a)(1) that have been provided or 
                required to have been provided to a Federal or 
                State agency; and
                    (B) information that has been reported 
                publicly.
            (5) Preservation of authority.--Nothing in this 
        title may be construed as limiting the authority of the 
        Director to require reports from persons described in 
        subsection (a)(1), as permitted under paragraph (1), 
        regarding information owned or under the control of 
        such person, regardless of whether such information is 
        maintained, stored, or processed by another person.
            (6) Reports of tax law noncompliance.--The Bureau 
        shall provide the Commissioner of Internal Revenue with 
        any report of examination or related information 
        identifying possible tax law noncompliance.
            (7) Registration, recordkeeping and other 
        requirements for certain persons.--
                    (A) In general.--The Bureau shall prescribe 
                rules to facilitate supervision of persons 
                described in subsection (a)(1) and assessment 
                and detection of risks to consumers.
                    (B) Recordkeeping.--The Bureau may require 
                a person described in subsection (a)(1), to 
                generate, provide, or retain records for the 
                purposes of facilitating supervision of such 
                persons and assessing and detecting risks to 
                consumers.
                    (C) Requirements concerning obligations.--
                The Bureau may prescribe rules regarding a 
                person described in subsection (a)(1), to 
                ensure that such persons are legitimate 
                entities and are able to perform their 
                obligations to consumers. Such requirements may 
                include background checks for principals, 
                officers, directors, or key personnel and 
                bonding or other appropriate financial 
                requirements.
                    (D) Consultation with state agencies.--In 
                developing and implementing requirements under 
                this paragraph, the Bureau shall consult with 
                State agencies
                regarding requirements or systems (including 
                coordinated or combined systems for 
                registration), where appropriate.
    (c) Enforcement Authority.--
            (1) The bureau to have enforcement authority.--
        Except as provided in paragraph (3) and section 1061, 
        with respect to any person described in subsection 
        (a)(1), to the extent that Federal law authorizes the 
        Bureau and another Federal agency to enforce Federal 
        consumer financial law, the Bureau shall have exclusive 
        authority to enforce that Federal consumer financial 
        law.
            (2) Referral.--Any Federal agency authorized to 
        enforce a Federal consumer financial law described in 
        paragraph (1) may recommend in writing to the Bureau 
        that the Bureau initiate an enforcement proceeding, as 
        the Bureau is authorized by that Federal law or by this 
        title.
            (3) Coordination with the federal trade 
        commission.--
                    (A) In general.--The Bureau and the Federal 
                Trade Commission shall negotiate an agreement 
                for coordinating with respect to enforcement 
                actions by each agency regarding the offering 
                or provision of consumer financial products or 
                services by any covered person that is 
                described in subsection (a)(1), or service 
                providers thereto. The agreement shall include 
                procedures for notice to the other agency, 
                where feasible, prior to initiating a civil 
                action to enforce any Federal law regarding the 
                offering or provision of consumer financial 
                products or services.
                    (B) Civil actions.--Whenever a civil action 
                has been filed by, or on behalf of, the Bureau 
                or the Federal Trade Commission for any 
                violation of any provision of Federal law 
                described in subparagraph (A), or any 
                regulation prescribed under such provision of 
                law--
                            (i) the other agency may not, 
                        during the pendency of that action, 
                        institute a civil action under such 
                        provision of law against any defendant 
                        named in the complaint in such pending 
                        action for any violation alleged in the 
                        complaint; and
                            (ii) the Bureau or the Federal 
                        Trade Commission may intervene as a 
                        party in any such action brought by the 
                        other agency, and, upon intervening--
                                    (I) be heard on all matters 
                                arising in such enforcement 
                                action; and
                                    (II) file petitions for 
                                appeal in such actions.
                    (C) Agreement terms.--The terms of any 
                agreement negotiated under subparagraph (A) may 
                modify or supersede the provisions of 
                subparagraph (B).
                    (D) Deadline.--The agencies shall reach the 
                agreement required under subparagraph (A) not 
                later than 6 months after the designated 
                transfer date.
    (d) Exclusive Rulemaking and Examination Authority.--
Notwithstanding any other provision of Federal law and except 
as provided in section 1061, to the extent that Federal law 
authorizes the Bureau and another Federal agency to issue 
regulations or guidance, conduct examinations, or require 
reports from a person described in subsection (a)(1) under such 
law for purposes of assuring compliance with Federal consumer 
financial law and any regulations thereunder, the Bureau shall 
have the exclusive authority to prescribe rules, issue 
guidance, conduct examinations, require reports, or issue 
exemptions with regard to a person described in subsection 
(a)(1), subject to those provisions of law.
    (e) Service Providers.--A service provider to a person 
described in subsection (a)(1) shall be subject to the 
authority of the Bureau under this section, to the same extent 
as if such service provider were engaged in a service 
relationship with a bank, and the Bureau were an appropriate 
Federal banking agency under section 7(c) of the Bank Service 
Company Act (12 U.S.C. 1867(c)). In conducting any examination 
or requiring any report from a service provider subject to this 
subsection, the Bureau shall coordinate with the appropriate 
prudential regulator, as applicable.
    (f) Preservation of Farm Credit Administration Authority.--
No provision of this title may be construed as modifying, 
limiting, or otherwise affecting the authority of the Farm 
Credit Administration.

SEC. 1025. SUPERVISION OF VERY LARGE BANKS, SAVINGS ASSOCIATIONS, AND 
                    CREDIT UNIONS.

    (a) Scope of Coverage.--This section shall apply to any 
covered person that is--
            (1) an insured depository institution with total 
        assets of more than $10,000,000,000 and any affiliate 
        thereof; or
            (2) an insured credit union with total assets of 
        more than $10,000,000,000 and any affiliate thereof.
    (b) Supervision.--
            (1) In general.--The Bureau shall have exclusive 
        authority to require reports and conduct examinations 
        on a periodic basis of persons described in subsection 
        (a) for purposes of--
                    (A) assessing compliance with the 
                requirements of Federal consumer financial 
                laws;
                    (B) obtaining information about the 
                activities subject to such laws and the 
                associated compliance systems or procedures of 
                such persons; and
                    (C) detecting and assessing associated 
                risks to consumers and to markets for consumer 
                financial products and services.
            (2) Coordination.--To minimize regulatory burden, 
        the Bureau shall coordinate its supervisory activities 
        with the supervisory activities conducted by prudential 
        regulators and the State bank regulatory authorities, 
        including consultation regarding their respective 
        schedules for examining such persons described in 
        subsection (a) and requirements regarding reports to be 
        submitted by such persons.
            (3) Use of existing reports.--The Bureau shall, to 
        the fullest extent possible, use--
                    (A) reports pertaining to a person 
                described in subsection (a) that have been 
                provided or required to have been provided to a 
                Federal or State agency; and
                    (B) information that has been reported 
                publicly.
            (4) Preservation of authority.--Nothing in this 
        title may be construed as limiting the authority of the 
        Director to require reports from a person described in 
        subsection (a), as permitted under paragraph (1), 
        regarding information owned or under the control of 
        such person, regardless of whether such information is 
        maintained, stored, or processed by another person.
            (5) Reports of tax law noncompliance.--The Bureau 
        shall provide the Commissioner of Internal Revenue with 
        any report of examination or related information 
        identifying possible tax law noncompliance.
    (c) Primary Enforcement Authority.--
            (1) The bureau to have primary enforcement 
        authority.--To the extent that the Bureau and another 
        Federal agency are authorized to enforce a Federal 
        consumer financial law, the Bureau shall have primary 
        authority to enforce that Federal consumer financial 
        law with respect to any person described in subsection 
        (a).
            (2) Referral.--Any Federal agency, other than the 
        Federal Trade Commission, that is authorized to enforce 
        a Federal consumer financial law may recommend, in 
        writing, to the Bureau that the Bureau initiate an 
        enforcement proceeding with respect to a person 
        described in subsection (a), as the Bureau is 
        authorized to do by that Federal consumer financial 
        law.
            (3) Backup enforcement authority of other federal 
        agency.--If the Bureau does not, before the end of the 
        120-day period beginning on the date on which the 
        Bureau receives a recommendation under paragraph (2), 
        initiate an enforcement proceeding, the other agency 
        referred to in paragraph (2) may initiate an 
        enforcement proceeding, including performing follow up 
        supervisory and support functions incidental thereto, 
        to assure compliance with such proceeding.
    (d) Service Providers.--A service provider to a person 
described in subsection (a) shall be subject to the authority 
of the Bureau under this section, to the same extent as if the 
Bureau were an appropriate Federal banking agency under section 
7(c) of the Bank Service Company Act 12 U.S.C. 1867(c). In 
conducting any examination or requiring any report from a 
service provider subject to this subsection, the Bureau shall 
coordinate with the appropriate prudential regulator.
    (e) Simultaneous and Coordinated Supervisory Action.--
            (1) Examinations.--A prudential regulator and the 
        Bureau shall, with respect to each insured depository 
        institution, insured credit union, or other covered 
        person described in subsection (a) that is supervised 
        by the prudential regulator and the Bureau, 
        respectively--
                    (A) coordinate the scheduling of 
                examinations of the insured depository 
                institution, insured credit union, or other 
                covered person described in subsection (a);
                    (B) conduct simultaneous examinations of 
                each insured depository institution or insured 
                credit union, unless such institution requests 
                examinations to be conducted separately;
                    (C) share each draft report of examination 
                with the other agency and permit the receiving 
                agency a reasonable opportunity (which shall 
                not be less than a period of 30 days after the 
                date of receipt) to comment on the draft report 
                before such report is made final; and
                    (D) prior to issuing a final report of 
                examination or taking supervisory action, take 
                into consideration concerns, if any, raised in 
                the comments made by the other agency.
            (2) Coordination with state bank supervisors.--The 
        Bureau shall pursue arrangements and agreements with 
        State bank supervisors to coordinate examinations, 
        consistent with paragraph (1).
            (3) Avoidance of conflict in supervision.--
                    (A) Request.--If the proposed supervisory 
                determinations of the Bureau and a prudential 
                regulator (in this section referred to 
                collectively as the ``agencies'') are 
                conflicting, an insured depository institution, 
                insured credit union, or other covered person 
                described in subsection (a) may request the 
                agencies to coordinate and present a joint 
                statement of coordinated supervisory action.
                    (B) Joint statement.--The agencies shall 
                provide a joint statement under subparagraph 
                (A), not later than 30 days after the date of 
                receipt of the request of the insured 
                depository institution, credit union, or 
                covered person described in subsection (a).
            (4) Appeals to governing panel.--
                    (A) In general.--If the agencies do not 
                resolve the conflict or issue a joint statement 
                required by subparagraph (B), or if either of 
                the agencies takes or attempts to take any 
                supervisory action relating to the request for 
                the joint statement without the consent of the 
                other agency, an insured depository 
                institution, insured credit union, or other 
                covered person described in subsection (a) may 
                institute an appeal to a governing panel, as 
                provided in this subsection, not later than 30 
                days after the expiration of the period during 
                which a joint statement is required to be filed 
                under paragraph (3)(B).
                    (B) Composition of governing panel.--The 
                governing panel for an appeal under this 
                paragraph shall be composed of--
                            (i) a representative from the 
                        Bureau and a representative of the 
                        prudential regulator, both of whom--
                                    (I) have not participated 
                                in the material supervisory 
                                determinations under appeal; 
                                and
                                    (II) do not directly or 
                                indirectly report to the person 
                                who participated materially in 
                                the supervisory determinations 
                                under appeal; and
                            (ii) one individual representative, 
                        to be determined on a rotating basis, 
                        from among the Board of Governors, the 
                        Corporation, the National Credit Union 
                        Administration, and the Office of the 
                        Comptroller of the Currency, other than 
                        any agency involved in the subject 
                        dispute.
                    (C) Conduct of appeal.--In an appeal under 
                this paragraph--
                            (i) the insured depository 
                        institution, insured credit union, or 
                        other covered person described in 
                        subsection (a)--
                                    (I) shall include in its 
                                appeal all the facts and legal 
                                arguments pertaining to the 
                                matter; and
                                    (II) may, through counsel, 
                                employees, or representatives, 
                                appear before the governing 
                                panel in person or by 
                                telephone; and
                            (ii) the governing panel--
                                    (I) may request the insured 
                                depository institution, insured 
                                credit union, or other covered 
                                person described in subsection 
                                (a), the Bureau, or the 
                                prudential regulator to produce 
                                additional information relevant 
                                to the appeal; and
                                    (II) by a majority vote of 
                                its members, shall provide a 
                                final determination, in 
                                writing, not later than 30 days 
                                after the date of filing of an 
                                informationally complete 
                                appeal, or such longer period 
                                as the panel and the insured 
                                depository institution, insured 
                                credit union, or other covered 
                                person described in subsection 
                                (a) may jointly agree.
                    (D) Public availability of 
                determinations.--A governing panel shall 
                publish all information contained in a 
                determination by the governing panel, with 
                appropriate redactions of information that 
                would be subject to an exemption from 
                disclosure under section 552 of title 5, United 
                States Code.
                    (E) Prohibition against retaliation.--The 
                Bureau and the prudential regulators shall 
                prescribe rules to provide safeguards from 
                retaliation against the insured depository 
                institution, insured credit union, or other 
                covered person described in subsection (a) 
                instituting an appeal under this paragraph, as 
                well as their officers and employees.
                    (F) Limitation.--The process provided in 
                this paragraph shall not apply to a 
                determination by a prudential regulator to 
                appoint a conservator or receiver for an 
                insured depository institution or a liquidating 
                agent for an insured credit union, as the case 
                may be, or a decision to take action pursuant 
                to section 38 of the Federal Deposit Insurance 
                Act (12 U.S.C. 1831o) or section 212 of the 
                Federal Credit Union Act (112 U.S.C. 1790a), as 
                applicable.
                    (G) Effect on other authority.--Nothing in 
                this section shall modify or limit the 
                authority of the Bureau to interpret, or take 
                enforcement action under, any Federal consumer 
                financial law, or the authority of a prudential 
                regulator to interpret or take enforcement 
                action under any other provision of Federal law 
                for safety and soundness purposes.

SEC. 1026. OTHER BANKS, SAVINGS ASSOCIATIONS, AND CREDIT UNIONS.

    (a) Scope of Coverage.--This section shall apply to any 
covered person that is--
            (1) an insured depository institution with total 
        assets of $10,000,000,000 or less; or
            (2) an insured credit union with total assets of 
        $10,000,000,000 or less.
    (b) Reports.--The Director may require reports from a 
person described in subsection (a), as necessary to support the 
role of the Bureau in implementing Federal consumer financial 
law, to support its examination activities under subsection 
(c), and to assess and detect risks to consumers and consumer 
financial markets.
            (1) Use of existing reports.--The Bureau shall, to 
        the fullest extent possible, use--
                    (A) reports pertaining to a person 
                described in subsection (a) that have been 
                provided or required to have been provided to a 
                Federal or State agency; and
                    (B) information that has been reported 
                publicly.
            (2) Preservation of authority.--Nothing in this 
        subsection may be construed as limiting the authority 
        of the Director from requiring from a person described 
        in subsection (a), as permitted under paragraph (1), 
        information owned or under the control of such person, 
        regardless of whether such information is maintained, 
        stored, or processed by another person.
            (3) Reports of tax law noncompliance.--The Bureau 
        shall provide the Commissioner of Internal Revenue with 
        any report of examination or related information 
        identifying possible tax law noncompliance.
    (c) Examinations.--
            (1) In general.--The Bureau may, at its discretion, 
        include examiners on a sampling basis of the 
        examinations performed by the prudential regulator to 
        assess compliance with the requirements of Federal 
        consumer financial law of persons described in 
        subsection (a).
            (2) Agency coordination.--The prudential regulator 
        shall--
                    (A) provide all reports, records, and 
                documentation related to the examination 
                process for any institution included in the 
                sample referred to in paragraph (1) to the 
                Bureau on a timely and continual basis;
                    (B) involve such Bureau examiner in the 
                entire examination process for such person; and
                    (C) consider input of the Bureau concerning 
                the scope of an examination, conduct of the 
                examination, the contents of the examination 
                report, the designation of matters requiring 
                attention, and examination ratings.
    (d) Enforcement.--
            (1) In general.--Except for requiring reports under 
        subsection (b), the prudential regulator is authorized 
        to enforce the requirements of Federal consumer 
        financial laws and, with respect to a covered person 
        described in subsection (a), shall have exclusive 
        authority (relative to the Bureau) to enforce such 
        laws.
            (2) Coordination with prudential regulator.--
                    (A) Referral.--When the Bureau has reason 
                to believe that a person described in 
                subsection (a) has engaged in a material 
                violation of a Federal consumer financial law, 
                the Bureau shall notify the prudential 
                regulator in writing and recommend appropriate 
                action to respond.
                    (B) Response.--Upon receiving a 
                recommendation under subparagraph (A), the 
                prudential regulator shall provide a written 
                response to the Bureau not later than 60 days 
                thereafter.
    (e) Service Providers.--A service provider to a substantial 
number of persons described in subsection (a) shall be subject 
to the authority of the Bureau under section 1025 to the same 
extent as if the Bureau were an appropriate Federal bank agency 
under section 7(c) of the Bank Service Company Act (12 U.S.C. 
1867(c)). When conducting any examination or requiring any 
report from a service provider subject to this subsection, the 
Bureau shall coordinate with the appropriate prudential 
regulator.

SEC. 1027. LIMITATIONS ON AUTHORITIES OF THE BUREAU; PRESERVATION OF 
                    AUTHORITIES.

    (a) Exclusion for Merchants, Retailers, and Other Sellers 
of Nonfinancial Goods or Services.--
            (1) Sale or brokerage of nonfinancial good or 
        service.--The Bureau may not exercise any rulemaking, 
        supervisory, enforcement or other authority under this 
        title with respect to a person who is a merchant, 
        retailer, or seller of any nonfinancial good or service 
        and is engaged in the sale or brokerage of such 
        nonfinancial good or service, except to the extent that 
        such person is engaged in offering or providing any 
        consumer financial product or service, or is otherwise 
        subject to any enumerated consumer law or any law for 
        which authorities are transferred under subtitle F or 
        H.
            (2) Offering or provision of certain consumer 
        financial products or services in connection with the 
        sale or brokerage of nonfinancial good or service.--
                    (A) In general.--Except as provided in 
                subparagraph (B), and subject to subparagraph 
                (C), the Bureau may not exercise any 
                rulemaking, supervisory, enforcement, or other 
                authority under this title with respect to a 
                merchant, retailer, or seller of nonfinancial 
                goods or services, but only to the extent that 
                such person--
                            (i) extends credit directly to a 
                        consumer, in a case in which the good 
                        or service being provided is not itself 
                        a consumer financial product or service 
                        (other than credit described in this 
                        subparagraph), exclusively for the 
                        purpose of enabling that consumer to 
                        purchase such nonfinancial good or 
                        service directly from the merchant, 
                        retailer, or seller;
                            (ii) directly, or through an 
                        agreement with another person, collects 
                        debt arising from credit extended as 
                        described in clause (i); or
                            (iii) sells or conveys debt 
                        described in clause (i) that is 
                        delinquent or otherwise in default.
                    (B) Applicability.--Subparagraph (A) does 
                not apply to any credit transaction or 
                collection of debt, other than as described in 
                subparagraph (C)(i), arising from a transaction 
                described in subparagraph (A)--
                            (i) in which the merchant, 
                        retailer, or seller of nonfinancial 
                        goods or services assigns, sells or 
                        otherwise conveys to another person 
                        such debt owed by the consumer (except 
                        for a sale of debt that is delinquent 
                        or otherwise in default, as described 
                        in subparagraph (A)(iii));
                            (ii) in which the credit extended 
                        significantly exceeds the market value 
                        of the nonfinancial good or service 
                        provided, or the Bureau otherwise finds 
                        that the sale of the nonfinancial good 
                        or service is done as a subterfuge, so 
                        as to evade or circumvent the 
                        provisions of this title; or
                            (iii) in which the merchant, 
                        retailer, or seller of nonfinancial 
                        goods or services regularly extends 
                        credit and the credit is subject to a 
                        finance charge.
                    (C) Limitations.--
                            (i) In general.--Notwithstanding 
                        subparagraph (B), subparagraph (A) 
                        shall apply with respect to a merchant, 
                        retailer, or seller of nonfinancial 
                        goods or services that is not engaged 
                        significantly in offering or providing 
                        consumer financial products or 
                        services.
                            (ii) Exception.--Subparagraph (A) 
                        and clause (i) of this subparagraph do 
                        not apply to any merchant, retailer, or 
                        seller of nonfinancial goods or 
                        services--
                                    (I) if such merchant, 
                                retailer, or seller of 
                                nonfinancial goods or services 
                                is engaged in a transaction 
                                described in subparagraph 
                                (B)(i) or (B)(ii); or
                                    (II) to the extent that 
                                such merchant, retailer, or 
                                seller is subject to any 
                                enumerated consumer law or any 
                                law for which authorities are 
                                transferred under subtitle F or 
                                H, but the Bureau may exercise 
                                such authority only with 
                                respect to that law.
                    (D) Rules.--
                            (i) Authority of other agencies.--
                        No provision of this title shall be 
                        construed as modifying, limiting, or 
                        superseding the supervisory or 
                        enforcement authority of the Federal 
                        Trade Commission or any other agency 
                        (other than the Bureau) with respect to 
                        credit extended, or the collection of 
                        debt arising from such extension, 
                        directly by a merchant or retailer to a 
                        consumer exclusively for the purpose of 
                        enabling that consumer to purchase 
                        nonfinancial goods or services directly 
                        from the merchant or retailer.
                            (ii) Small businesses.--A merchant, 
                        retailer, or seller of nonfinancial 
                        goods or services that would otherwise 
                        be subject to the authority of the 
                        Bureau solely by virtue of the 
                        application of subparagraph (B)(iii) 
                        shall be deemed not to be engaged 
                        significantly in offering or providing 
                        consumer financial products or services 
                        under subparagraph (C)(i), if such 
                        person--
                                    (I) only extends credit for 
                                the sale of nonfinancial goods 
                                or services, as described in 
                                subparagraph (A)(i);
                                    (II) retains such credit on 
                                its own accounts (except to 
                                sell or convey such debt that 
                                is delinquent or otherwise in 
                                default); and
                                    (III) meets the relevant 
                                industry size threshold to be a 
                                small business concern, based 
                                on annual receipts, pursuant to 
                                section 3 of the Small Business 
                                Act (15 U.S.C. 632) and the 
                                implementing rules thereunder.
                            (iii) Initial year.--A merchant, 
                        retailer, or seller of nonfinancial 
                        goods or services shall be deemed to 
                        meet the relevant industry size 
                        threshold described in clause (ii)(III) 
                        during the first year of operations of 
                        that business concern if, during that 
                        year, the receipts of that business 
                        concern reasonably are expected to meet 
                        that size threshold.
                            (iv) Other standards for small 
                        business.--With respect to a merchant, 
                        retailer, or seller of nonfinancial 
                        goods or services that is a classified 
                        on a basis other than annual receipts 
                        for the purposes of section 3 of the 
                        Small Business Act (15 U.S.C. 632) and 
                        the implementing rules thereunder, such 
                        merchant, retailer, or seller shall be 
                        deemed to meet the relevant industry 
                        size threshold described in clause 
                        (ii)(III) if such merchant, retailer, 
                        or seller meets the relevant industry 
                        size threshold to be a small business 
                        concern based on the number of 
                        employees, or other such applicable 
                        measure, established under that Act.
                    (E) Exception from state enforcement.--To 
                the extent that the Bureau may not exercise 
                authority under this subsection with respect to 
                a merchant, retailer, or seller of nonfinancial 
                goods or services, no action by a State 
                attorney general or State regulator with 
                respect to a claim made under this title may be 
                brought under subsection 1042(a), with respect 
                to an activity described in any of clauses (i) 
                through (iii) of subparagraph (A) by such 
                merchant, retailer, or seller of nonfinancial 
                goods or services.
    (b) Exclusion for Real Estate Brokerage Activities.--
            (1) Real estate brokerage activities excluded.--
        Without limiting subsection (a), and except as 
        permitted in paragraph (2), the Bureau may not exercise 
        any rulemaking, supervisory, enforcement, or other 
        authority under this title with respect to a person 
        that is licensed or registered as a real estate broker 
        or real estate agent, in accordance with State law, to 
        the extent that such person--
                    (A) acts as a real estate agent or broker 
                for a buyer, seller, lessor, or lessee of real 
                property;
                    (B) brings together parties interested in 
                the sale, purchase, lease, rental, or exchange 
                of real property;
                    (C) negotiates, 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 the 
                provision of financing with respect to any such 
                transaction); or
                    (D) offers to engage in any activity, or 
                act in any capacity, described in subparagraph 
                (A), (B), or (C).
            (2) Description of activities.--The Bureau may 
        exercise rulemaking, supervisory, enforcement, or other 
        authority under this title with respect to a person 
        described in paragraph (1) when such person is--
                    (A) engaged in an activity of offering or 
                providing any consumer financial product or 
                service, except that the Bureau may exercise 
                such authority only with respect to that 
                activity; or
                    (B) otherwise subject to any enumerated 
                consumer law or any law for which authorities 
                are transferred under subtitle F or H, but the 
                Bureau may exercise such authority only with 
                respect to that law.
    (c) Exclusion for Manufactured Home Retailers and Modular 
Home Retailers.--
            (1) In general.--The Director may not exercise any 
        rulemaking, supervisory, enforcement, or other 
        authority over a person to the extent that--
                    (A) such person is not described in 
                paragraph (2); and
                    (B) such person--
                            (i) acts as an agent or broker for 
                        a buyer or seller of a manufactured 
                        home or a modular home;
                            (ii) facilitates the purchase by a 
                        consumer of a manufactured home or 
                        modular home, by negotiating the 
                        purchase price or terms of the sales 
                        contract (other than providing 
                        financing with respect to such 
                        transaction); or
                            (iii) offers to engage in any 
                        activity described in clause (i) or 
                        (ii).
            (2) Description of activities.--A person is 
        described in this paragraph to the extent that such 
        person is engaged in the offering or provision of any 
        consumer financial product or service or is otherwise 
        subject to any enumerated consumer law or any law for 
        which authorities are transferred under subtitle F or 
        H.
            (3) Definitions.--For purposes of this subsection, 
        the following definitions shall apply:
                    (A) Manufactured home.--The term 
                ``manufactured home'' has the same meaning as 
                in section 603 of the National Manufactured 
                Housing Construction and Safety Standards Act 
                of 1974 (42 U.S.C. 5402).
                    (B) Modular home.--The term ``modular 
                home'' means a house built in a factory in 2 or 
                more modules that meet the State or local 
                building codes where the house will be located, 
                and where such modules are transported to the 
                building site, installed on foundations, and 
                completed.
    (d) Exclusion for Accountants and Tax Preparers.--
            (1) In general.--Except as permitted in paragraph 
        (2), the Bureau may not exercise any rulemaking, 
        supervisory, enforcement, or other authority over--
                    (A) any person that is a certified public 
                accountant, permitted to practice as a 
                certified public accounting firm, or certified 
                or licensed for such purpose by a State, or any 
                individual who is employed by or holds an 
                ownership interest with respect to a person 
                described in this subparagraph, when such 
                person is performing or offering to perform--
                            (i) customary and usual accounting 
                        activities, including the provision of 
                        accounting, tax, advisory, or other 
                        services that are subject to the 
                        regulatory authority of a State board 
                        of accountancy or a Federal authority; 
                        or
                            (ii) other services that are 
                        incidental to such customary and usual 
                        accounting activities, to the extent 
                        that such incidental services are not 
                        offered or provided--
                                    (I) by the person separate 
                                and apart from such customary 
                                and usual accounting 
                                activities; or
                                    (II) to consumers who are 
                                not receiving such customary 
                                and usual accounting 
                                activities; or
                    (B) any person, other than a person 
                described in subparagraph (A) that performs 
                income tax preparation activities for 
                consumers.
            (2) Description of activities.--
                    (A) In general.--Paragraph (1) shall not 
                apply to any person described in paragraph 
                (1)(A) or (1)(B) to the extent that such person 
                is engaged in any activity which is not a 
                customary and usual accounting activity 
                described in paragraph (1)(A) or incidental 
                thereto but which is the offering or provision 
                of any consumer financial product or service, 
                except to the extent that a person described in 
                paragraph (1)(A) is engaged in an activity 
                which is a customary and usual accounting 
                activity described in paragraph (1)(A), or 
                incidental thereto.
                    (B) Not a customary and usual accounting 
                activity.--For purposes of this subsection, 
                extending or brokering credit is not a 
                customary and usual accounting activity, or 
                incidental thereto.
                    (C) Rule of construction.--For purposes of 
                subparagraphs (A) and (B), a person described 
                in paragraph (1)(A) shall not be deemed to be 
                extending credit, if such person is only 
                extending credit directly to a consumer, 
                exclusively for the purpose of enabling such 
                consumer to purchase services described in 
                clause (i) or (ii) of paragraph (1)(A) directly 
                from such person, and such credit is--
                            (i) not subject to a finance 
                        charge; and
                            (ii) not payable by written 
                        agreement in more than 4 installments.
                    (D) Other limitations.--Paragraph (1) does 
                not apply to any person described in paragraph 
                (1)(A) or (1)(B) that is otherwise subject to 
                any enumerated consumer law or any law for 
                which authorities are transferred under 
                subtitle F or H.
    (e) Exclusion for Practice of Law.--
            (1)  In general.--Except as provided under 
        paragraph (2), the Bureau may not exercise any 
        supervisory or enforcement authority with respect to an 
        activity engaged in by an attorney as part of the 
        practice of law under the laws of a State in which the 
        attorney is licensed to practice law.
            (2)  Rule of construction.--Paragraph (1) shall not 
        be construed so as to limit the exercise by the Bureau 
        of any supervisory, enforcement, or other authority 
        regarding the offering or provision of a consumer 
        financial product or service described in any 
        subparagraph of section 1002(5)--
                    (A) that is not offered or provided as part 
                of, or incidental to, the practice of law, 
                occurring exclusively within the scope of the 
                attorney-client relationship; or
                    (B) that is otherwise offered or provided 
                by the attorney in question with respect to any 
                consumer who is not receiving legal advice or 
                services from the attorney in connection with 
                such financial product or service.
            (3)  Existing authority.--Paragraph (1) shall not 
        be construed so as to limit the authority of the Bureau 
        with respect to any attorney, to the extent that such 
        attorney is otherwise subject to any of the enumerated 
        consumer laws or the authorities transferred under 
        subtitle F or H.
    (f) Exclusion for Persons Regulated by a State Insurance 
Regulator.--
            (1) In general.--No provision of this title shall 
        be construed as altering, amending, or affecting the 
        authority of any State insurance regulator to adopt 
        rules, initiate enforcement proceedings, or take any 
        other action with respect to a person regulated by a 
        State insurance regulator. Except as provided in 
        paragraph (2), the Bureau shall have no authority to 
        exercise any power to enforce this title with respect 
        to a person regulated by a State insurance regulator.
            (2) Description of activities.--Paragraph (1) does 
        not apply to any person described in such paragraph to 
        the extent that such person is engaged in the offering 
        or provision of any consumer financial product or 
        service or is otherwise subject to any enumerated 
        consumer law or any law for which authorities are 
        transferred under subtitle F or H.
            (3) State insurance authority under gramm-leach-
        bliley.--Notwithstanding paragraph (2), the Bureau 
        shall not exercise any authorities that are granted a 
        State insurance authority under section 505(a)(6) of 
        the Gramm-Leach-Bliley Act with respect to a person 
        regulated by a State insurance authority.
    (g) Exclusion for Employee Benefit and Compensation Plans 
and Certain Other Arrangements Under the Internal Revenue Code 
of 1986.--
            (1) Preservation of authority of other agencies.--
        No provision of this title shall be construed as 
        altering, amending, or affecting the authority of the 
        Secretary of the Treasury, the Secretary of Labor, or 
        the Commissioner of Internal Revenue to adopt 
        regulations, initiate enforcement proceedings, or take 
        any actions with respect to any specified plan or 
        arrangement.
            (2) Activities not constituting the offering or 
        provision of any consumer financial product or 
        service.--For purposes of this title, a person shall 
        not be treated as having engaged in the offering or 
        provision of any consumer financial product or service 
        solely because such person is--
                    (A) a specified plan or arrangement;
                    (B) engaged in the activity of establishing 
                or maintaining, for the benefit of employees of 
                such person (or for members of an employee 
                organization), any specified plan or 
                arrangement; or
                    (C) engaged in the activity of establishing 
                or maintaining a qualified tuition program 
                under section 529(b)(1) of the Internal Revenue 
                Code of 1986 offered by a State or other 
                prepaid tuition program offered by a State.
            (3) Limitation on bureau authority.--
                    (A) In general.--Except as provided under 
                subparagraphs (B) and (C), the Bureau may not 
                exercise any rulemaking or enforcement 
                authority with respect to products or services 
                that relate to any specified plan or 
                arrangement.
                    (B) Bureau action pursuant to agency 
                request.--
                            (i) Agency request.--The Secretary 
                        and the Secretary of Labor may jointly 
                        issue a written request to the Bureau 
                        regarding implementation of appropriate 
                        consumer protection standards under 
                        this title with respect to the 
                        provision of services relating to any 
                        specified plan or arrangement.
                            (ii) Agency response.--In response 
                        to a request by the Bureau, the 
                        Secretary and the Secretary of Labor 
                        shall jointly issue a written response, 
                        not later than 90 days after receipt of 
                        such request, to grant or deny the 
                        request of the Bureau regarding 
                        implementation of appropriate consumer 
                        protection standards under this title 
                        with respect to the provision of 
                        services relating to any specified plan 
                        or arrangement.
                            (iii) Scope of bureau action.--
                        Subject to a request or response 
                        pursuant to clause (i) or clause (ii) 
                        by the agencies made under this 
                        subparagraph, the Bureau may exercise 
                        rulemaking authority, and may act to 
                        enforce a rule prescribed pursuant to 
                        such request or response, in accordance 
                        with the provisions of this title. A 
                        request or response made by the 
                        Secretary and the Secretary of Labor 
                        under this subparagraph shall describe 
                        the basis for, and scope of, 
                        appropriate consumer protection 
                        standards to be implemented under this 
                        title with respect to the provision of 
                        services relating to any specified plan 
                        or arrangement.
                    (C) Description of products or services.--
                To the extent that a person engaged in 
                providing products or services relating to any 
                specified plan or arrangement is subject to any 
                enumerated consumer law or any law for which 
                authorities are transferred under subtitle F or 
                H, subparagraph (A) shall not apply with 
                respect to that law.
            (4) Specified plan or arrangement.--For purposes of 
        this subsection, the term ``specified plan or 
        arrangement'' means any plan, account, or arrangement 
        described in section 220, 223, 401(a), 403(a), 403(b), 
        408, 408A, 529, or 530 of the Internal Revenue Code of 
        1986, or any employee benefit or compensation plan or 
        arrangement, including a plan that is subject to title 
        I of the Employee Retirement Income Security Act of 
        1974, or any prepaid tuition program offered by a 
        State.
    (h) Persons Regulated by a State Securities Commission.--
            (1) In general.--No provision of this title shall 
        be construed as altering, amending, or affecting the 
        authority of any securities commission (or any agency 
        or office performing like functions) of any State to 
        adopt rules, initiate enforcement proceedings, or take 
        any other action with respect to a person regulated by 
        any securities commission (or any agency or office 
        performing like functions) of any State. Except as 
        permitted in paragraph (2) and subsection (f), the 
        Bureau shall have no authority to exercise any power to 
        enforce this title with respect to a person regulated 
        by any securities commission (or any agency or office 
        performing like functions) of any State, but only to 
        the extent that the person acts in such regulated 
        capacity.
            (2) Description of activities.--Paragraph (1) shall 
        not apply to any person to the extent such person is 
        engaged in the offering or provision of any consumer 
        financial product or service, or is otherwise subject 
        to any enumerated consumer law or any law for which 
        authorities are transferred under subtitle F or H.
    (i) Exclusion for Persons Regulated by the Commission.--
            (1) In general.--No provision of this title may be 
        construed as altering, amending, or affecting the 
        authority of the Commission to adopt rules, initiate 
        enforcement proceedings, or take any other action with 
        respect to a person regulated by the Commission. The 
        Bureau shall have no authority to exercise any power to 
        enforce this title with respect to a person regulated 
        by the Commission.
            (2) Consultation and coordination.--Notwithstanding 
        paragraph (1), the Commission shall consult and 
        coordinate, where feasible, with the Bureau with 
        respect to any rule (including any advance notice of 
        proposed rulemaking) regarding an investment product or 
        service that is the same type of product as, or that 
        competes directly with, a consumer financial product or 
        service that is subject to the jurisdiction of the 
        Bureau under this title or under any other law. In 
        carrying out this paragraph, the agencies shall 
        negotiate an agreement to establish procedures for such 
        coordination, including procedures for providing 
        advance notice to the Bureau when the Commission is 
        initiating a rulemaking.
    (j) Exclusion for Persons Regulated by the Commodity 
Futures Trading Commission.--
            (1) In general.--No provision of this title shall 
        be construed as altering, amending, or affecting the 
        authority of the Commodity Futures Trading Commission 
        to adopt rules, initiate enforcement proceedings, or 
        take any other action with respect to a person 
        regulated by the Commodity Futures Trading Commission. 
        The Bureau shall have no authority to exercise any 
        power to enforce this title with respect to a person 
        regulated by the Commodity Futures Trading Commission.
            (2) Consultation and coordination.--Notwithstanding 
        paragraph (1), the Commodity Futures Trading Commission 
        shall consult and coordinate with the Bureau with 
        respect to any rule (including any advance notice of 
        proposed rulemaking) regarding a product or service 
        that is the same type of product as, or that competes 
        directly with, a consumer financial product or service 
        that is subject to the jurisdiction of the Bureau under 
        this title or under any other law.
    (k) Exclusion for Persons Regulated by the Farm Credit 
Administration.--
            (1) In general.--No provision of this title shall 
        be construed as altering, amending, or affecting the 
        authority of the Farm Credit Administration to adopt 
        rules, initiate enforcement proceedings, or take any 
        other action with respect to a person regulated by the 
        Farm Credit Administration. The Bureau shall have no 
        authority to exercise any power to enforce this title 
        with respect to a person regulated by the Farm Credit 
        Administration.
            (2) Definition.--For purposes of this subsection, 
        the term ``person regulated by the Farm Credit 
        Administration'' means any Farm Credit System 
        institution that is chartered and subject to the 
        provisions of the Farm Credit Act of 1971 (12 U.S.C. 
        2001 et seq.).
    (l) Exclusion for Activities Relating to Charitable 
Contributions.--
            (1) In general.--The Director and the Bureau may 
        not exercise any rulemaking, supervisory, enforcement, 
        or other authority, including authority to order 
        penalties, over any activities related to the 
        solicitation or making of voluntary contributions to a 
        tax-exempt organization as recognized by the Internal 
        Revenue Service, by any agent, volunteer, or 
        representative of such organizations to the extent the 
        organization, agent, volunteer, or representative 
        thereof is soliciting or providing advice, information, 
        education, or instruction to any donor or potential 
        donor relating to a contribution to the organization.
            (2) Limitation.--The exclusion in paragraph (1) 
        does not apply to other activities not described in 
        paragraph (1) that are the offering or provision of any 
        consumer financial product or service, or are otherwise 
        subject to any enumerated consumer law or any law for 
        which authorities are transferred under subtitle F or 
        H.
    (m) Insurance.--The Bureau may not define as a financial 
product or service, by regulation or otherwise, engaging in the 
business of insurance.
    (n) Limited Authority of the Bureau.--Notwithstanding 
subsections (a) through (h) and (l), a person subject to or 
described in one or more of such provisions--
            (1) may be a service provider; and
            (2) may be subject to requests from, or 
        requirements imposed by, the Bureau regarding 
        information in order to carry out the responsibilities 
        and functions of the Bureau and in accordance with 
        section 1022, 1052, or 1053.
    (o) No Authority To Impose Usury Limit.--No provision of 
this title shall be construed as conferring authority on the 
Bureau to establish a usury limit applicable to an extension of 
credit offered or made by a covered person to a consumer, 
unless explicitly authorized by law.
    (p) Attorney General.--No provision of this title, 
including section 1024(c)(1), shall affect the authorities of 
the Attorney General under otherwise applicable provisions of 
law.
    (q) Secretary of the Treasury.--No provision of this title 
shall affect the authorities of the Secretary, including with 
respect to prescribing rules, initiating enforcement 
proceedings, or taking other actions with respect to a person 
that performs income tax preparation activities for consumers.
    (r) Deposit Insurance and Share Insurance.--Nothing in this 
title shall affect the authority of the Corporation under the 
Federal Deposit Insurance Act or the National Credit Union 
Administration Board under the Federal Credit Union Act as to 
matters related to deposit insurance and share insurance, 
respectively.
    (s) Fair Housing Act.--No provision of this title shall be 
construed as affecting any authority arising under the Fair 
Housing Act.

SEC. 1028. AUTHORITY TO RESTRICT MANDATORY PRE-DISPUTE ARBITRATION.

    (a) Study and Report.--The Bureau shall conduct a study of, 
and shall provide a report to Congress concerning, the use of 
agreements providing for arbitration of any future dispute 
between covered persons and consumers in connection with the 
offering or providing of consumer financial products or 
services.
    (b) Further Authority.--The Bureau, by regulation, may 
prohibit or impose conditions or limitations on the use of an 
agreement between a covered person and a consumer for a 
consumer financial product or service providing for arbitration 
of any future dispute between the parties, if the Bureau finds 
that such a prohibition or imposition of conditions or 
limitations is in the public interest and for the protection of 
consumers. The findings in such rule shall be consistent with 
the study conducted under subsection (a).
    (c) Limitation.--The authority described in subsection (b) 
may not be construed to prohibit or restrict a consumer from 
entering into a voluntary arbitration agreement with a covered 
person after a dispute has arisen.
    (d) Effective Date.--Notwithstanding any other provision of 
law, any regulation prescribed by the Bureau under subsection 
(b) shall apply, consistent with the terms of the regulation, 
to any agreement between a consumer and a covered person 
entered into after the end of the 180-day period beginning on 
the effective date of the regulation, as established by the 
Bureau.

SEC. 1029. EXCLUSION FOR AUTO DEALERS.

    (a) Sale, Servicing, and Leasing of Motor Vehicles 
Excluded.--Except as permitted in subsection (b), the Bureau 
may not exercise any rulemaking, supervisory, enforcement or 
any other authority, including any authority to order 
assessments, over a motor vehicle dealer that is predominantly 
engaged in the sale and servicing of motor vehicles, the 
leasing and servicing of motor vehicles, or both.
    (b) Certain Functions Excepted.--Subsection (a) shall not 
apply to any person, to the extent that such person--
            (1) provides consumers with any services related to 
        residential or commercial mortgages or self-financing 
        transactions involving real property;
            (2) operates a line of business--
                    (A) that involves the extension of retail 
                credit or retail leases involving motor 
                vehicles; and
                    (B) in which--
                            (i) the extension of retail credit 
                        or retail leases are provided directly 
                        to consumers; and
                            (ii) the contract governing such 
                        extension of retail credit or retail 
                        leases is not routinely assigned to an 
                        unaffiliated third party finance or 
                        leasing source; or
            (3) offers or provides a consumer financial product 
        or service not involving or related to the sale, 
        financing, leasing, rental, repair, refurbishment, 
        maintenance, or other servicing of motor vehicles, 
        motor vehicle parts, or any related or ancillary 
        product or service.
    (c) Preservation of Authorities of Other Agencies.--Except 
as provided in subsections (b) and (d), nothing in this title, 
including subtitle F, shall be construed as modifying, 
limiting, or superseding the operation of any provision of 
Federal law, or otherwise affecting the authority of the Board 
of Governors, the Federal Trade Commission, or any other 
Federal agency, with respect to a person described in 
subsection (a).
    (d) Federal Trade Commission Authority.--Notwithstanding 
section 18 of the Federal Trade Commission Act, the Federal 
Trade Commission is authorized to prescribe rules under 
sections 5 and 18(a)(1)(B) of the Federal Trade Commission Act, 
in accordance with section 553 of title 5, United States Code, 
with respect to a person described in subsection (a).
    (e) Coordination With Office of Service Member Affairs.--
The Board of Governors and the Federal Trade Commission shall 
coordinate with the Office of Service Member Affairs, to ensure 
that--
            (1) service members and their families are educated 
        and empowered to make better informed decisions 
        regarding consumer financial products and services 
        offered by motor vehicle dealers, with a focus on motor 
        vehicle dealers in the proximity of military 
        installations; and
            (2) complaints by service members and their 
        families concerning such motor vehicle dealers are 
        effectively monitored and responded to, and where 
        appropriate, enforcement action is pursued by the 
        authorized agencies.
    (f) Definitions.--For purposes of this section, the 
following definitions shall apply:
            (1) Motor vehicle.--The term ``motor vehicle'' 
        means--
                    (A) any self-propelled vehicle designed for 
                transporting persons or property on a street, 
                highway, or other road;
                    (B) recreational boats and marine 
                equipment;
                    (C) motorcycles;
                    (D) motor homes, recreational vehicle 
                trailers, and slide-in campers, as those terms 
                are defined in sections 571.3 and 575.103 (d) 
                of title 49, Code of Federal Regulations, or 
                any successor thereto; and
                    (E) other vehicles that are titled and sold 
                through dealers.
            (2) Motor vehicle dealer.--The term ``motor vehicle 
        dealer'' means any person or resident in the United 
        States, or any territory of the United States, who--
                    (A) is licensed by a State, a territory of 
                the United States, or the District of Columbia 
                to engage in the sale of motor vehicles; and
                    (B) takes title to, holds an ownership in, 
                or takes physical custody of motor vehicles.

SEC. 1029A. EFFECTIVE DATE.

    This subtitle shall become effective on the designated 
transfer date, except that sections 1022, 1024, and 1025(e) 
shall become effective on the date of enactment of this Act.

                Subtitle C--Specific Bureau Authorities

SEC. 1031. PROHIBITING UNFAIR, DECEPTIVE, OR ABUSIVE ACTS OR PRACTICES.

    (a) In General.--The Bureau may take any action authorized 
under subtitle E to prevent a covered person or service 
provider from committing or engaging in an unfair, deceptive, 
or abusive act or practice under Federal law in connection with 
any transaction with a consumer for a consumer financial 
product or service, or the offering of a consumer financial 
product or service.
    (b) Rulemaking.--The Bureau may prescribe rules applicable 
to a covered person or service provider identifying as 
unlawful, unfair, deceptive, or abusive acts or practices in 
connection with any transaction with a consumer for a consumer 
financial product or service, or the offering of a consumer 
financial product or service. Rules under this section may 
include requirements for the purpose of preventing such acts or 
practices.
    (c) Unfairness.--
            (1) In general.--The Bureau shall have no authority 
        under this section to declare an act or practice in 
        connection with a transaction with a consumer for a 
        consumer financial product or service, or the offering 
        of a consumer financial product or service, to be 
        unlawful on the grounds that such act or practice is 
        unfair, unless the Bureau has a reasonable basis to 
        conclude that--
                    (A) the act or practice causes or is likely 
                to cause substantial injury to consumers which 
                is not reasonably avoidable by consumers; and
                    (B) such substantial injury is not 
                outweighed by countervailing benefits to 
                consumers or to competition.
            (2) Consideration of public policies.--In 
        determining whether an act or practice is unfair, the 
        Bureau may consider established public policies as 
        evidence to be considered with all other evidence. Such 
        public policy considerations may not serve as a primary 
        basis for such determination.
    (d) Abusive.--The Bureau shall have no authority under this 
section to declare an act or practice abusive in connection 
with the provision of a consumer financial product or service, 
unless the act or practice--
            (1) materially interferes with the ability of a 
        consumer to understand a term or condition of a 
        consumer financial product or service; or
            (2) takes unreasonable advantage of--
                    (A) a lack of understanding on the part of 
                the consumer of the material risks, costs, or 
                conditions of the product or service;
                    (B) the inability of the consumer to 
                protect the interests of the consumer in 
                selecting or using a consumer financial product 
                or service; or
                    (C) the reasonable reliance by the consumer 
                on a covered person to act in the interests of 
                the consumer.
    (e) Consultation.--In prescribing rules under this section, 
the Bureau shall consult with the Federal banking agencies, or 
other Federal agencies, as appropriate, concerning the 
consistency of the proposed rule with prudential, market, or 
systemic objectives administered by such agencies.
    (f) Consideration of Seasonal Income.--The rules of the 
Bureau under this section shall provide, with respect to an 
extension of credit secured by residential real estate or a 
dwelling, if documented income of the borrower, including 
income from a small business, is a repayment source for an 
extension of credit secured by residential real estate or a 
dwelling, the creditor may consider the seasonality and 
irregularity of such income in the underwriting of and 
scheduling of payments for such credit.

SEC. 1032. DISCLOSURES.

    (a) In General.--The Bureau may prescribe rules to ensure 
that the features of any consumer financial product or service, 
both initially and over the term of the product or service, are 
fully, accurately, and effectively disclosed to consumers in a 
manner that permits consumers to understand the costs, 
benefits, and risks associated with the product or service, in 
light of the facts and circumstances.
    (b) Model Disclosures.--
            (1) In general.--Any final rule prescribed by the 
        Bureau under this section requiring disclosures may 
        include a model form that may be used at the option of 
        the covered person for provision of the required 
        disclosures.
            (2) Format.--A model form issued pursuant to 
        paragraph (1) shall contain a clear and conspicuous 
        disclosure that, at a minimum--
                    (A) uses plain language comprehensible to 
                consumers;
                    (B) contains a clear format and design, 
                such as an easily readable type font; and
                    (C) succinctly explains the information 
                that must be communicated to the consumer.
            (3) Consumer testing.--Any model form issued 
        pursuant to this subsection shall be validated through 
        consumer testing.
    (c) Basis for Rulemaking.--In prescribing rules under this 
section, the Bureau shall consider available evidence about 
consumer awareness, understanding of, and responses to 
disclosures or communications about the risks, costs, and 
benefits of consumer financial products or services.
    (d) Safe Harbor.--Any covered person that uses a model form 
included with a rule issued under this section shall be deemed 
to be in compliance with the disclosure requirements of this 
section with respect to such model form.
    (e) Trial Disclosure Programs.--
            (1) In general.--The Bureau may permit a covered 
        person to conduct a trial program that is limited in 
        time and scope, subject to specified standards and 
        procedures, for the purpose of providing trial 
        disclosures to consumers that are designed to improve 
        upon any model form issued pursuant to subsection 
        (b)(1), or any other model form issued to implement an 
        enumerated statute, as applicable.
            (2) Safe harbor.--The standards and procedures 
        issued by the Bureau shall be designed to encourage 
        covered persons to conduct trial disclosure programs. 
        For the purposes of administering this subsection, the 
        Bureau may establish a limited period during which a 
        covered person conducting a trial disclosure program 
        shall be deemed to be in compliance with, or may be 
        exempted from, a requirement of a rule or an enumerated 
        consumer law.
            (3) Public disclosure.--The rules of the Bureau 
        shall provide for public disclosure of trial disclosure 
        programs, which public disclosure may be limited, to 
        the extent necessary to encourage covered persons to 
        conduct effective trials.
    (f) Combined Mortgage Loan Disclosure.--Not later than 1 
year after the designated transfer date, the Bureau shall 
propose for public comment rules and model disclosures that 
combine the disclosures required under the Truth in Lending Act 
and sections 4 and 5 of the Real Estate Settlement Procedures 
Act of 1974, into a single, integrated disclosure for mortgage 
loan transactions covered by those laws, unless the Bureau 
determines that any proposal issued by the Board of Governors 
and the Secretary of Housing and Urban Development carries out 
the same purpose.

SEC. 1033. CONSUMER RIGHTS TO ACCESS INFORMATION.

    (a) In General.--Subject to rules prescribed by the Bureau, 
a covered person shall make available to a consumer, upon 
request, information in the control or possession of the 
covered person concerning the consumer financial product or 
service that the consumer obtained from such covered person, 
including information relating to any transaction, series of 
transactions, or to the account including costs, charges and 
usage data. The information shall be made available in an 
electronic form usable by consumers.
    (b) Exceptions.--A covered person may not be required by 
this section to make available to the consumer--
            (1) any confidential commercial information, 
        including an algorithm used to derive credit scores or 
        other risk scores or predictors;
            (2) any information collected by the covered person 
        for the purpose of preventing fraud or money 
        laundering, or detecting, or making any report 
        regarding other unlawful or potentially unlawful 
        conduct;
            (3) any information required to be kept 
        confidential by any other provision of law; or
            (4) any information that the covered person cannot 
        retrieve in the ordinary course of its business with 
        respect to that information.
    (c) No Duty To Maintain Records.--Nothing in this section 
shall be construed to impose any duty on a covered person to 
maintain or keep any information about a consumer.
    (d) Standardized Formats for Data.--The Bureau, by rule, 
shall prescribe standards applicable to covered persons to 
promote the development and use of standardized formats for 
information, including through the use of machine readable 
files, to be made available to consumers under this section.
    (e) Consultation.--The Bureau shall, when prescribing any 
rule under this section, consult with the Federal banking 
agencies and the Federal Trade Commission to ensure, to the 
extent appropriate, that the rules--
            (1) impose substantively similar requirements on 
        covered persons;
            (2) take into account conditions under which 
        covered persons do business both in the United States 
        and in other countries; and
            (3) do not require or promote the use of any 
        particular technology in order to develop systems for 
        compliance.

SEC. 1034. RESPONSE TO CONSUMER COMPLAINTS AND INQUIRIES.

    (a) Timely Regulator Response to Consumers.--The Bureau 
shall establish, in consultation with the appropriate Federal 
regulatory agencies, reasonable procedures to provide a timely 
response to consumers, in writing where appropriate, to 
complaints against, or inquiries concerning, a covered person, 
including--
            (1) steps that have been taken by the regulator in 
        response to the complaint or inquiry of the consumer;
            (2) any responses received by the regulator from 
        the covered person; and
            (3) any follow-up actions or planned follow-up 
        actions by the regulator in response to the complaint 
        or inquiry of the consumer.
    (b) Timely Response to Regulator by Covered Person.--A 
covered person subject to supervision and primary enforcement 
by the Bureau pursuant to section 1025 shall provide a timely 
response, in writing where appropriate, to the Bureau, the 
prudential regulators, and any other agency having jurisdiction 
over such covered person concerning a consumer complaint or 
inquiry, including--
            (1) steps that have been taken by the covered 
        person to respond to the complaint or inquiry of the 
        consumer;
            (2) responses received by the covered person from 
        the consumer; and
            (3) follow-up actions or planned follow-up actions 
        by the covered person to respond to the complaint or 
        inquiry of the consumer.
    (c) Provision of Information to Consumers.--
            (1) In general.--A covered person subject to 
        supervision and primary enforcement by the Bureau 
        pursuant to section 1025 shall, in a timely manner, 
        comply with a consumer request for information in the 
        control or possession of such covered person concerning 
        the consumer financial product or service that the 
        consumer obtained from such covered person, including 
        supporting written documentation, concerning the 
        account of the consumer.
            (2) Exceptions.--A covered person subject to 
        supervision and primary enforcement by the Bureau 
        pursuant to section 1025, a prudential regulator, and 
        any other agency having jurisdiction over a covered 
        person subject to supervision and primary enforcement 
        by the Bureau pursuant to section 1025 may not be 
        required by this section to make available to the 
        consumer--
                    (A) any confidential commercial 
                information, including an algorithm used to 
                derive credit scores or other risk scores or 
                predictors;
                    (B) any information collected by the 
                covered person for the purpose of preventing 
                fraud or money laundering, or detecting or 
                making any report regarding other unlawful or 
                potentially unlawful conduct;
                    (C) any information required to be kept 
                confidential by any other provision of law; or
                    (D) any nonpublic or confidential 
                information, including confidential supervisory 
                information.
    (d) Agreements With Other Agencies.--The Bureau shall enter 
into a memorandum of understanding with any affected Federal 
regulatory agency regarding procedures by which any covered 
person, and the prudential regulators, and any other agency 
having jurisdiction over a covered person, including the 
Secretary of the Department of Housing and Urban Development 
and the Secretary of Education, shall comply with this section.

SEC. 1035. PRIVATE EDUCATION LOAN OMBUDSMAN.

    (a) Establishment.--The Secretary, in consultation with the 
Director, 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 Director 
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 Director, 
        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 
        Director, 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, Labor, and Pensions of the Senate 
        and the Committee on Financial 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).

SEC. 1036. PROHIBITED ACTS.

    (a) In General.--It shall be unlawful for--
            (1) any covered person or service provider--
                    (A) to offer or provide to a consumer any 
                financial product or service not in conformity 
                with Federal consumer financial law, or 
                otherwise commit any act or omission in 
                violation of a Federal consumer financial law; 
                or
                    (B) to engage in any unfair, deceptive, or 
                abusive act or practice;
            (2) any covered person or service provider to fail 
        or refuse, as required by Federal consumer financial 
        law, or any rule or order issued by the Bureau 
        thereunder--
                    (A) to permit access to or copying of 
                records;
                    (B) to establish or maintain records; or
                    (C) to make reports or provide information 
                to the Bureau; or
            (3) any person to knowingly or recklessly provide 
        substantial assistance to a covered person or service 
        provider in violation of the provisions of section 
        1031, or any rule or order issued thereunder, and 
        notwithstanding any provision of this title, the 
        provider of such substantial assistance shall be deemed 
        to be in violation of that section to the same extent 
        as the person to whom such assistance is provided.
    (b) Exception.--No person shall be held to have violated 
subsection (a)(1) solely by virtue of providing or selling time 
or space to a covered person or service provider placing an 
advertisement.

SEC. 1037. EFFECTIVE DATE.

    This subtitle shall take effect on the designated transfer 
date.

                 Subtitle D--Preservation of State Law

SEC. 1041. RELATION TO STATE LAW.

    (a) In General.--
            (1) Rule of construction.--This title, other than 
        sections 1044 through 1048, may not be construed as 
        annulling, altering, or affecting, or exempting any 
        person subject to the provisions of this title from 
        complying with, the statutes, regulations, orders, or 
        interpretations in effect in any State, except to the 
        extent that any such provision of law is inconsistent 
        with the provisions of this title, and then only to the 
        extent of the inconsistency.
            (2) Greater protection under state law.--For 
        purposes of this subsection, a statute, regulation, 
        order, or interpretation in effect in any State is not 
        inconsistent with the provisions of this title if the 
        protection that such statute, regulation, order, or 
        interpretation affords to consumers is greater than the 
        protection provided under this title. A determination 
        regarding whether a statute, regulation, order, or 
        interpretation in effect in any State is inconsistent 
        with the provisions of this title may be made by the 
        Bureau on its own motion or in response to a 
        nonfrivolous petition initiated by any interested 
        person.
    (b) Relation to Other Provisions of Enumerated Consumer 
Laws That Relate to State Law.--No provision of this title, 
except as provided in section 1083, shall be construed as 
modifying, limiting, or superseding the operation of any 
provision of an enumerated consumer law that relates to the 
application of a law in effect in any State with respect to 
such Federal law.
    (c) Additional Consumer Protection Regulations in Response 
to State Action.--
            (1) Notice of proposed rule required.--The Bureau 
        shall issue a notice of proposed rulemaking whenever a 
        majority of the States has enacted a resolution in 
        support of the establishment or modification of a 
        consumer protection regulation by the Bureau.
            (2) Bureau considerations required for issuance of 
        final regulation.--Before prescribing a final 
        regulation based upon a notice issued pursuant to 
        paragraph (1), the Bureau shall take into account 
        whether--
                    (A) the proposed regulation would afford 
                greater protection to consumers than any 
                existing regulation;
                    (B) the intended benefits of the proposed 
                regulation for consumers would outweigh any 
                increased costs or inconveniences for 
                consumers, and would not discriminate unfairly 
                against any category or class of consumers; and
                    (C) a Federal banking agency has advised 
                that the proposed regulation is likely to 
                present an unacceptable safety and soundness 
                risk to insured depository institutions.
            (3) Explanation of considerations.--The Bureau--
                    (A) shall include a discussion of the 
                considerations required in paragraph (2) in the 
                Federal Register notice of a final regulation 
                prescribed pursuant to this subsection; and
                    (B) whenever the Bureau determines not to 
                prescribe a final regulation, shall publish an 
                explanation of such determination in the 
                Federal Register, and provide a copy of such 
                explanation to each State that enacted a 
                resolution in support of the proposed 
                regulation, the Committee on Banking, Housing, 
                and Urban Affairs of the Senate, and the 
                Committee on Financial Services of the House of 
                Representatives.
            (4) Reservation of authority.--No provision of this 
        subsection shall be construed as limiting or 
        restricting the authority of the Bureau to enhance 
        consumer protection standards established pursuant to 
        this title in response to its own motion or in response 
        to a request by any other interested person.
            (5) Rule of construction.--No provision of this 
        subsection shall be construed as exempting the Bureau 
        from complying with subchapter II of chapter 5 of title 
        5, United States Code.
            (6) Definition.--For purposes of this subsection, 
        the term ``consumer protection regulation'' means a 
        regulation that the Bureau is authorized to prescribe 
        under the Federal consumer financial laws.

SEC. 1042. PRESERVATION OF ENFORCEMENT POWERS OF STATES.

    (a) In General.--
            (1) Action by state.--Except as provided in 
        paragraph (2), the attorney general (or the equivalent 
        thereof) of any State may bring a civil action in the 
        name of such State in any district court of the United 
        States in that State or in State court that is located 
        in that State and that has jurisdiction over the 
        defendant, to enforce provisions of this title or 
        regulations issued under this title, and to secure 
        remedies under provisions of this title or remedies 
        otherwise provided under other law. A State regulator 
        may bring a civil action or other appropriate 
        proceeding to enforce the provisions of this title or 
        regulations issued under this title with respect to any 
        entity that is State-chartered, incorporated, licensed, 
        or otherwise authorized to do business under State law 
        (except as provided in paragraph (2)), and to secure 
        remedies under provisions of this title or remedies 
        otherwise provided under other provisions of law with 
        respect to such an entity.
            (2) Action by state against national bank or 
        federal savings association to enforce rules.--
                    (A) In general.--Except as permitted under 
                subparagraph (B), the attorney general (or 
                equivalent thereof) of any State may not bring 
                a civil action in the name of such State 
                against a national bank or Federal savings 
                association to enforce a provision of this 
                title.
                    (B) Enforcement of rules permitted.--The 
                attorney general (or the equivalent thereof) of 
                any State may bring a civil action in the name 
                of such State against a national bank or 
                Federal savings association in any district 
                court of the United States in the State or in 
                State court that is located in that State and 
                that has jurisdiction over the defendant to 
                enforce a regulation prescribed by the Bureau 
                under a provision of this title and to secure 
                remedies under provisions of this title or 
                remedies otherwise provided under other law.
            (3) Rule of construction.--No provision of this 
        title shall be construed as modifying, limiting, or 
        superseding the operation of any provision of an 
        enumerated consumer law that relates to the authority 
        of a State attorney general or State regulator to 
        enforce such Federal law.
    (b) Consultation Required.--
            (1) Notice.--
                    (A) In general.--Before initiating any 
                action in a court or other administrative or 
                regulatory proceeding against any covered 
                person as authorized by subsection (a) to 
                enforce any provision of this title, including 
                any regulation prescribed by the Bureau under 
                this title, a State attorney general or State 
                regulator shall timely provide a copy of the 
                complete complaint to be filed and written 
                notice describing such action or proceeding to 
                the Bureau and the prudential regulator, if 
                any, or the designee thereof.
                    (B) Emergency action.--If prior notice is 
                not practicable, the State attorney general or 
                State regulator shall provide a copy of the 
                complete complaint and the notice to the Bureau 
                and the prudential regulator, if any, 
                immediately upon instituting the action or 
                proceeding.
                    (C) Contents of notice.--The notification 
                required under this paragraph shall, at a 
                minimum, describe--
                            (i) the identity of the parties;
                            (ii) the alleged facts underlying 
                        the proceeding; and
                            (iii) whether there may be a need 
                        to coordinate the prosecution of the 
                        proceeding so as not to interfere with 
                        any action, including any rulemaking, 
                        undertaken by the Bureau, a prudential 
                        regulator, or another Federal agency.
            (2) Bureau response.--In any action described in 
        paragraph (1), the Bureau may--
                    (A) intervene in the action as a party;
                    (B) upon intervening--
                            (i) remove the action to the 
                        appropriate United States district 
                        court, if the action was not originally 
                        brought there; and
                            (ii) be heard on all matters 
                        arising in the action; and
                    (C) appeal any order or judgment, to the 
                same extent as any other party in the 
                proceeding may.
    (c) Regulations.--The Bureau shall prescribe regulations to 
implement the requirements of this section and, from time to 
time, provide guidance in order to further coordinate actions 
with the State attorneys general and other regulators.
    (d) Preservation of State Authority.--
            (1) State claims.--No provision of this section 
        shall be construed as altering, limiting, or affecting 
        the authority of a State attorney general or any other 
        regulatory or enforcement agency or authority to bring 
        an action or other regulatory proceeding arising solely 
        under the law in effect in that State.
            (2) State securities regulators.--No provision of 
        this title shall be construed as altering, limiting, or 
        affecting the authority of a State securities 
        commission (or any agency or office performing like 
        functions) under State law to adopt rules, initiate 
        enforcement proceedings, or take any other action with 
        respect to a person regulated by such commission or 
        authority.
            (3) State insurance regulators.--No provision of 
        this title shall be construed as altering, limiting, or 
        affecting the authority of a State insurance commission 
        or State insurance regulator under State law to adopt 
        rules, initiate enforcement proceedings, or take any 
        other action with respect to a person regulated by such 
        commission or regulator.

SEC. 1043. PRESERVATION OF EXISTING CONTRACTS.

    This title, and regulations, orders, guidance, and 
interpretations prescribed, issued, or established by the 
Bureau, shall not be construed to alter or affect the 
applicability of any regulation, order, guidance, or 
interpretation prescribed, issued, and established by the 
Comptroller of the Currency or the Director of the Office of 
Thrift Supervision regarding the applicability of State law 
under Federal banking law to any contract entered into on or 
before the date of enactment of this Act, by national banks, 
Federal savings associations, or subsidiaries thereof that are 
regulated and supervised by the Comptroller of the Currency or 
the Director of the Office of Thrift Supervision, respectively.

SEC. 1044. STATE LAW PREEMPTION STANDARDS FOR NATIONAL BANKS AND 
                    SUBSIDIARIES CLARIFIED.

    (a) In General.--Chapter one of title LXII of the Revised 
Statutes of the United States (12 U.S.C. 21 et seq.) is amended 
by inserting after section 5136B the following new section:

``SEC. 5136C. STATE LAW PREEMPTION STANDARDS FOR NATIONAL BANKS AND 
                    SUBSIDIARIES CLARIFIED.

    ``(a) Definitions.--For purposes of this section, the 
following definitions shall apply:
            ``(1) National bank.--The term `national bank' 
        includes--
                    ``(A) any bank organized under the laws of 
                the United States; and
                    ``(B) any Federal branch established in 
                accordance with the International Banking Act 
                of 1978.
            ``(2) State consumer financial laws.--The term 
        `State consumer financial law' means a State law that 
        does not directly or indirectly discriminate against 
        national banks and that directly and specifically 
        regulates the manner, content, or terms and conditions 
        of any financial transaction (as may be authorized for 
        national banks to engage in), or any account related 
        thereto, with respect to a consumer.
            ``(3) Other definitions.--The terms `affiliate', 
        `subsidiary', `includes', and `including' have the same 
        meanings as in section 3 of the Federal Deposit 
        Insurance Act.
    ``(b) Preemption Standard.--
            ``(1) In general.--State consumer financial laws 
        are preempted, only if--
                    ``(A) application of a State consumer 
                financial law would have a discriminatory 
                effect on national banks, in comparison with 
                the effect of the law on a bank chartered by 
                that State;
                    ``(B) in accordance with the legal standard 
                for preemption in the decision of the Supreme 
                Court of the United States in Barnett Bank of 
                Marion County, N. A. v. Nelson, Florida 
                Insurance Commissioner, et al., 517 U.S. 25 
                (1996), the State consumer financial law 
                prevents or significantly interferes with the 
                exercise by the national bank of its powers; 
                and any preemption determination under this 
                subparagraph may be made by a court, or by 
                regulation or order of the Comptroller of the 
                Currency on a case-by-case basis, in accordance 
                with applicable law; or
                    ``(C) the State consumer financial law is 
                preempted by a provision of Federal law other 
                than this title.
            ``(2) Savings clause.--This title and section 24 of 
        the Federal Reserve Act (12 U.S.C. 371) do not preempt, 
        annul, or affect the applicability of any State law to 
        any subsidiary or affiliate of a national bank (other 
        than a subsidiary or affiliate that is chartered as a 
        national bank).
            ``(3) Case-by-case basis.--
                    ``(A) Definition.--As used in this section 
                the term `case-by-case basis' refers to a 
                determination pursuant to this section made by 
                the Comptroller concerning the impact of a 
                particular State consumer financial law on any 
                national bank that is subject to that law, or 
                the law of any other State with substantively 
                equivalent terms.
                    ``(B) Consultation.--When making a 
                determination on a case-by-case basis that a 
                State consumer financial law of another State 
                has substantively equivalent terms as one that 
                the Comptroller is preempting, the Comptroller 
                shall first consult with the Bureau of Consumer 
                Financial Protection and shall take the views 
                of the Bureau into account when making the 
                determination.
            ``(4) Rule of construction.--This title does not 
        occupy the field in any area of State law.
            ``(5) Standards of review.--
                    ``(A) Preemption.--A court reviewing any 
                determinations made by the Comptroller 
                regarding preemption of a State law by this 
                title or section 24 of the Federal Reserve Act 
                (12 U.S.C. 371) shall assess the validity of 
                such determinations, depending upon the 
                thoroughness evident in the consideration of 
                the agency, the validity of the reasoning of 
                the agency, the consistency with other valid 
                determinations made by the agency, and other 
                factors which the court finds persuasive and 
                relevant to its decision.
                    ``(B) Savings clause.--Except as provided 
                in subparagraph (A), nothing in this section 
                shall affect the deference that a court may 
                afford to the Comptroller in making 
                determinations regarding the meaning or 
                interpretation of title LXII of the Revised 
                Statutes of the United States or other Federal 
                laws.
            ``(6) Comptroller determination not delegable.--Any 
        regulation, order, or determination made by the 
        Comptroller of the Currency under paragraph (1)(B) 
        shall be made by the Comptroller, and shall not be 
        delegable to another officer or employee of the 
        Comptroller of the Currency.
    ``(c) Substantial Evidence.--No regulation or order of the 
Comptroller of the Currency prescribed under subsection 
(b)(1)(B), shall be interpreted or applied so as to invalidate, 
or otherwise declare inapplicable to a national bank, the 
provision of the State consumer financial law, unless 
substantial evidence, made on the record of the proceeding, 
supports the specific finding regarding the preemption of such 
provision in accordance with the legal standard of the decision 
of the Supreme Court of the United States in Barnett Bank of 
Marion County, N.A. v. Nelson, Florida Insurance Commissioner, 
et al., 517 U.S. 25 (1996).
    ``(d) Periodic Review of Preemption Determinations.--
            ``(1) In general.--The Comptroller of the Currency 
        shall periodically conduct a review, through notice and 
        public comment, of each determination that a provision 
        of Federal law preempts a State consumer financial law. 
        The agency shall conduct such review within the 5-year 
        period after prescribing or otherwise issuing such 
        determination, and at least once during each 5-year 
        period thereafter. After conducting the review of, and 
        inspecting the comments made on, the determination, the 
        agency shall publish a notice in the Federal Register 
        announcing the decision to continue or rescind the 
        determination or a proposal to amend the determination. 
        Any such notice of a proposal to amend a determination 
        and the subsequent resolution of such proposal shall 
        comply with the procedures set forth in subsections (a) 
        and (b) of section 5244 of the Revised Statutes of the 
        United States (12 U.S.C. 43 (a), (b)).
            ``(2) Reports to congress.--At the time of issuing 
        a review conducted under paragraph (1), the Comptroller 
        of the Currency shall submit a report regarding such 
        review to the Committee on Financial Services of the 
        House of Representatives and the Committee on Banking, 
        Housing, and Urban Affairs of the Senate. The report 
        submitted to the respective committees shall address 
        whether the agency intends to continue, rescind, or 
        propose to amend any determination that a provision of 
        Federal law preempts a State consumer financial law, 
        and the reasons therefor.
    ``(e) Application of State Consumer Financial Law to 
Subsidiaries and Affiliates.--Notwithstanding any provision of 
this title or section 24 of Federal Reserve Act (12 U.S.C. 
371), a State consumer financial law shall apply to a 
subsidiary or affiliate of a national bank (other than a 
subsidiary or affiliate that is chartered as a national bank) 
to the same extent that the State consumer financial law 
applies to any person, corporation, or other entity subject to 
such State law.
    ``(f) Preservation of Powers Related to Charging 
Interest.--No provision of this title shall be construed as 
altering or otherwise affecting the authority conferred by 
section 5197 of the Revised Statutes of the United States (12 
U.S.C. 85) for the charging of interest by a national bank at 
the rate allowed by the laws of the State, territory, or 
district where the bank is located, including with respect to 
the meaning of `interest' under such provision.
    ``(g) Transparency of OCC Preemption Determinations.--The 
Comptroller of the Currency shall publish and update no less 
frequently than quarterly, a list of preemption determinations 
by the Comptroller of the Currency then in effect that 
identifies the activities and practices covered by each 
determination and the requirements and constraints determined 
to be preempted.''.
    (b) Clerical Amendment.--The table of sections for chapter 
one of title LXII of the Revised Statutes of the United States 
is amended by inserting after the item relating to section 
5136B the following new item:

``Sec. 5136C. State law preemption standards for national banks and 
          subsidiaries clarified.''.

SEC. 1045. CLARIFICATION OF LAW APPLICABLE TO NONDEPOSITORY INSTITUTION 
                    SUBSIDIARIES.

    Section 5136C of the Revised Statutes of the United States 
(as added by this subtitle) is amended by adding at the end the 
following:
    ``(h) Clarification of Law Applicable to Nondepository 
Institution Subsidiaries and Affiliates of National Banks.--
            ``(1) Definitions.--For purposes of this 
        subsection, the terms `depository institution', 
        `subsidiary', and `affiliate' have the same meanings as 
        in section 3 of the Federal Deposit Insurance Act.
            ``(2) Rule of construction.--No provision of this 
        title or section 24 of the Federal Reserve Act (12 
        U.S.C. 371) shall be construed as preempting, 
        annulling, or affecting the applicability of State law 
        to any subsidiary, affiliate, or agent of a national 
        bank (other than a subsidiary, affiliate, or agent that 
        is chartered as a national bank).''.

SEC. 1046. STATE LAW PREEMPTION STANDARDS FOR FEDERAL SAVINGS 
                    ASSOCIATIONS AND SUBSIDIARIES CLARIFIED.

    (a) In General.--The Home Owners' Loan Act (12 U.S.C. 1461 
et seq.) is amended by inserting after section 5 the following 
new section:

``SEC. 6. STATE LAW PREEMPTION STANDARDS FOR FEDERAL SAVINGS 
                    ASSOCIATIONS CLARIFIED.

    ``(a) In General.--Any determination by a court or by the 
Director or any successor officer or agency regarding the 
relation of State law to a provision of this Act or any 
regulation or order prescribed under this Act shall be made in 
accordance with the laws and legal standards applicable to 
national banks regarding the preemption of State law.
    ``(b) Principles of Conflict Preemption Applicable.--
Notwithstanding the authorities granted under sections 4 and 5, 
this Act does not occupy the field in any area of State law.''.
    (b) Clerical Amendment.--The table of sections for the Home 
Owners' Loan Act (12 U.S.C. 1461 et seq.) is amended by 
striking the item relating to section 6 and inserting the 
following new item:

    ``Sec. 6. State law preemption standards for Federal savings 
              associations and subsidiaries clarified.''.

SEC. 1047. VISITORIAL STANDARDS FOR NATIONAL BANKS AND SAVINGS 
                    ASSOCIATIONS.

    (a) National Banks.--Section 5136C of the Revised Statutes 
of the United States (as added by this subtitle) is amended by 
adding at the end the following:
    ``(i) Visitorial Powers.--
            ``(1) In general.--In accordance with the decision 
        of the Supreme Court of the United States in Cuomo v. 
        Clearing House Assn., L. L. C. (129 S. Ct. 2710 
        (2009)), no provision of this title which relates to 
        visitorial powers or otherwise limits or restricts the 
        visitorial authority to which any national bank is 
        subject shall be construed as limiting or restricting 
        the authority of any attorney general (or other chief 
        law enforcement officer) of any State to bring an 
        action against a national bank in a court of 
        appropriate jurisdiction to enforce an applicable law 
        and to seek relief as authorized by such law.
    ``(j) Enforcement Actions.--The ability of the Comptroller 
of the Currency to bring an enforcement action under this title 
or section 5 of the Federal Trade Commission Act does not 
preclude any private party from enforcing rights granted under 
Federal or State law in the courts.''.
    (b) Savings Associations.--Section 6 of the Home Owners' 
Loan Act (as added by this title) is amended by adding at the 
end the following:
    ``(c) Visitorial Powers.--The provisions of sections 
5136C(i) of the Revised Statutes of the United States shall 
apply to Federal savings associations, and any subsidiary 
thereof, to the same extent and in the same manner as if such 
savings associations, or subsidiaries thereof, were national 
banks or subsidiaries of national banks, respectively.''
    ``(d) Enforcement Actions.--The ability of the Comptroller 
of the Currency to bring an enforcement action under this Act 
or section 5 of the Federal Trade Commission Act does not 
preclude any private party from enforcing rights granted under 
Federal or State law in the courts.''.

SEC. 1048. EFFECTIVE DATE.

    This subtitle shall become effective on the designated 
transfer date.

                     Subtitle E--Enforcement Powers

SEC. 1051. DEFINITIONS.

    For purposes of this subtitle, the following definitions 
shall apply:
            (1) Bureau investigation.--The term ``Bureau 
        investigation'' means any inquiry conducted by a Bureau 
        investigator for the purpose of ascertaining whether 
        any person is or has been engaged in any conduct that 
        is a violation, as defined in this section.
            (2) Bureau investigator.--The term ``Bureau 
        investigator'' means any attorney or investigator 
        employed by the Bureau who is charged with the duty of 
        enforcing or carrying into effect any Federal consumer 
        financial law.
            (3) Custodian.--The term ``custodian'' means the 
        custodian or any deputy custodian designated by the 
        Bureau.
            (4) Documentary material.--The term ``documentary 
        material'' includes the original or any copy of any 
        book, document, record, report, memorandum, paper, 
        communication, tabulation, chart, logs, electronic 
        files, or other data or data compilations stored in any 
        medium.
            (5) Violation.--The term ``violation'' means any 
        act or omission that, if proved, would constitute a 
        violation of any provision of Federal consumer 
        financial law.

SEC. 1052. INVESTIGATIONS AND ADMINISTRATIVE DISCOVERY.

    (a) Joint Investigations.--
            (1) In general.--The Bureau or, where appropriate, 
        a Bureau investigator, may engage in joint 
        investigations and requests for information, as 
        authorized under this title.
            (2) Fair lending.--The authority under paragraph 
        (1) includes matters relating to fair lending, and 
        where appropriate, joint investigations with, and 
        requests for information from, the Secretary of Housing 
        and Urban Development, the Attorney General of the 
        United States, or both.
    (b) Subpoenas.--
            (1) In general.--The Bureau or a Bureau 
        investigator may issue subpoenas for the attendance and 
        testimony of witnesses and the production of relevant 
        papers, books, documents, or other material in 
        connection with hearings under this title.
            (2) Failure to obey.--In the case of contumacy or 
        refusal to obey a subpoena issued pursuant to this 
        paragraph and served upon any person, the district 
        court of the United States for any district in which 
        such person is found, resides, or transacts business, 
        upon application by the Bureau or a Bureau investigator 
        and after notice to such person, may issue an order 
        requiring such person to appear and give testimony or 
        to appear and produce documents or other material.
            (3) Contempt.--Any failure to obey an order of the 
        court under this subsection may be punished by the 
        court as a contempt thereof.
    (c) Demands.--
            (1) In general.--Whenever the Bureau has reason to 
        believe that any person may be in possession, custody, 
        or control of any documentary material or tangible 
        things, or may have any information, relevant to a 
        violation, the Bureau may, before the institution of 
        any proceedings under the Federal consumer financial 
        law, issue in writing, and cause to be served upon such 
        person, a civil investigative demand requiring such 
        person to--
                    (A) produce such documentary material for 
                inspection and copying or reproduction in the 
                form or medium requested by the Bureau;
                    (B) submit such tangible things;
                    (C) file written reports or answers to 
                questions;
                    (D) give oral testimony concerning 
                documentary material, tangible things, or other 
                information; or
                    (E) furnish any combination of such 
                material, answers, or testimony.
            (2) Requirements.--Each civil investigative demand 
        shall state the nature of the conduct constituting the 
        alleged violation which is under investigation and the 
        provision of law applicable to such violation.
            (3) Production of documents.--Each civil 
        investigative demand for the production of documentary 
        material shall--
                    (A) describe each class of documentary 
                material to be produced under the demand with 
                such definiteness and certainty as to permit 
                such material to be fairly identified;
                    (B) prescribe a return date or dates which 
                will provide a reasonable period of time within 
                which the material so demanded may be assembled 
                and made available for inspection and copying 
                or reproduction; and
                    (C) identify the custodian to whom such 
                material shall be made available.
            (4) Production of things.--Each civil investigative 
        demand for the submission of tangible things shall--
                    (A) describe each class of tangible things 
                to be submitted under the demand with such 
                definiteness and certainty as to permit such 
                things to be fairly identified;
                    (B) prescribe a return date or dates which 
                will provide a reasonable period of time within 
                which the things so demanded may be assembled 
                and submitted; and
                    (C) identify the custodian to whom such 
                things shall be submitted.
            (5) Demand for written reports or answers.--Each 
        civil investigative demand for written reports or 
        answers to questions shall--
                    (A) propound with definiteness and 
                certainty the reports to be produced or the 
                questions to be answered;
                    (B) prescribe a date or dates at which time 
                written reports or answers to questions shall 
                be submitted; and
                    (C) identify the custodian to whom such 
                reports or answers shall be submitted.
            (6) Oral testimony.--Each civil investigative 
        demand for the giving of oral testimony shall--
                    (A) prescribe a date, time, and place at 
                which oral testimony shall be commenced; and
                    (B) identify a Bureau investigator who 
                shall conduct the investigation and the 
                custodian to whom the transcript of such 
                investigation shall be submitted.
            (7) Service.--Any civil investigative demand 
        issued, and any enforcement petition filed, under this 
        section may be served--
                    (A) by any Bureau investigator at any place 
                within the territorial jurisdiction of any 
                court of the United States; and
                    (B) upon any person who is not found within 
                the territorial jurisdiction of any court of 
                the United States--
                            (i) in such manner as the Federal 
                        Rules of Civil Procedure prescribe for 
                        service in a foreign nation; and
                            (ii) to the extent that the courts 
                        of the United States have authority to 
                        assert jurisdiction over such person, 
                        consistent with due process, the United 
                        States District Court for the District 
                        of Columbia shall have the same 
                        jurisdiction to take any action 
                        respecting compliance with this section 
                        by such person that such district court 
                        would have if such person were 
                        personally within the jurisdiction of 
                        such district court.
            (8) Method of service.--Service of any civil 
        investigative demand or any enforcement petition filed 
        under this section may be made upon a person, including 
        any legal entity, by--
                    (A) delivering a duly executed copy of such 
                demand or petition to the individual or to any 
                partner, executive officer, managing agent, or 
                general agent of such person, or to any agent 
                of such person authorized by appointment or by 
                law to receive service of process on behalf of 
                such person;
                    (B) delivering a duly executed copy of such 
                demand or petition to the principal office or 
                place of business of the person to be served; 
                or
                    (C) depositing a duly executed copy in the 
                United States mails, by registered or certified 
                mail, return receipt requested, duly addressed 
                to such person at the principal office or place 
                of business of such person.
            (9) Proof of service.--
                    (A) In general.--A verified return by the 
                individual serving any civil investigative 
                demand or any enforcement petition filed under 
                this section setting forth the manner of such 
                service shall be proof of such service.
                    (B) Return receipts.--In the case of 
                service by registered or certified mail, such 
                return shall be accompanied by the return post 
                office receipt of delivery of such demand or 
                enforcement petition.
            (10) Production of documentary material.--The 
        production of documentary material in response to a 
        civil investigative demand shall be made under a sworn 
        certificate, in such form as the demand designates, by 
        the person, if a natural person, to whom the demand is 
        directed or, if not a natural person, by any person 
        having knowledge of the facts and circumstances 
        relating to such production, to the effect that all of 
        the documentary material required by the demand and in 
        the possession, custody, or control of the person to 
        whom the demand is directed has been produced and made 
        available to the custodian.
            (11) Submission of tangible things.--The submission 
        of tangible things in response to a civil investigative 
        demand shall be made under a sworn certificate, in such 
        form as the demand designates, by the person to whom 
        the demand is directed or, if not a natural person, by 
        any person having knowledge of the facts and 
        circumstances relating to such production, to the 
        effect that all of the tangible things required by the 
        demand and in the possession, custody, or control of 
        the person to whom the demand is directed have been 
        submitted to the custodian.
            (12) Separate answers.--Each reporting requirement 
        or question in a civil investigative demand shall be 
        answered separately and fully in writing under oath, 
        unless it is objected to, in which event the reasons 
        for the objection shall be stated in lieu of an answer, 
        and it shall be submitted under a sworn certificate, in 
        such form as the demand designates, by the person, if a 
        natural person, to whom the demand is directed or, if 
        not a natural person, by any person responsible for 
        answering each reporting requirement or question, to 
        the effect that all information required by the demand 
        and in the possession, custody, control, or knowledge 
        of the person to whom the demand is directed has been 
        submitted.
            (13) Testimony.--
                    (A) In general.--
                            (i) Oath and recordation.--The 
                        examination of any person pursuant to a 
                        demand for oral testimony served under 
                        this subsection shall be taken before 
                        an officer authorized to administer 
                        oaths and affirmations by the laws of 
                        the United States or of the place at 
                        which the examination is held. The 
                        officer before whom oral testimony is 
                        to be taken shall put the witness on 
                        oath or affirmation and shall 
                        personally, or by any individual acting 
                        under the direction of and in the 
                        presence of the officer, record the 
                        testimony of the witness.
                            (ii) Transcription.--The testimony 
                        shall be taken stenographically and 
                        transcribed.
                            (iii) Transmission to custodian.--
                        After the testimony is fully 
                        transcribed, the officer investigator 
                        before whom the testimony is taken 
                        shall promptly transmit a copy of the 
                        transcript of the testimony to the 
                        custodian.
                    (B) Parties present.--Any Bureau 
                investigator before whom oral testimony is to 
                be taken shall exclude from the place where the 
                testimony is to be taken all other persons, 
                except the person giving the testimony, the 
                attorney for that person, the officer before 
                whom the testimony is to be taken, an 
                investigator or representative of an agency 
                with which the Bureau is engaged in a joint 
                investigation, and any stenographer taking such 
                testimony.
                    (C) Location.--The oral testimony of any 
                person taken pursuant to a civil investigative 
                demand shall be taken in the judicial district 
                of the United States in which such person 
                resides, is found, or transacts business, or in 
                such other place as may be agreed upon by the 
                Bureau investigator before whom the oral 
                testimony of such person is to be taken and 
                such person.
                    (D) Attorney representation.--
                            (i) In general.--Any person 
                        compelled to appear under a civil 
                        investigative demand for oral testimony 
                        pursuant to this section may be 
                        accompanied, represented, and advised 
                        by an attorney.
                            (ii) Authority.--The attorney may 
                        advise a person described in clause 
                        (i), in confidence, either upon the 
                        request of such person or upon the 
                        initiative of the attorney, with 
                        respect to any question asked of such 
                        person.
                            (iii) Objections.--A person 
                        described in clause (i), or the 
                        attorney for that person, may object on 
                        the record to any question, in whole or 
                        in part, and such person shall briefly 
                        state for the record the reason for the 
                        objection. An objection may properly be 
                        made, received, and entered upon the 
                        record when it is claimed that such 
                        person is entitled to refuse to answer 
                        the question on grounds of any 
                        constitutional or other legal right or 
                        privilege, including the privilege 
                        against self-incrimination, but such 
                        person shall not otherwise object to or 
                        refuse to answer any question, and such 
                        person or attorney shall not otherwise 
                        interrupt the oral examination.
                            (iv) Refusal to answer.--If a 
                        person described in clause (i) refuses 
                        to answer any question--
                                    (I) the Bureau may petition 
                                the district court of the 
                                United States pursuant to this 
                                section for an order compelling 
                                such person to answer such 
                                question; and
                                    (II) if the refusal is on 
                                grounds of the privilege 
                                against self-incrimination, the 
                                testimony of such person may be 
                                compelled in accordance with 
                                the provisions of section 6004 
                                of title 18, United States 
                                Code.
                    (E) Transcripts.--For purposes of this 
                subsection--
                            (i) after the testimony of any 
                        witness is fully transcribed, the 
                        Bureau investigator shall afford the 
                        witness (who may be accompanied by an 
                        attorney) a reasonable opportunity to 
                        examine the transcript;
                            (ii) the transcript shall be read 
                        to or by the witness, unless such 
                        examination and reading are waived by 
                        the witness;
                            (iii) any changes in form or 
                        substance which the witness desires to 
                        make shall be entered and identified 
                        upon the transcript by the Bureau 
                        investigator, with a statement of the 
                        reasons given by the witness for making 
                        such changes;
                            (iv) the transcript shall be signed 
                        by the witness, unless the witness in 
                        writing waives the signing, is ill, 
                        cannot be found, or refuses to sign; 
                        and
                            (v) if the transcript is not signed 
                        by the witness during the 30-day period 
                        following the date on which the witness 
                        is first afforded a reasonable 
                        opportunity to examine the transcript, 
                        the Bureau investigator shall sign the 
                        transcript and state on the record the 
                        fact of the waiver, illness, absence of 
                        the witness, or the refusal to sign, 
                        together with any reasons given for the 
                        failure to sign.
                    (F) Certification by investigator.--The 
                Bureau investigator shall certify on the 
                transcript that the witness was duly sworn by 
                him or her and that the transcript is a true 
                record of the testimony given by the witness, 
                and the Bureau investigator shall promptly 
                deliver the transcript or send it by registered 
                or certified mail to the custodian.
                    (G) Copy of transcript.--The Bureau 
                investigator shall furnish a copy of the 
                transcript (upon payment of reasonable charges 
                for the transcript) to the witness only, except 
                that the Bureau may for good cause limit such 
                witness to inspection of the official 
                transcript of his testimony.
                    (H) Witness fees.--Any witness appearing 
                for the taking of oral testimony pursuant to a 
                civil investigative demand shall be entitled to 
                the same fees and mileage which are paid to 
                witnesses in the district courts of the United 
                States.
    (d) Confidential Treatment of Demand Material.--
            (1) In general.--Documentary materials and tangible 
        things received as a result of a civil investigative 
        demand shall be subject to requirements and procedures 
        regarding confidentiality, in accordance with rules 
        established by the Bureau.
            (2) Disclosure to congress.--No rule established by 
        the Bureau regarding the confidentiality of materials 
        submitted to, or otherwise obtained by, the Bureau 
        shall be intended to prevent disclosure to either House 
        of Congress or to an appropriate committee of the 
        Congress, except that the Bureau is permitted to adopt 
        rules allowing prior notice to any party that owns or 
        otherwise provided the material to the Bureau and had 
        designated such material as confidential.
    (e) Petition for Enforcement.--
            (1) In general.--Whenever any person fails to 
        comply with any civil investigative demand duly served 
        upon him under this section, or whenever satisfactory 
        copying or reproduction of material requested pursuant 
        to the demand cannot be accomplished and such person 
        refuses to surrender such material, the Bureau, through 
        such officers or attorneys as it may designate, may 
        file, in the district court of the United States for 
        any judicial district in which such person resides, is 
        found, or transacts business, and serve upon such 
        person, a petition for an order of such court for the 
        enforcement of this section.
            (2) Service of process.--All process of any court 
        to which application may be made as provided in this 
        subsection may be served in any judicial district.
    (f) Petition for Order Modifying or Setting Aside Demand.--
            (1) In general.--Not later than 20 days after the 
        service of any civil investigative demand upon any 
        person under subsection (b), or at any time before the 
        return date specified in the demand, whichever period 
        is shorter, or within such period exceeding 20 days 
        after service or in excess of such return date as may 
        be prescribed in writing, subsequent to service, by any 
        Bureau investigator named in the demand, such person 
        may file with the Bureau a petition for an order by the 
        Bureau modifying or setting aside the demand.
            (2) Compliance during pendency.--The time permitted 
        for compliance with the demand in whole or in part, as 
        determined proper and ordered by the Bureau, shall not 
        run during the pendency of a petition under paragraph 
        (1) at the Bureau, except that such person shall comply 
        with any portions of the demand not sought to be 
        modified or set aside.
            (3) Specific grounds.--A petition under paragraph 
        (1) shall specify each ground upon which the petitioner 
        relies in seeking relief, and may be based upon any 
        failure of the demand to comply with the provisions of 
        this section, or upon any constitutional or other legal 
        right or privilege of such person.
    (g) Custodial Control.--At any time during which any 
custodian is in custody or control of any documentary material, 
tangible things, reports, answers to questions, or transcripts 
of oral testimony given by any person in compliance with any 
civil investigative demand, such person may file, in the 
district court of the United States for the judicial district 
within which the office of such custodian is situated, and 
serve upon such custodian, a petition for an order of such 
court requiring the performance by such custodian of any duty 
imposed upon him by this section or rule promulgated by the 
Bureau.
    (h) Jurisdiction of Court.--
            (1) In general.--Whenever any petition is filed in 
        any district court of the United States under this 
        section, such court shall have jurisdiction to hear and 
        determine the matter so presented, and to enter such 
        order or orders as may be required to carry out the 
        provisions of this section.
            (2) Appeal.--Any final order entered as described 
        in paragraph (1) shall be subject to appeal pursuant to 
        section 1291 of title 28, United States Code.

SEC. 1053. HEARINGS AND ADJUDICATION PROCEEDINGS.

    (a) In General.--The Bureau is authorized to conduct 
hearings and adjudication proceedings with respect to any 
person in the manner prescribed by chapter 5 of title 5, United 
States Code in order to ensure or enforce compliance with--
            (1) the provisions of this title, including any 
        rules prescribed by the Bureau under this title; and
            (2) any other Federal law that the Bureau is 
        authorized to enforce, including an enumerated consumer 
        law, and any regulations or order prescribed 
        thereunder, unless such Federal law specifically limits 
        the Bureau from conducting a hearing or adjudication 
        proceeding and only to the extent of such limitation.
    (b) Special Rules for Cease-and-desist Proceedings.--
            (1) Orders authorized.--
                    (A) In general.--If, in the opinion of the 
                Bureau, any covered person or service provider 
                is engaging or has engaged in an activity that 
                violates a law, rule, or any condition imposed 
                in writing on the person by the Bureau, the 
                Bureau may, subject to sections 1024, 1025, and 
                1026, issue and serve upon the covered person 
                or service provider a notice of charges in 
                respect thereof.
                    (B) Content of notice.--The notice under 
                subparagraph (A) shall contain a statement of 
                the facts constituting the alleged violation or 
                violations, and shall fix a time and place at 
                which a hearing will be held to determine 
                whether an order to cease and desist should 
                issue against the covered person or service 
                provider, such hearing to be held not earlier 
                than 30 days nor later than 60 days after the 
                date of service of such notice, unless an 
                earlier or a later date is set by the Bureau, 
                at the request of any party so served.
                    (C) Consent.--Unless the party or parties 
                served under subparagraph (B) appear at the 
                hearing personally or by a duly authorized 
                representative, such person shall be deemed to 
                have consented to the issuance of the cease-
                and-desist order.
                    (D) Procedure.--In the event of consent 
                under subparagraph (C), or if, upon the record, 
                made at any such hearing, the Bureau finds that 
                any violation specified in the notice of 
                charges has been established, the Bureau may 
                issue and serve upon the covered person or 
                service provider an order to cease and desist 
                from the violation or practice. Such order may, 
                by provisions which may be mandatory or 
                otherwise, require the covered person or 
                service provider to cease and desist from the 
                subject activity, and to take affirmative 
                action to correct the conditions resulting from 
                any such violation.
            (2) Effectiveness of order.--A cease-and-desist 
        order shall become effective at the expiration of 30 
        days after the date of service of an order under 
        paragraph (1) upon the covered person or service 
        provider concerned (except in the case of a cease-and-
        desist order issued upon consent, which shall become 
        effective at the time specified therein), and shall 
        remain effective and enforceable as provided therein, 
        except to such extent as the order is stayed, modified, 
        terminated, or set aside by action of the Bureau or a 
        reviewing court.
            (3) Decision and appeal.--Any hearing provided for 
        in this subsection shall be held in the Federal 
        judicial district or in the territory in which the 
        residence or principal office or place of business of 
        the person is located unless the person consents to 
        another place, and shall be conducted in accordance 
        with the provisions of chapter 5 of title 5 of the 
        United States Code. After such hearing, and within 90 
        days after the Bureau has notified the parties that the 
        case has been submitted to the Bureau for final 
        decision, the Bureau shall render its decision (which 
        shall include findings of fact upon which its decision 
        is predicated) and shall issue and serve upon each 
        party to the proceeding an order or orders consistent 
        with the provisions of this section. Judicial review of 
        any such order shall be exclusively as provided in this 
        subsection. Unless a petition for review is timely 
        filed in a court of appeals of the United States, as 
        provided in paragraph (4), and thereafter until the 
        record in the proceeding has been filed as provided in 
        paragraph (4), the Bureau may at any time, upon such 
        notice and in such manner as the Bureau shall determine 
        proper, modify, terminate, or set aside any such order. 
        Upon filing of the record as provided, the Bureau may 
        modify, terminate, or set aside any such order with 
        permission of the court.
            (4) Appeal to court of appeals.--Any party to any 
        proceeding under this subsection may obtain a review of 
        any order served pursuant to this subsection (other 
        than an order issued with the consent of the person 
        concerned) by the filing in the court of appeals of the 
        United States for the circuit in which the principal 
        office of the covered person is located, or in the 
        United States Court of Appeals for the District of 
        Columbia Circuit, within 30 days after the date of 
        service of such order, a written petition praying that 
        the order of the Bureau be modified, terminated, or set 
        aside. A copy of such petition shall be forthwith 
        transmitted by the clerk of the court to the Bureau, 
        and thereupon the Bureau shall file in the court the 
        record in the proceeding, as provided in section 2112 
        of title 28 of the United States Code. Upon the filing 
        of such petition, such court shall have jurisdiction, 
        which upon the filing of the record shall except as 
        provided in the last sentence of paragraph (3) be 
        exclusive, to affirm, modify, terminate, or set aside, 
        in whole or in part, the order of the Bureau. Review of 
        such proceedings shall be had as provided in chapter 7 
        of title 5 of the United States Code. The judgment and 
        decree of the court shall be final, except that the 
        same shall be subject to review by the Supreme Court of 
        the United States, upon certiorari, as provided in 
        section 1254 of title 28 of the United States Code.
            (5) No stay.--The commencement of proceedings for 
        judicial review under paragraph (4) shall not, unless 
        specifically ordered by the court, operate as a stay of 
        any order issued by the Bureau.
    (c) Special Rules for Temporary Cease-and-desist 
Proceedings.--
            (1) In general.--Whenever the Bureau determines 
        that the violation specified in the notice of charges 
        served upon a person, including a service provider, 
        pursuant to subsection (b), or the continuation 
        thereof, is likely to cause the person to be insolvent 
        or otherwise prejudice the interests of consumers 
        before the completion of the proceedings conducted 
        pursuant to subsection (b), the Bureau may issue a 
        temporary order requiring the person to cease and 
        desist from any such violation or practice and to take 
        affirmative action to prevent or remedy such insolvency 
        or other condition pending completion of such 
        proceedings. Such order may include any requirement 
        authorized under this subtitle. Such order shall become 
        effective upon service upon the person and, unless set 
        aside, limited, or suspended by a court in proceedings 
        authorized by paragraph (2), shall remain effective and 
        enforceable pending the completion of the 
        administrative proceedings pursuant to such notice and 
        until such time as the Bureau shall dismiss the charges 
        specified in such notice, or if a cease-and-desist 
        order is issued against the person, until the effective 
        date of such order.
            (2) Appeal.--Not later than 10 days after the 
        covered person or service provider concerned has been 
        served with a temporary cease-and-desist order, the 
        person may apply to the United States district court 
        for the judicial district in which the residence or 
        principal office or place of business of the person is 
        located, or the United States District Court for the 
        District of Columbia, for an injunction setting aside, 
        limiting, or suspending the enforcement, operation, or 
        effectiveness of such order pending the completion of 
        the administrative proceedings pursuant to the notice 
        of charges served upon the person under subsection (b), 
        and such court shall have jurisdiction to issue such 
        injunction.
            (3) Incomplete or inaccurate records.--
                    (A) Temporary order.--If a notice of 
                charges served under subsection (b) specifies, 
                on the basis of particular facts and 
                circumstances, that the books and records of a 
                covered person or service provider are so 
                incomplete or inaccurate that the Bureau is 
                unable to determine the financial condition of 
                that person or the details or purpose of any 
                transaction or transactions that may have a 
                material effect on the financial condition of 
                that person, the Bureau may issue a temporary 
                order requiring--
                            (i) the cessation of any activity 
                        or practice which gave rise, whether in 
                        whole or in part, to the incomplete or 
                        inaccurate state of the books or 
                        records; or
                            (ii) affirmative action to restore 
                        such books or records to a complete and 
                        accurate state, until the completion of 
                        the proceedings under subsection 
                        (b)(1).
                    (B) Effective period.--Any temporary order 
                issued under subparagraph (A)--
                            (i) shall become effective upon 
                        service; and
                            (ii) unless set aside, limited, or 
                        suspended by a court in proceedings 
                        under paragraph (2), shall remain in 
                        effect and enforceable until the 
                        earlier of--
                                    (I) the completion of the 
                                proceeding initiated under 
                                subsection (b) in connection 
                                with the notice of charges; or
                                    (II) the date the Bureau 
                                determines, by examination or 
                                otherwise, that the books and 
                                records of the covered person 
                                or service provider are 
                                accurate and reflect the 
                                financial condition thereof.
    (d) Special Rules for Enforcement of Orders.--
            (1) In general.--The Bureau may in its discretion 
        apply to the United States district court within the 
        jurisdiction of which the principal office or place of 
        business of the person is located, for the enforcement 
        of any effective and outstanding notice or order issued 
        under this section, and such court shall have 
        jurisdiction and power to order and require compliance 
        herewith.
            (2) Exception.--Except as otherwise provided in 
        this subsection, no court shall have jurisdiction to 
        affect by injunction or otherwise the issuance or 
        enforcement of any notice or order or to review, 
        modify, suspend, terminate, or set aside any such 
        notice or order.
    (e) Rules.--The Bureau shall prescribe rules establishing 
such procedures as may be necessary to carry out this section.

SEC. 1054. LITIGATION AUTHORITY.

    (a) In General.--If any person violates a Federal consumer 
financial law, the Bureau may, subject to sections 1024, 1025, 
and 1026, commence a civil action against such person to impose 
a civil penalty or to seek all appropriate legal and equitable 
relief including a permanent or temporary injunction as 
permitted by law.
    (b) Representation.--The Bureau may act in its own name and 
through its own attorneys in enforcing any provision of this 
title, rules thereunder, or any other law or regulation, or in 
any action, suit, or proceeding to which the Bureau is a party.
    (c) Compromise of Actions.--The Bureau may compromise or 
settle any action if such compromise is approved by the court.
    (d) Notice to the Attorney General.--
            (1) In general.--When commencing a civil action 
        under Federal consumer financial law, or any rule 
        thereunder, the Bureau shall notify the Attorney 
        General and, with respect to a civil action against an 
        insured depository institution or insured credit union, 
        the appropriate prudential regulator.
            (2) Notice and coordination.--
                    (A) Notice of other actions.--In addition 
                to any notice required under paragraph (1), the 
                Bureau shall notify the Attorney General 
                concerning any action, suit, or proceeding to 
                which the Bureau is a party, except an action, 
                suit, or proceeding that involves the offering 
                or provision of consumer financial products or 
                services.
                    (B) Coordination.--In order to avoid 
                conflicts and promote consistency regarding 
                litigation of matters under Federal law, the 
                Attorney General and the Bureau shall consult 
                regarding the coordination of investigations 
                and proceedings, including by negotiating an 
                agreement for coordination by not later than 
                180 days after the designated transfer date. 
                The agreement under this subparagraph shall 
                include provisions to ensure that parallel 
                investigations and proceedings involving the 
                Federal consumer financial laws are conducted 
                in a manner that avoids conflicts and does not 
                impede the ability of the Attorney General to 
                prosecute violations of Federal criminal laws.
                    (C) Rule of construction.--Nothing in this 
                paragraph shall be construed to limit the 
                authority of the Bureau under this title, 
                including the authority to interpret Federal 
                consumer financial law.
    (e) Appearance Before the Supreme Court.--The Bureau may 
represent itself in its own name before the Supreme Court of 
the United States, provided that the Bureau makes a written 
request to the Attorney General within the 10-day period which 
begins on the date of entry of the judgment which would permit 
any party to file a petition for writ of certiorari, and the 
Attorney General concurs with such request or fails to take 
action within 60 days of the request of the Bureau.
    (f) Forum.--Any civil action brought under this title may 
be brought in a United States district court or in any court of 
competent jurisdiction of a state in a district in which the 
defendant is located or resides or is doing business, and such 
court shall have jurisdiction to enjoin such person and to 
require compliance with any Federal consumer financial law.
    (g) Time for Bringing Action.--
            (1) In general.--Except as otherwise permitted by 
        law or equity, no action may be brought under this 
        title more than 3 years after the date of discovery of 
        the violation to which an action relates.
            (2) Limitations under other federal laws.--
                    (A) In general.--An action arising under 
                this title does not include claims arising 
                solely under enumerated consumer laws.
                    (B) Bureau authority.--In any action 
                arising solely under an enumerated consumer 
                law, the Bureau may commence, defend, or 
                intervene in the action in accordance with the 
                requirements of that provision of law, as 
                applicable.
                    (C) Transferred authority.--In any action 
                arising solely under laws for which authorities 
                were transferred under subtitles F and H, the 
                Bureau may commence, defend, or intervene in 
                the action in accordance with the requirements 
                of that provision of law, as applicable.

SEC. 1055. RELIEF AVAILABLE.

    (a) Administrative Proceedings or Court Actions.--
            (1) Jurisdiction.--The court (or the Bureau, as the 
        case may be) in an action or adjudication proceeding 
        brought under Federal consumer financial law, shall 
        have jurisdiction to grant any appropriate legal or 
        equitable relief with respect to a violation of Federal 
        consumer financial law, including a violation of a rule 
        or order prescribed under a Federal consumer financial 
        law.
            (2) Relief.--Relief under this section may include, 
        without limitation--
                    (A) rescission or reformation of contracts;
                    (B) refund of moneys or return of real 
                property;
                    (C) restitution;
                    (D) disgorgement or compensation for unjust 
                enrichment;
                    (E) payment of damages or other monetary 
                relief;
                    (F) public notification regarding the 
                violation, including the costs of notification;
                    (G) limits on the activities or functions 
                of the person; and
                    (H) civil money penalties, as set forth 
                more fully in subsection (c).
            (3) No exemplary or punitive damages.--Nothing in 
        this subsection shall be construed as authorizing the 
        imposition of exemplary or punitive damages.
    (b) Recovery of Costs.--In any action brought by the 
Bureau, a State attorney general, or any State regulator to 
enforce any Federal consumer financial law, the Bureau, the 
State attorney general, or the State regulator may recover its 
costs in connection with prosecuting such action if the Bureau, 
the State attorney general, or the State regulator is the 
prevailing party in the action.
    (c) Civil Money Penalty in Court and Administrative 
Actions.--
            (1) In general.--Any person that violates, through 
        any act or omission, any provision of Federal consumer 
        financial law shall forfeit and pay a civil penalty 
        pursuant to this subsection.
            (2) Penalty amounts.--
                    (A) First tier.--For any violation of a 
                law, rule, or final order or condition imposed 
                in writing by the Bureau, a civil penalty may 
                not exceed $5,000 for each day during which 
                such violation or failure to pay continues.
                    (B) Second tier.--Notwithstanding paragraph 
                (A), for any person that recklessly engages in 
                a violation of a Federal consumer financial 
                law, a civil penalty may not exceed $25,000 for 
                each day during which such violation continues.
                    (C) Third tier.--Notwithstanding 
                subparagraphs (A) and (B), for any person that 
                knowingly violates a Federal consumer financial 
                law, a civil penalty may not exceed $1,000,000 
                for each day during which such violation 
                continues.
            (3) Mitigating factors.--In determining the amount 
        of any penalty assessed under paragraph (2), the Bureau 
        or the court shall take into account the 
        appropriateness of the penalty with respect to--
                    (A) the size of financial resources and 
                good faith of the person charged;
                    (B) the gravity of the violation or failure 
                to pay;
                    (C) the severity of the risks to or losses 
                of the consumer, which may take into account 
                the number of products or services sold or 
                provided;
                    (D) the history of previous violations; and
                    (E) such other matters as justice may 
                require.
            (4) Authority to modify or remit penalty.--The 
        Bureau may compromise, modify, or remit any penalty 
        which may be assessed or had already been assessed 
        under paragraph (2). The amount of such penalty, when 
        finally determined, shall be exclusive of any sums owed 
        by the person to the United States in connection with 
        the costs of the proceeding, and may be deducted from 
        any sums owing by the United States to the person 
        charged.
            (5) Notice and hearing.--No civil penalty may be 
        assessed under this subsection with respect to a 
        violation of any Federal consumer financial law, 
        unless--
                    (A) the Bureau gives notice and an 
                opportunity for a hearing to the person accused 
                of the violation; or
                    (B) the appropriate court has ordered such 
                assessment and entered judgment in favor of the 
                Bureau.

SEC. 1056. REFERRALS FOR CRIMINAL PROCEEDINGS.

    If the Bureau obtains evidence that any person, domestic or 
foreign, has engaged in conduct that may constitute a violation 
of Federal criminal law, the Bureau shall transmit such 
evidence to the Attorney General of the United States, who may 
institute criminal proceedings under appropriate law. Nothing 
in this section affects any other authority of the Bureau to 
disclose information.

SEC. 1057. EMPLOYEE PROTECTION.

    (a) In General.--No covered person or service provider 
shall terminate or in any other way discriminate against, or 
cause to be terminated or discriminated against, any covered 
employee or any authorized representative of covered employees 
by reason of the fact that such employee or representative, 
whether at the initiative of the employee or in the ordinary 
course of the duties of the employee (or any person acting 
pursuant to a request of the employee), has--
            (1) provided, caused to be provided, or is about to 
        provide or cause to be provided, information to the 
        employer, the Bureau, or any other State, local, or 
        Federal, government authority or law enforcement agency 
        relating to any violation of, or any act or omission 
        that the employee reasonably believes to be a violation 
        of, any provision of this title or any other provision 
        of law that is subject to the jurisdiction of the 
        Bureau, or any rule, order, standard, or prohibition 
        prescribed by the Bureau;
            (2) testified or will testify in any proceeding 
        resulting from the administration or enforcement of any 
        provision of this title or any other provision of law 
        that is subject to the jurisdiction of the Bureau, or 
        any rule, order, standard, or prohibition prescribed by 
        the Bureau;
            (3) filed, instituted, or caused to be filed or 
        instituted any proceeding under any Federal consumer 
        financial law; or
            (4) objected to, or refused to participate in, any 
        activity, policy, practice, or assigned task that the 
        employee (or other such person) reasonably believed to 
        be in violation of any law, rule, order, standard, or 
        prohibition, subject to the jurisdiction of, or 
        enforceable by, the Bureau.
    (b) Definition of Covered Employee.--For the purposes of 
this section, the term ``covered employee'' means any 
individual performing tasks related to the offering or 
provision of a consumer financial product or service.
    (c) Procedures and Timetables.--
            (1) Complaint.--
                    (A) In general.--A person who believes that 
                he or she has been discharged or otherwise 
                discriminated against by any person in 
                violation of subsection (a) may, not later than 
                180 days after the date on which such alleged 
                violation occurs, file (or have any person file 
                on his or her behalf) a complaint with the 
                Secretary of Labor alleging such discharge or 
                discrimination and identifying the person 
                responsible for such act.
                    (B) Actions of secretary of labor.--Upon 
                receipt of such a complaint, the Secretary of 
                Labor shall notify, in writing, the person 
                named in the complaint who is alleged to have 
                committed the violation, of--
                            (i) the filing of the complaint;
                            (ii) the allegations contained in 
                        the complaint;
                            (iii) the substance of evidence 
                        supporting the complaint; and
                            (iv) opportunities that will be 
                        afforded to such person under paragraph 
                        (2).
            (2) Investigation by secretary of labor.--
                    (A) In general.--Not later than 60 days 
                after the date of receipt of a complaint filed 
                under paragraph (1), and after affording the 
                complainant and the person named in the 
                complaint who is alleged to have committed the 
                violation that is the basis for the complaint 
                an opportunity to submit to the Secretary of 
                Labor a written response to the complaint and 
                an opportunity to meet with a representative of 
                the Secretary of Labor to present statements 
                from witnesses, the Secretary of Labor shall--
                            (i) initiate an investigation and 
                        determine whether there is reasonable 
                        cause to believe that the complaint has 
                        merit; and
                            (ii) notify the complainant and the 
                        person alleged to have committed the 
                        violation of subsection (a), in 
                        writing, of such determination.
                    (B) Notice of relief available.--If the 
                Secretary of Labor concludes that there is 
                reasonable cause to believe that a violation of 
                subsection (a) has occurred, the Secretary of 
                Labor shall, together with the notice under 
                subparagraph (A)(ii), issue a preliminary order 
                providing the relief prescribed by paragraph 
                (4)(B).
                    (C) Request for hearing.--Not later than 30 
                days after the date of receipt of notification 
                of a determination of the Secretary of Labor 
                under this paragraph, either the person alleged 
                to have committed the violation or the 
                complainant may file objections to the findings 
                or preliminary order, or both, and request a 
                hearing on the record. The filing of such 
                objections shall not operate to stay any 
                reinstatement remedy contained in the 
                preliminary order. Any such hearing shall be 
                conducted expeditiously, and if a hearing is 
                not requested in such 30-day period, the 
                preliminary order shall be deemed a final order 
                that is not subject to judicial review.
            (3) Grounds for determination of complaints.--
                    (A) In general.--The Secretary of Labor 
                shall dismiss a complaint filed under this 
                subsection, and shall not conduct an 
                investigation otherwise required under 
                paragraph (2), unless the complainant makes a 
                prima facie showing that any behavior described 
                in paragraphs (1) through (4) of subsection (a) 
                was a contributing factor in the unfavorable 
                personnel action alleged in the complaint.
                    (B) Rebuttal evidence.--Notwithstanding a 
                finding by the Secretary of Labor that the 
                complainant has made the showing required under 
                subparagraph (A), no investigation otherwise 
                required under paragraph (2) shall be 
                conducted, if the employer demonstrates, by 
                clear and convincing evidence, that the 
                employer would have taken the same unfavorable 
                personnel action in the absence of that 
                behavior.
                    (C) Evidentiary standards.--The Secretary 
                of Labor may determine that a violation of 
                subsection (a) has occurred only if the 
                complainant demonstrates that any behavior 
                described in paragraphs (1) through (4) of 
                subsection (a) was a contributing factor in the 
                unfavorable personnel action alleged in the 
                complaint. Relief may not be ordered under 
                subparagraph (A) if the employer demonstrates 
                by clear and convincing evidence that the 
                employer would have taken the same unfavorable 
                personnel action in the absence of that 
                behavior.
            (4) Issuance of final orders; review procedures.--
                    (A) Timing.--Not later than 120 days after 
                the date of conclusion of any hearing under 
                paragraph (2), the Secretary of Labor shall 
                issue a final order providing the relief 
                prescribed by this paragraph or denying the 
                complaint. At any time before issuance of a 
                final order, a proceeding under this subsection 
                may be terminated on the basis of a settlement 
                agreement entered into by the Secretary of 
                Labor, the complainant, and the person alleged 
                to have committed the violation.
                    (B) Penalties.--
                            (i) Order of secretary of labor.--
                        If, in response to a complaint filed 
                        under paragraph (1), the Secretary of 
                        Labor determines that a violation of 
                        subsection (a) has occurred, the 
                        Secretary of Labor shall order the 
                        person who committed such violation--
                                    (I) to take affirmative 
                                action to abate the violation;
                                    (II) to reinstate the 
                                complainant to his or her 
                                former position, together with 
                                compensation (including back 
                                pay) and restore the terms, 
                                conditions, and privileges 
                                associated with his or her 
                                employment; and
                                    (III) to provide 
                                compensatory damages to the 
                                complainant.
                            (ii) Penalty.--If an order is 
                        issued under clause (i), the Secretary 
                        of Labor, at the request of the 
                        complainant, shall assess against the 
                        person against whom the order is 
                        issued, a sum equal to the aggregate 
                        amount of all costs and expenses 
                        (including attorney fees and expert 
                        witness fees) reasonably incurred, as 
                        determined by the Secretary of Labor, 
                        by the complainant for, or in 
                        connection with, the bringing of the 
                        complaint upon which the order was 
                        issued.
                    (C) Penalty for frivolous claims.--If the 
                Secretary of Labor finds that a complaint under 
                paragraph (1) is frivolous or has been brought 
                in bad faith, the Secretary of Labor may award 
                to the prevailing employer a reasonable 
                attorney fee, not exceeding $1,000, to be paid 
                by the complainant.
                    (D) De novo review.--
                            (i) Failure of the secretary to 
                        act.--If the Secretary of Labor has not 
                        issued a final order within 210 days 
                        after the date of filing of a complaint 
                        under this subsection, or within 90 
                        days after the date of receipt of a 
                        written determination, the complainant 
                        may bring an action at law or equity 
                        for de novo review in the appropriate 
                        district court of the United States 
                        having jurisdiction, which shall have 
                        jurisdiction over such an action 
                        without regard to the amount in 
                        controversy, and which action shall, at 
                        the request of either party to such 
                        action, be tried by the court with a 
                        jury.
                            (ii) Procedures.--A proceeding 
                        under clause (i) shall be governed by 
                        the same legal burdens of proof 
                        specified in paragraph (3). The court 
                        shall have jurisdiction to grant all 
                        relief necessary to make the employee 
                        whole, including injunctive relief and 
                        compensatory damages, including--
                                    (I) reinstatement with the 
                                same seniority status that the 
                                employee would have had, but 
                                for the discharge or 
                                discrimination;
                                    (II) the amount of back 
                                pay, with interest; and
                                    (III) compensation for any 
                                special damages sustained as a 
                                result of the discharge or 
                                discrimination, including 
                                litigation costs, expert 
                                witness fees, and reasonable 
                                attorney fees.
                    (E) Other appeals.--Unless the complainant 
                brings an action under subparagraph (D), any 
                person adversely affected or aggrieved by a 
                final order issued under subparagraph (A) may 
                file a petition for review of the order in the 
                United States Court of Appeals for the circuit 
                in which the violation with respect to which 
                the order was issued, allegedly occurred or the 
                circuit in which the complainant resided on the 
                date of such violation, not later than 60 days 
                after the date of the issuance of the final 
                order of the Secretary of Labor under 
                subparagraph (A). Review shall conform to 
                chapter 7 of title 5, United States Code. The 
                commencement of proceedings under this 
                subparagraph shall not, unless ordered by the 
                court, operate as a stay of the order. An order 
                of the Secretary of Labor with respect to which 
                review could have been obtained under this 
                subparagraph shall not be subject to judicial 
                review in any criminal or other civil 
                proceeding.
            (5) Failure to comply with order.--
                    (A) Actions by the secretary.--If any 
                person has failed to comply with a final order 
                issued under paragraph (4), the Secretary of 
                Labor may file a civil action in the United 
                States district court for the district in which 
                the violation was found to have occurred, or in 
                the United States district court for the 
                District of Columbia, to enforce such order. In 
                actions brought under this paragraph, the 
                district courts shall have jurisdiction to 
                grant all appropriate relief including 
                injunctive relief and compensatory damages.
                    (B) Civil actions to compel compliance.--A 
                person on whose behalf an order was issued 
                under paragraph (4) may commence a civil action 
                against the person to whom such order was 
                issued to require compliance with such order. 
                The appropriate United States district court 
                shall have jurisdiction, without regard to the 
                amount in controversy or the citizenship of the 
                parties, to enforce such order.
                    (C) Award of costs authorized.--The court, 
                in issuing any final order under this 
                paragraph, may award costs of litigation 
                (including reasonable attorney and expert 
                witness fees) to any party, whenever the court 
                determines such award is appropriate.
                    (D) Mandamus proceedings.--Any 
                nondiscretionary duty imposed by this section 
                shall be enforceable in a mandamus proceeding 
                brought under section 1361 of title 28, United 
                States Code.
    (d) Unenforceability of Certain Agreements.--
            (1) No waiver of rights and remedies.--Except as 
        provided under paragraph (3), and notwithstanding any 
        other provision of law, the rights and remedies 
        provided for in this section may not be waived by any 
        agreement, policy, form, or condition of employment, 
        including by any predispute arbitration agreement.
            (2) No predispute arbitration agreements.--Except 
        as provided under paragraph (3), and notwithstanding 
        any other provision of law, no predispute arbitration 
        agreement shall be valid or enforceable to the extent 
        that it requires arbitration of a dispute arising under 
        this section.
            (3) Exception.--Notwithstanding paragraphs (1) and 
        (2), an arbitration provision in a collective 
        bargaining agreement shall be enforceable as to 
        disputes arising under subsection (a)(4), unless the 
        Bureau determines, by rule, that such provision is 
        inconsistent with the purposes of this title.

SEC. 1058. EFFECTIVE DATE.

    This subtitle shall become effective on the designated 
transfer date.

     Subtitle F--Transfer of Functions and Personnel; Transitional 
                               Provisions

SEC. 1061. TRANSFER OF CONSUMER FINANCIAL PROTECTION FUNCTIONS.

    (a) Defined Terms.--For purposes of this subtitle--
            (1) the term ``consumer financial protection 
        functions'' means--
                    (A) all authority to prescribe rules or 
                issue orders or guidelines pursuant to any 
                Federal consumer financial law, including 
                performing appropriate functions to promulgate 
                and review such rules, orders, and guidelines; 
                and
                    (B) the examination authority described in 
                subsection (c)(1), with respect to a person 
                described in subsection 1025(a); and
            (2) the terms ``transferor agency'' and 
        ``transferor agencies'' mean, respectively--
                    (A) the Board of Governors (and any Federal 
                reserve bank, as the context requires), the 
                Federal Deposit Insurance Corporation, the 
                Federal Trade Commission, the National Credit 
                Union Administration, the Office of the 
                Comptroller of the Currency, the Office of 
                Thrift Supervision, and the Department of 
                Housing and Urban Development, and the heads of 
                those agencies; and
                    (B) the agencies listed in subparagraph 
                (A), collectively.
    (b) In General.--Except as provided in subsection (c), 
consumer financial protection functions are transferred as 
follows:
            (1) Board of governors.--
                    (A) Transfer of functions.--All consumer 
                financial protection functions of the Board of 
                Governors are transferred to the Bureau.
                    (B) Board of governors authority.--The 
                Bureau shall have all powers and duties that 
                were vested in the Board of Governors, relating 
                to consumer financial protection functions, on 
                the day before the designated transfer date.
            (2) Comptroller of the currency.--
                    (A) Transfer of functions.--All consumer 
                financial protection functions of the 
                Comptroller of the Currency are transferred to 
                the Bureau.
                    (B) Comptroller authority.--The Bureau 
                shall have all powers and duties that were 
                vested in the Comptroller of the Currency, 
                relating to consumer financial protection 
                functions, on the day before the designated 
                transfer date.
            (3) Director of the office of thrift supervision.--
                    (A) Transfer of functions.--All consumer 
                financial protection functions of the Director 
                of the Office of Thrift Supervision are 
                transferred to the Bureau.
                    (B) Director authority.--The Bureau shall 
                have all powers and duties that were vested in 
                the Director of the Office of Thrift 
                Supervision, relating to consumer financial 
                protection functions, on the day before the 
                designated transfer date.
            (4) Federal deposit insurance corporation.--
                    (A) Transfer of functions.--All consumer 
                financial protection functions of the Federal 
                Deposit Insurance Corporation are transferred 
                to the Bureau.
                    (B) Corporation authority.--The Bureau 
                shall have all powers and duties that were 
                vested in the Federal Deposit Insurance 
                Corporation, relating to consumer financial 
                protection functions, on the day before the 
                designated transfer date.
            (5) Federal trade commission.--
                    (A) Transfer of functions.--The authority 
                of the Federal Trade Commission under an 
                enumerated consumer law to prescribe rules, 
                issue guidelines, or conduct a study or issue a 
                report mandated under such law shall be 
                transferred to the Bureau on the designated 
                transfer date. Nothing in this title shall be 
                construed to require a mandatory transfer of 
                any employee of the Federal Trade Commission.
                    (B) Bureau authority.--
                            (i) In general.--The Bureau shall 
                        have all powers and duties under the 
                        enumerated consumer laws to prescribe 
                        rules, issue guidelines, or to conduct 
                        studies or issue reports mandated by 
                        such laws, that were vested in the 
                        Federal Trade Commission on the day 
                        before the designated transfer date.
                            (ii) Federal trade commission 
                        act.--Subject to subtitle B, the Bureau 
                        may enforce a rule prescribed under the 
                        Federal Trade Commission Act by the 
                        Federal Trade Commission with respect 
                        to an unfair or deceptive act or 
                        practice to the extent that such rule 
                        applies to a covered person or service 
                        provider with respect to the offering 
                        or provision of a consumer financial 
                        product or service as if it were a rule 
                        prescribed under section 1031 of this 
                        title.
                    (C) Authority of the federal trade 
                commission.--
                            (i) In general.--No provision of 
                        this title shall be construed as 
                        modifying, limiting, or otherwise 
                        affecting the authority of the Federal 
                        Trade Commission (including its 
                        authority with respect to affiliates 
                        described in section 1025(a)(1)) under 
                        the Federal Trade Commission Act or any 
                        other law, other than the authority 
                        under an enumerated consumer law to 
                        prescribe rules, issue official 
                        guidelines, or conduct a study or issue 
                        a report mandated under such law.
                            (ii) Commission authority relating 
                        to rules prescribed by the bureau.--
                        Subject to subtitle B, the Federal 
                        Trade Commission shall have authority 
                        to enforce under the Federal Trade 
                        Commission Act (15 U.S.C. 41 et seq.) a 
                        rule prescribed by the Bureau under 
                        this title with respect to a covered 
                        person subject to the jurisdiction of 
                        the Federal Trade Commission under that 
                        Act, and a violation of such a rule by 
                        such a person shall be treated as a 
                        violation of a rule issued under 
                        section 18 of that Act (15 U.S.C. 57a) 
                        with respect to unfair or deceptive 
                        acts or practices.
                    (D) Coordination.--To avoid duplication of 
                or conflict between rules prescribed by the 
                Bureau under section 1031 of this title and the 
                Federal Trade Commission under section 
                18(a)(1)(B) of the Federal Trade Commission Act 
                that apply to a covered person or service 
                provider with respect to the offering or 
                provision of consumer financial products or 
                services, the agencies shall negotiate an 
                agreement with respect to rulemaking by each 
                agency, including consultation with the other 
                agency prior to proposing a rule and during the 
                comment period.
                    (E) Deference.--No provision of this title 
                shall be construed as altering, limiting, 
                expanding, or otherwise affecting the deference 
                that a court affords to the--
                            (i) Federal Trade Commission in 
                        making determinations regarding the 
                        meaning or interpretation of any 
                        provision of the Federal Trade 
                        Commission Act, or of any other Federal 
                        law for which the Commission has 
                        authority to prescribe rules; or
                            (ii) Bureau in making 
                        determinations regarding the meaning or 
                        interpretation of any provision of a 
                        Federal consumer financial law (other 
                        than any law described in clause (i)).
            (6) National credit union administration.--
                    (A) Transfer of functions.--All consumer 
                financial protection functions of the National 
                Credit Union Administration are transferred to 
                the Bureau.
                    (B) National credit union administration 
                authority.--The Bureau shall have all powers 
                and duties that were vested in the National 
                Credit Union Administration, relating to 
                consumer financial protection functions, on the 
                day before the designated transfer date.
            (7) Department of housing and urban development.--
                    (A) Transfer of functions.--All consumer 
                protection functions of the Secretary of the 
                Department of Housing and Urban Development 
                relating to the Real Estate Settlement 
                Procedures Act of 1974 (12 U.S.C. 2601 et 
                seq.), the Secure and Fair Enforcement for 
                Mortgage Licensing Act of 2008 (12 U.S.C. 5102 
                et seq.), and the Interstate Land Sales Full 
                Disclosure Act (15 U.S.C. 1701 et seq.) are 
                transferred to the Bureau.
                    (B) Authority of the department of housing 
                and urban development.--The Bureau shall have 
                all powers and duties that were vested in the 
                Secretary of the Department of Housing and 
                Urban Development relating to the Real Estate 
                Settlement Procedures Act of 1974 (12 U.S.C. 
                2601 et seq.), the Secure and Fair Enforcement 
                for Mortgage Licensing Act of 2008 (12 U.S.C. 
                5101 et seq.), and the Interstate Land Sales 
                Full Disclosure Act (15 U.S.C. 1701 et seq.), 
                on the day before the designated transfer date.
    (c) Authorities of the Prudential Regulators.--
            (1) Examination.--A transferor agency that is a 
        prudential regulator shall have--
                    (A) authority to require reports from and 
                conduct examinations for compliance with 
                Federal consumer financial laws with respect to 
                a person described in section 1025(a), that is 
                incidental to the backup and enforcement 
                procedures provided to the regulator under 
                section 1025(c); and
                    (B) exclusive authority (relative to the 
                Bureau) to require reports from and conduct 
                examinations for compliance with Federal 
                consumer financial laws with respect to a 
                person described in section 1026(a), except as 
                provided to the Bureau under subsections (b) 
                and (c) of section 1026.
            (2) Enforcement.--
                    (A) Limitation.--The authority of a 
                transferor agency that is a prudential 
                regulator to enforce compliance with Federal 
                consumer financial laws with respect to a 
                person described in section 1025(a), shall be 
                limited to the backup and enforcement 
                procedures in described in section 1025(c).
                    (B) Exclusive authority.--A transferor 
                agency that is a prudential regulator shall 
                have exclusive authority (relative to the 
                Bureau) to enforce compliance with Federal 
                consumer financial laws with respect to a 
                person described in section 1026(a), except as 
                provided to the Bureau under subsections (b) 
                and (c) of section 1026.
                    (C) Statutory enforcement.--For purposes of 
                carrying out the authorities under, and subject 
                to the limitations of, subtitle B, each 
                prudential regulator may enforce compliance 
                with the requirements imposed under this title, 
                and any rule or order prescribed by the Bureau 
                under this title, under--
                            (i) the Federal Credit Union Act 
                        (12 U.S.C. 1751 et seq.), by the 
                        National Credit Union Administration 
                        Board with respect to any covered 
                        person or service provider that is an 
                        insured credit union, or service 
                        provider thereto, or any affiliate of 
                        an insured credit union, who is subject 
                        to the jurisdiction of the Board under 
                        that Act; and
                            (ii) section 8 of the Federal 
                        Deposit Insurance Act (12 U.S.C. 1818), 
                        by the appropriate Federal banking 
                        agency, as defined in section 3(q) of 
                        the Federal Deposit Insurance Act (12 
                        U.S.C. 1813(q)), with respect to a 
                        covered person or service provider that 
                        is a person described in section 3(q) 
                        of that Act and who is subject to the 
                        jurisdiction of that agency, as set 
                        forth in sections 3(q) and 8 of the 
                        Federal Deposit Insurance Act; or
                            (iii) the Bank Service Company Act 
                        (12 U.S.C. 1861 et seq.).
    (d) Effective Date.--Subsections (b) and (c) shall become 
effective on the designated transfer date.

SEC. 1062. DESIGNATED TRANSFER DATE.

    (a) In General.--Not later than 60 days after the date of 
enactment of this Act, the Secretary shall--
            (1) in consultation with the Chairman of the Board 
        of Governors, the Chairperson of the Corporation, the 
        Chairman of the Federal Trade Commission, the Chairman 
        of the National Credit Union Administration Board, the 
        Comptroller of the Currency, the Director of the Office 
        of Thrift Supervision, the Secretary of the Department 
        of Housing and Urban Development, and the Director of 
        the Office of Management and Budget, designate a single 
        calendar date for the transfer of functions to the 
        Bureau under section 1061; and
            (2) publish notice of that designated date in the 
        Federal Register.
    (b) Changing Designation.--The Secretary--
            (1) may, in consultation with the Chairman of the 
        Board of Governors, the Chairperson of the Federal 
        Deposit Insurance Corporation, the Chairman of the 
        Federal Trade Commission, the Chairman of the National 
        Credit Union Administration Board, the Comptroller of 
        the Currency, the Director of the Office of Thrift 
        Supervision, the Secretary of the Department of Housing 
        and Urban Development, and the Director of the Office 
        of Management and Budget, change the date designated 
        under subsection (a); and
            (2) shall publish notice of any changed designated 
        date in the Federal Register.
    (c) Permissible Dates.--
            (1) In general.--Except as provided in paragraph 
        (2), any date designated under this section shall be 
        not earlier than 180 days, nor later than 12 months, 
        after the date of enactment of this Act.
            (2) Extension of time.--The Secretary may designate 
        a date that is later than 12 months after the date of 
        enactment of this Act if the Secretary transmits to 
        appropriate committees of Congress--
                    (A) a written determination that orderly 
                implementation of this title is not feasible 
                before the date that is 12 months after the 
                date of enactment of this Act;
                    (B) an explanation of why an extension is 
                necessary for the orderly implementation of 
                this title; and
                    (C) a description of the steps that will be 
                taken to effect an orderly and timely 
                implementation of this title within the 
                extended time period.
            (3) Extension limited.--In no case may any date 
        designated under this section be later than 18 months 
        after the date of enactment of this Act.

SEC. 1063. SAVINGS PROVISIONS.

    (a) Board of Governors.--
            (1) Existing rights, duties, and obligations not 
        affected.--Section 1061(b)(1) does not affect the 
        validity of any right, duty, or obligation of the 
        United States, the Board of Governors (or any Federal 
        reserve bank), or any other person that--
                    (A) arises under any provision of law 
                relating to any consumer financial protection 
                function of the Board of Governors transferred 
                to the Bureau by this title; and
                    (B) existed on the day before the 
                designated transfer date.
            (2) Continuation of suits.--No provision of this 
        Act shall abate any proceeding commenced by or against 
        the Board of Governors (or any Federal reserve bank) 
        before the designated transfer date with respect to any 
        consumer financial protection function of the Board of 
        Governors (or any Federal reserve bank) transferred to 
        the Bureau by this title, except that the Bureau, 
        subject to sections 1024, 1025, and 1026, shall be 
        substituted for the Board of Governors (or Federal 
        reserve bank) as a party to any such proceeding as of 
        the designated transfer date.
    (b) Federal Deposit Insurance Corporation.--
            (1) Existing rights, duties, and obligations not 
        affected.--Section 1061(b)(4) does not affect the 
        validity of any right, duty, or obligation of the 
        United States, the Federal Deposit Insurance 
        Corporation, the Board of Directors of that 
        Corporation, or any other person, that--
                    (A) arises under any provision of law 
                relating to any consumer financial protection 
                function of the Federal Deposit Insurance 
                Corporation transferred to the Bureau by this 
                title; and
                    (B) existed on the day before the 
                designated transfer date.
            (2) Continuation of suits.--No provision of this 
        Act shall abate any proceeding commenced by or against 
        the Federal Deposit Insurance Corporation (or the Board 
        of Directors of that Corporation) before the designated 
        transfer date with respect to any consumer financial 
        protection function of the Federal Deposit Insurance 
        Corporation transferred to the Bureau by this title, 
        except that the Bureau, subject to sections 1024, 1025, 
        and 1026, shall be substituted for the Federal Deposit 
        Insurance Corporation (or Board of Directors) as a 
        party to any such proceeding as of the designated 
        transfer date.
    (c) Federal Trade Commission.--Section 1061(b)(5) does not 
affect the validity of any right, duty, or obligation of the 
United States, the Federal Trade Commission, or any other 
person, that--
            (1) arises under any provision of law relating to 
        any consumer financial protection function of the 
        Federal Trade Commission transferred to the Bureau by 
        this title; and
            (2) existed on the day before the designated 
        transfer date.
    (d) National Credit Union Administration.--
            (1) Existing rights, duties, and obligations not 
        affected.--Section 1061(b)(6) does not affect the 
        validity of any right, duty, or obligation of the 
        United States, the National Credit Union 
        Administration, the National Credit Union 
        Administration Board, or any other person, that--
                    (A) arises under any provision of law 
                relating to any consumer financial protection 
                function of the National Credit Union 
                Administration transferred to the Bureau by 
                this title; and
                    (B) existed on the day before the 
                designated transfer date.
            (2) Continuation of suits.--No provision of this 
        Act shall abate any proceeding commenced by or against 
        the National Credit Union Administration (or the 
        National Credit Union Administration Board) before the 
        designated transfer date with respect to any consumer 
        financial protection function of the National Credit 
        Union Administration transferred to the Bureau by this 
        title, except that the Bureau, subject to sections 
        1024, 1025, and 1026, shall be substituted for the 
        National Credit Union Administration (or National 
        Credit Union Administration Board) as a party to any 
        such proceeding as of the designated transfer date.
    (e) Office of the Comptroller of the Currency.--
            (1) Existing rights, duties, and obligations not 
        affected.--Section 1061(b)(2) does not affect the 
        validity of any right, duty, or obligation of the 
        United States, the Comptroller of the Currency, the 
        Office of the Comptroller of the Currency, or any other 
        person, that--
                    (A) arises under any provision of law 
                relating to any consumer financial protection 
                function of the Comptroller of the Currency 
                transferred to the Bureau by this title; and
                    (B) existed on the day before the 
                designated transfer date.
            (2) Continuation of suits.--No provision of this 
        Act shall abate any proceeding commenced by or against 
        the Comptroller of the Currency (or the Office of the 
        Comptroller of the Currency) with respect to any 
        consumer financial protection function of the 
        Comptroller of the Currency transferred to the Bureau 
        by this title before the designated transfer date, 
        except that the Bureau, subject to sections 1024, 1025, 
        and 1026, shall be substituted for the Comptroller of 
        the Currency (or the Office of the Comptroller of the 
        Currency) as a party to any such proceeding as of the 
        designated transfer date.
    (f) Office of Thrift Supervision.--
            (1) Existing rights, duties, and obligations not 
        affected.--Section 1061(b)(3) does not affect the 
        validity of any right, duty, or obligation of the 
        United States, the Director of the Office of Thrift 
        Supervision, the Office of Thrift Supervision, or any 
        other person, that--
                    (A) arises under any provision of law 
                relating to any consumer financial protection 
                function of the Director of the Office of 
                Thrift Supervision transferred to the Bureau by 
                this title; and
                    (B) that existed on the day before the 
                designated transfer date.
            (2) Continuation of suits.--No provision of this 
        Act shall abate any proceeding commenced by or against 
        the Director of the Office of Thrift Supervision (or 
        the Office of Thrift Supervision) with respect to any 
        consumer financial protection function of the Director 
        of the Office of Thrift Supervision transferred to the 
        Bureau by this title before the designated transfer 
        date, except that the Bureau, subject to sections 1024, 
        1025, and 1026, shall be substituted for the Director 
        (or the Office of Thrift Supervision) as a party to any 
        such proceeding as of the designated transfer date.
    (g) Department of Housing and Urban Development.--
            (1) Existing rights, duties, and obligations not 
        affected.--Section 1061(b)(7) shall not affect the 
        validity of any right, duty, or obligation of the 
        United States, the Secretary of the Department of 
        Housing and Urban Development (or the Department of 
        Housing and Urban Development), or any other person, 
        that--
                    (A) arises under any provision of law 
                relating to any function of the Secretary of 
                the Department of Housing and Urban Development 
                with respect to the Real Estate Settlement 
                Procedures Act of 1974 (12 U.S.C. 2601 et 
                seq.), the Secure and Fair Enforcement for 
                Mortgage Licensing Act of 2008 (12 U.S.C. 5102 
                et seq.), or the Interstate Land Sales Full 
                Disclosure Act (15 U.S.C. 1701 et seq.) 
                transferred to the Bureau by this title; and
                    (B) existed on the day before the 
                designated transfer date.
            (2) Continuation of suits.--This title shall not 
        abate any proceeding commenced by or against the 
        Secretary of the Department of Housing and Urban 
        Development (or the Department of Housing and Urban 
        Development) with respect to any consumer financial 
        protection function of the Secretary of the Department 
        of Housing and Urban Development transferred to the 
        Bureau by this title before the designated transfer 
        date, except that the Bureau, subject to sections 1024, 
        1025, and 1026, shall be substituted for the Secretary 
        of the Department of Housing and Urban Development (or 
        the Department of Housing and Urban Development) as a 
        party to any such proceeding as of the designated 
        transfer date.
    (h) Continuation of Existing Orders, Rulings, 
Determinations, Agreements, and Resolutions.--
            (1) In general.--Except as provided in paragraph 
        (2) and under subsection (i), all orders, resolutions, 
        determinations, agreements, and rulings that have been 
        issued, made, prescribed, or allowed to become 
        effective by any transferor agency or by a court of 
        competent jurisdiction, in the performance of consumer 
        financial protection functions that are transferred by 
        this title and that are in effect on the day before the 
        designated transfer date, shall continue in effect, and 
        shall continue to be enforceable by the appropriate 
        transferor agency, according to the terms of those 
        orders, resolutions, determinations, agreements, and 
        rulings, and shall not be enforceable by or against the 
        Bureau.
            (2) Exception for orders applicable to persons 
        described in section 1025(a).--All orders, resolutions, 
        determinations, agreements, and rulings that have been 
        issued, made, prescribed, or allowed to become 
        effective by any transferor agency or by a court of 
        competent jurisdiction, in the performance of consumer 
        financial protection functions that are transferred by 
        this title and that are in effect on the day before the 
        designated transfer date with respect to any person 
        described in section 1025(a), shall continue in effect, 
        according to the terms of those orders, resolutions, 
        determinations, agreements, and rulings, and shall be 
        enforceable by or against the Bureau or transferor 
        agency.
    (i) Identification of Rules and Orders Continued.--Not 
later than the designated transfer date, the Bureau--
            (1) shall, after consultation with the head of each 
        transferor agency, identify the rules and orders that 
        will be enforced by the Bureau; and
            (2) shall publish a list of such rules and orders 
        in the Federal Register.
    (j) Status of Rules Proposed or Not Yet Effective.--
            (1) Proposed rules.--Any proposed rule of a 
        transferor agency which that agency, in performing 
        consumer financial protection functions transferred by 
        this title, has proposed before the designated transfer 
        date, but has not been published as a final rule before 
        that date, shall be deemed to be a proposed rule of the 
        Bureau.
            (2) Rules not yet effective.--Any interim or final 
        rule of a transferor agency which that agency, in 
        performing consumer financial protection functions 
        transferred by this title, has published before the 
        designated transfer date, but which has not become 
        effective before that date, shall become effective as a 
        rule of the Bureau according to its terms.

SEC. 1064. TRANSFER OF CERTAIN PERSONNEL.

    (a) In General.--
            (1) Certain federal reserve system employees 
        transferred.--
                    (A) Identifying employees for transfer.--
                The Bureau and the Board of Governors shall--
                            (i) jointly determine the number of 
                        employees of the Board of Governors 
                        necessary to perform or support the 
                        consumer financial protection functions 
                        of the Board of Governors that are 
                        transferred to the Bureau by this 
                        title; and
                            (ii) consistent with the number 
                        determined under clause (i), jointly 
                        identify employees of the Board of 
                        Governors for transfer to the Bureau, 
                        in a manner that the Bureau and the 
                        Board of Governors, in their sole 
                        discretion, determine equitable.
                    (B) Identified employees transferred.--All 
                employees of the Board of Governors identified 
                under subparagraph (A)(ii) shall be transferred 
                to the Bureau for employment.
                    (C) Federal reserve bank employees.--
                Employees of any Federal reserve bank who are 
                performing consumer financial protection 
                functions on behalf of the Board of Governors 
                shall be treated as employees of the Board of 
                Governors for purposes of subparagraphs (A) and 
                (B).
            (2) Certain fdic employees transferred.--
                    (A) Identifying employees for transfer.--
                The Bureau and the Board of Directors of the 
                Federal Deposit Insurance Corporation shall--
                            (i) jointly determine the number of 
                        employees of that Corporation necessary 
                        to perform or support the consumer 
                        financial protection functions of the 
                        Corporation that are transferred to the 
                        Bureau by this title; and
                            (ii) consistent with the number 
                        determined under clause (i), jointly 
                        identify employees of the Corporation 
                        for transfer to the Bureau, in a manner 
                        that the Bureau and the Board of 
                        Directors of the Corporation, in their 
                        sole discretion, determine equitable.
                    (B) Identified employees transferred.--All 
                employees of the Corporation identified under 
                subparagraph (A)(ii) shall be transferred to 
                the Bureau for employment.
            (3) Certain ncua employees transferred.--
                    (A) Identifying employees for transfer.--
                The Bureau and the National Credit Union 
                Administration Board shall--
                            (i) jointly determine the number of 
                        employees of the National Credit Union 
                        Administration necessary to perform or 
                        support the consumer financial 
                        protection functions of the National 
                        Credit Union Administration that are 
                        transferred to the Bureau by this 
                        title; and
                            (ii) consistent with the number 
                        determined under clause (i), jointly 
                        identify employees of the National 
                        Credit Union Administration for 
                        transfer to the Bureau, in a manner 
                        that the Bureau and the National Credit 
                        Union Administration Board, in their 
                        sole discretion, determine equitable.
                    (B) Identified employees transferred.--All 
                employees of the National Credit Union 
                Administration identified under subparagraph 
                (A)(ii) shall be transferred to the Bureau for 
                employment.
            (4) Certain office of the comptroller of the 
        currency employees transferred.--
                    (A) Identifying employees for transfer.--
                The Bureau and the Comptroller of the Currency 
                shall--
                            (i) jointly determine the number of 
                        employees of the Office of the 
                        Comptroller of the Currency necessary 
                        to perform or support the consumer 
                        financial protection functions of the 
                        Office of the Comptroller of the 
                        Currency that are transferred to the 
                        Bureau by this title; and
                            (ii) consistent with the number 
                        determined under clause (i), jointly 
                        identify employees of the Office of the 
                        Comptroller of the Currency for 
                        transfer to the Bureau, in a manner 
                        that the Bureau and the Office of the 
                        Comptroller of the Currency, in their 
                        sole discretion, determine equitable.
                    (B) Identified employees transferred.--All 
                employees of the Office of the Comptroller of 
                the Currency identified under subparagraph 
                (A)(ii) shall be transferred to the Bureau for 
                employment.
            (5) Certain office of thrift supervision employees 
        transferred.--
                    (A) Identifying employees for transfer.--
                The Bureau and the Director of the Office of 
                Thrift Supervision shall--
                            (i) jointly determine the number of 
                        employees of the Office of Thrift 
                        Supervision necessary to perform or 
                        support the consumer financial 
                        protection functions of the Office of 
                        Thrift Supervision that are transferred 
                        to the Bureau by this title; and
                            (ii) consistent with the number 
                        determined under clause (i), jointly 
                        identify employees of the Office of 
                        Thrift Supervision for transfer to the 
                        Bureau, in a manner that the Bureau and 
                        the Office of Thrift Supervision, in 
                        their sole discretion, determine 
                        equitable.
                    (B) Identified employees transferred.--All 
                employees of the Office of Thrift Supervision 
                identified under subparagraph (A)(ii) shall be 
                transferred to the Bureau for employment.
            (6) Certain employees of department of housing and 
        urban development transferred.--
                    (A) Identifying employees for transfer.--
                The Bureau and the Secretary of the Department 
                of Housing and Urban Development shall--
                            (i) jointly determine the number of 
                        employees of the Department of Housing 
                        and Urban Development necessary to 
                        perform or support the consumer 
                        protection functions of the Department 
                        that are transferred to the Bureau by 
                        this title; and
                            (ii) consistent with the number 
                        determined under clause (i), jointly 
                        identify employees of the Department of 
                        Housing and Urban Development for 
                        transfer to the Bureau in a manner that 
                        the Bureau and the Secretary of the 
                        Department of Housing and Urban 
                        Development, in their sole discretion, 
                        deem equitable.
                    (B) Identified employees transferred.--All 
                employees of the Department of Housing and 
                Urban Development identified under subparagraph 
                (A)(ii) shall be transferred to the Bureau for 
                employment.
            (7) Consumer education, financial literacy, 
        consumer complaints, and research functions.--The 
        Bureau and each of the transferor agencies (except the 
        Federal Trade Commission) shall jointly determine the 
        number of employees and the types and grades of 
        employees necessary to perform the functions of the 
        Bureau under subtitle A, including consumer education, 
        financial literacy, policy analysis, responses to 
        consumer complaints and inquiries, research, and 
        similar functions. All employees jointly identified 
        under this paragraph shall be transferred to the Bureau 
        for employment.
            (8) Authority of the president to resolve 
        disputes.--
                    (A) Action authorized.--In the event that 
                the Bureau and a transferor agency are unable 
                to reach an agreement under paragraphs (1) 
                through (7) by the designated transfer date, 
                the President, or the designee thereof, may 
                issue an order or directive to the transferor 
                agency to effect the transfer of personnel and 
                property under this subtitle.
                    (B) Transmittal to congress required.--If 
                an order or directive is issued under 
                subparagraph (A), the President shall transmit 
                a copy of the written determination made with 
                respect to such order or directive, including 
                an explanation for the need for the order or 
                directive, to the Committee on Banking, 
                Housing, and Urban Affairs and the Committee on 
                Appropriations of the Senate and the Committee 
                on Financial Services and the Committee on 
                Appropriations of the House of Representatives.
                    (C) Sunset.--The authority provided in this 
                paragraph shall terminate 3 years after the 
                designated transfer date.
            (9) Appointment authority for excepted service and 
        senior executive service transferred.--
                    (A) In general.--In the case of an employee 
                occupying a position in the excepted service or 
                the Senior Executive Service, any appointment 
                authority established pursuant to law or 
                regulations of the Office of Personnel 
                Management for filling such positions shall be 
                transferred, subject to subparagraph (B).
                    (B) Declining transfers allowed.--An agency 
                or entity may decline to make a transfer of 
                authority under subparagraph (A) (and the 
                employees appointed pursuant thereto) to the 
                extent that such authority relates to positions 
                excepted from the competitive service because 
                of their confidential, policy-making, policy-
                determining, or policy-advocating character, 
                and non-career positions in the Senior 
                Executive Service (within the meaning of 
                section 3132(a)(7) of title 5, United States 
                Code).
    (b) Timing of Transfers and Position Assignments.--Each 
employee to be transferred under this section shall--
            (1) be transferred not later than 90 days after the 
        designated transfer date; and
            (2) receive notice of a position assignment not 
        later than 120 days after the effective date of his or 
        her transfer.
    (c) Transfer of Function.--
            (1) In general.--Notwithstanding any other 
        provision of law, the transfer of employees shall be 
        deemed a transfer of functions for the purpose of 
        section 3503 of title 5, United States Code.
            (2) Priority of this title.--If any provisions of 
        this title conflict with any protection provided to 
        transferred employees under section 3503 of title 5, 
        United States Code, the provisions of this title shall 
        control.
    (d) Equal Status and Tenure Positions.--
            (1) Employees transferred from the federal reserve 
        system, fdic, hud, ncua, occ, and ots.--Each employee 
        transferred to the Bureau from the Board of Governors, 
        a Federal reserve bank, the Federal Deposit Insurance 
        Corporation, the Department of Housing and Urban 
        Development, the National Credit Union Administration, 
        the Office of the Comptroller of the Currency, or the 
        Office of Thrift Supervision shall be placed in a 
        position at the Bureau with the same status and tenure 
        as that employee held on the day before the designated 
        transfer date.
            (2) Employees transferred from the federal reserve 
        system.--For purposes of determining the status and 
        position placement of a transferred employee, any 
        period of service with the Board of Governors or a 
        Federal reserve bank shall be credited as a period of 
        service with a Federal agency.
    (e) Additional Certification Requirements Limited.--
Examiners transferred to the Bureau are not subject to any 
additional certification requirements before being placed in a 
comparable examiner position at the Bureau examining the same 
types of institutions as they examined before they were 
transferred.
    (f) Personnel Actions Limited.--
            (1) 2-year protection.--Except as provided in 
        paragraph (2), each transferred employee holding a 
        permanent position on the day before the designated 
        transfer date may not, during the 2-year period 
        beginning on the designated transfer date, be 
        involuntarily separated, or involuntarily reassigned 
        outside his or her locality pay area.
            (2) Exceptions.--Paragraph (1) does not limit the 
        right of the Bureau--
                    (A) to separate an employee for cause or 
                for unacceptable performance;
                    (B) to terminate an appointment to a 
                position excepted from the competitive service 
                because of its confidential policy-making, 
                policy-determining, or policy-advocating 
                character; or
                    (C) to reassign a supervisory employee 
                outside of his or her locality pay area when 
                the Bureau determines that the reassignment is 
                necessary for the efficient operation of the 
                Bureau.
    (g) Pay.--
            (1) 2-year protection.--
                    (A) In general.--Except as provided in 
                paragraph (2), each transferred employee shall, 
                during the 2-year period beginning on the 
                designated transfer date, receive pay at a rate 
                equal to not less than the basic rate of pay 
                (including any geographic differential) that 
                the employee received during the pay period 
                immediately preceding the date of transfer.
                    (B) Limitation.--Notwithstanding 
                subparagraph (A), if the employee was receiving 
                a higher rate of basic pay on a temporary basis 
                (because of a temporary assignment, temporary 
                promotion, or other temporary action) 
                immediately before the date of transfer, the 
                Bureau may reduce the rate of basic pay on the 
                date on which the rate would have been reduced 
                but for the transfer, and the protected rate 
                for the remainder of the 2-year period shall be 
                the reduced rate that would have applied, but 
                for the transfer.
            (2) Exceptions.--Paragraph (1) does not limit the 
        right of the Bureau to reduce the rate of basic pay of 
        a transferred employee--
                    (A) for cause;
                    (B) for unacceptable performance; or
                    (C) with the consent of the employee.
            (3) Protection only while employed.--Paragraph (1) 
        applies to a transferred employee only while that 
        employee remains employed by the Bureau.
            (4) Pay increases permitted.--Paragraph (1) does 
        not limit the authority of the Bureau to increase the 
        pay of a transferred employee.
    (h) Reorganization.--
            (1) Between 1st and 3rd year.--
                    (A) In general.--If the Bureau determines, 
                during the 2-year period beginning 1 year after 
                the designated transfer date, that a 
                reorganization of the staff of the Bureau is 
                required--
                            (i) that reorganization shall be 
                        deemed a ``substantial reorganization'' 
                        for purposes of affording affected 
                        employees retirement under section 
                        8336(d)(2) or 8414(b)(1)(B) of title 5, 
                        United States Code;
                            (ii) before the reorganization 
                        occurs, all employees in the same 
                        locality pay area as defined by the 
                        Office of Personnel Management shall be 
                        placed in a uniform position 
                        classification system; and
                            (iii) any resulting reduction in 
                        force shall be governed by the 
                        provisions of chapter 35 of title 5, 
                        United States Code, except that the 
                        Bureau shall--
                                    (I) establish competitive 
                                areas (as that term is defined 
                                in regulations issued by the 
                                Office of Personnel Management) 
                                to include at a minimum all 
                                employees in the same locality 
                                pay area as defined by the 
                                Office of Personnel Management;
                                    (II) establish competitive 
                                levels (as that term is defined 
                                in regulations issued by the 
                                Office of Personnel Management) 
                                without regard to whether the 
                                particular employees have been 
                                appointed to positions in the 
                                competitive service or the 
                                excepted service; and
                                    (III) afford employees 
                                appointed to positions in the 
                                excepted service (other than to 
                                a position excepted from the 
                                competitive service because of 
                                its confidential policy-making, 
                                policy-determining, or policy-
                                advocating character) the same 
                                assignment rights to positions 
                                within the Bureau as employees 
                                appointed to positions in the 
                                competitive service.
                    (B) Service credit for reductions in 
                force.--For purposes of this paragraph, periods 
                of service with a Federal home loan bank, a 
                joint office of the Federal home loan banks, 
                the Board of Governors, a Federal reserve bank, 
                the Federal Deposit Insurance Corporation, or 
                the National Credit Union Administration shall 
                be credited as periods of service with a 
                Federal agency.
            (2) After 3rd year.--
                    (A) In general.--If the Bureau determines, 
                at any time after the 3-year period beginning 
                on the designated transfer date, that a 
                reorganization of the staff of the Bureau is 
                required, any resulting reduction in force 
                shall be governed by the provisions of chapter 
                35 of title 5, United States Code, except that 
                the Bureau shall establish competitive levels 
                (as that term is defined in regulations issued 
                by the Office of Personnel Management) without 
                regard to types of appointment held by 
                particular employees transferred under this 
                section.
                    (B) Service credit for reductions in 
                force.--For purposes of this paragraph, periods 
                of service with a Federal home loan bank, a 
                joint office of the Federal home loan banks, 
                the Board of Governors, a Federal reserve bank, 
                the Federal Deposit Insurance Corporation, or 
                the National Credit Union Administration shall 
                be credited as periods of service with a 
                Federal agency.
    (i) Benefits.--
            (1) Retirement benefits for transferred 
        employees.--
                    (A) In general.--
                            (i) Continuation of existing 
                        retirement plan.--Unless an election is 
                        made under clause (iii) or subparagraph 
                        (B), each employee transferred pursuant 
                        to this subtitle shall remain enrolled 
                        in the existing retirement plan of that 
                        employee as of the date of transfer, 
                        through any period of continuous 
                        employment with the Bureau.
                            (ii) Employer contribution.--The 
                        Bureau shall pay any employer 
                        contributions to the existing 
                        retirement plan of each transferred 
                        employee, as required under that plan.
                            (iii) Option to elect into the 
                        federal reserve system retirement plan 
                        and federal reserve system thrift 
                        plan.--Any employee transferred 
                        pursuant to this subtitle may, during 
                        the 1-year period beginning 6 months 
                        after the designated transfer date, 
                        elect to end their participation and 
                        benefit accruals under their existing 
                        retirement plan or plans and elect to 
                        participate in both the Federal Reserve 
                        System Retirement Plan and the Federal 
                        Reserve System Thrift Plan, through any 
                        period of continuous employment with 
                        the Bureau, under the same terms as are 
                        applicable to Federal Reserve System 
                        transferred employees, as provided in 
                        subparagraph (C). An election of 
                        coverage by the Federal Reserve System 
                        Retirement Plan and the Federal Reserve 
                        System Thrift Plan shall begin on the 
                        day following the end of the 18-month 
                        period beginning on the designated 
                        transfer date, and benefit accruals 
                        under the existing retirement plan of 
                        the transferred employee shall end on 
                        the last day of the 18-month period 
                        beginning on the designated transfer 
                        date. If an employee elects to 
                        participate in the Federal Reserve 
                        System Retirement Plan and the Federal 
                        Reserve System Thrift Plan, all of the 
                        service of the employee that was 
                        creditable under their existing 
                        retirement plan shall be transferred to 
                        the Federal Reserve System Retirement 
                        Plan on the day following the end of 
                        the 18-month period beginning on the 
                        designated transfer date.
                            (iv) Bureau 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 under this 
                        subparagraph. 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 the Federal Reserve 
                        System Thrift Plan.
                            (v) Additional funding.--The Bureau 
                        shall transfer to the Federal Reserve 
                        System Retirement Plan an amount 
                        determined by the Board of Governors, 
                        in consultation with the Bureau, to be 
                        necessary to reimburse the Federal 
                        Reserve System Retirement Plan for the 
                        costs to such plan of providing 
                        benefits to employees electing coverage 
                        under the Federal Reserve System 
                        Retirement Plan under subparagraph 
                        (iii), and who were transferred to the 
                        Bureau from outside of the Federal 
                        Reserve System.
                            (vi) Option to elect into thrift 
                        plan created by the bureau.--If the 
                        Bureau chooses to establish a thrift 
                        plan, the employees transferred 
                        pursuant to this subtitle shall have 
                        the option to elect, under such terms 
                        and conditions as the Bureau may 
                        establish, coverage under such a thrift 
                        plan established by the Bureau. 
                        Transferred employees may not remain in 
                        the thrift plan of the agency from 
                        which the employee transferred under 
                        this subtitle, if the employee elects 
                        to participate in a thrift plan 
                        established by the Bureau.
                    (B) Option for employees transferred from 
                federal reserve system to be subject to the 
                federal employee retirement program.--
                            (i) Election.--Any Federal Reserve 
                        System transferred employee who was 
                        enrolled in the Federal Reserve System 
                        Retirement Plan on the day before the 
                        date of his or her transfer to the 
                        Bureau may, during the 1-year period 
                        beginning 6 months after the designated 
                        transfer date, elect to be subject to 
                        the Federal Employee Retirement 
                        Program.
                            (ii) Effective date of coverage.--
                        An election of coverage by the Federal 
                        Employee Retirement Program under this 
                        subparagraph shall begin on the day 
                        following the end of the 18-month 
                        period beginning on the designated 
                        transfer date, and benefit accruals 
                        under the existing retirement plan of 
                        the Federal Reserve System transferred 
                        employee shall end on the last day of 
                        the 18-month period beginning on the 
                        designated transfer date.
                    (C) Bureau participation in federal reserve 
                system retirement plan.--
                            (i) Benefits provided.--Federal 
                        Reserve System employees transferred 
                        pursuant to this subtitle shall 
                        continue to be eligible to participate 
                        in the Federal Reserve System 
                        Retirement Plan and Federal Reserve 
                        System Thrift Plan through any period 
                        of continuous employment with the 
                        Bureau, unless the employee makes an 
                        election under subparagraph (A)(vi) or 
                        (B). The retirement benefits, formulas, 
                        and features offered to the Federal 
                        Reserve System transferred employees 
                        shall be the same as those offered to 
                        employees of the Board of Governors who 
                        participate in the Federal Reserve 
                        System Retirement Plan and the Federal 
                        Reserve System Thrift Plan, as amended 
                        from time to time.
                            (ii) Limitation.--The Bureau shall 
                        not have responsibility or authority--
                                    (I) to amend an existing 
                                retirement plan (including the 
                                Federal Reserve System 
                                Retirement Plan or Federal 
                                Reserve System Thrift Plan);
                                    (II) for administering an 
                                existing retirement plan 
                                (including the Federal Reserve 
                                System Retirement Plan or 
                                Federal Reserve System Thrift 
                                Plan); or
                                    (III) for ensuring the 
                                plans comply with applicable 
                                laws, fiduciary rules, and 
                                related responsibilities.
                            (iii) Tax qualified status.--
                        Notwithstanding any other provision of 
                        law, providing benefits to Federal 
                        Reserve System employees transferred to 
                        the Bureau pursuant to this subtitle, 
                        and to employees who elect coverage 
                        pursuant to subparagraph (A)(iii) or 
                        under section 1013(a)(2)(B), shall not 
                        cause any existing retirement plan 
                        (including the Federal Reserve System 
                        Retirement Plan and the Federal Reserve 
                        System Thrift Plan) to lose its tax-
                        qualified status under sections 401(a) 
                        and 501(a) of the Internal Revenue Code 
                        of 1986.
                            (iv) Bureau contribution.--The 
                        Bureau shall pay any employer 
                        contributions to the existing 
                        retirement plan (including the Federal 
                        Reserve System Retirement Plan and the 
                        Federal Reserve System Thrift Plan) for 
                        each Federal Reserve System transferred 
                        employee participating in those plans, 
                        as required under the plan, after the 
                        designated transfer date.
                            (v) 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).
                    (D) Definitions.--For purposes of this 
                paragraph--
                            (i) the term ``existing retirement 
                        plan'' means, with respect to an 
                        employee transferred pursuant to this 
                        subtitle, the retirement plan 
                        (including the Financial Institutions 
                        Retirement Fund) and any associated 
                        thrift savings plan, of the agency from 
                        which the employee was transferred 
                        under this subtitle, in which the 
                        employee was enrolled on the day before 
                        the date on which the employee was 
                        transferred;
                            (ii) the term ``Federal Employee 
                        Retirement Program'' means either the 
                        Civil Service Retirement System 
                        established under chapter 83 of title 
                        5, United States Code, or the Federal 
                        Employees Retirement System established 
                        under chapter 84 of title 5, United 
                        States Code, depending upon the service 
                        history of the individual;
                            (iii) the term ``Federal Reserve 
                        System transferred employee'' means a 
                        transferred employee who is an employee 
                        of the Board of Governors or a Federal 
                        reserve bank on the day before the 
                        designated transfer date, and who is 
                        transferred to the Bureau on the 
                        designated transfer date pursuant to 
                        this subtitle;
                            (iv) the term ``Federal Reserve 
                        System Retirement Plan'' means the 
                        Retirement Plan for Employees of the 
                        Federal Reserve System; and
                            (v) the term ``Federal Reserve 
                        System Thrift Plan'' means the Thrift 
                        Plan for Employees of the Federal 
                        Reserve System.
            (2) Benefits other than retirement benefits for 
        transferred employees.--
                    (A) During 1st year.--
                            (i) Existing plans continue.--Each 
                        employee transferred pursuant to this 
                        subtitle may, for 1 year after the 
                        designated transfer date, retain 
                        membership in any other employee 
                        benefit program of the agency or bank 
                        from which the employee transferred, 
                        including a medical, dental, vision, 
                        long term care, or life insurance 
                        program, to which the employee belonged 
                        on the day before the designated 
                        transfer date.
                            (ii) Employer contribution.--The 
                        Bureau shall reimburse the agency or 
                        bank from which an employee was 
                        transferred for any cost incurred by 
                        that agency or bank in continuing to 
                        extend coverage in the benefit program 
                        to the employee, as required under that 
                        program or negotiated agreements.
                    (B) Medical, dental, vision, or life 
                insurance after first year.--If, at the end of 
                the 1-year period beginning on the designated 
                transfer date, the Bureau has not established 
                its own, or arranged for participation in 
                another entity's, medical, dental, vision, or 
                life insurance program, an employee transferred 
                pursuant to this subtitle who was a member of 
                such a program at the agency or Federal reserve 
                bank from which the employee transferred may, 
                before the coverage of that employee ends under 
                subparagraph (A)(i), elect to enroll, without 
                regard to any regularly scheduled open season, 
                in--
                            (i) the enhanced dental benefits 
                        program established under chapter 89A 
                        of title 5, United States Code;
                            (ii) the enhanced vision benefits 
                        established under chapter 89B of title 
                        5, United States Code;
                            (iii) the Federal Employees Group 
                        Life Insurance Program established 
                        under chapter 87 of title 5, United 
                        States Code, without regard to any 
                        requirement of insurability; and
                            (iv) the Federal Employees Health 
                        Benefits Program established under 
                        chapter 89 of title 5, United States 
                        Code.
                    (C) Long term care insurance after 1st 
                year.--If, at the end of the 1-year period 
                beginning on the designated transfer date, the 
                Bureau has not established its own, or arranged 
                for participation in another entity's, long 
                term care insurance program, an employee 
                transferred pursuant to this subtitle who was a 
                member of such a program at the agency or 
                Federal reserve bank from which the employee 
                transferred may, before the coverage of that 
                employee ends under subparagraph (A)(i), elect 
                to apply for coverage under the Federal Long 
                Term Care Insurance Program established under 
                chapter 90 of title 5, United States Code, 
                under the underwriting requirements applicable 
                to a new active workforce member (as defined in 
                part 875 of title 5, Code of Federal 
                Regulations).
                    (D) Employee contribution.--An individual 
                enrolled in the Federal Employees Health 
                Benefits program shall pay any employee 
                contribution required by the plan.
                    (E) Additional funding.--The Bureau shall 
                transfer to the Federal Employees Health 
                Benefits Fund established under section 8909 of 
                title 5, United States Code, an amount 
                determined by the Director of the Office of 
                Personnel Management, after consultation with 
                the Bureau and the Office of Management and 
                Budget, to be necessary to reimburse the Fund 
                for the cost to the Fund of providing benefits 
                under this paragraph.
                    (F) Credit for time enrolled in other 
                plans.--For employees transferred under this 
                title, enrollment in a health benefits plan 
                administered by a transferor agency or a 
                Federal reserve bank, as the case may be, 
                immediately before enrollment in a health 
                benefits plan under chapter 89 of title 5, 
                United States Code, shall be considered as 
                enrollment in a health benefits plan under that 
                chapter for purposes of section 8905(b)(1)(A) 
                of title 5, United States Code.
                    (G) Special provisions to ensure 
                continuation of life insurance benefits.--
                            (i) In general.--An annuitant (as 
                        defined in section 8901(3) of title 5, 
                        United States Code) who is enrolled in 
                        a life insurance plan administered by a 
                        transferor agency on the day before the 
                        designated transfer date shall be 
                        eligible for coverage by a life 
                        insurance plan under sections 8706(b), 
                        8714a, 8714b, and 8714c of title 5, 
                        United States Code, or in a life 
                        insurance plan established by the 
                        Bureau, without regard to any regularly 
                        scheduled open season and requirement 
                        of insurability.
                            (ii) Employee contribution.--An 
                        individual enrolled in a life insurance 
                        plan under this subparagraph shall pay 
                        any employee contribution required by 
                        the plan.
                            (iii) Additional funding.--The 
                        Bureau shall transfer to the Employees' 
                        Life Insurance Fund established under 
                        section 8714 of title 5, United States 
                        Code, an amount determined by the 
                        Director of the Office of Personnel 
                        Management, after consultation with the 
                        Bureau and the Office of Management and 
                        Budget, to be necessary to reimburse 
                        the Fund for the cost to the Fund of 
                        providing benefits under this 
                        subparagraph not otherwise paid for by 
                        the employee under clause (ii).
                            (iv) Credit for time enrolled in 
                        other plans.--For employees transferred 
                        under this title, enrollment in a life 
                        insurance plan administered by a 
                        transferor agency immediately before 
                        enrollment in a life insurance plan 
                        under chapter 87 of title 5, United 
                        States Code, shall be considered as 
                        enrollment in a life insurance plan 
                        under that chapter for purposes of 
                        section 8706(b)(1)(A) of title 5, 
                        United States Code.
            (3) OPM rules.--The Office of Personnel Management 
        shall issue such rules as are necessary to carry out 
        this subsection.
    (j) Implementation of Uniform Pay and Classification 
System.--Not later than 2 years after the designated transfer 
date, the Bureau shall implement a uniform pay and 
classification system for all employees transferred under this 
title.
    (k) Equitable Treatment.--In administering the provisions 
of this section, the Bureau--
            (1) shall take no action that would unfairly 
        disadvantage transferred employees relative to each 
        other based on their prior employment by the Board of 
        Governors, the Federal Deposit Insurance Corporation, 
        the Department of Housing and Urban Development, the 
        National Credit Union Administration, the Office of the 
        Comptroller of the Currency, the Office of Thrift 
        Supervision, a Federal reserve bank, a Federal home 
        loan bank, or a joint office of the Federal home loan 
        banks; and
            (2) may take such action as is appropriate in 
        individual cases so that employees transferred under 
        this section receive equitable treatment, with respect 
        to the status, tenure, pay, benefits (other than 
        benefits under programs administered by the Office of 
        Personnel Management), and accrued leave or vacation 
        time of those employees, for prior periods of service 
        with any Federal agency, including the Board of 
        Governors, the Corporation, the Department of Housing 
        and Urban Development, the National Credit Union 
        Administration, the Office of the Comptroller of the 
        Currency, the Office of Thrift Supervision, a Federal 
        reserve bank, a Federal home loan bank, or a joint 
        office of the Federal home loan banks.
    (l) Implementation.--In implementing the provisions of this 
section, the Bureau shall coordinate with the Office of 
Personnel Management and other entities having expertise in 
matters related to employment to ensure a fair and orderly 
transition for affected employees.

SEC. 1065. INCIDENTAL TRANSFERS.

    (a) Incidental Transfers Authorized.--The Director of the 
Office of Management and Budget, in consultation with the 
Secretary, shall make such additional incidental transfers and 
dispositions of assets and liabilities held, used, arising 
from, available, or to be made available, in connection with 
the functions transferred by this title, as the Director may 
determine necessary to accomplish the purposes of this title.
    (b) Sunset.--The authority provided in this section shall 
terminate 5 years after the date of enactment of this Act.

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 Director 
of the Bureau 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.

SEC. 1067. TRANSITION OVERSIGHT.

    (a) Purpose.--The purpose of this section is to ensure that 
the Bureau--
            (1) has an orderly and organized startup;
            (2) attracts and retains a qualified workforce; and
            (3) establishes comprehensive employee training and 
        benefits programs.
    (b) Reporting Requirement.--
            (1) In general.--The Bureau shall submit an annual 
        report to the Committee on Banking, Housing, and Urban 
        Affairs of the Senate and the Committee on Financial 
        Services of the House of Representatives that includes 
        the plans described in paragraph (2).
            (2) Plans.--The plans described in this paragraph 
        are as follows:
                    (A) Training and workforce development 
                plan.--The Bureau shall submit a training and 
                workforce development plan that includes, to 
                the extent practicable--
                            (i) identification of skill and 
                        technical expertise needs and actions 
                        taken to meet those requirements;
                            (ii) steps taken to foster 
                        innovation and creativity;
                            (iii) leadership development and 
                        succession planning; and
                            (iv) effective use of technology by 
                        employees.
                    (B) Workplace flexibilities plan.--The 
                Bureau shall submit a workforce flexibility 
                plan that includes, to the extent practicable--
                            (i) telework;
                            (ii) flexible work schedules;
                            (iii) phased retirement;
                            (iv) reemployed annuitants;
                            (v) part-time work;
                            (vi) job sharing;
                            (vii) parental leave benefits and 
                        childcare assistance;
                            (viii) domestic partner benefits;
                            (ix) other workplace flexibilities; 
                        or
                            (x) any combination of the items 
                        described in clauses (i) through (ix).
                    (C) Recruitment and retention plan.--The 
                Bureau shall submit a recruitment and retention 
                plan that includes, to the extent practicable, 
                provisions relating to--
                            (i) the steps necessary to target 
                        highly qualified applicant pools with 
                        diverse backgrounds;
                            (ii) streamlined employment 
                        application processes;
                            (iii) the provision of timely 
                        notification of the status of 
                        employment applications to applicants; 
                        and
                            (iv) the collection of information 
                        to measure indicators of hiring 
                        effectiveness.
    (c) Expiration.--The reporting requirement under subsection 
(b) shall terminate 5 years after the date of enactment of this 
Act.
    (d) Rule of Construction.--Nothing in this section may be 
construed to affect--
            (1) a collective bargaining agreement, as that term 
        is defined in section 7103(a)(8) of title 5, United 
        States Code, that is in effect on the date of enactment 
        of this Act; or
            (2) the rights of employees under chapter 71 of 
        title 5, United States Code.
    (e) Participation in Examinations.--In order to prepare the 
Bureau to conduct examinations under section 1025 upon the 
designated transfer date, the Bureau and the applicable 
prudential regulator may agree to include, on a sampling basis, 
examiners on examinations of the compliance with Federal 
consumer financial law of institutions described in section 
1025(a) conducted by the prudential regulators prior to the 
designated transfer date.

                  Subtitle G--Regulatory Improvements

SEC. 1071. SMALL BUSINESS DATA COLLECTION.

    (a) In General.--The Equal Credit Opportunity Act (15 
U.S.C. 1691 et seq.) is amended by inserting after section 704A 
the following:

``SEC. 704B. SMALL BUSINESS LOAN DATA COLLECTION.

    ``(a) Purpose.--The purpose of this section is to 
facilitate enforcement of fair lending laws and enable 
communities, governmental entities, and creditors to identify 
business and community development needs and opportunities of 
women-owned, minority-owned, and small businesses.
    ``(b) Information Gathering.--Subject to the requirements 
of this section, in the case of any application to a financial 
institution for credit for women-owned, minority-owned, or 
small business, the financial institution shall--
            ``(1) inquire whether the business is a women-
        owned, minority-owned, or small business, without 
        regard to whether such application is received in 
        person, by mail, by telephone, by electronic mail or 
        other form of electronic transmission, or by any other 
        means, and whether or not such application is in 
        response to a solicitation by the financial 
        institution; and
            ``(2) maintain a record of the responses to such 
        inquiry, separate from the application and accompanying 
        information.
    ``(c) Right To Refuse.--Any applicant for credit may refuse 
to provide any information requested pursuant to subsection (b) 
in connection with any application for credit.
    ``(d) No Access by Underwriters.--
            ``(1) Limitation.--Where feasible, no loan 
        underwriter or other officer or employee of a financial 
        institution, or any affiliate of a financial 
        institution, involved in making any determination 
        concerning an application for credit shall have access 
        to any information provided by the applicant pursuant 
        to a request under subsection (b) in connection with 
        such application.
            ``(2) Limited access.--If a financial institution 
        determines that a loan underwriter or other officer or 
        employee of a financial institution, or any affiliate 
        of a financial institution, involved in making any 
        determination concerning an application for credit 
        should have access to any information provided by the 
        applicant pursuant to a request under subsection (b), 
        the financial institution shall provide notice to the 
        applicant of the access of the underwriter to such 
        information, along with notice that the financial 
        institution may not discriminate on the basis of such 
        information.
    ``(e) Form and Manner of Information.--
            ``(1) In general.--Each financial institution shall 
        compile and maintain, in accordance with regulations of 
        the Bureau, a record of the information provided by any 
        loan applicant pursuant to a request under subsection 
        (b).
            ``(2) Itemization.--Information compiled and 
        maintained under paragraph (1) shall be itemized in 
        order to clearly and conspicuously disclose--
                    ``(A) the number of the application and the 
                date on which the application was received;
                    ``(B) the type and purpose of the loan or 
                other credit being applied for;
                    ``(C) the amount of the credit or credit 
                limit applied for, and the amount of the credit 
                transaction or the credit limit approved for 
                such applicant;
                    ``(D) the type of action taken with respect 
                to such application, and the date of such 
                action;
                    ``(E) the census tract in which is located 
                the principal place of business of the women-
                owned, minority-owned, or small business loan 
                applicant;
                    ``(F) the gross annual revenue of the 
                business in the last fiscal year of the women-
                owned, minority-owned, or small business loan 
                applicant preceding the date of the 
                application;
                    ``(G) the race, sex, and ethnicity of the 
                principal owners of the business; and
                    ``(H) any additional data that the Bureau 
                determines would aid in fulfilling the purposes 
                of this section.
            ``(3) No personally identifiable information.--In 
        compiling and maintaining any record of information 
        under this section, a financial institution may not 
        include in such record the name, specific address 
        (other than the census tract required under paragraph 
        (1)(E)), telephone number, electronic mail address, or 
        any other personally identifiable information 
        concerning any individual who is, or is connected with, 
        the women-owned, minority-owned, or small business loan 
        applicant.
            ``(4) Discretion to delete or modify publicly 
        available data.--The Bureau may, at its discretion, 
        delete or modify data collected under this section 
        which is or will be available to the public, if the 
        Bureau determines that the deletion or modification of 
        the data would advance a privacy interest.
    ``(f) Availability of Information.--
            ``(1) Submission to bureau.--The data required to 
        be compiled and maintained under this section by any 
        financial institution shall be submitted annually to 
        the Bureau.
            ``(2) Availability of information.--Information 
        compiled and maintained under this section shall be--
                    ``(A) retained for not less than 3 years 
                after the date of preparation;
                    ``(B) made available to any member of the 
                public, upon request, in the form required 
                under regulations prescribed by the Bureau;
                    ``(C) annually made available to the public 
                generally by the Bureau, in such form and in 
                such manner as is determined by the Bureau, by 
                regulation.
            ``(3) Compilation of aggregate data.--The Bureau 
        may, at its discretion--
                    ``(A) compile and aggregate data collected 
                under this section for its own use; and
                    ``(B) make public such compilations of 
                aggregate data.
    ``(g) Bureau Action.--
            ``(1) In general.--The Bureau shall prescribe such 
        rules and issue such guidance as may be necessary to 
        carry out, enforce, and compile data pursuant to this 
        section.
            ``(2) Exceptions.--The Bureau, by rule or order, 
        may adopt exceptions to any requirement of this section 
        and may, conditionally or unconditionally, exempt any 
        financial institution or class of financial 
        institutions from the requirements of this section, as 
        the Bureau deems necessary or appropriate to carry out 
        the purposes of this section.
            ``(3) Guidance.--The Bureau shall issue guidance 
        designed to facilitate compliance with the requirements 
        of this section, including assisting financial 
        institutions in working with applicants to determine 
        whether the applicants are women-owned, minority-owned, 
        or small businesses for purposes of this section.
    ``(h) Definitions.--For purposes of this section, the 
following definitions shall apply:
            ``(1) Financial institution.--The term `financial 
        institution' means any partnership, company, 
        corporation, association (incorporated or 
        unincorporated), trust, estate, cooperative 
        organization, or other entity that engages in any 
        financial activity.
            ``(2) Small business.--The term `small business' 
        has the same meaning as the term `small business 
        concern' in section 3 of the Small Business Act (15 
        U.S.C. 632).
            ``(3) Small business loan.--The term `small 
        business loan' means a loan made to a small business.
            ``(4) Minority.--The term `minority' has the same 
        meaning as in section 1204(c)(3) of the Financial 
        Institutions Reform, Recovery, and Enforcement Act of 
        1989.
            ``(5) Minority-owned business.--The term `minority-
        owned business' means a business--
                    ``(A) more than 50 percent of the ownership 
                or control of which is held by 1 or more 
                minority individuals; and
                    ``(B) more than 50 percent of the net 
                profit or loss of which accrues to 1 or more 
                minority individuals.
            ``(6) Women-owned business.--The term `women-owned 
        business' means a business--
                    ``(A) more than 50 percent of the ownership 
                or control of which is held by 1 or more women; 
                and
                    ``(B) more than 50 percent of the net 
                profit or loss of which accrues to 1 or more 
                women.''.
    (b) Technical and Conforming Amendments.--Section 701(b) of 
the Equal Credit Opportunity Act (15 U.S.C. 1691(b)) is 
amended--
            (1) in paragraph (3), by striking ``or'' at the 
        end;
            (2) in paragraph (4), by striking the period at the 
        end and inserting ``; or''; and
            (3) by inserting after paragraph (4), the 
        following:
            ``(5) to make an inquiry under section 704B, in 
        accordance with the requirements of that section.''.
    (c) Clerical Amendment.--The table of sections for title 
VII of the Consumer Credit Protection Act is amended by 
inserting after the item relating to section 704A the following 
new item:

``704B. Small business loan data collection.''.

    (d) Effective Date.--This section shall become effective on 
the designated transfer date.

SEC. 1072. ASSISTANCE FOR ECONOMICALLY VULNERABLE INDIVIDUALS AND 
                    FAMILIES.

    (a) HERA Amendments.--Section 1132 of the Housing and 
Economic Recovery Act of 2008 (12 U.S.C. 1701x note) is 
amended--
            (1) in subsection (a), by inserting in each of 
        paragraphs (1), (2), (3), and (4) ``or economically 
        vulnerable individuals and families'' after 
        ``homebuyers'' each place that term appears;
            (2) in subsection (b)(1), by inserting ``or 
        economically vulnerable individuals and families'' 
        after ``homebuyers'';
            (3) in subsection (c)(1)--
                    (A) in subparagraph (A), by striking ``or'' 
                at the end;
                    (B) in subparagraph (B), by striking the 
                period at the end and inserting ``; or''; and
                    (C) by adding at the end the following:
                    ``(C) a nonprofit corporation that--
                            ``(i) is exempt from taxation under 
                        section 501(c)(3) of the Internal 
                        Revenue Code of 1986; and
                            ``(ii) specializes or has expertise 
                        in working with economically vulnerable 
                        individuals and families, but whose 
                        primary purpose is not provision of 
                        credit counseling services.''; and
            (4) in subsection (d)(1), by striking ``not more 
        than 5''.
    (b) Applicability.--Amendments made by subsection (a) shall 
not apply to programs authorized by section 1132 of the Housing 
and Economic Recovery Act of 2008 (12 U.S.C. 1701x note) that 
are funded with appropriations prior to fiscal year 2011.

SEC. 1073. REMITTANCE TRANSFERS.

    (a) Treatment of Remittance Transfers.--The Electronic Fund 
Transfer Act (15 U.S.C. 1693 et seq.) is amended--
            (1) in section 902(b) (15 U.S.C. 1693(b)), by 
        inserting ``and remittance'' after ``electronic fund'';
            (2) in section 904(c) (15 U.S.C. 1693b(c)), in the 
        first sentence, by inserting ``or remittance 
        transfers'' after ``electronic fund transfers'';
            (3) by redesignating sections 919, 920, 921, and 
        922 as sections 920, 921, 922, and 923, respectively; 
        and
            (4) by inserting after section 918 the following:

``SEC. 919. REMITTANCE TRANSFERS.

    ``(a) Disclosures Required for Remittance Transfers.--
            ``(1) In general.--Each remittance transfer 
        provider shall make disclosures as required under this 
        section and in accordance with rules prescribed by the 
        Board. Disclosures required under this section shall be 
        in addition to any other disclosures applicable under 
        this title.
            ``(2) Disclosures.--Subject to rules prescribed by 
        the Board, a remittance transfer provider shall 
        provide, in writing and in a form that the sender may 
        keep, to each sender requesting a remittance transfer, 
        as applicable to the transaction--
                    ``(A) at the time at which the sender 
                requests a remittance transfer to be initiated, 
                and prior to the sender making any payment in 
                connection with the remittance transfer, a 
                disclosure describing--
                            ``(i) the amount of currency that 
                        will be received by the designated 
                        recipient, using the values of the 
                        currency into which the funds will be 
                        exchanged;
                            ``(ii) the amount of transfer and 
                        any other fees charged by the 
                        remittance transfer provider for the 
                        remittance transfer; and
                            ``(iii) any exchange rate to be 
                        used by the remittance transfer 
                        provider for the remittance transfer, 
                        to the nearest 1/100th of a point; and
                    ``(B) at the time at which the sender makes 
                payment in connection with the remittance 
                transfer--
                            ``(i) a receipt showing--
                                    ``(I) the information 
                                described in subparagraph (A);
                                    ``(II) the promised date of 
                                delivery to the designated 
                                recipient; and
                                    ``(III) the name and either 
                                the telephone number or the 
                                address of the designated 
                                recipient, if either the 
                                telephone number or the address 
                                of the designated recipient is 
                                provided by the sender; and
                            ``(ii) a statement containing--
                                    ``(I) information about the 
                                rights of the sender under this 
                                section regarding the 
                                resolution of errors; and
                                    ``(II) appropriate contact 
                                information for--
                                            ``(aa) the 
                                        remittance transfer 
                                        provider; and
                                            ``(bb) the State 
                                        agency that regulates 
                                        the remittance transfer 
                                        provider and the Board, 
                                        including the toll-free 
                                        telephone number 
                                        established under 
                                        section 1013 of the 
                                        Consumer Financial 
                                        Protection Act of 2010.
            ``(3) Requirements relating to disclosures.--With 
        respect to each disclosure required to be provided 
        under paragraph (2) a remittance transfer provider 
        shall--
                    ``(A) provide an initial notice and 
                receipt, as required by subparagraphs (A) and 
                (B) of paragraph (2), and an error resolution 
                statement, as required by subsection (d), that 
                clearly and conspicuously describe the 
                information required to be disclosed therein; 
                and
                    ``(B) with respect to any transaction that 
                a sender conducts electronically, comply with 
                the Electronic Signatures in Global and 
                National Commerce Act (15 U.S.C. 7001 et seq.).
            ``(4) Exception for disclosures of amount 
        received.--
                    ``(A) In general.--Subject to the rules 
                prescribed by the Board, and except as provided 
                under subparagraph (B), the disclosures 
                required regarding the amount of currency that 
                will be received by the designated recipient 
                shall be deemed to be accurate, so long as the 
                disclosures provide a reasonably accurate 
                estimate of the foreign currency to be 
                received. This paragraph shall apply only to a 
                remittance transfer provider who is an insured 
                depository institution, as defined in section 3 
                of the Federal Deposit Insurance Act (12 U.S.C. 
                1813), or an insured credit union, as defined 
                in section 101 of the Federal Credit Union Act 
                (12 U.S.C. 1752), and if--
                            ``(i) a remittance transfer is 
                        conducted through a demand deposit, 
                        savings deposit, or other asset account 
                        that the sender holds with such 
                        remittance transfer provider; and
                            ``(ii) at the time at which the 
                        sender requests the transaction, the 
                        remittance transfer provider is unable 
                        to know, for reasons beyond its 
                        control, the amount of currency that 
                        will be made available to the 
                        designated recipient.
                    ``(B) Deadline.--The application of 
                subparagraph (A) shall terminate 5 years after 
                the date of enactment of the Consumer Financial 
                Protection Act of 2010, unless the Board 
                determines that termination of such provision 
                would negatively affect the ability of 
                remittance transfer providers described in 
                subparagraph (A) to send remittances to 
                locations in foreign countries, in which case, 
                the Board may, by rule, extend the application 
                of subparagraph (A) to not longer than 10 years 
                after the date of enactment of the Consumer 
                Financial Protection Act of 2010.
            ``(5) Exemption authority.--The Board may, by rule, 
        permit a remittance transfer provider to satisfy the 
        requirements of--
                    ``(A) paragraph (2)(A) orally, if the 
                transaction is conducted entirely by telephone;
                    ``(B) paragraph (2)(B), in the case of a 
                transaction conducted entirely by telephone, by 
                mailing the disclosures required under such 
                subparagraph to the sender, not later than 1 
                business day after the date on which the 
                transaction is conducted, or by including such 
                documents in the next periodic statement, if 
                the telephone transaction is conducted through 
                a demand deposit, savings deposit, or other 
                asset account that the sender holds with the 
                remittance transfer provider;
                    ``(C) subparagraphs (A) and (B) of 
                paragraph (2) together in one written 
                disclosure, but only to the extent that the 
                information provided in accordance with 
                paragraph (3)(A) is accurate at the time at 
                which payment is made in connection with the 
                subject remittance transfer; and
                    ``(D) paragraph (2)(A), without compliance 
                with section 101(c) of the Electronic 
                Signatures in Global Commerce Act, if a sender 
                initiates the transaction electronically and 
                the information is displayed electronically in 
                a manner that the sender can keep.
            ``(6) Storefront and internet notices.--
                    ``(A) In general.--
                            ``(i) Prominent posting.--Subject 
                        to subparagraph (B), the Board may 
                        prescribe rules to require a remittance 
                        transfer provider to prominently post, 
                        and timely update, a notice describing 
                        a model remittance transfer for one or 
                        more amounts, as the Board may 
                        determine, which notice shall show the 
                        amount of currency that will be 
                        received by the designated recipient, 
                        using the values of the currency into 
                        which the funds will be exchanged.
                            ``(ii) Onsite displays.--The Board 
                        may require the notice prescribed under 
                        this subparagraph to be displayed in 
                        every physical storefront location 
                        owned or controlled by the remittance 
                        transfer provider.
                            ``(iii) Internet notices.--Subject 
                        to paragraph (3), the Board shall 
                        prescribe rules to require a remittance 
                        transfer provider that provides 
                        remittance transfers via the Internet 
                        to provide a notice, comparable to a 
                        storefront notice described in this 
                        subparagraph, located on the home page 
                        or landing page (with respect to such 
                        remittance transfer services) owned or 
                        controlled by the remittance transfer 
                        provider.
                            ``(iv) Rulemaking authority.--In 
                        prescribing rules under this 
                        subparagraph, the Board may impose 
                        standards or requirements regarding the 
                        provision of the storefront and 
                        Internet notices required under this 
                        subparagraph and the provision of the 
                        disclosures required under paragraphs 
                        (2) and (3).
                    ``(B) Study and analysis.--Prior to 
                proposing rules under subparagraph (A), the 
                Board shall undertake appropriate studies and 
                analyses, which shall be consistent with 
                section 904(a)(2), and may include an advanced 
                notice of proposed rulemaking, to determine 
                whether a storefront notice or Internet notice 
                facilitates the ability of a consumer--
                            ``(i) to compare prices for 
                        remittance transfers; and
                            ``(ii) to understand the types and 
                        amounts of any fees or costs imposed on 
                        remittance transfers.
    ``(b) Foreign Language Disclosures.--The disclosures 
required under this section shall be made in English and in 
each of the foreign languages principally used by the 
remittance transfer provider, or any of its agents, to 
advertise, solicit, or market, either orally or in writing, at 
that office.
    ``(c) Regulations Regarding Transfers to Certain Nations.--
If the Board determines that a recipient nation does not 
legally allow, or the method by which transactions are made in 
the recipient country do not allow, a remittance transfer 
provider to know the amount of currency that will be received 
by the designated recipient, the Board may prescribe rules (not 
later than 18 months after the date of enactment of the 
Consumer Financial Protection Act of 2010) addressing the 
issue, which rules shall include standards for a remittance 
transfer provider to provide--
            ``(1) a receipt that is consistent with subsections 
        (a) and (b); and
            ``(2) a reasonably accurate estimate of the foreign 
        currency to be received, based on the rate provided to 
        the sender by the remittance transfer provider at the 
        time at which the transaction was initiated by the 
        sender.
    ``(d) Remittance Transfer Errors.--
            ``(1) Error resolution.--
                    ``(A) In general.--If a remittance transfer 
                provider receives oral or written notice from 
                the sender within 180 days of the promised date 
                of delivery that an error occurred with respect 
                to a remittance transfer, including the amount 
                of currency designated in subsection (a)(3)(A) 
                that was to be sent to the designated recipient 
                of the remittance transfer, using the values of 
                the currency into which the funds should have 
                been exchanged, but was not made available to 
                the designated recipient in the foreign 
                country, the remittance transfer provider shall 
                resolve the error pursuant to this subsection 
                and investigate the reason for the error.
                    ``(B) Remedies.--Not later than 90 days 
                after the date of receipt of a notice from the 
                sender pursuant to subparagraph (A), the 
                remittance transfer provider shall, as 
                applicable to the error and as designated by 
                the sender--
                            ``(i) refund to the sender the 
                        total amount of funds tendered by the 
                        sender in connection with the 
                        remittance transfer which was not 
                        properly transmitted;
                            ``(ii) make available to the 
                        designated recipient, without 
                        additional cost to the designated 
                        recipient or to the sender, the amount 
                        appropriate to resolve the error;
                            ``(iii) provide such other remedy, 
                        as determined appropriate by rule of 
                        the Board for the protection of 
                        senders; or
                            ``(iv) provide written notice to 
                        the sender that there was no error with 
                        an explanation responding to the 
                        specific complaint of the sender.
            ``(2) Rules.--The Board shall establish, by rule 
        issued not later than 18 months after the date of 
        enactment of the Consumer Financial Protection Act of 
        2010, clear and appropriate standards for remittance 
        transfer providers with respect to error resolution 
        relating to remittance transfers, to protect senders 
        from such errors. Standards prescribed under this 
        paragraph shall include appropriate standards regarding 
        record keeping, as required, including documentation--
                    ``(A) of the complaint of the sender;
                    ``(B) that the sender provides the 
                remittance transfer provider with respect to 
                the alleged error; and
                    ``(C) of the findings of the remittance 
                transfer provider regarding the investigation 
                of the alleged error that the sender brought to 
                their attention.
            ``(3) Cancellation and refund policy rules.--Not 
        later than 18 months after the date of enactment of the 
        Consumer Financial Protection Act of 2010, the Board 
        shall issue final rules regarding appropriate 
        remittance transfer cancellation and refund policies 
        for consumers.
    ``(e) Applicability of This Title.--
            ``(1) In general.--A remittance transfer that is 
        not an electronic fund transfer, as defined in section 
        903, shall not be subject to any of the provisions of 
        sections 905 through 913. A remittance transfer that is 
        an electronic fund transfer, as defined in section 903, 
        shall be subject to all provisions of this title, 
        except for section 908, that are otherwise applicable 
        to electronic fund transfers under this title.
            ``(2) Rule of construction.--Nothing in this 
        section shall be construed--
                    ``(A) to affect the application to any 
                transaction, to any remittance provider, or to 
                any other person of any of the provisions of 
                subchapter II of chapter 53 of title 31, United 
                States Code, section 21 of the Federal Deposit 
                Insurance Act (12 U.S.C. 1829b), or chapter 2 
                of title I of Public Law 91-508 (12 U.S.C. 
                1951-1959), or any regulations promulgated 
                thereunder; or
                    ``(B) to cause any fund transfer that would 
                not otherwise be treated as such under 
                paragraph (1) to be treated as an electronic 
                fund transfer, or as otherwise subject to this 
                title, for the purposes of any of the 
                provisions referred to in subparagraph (A) or 
                any regulations promulgated thereunder.
    ``(f) Acts of Agents.--
            ``(1) In general.--A remittance transfer provider 
        shall be liable for any violation of this section by 
        any agent, authorized delegate, or person affiliated 
        with such provider, when such agent, authorized 
        delegate, or affiliate acts for that remittance 
        transfer provider.
            ``(2) Obligations of remittance transfer 
        providers.--The Board shall prescribe rules to 
        implement appropriate standards or conditions of, 
        liability of a remittance transfer provider, including 
        a provider who acts through an agent or authorized 
        delegate. An agency charged with enforcing the 
        requirements of this section, or rules prescribed by 
        the Board under this section, may consider, in any 
        action or other proceeding against a remittance 
        transfer provider, the extent to which the provider had 
        established and maintained policies or procedures for 
        compliance, including policies, procedures, or other 
        appropriate oversight measures designed to assure 
        compliance by an agent or authorized delegate acting 
        for such provider.
    ``(g) Definitions.--As used in this section--
            ``(1) the term `designated recipient' means any 
        person located in a foreign country and identified by 
        the sender as the authorized recipient of a remittance 
        transfer to be made by a remittance transfer provider, 
        except that a designated recipient shall not be deemed 
        to be a consumer for purposes of this Act;
            ``(2) the term `remittance transfer'--
                    ``(A) means the electronic (as defined in 
                section 106(2) of the Electronic Signatures in 
                Global and National Commerce Act (15 U.S.C. 
                7006(2))) transfer of funds requested by a 
                sender located in any State to a designated 
                recipient that is initiated by a remittance 
                transfer provider, whether or not the sender 
                holds an account with the remittance transfer 
                provider or whether or not the remittance 
                transfer is also an electronic fund transfer, 
                as defined in section 903; and
                    ``(B) does not include a transfer described 
                in subparagraph (A) in an amount that is equal 
                to or lesser than the amount of a small-value 
                transaction determined, by rule, to be excluded 
                from the requirements under section 906(a);
            ``(3) the term `remittance transfer provider' means 
        any person or financial institution that provides 
        remittance transfers for a consumer in the normal 
        course of its business, whether or not the consumer 
        holds an account with such person or financial 
        institution; and
            ``(4) the term `sender' means a consumer who 
        requests a remittance provider to send a remittance 
        transfer for the consumer to a designated recipient.''.
    (b) Automated Clearinghouse System.--
            (1) Expansion of system.--The Board of Governors 
        shall work with the Federal reserve banks and the 
        Department of the Treasury to expand the use of the 
        automated clearinghouse system and other payment 
        mechanisms for remittance transfers to foreign 
        countries, with a focus on countries that receive 
        significant remittance transfers from the United 
        States, based on--
                    (A) the number, volume, and size of such 
                transfers;
                    (B) the significance of the volume of such 
                transfers relative to the external financial 
                flows of the receiving country, including--
                            (i) the total amount transferred; 
                        and
                            (ii) the total volume of payments 
                        made by United States Government 
                        agencies to beneficiaries and retirees 
                        living abroad;
                    (C) the feasibility of such an expansion; 
                and
                    (D) the ability of the Federal Reserve 
                System to establish payment gateways in 
                different geographic regions and currency zones 
                to receive remittance transfers and route them 
                through the payments systems in the destination 
                countries.
            (2) Report to congress.--Not later than one 
        calendar year after the date of enactment of this Act, 
        and on April 30 biennially thereafter during the 10-
        year period beginning on that date of enactment, the 
        Board of Governors shall submit a report to the 
        Committee on Banking, Housing, and Urban Affairs of the 
        Senate and the Committee on Financial Services of the 
        House of Representatives on the status of the automated 
        clearinghouse system and its progress in complying with 
        the requirements of this subsection. The report shall 
        include an analysis of adoption rates of International 
        ACH Transactions rules and formats, the efficacy of 
        increasing adoption rates, and potential 
        recommendations to increase adoption.
    (c) Expansion of Financial Institution Provision of 
Remittance Transfers.--
            (1) Provision of guidelines to institutions.--Each 
        of the Federal banking agencies and the National Credit 
        Union Administration shall provide guidelines to 
        financial institutions under the jurisdiction of the 
        agency regarding the offering of low-cost remittance 
        transfers and no-cost or low-cost basic consumer 
        accounts, as well as agency services to remittance 
        transfer providers.
            (2) Assistance to financial literacy commission.--
        As part of its duties as members of the Financial 
        Literacy and Education Commission, the Bureau, the 
        Federal banking agencies, and the National Credit Union 
        Administration shall assist the Financial Literacy and 
        Education Commission in executing the Strategy for 
        Assuring Financial Empowerment (or the ``SAFE 
        Strategy''), as it relates to remittances.
    (d) Federal Credit Union Act Conforming Amendment.--
Paragraph (12) of section 107 of the Federal Credit Union Act 
(12 U.S.C. 1757) is amended to read as follows:
            ``(12) in accordance with regulations prescribed by 
        the Board--
                    ``(A) to sell, to persons in the field of 
                membership, negotiable checks (including 
                travelers checks), money orders, and other 
                similar money transfer instruments (including 
                international and domestic electronic fund 
                transfers and remittance transfers, as defined 
                in section 919 of the Electronic Fund Transfer 
                Act); and
                    ``(B) to cash checks and money orders for 
                persons in the field of membership for a 
                fee;''.
    (e) Report on Feasibility of and Impediments to Use of 
Remittance History in Calculation of Credit Score.--Before the 
end of the 365-day period beginning on the date of enactment of 
this Act, the Director shall submit a report to the President, 
the Committee on Banking, Housing, and Urban Affairs of the 
Senate, and the Committee on Financial Services of the House of 
Representatives regarding--
            (1) the manner in which the remittance history of a 
        consumer could be used to enhance the credit score of 
        the consumer;
            (2) the current legal and business model barriers 
        and impediments that impede the use of the remittance 
        history of the consumer to enhance the credit score of 
        the consumer; and
            (3) recommendations on the manner in which maximum 
        transparency and disclosure to consumers of exchange 
        rates for remittance transfers subject to this title 
        and the amendments made by this title may be 
        accomplished, whether or not such exchange rates are 
        known at the time of origination or payment by the 
        consumer for the remittance transfer, including 
        disclosure to the sender of the actual exchange rate 
        used and the amount of currency that the recipient of 
        the remittance transfer received, using the values of 
        the currency into which the funds were exchanged, as 
        contained in sections 919(a)(2)(D) and 919(a)(3) of the 
        Electronic Fund Transfer Act (as amended by this 
        section).

SEC. 1074. DEPARTMENT OF THE TREASURY STUDY ON ENDING THE 
                    CONSERVATORSHIP OF FANNIE MAE, FREDDIE MAC, AND 
                    REFORMING THE HOUSING FINANCE SYSTEM.

    (a) Study Required.--
            (1) In general.--The Secretary of the Treasury 
        shall conduct a study of and develop recommendations 
        regarding the options for ending the conservatorship of 
        the Federal National Mortgage Association (in this 
        section referred to as ``Fannie Mae'') and the Federal 
        Home Loan Mortgage Corporation (in this section 
        referred to as ``Freddie Mac''), while minimizing the 
        cost to taxpayers, including such options as--
                    (A) the gradual wind-down and liquidation 
                of such entities;
                    (B) the privatization of such entities;
                    (C) the incorporation of the functions of 
                such entities into a Federal agency;
                    (D) the dissolution of Fannie Mae and 
                Freddie Mac into smaller companies; or
                    (E) any other measures the Secretary 
                determines appropriate.
            (2) Analyses.--The study required under paragraph 
        (1) shall include an analysis of--
                    (A) the role of the Federal Government in 
                supporting a stable, well-functioning housing 
                finance system, and whether and to what extent 
                the Federal Government should bear risks in 
                meeting Federal housing finance objectives;
                    (B) how the current structure of the 
                housing finance system can be improved;
                    (C) how the housing finance system should 
                support the continued availability of mortgage 
                credit to all segments of the market;
                    (D) how the housing finance system should 
                be structured to ensure that consumers continue 
                to have access to 30-year, fixed rate, pre-
                payable mortgages and other mortgage products 
                that have simple terms that can be easily 
                understood;
                    (E) the role of the Federal Housing 
                Administration and the Department of Veterans 
                Affairs in a future housing system;
                    (F) the impact of reforms of the housing 
                finance system on the financing of rental 
                housing;
                    (G) the impact of reforms of the housing 
                finance system on secondary market liquidity;
                    (H) the role of standardization in the 
                housing finance system;
                    (I) how housing finance systems in other 
                countries offer insights that can help inform 
                options for reform in the United States; and
                    (J) the options for transition to a 
                reformed housing finance system.
    (b) Report and Recommendations.--Not later than January 31, 
2011, the Secretary of the Treasury shall submit the report and 
recommendations required under subsection (a) to the Committee 
on Banking, Housing, and Urban Affairs of the Senate and the 
Committee on Financial Services of the House of 
Representatives.

SEC. 1075. REASONABLE FEES AND RULES FOR PAYMENT CARD TRANSACTIONS.

    (a) In General.--The Electronic Fund Transfer Act (15 
U.S.C. 1693 et seq.) is amended--
            (1) by redesignating sections 920 and 921 as 
        sections 921 and 922, respectively; and
            (2) by inserting after section 919 the following:

``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.--
                    ``(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 the Director 
                of the Bureau of Consumer Financial Protection.
            ``(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--
                                    ``(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).
                    ``(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
                            ``(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 general-use 
                        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 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 in-
                        kind 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 
                        in-kind 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 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.
            ``(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.''.
    (b) Amendment to the Food and Nutrition Act of 2008.--
Section 7(h)(10) of the Food and Nutrition Act of 2008 (7 
U.S.C. 2016(h)(10)) is amended to read as follows:
            ``(10) Federal law not applicable.--Section 920 of 
        the Electronic Fund Transfer Act shall not apply to 
        electronic benefit transfer or reimbursement systems 
        under this Act.''.
    (c) Amendment to the Farm Security and Rural Investment Act 
of 2002.--Section 4402 of the Farm Security and Rural 
Investment Act of 2002 (7 U.S.C. 3007) is amended by adding at 
the end the following new subsection:
    ``(f) Federal Law Not Applicable.--Section 920 of the 
Electronic Fund Transfer Act shall not apply to electronic 
benefit transfer systems established under this section.''.
    (d) Amendment to the Child Nutrition Act of 1966.--Section 
11 of the Child Nutrition Act of 1966 (42 U.S.C. 1780) is 
amended by adding at the end the following:
    ``(c) Federal Law Not Applicable.--Section 920 of the 
Electronic Fund Transfer Act shall not apply to electronic 
benefit transfer systems established under this Act or the 
Richard B. Russell National School Lunch Act (42 U.S.C. 1751 et 
seq.).''.

SEC. 1076. REVERSE MORTGAGE STUDY AND REGULATIONS.

    (a) Study.--Not later than 1 year after the designated 
transfer date, the Bureau shall conduct a study on reverse 
mortgage transactions.
    (b) Regulations.--
            (1) In general.--If the Bureau determines through 
        the study required under subsection (a) that conditions 
        or limitations on reverse mortgage transactions are 
        necessary or appropriate for accomplishing the purposes 
        and objectives of this title, including protecting 
        borrowers with respect to the obtaining of reverse 
        mortgage loans for the purpose of funding investments, 
        annuities, and other investment products and the 
        suitability of a borrower in obtaining a reverse 
        mortgage for such purpose.
            (2) Identified practices and integrated 
        disclosures.--The regulations prescribed under 
        paragraph (1) may, as the Bureau may so determine--
                    (A) identify any practice as unfair, 
                deceptive, or abusive in connection with a 
                reverse mortgage transaction; and
                    (B) provide for an integrated disclosure 
                standard and model disclosures for reverse 
                mortgage transactions, consistent with section 
                4302(d), that combines the relevant disclosures 
                required under the Truth in Lending Act (15 
                U.S.C. 1601 et seq.) and the Real Estate 
                Settlement Procedures Act, with the disclosures 
                required to be provided to consumers for Home 
                Equity Conversion Mortgages under section 255 
                of the National Housing Act.
    (c) Rule of Construction.--This section shall not be 
construed as limiting the authority of the Bureau to issue 
regulations, orders, or guidance that apply to reverse 
mortgages prior to the completion of the study required under 
subsection (a).

SEC. 1077. REPORT ON PRIVATE EDUCATION LOANS AND PRIVATE EDUCATIONAL 
                    LENDERS.

    (a) Report.--Not later than 2 years after the date of 
enactment of this Act, the Director and the Secretary of 
Education, in consultation with the Commissioners of the 
Federal Trade Commission, and the Attorney General of the 
United States, shall submit a report to 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, on private education 
loans (as that term is defined in section 140 of the Truth in 
Lending Act (15 U.S.C. 1650)) and private educational lenders 
(as that term is defined in such section).
    (b) Content.--The report required by this section shall 
examine, at a minimum--
            (1) the growth and changes of the private education 
        loan market in the United States;
            (2) factors influencing such growth and changes;
            (3) the extent to which students and parents of 
        students rely on private education loans to finance 
        postsecondary education and the private education loan 
        indebtedness of borrowers;
            (4) the characteristics of private education loan 
        borrowers, including--
                    (A) the types of institutions of higher 
                education that they attend;
                    (B) socioeconomic characteristics 
                (including income and education levels, racial 
                characteristics, geographical background, age, 
                and gender);
                    (C) what other forms of financing borrowers 
                use to pay for education;
                    (D) whether they exhaust their Federal loan 
                options before taking out a private loan;
                    (E) whether such borrowers are dependent or 
                independent students (as determined under part 
                F of title IV of the Higher Education Act of 
                1965) or parents of such students;
                    (F) whether such borrowers are students 
                enrolled in a program leading to a certificate, 
                license, or credential other than a degree, an 
                associates degree, a baccalaureate degree, or a 
                graduate or professional degree; and
                    (G) if practicable, employment and 
                repayment behaviors;
            (5) the characteristics of private educational 
        lenders, including whether such creditors are for-
        profit, non-profit, or institutions of higher 
        education;
            (6) the underwriting criteria used by private 
        educational lenders, including the use of cohort 
        default rate (as such term is defined in section 435(m) 
        of the Higher Education Act of 1965);
            (7) the terms, conditions, and pricing of private 
        education loans;
            (8) the consumer protections available to private 
        education loan borrowers, including the effectiveness 
        of existing disclosures and requirements and borrowers' 
        awareness and understanding about terms and conditions 
        of various financial products;
            (9) whether Federal regulators and the public have 
        access to information sufficient to provide them with 
        assurances that private education loans are provided in 
        accord with the Nation's fair lending laws and that 
        allows public officials to determine lender compliance 
        with fair lending laws; and
            (10) any statutory or legislative recommendations 
        necessary to improve consumer protections for private 
        education loan borrowers and to better enable Federal 
        regulators and the public to ascertain private 
        educational lender compliance with fair lending laws.

SEC. 1078. STUDY AND REPORT ON CREDIT SCORES.

    (a) Study.--The Bureau shall conduct a study on the nature, 
range, and size of variations between the credit scores sold to 
creditors and those sold to consumers by consumer reporting 
agencies that compile and maintain files on consumers on a 
nationwide basis (as defined in section 603(p) of the Fair 
Credit Reporting Act; 15 U.S.C. 1681a(p)), and whether such 
variations disadvantage consumers.
    (b) Report to Congress.--The Bureau shall submit a report 
to Congress on the results of the study conducted under 
subsection (a) not later than 1 year after the date of 
enactment of this Act.

SEC. 1079. REVIEW, REPORT, AND PROGRAM WITH RESPECT TO EXCHANGE 
                    FACILITATORS.

    (a) Review.--The Director shall review all Federal laws and 
regulations relating to the protection of 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 Director 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 entering into an agreement with a 
        taxpayer by which the exchange facilitator acquires 
        from the taxpayer the contractual rights to sell the 
        taxpayer's relinquished property and transfers a 
        replacement property to the taxpayer as a qualified 
        intermediary (within the meaning of Treasury 
        Regulations section 1.1031(k)-1(g)(4)) or enters into 
        an agreement with the taxpayer to take title to a 
        property as an exchange accommodation titleholder 
        (within the meaning of Revenue Procedure 2000-37) or 
        enters into an agreement with a taxpayer to act as a 
        qualified trustee or qualified escrow holder (within 
        the meaning of Treasury Regulations section 1.1031(k)-
        1(g)(3));
            (2) maintains an office for the purpose of 
        soliciting business 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.

SEC. 1079A. FINANCIAL FRAUD PROVISIONS.

    (a) Sentencing Guidelines.--
            (1) Securities fraud.--
                    (A) Directive.--Pursuant to its authority 
                under section 994 of title 28, United States 
                Code, and in accordance with this paragraph, 
                the United States Sentencing Commission shall 
                review and, if appropriate, amend the Federal 
                Sentencing Guidelines and policy statements 
                applicable to persons convicted of offenses 
                relating to securities fraud or any other 
                similar provision of law, in order to reflect 
                the intent of Congress that penalties for the 
                offenses under the guidelines and policy 
                statements appropriately account for the 
                potential and actual harm to the public and the 
                financial markets from the offenses.
                    (B) Requirements.--In making any amendments 
                to the Federal Sentencing Guidelines and policy 
                statements under subparagraph (A), the United 
                States Sentencing Commission shall--
                            (i) ensure that the guidelines and 
                        policy statements, particularly section 
                        2B1.1(b)(14) and section 2B1.1(b)(17) 
                        (and any successors thereto), reflect--
                                    (I) the serious nature of 
                                the offenses described in 
                                subparagraph (A);
                                    (II) the need for an 
                                effective deterrent and 
                                appropriate punishment to 
                                prevent the offenses; and
                                    (III) the effectiveness of 
                                incarceration in furthering the 
                                objectives described in 
                                subclauses (I) and (II);
                            (ii) consider the extent to which 
                        the guidelines appropriately account 
                        for the potential and actual harm to 
                        the public and the financial markets 
                        resulting from the offenses;
                            (iii) ensure reasonable consistency 
                        with other relevant directives and 
                        guidelines and Federal statutes;
                            (iv) make any necessary conforming 
                        changes to guidelines; and
                            (v) ensure that the guidelines 
                        adequately meet the purposes of 
                        sentencing, as set forth in section 
                        3553(a)(2) of title 18, United States 
                        Code.
            (2) Financial institution fraud.--
                    (A) Directive.--Pursuant to its authority 
                under section 994 of title 28, United States 
                Code, and in accordance with this paragraph, 
                the United States Sentencing Commission shall 
                review and, if appropriate, amend the Federal 
                Sentencing Guidelines and policy statements 
                applicable to persons convicted of fraud 
                offenses relating to financial institutions or 
                federally related mortgage loans and any other 
                similar provisions of law, to reflect the 
                intent of Congress that the penalties for the 
                offenses under the guidelines and policy 
                statements ensure appropriate terms of 
                imprisonment for offenders involved in 
                substantial bank frauds or other frauds 
                relating to financial institutions.
                    (B) Requirements.--In making any amendments 
                to the Federal Sentencing Guidelines and policy 
                statements under subparagraph (A), the United 
                States Sentencing Commission shall--
                            (i) ensure that the guidelines and 
                        policy statements reflect--
                                    (I) the serious nature of 
                                the offenses described in 
                                subparagraph (A);
                                    (II) the need for an 
                                effective deterrent and 
                                appropriate punishment to 
                                prevent the offenses; and
                                    (III) the effectiveness of 
                                incarceration in furthering the 
                                objectives described in 
                                subclauses (I) and (II);
                            (ii) consider the extent to which 
                        the guidelines appropriately account 
                        for the potential and actual harm to 
                        the public and the financial markets 
                        resulting from the offenses;
                            (iii) ensure reasonable consistency 
                        with other relevant directives and 
                        guidelines and Federal statutes;
                            (iv) make any necessary conforming 
                        changes to guidelines; and
                            (v) ensure that the guidelines 
                        adequately meet the purposes of 
                        sentencing, as set forth in section 
                        3553(a)(2) of title 18, United States 
                        Code.
    (b) Extension of Statute of Limitations for Securities 
Fraud Violations.--
            (1) In general.--Chapter 213 of title 18, United 
        States Code, is amended by adding at the end the 
        following:

``Sec. 3301. Securities fraud offenses

    ``(a) Definition.--In this section, the term `securities 
fraud offense' means a violation of, or a conspiracy or an 
attempt to violate--
            ``(1) section 1348;
            ``(2) section 32(a) of the Securities Exchange Act 
        of 1934 (15 U.S.C. 78ff(a));
            ``(3) section 24 of the Securities Act of 1933 (15 
        U.S.C. 77x);
            ``(4) section 217 of the Investment Advisers Act of 
        1940 (15 U.S.C. 80b-17);
            ``(5) section 49 of the Investment Company Act of 
        1940 (15 U.S.C. 80a-48); or
            ``(6) section 325 of the Trust Indenture Act of 
        1939 (15 U.S.C. 77yyy).
    ``(b) Limitation.--No person shall be prosecuted, tried, or 
punished for a securities fraud offense, unless the indictment 
is found or the information is instituted within 6 years after 
the commission of the offense.''.
            (2) Technical and conforming amendment.--The table 
        of sections for chapter 213 of title 18, United States 
        Code, is amended by adding at the end the following:

``3301. Securities fraud offenses.''.

    (c) Amendments to the False Claims Act Relating to 
Limitations on Actions.--Section 3730(h) of title 31, United 
States Code, is amended--
            (1) in paragraph (1), by striking ``or agent on 
        behalf of the employee, contractor, or agent or 
        associated others in furtherance of other efforts to 
        stop 1 or more violations of this subchapter'' and 
        inserting ``agent or associated others in furtherance 
        of an action under this section or other efforts to 
        stop 1 or more violations of this subchapter''; and
            (2) by adding at the end the following:
            ``(3) Limitation on bringing civil action.--A civil 
        action under this subsection may not be brought more 
        than 3 years after the date when the retaliation 
        occurred.''.

                   Subtitle H--Conforming Amendments

SEC. 1081. AMENDMENTS TO THE INSPECTOR GENERAL ACT.

    Effective on the date of enactment of this Act, the 
Inspector General Act of 1978 (5 U.S.C. App. 3) is amended--
            (1) in section 8G(a)(2), by inserting ``and the 
        Bureau of Consumer Financial Protection'' after ``Board 
        of Governors of the Federal Reserve System'';
            (2) in section 8G(c), by adding at the end the 
        following: ``For purposes of implementing this section, 
        the Chairman of the Board of Governors of the Federal 
        Reserve System shall appoint the Inspector General of 
        the Board of Governors of the Federal Reserve System 
        and the Bureau of Consumer Financial Protection. The 
        Inspector General of the Board of Governors of the 
        Federal Reserve System and the Bureau of Consumer 
        Financial Protection shall have all of the authorities 
        and responsibilities provided by this Act with respect 
        to the Bureau of Consumer Financial Protection, as if 
        the Bureau were part of the Board of Governors of the 
        Federal Reserve System.''; and
            (3) in section 8G(g)(3), by inserting ``and the 
        Bureau of Consumer Financial Protection'' after ``Board 
        of Governors of the Federal Reserve System'' the first 
        place that term appears.

SEC. 1082. AMENDMENTS TO THE PRIVACY ACT OF 1974.

    Effective on the date of enactment of this Act, section 
552a of title 5, United States Code, is amended by adding at 
the end the following:
    ``(w) Applicability to Bureau of Consumer Financial 
Protection.--Except as provided in the Consumer Financial 
Protection Act of 2010, this section shall apply with respect 
to the Bureau of Consumer Financial Protection.''.

SEC. 1083. AMENDMENTS TO THE ALTERNATIVE MORTGAGE TRANSACTION PARITY 
                    ACT OF 1982.

    (a) In General.--The Alternative Mortgage Transaction 
Parity Act of 1982 (12 U.S.C. 3801 et seq.) is amended--
            (1) in section 803 (12 U.S.C. 3802(1)), by striking 
        ``1974'' and all that follows through ``described and 
        defined'' and inserting the following: ``1974), in 
        which the interest rate or finance charge may be 
        adjusted or renegotiated, described and defined''; and
            (2) in section 804 (12 U.S.C. 3803)--
                    (A) in subsection (a)--
                            (i) in each of paragraphs (1), (2), 
                        and (3), by inserting after 
                        ``transactions made'' each place that 
                        term appears ``on or before the 
                        designated transfer date, as determined 
                        under section 1062 of the Consumer 
                        Financial Protection Act of 2010,'';
                            (ii) in paragraph (2), by striking 
                        ``and'' at the end;
                            (iii) in paragraph (3), by striking 
                        the period at the end and inserting ``; 
                        and''; and
                            (iv) by adding at the end the 
                        following new paragraph:
            ``(4) with respect to transactions made after the 
        designated transfer date, only in accordance with 
        regulations governing alternative mortgage 
        transactions, as issued by the Bureau of Consumer 
        Financial Protection for federally chartered housing 
        creditors, in accordance with the rulemaking authority 
        granted to the Bureau of Consumer Financial Protection 
        with regard to federally chartered housing creditors 
        under provisions of law other than this section.'';
                    (B) by striking subsection (c) and 
                inserting the following:
    ``(c) Preemption of State Law.--An alternative mortgage 
transaction may be made by a housing creditor in accordance 
with this section, notwithstanding any State constitution, law, 
or regulation that prohibits an alternative mortgage 
transaction. For purposes of this subsection, a State 
constitution, law, or regulation that prohibits an alternative 
mortgage transaction does not include any State constitution, 
law, or regulation that regulates mortgage transactions 
generally, including any restriction on prepayment penalties or 
late charges.''; and
                    (C) by adding at the end the following:
    ``(d) Bureau Actions.--The Bureau of Consumer Financial 
Protection shall--
            ``(1) review the regulations identified by the 
        Comptroller of the Currency and the National Credit 
        Union Administration, (as those rules exist on the 
        designated transfer date), as applicable under 
        paragraphs (1) through (3) of subsection (a);
            ``(2) determine whether such regulations are fair 
        and not deceptive and otherwise meet the objectives of 
        the Consumer Financial Protection Act of 2010; and
            ``(3) promulgate regulations under subsection 
        (a)(4) after the designated transfer date.
    ``(e) Designated Transfer Date.--As used in this section, 
the term `designated transfer date' means the date determined 
under section 1062 of the Consumer Financial Protection Act of 
2010.''.
    (b) Effective Date.--This section and the amendments made 
by this section shall become effective on the designated 
transfer date.
    (c) Rule of Construction.--The amendments made by 
subsection (a) shall not affect any transaction covered by the 
Alternative Mortgage Transaction Parity Act of l982 (12 U.S.C. 
3801 et seq.) and entered into on or before the designated 
transfer date.

SEC. 1084. AMENDMENTS TO THE ELECTRONIC FUND TRANSFER ACT.

    The Electronic Fund Transfer Act (15 U.S.C. 1693 et seq.) 
is amended--
            (1) by striking ``Board'' each place that term 
        appears and inserting ``Bureau'', except in subsections 
        (a) and (e) of section 904 (as amended in paragraph (3) 
        of this section) and in 918 (15 U.S.C. 1693o) (as so 
        designated by the Credit Card Act of 2009) and section 
        920 (as added by section 1076);
            (2) in section 903 (15 U.S.C. 1693a)--
                    (A) by redesignating paragraphs (3) through 
                (11) as paragraphs (4) through (12), 
                respectively; and
                    (B) by inserting after paragraph (3) the 
                following:
            ``(4) the term `Bureau' means the Bureau of 
        Consumer Financial Protection;'';
            (3) in section 904 (15 U.S.C. 1693b)--
                    (A) in subsection (a), by striking ``(a) 
                Prescription by Board.--The Board shall 
                prescribe regulations to carry out the purposes 
                of this title.'' and inserting the following:
    ``(a) Prescription by the Bureau and the Board.--
            ``(1) In general.--Except as provided in paragraph 
        (2), the Bureau shall prescribe rules to carry out the 
        purposes of this title.
            ``(2) Authority of the board.--The Board shall have 
        sole authority to prescribe rules--
                    ``(A) to carry out the purposes of this 
                title with respect to a person described in 
                section 1029(a) of the Consumer Financial 
                Protection Act of 2010; and
                    ``(B) to carry out the purposes of section 
                920.''; and
                    (B) by adding at the end the following new 
                subsection:
    ``(e) Deference.--No provision of this title may be 
construed as altering, limiting, or otherwise affecting the 
deference that a court affords to--
            ``(1) the Bureau in making determinations regarding 
        the meaning or interpretation of any provision of this 
        title for which the Bureau has authority to prescribe 
        regulations; or
            ``(2) the Board in making determinations regarding 
        the meaning or interpretation of section 920.''.
            (4) in section 916(d) (15 U.S.C. 1693m) (as so 
        designated by the Credit CARD Act of 2009)--
                    (A) in the subsection heading, by striking 
                ``of Board or Approval of Duly Authorized 
                Official or Employee of Federal Reserve 
                System'';
                    (B) by inserting ``Bureau or the'' before 
                ``Board'' each place that term appears; and
                    (C) by inserting ``Bureau of Consumer 
                Financial Protection or the'' before ``Federal 
                Reserve System''; and
            (5) in section 918 (15 U.S.C. 1693o) (as so 
        designated by the Credit CARD Act of 2009)--
                    (A) in subsection (a)--
                            (i) by striking ``Compliance'' and 
                        inserting ``Subject to subtitle B of 
                        the Consumer Financial Protection Act 
                        of 2010, compliance'';
                            (ii) by striking paragraphs (1) and 
                        (2), and inserting the following:
            ``(1) section 8 of the Federal Deposit Insurance 
        Act, by the appropriate Federal banking agency, as 
        defined in section 3(q) of the Federal Deposit 
        Insurance Act (12 U.S.C. 1813(q)), with respect to--
                    ``(A) national banks, Federal savings 
                associations, and Federal branches and Federal 
                agencies of foreign banks;
                    ``(B) member banks of the Federal Reserve 
                System (other than national banks), branches 
                and agencies of foreign banks (other than 
                Federal branches, Federal agencies, and insured 
                State branches of foreign banks), commercial 
                lending companies owned or controlled by 
                foreign banks, and organizations operating 
                under section 25 or 25A of the Federal Reserve 
                Act; and
                    ``(C) banks and State savings associations 
                insured by the Federal Deposit Insurance 
                Corporation (other than members of the Federal 
                Reserve System), and insured State branches of 
                foreign banks;'';
                            (iii) by redesignating paragraphs 
                        (3) through (5) as paragraphs (2) 
                        through (4), respectively;
                            (iv) in paragraph (2) (as so 
                        redesignated), by striking the period 
                        at the end and inserting a semicolon;
                            (v) in paragraph (3) (as so 
                        redesignated), by striking ``and'' at 
                        the end;
                            (vi) in paragraph (4) (as so 
                        redesignated), by striking the period 
                        at the end and inserting ``and''; and
                            (vii) by adding at the end the 
                        following:
            ``(5) subtitle E of the Consumer Financial 
        Protection Act of 2010, by the Bureau, with respect to 
        any person subject to this title, except that the 
        Bureau shall not have authority to enforce the 
        requirements of section 920 or any regulations 
        prescribed by the Board under section 920.'';
                    (B) in subsection (b), by inserting ``any 
                of paragraphs (1) through (4) of'' before 
                ``subsection (a)'' each place that term 
                appears; and
                    (C) by striking subsection (c) and 
                inserting the following:
    ``(c) Overall Enforcement Authority of the Federal Trade 
Commission.--Except to the extent that enforcement of the 
requirements imposed under this title is specifically committed 
to some other Government agency under any of paragraphs (1) 
through (4) of subsection (a), and subject to subtitle B of the 
Consumer Financial Protection Act of 2010, the Federal Trade 
Commission shall be authorized to enforce such requirements. 
For the purpose of the exercise by the Federal Trade Commission 
of its functions and powers under the Federal Trade Commission 
Act, a violation of any requirement imposed under this title 
shall be deemed a violation of a requirement imposed under that 
Act. All of the functions and powers of the Federal Trade 
Commission under the Federal Trade Commission Act are available 
to the Federal Trade Commission to enforce compliance by any 
person subject to the jurisdiction of the Federal Trade 
Commission with the requirements imposed under this title, 
irrespective of whether that person is engaged in commerce or 
meets any other jurisdictional tests under the Federal Trade 
Commission Act.''.

SEC. 1085. AMENDMENTS TO THE EQUAL CREDIT OPPORTUNITY ACT.

    The Equal Credit Opportunity Act (15 U.S.C. 1691 et seq.) 
is amended--
            (1) by striking ``Board'' each place that term 
        appears, other than in section 703(f) (as added by this 
        section) and section 704(a)(4) (15 U.S.C. 1691c(a)(4)), 
        and inserting ``Bureau'';
            (2) in section 702 (15 U.S.C. 1691a), by striking 
        subsection (c) and inserting the following:
    ``(c) The term `Bureau' means the Bureau of Consumer 
Financial Protection.'';
            (3) in section 703 (15 U.S.C. 1691b)--
                    (A) by striking the section heading and 
                inserting the following:

``SEC. 703. PROMULGATION OF REGULATIONS BY THE BUREAU.'';

                    (B) by striking ``(a) Regulations.--'';
                    (C) by striking subsection (b);
                    (D) by redesignating paragraphs (1) through 
                (5) as subsections (a) through (e), 
                respectively;
                    (E) in subsection (c), as so redesignated, 
                by striking ``paragraph (2)'' and inserting 
                ``subsection (b)''; and
                    (F) by adding at the end the following:
    ``(f) Board Authority.--Notwithstanding subsection (a), the 
Board shall prescribe regulations to carry out the purposes of 
this title with respect to a person described in section 
1029(a) of the Consumer Financial Protection Act of 2010. These 
regulations may contain but are not limited to such 
classifications, differentiation, or other provision, and may 
provide for such adjustments and exceptions for any class of 
transactions, as in the judgment of the Board are necessary or 
proper to effectuate the purposes of this title, to prevent 
circumvention or evasion thereof, or to facilitate or 
substantiate compliance therewith.
    ``(g) Deference.--Notwithstanding any power granted to any 
Federal agency under this title, the deference that a court 
affords to a Federal agency with respect to a determination 
made by such agency relating to the meaning or interpretation 
of any provision of this title that is subject to the 
jurisdiction of such agency shall be applied as if that agency 
were the only agency authorized to apply, enforce, interpret, 
or administer the provisions of this title'';
            (4) in section 704 (15 U.S.C. 1691c)--
                    (A) in subsection (a)--
                            (i) by striking ``Compliance'' and 
                        inserting ``Subject to subtitle B of 
                        the Consumer Protection Financial 
                        Protection Act of 2010'';
                            (ii) by striking paragraphs (1) and 
                        (2) and inserting the following:
            ``(1) section 8 of the Federal Deposit Insurance 
        Act, by the appropriate Federal banking agency, as 
        defined in section 3(q) of the Federal Deposit 
        Insurance Act (12 U.S.C. 1813(q)), with respect to--
                    ``(A) national banks, Federal savings 
                associations, and Federal branches and Federal 
                agencies of foreign banks;
                    ``(B) member banks of the Federal Reserve 
                System (other than national banks), branches 
                and agencies of foreign banks (other than 
                Federal branches, Federal agencies, and insured 
                State branches of foreign banks), commercial 
                lending companies owned or controlled by 
                foreign banks, and organizations operating 
                under section 25 or 25A of the Federal Reserve 
                Act; and
                    ``(C) banks and State savings associations 
                insured by the Federal Deposit Insurance 
                Corporation (other than members of the Federal 
                Reserve System), and insured State branches of 
                foreign banks;'';
                            (iii) by redesignating paragraphs 
                        (3) through (9) as paragraphs (2) 
                        through (8), respectively;
                            (iv) in paragraph (7) (as so 
                        redesignated), by striking ``and'' at 
                        the end;
                            (v) in paragraph (8) (as so 
                        redesignated), by striking the period 
                        at the end, and inserting ``; and''; 
                        and
                            (vi) by adding at the end the 
                        following:
            ``(9) Subtitle E of the Consumer Financial 
        Protection Act of 2010, by the Bureau, with respect to 
        any person subject to this title.'';
                    (B) by striking subsection (c) and 
                inserting the following:
    ``(c) Overall Enforcement Authority of Federal Trade 
Commission.--Except to the extent that enforcement of the 
requirements imposed under this title is specifically committed 
to some other Government agency under any of paragraphs (1) 
through (8) of subsection (a), and subject to subtitle B of the 
Consumer Financial Protection Act of 2010, the Federal Trade 
Commission shall be authorized to enforce such requirements. 
For the purpose of the exercise by the Federal Trade Commission 
of its functions and powers under the Federal Trade Commission 
Act (15 U.S.C. 41 et seq.), a violation of any requirement 
imposed under this subchapter shall be deemed a violation of a 
requirement imposed under that Act. All of the functions and 
powers of the Federal Trade Commission under the Federal Trade 
Commission Act are available to the Federal Trade Commission to 
enforce compliance by any person with the requirements imposed 
under this title, irrespective of whether that person is 
engaged in commerce or meets any other jurisdictional tests 
under the Federal Trade Commission Act, including the power to 
enforce any rule prescribed by the Bureau under this title in 
the same manner as if the violation had been a violation of a 
Federal Trade Commission trade regulation rule.''; and
                    (C) in subsection (d), by striking 
                ``Board'' and inserting ``Bureau'';
            (5) in section 706(e) (15 U.S.C. 1691e(e))--
                    (A) in the subsection heading--
                            (i) by striking ``Board'' each 
                        place that term appears and inserting 
                        ``Bureau''; and
                            (ii) by striking ``Federal Reserve 
                        System'' and inserting ``Bureau of 
                        Consumer Financial Protection''; and
                    (B) by striking ``Federal Reserve System'' 
                and inserting ``Bureau of Consumer Financial 
                Protection'';
            (6) in section 706(g) (15 U.S.C. 1691e(g)), by 
        striking ``(3)'' and inserting ``(9)''; and
            (7) in section 706(f) (15 U.S.C. 1691e(f)), by 
        striking ``two years from'' each place that term 
        appears and inserting ``5 years after''.

SEC. 1086. AMENDMENTS TO THE EXPEDITED FUNDS AVAILABILITY ACT.

    (a) Amendment to Section 603.--Section 603(d)(1) of the 
Expedited Funds Availability Act (12 U.S.C. 4002) is amended by 
inserting after ``Board'' the following ``, jointly with the 
Director of the Bureau of Consumer Financial Protection,''.
    (b) Amendments to Section 604.--Section 604 of the 
Expedited Funds Availability Act (12 U.S.C. 4003) is amended--
            (1) by inserting after ``Board'' each place that 
        term appears, other than in subsection (f), the 
        following: ``, jointly with the Director of the Bureau 
        of Consumer Financial Protection,''; and
            (2) in subsection (f), by striking ``Board.'' each 
        place that term appears and inserting the following: 
        ``Board, jointly with the Director of the Bureau of 
        Consumer Financial Protection.''.
    (c) Amendments to Section 605.--Section 605 of the 
Expedited Funds Availability Act (12 U.S.C. 4004) is amended--
            (1) by inserting after ``Board'' each place that 
        term appears, other than in the heading for section 
        605(f)(1), the following: ``, jointly with the Director 
        of the Bureau of Consumer Financial Protection,''; and
            (2) in subsection (f)(1), in the paragraph heading, 
        by inserting ``and bureau'' after ``board''.
    (d) Amendments to Section 609.--Section 609 of the 
Expedited Funds Availability Act (12 U.S.C. 4008) is amended:
            (1) in subsection (a), by inserting after ``Board'' 
        the following ``, jointly with the Director of the 
        Bureau of Consumer Financial Protection,''; and
            (2) by striking subsection (e) and inserting the 
        following:
    ``(e) Consultations.--In prescribing regulations under 
subsections (a) and (b), the Board and the Director of the 
Bureau 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.''.
    (e) Expedited Funds Availability Improvements.--Section 603 
of the Expedited Funds Availability Act (12 U.S.C. 4002) is 
amended--
            (1) in subsection (a)(2)(D), by striking ``$100'' 
        and inserting ``$200''; and
            (2) in subsection (b)(3)(C), in the subparagraph 
        heading, by striking ``$100'' and inserting ``$200''; 
        and
            (3) in subsection (c)(1)(B)(iii), in the clause 
        heading, by striking ``$100'' and inserting ``$200''.
    (f) Regular Adjustments for Inflation.--Section 607 of the 
Expedited Funds Availability Act (12 U.S.C. 4006) is amended by 
adding at the end the following:
    ``(f) Adjustments to Dollar Amounts for Inflation.--The 
dollar amounts under this title shall be adjusted every 5 years 
after December 31, 2011, by the annual percentage increase in 
the Consumer Price Index for Urban Wage Earners and Clerical 
Workers, as published by the Bureau of Labor Statistics, 
rounded to the nearest multiple of $25.''.

SEC. 1087. AMENDMENTS TO THE FAIR CREDIT BILLING ACT.

    The Fair Credit Billing Act (15 U.S.C. 1666-1666j) is 
amended by striking ``Board'' each place that term appears, 
other than in section 105(i) (as added by this subtitle) and 
inserting ``Bureau''.

SEC. 1088. AMENDMENTS TO THE FAIR CREDIT REPORTING ACT AND THE FAIR AND 
                    ACCURATE CREDIT TRANSACTIONS ACT OF 2003.

    (a) Fair Credit Reporting Act.--The Fair Credit Reporting 
Act (15 U.S.C. 1681 et seq.) is amended--
            (1) in section 603 (15 U.S.C. 1681a)--
                    (A) by redesignating subsections (w) and 
                (x) as subsections (x) and (y), respectively; 
                and
                    (B) by inserting after subsection (v) the 
                following:
    ``(w) The term `Bureau' means the Bureau of Consumer 
Financial Protection.''; and
            (2) except as otherwise specifically provided in 
        this subsection--
                    (A) by striking ``Federal Trade 
                Commission'' each place that term appears and 
                inserting ``Bureau'';
                    (B) by striking ``FTC'' each place that 
                term appears and inserting ``Bureau'';
                    (C) by striking ``the Commission'' each 
                place that term appears, other than sections 
                615(e) (15 U.S.C. 1681m(e)) and 628(a)(1) (15 
                U.S.C. 1681w(a)(1)), and inserting ``the 
                Bureau''; and
                    (D) by striking ``The Federal banking 
                agencies, the National Credit Union 
                Administration, and the Commission shall 
                jointly'' each place that term appears, other 
                than section 615(e)(1) (15 U.S.C. 1681m(e)) and 
                section 628(a)(1) (15 U.S.C. 1681w(a)(1)), and 
                inserting ``The Bureau shall'';
            (3) in section 603(k)(2) (15 U.S.C. 1681a(k)(2)), 
        by striking ``Board of Governors of the Federal Reserve 
        System'' and inserting ``Bureau'';
            (4) in section 604(g) (15 U.S.C. 1681b(g))--
                    (A) in paragraph (3), by striking 
                subparagraph (C) and inserting the following:
                    ``(C) as otherwise determined to be 
                necessary and appropriate, by regulation or 
                order, by the Bureau or the applicable State 
                insurance authority (with respect to any person 
                engaged in providing insurance or 
                annuities).''; and
                    (B) by striking paragraph (5) and inserting 
                the following:
            ``(5) Regulations and effective date for paragraph 
        (2).--
                    ``(A) Regulations required.--The Bureau 
                may, after notice and opportunity for comment, 
                prescribe regulations that permit transactions 
                under paragraph (2) that are determined to be 
                necessary and appropriate to protect legitimate 
                operational, transactional, risk, consumer, and 
                other needs (and which shall include permitting 
                actions necessary for administrative 
                verification purposes), consistent with the 
                intent of paragraph (2) to restrict the use of 
                medical information for inappropriate 
                purposes.'';
            (5) in section 605(h)(2)(A) (15 U.S.C. 
        1681c(h)(2)(A)), by striking ``with respect to the 
        entities that are subject to their respective 
        enforcement authority under section 621'' and inserting 
        ``, in consultation with the Federal banking agencies, 
        the National Credit Union Administration, and the 
        Federal Trade Commission,''.
            (6) in section 611(e)(2) (15 U.S.C. 1681i(e)), by 
        striking paragraph (2) and inserting the following:
            ``(2) Exclusion.--Complaints received or obtained 
        by the Bureau pursuant to its investigative authority 
        under the Consumer Financial Protection Act of 2010 
        shall not be subject to paragraph (1).'';
            (7) in section 615(d)(2)(B) (15 U.S.C. 
        1681m(d)(2)(B)), by striking ``the Federal banking 
        agencies'' and inserting ``the Federal Trade 
        Commission, the Federal banking agencies,'';
            (8) in section 615(e)(1) (15 U.S.C. 1681m(e)(1)), 
        by striking ``and the Commission'' and inserting ``the 
        Federal Trade Commission, the Commodity Futures Trading 
        Commission, and the Securities and Exchange 
        Commission'';
            (9) in section 615(h)(6) (15 U.S.C. 1681m(h)(6)), 
        by striking subparagraph (A) and inserting the 
        following:
                    ``(A) Rules required.--The Bureau shall 
                prescribe rules to carry out this 
                subsection.'';
            (10) in section 621 (15 U.S.C. 1681s)--
                    (A) by striking subsection (a) and 
                inserting the following:
    ``(a) Enforcement by Federal Trade Commission.--
            ``(1) In general.--The Federal Trade Commission 
        shall be authorized to enforce compliance with the 
        requirements imposed by this title under the Federal 
        Trade Commission Act (15 U.S.C. 41 et seq.), with 
        respect to consumer reporting agencies and all other 
        persons subject thereto, except to the extent that 
        enforcement of the requirements imposed under this 
        title is specifically committed to some other 
        Government agency under any of subparagraphs (A) 
        through (G) of subsection (b)(1), and subject to 
        subtitle B of the Consumer Financial Protection Act of 
        2010, subsection (b). For the purpose of the exercise 
        by the Federal Trade Commission of its functions and 
        powers under the Federal Trade Commission Act, a 
        violation of any requirement or prohibition imposed 
        under this title shall constitute an unfair or 
        deceptive act or practice in commerce, in violation of 
        section 5(a) of the Federal Trade Commission Act (15 
        U.S.C. 45(a)), and shall be subject to enforcement by 
        the Federal Trade Commission under section 5(b) of that 
        Act with respect to any consumer reporting agency or 
        person that is subject to enforcement by the Federal 
        Trade Commission pursuant to this subsection, 
        irrespective of whether that person is engaged in 
        commerce or meets any other jurisdictional tests under 
        the Federal Trade Commission Act. The Federal Trade 
        Commission shall have such procedural, investigative, 
        and enforcement powers, including the power to issue 
        procedural rules in enforcing compliance with the 
        requirements imposed under this title and to require 
        the filing of reports, the production of documents, and 
        the appearance of witnesses, as though the applicable 
        terms and conditions of the Federal Trade Commission 
        Act were part of this title. Any person violating any 
        of the provisions of this title shall be subject to the 
        penalties and entitled to the privileges and immunities 
        provided in the Federal Trade Commission Act as though 
        the applicable terms and provisions of such Act are 
        part of this title.
            ``(2) Penalties.--
                    ``(A) Knowing violations.--Except as 
                otherwise provided by subtitle B of the 
                Consumer Financial Protection Act of 2010, in 
                the event of a knowing violation, which 
                constitutes a pattern or practice of violations 
                of this title, the Federal Trade Commission may 
                commence a civil action to recover a civil 
                penalty in a district court of the United 
                States against any person that violates this 
                title. In such action, such person shall be 
                liable for a civil penalty of not more than 
                $2,500 per violation.
                    ``(B) Determining penalty amount.--In 
                determining the amount of a civil penalty under 
                subparagraph (A), the court shall take into 
                account the degree of culpability, any history 
                of such prior conduct, ability to pay, effect 
                on ability to continue to do business, and such 
                other matters as justice may require.
                    ``(C) Limitation.--Notwithstanding 
                paragraph (2), a court may not impose any civil 
                penalty on a person for a violation of section 
                623(a)(1), unless the person has been enjoined 
                from committing the violation, or ordered not 
                to commit the violation, in an action or 
                proceeding brought by or on behalf of the 
                Federal Trade Commission, and has violated the 
                injunction or order, and the court may not 
                impose any civil penalty for any violation 
                occurring before the date of the violation of 
                the injunction or order.'';
                    (B) by striking subsection (b) and 
                inserting the following:
    ``(b) Enforcement by Other Agencies.--
            ``(1) In general.--Subject to subtitle B of the 
        Consumer Financial Protection Act of 2010, compliance 
        with the requirements imposed under this title with 
        respect to consumer reporting agencies, persons who use 
        consumer reports from such agencies, persons who 
        furnish information to such agencies, and users of 
        information that are subject to section 615(d) shall be 
        enforced under--
                    ``(A) section 8 of the Federal Deposit 
                Insurance Act (12 U.S.C. 1818), by the 
                appropriate Federal banking agency, as defined 
                in section 3(q) of the Federal Deposit 
                Insurance Act (12 U.S.C. 1813(q)), with respect 
                to--
                            ``(i) any national bank or State 
                        savings association, and any Federal 
                        branch or Federal agency of a foreign 
                        bank;
                            ``(ii) any member bank of the 
                        Federal Reserve System (other than a 
                        national bank), a branch or agency of a 
                        foreign bank (other than a Federal 
                        branch, Federal agency, or insured 
                        State branch of a foreign bank), a 
                        commercial lending company owned or 
                        controlled by a foreign bank, and any 
                        organization operating under section 25 
                        or 25A of the Federal Reserve Act; and
                            ``(iii) any bank or Federal savings 
                        association insured by the Federal 
                        Deposit Insurance Corporation (other 
                        than a member of the Federal Reserve 
                        System) and any insured State branch of 
                        a foreign bank;
                    ``(B) the Federal Credit Union Act (12 
                U.S.C. 1751 et seq.), by the Administrator of 
                the National Credit Union Administration with 
                respect to any Federal credit union;
                    ``(C) subtitle IV of title 49, United 
                States Code, by the Secretary of 
                Transportation, with respect to all carriers 
                subject to the jurisdiction of the Surface 
                Transportation Board;
                    ``(D) the Federal Aviation Act of 1958 (49 
                U.S.C. App. 1301 et seq.), by the Secretary of 
                Transportation, with respect to any air carrier 
                or foreign air carrier subject to that Act;
                    ``(E) the Packers and Stockyards Act, 1921 
                (7 U.S.C. 181 et seq.) (except as provided in 
                section 406 of that Act), by the Secretary of 
                Agriculture, with respect to any activities 
                subject to that Act;
                    ``(F) the Commodity Exchange Act, with 
                respect to a person subject to the jurisdiction 
                of the Commodity Futures Trading Commission;
                    ``(G) the Federal securities laws, and any 
                other laws that are subject to the jurisdiction 
                of the Securities and Exchange Commission, with 
                respect to a person that is subject to the 
                jurisdiction of the Securities and Exchange 
                Commission; and
                    ``(H) subtitle E of the Consumer Financial 
                Protection Act of 2010, by the Bureau, with 
                respect to any person subject to this title.
            ``(2) Incorporated definitions.--The terms used in 
        paragraph (1) that are not defined in this title or 
        otherwise defined in section 3(s) of the Federal 
        Deposit Insurance Act (12 U.S.C. 1813(s)) have the same 
        meanings as in section 1(b) of the International 
        Banking Act of 1978 (12 U.S.C. 3101).'';
                    (C) in subsection (c)(2)--
                            (i) by inserting ``and the Federal 
                        Trade Commission'' before ``or the 
                        appropriate''; and
                            (ii) by inserting ``and the Federal 
                        Trade Commission'' before ``or 
                        appropriate'' each place that term 
                        appears;
                    (D) in subsection (c)(4), by inserting 
                before ``or the appropriate'' each place that 
                term appears the following: ``, the Federal 
                Trade Commission,'';
                    (E) by striking subsection (e) and 
                inserting the following:
    ``(e) Regulatory Authority.--
            ``(1) In general.--The Bureau shall prescribe such 
        regulations as are necessary to carry out the purposes 
        of this title, except with respect to sections 615(e) 
        and 628. The Bureau may prescribe regulations as may be 
        necessary or appropriate to administer and carry out 
        the purposes and objectives of this title, and to 
        prevent evasions thereof or to facilitate compliance 
        therewith. Except as provided in section 1029(a) of the 
        Consumer Financial Protection Act of 2010, the 
        regulations prescribed by the Bureau under this title 
        shall apply to any person that is subject to this 
        title, notwithstanding the enforcement authorities 
        granted to other agencies under this section.
            ``(2) Deference.--Notwithstanding any power granted 
        to any Federal agency under this title, the deference 
        that a court affords to a Federal agency with respect 
        to a determination made by such agency relating to the 
        meaning or interpretation of any provision of this 
        title that is subject to the jurisdiction of such 
        agency shall be applied as if that agency were the only 
        agency authorized to apply, enforce, interpret, or 
        administer the provisions of this title. The 
        regulations prescribed by the Bureau under this title 
        shall apply to any person that is subject to this 
        title, notwithstanding the enforcement authorities 
        granted to other agencies under this section.''; and
                    (F) in subsection (f)(2), by striking ``the 
                Federal banking agencies'' and insert ``the 
                Federal Trade Commission, the Federal banking 
                agencies,'';
            (11) in section 623 (15 U.S.C. 1681s-2)--
                    (A) in subsection (a)(7), by striking 
                subparagraph (D) and inserting the following:
                    ``(D) Model disclosure.--
                            ``(i) Duty of bureau.--The Bureau 
                        shall prescribe a brief model 
                        disclosure that a financial institution 
                        may use to comply with subparagraph 
                        (A), which shall not exceed 30 words.
                            ``(ii) Use of model not required.--
                        No provision of this paragraph may be 
                        construed to require a financial 
                        institution to use any such model form 
                        prescribed by the Bureau.
                            ``(iii) Compliance using model.--A 
                        financial institution shall be deemed 
                        to be in compliance with subparagraph 
                        (A) if the financial institution uses 
                        any model form prescribed by the Bureau 
                        under this subparagraph, or the 
                        financial institution uses any such 
                        model form and rearranges its 
                        format.'';
                    (B) in subsection (a)(8), by inserting ``, 
                in consultation with the Federal Trade 
                Commission, the Federal banking agencies, and 
                the National Credit Union Administration,'' 
                before ``shall jointly''; and
                    (C) by striking subsection (e) and 
                inserting the following:
    ``(e) Accuracy Guidelines and Regulations Required.--
            ``(1) Guidelines.--The Bureau shall, with respect 
        to persons or entities that are subject to the 
        enforcement authority of the Bureau under section 621--
                    ``(A) establish and maintain guidelines for 
                use by each person that furnishes information 
                to a consumer reporting agency regarding the 
                accuracy and integrity of the information 
                relating to consumers that such entities 
                furnish to consumer reporting agencies, and 
                update such guidelines as often as necessary; 
                and
                    ``(B) prescribe regulations requiring each 
                person that furnishes information to a consumer 
                reporting agency to establish reasonable 
                policies and procedures for implementing the 
                guidelines established pursuant to subparagraph 
                (A).
            ``(2) Criteria.--In developing the guidelines 
        required by paragraph (1)(A), the Bureau shall--
                    ``(A) identify patterns, practices, and 
                specific forms of activity that can compromise 
                the accuracy and integrity of information 
                furnished to consumer reporting agencies;
                    ``(B) review the methods (including 
                technological means) used to furnish 
                information relating to consumers to consumer 
                reporting agencies;
                    ``(C) determine whether persons that 
                furnish information to consumer reporting 
                agencies maintain and enforce policies to 
                ensure the accuracy and integrity of 
                information furnished to consumer reporting 
                agencies; and
                    ``(D) examine the policies and processes 
                that persons that furnish information to 
                consumer reporting agencies employ to conduct 
                reinvestigations and correct inaccurate 
                information relating to consumers that has been 
                furnished to consumer reporting agencies.'';
            (12) in section 628(a)(1) (15 U.S.C. 1681w(a)(1)), 
        by striking ``Not later than'' and all that follows 
        through ``Exchange Commission,'' and inserting ``The 
        Federal Trade Commission, the Securities and Exchange 
        Commission, the Commodity Futures Trading Commission, 
        the Federal banking agencies, and the National Credit 
        Union Administration, with respect to the entities that 
        are subject to their respective enforcement authority 
        under section 621,''; and
            (13) in section 628(a)(3) (15 U.S.C. 1681w(a)(3)), 
        by striking ``the Federal banking agencies, the 
        National Credit Union Administration, the Commission, 
        and the Securities and Exchange Commission'' and 
        inserting ``the agencies identified in paragraph (1)''.
    (b) Fair and Accurate Credit Transactions Act of 2003.--The 
Fair and Accurate Credit Transactions Act of 2003 (Public Law 
108-159) is amended--
            (1) in section 112(b) (15 U.S.C. 1681c-1 note), by 
        striking ``Commission'' and inserting ``Bureau'';
            (2) in section 211(d) (15 U.S.C. 1681j note), by 
        striking ``Commission'' each place that term appears 
        and inserting ``Bureau'';
            (3) in section 214(b) (15 U.S.C. 1681s-3 note), by 
        striking paragraph (1) and inserting the following:
            ``(1) In general.--Regulations to carry out section 
        624 of the Fair Credit Reporting Act (15 U.S.C. 1681s-
        3), shall be prescribed, as described in paragraph (2), 
        by--
                    ``(A) the Commodity Futures Trading 
                Commission, with respect to entities subject to 
                its enforcement authorities;
                    ``(B) the Securities and Exchange 
                Commission, with respect to entities subject to 
                its enforcement authorities; and
                    ``(C) the Bureau, with respect to other 
                entities subject to this Act.''; and
            (4) in section 214(e)(1) (15 U.S.C. 1681s-3 note), 
        by striking ``Commission'' and inserting ``Bureau''.

SEC. 1089. AMENDMENTS TO THE FAIR DEBT COLLECTION PRACTICES ACT.

    The Fair Debt Collection Practices Act (15 U.S.C. 1692 et 
seq.) is amended--
            (1) by striking ``Commission'' each place that term 
        appears and inserting ``Bureau'';
            (2) in section 803 (15 U.S.C. 1692a)--
                    (A) by striking paragraph (1) and inserting 
                the following:
            ``(1) The term `Bureau' means the Bureau of 
        Consumer Financial Protection.'';
            (3) in section 814 (15 U.S.C. 1692l)--
                    (A) by striking subsection (a) and 
                inserting the following:
    ``(a) Federal Trade Commission.--The Federal Trade 
Commission shall be authorized to enforce compliance with this 
title, except to the extent that enforcement of the 
requirements imposed under this title is specifically committed 
to another Government agency under any of paragraphs (1) 
through (5) of subsection (b), subject to subtitle B of the 
Consumer Financial Protection Act of 2010. For purpose of the 
exercise by the Federal Trade Commission of its functions and 
powers under the Federal Trade Commission Act (15 U.S.C. 41 et 
seq.), a violation of this title shall be deemed an unfair or 
deceptive act or practice in violation of that Act. All of the 
functions and powers of the Federal Trade Commission under the 
Federal Trade Commission Act are available to the Federal Trade 
Commission to enforce compliance by any person with this title, 
irrespective of whether that person is engaged in commerce or 
meets any other jurisdictional tests under the Federal Trade 
Commission Act, including the power to enforce the provisions 
of this title, in the same manner as if the violation had been 
a violation of a Federal Trade Commission trade regulation 
rule.''; and
                    (B) in subsection (b)--
                            (i) by striking ``Compliance'' and 
                        inserting ``Subject to subtitle B of 
                        the Consumer Financial Protection Act 
                        of 2010, compliance'';
                            (ii) by striking paragraphs (1) and 
                        (2) and inserting the following:
            ``(1) section 8 of the Federal Deposit Insurance 
        Act, by the appropriate Federal banking agency, as 
        defined in section 3(q) of the Federal Deposit 
        Insurance Act (12 U.S.C. 1813(q)), with respect to--
                    ``(A) national banks, Federal savings 
                associations, and Federal branches and Federal 
                agencies of foreign banks;
                    ``(B) member banks of the Federal Reserve 
                System (other than national banks), branches 
                and agencies of foreign banks (other than 
                Federal branches, Federal agencies, and insured 
                State branches of foreign banks), commercial 
                lending companies owned or controlled by 
                foreign banks, and organizations operating 
                under section 25 or 25A of the Federal Reserve 
                Act; and
                    ``(C) banks and State savings associations 
                insured by the Federal Deposit Insurance 
                Corporation (other than members of the Federal 
                Reserve System), and insured State branches of 
                foreign banks;'';
                            (iii) by redesignating paragraphs 
                        (3) through (6), as paragraphs (2) 
                        through (5), respectively;
                            (iv) in paragraph (4) (as so 
                        redesignated), by striking ``and'' at 
                        the end;
                            (v) in paragraph (5) (as so 
                        redesignated), by striking the period 
                        at the end and inserting ``; and''; and
                            (vi) by inserting before the 
                        undesignated matter at the end the 
                        following:
            ``(6) subtitle E of the Consumer Financial 
        Protection Act of 2010, by the Bureau, with respect to 
        any person subject to this title.''.
            (4) in subsection (d), by striking ``Neither the 
        Commission'' and all that follows through the end of 
        the subsection and inserting the following: ``Except as 
        provided in section 1029(a) of the Consumer Financial 
        Protection Act of 2010, the Bureau may prescribe rules 
        with respect to the collection of debts by debt 
        collectors, as defined in this title.''.

SEC. 1090. AMENDMENTS TO THE FEDERAL DEPOSIT INSURANCE ACT.

    The Federal Deposit Insurance Act (12 U.S.C. 1811 et seq.) 
is amended--
            (1) in section 8(t) (12 U.S.C. 1818(t)), by adding 
        at the end the following:
            ``(6) Referral to bureau of consumer financial 
        protection.--Subject to subtitle B of the Consumer 
        Financial Protection Act of 2010, each appropriate 
        Federal banking agency shall make a referral to the 
        Bureau of Consumer Financial Protection when the 
        Federal banking agency has a reasonable belief that a 
        violation of an enumerated consumer law, as defined in 
        the Consumer Financial Protection Act of 2010, has been 
        committed by any insured depository institution or 
        institution-affiliated party within the jurisdiction of 
        that appropriate Federal banking agency.''; and
            (2) in section 43 (12 U.S.C. 1831t)--
                    (A) in subsection (c), by striking 
                ``Federal Trade Commission'' and inserting 
                ``Bureau'';
                    (B) in subsection (d), by striking 
                ``Federal Trade Commission'' and inserting 
                ``Bureau'';
                    (C) in subsection (e)--
                            (i) in paragraph (2), by striking 
                        ``Federal Trade Commission'' and 
                        inserting ``Bureau''; and
                            (ii) by adding at the end the 
                        following new paragraph:
            ``(5) Bureau.--The term `Bureau' means the Bureau 
        of Consumer Financial Protection.''; and
                    (D) in subsection (f)--
                            (i) by striking paragraph (1) and 
                        inserting the following:
            ``(1) Limited enforcement authority.--Compliance 
        with the requirements of subsections (b), (c), and (e), 
        and any regulation prescribed or order issued under 
        such subsection, shall be enforced under the Consumer 
        Financial Protection Act of 2010, by the Bureau, 
        subject to subtitle B of the Consumer Financial 
        Protection Act of 2010, and under the Federal Trade 
        Commission Act (15 U.S.C. 41 et seq.) by the Federal 
        Trade Commission.''; and
                            (ii) in paragraph (2), by striking 
                        subparagraph (C) and inserting the 
                        following:
                    ``(C) Limitation on state action while 
                federal action pending.--If the Bureau or 
                Federal Trade Commission has instituted an 
                enforcement action for a violation of this 
                section, no appropriate State supervisory 
                agency may, during the pendency of such action, 
                bring an action under this section against any 
                defendant named in the complaint of the Bureau 
                or Federal Trade Commission for any violation 
                of this section that is alleged in that 
                complaint.''.

SEC. 1091. AMENDMENT TO 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)) is 
amended by striking ``Director, Office of Thrift Supervision'' 
and inserting ``Director of the Consumer Financial Protection 
Bureau''.

SEC. 1092. AMENDMENTS TO THE FEDERAL TRADE COMMISSION ACT.

    Section 18(f) of the Federal Trade Commission Act (15 
U.S.C. 57a(f)) is amended--
            (1) by striking the subsection heading and 
        inserting the following:
    ``(f) Definitions of Banks, Savings and Loan Institutions, 
and Federal Credit Unions.--''.
            (2) by striking paragraph (1) and inserting the 
        following:
            ``(1) [Repealed.]'';
            (3) by striking paragraphs (5) through (7);
            (4) in paragraph (2)--
                    (A) by striking ``(2) Enforcement'' and all 
                that follows through ``in the case of'' and 
                inserting the following:
            ``(2) Definition.--For purposes of this Act, the 
        term `bank' means'';
                    (B) in subparagraph (A), by striking ``, by 
                the division'' and all that follows through 
                ``Currency'';
                    (C) in subparagraph (B)--
                            (i) by striking ``, by the 
                        division'' and all that follows through 
                        ``System''; and
                            (ii) by striking ``25(a)'' and 
                        inserting ``25A''; and
                    (D) in subparagraph (C)--
                            (i) by striking ``(other'' and 
                        inserting ``(other than''; and
                            (ii) by striking ``, by the 
                        division'' and all that follows through 
                        ``Corporation'';
            (5) in paragraph (3), by striking ``Compliance'' 
        and all that follows through ``as defined in'' and 
        inserting the following: ``For purposes of this Act, 
        the term ``savings and loan institution'' has the same 
        meaning as in''; and
            (6) in paragraph (4), by striking ``Compliance'' 
        and all that follows through ``credit unions under'' 
        and inserting the following: ``For purposes of this 
        Act, the term ``Federal credit union'' has the same 
        meaning as in''.

SEC. 1093. AMENDMENTS TO THE GRAMM-LEACH-BLILEY ACT.

    Title V of the Gramm-Leach-Bliley Act (15 U.S.C. 6801 et 
seq.) is amended--
            (1) in section 501(b) (15 U.S.C. 6801(b)), by 
        inserting ``, other than the Bureau of Consumer 
        Financial Protection,'' after ``505(a)'';
            (2) in section 502(e)(5) (15 U.S.C. 6802(e)(5)), by 
        inserting ``the Bureau of Consumer Financial 
        Protection'' after ``(including'';
            (3) in section 504(a) (15 U.S.C. 6804(a))--
                    (A) by striking paragraphs (1) and (2) and 
                inserting the following:
            ``(1) Rulemaking.--
                    ``(A) In general.--Except as provided in 
                subparagraph (C), the Bureau of Consumer 
                Financial Protection and the Securities and 
                Exchange Commission shall have authority to 
                prescribe such regulations as may be necessary 
                to carry out the purposes of this subtitle with 
                respect to financial institutions and other 
                persons subject to their respective 
                jurisdiction under section 505 (and 
                notwithstanding subtitle B of the Consumer 
                Financial Protection Act of 2010), except that 
                the Bureau of Consumer Financial Protection 
                shall not have authority to prescribe 
                regulations with respect to the standards under 
                section 501.
                    ``(B) CFTC.--The Commodity Futures Trading 
                Commission shall have authority to prescribe 
                such regulations as may be necessary to carry 
                out the purposes of this subtitle with respect 
                to financial institutions and other persons 
                subject to the jurisdiction of the Commodity 
                Futures Trading Commission under section 5g of 
                the Commodity Exchange Act.
                    ``(C) Federal trade commission authority.--
                Notwithstanding the authority of the Bureau of 
                Consumer Financial Protection under 
                subparagraph (A), the Federal Trade Commission 
                shall have authority to prescribe such 
                regulations as may be necessary to carry out 
                the purposes of this subtitle with respect to 
                any financial institution that is a person 
                described in section 1029(a) of the Consumer 
                Financial Protection Act of 2010.
                    ``(D) Rule of construction.--Nothing in 
                this paragraph shall be construed to alter, 
                affect, or otherwise limit the authority of a 
                State insurance authority to adopt regulations 
                to carry out this subtitle.
            ``(2) Coordination, consistency, and 
        comparability.--Each of the agencies authorized under 
        paragraph (1) to prescribe regulations shall consult 
        and coordinate with the other such agencies and, as 
        appropriate, and with representatives of State 
        insurance authorities designated by the National 
        Association of Insurance Commissioners, for the purpose 
        of assuring, to the extent possible, that the 
        regulations prescribed by each such agency are 
        consistent and comparable with the regulations 
        prescribed by the other such agencies.''; and
                    (B) in paragraph (3), by striking ``, and 
                shall be issued in final form not later than 6 
                months after the date of enactment of this 
                Act'';
            (4) in section 505(a) (15 U.S.C. 6805(a))--
                    (A) by striking ``This subtitle'' and all 
                that follows through ``as follows:'' and 
                inserting ``Subject to subtitle B of the 
                Consumer Financial Protection Act of 2010, this 
                subtitle and the regulations prescribed 
                thereunder shall be enforced by the Bureau of 
                Consumer Financial Protection, the Federal 
                functional regulators, the State insurance 
                authorities, and the Federal Trade Commission 
                with respect to financial institutions and 
                other persons subject to their jurisdiction 
                under applicable law, as follows:'';
                    (B) in paragraph (1)--
                            (i) in the matter preceding 
                        subparagraph (A), by inserting ``by the 
                        appropriate Federal banking agency, as 
                        defined in section 3(q) of the Federal 
                        Deposit Insurance Act,'' after 
                        ``Act,'';
                            (ii) in subparagraph (A), by 
                        striking ``, by the Office of the 
                        Comptroller of the Currency'';
                            (iii) in subparagraph (B), by 
                        striking ``, by the Board of Governors 
                        of the Federal Reserve System'';
                            (iv) in subparagraph (C), by 
                        striking ``, by the Board of Directors 
                        of the Federal Deposit Insurance 
                        Corporation''; and
                            (v) in subparagraph (D), by 
                        striking ``, by the Director of the 
                        Office of Thrift Supervision''; and
                    (C) by adding at the end the following:
            ``(8) Under subtitle E of the Consumer Financial 
        Protection Act of 2010, by the Bureau of Consumer 
        Financial Protection, in the case of any financial 
        institution and other covered person or service 
        provider that is subject to the jurisdiction of the 
        Bureau and any person subject to this subtitle, but not 
        with respect to the standards under section 501.'';
            (5) in section 505(b)(1) (15 U.S.C. 6805(b)(1)), by 
        inserting ``, other than the Bureau of Consumer 
        Financial Protection,'' after ``subsection (a)''; and
            (6) in section 507(b) (15 U.S.C. 6807), by striking 
        ``Federal Trade Commission'' and inserting ``Bureau of 
        Consumer Financial Protection''.

SEC. 1094. AMENDMENTS TO THE HOME MORTGAGE DISCLOSURE ACT OF 1975.

    The Home Mortgage Disclosure Act of 1975 (12 U.S.C. 2801 et 
seq.) is amended--
            (1) by striking ``Board'' each place that term 
        appears, other than in sections 303, 304(h), 305(b) (as 
        amended by this section), and 307(a) (as amended by 
        this section) and inserting ``Bureau''.
            (2) in section 303 (12 U.S.C. 2802)--
                    (A) by redesignating paragraphs (1) through 
                (6) as paragraphs (2) through (7), 
                respectively; and
                    (B) by inserting before paragraph (2) the 
                following:
            ``(1) the term `Bureau' means the Bureau of 
        Consumer Financial Protection;'';
            (3) in section 304 (12 U.S.C. 2803)--
                    (A) in subsection (b)--
                            (i) in paragraph (4), by inserting 
                        ``age,'' before ``and gender'';
                            (ii) in paragraph (3), by striking 
                        ``and'' at the end;
                            (iii) in paragraph (4), by striking 
                        the period at the end and inserting a 
                        semicolon; and
                            (iv) by adding at the end the 
                        following:
            ``(5) the number and dollar amount of mortgage 
        loans grouped according to measurements of--
                    ``(A) the total points and fees payable at 
                origination in connection with the mortgage as 
                determined by the Bureau, taking into account 
                15 U.S.C. 1602(aa)(4);
                    ``(B) the difference between the annual 
                percentage rate associated with the loan and a 
                benchmark rate or rates for all loans;
                    ``(C) the term in months of any prepayment 
                penalty or other fee or charge payable on 
                repayment of some portion of principal or the 
                entire principal in advance of scheduled 
                payments; and
                    ``(D) such other information as the Bureau 
                may require; and
            ``(6) the number and dollar amount of mortgage 
        loans and completed applications grouped according to 
        measurements of--
                    ``(A) the value of the real property 
                pledged or proposed to be pledged as 
                collateral;
                    ``(B) the actual or proposed term in months 
                of any introductory period after which the rate 
                of interest may change;
                    ``(C) the presence of contractual terms or 
                proposed contractual terms that would allow the 
                mortgagor or applicant to make payments other 
                than fully amortizing payments during any 
                portion of the loan term;
                    ``(D) the actual or proposed term in months 
                of the mortgage loan;
                    ``(E) the channel through which application 
                was made, including retail, broker, and other 
                relevant categories;
                    ``(F) as the Bureau may determine to be 
                appropriate, a unique identifier that 
                identifies the loan originator as set forth in 
                section 1503 of the S.A.F.E. Mortgage Licensing 
                Act of 2008;
                    ``(G) as the Bureau may determine to be 
                appropriate, a universal loan identifier;
                    ``(H) as the Bureau may determine to be 
                appropriate, the parcel number that corresponds 
                to the real property pledged or proposed to be 
                pledged as collateral;
                    ``(I) the credit score of mortgage 
                applicants and mortgagors, in such form as the 
                Bureau may prescribe; and
                    ``(J) such other information as the Bureau 
                may require.'';
                    (B) by striking subsection (h) and 
                inserting the following:
    ``(h) Submission to Agencies.--
            ``(1) In general.--The data required to be 
        disclosed under subsection (b) shall be submitted to 
        the Bureau or to the appropriate agency for the 
        institution reporting under this title, in accordance 
        with rules prescribed by the Bureau. Notwithstanding 
        the requirement of subsection (a)(2)(A) for disclosure 
        by census tract, the Bureau, in consultation with other 
        appropriate agencies described in paragraph (2) and, 
        after notice and comment, shall develop regulations 
        that--
                    ``(A) prescribe the format for such 
                disclosures, the method for submission of the 
                data to the appropriate agency, and the 
                procedures for disclosing the information to 
                the public;
                    ``(B) require the collection of data 
                required to be disclosed under subsection (b) 
                with respect to loans sold by each institution 
                reporting under this title;
                    ``(C) require disclosure of the class of 
                the purchaser of such loans;
                    ``(D) permit any reporting institution to 
                submit in writing to the Bureau or to the 
                appropriate agency such additional data or 
                explanations as it deems relevant to the 
                decision to originate or purchase mortgage 
                loans; and
                    ``(E) modify or require modification of 
                itemized information, for the purpose of 
                protecting the privacy interests of the 
                mortgage applicants or mortgagors, that is or 
                will be available to the public.
            ``(2) Other appropriate agencies.--The appropriate 
        agencies described in this paragraph are--
                    ``(A) the appropriate Federal banking 
                agencies, as defined in section 3(q) of the 
                Federal Deposit Insurance Act (12 U.S.C. 
                1813(q)), with respect to the entities that are 
                subject to the jurisdiction of each such 
                agency, respectively;
                    ``(B) the Federal Deposit Insurance 
                Corporation for banks insured by the Federal 
                Deposit Insurance Corporation (other than 
                members of the Federal Reserve System), mutual 
                savings banks, insured State branches of 
                foreign banks, and any other depository 
                institution described in section 303(2)(A) 
                which is not otherwise referred to in this 
                paragraph;
                    ``(C) the National Credit Union 
                Administration Board with respect to credit 
                unions; and
                    ``(D) the Secretary of Housing and Urban 
                Development with respect to other lending 
                institutions not regulated by the agencies 
                referred to in subparagraph (A) or (B).
            ``(3) Rules for modifications under paragraph 
        (1).--
                    ``(A) Application.--A modification under 
                paragraph (1)(E) shall apply to information 
                concerning--
                            ``(i) credit score data described 
                        in subsection (b)(6)(I), in a manner 
                        that is consistent with the purpose 
                        described in paragraph (1)(E); and
                            ``(ii) age or any other category of 
                        data described in paragraph (5) or (6) 
                        of subsection (b), as the Bureau 
                        determines to be necessary to satisfy 
                        the purpose described in paragraph 
                        (1)(E), and in a manner consistent with 
                        that purpose.
                    ``(B) Standards.--The Bureau shall 
                prescribe standards for any modification under 
                paragraph (1)(E) to effectuate the purposes of 
                this title, in light of the privacy interests 
                of mortgage applicants or mortgagors. Where 
                necessary to protect the privacy interests of 
                mortgage applicants or mortgagors, the Bureau 
                shall provide for the disclosure of information 
                described in subparagraph (A) in aggregate or 
                other reasonably modified form, in order to 
                effectuate the purposes of this title.'';
                    (C) in subsection (i), by striking 
                ``subsection (b)(4)'' and inserting 
                ``subsections (b)(4), (b)(5), and (b)(6)'';
                    (D) in subsection (j)--
                            (i) by striking paragraph (3) and 
                        inserting the following:
            ``(3) Change of form not required.--A depository 
        institution meets the disclosure requirement of 
        paragraph (1) if the institution provides the 
        information required under such paragraph in such 
        formats as the Bureau may require''; and
                            (ii) in paragraph (2)(A), by 
                        striking ``in the format in which such 
                        information is maintained by the 
                        institution'' and inserting ``in such 
                        formats as the Bureau may require'';
                    (E) in subsection (m), by striking 
                paragraph (2) and inserting the following:
            ``(2) Form of information.--In complying with 
        paragraph (1), a depository institution shall provide 
        the person requesting the information with a copy of 
        the information requested in such formats as the Bureau 
        may require.''; and
                    (F) by adding at the end the following:
    ``(n) Timing of Certain Disclosures.--The data required to 
be disclosed under subsection (b) shall be submitted to the 
Bureau or to the appropriate agency for any institution 
reporting under this title, in accordance with regulations 
prescribed by the Bureau. Institutions shall not be required to 
report new data under paragraph (5) or (6) of subsection (b) 
before the first January 1 that occurs after the end of the 9-
month period beginning on the date on which regulations are 
issued by the Bureau in final form with respect to such 
disclosures.'';
            (4) in section 305 (12 U.S.C. 2804)--
                    (A) by striking subsection (b) and 
                inserting the following:
    ``(b) Powers of Certain Other Agencies.--
            ``(1) In general.--Subject to subtitle B of the 
        Consumer Financial Protection Act of 2010, compliance 
        with the requirements of this title shall be enforced--
                    ``(A) under section 8 of the Federal 
                Deposit Insurance Act, the appropriate Federal 
                banking agency, as defined in section 3(q) of 
                the Federal Deposit Insurance Act (12 U.S.C. 
                1813(q)), with respect to--
                            ``(i) any national bank or Federal 
                        savings association, and any Federal 
                        branch or Federal agency of a foreign 
                        bank;
                            ``(ii) any member bank of the 
                        Federal Reserve System (other than a 
                        national bank), branch or agency of a 
                        foreign bank (other than a Federal 
                        branch, Federal agency, and insured 
                        State branch of a foreign bank), 
                        commercial lending company owned or 
                        controlled by a foreign bank, and any 
                        organization operating under section 25 
                        or 25A of the Federal Reserve Act; and
                            ``(iii) any bank or State savings 
                        association insured by the Federal 
                        Deposit Insurance Corporation (other 
                        than a member of the Federal Reserve 
                        System), any mutual savings bank as, 
                        defined in section 3(f) of the Federal 
                        Deposit Insurance Act (12 U.S.C. 
                        1813(f)), any insured State branch of a 
                        foreign bank, and any other depository 
                        institution not referred to in this 
                        paragraph or subparagraph (B) or (C);
                    ``(B) under subtitle E of the Consumer 
                Financial Protection Act of 2010, by the 
                Bureau, with respect to any person subject to 
                this subtitle;
                    ``(C) under the Federal Credit Union Act, 
                by the Administrator of the National Credit 
                Union Administration with respect to any 
                insured credit union; and
                    ``(D) with respect to other lending 
                institutions, by the Secretary of Housing and 
                Urban Development.
            ``(2) Incorporated definitions.--The terms used in 
        paragraph (1) that are not defined in this title or 
        otherwise defined in section 3(s) of the Federal 
        Deposit Insurance Act (12 U.S.C. 1813(s)) shall have 
        the same meanings as in section 1(b) of the 
        International Banking Act of 1978 (12 U.S.C. 3101).''; 
        and
                    (B) by adding at the end the following:
    ``(d) Overall Enforcement Authority of the Bureau of 
Consumer Financial Protection.--Subject to subtitle B of the 
Consumer Financial Protection Act of 2010, enforcement of the 
requirements imposed under this title is committed to each of 
the agencies under subsection (b). To facilitate research, 
examinations, and enforcement, all data collected pursuant to 
section 304 shall be available to the entities listed under 
subsection (b). The Bureau may exercise its authorities under 
the Consumer Financial Protection Act of 2010 to exercise 
principal authority to examine and enforce compliance by any 
person with the requirements of this title.'';
            (5) in section 306 (12 U.S.C. 2805(b)), by striking 
        subsection (b) and inserting the following:
    ``(b) Exemption Authority.--The Bureau may, by regulation, 
exempt from the requirements of this title any State-chartered 
depository institution within any State or subdivision thereof, 
if the agency determines that, under the law of such State or 
subdivision, that institution is subject to requirements that 
are substantially similar to those imposed under this title, 
and that such law contains adequate provisions for enforcement. 
Notwithstanding any other provision of this subsection, 
compliance with the requirements imposed under this subsection 
shall be enforced by the Office of the Comptroller of the 
Currency under section 8 of the Federal Deposit Insurance Act, 
in the case of national banks and Federal savings associations, 
the deposits of which are insured by the Federal Deposit 
Insurance Corporation.''; and
            (6) by striking section 307 (12 U.S.C. 2806) and 
        inserting the following:

``SEC. 307. COMPLIANCE IMPROVEMENT METHODS.

    ``(a) In General.--
            ``(1) Consultation required.--The Director of the 
        Bureau of Consumer Financial Protection, 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 Director of the 
        Bureau of Consumer Financial Protection is authorized 
        to utilize, contract with, act through, or compensate 
        any person or agency in order to carry out this 
        subsection.
    ``(b) Recommendations to Congress.--The Director of the 
Bureau of Consumer Financial Protection 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 Director of 
the Bureau of Consumer Financial Protection deems appropriate 
to carry out the purpose of this title.''.

SEC. 1095. AMENDMENTS TO THE HOMEOWNERS PROTECTION ACT OF 1998.

    Section 10 of the Homeowners Protection Act of 1998 (12 
U.S.C. 4909) is amended--
            (1) in subsection (a)--
                    (A) by striking ``Compliance'' and all that 
                follows through the end of paragraph (1) and 
                inserting the following: ``Subject to subtitle 
                B of the Consumer Financial Protection Act of 
                2010, compliance with the requirements imposed 
                under this Act shall be enforced under--
            ``(1) section 8 of the Federal Deposit Insurance 
        Act, by the appropriate Federal banking agency (as 
        defined in section 3(q) of that Act), with respect to--
                    ``(A) insured depository institutions (as 
                defined in section 3(c)(2) of that Act);
                    ``(B) depository institutions described in 
                clause (i), (ii), or (iii) of section 
                19(b)(1)(A) of the Federal Reserve Act which 
                are not insured depository institutions (as 
                defined in section 3(c)(2) of the Federal 
                Deposit Insurance Act); and
                    ``(C) depository institutions described in 
                clause (v) or (vi) of section 19(b)(1)(A) of 
                the Federal Reserve Act which are not insured 
                depository institutions (as defined in section 
                3(c)(2) of the Federal Deposit Insurance 
                Act);'';
                    (B) in paragraph (2), by striking ``and'' 
                at the end;
                    (C) in paragraph (3), by striking the 
                period at the end and inserting ``; and''; and
                    (D) by adding at the end the following:
            ``(4) subtitle E of the Consumer Financial 
        Protection Act of 2010, by the Bureau of Consumer 
        Financial Protection, with respect to any person 
        subject to this Act.''; and
            (2) in subsection (b)(2), by inserting before the 
        period at the end the following: ``, subject to 
        subtitle B of the Consumer Financial Protection Act of 
        2010''.

SEC. 1096. AMENDMENTS TO THE HOME OWNERSHIP AND EQUITY PROTECTION ACT 
                    OF 1994.

    The Home Ownership and Equity Protection Act of 1994 (15 
U.S.C. 1601 note) is amended--
            (1) in section 158(a), by striking ``Board of 
        Governors of the Federal Reserve System, in 
        consultation with the Consumer Advisory Council of the 
        Board'' and inserting ``Bureau, in consultation with 
        the Advisory Board to the Bureau''; and
            (2) in section 158(b), by striking ``Board of 
        Governors of the Federal Reserve System'' and inserting 
        ``Bureau''.

SEC. 1097. AMENDMENTS TO THE OMNIBUS APPROPRIATIONS ACT, 2009.

    Section 626 of the Omnibus Appropriations Act, 2009 (15 
U.S.C. 1638 note) is amended--
            (1) by striking subsection (a) and inserting the 
        following:
    ``(a)(1) The Bureau of Consumer Financial Protection shall 
have authority to prescribe rules with respect to mortgage 
loans in accordance with section 553 of title 5, United States 
Code. Such rulemaking shall relate to unfair or deceptive acts 
or practices regarding mortgage loans, which may include unfair 
or deceptive acts or practices involving loan modification and 
foreclosure rescue services. Any violation of a rule prescribed 
under this paragraph shall be treated as a violation of a rule 
prohibiting unfair, deceptive, or abusive acts or practices 
under the Consumer Financial Protection Act of 2010 and a 
violation of a rule under section 18 of the Federal Trade 
Commission Act (15 U.S.C. 57a) regarding unfair or deceptive 
acts or practices.
    ``(2) The Bureau of Consumer Financial Protection shall 
enforce the rules issued under paragraph (1) in the same 
manner, by the same means, and with the same jurisdiction, 
powers, and duties, as though all applicable terms and 
provisions of the Consumer Financial Protection Act of 2010 
were incorporated into and made part of this subsection.
    ``(3) Subject to subtitle B of the Consumer Financial 
Protection Act of 2010, the Federal Trade Commission shall 
enforce the rules issued under paragraph (1), in the same 
manner, by the same means, and with the same jurisdiction, as 
though all applicable terms and provisions of the Federal Trade 
Commission Act were incorporated into and made part of this 
section.''; and
            (2) in subsection (b)--
                    (A) by striking paragraph (1) and inserting 
                the following:
            ``(1) Except as provided in paragraph (6), in any 
        case in which the attorney general of a State has 
        reason to believe that an interest of the residents of 
        the State has been or is threatened or adversely 
        affected by the engagement of any person subject to a 
        rule prescribed under subsection (a) in practices that 
        violate such rule, the State, as parens patriae, may 
        bring a civil action on behalf of its residents in an 
        appropriate district court of the United States or 
        other court of competent jurisdiction--
                    ``(A) to enjoin that practice;
                    ``(B) to enforce compliance with the rule;
                    ``(C) to obtain damages, restitution, or 
                other compensation on behalf of the residents 
                of the State; or
                    ``(D) to obtain penalties and relief 
                provided under the Consumer Financial 
                Protection Act of 2010, the Federal Trade 
                Commission Act, and such other relief as the 
                court deems appropriate.'';
                    (B) in paragraphs (2) and (3), by striking 
                ``the primary Federal regulator'' each time the 
                term appears and inserting ``the Bureau of 
                Consumer Financial Protection or the 
                Commission, as appropriate'';
                    (C) in paragraph (3), by inserting ``and 
                subject to subtitle B of the Consumer Financial 
                Protection Act of 2010,'' after ``paragraph 
                (2),''; and
                    (D) in paragraph (6), by striking ``the 
                primary Federal regulator'' each place that 
                term appears and inserting ``the Bureau of 
                Consumer Financial Protection or the 
                Commission''.

SEC. 1098. AMENDMENTS TO THE REAL ESTATE SETTLEMENT PROCEDURES ACT OF 
                    1974.

    The Real Estate Settlement Procedures Act of 1974 (12 
U.S.C. 2601 et seq.) is amended--
            (1) in section 3 (12 U.S.C. 2602)--
                    (A) in paragraph (7), by striking ``and'' 
                at the end;
                    (B) in paragraph (8), by striking the 
                period at the end and inserting ``; and''; and
                    (C) by adding at the end the following:
            ``(9) the term `Bureau' means the Bureau of 
        Consumer Financial Protection.'';
            (2) in section 4 (12 U.S.C. 2603)--
                    (A) in subsection (a), by striking the 
                first sentence and inserting the following: 
                ``The Bureau shall publish a single, integrated 
                disclosure for mortgage loan transactions 
                (including real estate settlement cost 
                statements) which includes the disclosure 
                requirements of this section and section 5, in 
                conjunction with the disclosure requirements of 
                the Truth in Lending Act that, taken together, 
                may apply to a transaction that is subject to 
                both or either provisions of law. The purpose 
                of such model disclosure shall be to facilitate 
                compliance with the disclosure requirements of 
                this title and the Truth in Lending Act, and to 
                aid the borrower or lessee in understanding the 
                transaction by utilizing readily understandable 
                language to simplify the technical nature of 
                the disclosures.'';
                    (B) by striking ``Secretary'' each place 
                that term appears and inserting ``Bureau''; and
                    (C) by striking ``form'' each place that 
                term appears and inserting ``forms'';
            (3) in section 5 (12 U.S.C. 2604)--
                    (A) by striking ``Secretary'' each place 
                that term appears and inserting ``Bureau''; and
                    (B) in subsection (a), by striking the 
                first sentence and inserting the following: 
                ``The Bureau shall prepare and distribute 
                booklets jointly addressing compliance with the 
                requirements of the Truth in Lending Act and 
                the provisions of this title, in order to help 
                persons borrowing money to finance the purchase 
                of residential real estate better to understand 
                the nature and costs of real estate settlement 
                services.'';
            (4) in section 6(j)(3) (12 U.S.C. 2605(j)(3))--
                    (A) by striking ``Secretary'' and inserting 
                ``Bureau''; and
                    (B) by striking ``, by regulations that 
                shall take effect not later than April 20, 
                1991,'';
            (5) in section 7(b) (12 U.S.C. 2606(b)) by striking 
        ``Secretary'' and inserting ``Bureau'';
            (6) in section 8(c)(5) (12 U.S.C. 2607(c)(5)), by 
        striking ``Secretary'' and inserting ``Bureau'';
            (7) in section 8(d) (12 U.S.C. 2607(d))--
                    (A) in the subsection heading, by inserting 
                ``Bureau and'' before ``Secretary''; and
                    (B) by striking paragraph (4), and 
                inserting the following:
            ``(4) The Bureau, the Secretary, or the attorney 
        general or the insurance commissioner of any State may 
        bring an action to enjoin violations of this section. 
        Except, to the extent that a person is subject to the 
        jurisdiction of the Bureau, the Secretary, or the 
        attorney general or the insurance commissioner of any 
        State, the Bureau shall have primary authority to 
        enforce or administer this section, subject to subtitle 
        B of the Consumer Financial Protection Act of 2010.'';
            (8) in section 10(c) (12 U.S.C. 2609(c) and (d)), 
        by striking ``Secretary'' and inserting ``Bureau'';
            (9) in section 16 (12 U.S.C. 2614), by inserting 
        ``the Bureau,'' before ``the Secretary'';
            (10) in section 18 (12 U.S.C. 2616), by striking 
        ``Secretary'' each place that term appears and 
        inserting ``Bureau''; and
            (11) in section 19 (12 U.S.C. 2617)--
                    (A) in the section heading by striking 
                ``SECRETARY'' and inserting ``BUREAU'';
                    (B) in subsection (a), by striking 
                ``Secretary'' each place that term appears and 
                inserting ``Bureau''; and
                    (C) in subsections (b) and (c), by striking 
                ``the Secretary'' each place that term appears 
                and inserting ``the Bureau''.

SEC. 1098A. AMENDMENTS TO THE INTERSTATE LAND SALES FULL DISCLOSURE 
                    ACT.

    The Interstate Land Sales Full Disclosure Act (15 U.S.C. 
1701 et seq.) is amended--
            (1) by striking ``Secretary'' each place that term 
        appears and inserting ``Director'';
            (2) by striking ``Department of Housing and Urban 
        Development'' each place that term appears and 
        inserting ``Bureau of Consumer Financial Protection'';
            (3) by striking ``Department'' each place that term 
        appears and inserting ``Bureau'';
            (4) in section 1402 (15 U.S.C. 1701)--
                    (A) by striking paragraph (1) and inserting 
                the following:
            ``(1) `Director' means the Director of the Bureau 
        of Consumer Financial Protection;'';
                    (B) in paragraph (10), by striking ``and'' 
                at the end;
                    (C) in paragraph (11), by striking the 
                period at the end and inserting ``; and''; and
                    (D) by adding at the end the following:
            ``(12) `Bureau' means the Bureau of Consumer 
        Financial Protection.''; and
            (5) in section 1416(a) (15 U.S.C. 1715(a)), by 
        striking ``Secretary of Housing and Urban Development'' 
        and inserting ``Director of the Bureau of Consumer 
        Financial Protection''.

SEC. 1099. AMENDMENTS TO THE RIGHT TO FINANCIAL PRIVACY ACT OF 1978.

    The Right to Financial Privacy Act of 1978 (12 U.S.C. 3401 
et seq.) is amended--
            (1) in section 1101--
                    (A) in paragraph (6)--
                            (i) in subparagraph (A), by 
                        inserting ``and'' after the semicolon;
                            (ii) in subparagraph (B), by 
                        striking ``and'' at the end; and
                            (iii) by striking subparagraph (C); 
                        and
                    (B) in paragraph (7), by striking 
                subparagraph (B), and inserting the following:
                    ``(B) the Bureau of Consumer Financial 
                Protection;'';
            (2) in section 1112(e) (12 U.S.C. 3412(e)), by 
        striking ``and the Commodity Futures Trading Commission 
        is permitted'' and inserting ``the Commodity Futures 
        Trading Commission, and the Bureau of Consumer 
        Financial Protection is permitted''; and
            (3) in section 1113 (12 U.S.C. 3413), by adding at 
        the end the following new subsection:
    ``(r) Disclosure to the Bureau of Consumer Financial 
Protection.--Nothing in this title shall apply to the 
examination by or disclosure to the Bureau of Consumer 
Financial Protection of financial records or information in the 
exercise of its authority with respect to a financial 
institution.''.

SEC. 1100. AMENDMENTS TO THE SECURE AND FAIR ENFORCEMENT FOR MORTGAGE 
                    LICENSING ACT OF 2008.

    The S.A.F.E. Mortgage Licensing Act of 2008 (12 U.S.C. 5101 
et seq.) is amended--
            (1) by striking ``a Federal banking agency'' each 
        place that term appears, other than in paragraphs (7) 
        and (11) of section 1503 and section 1507(a)(1), and 
        inserting ``the Bureau'';
            (2) by striking ``Federal banking agencies'' each 
        place that term appears and inserting ``Bureau''; and
            (3) by striking ``Secretary'' each place that term 
        appears and inserting ``Director'';
            (4) in section 1503 (12 U.S.C. 5102)--
                    (A) by redesignating paragraphs (2) through 
                (12) as (3) through (13), respectively;
                    (B) by striking paragraph (1) and inserting 
                the following:
            ``(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.''; and
                    (C) by striking paragraph (10), as so 
                designated by this section, and inserting the 
                following:
            ``(10) Director.--The term `Director' means the 
        Director of the Bureau of Consumer Financial 
        Protection.''; and
            (5) in section 1507 (12 U.S.C. 5106)--
                    (A) in subsection (a)--
                            (i) by striking paragraph (1) and 
                        inserting the following:
            ``(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.''; and
                            (ii) in paragraph (2)--
                                    (I) by striking 
                                ``appropriate Federal banking 
                                agency and the Farm Credit 
                                Administration'' and inserting 
                                ``Bureau''; and
                                    (II) by striking 
                                ``employees's identity'' and 
                                inserting ``identity of the 
                                employee''; and
                    (B) in subsection (b), by striking 
                ``through the Financial Institutions 
                Examination Council, and the Farm Credit 
                Administration'', and inserting ``and the 
                Bureau of Consumer Financial Protection'';
            (6) in section 1508 (12 U.S.C. 5107)--
                    (A) by striking the section heading and 
                inserting the following: ``SEC. 1508. BUREAU OF 
                CONSUMER FINANCIAL PROTECTION BACKUP AUTHORITY 
                TO ESTABLISH LOAN ORIGINATOR LICENSING 
                SYSTEM.''; and
                    (B) by adding at the end the following:
    ``(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.'';
            (7) by striking section 1510 (12 U.S.C. 5109) and 
        inserting the following:

``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 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.'';
            (8) by striking section 1513 (12 U.S.C. 5112) and 
        inserting the following:

``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 Director 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.''; 
and
            (9) in section 1514 (12 U.S.C. 5113) in the section 
        heading, by striking ``UNDER HUD BACKUP LICENSING 
        SYSTEM'' and inserting ``BY THE BUREAU''.

SEC. 1100A. AMENDMENTS TO THE TRUTH IN LENDING ACT.

    The Truth in Lending Act (15 U.S.C. 1601 et seq.) is 
amended--
            (1) in section 103 (15 U.S.C. 1602)--
                    (A) by redesignating subsections (b) 
                through (bb) as subsections (c) through (cc), 
                respectively; and
                    (B) by inserting after subsection (a) the 
                following:
    ``(b) Bureau.--The term `Bureau' means the Bureau of 
Consumer Financial Protection.'';
            (2) by striking ``Board'' each place that term 
        appears, other than in section 140(d) and sections 
        105(i) and 108(a), as amended by this section, and 
        inserting ``Bureau'';
            (3) by striking ``Federal Trade Commission'' each 
        place that term appears, other than in section 108(c) 
        and section 129(m), as amended by this Act, and other 
        than in the context of a reference to the Federal Trade 
        Commission Act, and inserting ``Bureau'';
            (4) in section 105(a) (15 U.S.C. 1604(a)), in the 
        second sentence--
                    (A) by striking ``Except in the case of a 
                mortgage referred to in section 103(aa), these 
                regulations may contain such'' and inserting 
                ``Except with respect to the provisions of 
                section 129 that apply to a mortgage referred 
                to in section 103(aa), such regulations may 
                contain such additional requirements,''; and
                    (B) by inserting ``all or'' after 
                ``exceptions for'';
            (5) in section 105(b) (15 U.S.C. 1604(b)), by 
        striking the first sentence and inserting the 
        following: ``The Bureau shall publish a single, 
        integrated disclosure for mortgage loan transactions 
        (including real estate settlement cost statements) 
        which includes the disclosure requirements of this 
        title in conjunction with the disclosure requirements 
        of the Real Estate Settlement Procedures Act of 1974 
        that, taken together, may apply to a transaction that 
        is subject to both or either provisions of law. The 
        purpose of such model disclosure shall be to facilitate 
        compliance with the disclosure requirements of this 
        title and the Real Estate Settlement Procedures Act of 
        1974, and to aid the borrower or lessee in 
        understanding the transaction by utilizing readily 
        understandable language to simplify the technical 
        nature of the disclosures.'';
            (6) in section 105(f)(1) (15 U.S.C. 1604(f)(1)), by 
        inserting ``all or'' after ``from all or part of this 
        title'';
            (7) in section 105 (15 U.S.C. 1604), by adding at 
        the end the following:
                            ``(i) Authority of the board to 
                        prescribe rules.--Notwithstanding 
                        subsection (a), the Board shall have 
                        authority to prescribe rules under this 
                        title with respect to a person 
                        described in section 1029(a) of the 
                        Consumer Financial Protection Act of 
                        2010. Regulations prescribed under this 
                        subsection may contain such 
                        classifications, differentiations, or 
                        other provisions, as in the judgment of 
                        the Board are necessary or proper to 
                        effectuate the purposes of this title, 
                        to prevent circumvention or evasion 
                        thereof, or to facilitate compliance 
                        therewith.'';
            (8) in section 108 (15 U.S.C. 1604), by adding at 
        the end the following:
                    (A) by striking subsection (a) and 
                inserting the following:
    ``(a) Enforcing Agencies.--Subject to subtitle B of the 
Consumer Financial Protection Act of 2010, compliance with the 
requirements imposed under this title shall be enforced under--
            ``(1) section 8 of the Federal Deposit Insurance 
        Act, by the appropriate Federal banking agency, as 
        defined in section 3(q) of the Federal Deposit 
        Insurance Act (12 U.S.C. 1813(q)), with respect to--
                    ``(A) national banks, Federal savings 
                associations, and Federal branches and Federal 
                agencies of foreign banks;
                    ``(B) member banks of the Federal Reserve 
                System (other than national banks), branches 
                and agencies of foreign banks (other than 
                Federal branches, Federal agencies, and insured 
                State branches of foreign banks), commercial 
                lending companies owned or controlled by 
                foreign banks, and organizations operating 
                under section 25 or 25A of the Federal Reserve 
                Act; and
                    ``(C) banks and State savings associations 
                insured by the Federal Deposit Insurance 
                Corporation (other than members of the Federal 
                Reserve System), and insured State branches of 
                foreign banks;
            ``(2) the Federal Credit Union Act, by the Director 
        of the National Credit Union Administration, with 
        respect to any Federal credit union;
            ``(3) the Federal Aviation Act of 1958, by the 
        Secretary of Transportation, with respect to any air 
        carrier or foreign air carrier subject to that Act;
            ``(4) the Packers and Stockyards Act, 1921 (except 
        as provided in section 406 of that Act), by the 
        Secretary of Agriculture, with respect to any 
        activities subject to that Act;
            ``(5) the Farm Credit Act of 1971, by the Farm 
        Credit Administration with respect to any Federal land 
        bank, Federal land bank association, Federal 
        intermediate credit bank, or production credit 
        association; and
            ``(6) subtitle E of the Consumer Financial 
        Protection Act of 2010, by the Bureau, with respect to 
        any person subject to this title.''; and
                    (B) by striking subsection (c) and 
                inserting the following:
    ``(c) Overall Enforcement Authority of the Federal Trade 
Commission.--Except to the extent that enforcement of the 
requirements imposed under this title is specifically committed 
to some other Government agency under any of paragraphs (1) 
through (5) of subsection (a), and subject to subtitle B of the 
Consumer Financial Protection Act of 2010, the Federal Trade 
Commission shall be authorized to enforce such requirements. 
For the purpose of the exercise by the Federal Trade Commission 
of its functions and powers under the Federal Trade Commission 
Act, a violation of any requirement imposed under this title 
shall be deemed a violation of a requirement imposed under that 
Act. All of the functions and powers of the Federal Trade 
Commission under the Federal Trade Commission Act are available 
to the Federal Trade Commission to enforce compliance by any 
person with the requirements under this title, irrespective of 
whether that person is engaged in commerce or meets any other 
jurisdictional tests under the Federal Trade Commission Act.''; 
and
            (9) in section 129 (15 U.S.C. 1639), by striking 
        subsection (m) and inserting the following:
    ``(m) Civil Penalties in Federal Trade Commission 
Enforcement Actions.--For purposes of enforcement by the 
Federal Trade Commission, any violation of a regulation issued 
by the Bureau pursuant to subsection (l)(2) shall be treated as 
a violation of a rule promulgated under section 18 of the 
Federal Trade Commission Act (15 U.S.C. 57a) regarding unfair 
or deceptive acts or practices.''; and
            (10) in chapter 5 (15 U.S.C. 1667 et seq.)--
                    (A) by striking ``the Board'' each place 
                that term appears and inserting ``the Bureau''; 
                and
                    (B) by striking ``The Board'' each place 
                that term appears and inserting ``The Bureau''.

SEC. 1100B. AMENDMENTS TO THE TRUTH IN SAVINGS ACT.

    The Truth in Savings Act (12 U.S.C. 4301 et seq.) is 
amended--
            (1) by striking ``Board'' each place that term 
        appears, other than in section 272(b) (12 U.S.C. 4311), 
        and inserting ``Bureau'';
            (2) in section 270(a) (12 U.S.C. 4309)--
                    (A) by striking ``Compliance'' and all that 
                follows through the end of paragraph (1) and 
                inserting: ``Subject to subtitle B of the 
                Consumer Financial Protection Act of 2010, 
                compliance with the requirements imposed under 
                this subtitle shall be enforced under--
            ``(1) section 8 of the Federal Deposit Insurance 
        Act by the appropriate Federal banking agency (as 
        defined in section 3(q) of that Act), with respect to--
                    ``(A) insured depository institutions (as 
                defined in section 3(c)(2) of that Act);
                    ``(B) depository institutions described in 
                clause (i), (ii), or (iii) of section 
                19(b)(1)(A) of the Federal Reserve Act which 
                are not insured depository institutions (as 
                defined in section 3(c)(2) of the Federal 
                Deposit Insurance Act); and
                    ``(C) depository institutions described in 
                clause (v) or (vi) of section 19(b)(1)(A) of 
                the Federal Reserve Act which are not insured 
                depository institutions (as defined in section 
                3(c)(2) of the Federal Deposit Insurance 
                Act);'';
                    (B) in paragraph (2), by striking the 
                period at the end and inserting ``; and''; and
                    (C) by adding at the end the following:
            ``(3) subtitle E of the Consumer Financial 
        Protection Act of 2010, by the Bureau, with respect to 
        any person subject to this subtitle.'';
            (3) in section 272(b) (12 U.S.C. 4311(b)), by 
        striking ``regulation prescribed by the Board'' each 
        place that term appears and inserting ``regulation 
        prescribed by the Bureau''; and
            (4) in section 274 (12 U.S.C. 4313), by striking 
        paragraph (4) and inserting the following:
            ``(4) Bureau.--The term `Bureau' means the Bureau 
        of Consumer Financial Protection.''.

SEC. 1100C. AMENDMENTS TO THE TELEMARKETING AND CONSUMER FRAUD AND 
                    ABUSE PREVENTION ACT.

    (a) Amendments to Section 3.--Section 3 of the 
Telemarketing and Consumer Fraud and Abuse Prevention Act (15 
U.S.C. 6102) is amended by striking subsections (b) and (c) and 
inserting the following:
    ``(b) Rulemaking Authority.--The Commission shall have 
authority to prescribe rules under subsection (a), in 
accordance with section 553 of title 5, United States Code. In 
prescribing a rule under this section that relates to the 
provision of a consumer financial product or service that is 
subject to the Consumer Financial Protection Act of 2010, 
including any enumerated consumer law thereunder, the 
Commission shall consult with the Bureau of Consumer Financial 
Protection regarding the consistency of a proposed rule with 
standards, purposes, or objectives administered by the Bureau 
of Consumer Financial Protection.
    ``(c) Violations.--Any violation of any rule prescribed 
under subsection (a)--
            ``(1) shall be treated as a violation of a rule 
        under section 18 of the Federal Trade Commission Act 
        regarding unfair or deceptive acts or practices; and
            ``(2) that is committed by a person subject to the 
        Consumer Financial Protection Act of 2010 shall be 
        treated as a violation of a rule under section 1031 of 
        that Act regarding unfair, deceptive, or abusive acts 
        or practices.''.
    (b) Amendments to Section 4.--Section 4(d) of the 
Telemarketing and Consumer Fraud and Abuse Prevention Act (15 
U.S.C. 6103(d)) is amended by inserting after ``Commission'' 
each place that term appears the following: ``or the Bureau of 
Consumer Financial Protection''.
    (c) Amendments to Section 5.--Section 5(c) of the 
Telemarketing and Consumer Fraud and Abuse Prevention Act (15 
U.S.C. 6104(c)) is amended by inserting after ``Commission'' 
each place that term appears the following: ``or the Bureau of 
Consumer Financial Protection''.
    (d) Amendment to Section 6.--Section 6 of the Telemarketing 
and Consumer Fraud and Abuse Prevention Act (15 U.S.C. 6105) is 
amended by adding at the end the following:
    ``(d) Enforcement by Bureau of Consumer Financial 
Protection.--Except as otherwise provided in sections 3(d), 
3(e), 4, and 5, and subject to subtitle B of the Consumer 
Financial Protection Act of 2010, this Act shall be enforced by 
the Bureau of Consumer Financial Protection under subtitle E of 
the Consumer Financial Protection Act of 2010, with respect to 
the offering or provision of a consumer financial product or 
service subject to that Act.''.

SEC. 1100D. AMENDMENTS TO THE PAPERWORK REDUCTION ACT.

    (a) Designation as an Independent Agency.--Section 2(5) of 
the Paperwork Reduction Act (44 U.S.C. 3502(5)) is amended by 
inserting ``the Bureau of Consumer Financial Protection, the 
Office of Financial Research,'' after ``the Securities and 
Exchange Commission,''.
    (b) Comparable Treatment.--Section 3513 of title 44, United 
States Code, is amended by adding at the end the following:
    ``(c) Comparable Treatment.--Notwithstanding any other 
provision of law, the Director shall treat or review a rule or 
order prescribed or proposed by the Director of the Bureau 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.''.

SEC. 1100E. ADJUSTMENTS FOR INFLATION IN THE TRUTH IN LENDING ACT.

    (a) Caps.--
            (1) Credit transactions.--Section 104(3) of the 
        Truth in Lending Act (15 U.S.C. 1603(3)) is amended by 
        striking ``$25,000'' and inserting ``$50,000''.
            (2) Consumer leases.--Section 181(1) of the Truth 
        in Lending Act (15 U.S.C. 1667(1)) is amended by 
        striking ``$25,000'' and inserting ``$50,000''.
    (b) Adjustments for Inflation.--On and after December 31, 
2011, the Bureau shall adjust annually the dollar amounts 
described in sections 104(3) and 181(1) of the Truth in Lending 
Act (as amended by this section), by the annual percentage 
increase in the Consumer Price Index for Urban Wage Earners and 
Clerical Workers, as published by the Bureau of Labor 
Statistics, rounded to the nearest multiple of $100, or $1,000, 
as applicable.

SEC. 1100F. USE OF CONSUMER REPORTS.

    Section 615 of the Fair Credit Reporting Act (15 U.S.C. 
1681m) is amended--
            (1) in subsection (a)--
                    (A) by redesignating paragraphs (2) and (3) 
                as paragraphs (3) and (4), respectively;
                    (B) by inserting after paragraph (1) the 
                following:
            ``(2) provide to the consumer written or electronic 
        disclosure--
                    ``(A) of a numerical credit score as 
                defined in section 609(f)(2)(A) used by such 
                person in taking any adverse action based in 
                whole or in part on any information in a 
                consumer report; and
                    ``(B) of the information set forth in 
                subparagraphs (B) through (E) of section 
                609(f)(1);''; and
                    (C) in paragraph (4) (as so redesignated), 
                by striking ``paragraph (2)'' and inserting 
                ``paragraph (3)''; and
            (2) in subsection (h)(5)--
                    (A) in subparagraph (C), by striking ``; 
                and'' and inserting a semicolon;
                    (B) in subparagraph (D), by striking the 
                period and inserting ``; and''; and
                    (C) by inserting at the end the following:
                    ``(E) include a statement informing the 
                consumer of--
                            ``(i) a numerical credit score as 
                        defined in section 609(f)(2)(A), used 
                        by such person in making the credit 
                        decision described in paragraph (1) 
                        based in whole or in part on any 
                        information in a consumer report; and
                            ``(ii) the information set forth in 
                        subparagraphs (B) through (E) of 
                        section 609(f)(1).''.

SEC. 1100G. SMALL BUSINESS FAIRNESS AND REGULATORY TRANSPARENCY.

    (a) Panel Requirement.--Section 609(d) of title 5, United 
States Code, is amended by striking ``means the'' and all that 
follows and inserting the following: ``means--
            ``(1) the Environmental Protection Agency;
            ``(2) the Consumer Financial Protection Bureau of 
        the Federal Reserve System; and
            ``(3) the Occupational Safety and Health 
        Administration of the Department of Labor.''.
    (b) Initial Regulatory Flexibility Analysis.--Section 603 
of title 5, United States Code, is amended by adding at the end 
the following:
    ``(d)(1) For a covered agency, as defined in section 
609(d)(2), each initial regulatory flexibility analysis shall 
include a description of--
            ``(A) any projected increase in the cost of credit 
        for small entities;
            ``(B) any significant alternatives to the proposed 
        rule which accomplish the stated objectives of 
        applicable statutes and which minimize any increase in 
        the cost of credit for small entities; and
            ``(C) advice and recommendations of representatives 
        of small entities relating to issues described in 
        subparagraphs (A) and (B) and subsection (b).
    ``(2) A covered agency, as defined in section 609(d)(2), 
shall, for purposes of complying with paragraph (1)(C)--
            ``(A) identify representatives of small entities in 
        consultation with the Chief Counsel for Advocacy of the 
        Small Business Administration; and
            ``(B) collect advice and recommendations from the 
        representatives identified under subparagraph (A) 
        relating to issues described in subparagraphs (A) and 
        (B) of paragraph (1) and subsection (b).''.
    (c) Final Regulatory Flexibility Analysis.--Section 604(a) 
of title 5, United States Code, is amended--
            (1) in paragraph (4), by striking ``and'' at the 
        end;
            (2) in paragraph (5), by striking the period at the 
        end and inserting ``; and''; and
            (3) by adding at the end the following:
            ``(6) for a covered agency, as defined in section 
        609(d)(2), a description of the steps the agency has 
        taken to minimize any additional cost of credit for 
        small entities.''.

SEC. 1100H. EFFECTIVE DATE.

    Except as otherwise provided in this subtitle and the 
amendments made by this subtitle, this subtitle and the 
amendments made by this subtitle, other than sections 1081 and 
1082, shall become effective on the designated transfer date.

              TITLE XI--FEDERAL RESERVE SYSTEM PROVISIONS

SEC. 1101. FEDERAL RESERVE ACT AMENDMENTS ON EMERGENCY LENDING 
                    AUTHORITY.

    (a) Federal Reserve Act.--The third undesignated paragraph 
of section 13 of the Federal Reserve Act (12 U.S.C. 343) 
(relating to emergency lending authority) is amended--
            (1) by inserting ``(3)(A)'' before ``In unusual'';
            (2) by striking ``individual, partnership, or 
        corporation'' the first place that term appears and 
        inserting the following: ``participant in any program 
        or facility with broad-based eligibility'';
            (3) by striking ``exchange for an individual or a 
        partnership or corporation'' and inserting 
        ``exchange,'';
            (4) by striking ``such individual, partnership, or 
        corporation'' and inserting the following: ``such 
        participant in any program or facility with broad-based 
        eligibility'';
            (5) by striking ``for individuals, partnerships, 
        corporations'' and inserting ``for any participant in 
        any program or facility with broad-based eligibility''; 
        and
            (6) by striking ``may prescribe.'' and inserting 
        the following: ``may prescribe.
                    ``(B)(i) As soon as is practicable after 
                the date of enactment of this subparagraph, the 
                Board shall establish, by regulation, in 
                consultation with the Secretary of the 
                Treasury, the policies and procedures governing 
                emergency lending under this paragraph. Such 
                policies and procedures shall be designed to 
                ensure that any emergency lending program or 
                facility is for the purpose of providing 
                liquidity to the financial system, and not to 
                aid a failing financial company, and that the 
                security for emergency loans is sufficient to 
                protect taxpayers from losses and that any such 
                program is terminated in a timely and orderly 
                fashion. The policies and procedures 
                established by the Board shall require that a 
                Federal reserve bank assign, consistent with 
                sound risk management practices and to ensure 
                protection for the taxpayer, a lendable value 
                to all collateral for a loan executed by a 
                Federal reserve bank under this paragraph in 
                determining whether the loan is secured 
                satisfactorily for purposes of this paragraph.
                    ``(ii) The Board shall establish procedures 
                to prohibit borrowing from programs and 
                facilities by borrowers that are insolvent. 
                Such procedures may include a certification 
                from the chief executive officer (or other 
                authorized officer) of the borrower, at the 
                time the borrower initially borrows under the 
                program or facility (with a duty by the 
                borrower to update the certification if the 
                information in the certification materially 
                changes), that the borrower is not insolvent. A 
                borrower shall be considered insolvent for 
                purposes of this subparagraph, if the borrower 
                is in bankruptcy, resolution under title II of 
                the Dodd-Frank Wall Street Reform and Consumer 
                Protection Act, or any other Federal or State 
                insolvency proceeding.
                    ``(iii) A program or facility that is 
                structured to remove assets from the balance 
                sheet of a single and specific company, or that 
                is established for the purpose of assisting a 
                single and specific company avoid bankruptcy, 
                resolution under title II of the Dodd-Frank 
                Wall Street Reform and Consumer Protection Act, 
                or any other Federal or State insolvency 
                proceeding, shall not be considered a program 
                or facility with broad-based eligibility.
                    ``(iv) The Board may not establish any 
                program or facility under this paragraph 
                without the prior approval of the Secretary of 
                the Treasury.
                    ``(C) The Board shall provide to the 
                Committee on Banking, Housing, and Urban 
                Affairs of the Senate and the Committee on 
                Financial Services of the House of 
                Representatives--
                            ``(i) not later than 7 days after 
                        the Board authorizes any loan or other 
                        financial assistance under this 
                        paragraph, a report that includes--
                                    ``(I) the justification for 
                                the exercise of authority to 
                                provide such assistance;
                                    ``(II) the identity of the 
                                recipients of such assistance;
                                    ``(III) the date and amount 
                                of the assistance, and form in 
                                which the assistance was 
                                provided; and
                                    ``(IV) the material terms 
                                of the assistance, including--
                                            ``(aa) duration;
                                            ``(bb) collateral 
                                        pledged and the value 
                                        thereof;
                                            ``(cc) all 
                                        interest, fees, and 
                                        other revenue or items 
                                        of value to be received 
                                        in exchange for the 
                                        assistance;
                                            ``(dd) any 
                                        requirements imposed on 
                                        the recipient with 
                                        respect to employee 
                                        compensation, 
                                        distribution of 
                                        dividends, or any other 
                                        corporate decision in 
                                        exchange for the 
                                        assistance; and
                                            ``(ee) the expected 
                                        costs to the taxpayers 
                                        of such assistance; and
                            ``(ii) once every 30 days, with 
                        respect to any outstanding loan or 
                        other financial assistance under this 
                        paragraph, written updates on--
                                    ``(I) the value of 
                                collateral;
                                    ``(II) the amount of 
                                interest, fees, and other 
                                revenue or items of value 
                                received in exchange for the 
                                assistance; and
                                    ``(III) the expected or 
                                final cost to the taxpayers of 
                                such assistance.
                    ``(D) The information required to be 
                submitted to Congress under subparagraph (C) 
                related to--
                            ``(i) the identity of the 
                        participants in an emergency lending 
                        program or facility commenced under 
                        this paragraph;
                            ``(ii) the amounts borrowed by each 
                        participant in any such program or 
                        facility;
                            ``(iii) identifying details 
                        concerning the assets or collateral 
                        held by, under, or in connection with 
                        such a program or facility,
                shall be kept confidential, upon the written 
                request of the Chairman of the Board, in which 
                case such information shall be made available 
                only to the Chairpersons or Ranking Members of 
                the Committees described in subparagraph (C).
                    ``(E) If an entity to which a Federal 
                reserve bank has provided a loan under this 
                paragraph becomes a covered financial company, 
                as defined in section 201 of the Dodd-Frank 
                Wall Street Reform and Consumer Protection Act, 
                at any time while such loan is outstanding, and 
                the Federal reserve bank incurs a realized net 
                loss on the loan, then the Federal reserve bank 
                shall have a claim equal to the amount of the 
                net realized loss against the covered entity, 
                with the same priority as an obligation to the 
                Secretary of the Treasury under section 210(b) 
                of the Dodd-Frank Wall Street Reform and 
                Consumer Protection Act.''.
    (b) Conforming Amendment.--Section 507(a)(2) of title 11, 
United States Code, is amended by inserting ``unsecured claims 
of any Federal reserve bank related to loans made through 
programs or facilities authorized under section 13(3) of the 
Federal Reserve Act (12 U.S.C. 343),'' after ``this title,''.
    (c) References.--On and after the date of enactment of this 
Act, any reference in any provision of Federal law to the third 
undesignated paragraph of section 13 of the Federal Reserve Act 
(12 U.S.C. 343) shall be deemed to be a reference to section 
13(3) of the Federal Reserve Act, as so designated by this 
section.

SEC. 1102. AUDITS OF SPECIAL FEDERAL RESERVE CREDIT FACILITIES.

    (a) Audits.--Section 714 of title 31, United States Code, 
is amended by adding at the end the following:
    ``(f) Audits of Credit Facilities of the Federal Reserve 
System.--
            ``(1) Definitions.--In this subsection, the 
        following definitions shall apply:
                    ``(A) Credit facility.--The term `credit 
                facility' means a program or facility, 
                including any special purpose vehicle or other 
                entity established by or on behalf of the Board 
                of Governors of the Federal Reserve System or a 
                Federal reserve bank, authorized by the Board 
                of Governors under section 13(3) of the Federal 
                Reserve Act (12 U.S.C. 343), that is not 
                subject to audit under subsection (e).
                    ``(B) Covered transaction.--The term 
                `covered transaction' means any open market 
                transaction or discount window advance that 
                meets the definition of `covered transaction' 
                in section 11(s) of the Federal Reserve Act.
            ``(2) Authority for audits and examinations.--
        Subject to paragraph (3), and notwithstanding any 
        limitation in subsection (b) on the auditing and 
        oversight of certain functions of the Board of 
        Governors of the Federal Reserve System or any Federal 
        reserve bank, the Comptroller General of the United 
        States may conduct audits, including onsite 
        examinations, of the Board of Governors, a Federal 
        reserve bank, or a credit facility, if the Comptroller 
        General determines that such audits are appropriate, 
        solely for the purposes of assessing, with respect to a 
        credit facility or a covered transaction--
                    ``(A) the operational integrity, 
                accounting, financial reporting, and internal 
                controls governing the credit facility or 
                covered transaction;
                    ``(B) the effectiveness of the security and 
                collateral policies established for the 
                facility or covered transaction in mitigating 
                risk to the relevant Federal reserve bank and 
                taxpayers;
                    ``(C) whether the credit facility or the 
                conduct of a covered transaction 
                inappropriately favors one or more specific 
                participants over other institutions eligible 
                to utilize the facility; and
                    ``(D) the policies governing the use, 
                selection, or payment of third-party 
                contractors by or for any credit facility or to 
                conduct any covered transaction.
            ``(3) Reports and delayed disclosure.--
                    ``(A) Reports required.--A report on each 
                audit conducted under paragraph (2) shall be 
                submitted by the Comptroller General to the 
                Congress before the end of the 90-day period 
                beginning on the date on which such audit is 
                completed.
                    ``(B) Contents.--The report under 
                subparagraph (A) shall include a detailed 
                description of the findings and conclusions of 
                the Comptroller General with respect to the 
                matters described in paragraph (2) that were 
                audited and are the subject of the report, 
                together with such recommendations for 
                legislative or administrative action relating 
                to such matters as the Comptroller General may 
                determine to be appropriate.
                    ``(C) Delayed release of certain 
                information.--
                            ``(i) In general.--The Comptroller 
                        General shall not disclose to any 
                        person or entity, including to 
                        Congress, the names or identifying 
                        details of specific participants in any 
                        credit facility or covered transaction, 
                        the amounts borrowed by or transferred 
                        by or to specific participants in any 
                        credit facility or covered transaction, 
                        or identifying details regarding assets 
                        or collateral held or transferred by, 
                        under, or in connection with any credit 
                        facility or covered transaction, and 
                        any report provided under subparagraph 
                        (A) shall be redacted to ensure that 
                        such names and details are not 
                        disclosed.
                            ``(ii) Delayed release.--The 
                        nondisclosure obligation under clause 
                        (i) shall expire with respect to any 
                        participant on the date on which the 
                        Board of Governors, directly or through 
                        a Federal reserve bank, publicly 
                        discloses the identity of the subject 
                        participant or the identifying details 
                        of the subject assets, collateral, or 
                        transaction.
                            ``(iii) General release.--The 
                        Comptroller General shall release a 
                        nonredacted version of any report on a 
                        credit facility 1 year after the 
                        effective date of the termination by 
                        the Board of Governors of the 
                        authorization for the credit facility. 
                        For purposes of this clause, a credit 
                        facility shall be deemed to have 
                        terminated 24 months after the date on 
                        which the credit facility ceases to 
                        make extensions of credit and loans, 
                        unless the credit facility is otherwise 
                        terminated by the Board of Governors.
                            ``(iv) Exceptions.--The 
                        nondisclosure obligation under clause 
                        (i) shall not apply to the credit 
                        facilities Maiden Lane, Maiden Lane II, 
                        and Maiden Lane III.
                            ``(v) Release of covered 
                        transaction information.--The 
                        Comptroller General shall release a 
                        nonredacted version of any report 
                        regarding covered transactions upon the 
                        release of the information regarding 
                        such covered transactions by the Board 
                        of Governors of the Federal Reserve 
                        System, as provided in section 11(s) of 
                        the Federal Reserve Act.''.
    (b) Access to Records.--Section 714(d) of title 31, United 
States Code, is amended--
            (1) in paragraph (2), by inserting ``or any person 
        or entity described in paragraph (3)(A)'' after ``used 
        by an agency'';
            (2) in paragraph (3), by inserting ``or (f)'' after 
        ``subsection (e)'' each place that term appears;
            (3) in clauses (i) and (ii) of paragraph (3)(A), by 
        inserting ``or the Federal Reserve banks'' after ``by 
        the Board'' each place that term appears;
            (4) in paragraph (3)(A)(ii), by inserting 
        ``participating in or'' after ``any entity''; and
            (5) in paragraph (3)(B), by adding at the end the 
        following: ``The Comptroller General may make and 
        retain copies of books, accounts, and other records 
        provided under subparagraph (A) as the Comptroller 
        General deems appropriate. The Comptroller General 
        shall provide to any person or entity described in 
        subparagraph (A) a current list of officers and 
        employees to whom, with proper identification, records 
        and property may be made available, and who may make 
        notes or copies necessary to carry out a audit or 
        examination under this subsection.''.

SEC. 1103. PUBLIC ACCESS TO INFORMATION.

    (a) In General.--Section 2B of the Federal Reserve Act (12 
U.S.C. 225b) is amended by adding at the end the following:
    ``(c) Public Access to Information.--The Board shall place 
on its home Internet website, a link entitled `Audit', which 
shall link to a webpage that shall serve as a repository of 
information made available to the public for a reasonable 
period of time, not less than 6 months following the date of 
release of the relevant information, including--
            ``(1) the reports prepared by the Comptroller 
        General under section 714 of title 31, United States 
        Code;
            ``(2) the annual financial statements prepared by 
        an independent auditor for the Board in accordance with 
        section 11B;
            ``(3) the reports to the Committee on Banking, 
        Housing, and Urban Affairs of the Senate required under 
        section 13(3) (relating to emergency lending 
        authority); and
            ``(4) such other information as the Board 
        reasonably believes is necessary or helpful to the 
        public in understanding the accounting, financial 
        reporting, and internal controls of the Board and the 
        Federal reserve banks.''.
    (b) Federal Reserve Transparency and Release of 
Information.--Section 11 of the Federal Reserve Act (12 U.S.C. 
248) is amended by adding at the end the following new 
subsection:
    ``(s) Federal Reserve Transparency and Release of 
Information.--
            ``(1) In general.--In order to ensure the 
        disclosure in a timely manner consistent with the 
        purposes of this Act of information concerning the 
        borrowers and counterparties participating in emergency 
        credit facilities, discount window lending programs, 
        and open market operations authorized or conducted by 
        the Board or a Federal reserve bank, the Board of 
        Governors shall disclose, as provided in paragraph 
        (2)--
                    ``(A) the names and identifying details of 
                each borrower, participant, or counterparty in 
                any credit facility or covered transaction;
                    ``(B) the amount borrowed by or transferred 
                by or to a specific borrower, participant, or 
                counterparty in any credit facility or covered 
                transaction;
                    ``(C) the interest rate or discount paid by 
                each borrower, participant, or counterparty in 
                any credit facility or covered transaction; and
                    ``(D) information identifying the types and 
                amounts of collateral pledged or assets 
                transferred in connection with participation in 
                any credit facility or covered transaction.
            ``(2) Mandatory release date.--In the case of--
                    ``(A) a credit facility, the Board shall 
                disclose the information described in paragraph 
                (1) on the date that is 1 year after the 
                effective date of the termination by the Board 
                of the authorization of the credit facility; 
                and
                    ``(B) a covered transaction, the Board 
                shall disclose the information described in 
                paragraph (1) on the last day of the eighth 
                calendar quarter following the calendar quarter 
                in which the covered transaction was conducted.
            ``(3) Earlier release date authorized.--The 
        Chairman of the Board may publicly release the 
        information described in paragraph (1) before the 
        relevant date specified in paragraph (2), if the 
        Chairman determines that such disclosure would be in 
        the public interest and would not harm the 
        effectiveness of the relevant credit facility or the 
        purpose or conduct of covered transactions.
            ``(4) Definitions.--For purposes of this 
        subsection, the following definitions shall apply:
                    ``(A) Credit facility.--The term `credit 
                facility' has the same meaning as in section 
                714(f)(1)(A) of title 31, United States Code.
                    ``(B) Covered transaction.--The term 
                `covered transaction' means--
                            ``(i) any open market transaction 
                        with a nongovernmental third party 
                        conducted under the first undesignated 
                        paragraph of section 14 or subparagraph 
                        (a), (b), or (c) of the 2nd 
                        undesignated paragraph of such section, 
                        after the date of enactment of the 
                        Dodd-Frank Wall Street Reform and 
                        Consumer Protection Act; and
                            ``(ii) any advance made under 
                        section 10B after the date of enactment 
                        of that Act.
            ``(5) Termination of credit facility by operation 
        of law.--A credit facility shall be deemed to have 
        terminated as of the end of the 24-month period 
        beginning on the date on which the credit facility 
        ceases to make extensions of credit and loans, unless 
        the credit facility is otherwise terminated by the 
        Board before such date.
            ``(6) Consistent treatment of information.--Except 
        as provided in this subsection or section 13(3)(D), or 
        in section 714(f)(3)(C) of title 31, United States 
        Code, the information described in paragraph (1) and 
        information concerning the transactions described in 
        section 714(f) of such title, shall be confidential, 
        including for purposes of section 552(b)(3) of title 5 
        of such Code, until the relevant mandatory release date 
        described in paragraph (2), unless the Chairman of the 
        Board determines that earlier disclosure of such 
        information would be in the public interest and would 
        not harm the effectiveness of the relevant credit 
        facility or the purpose of conduct of the relevant 
        transactions.
            ``(7) Protection of personal privacy.--This 
        subsection and section 13(3)(C), section 714(f)(3)(C) 
        of title 31, United States Code, and subsection (a) or 
        (c) of section 1109 of the Dodd-Frank Wall Street 
        Reform and Consumer Protection Act shall not be 
        construed as requiring any disclosure of nonpublic 
        personal information (as defined for purposes of 
        section 502 of the Gramm-Leach-Bliley Act (12 U.S.C. 
        6802)) concerning any individual who is referenced in 
        collateral pledged or assets transferred in connection 
        with a credit facility or covered transaction, unless 
        the person is a borrower, participant, or counterparty 
        under the credit facility or covered transaction.
            ``(8) Study of foia exemption impact.--
                    ``(A) Study.--The Inspector General of the 
                Board of Governors of the Federal Reserve 
                System shall--
                            ``(i) conduct a study on the impact 
                        that the exemption from section 
                        552(b)(3) of title 5 (known as the 
                        Freedom of Information Act) established 
                        under paragraph (6) has had on the 
                        ability of the public to access 
                        information about the administration by 
                        the Board of Governors of emergency 
                        credit facilities, discount window 
                        lending programs, and open market 
                        operations; and
                            ``(ii) make any recommendations on 
                        whether the exemption described in 
                        clause (i) should remain in effect.
                    ``(B) Report.--Not later than 30 months 
                after the date of enactment of this section, 
                the Inspector General of the Board of Governors 
                of the Federal Reserve System shall submit a 
                report on the findings of the study required 
                under subparagraph (A) to the Committee on 
                Banking, Housing, and Urban Affairs of the 
                Senate and the Committee on Financial Services 
                of the House of Representatives, and publish 
                the report on the website of the Board.
            ``(9) Rule of construction.--Nothing in this 
        section is meant to affect any pending litigation or 
        lawsuit filed under section 552 of title 5, United 
        States Code (popularly known as the Freedom of 
        Information Act), on or before the date of enactment of 
        the Dodd-Frank Wall Street Reform and Consumer 
        Protection Act.''.

SEC. 1104. LIQUIDITY EVENT DETERMINATION.

    (a) Determination and Written Recommendation.--
            (1) Determination request.--The Secretary may 
        request the Corporation and the Board of Governors to 
        determine whether a liquidity event exists that 
        warrants use of the guarantee program authorized under 
        section 1105.
            (2) Requirements of determination.--Any 
        determination pursuant to paragraph (1) shall--
                    (A) be written; and
                    (B) contain an evaluation of the evidence 
                that--
                            (i) a liquidity event exists;
                            (ii) failure to take action would 
                        have serious adverse effects on 
                        financial stability or economic 
                        conditions in the United States; and
                            (iii) actions authorized under 
                        section 1105 are needed to avoid or 
                        mitigate potential adverse effects on 
                        the United States financial system or 
                        economic conditions.
    (b) Procedures.--Notwithstanding any other provision of 
Federal or State law, upon the determination of both the 
Corporation (upon a vote of not fewer than \2/3\ of the members 
of the Corporation then serving) and the Board of Governors 
(upon a vote of not fewer than \2/3\ of the members of the 
Board of Governors then serving) under subsection (a) that a 
liquidity event exists that warrants use of the guarantee 
program authorized under section 1105, and with the written 
consent of the Secretary--
            (1) the Corporation shall take action in accordance 
        with section 1105(a); and
            (2) the Secretary (in consultation with the 
        President) shall take action in accordance with section 
        1105(c).
    (c) Documentation and Review.--
            (1) Documentation.--The Secretary shall--
                    (A) maintain the written documentation of 
                each determination of the Corporation and the 
                Board of Governors under this section; and
                    (B) provide the documentation for review 
                under paragraph (2).
            (2) GAO review.--The Comptroller General of the 
        United States shall review and report to Congress on 
        any determination of the Corporation and the Board of 
        Governors under subsection (a), including--
                    (A) the basis for the determination; and
                    (B) the likely effect of the actions taken.
    (d) Report to Congress.--On the earlier of the date of a 
submission made to Congress under section 1105(c), or within 30 
days of the date of a determination under subsection (a), the 
Secretary shall provide written notice of the determination of 
the Corporation and the Board of Governors to the Committee on 
Banking, Housing, and Urban Affairs of the Senate and the 
Committee on Financial Services of the House of 
Representatives, including a description of the basis for the 
determination.

SEC. 1105. EMERGENCY FINANCIAL STABILIZATION.

    (a) In General.--Upon the written determination of the 
Corporation and the Board of Governors under section 1104, the 
Corporation shall create a widely available program to 
guarantee obligations of solvent insured depository 
institutions or solvent depository institution holding 
companies (including any affiliates thereof) during times of 
severe economic distress, except that a guarantee of 
obligations under this section may not include the provision of 
equity in any form.
    (b) Rulemaking and Terms and Conditions.--
            (1) Policies and procedures.--As soon as is 
        practicable after the date of enactment of this Act, 
        the Corporation shall establish, by regulation, and in 
        consultation with the Secretary, policies and 
        procedures governing the issuance of guarantees 
        authorized by this section. Such policies and 
        procedures may include a requirement of collateral as a 
        condition of any such guarantee.
            (2) Terms and conditions.--The terms and conditions 
        of any guarantee program shall be established by the 
        Corporation, with the concurrence of the Secretary.
    (c) Determination of Guaranteed Amount.--
            (1) In general.--In connection with any program 
        established pursuant to subsection (a) and subject to 
        paragraph (2) of this subsection, the Secretary (in 
        consultation with the President) shall determine the 
        maximum amount of debt outstanding that the Corporation 
        may guarantee under this section, and the President may 
        transmit to Congress a written report on the plan of 
        the Corporation to exercise the authority under this 
        section to issue guarantees up to that maximum amount 
        and a request for approval of such plan. The 
        Corporation shall exercise the authority under this 
        section to issue guarantees up to that specified 
        maximum amount upon passage of the joint resolution of 
        approval, as provided in subsection (d). Absent such 
        approval, the Corporation shall issue no such 
        guarantees.
            (2) Additional debt guarantee authority.--If the 
        Secretary (in consultation with the President) 
        determines, after a submission to Congress under 
        paragraph (1), that the maximum guarantee amount should 
        be raised, and the Council concurs with that 
        determination, the President may transmit to Congress a 
        written report on the plan of the Corporation to 
        exercise the authority under this section to issue 
        guarantees up to the increased maximum debt guarantee 
        amount. The Corporation shall exercise the authority 
        under this section to issue guarantees up to that 
        specified maximum amount upon passage of the joint 
        resolution of approval, as provided in subsection (d). 
        Absent such approval, the Corporation shall issue no 
        such guarantees.
    (d) Resolution of Approval.--
            (1) Additional debt guarantee authority.--A request 
        by the President under this section shall be considered 
        granted by Congress upon adoption of a joint resolution 
        approving such request. Such joint resolution shall be 
        considered in the Senate under expedited procedures.
            (2) Fast track consideration in senate.--
                    (A) Reconvening.--Upon receipt of a request 
                under subsection (c), if the Senate has 
                adjourned or recessed for more than 2 days, the 
                majority leader of the Senate, after 
                consultation with the minority leader of the 
                Senate, shall notify the Members of the Senate 
                that, pursuant to this section, the Senate 
                shall convene not later than the second 
                calendar day after receipt of such message.
                    (B) Placement on calendar.--Upon 
                introduction in the Senate, the joint 
                resolution shall be placed immediately on the 
                calendar.
                    (C) Floor consideration.--
                            (i) In general.--Notwithstanding 
                        Rule XXII of the Standing Rules of the 
                        Senate, it is in order at any time 
                        during the period beginning on the 4th 
                        day after the date on which Congress 
                        receives a request under subsection 
                        (c), and ending on the 7th day after 
                        that date (even though a previous 
                        motion to the same effect has been 
                        disagreed to) to move to proceed to the 
                        consideration of the joint resolution, 
                        and all points of order against the 
                        joint resolution (and against 
                        consideration of the joint resolution) 
                        are waived. The motion to proceed is 
                        not debatable. The motion is not 
                        subject to a motion to postpone. A 
                        motion to reconsider the vote by which 
                        the motion is agreed to or disagreed to 
                        shall not be in order. If a motion to 
                        proceed to the consideration of the 
                        resolution is agreed to, the joint 
                        resolution shall remain the unfinished 
                        business until disposed of.
                            (ii) Debate.--Debate on the joint 
                        resolution, and on all debatable 
                        motions and appeals in connection 
                        therewith, shall be limited to not more 
                        than 10 hours, which shall be divided 
                        equally between the majority and 
                        minority leaders or their designees. A 
                        motion further to limit debate is in 
                        order and not debatable. An amendment 
                        to, or a motion to postpone, or a 
                        motion to proceed to the consideration 
                        of other business, or a motion to 
                        recommit the joint resolution is not in 
                        order.
                            (iii) Vote on passage.--The vote on 
                        passage shall occur immediately 
                        following the conclusion of the debate 
                        on the joint resolution, and a single 
                        quorum call at the conclusion of the 
                        debate if requested in accordance with 
                        the rules of the Senate.
                            (iv) Rulings of the chair on 
                        procedure.--Appeals from the decisions 
                        of the Chair relating to the 
                        application of the rules of the Senate, 
                        as the case may be, to the procedure 
                        relating to a joint resolution shall be 
                        decided without debate.
            (3) Rules.--
                    (A) Coordination with action by house of 
                representatives.--If, before the passage by the 
                Senate of a joint resolution of the Senate, the 
                Senate receives a joint resolution, from the 
                House of Representatives, then the following 
                procedures shall apply:
                            (i) The joint resolution of the 
                        House of Representatives shall not be 
                        referred to a committee.
                            (ii) With respect to a joint 
                        resolution of the Senate--
                                    (I) the procedure in the 
                                Senate shall be the same as if 
                                no joint resolution had been 
                                received from the other House; 
                                but
                                    (II) the vote on passage 
                                shall be on the joint 
                                resolution of the House of 
                                Representatives.
                    (B) Treatment of joint resolution of house 
                of representatives.--If the Senate fails to 
                introduce or consider a joint resolution under 
                this section, the joint resolution of the House 
                of Representatives shall be entitled to 
                expedited floor procedures under this 
                subsection.
                    (C) Treatment of companion measures.--If, 
                following passage of the joint resolution in 
                the Senate, the Senate then receives the 
                companion measure from the House of 
                Representatives, the companion measure shall 
                not be debatable.
                    (D) Rules of the senate.--This subsection 
                is enacted by Congress--
                            (i) as an exercise of the 
                        rulemaking power of the Senate, and as 
                        such it is deemed a part of the rules 
                        of the Senate, but applicable only with 
                        respect to the procedure to be followed 
                        in the Senate in the case of a joint 
                        resolution, and it supersedes other 
                        rules, only to the extent that it is 
                        inconsistent with such rules; and
                            (ii) with full recognition of the 
                        constitutional right of the Senate to 
                        change the rules (so far as relating to 
                        the procedure of the Senate) at any 
                        time, in the same manner, and to the 
                        same extent as in the case of any other 
                        rule of the Senate.
            (4) Definition.--As used in this subsection, the 
        term ``joint resolution'' means only a joint 
        resolution--
                    (A) that is introduced not later than 3 
                calendar days after the date on which the 
                request referred to in subsection (c) is 
                received by Congress;
                    (B) that does not have a preamble;
                    (C) the title of which is as follows: 
                ``Joint resolution relating to the approval of 
                a plan to guarantee obligations under section 
                1105 of the Dodd-Frank Wall Street Reform and 
                Consumer Protection Act''; and
                    (D) the matter after the resolving clause 
                of which is as follows: ``That Congress 
                approves the obligation of any amount described 
                in section 1105(c) of the Dodd-Frank Wall 
                Street Reform and Consumer Protection Act.''.
    (e) Funding.--
            (1) Fees and other charges.--The Corporation shall 
        charge fees and other assessments to all participants 
        in the program established pursuant to this section, in 
        such amounts as are necessary to offset projected 
        losses and administrative expenses, including amounts 
        borrowed pursuant to paragraph (3), and such amounts 
        shall be available to the Corporation.
            (2) Excess funds.--If, at the conclusion of the 
        program established under this section, there are any 
        excess funds collected from the fees associated with 
        such program, the funds shall be deposited in the 
        General Fund of the Treasury.
            (3) Authority of corporation.--The Corporation--
                    (A) may borrow funds from the Secretary of 
                the Treasury and issue obligations of the 
                Corporation to the Secretary for amounts 
                borrowed, and the amounts borrowed shall be 
                available to the Corporation for purposes of 
                carrying out a program established pursuant to 
                this section, including the payment of 
                reasonable costs of administering the program, 
                and the obligations issued shall be repaid in 
                full with interest through fees and charges 
                paid by participants in accordance with 
                paragraphs (1) and (4), as applicable; and
                    (B) may not borrow funds from the Deposit 
                Insurance Fund established pursuant to section 
                11(a)(4) of the Federal Deposit Insurance Act.
            (4) Backup special assessments.--To the extent that 
        the funds collected pursuant to paragraph (1) are 
        insufficient to cover any losses or expenses, including 
        amounts borrowed pursuant to paragraph (3), arising 
        from a program established pursuant to this section, 
        the Corporation shall impose a special assessment 
        solely on participants in the program, in amounts 
        necessary to address such insufficiency, and which 
        shall be available to the Corporation to cover such 
        losses or expenses.
            (5) Authority of the secretary.--The Secretary may 
        purchase any obligations issued under paragraph (3)(A). 
        For such purpose, the Secretary may use the proceeds of 
        the sale of any securities issued under chapter 31 of 
        title 31, United States Code, and the purposes for 
        which securities may be issued under that chapter 31 
        are extended to include such purchases, and the amount 
        of any securities issued under that chapter 31 for such 
        purpose shall be treated in the same manner as 
        securities issued under section 208(n)(5)(E).
    (f) Rule of Construction.--For purposes of this section, a 
guarantee of deposits held by insured depository institutions 
shall not be treated as a debt guarantee program.
    (g) Definitions.--For purposes of this section, the 
following definitions shall apply:
            (1) Company.--The term ``company'' means any entity 
        other than a natural person that is incorporated or 
        organized under Federal law or the laws of any State.
            (2) Depository institution holding company.--The 
        term ``depository institution holding company'' has the 
        same meaning as in section 3 of the Federal Deposit 
        Insurance Act (12 U.S.C. 1813).
            (3) Liquidity event.--The term ``liquidity event'' 
        means--
                    (A) an exceptional and broad reduction in 
                the general ability of financial market 
                participants--
                            (i) to sell financial assets 
                        without an unusual and significant 
                        discount; or
                            (ii) to borrow using financial 
                        assets as collateral without an unusual 
                        and significant increase in margin; or
                    (B) an unusual and significant reduction in 
                the ability of financial market participants to 
                obtain unsecured credit.
            (4) Solvent.--The term ``solvent'' means that the 
        value of the assets of an entity exceed its obligations 
        to creditors.

SEC. 1106. ADDITIONAL RELATED AMENDMENTS.

    (a) Suspension of Parallel Federal Deposit Insurance Act 
Authority.--Effective upon the date of enactment of this 
section, the Corporation may not exercise its authority under 
section 13(c)(4)(G)(i) of the Federal Deposit Insurance Act (12 
U.S.C. 1823(c)(4)(G)(i)) to establish any widely available debt 
guarantee program for which section 1105 would provide 
authority.
    (b) Federal Deposit Insurance Act.--Section 13(c)(4)(G) of 
the Federal Deposit Insurance Act (12 U.S.C. 1823(c)(4)(G)) is 
amended--
            (1) in clause (i)--
                    (A) in subclause (I), by inserting ``for 
                which the Corporation has been appointed 
                receiver'' before ``would have serious''; and
                    (B) in the undesignated matter following 
                subclause (II), by inserting ``for the purpose 
                of winding up the insured depository 
                institution for which the Corporation has been 
                appointed receiver'' after ``provide assistance 
                under this section''; and
            (2) in clause (v)(I), by striking ``The'' and 
        inserting ``Not later than 3 days after making a 
        determination under clause (i), the''.
    (c) Effect of Default on an FDIC Guarantee.--If an insured 
depository institution or depository institution holding 
company (as those terms are defined in section 3 of the Federal 
Deposit Insurance Act) participating in a program under section 
1105, or any participant in a debt guarantee program 
established pursuant to section 13(c)(4)(G)(i) of the Federal 
Deposit Insurance Act defaults on any obligation guaranteed by 
the Corporation after the date of enactment of this Act, the 
Corporation shall--
            (1) appoint itself as receiver for the insured 
        depository institution that defaults; and
            (2) with respect to any other participating company 
        that is not an insured depository institution that 
        defaults--
                    (A) require--
                            (i) consideration of whether a 
                        determination shall be made, as 
                        provided in section 203 to resolve the 
                        company under section 202; and
                            (ii) the company to file a petition 
                        for bankruptcy under section 301 of 
                        title 11, United States Code, if the 
                        Corporation is not appointed receiver 
                        pursuant to section 202 within 30 days 
                        of the date of default; or
                    (B) file a petition for involuntary 
                bankruptcy on behalf of the company under 
                section 303 of title 11, United States Code.

SEC. 1107. FEDERAL RESERVE ACT AMENDMENTS ON FEDERAL RESERVE BANK 
                    GOVERNANCE.

    The 5th subparagraph of the 4th undesignated paragraph of 
section 4 of the Federal Reserve Act (12 U.S.C. 341) is amended 
by striking the 2nd sentence and inserting the following: ``The 
president shall be the chief executive officer of the bank and 
shall be appointed by the Class B and Class C directors of the 
bank, with the approval of the Board of Governors of the 
Federal Reserve System, for a term of 5 years; and all other 
executive officers and all employees of the bank shall be 
directly responsible to the president.''.

SEC. 1108. FEDERAL RESERVE ACT AMENDMENTS ON SUPERVISION AND REGULATION 
                    POLICY.

    (a) Establishment of the Position of Vice Chairman for 
Supervision.--
            (1) Position established.--The second undesignated 
        paragraph of section 10 of the Federal Reserve Act (12 
        U.S.C. 242) (relating to the Chairman and Vice Chairman 
        of the Board) is amended by striking the third sentence 
        and inserting the following: ``Of the persons thus 
        appointed, 1 shall be designated by the President, by 
        and with the advice and consent of the Senate, to serve 
        as Chairman of the Board for a term of 4 years, and 2 
        shall be designated by the President, by and with the 
        advice and consent of the Senate, to serve as Vice 
        Chairmen of the Board, each for a term of 4 years, 1 of 
        whom shall serve in the absence of the Chairman, as 
        provided in the fourth undesignated paragraph of this 
        section, and 1 of whom shall be designated Vice 
        Chairman for Supervision. The Vice Chairman for 
        Supervision shall develop policy recommendations for 
        the Board regarding supervision and regulation of 
        depository institution holding companies and other 
        financial firms supervised by the Board, and shall 
        oversee the supervision and regulation of such 
        firms.''.
            (2) Effective date.--The amendment made by 
        subsection (a) takes effect on the date of enactment of 
        this title and applies to individuals who are 
        designated by the President on or after that date to 
        serve as Vice Chairman of Supervision.
    (b) Appearances Before Congress.--Section 10 of the Federal 
Reserve Act (12 U.S.C. 241 et seq.) is amended by adding at the 
end the following:
            ``(12) Appearances before congress.--The Vice 
        Chairman for Supervision shall appear before the 
        Committee on Banking, Housing, and Urban Affairs of the 
        Senate and the Committee on Financial Services of the 
        House of Representatives and at semi-annual hearings 
        regarding the efforts, activities, objectives, and 
        plans of the Board with respect to the conduct of 
        supervision and regulation of depository institution 
        holding companies and other financial firms supervised 
        by the Board.''.
    (c) Board Responsibility To Set Supervision and Regulatory 
Policy.--Section 11 of the Federal Reserve Act (12 U.S.C. 248) 
(relating to enumerated powers of the Board) is amended by 
adding at the end of subsection (k) (relating to delegation) 
the following: ``The Board of Governors may not delegate to a 
Federal reserve bank its functions for the establishment of 
policies for the supervision and regulation of depository 
institution holding companies and other financial firms 
supervised by the Board of Governors.''.
    (d) Exercise of Federal Reserve Authority.--
            (1) No decisions by federal reserve bank 
        presidents.--No provision of title I relating to the 
        authority of the Board of Governors shall be construed 
        as conferring any decision-making authority on 
        presidents of Federal reserve banks.
            (2) Voting decisions by board.--The Board of 
        Governors shall not delegate the authority to make any 
        voting decision that the Board of Governors is 
        authorized or required to make under title I of this 
        Act in contravention of section 11(k) of the Federal 
        Reserve Act.

SEC. 1109. GAO AUDIT OF THE FEDERAL RESERVE FACILITIES; PUBLICATION OF 
                    BOARD ACTIONS.

    (a) GAO Audit.--
            (1) In general.--Notwithstanding section 714(b) of 
        title 31, United States Code, or any other provision of 
        law, the Comptroller General of the United States (in 
        this subsection referred to as the ``Comptroller 
        General'') shall conduct a one-time audit of all loans 
        and other financial assistance provided during the 
        period beginning on December 1, 2007 and ending on the 
        date of enactment of this Act by the Board of Governors 
        or a Federal reserve bank under the Asset-Backed 
        Commercial Paper Money Market Mutual Fund Liquidity 
        Facility, the Term Asset-Backed Securities Loan 
        Facility, the Primary Dealer Credit Facility, the 
        Commercial Paper Funding Facility, the Term Securities 
        Lending Facility, the Term Auction Facility, Maiden 
        Lane, Maiden Lane II, Maiden Lane III, the agency 
        Mortgage-Backed Securities program, foreign currency 
        liquidity swap lines, and any other program created as 
        a result of section 13(3) of the Federal Reserve Act 
        (as so designated by this title).
            (2) Assessments.--In conducting the audit under 
        paragraph (1), the Comptroller General shall assess--
                    (A) the operational integrity, accounting, 
                financial reporting, and internal controls of 
                the credit facility;
                    (B) the effectiveness of the security and 
                collateral policies established for the 
                facility in mitigating risk to the relevant 
                Federal reserve bank and taxpayers;
                    (C) whether the credit facility 
                inappropriately favors one or more specific 
                participants over other institutions eligible 
                to utilize the facility;
                    (D) the policies governing the use, 
                selection, or payment of third-party 
                contractors by or for any credit facility; and
                    (E) whether there were conflicts of 
                interest with respect to the manner in which 
                such facility was established or operated.
            (3) Timing.--The audit required by this subsection 
        shall be commenced not later than 30 days after the 
        date of enactment of this Act, and shall be completed 
        not later than 12 months after that date of enactment.
            (4) Report required.--The Comptroller General shall 
        submit a report on the audit conducted under paragraph 
        (1) to the Congress not later than 12 months after the 
        date of enactment of this Act, and such report shall be 
        made available to--
                    (A) the Speaker of the House of 
                Representatives;
                    (B) the majority and minority leaders of 
                the House of Representatives;
                    (C) the majority and minority leaders of 
                the Senate;
                    (D) the Chairman and Ranking Member of the 
                Committee on Banking, Housing, and Urban 
                Affairs of the Senate and of the Committee on 
                Financial Services of the House of 
                Representatives; and
                    (E) any member of Congress who requests it.
    (b) Audit of Federal Reserve Bank Governance.--
            (1) Audit.--
                    (A) In general.--Not later than 1 year 
                after the date of enactment of this Act, the 
                Comptroller General shall complete an audit of 
                the governance of the Federal reserve bank 
                system.
                    (B) Required examinations.--The audit 
                required under subparagraph (A) shall--
                            (i) examine the extent to which the 
                        current system of appointing Federal 
                        reserve bank directors effectively 
                        represents ``the public, without 
                        discrimination on the basis of race, 
                        creed, color, sex or national origin, 
                        and with due but not exclusive 
                        consideration to the interests of 
                        agriculture, commerce, industry, 
                        services, labor, and consumers'' in the 
                        selection of bank directors, as such 
                        requirement is set forth under section 
                        4 of the Federal Reserve Act;
                            (ii) examine whether there are 
                        actual or potential conflicts of 
                        interest created when the directors of 
                        Federal reserve banks, which execute 
                        the supervisory functions of the Board 
                        of Governors of the Federal Reserve 
                        System, are elected by member banks;
                            (iii) examine the establishment and 
                        operations of each facility described 
                        in subsection (a)(1) and each Federal 
                        reserve bank involved in the 
                        establishment and operations thereof; 
                        and
                            (iv) identify changes to selection 
                        procedures for Federal reserve bank 
                        directors, or to other aspects of 
                        Federal reserve bank governance, that 
                        would--
                                    (I) improve how the public 
                                is represented;
                                    (II) eliminate actual or 
                                potential conflicts of interest 
                                in bank supervision;
                                    (III) increase the 
                                availability of information 
                                useful for the formation and 
                                execution of monetary policy; 
                                or
                                    (IV) in other ways increase 
                                the effectiveness or efficiency 
                                of reserve banks.
            (2) Report required.--A report on the audit 
        conducted under paragraph (1) shall be submitted by the 
        Comptroller General to the Congress before the end of 
        the 90-day period beginning on the date on which such 
        audit is completed, and such report shall be made 
        available to--
                    (A) the Speaker of the House of 
                Representatives;
                    (B) the majority and minority leaders of 
                the House of Representatives;
                    (C) the majority and minority leaders of 
                the Senate;
                    (D) the Chairman and Ranking Member of the 
                Committee on Banking, Housing, and Urban 
                Affairs of the Senate and of the Committee on 
                Financial Services of the House of 
                Representatives; and
                    (E) any member of Congress who requests it.
    (c) Publication of Board Actions.--Notwithstanding any 
other provision of law, the Board of Governors shall publish on 
its website, not later than December 1, 2010, with respect to 
all loans and other financial assistance provided during the 
period beginning on December 1, 2007 and ending on the date of 
enactment of this Act under the Asset-Backed Commercial Paper 
Money Market Mutual Fund Liquidity Facility, the Term Asset-
Backed Securities Loan Facility, the Primary Dealer Credit 
Facility, the Commercial Paper Funding Facility, the Term 
Securities Lending Facility, the Term Auction Facility, Maiden 
Lane, Maiden Lane II, Maiden Lane III, the agency Mortgage-
Backed Securities program, foreign currency liquidity swap 
lines, and any other program created as a result of section 
13(3) of the Federal Reserve Act (as so designated by this 
title)--
            (1) the identity of each business, individual, 
        entity, or foreign central bank to which the Board of 
        Governors or a Federal reserve bank has provided such 
        assistance;
            (2) the type of financial assistance provided to 
        that business, individual, entity, or foreign central 
        bank;
            (3) the value or amount of that financial 
        assistance;
            (4) the date on which the financial assistance was 
        provided;
            (5) the specific terms of any repayment expected, 
        including the repayment time period, interest charges, 
        collateral, limitations on executive compensation or 
        dividends, and other material terms; and
            (6) the specific rationale for each such facility 
        or program.

    TITLE XII--IMPROVING ACCESS TO MAINSTREAM FINANCIAL INSTITUTIONS

SEC. 1201. SHORT TITLE.

    This title may be cited as the ``Improving Access to 
Mainstream Financial Institutions Act of 2010''.

SEC. 1202. PURPOSE.

    The purpose of this title is to encourage initiatives for 
financial products and services that are appropriate and 
accessible for millions of Americans who are not fully 
incorporated into the financial mainstream.

SEC. 1203. DEFINITIONS.

    In this title, the following definitions shall apply:
            (1) Account.--The term ``account'' means an 
        agreement between an individual and an eligible entity 
        under which the individual obtains from or through the 
        entity 1 or more banking products and services, and 
        includes a deposit account, a savings account 
        (including a money market savings account), an account 
        for a closed-end loan, and other products or services, 
        as the Secretary deems appropriate.
            (2) Community development financial institution.--
        The term ``community development financial 
        institution'' has the same meaning as in section 103(5) 
        of the Community Development Banking and Financial 
        Institutions Act of 1994 (12 U.S.C. 4702(5)).
            (3) Eligible entity.--The term ``eligible entity'' 
        means--
                    (A) an organization described in section 
                501(c)(3) of the Internal Revenue Code of 1986, 
                and exempt from tax under section 501(a) of 
                such Code;
                    (B) a federally insured depository 
                institution;
                    (C) a community development financial 
                institution;
                    (D) a State, local, or tribal government 
                entity; or
                    (E) a partnership or other joint venture 
                comprised of 1 or more of the entities 
                described in subparagraphs (A) through (D), in 
                accordance with regulations prescribed by the 
                Secretary under this title.
            (4) Federally insured depository institution.--The 
        term ``federally insured depository institution'' means 
        any insured depository institution (as that term is 
        defined in section 3 of the Federal Deposit Insurance 
        Act (12 U.S.C. 1813)) and any insured credit union (as 
        that term is defined in section 101 of the Federal 
        Credit Union Act (12 U.S.C. 1752)).

SEC. 1204. EXPANDED ACCESS TO MAINSTREAM FINANCIAL INSTITUTIONS.

    (a) In General.--The Secretary is authorized to establish a 
multiyear program of grants, cooperative agreements, financial 
agency agreements, and similar contracts or undertakings to 
promote initiatives designed--
            (1) to enable low- and moderate-income individuals 
        to establish one or more accounts in a federally 
        insured depository institution that are appropriate to 
        meet the financial needs of such individuals; and
            (2) to improve access to the provision of accounts, 
        on reasonable terms, for low- and moderate-income 
        individuals.
    (b) Program Eligibility and Activities.--
            (1) In general.--The Secretary shall restrict 
        participation in any program established under 
        subsection (a) to an eligible entity. Subject to 
        regulations prescribed by the Secretary under this 
        title, 1 or more eligible entities may participate in 1 
        or several programs established under subsection (a).
            (2) Account activities.--Subject to regulations 
        prescribed by the Secretary, an eligible entity may, in 
        participating in a program established under subsection 
        (a), offer or provide to low- and moderate-income 
        individuals products and services relating to accounts, 
        including--
                    (A) small-dollar value loans; and
                    (B) financial education and counseling 
                relating to conducting transactions in and 
                managing accounts.

SEC. 1205. LOW-COST ALTERNATIVES TO SMALL DOLLAR LOANS.

    (a) Grants Authorized.--The Secretary is authorized to 
establish multiyear demonstration programs by means of grants, 
cooperative agreements, financial agency agreements, and 
similar contracts or undertakings, with eligible entities to 
provide low-cost, small loans to consumers that will provide 
alternatives to more costly small dollar loans.
    (b) Terms and Conditions.--
            (1) In general.--Loans under this section shall be 
        made on terms and conditions, and pursuant to lending 
        practices, that are reasonable for consumers.
            (2) Financial literacy and education 
        opportunities.--
                    (A) In general.--Each eligible entity 
                awarded a grant under this section shall 
                promote and take appropriate steps to ensure 
                the provision of financial literacy and 
                education opportunities, such as relevant 
                counseling services, educational courses, or 
                wealth building programs, to each consumer 
                provided with a loan pursuant to this section.
                    (B) Authority to expand access.--As part of 
                the grants, agreements, and undertakings 
                established under this section, the Secretary 
                may implement reasonable measures or programs 
                designed to expand access to financial literacy 
                and education opportunities, including relevant 
                counseling services, educational courses, or 
                wealth building programs to be provided to 
                individuals who obtain loans from eligible 
                entities under this section.

SEC. 1206. GRANTS TO ESTABLISH LOAN-LOSS RESERVE FUNDS.

    The Community Development Banking and Financial 
Institutions Act of 1994 (12 U.S.C. 4701 et seq.) is amended by 
adding at the end the following:

``SEC. 122. GRANTS TO ESTABLISH LOAN-LOSS RESERVE FUNDS.

    ``(a) Purposes.--The purposes of this section are--
            ``(1) to make financial assistance available from 
        the Fund in order to help community development 
        financial institutions defray the costs of operating 
        small dollar loan programs, by providing the amounts 
        necessary for such institutions to establish their own 
        loan loss reserve funds to mitigate some of the losses 
        on such small dollar loan programs; and
            ``(2) to encourage community development financial 
        institutions to establish and maintain small dollar 
        loan programs that would help give consumers access to 
        mainstream financial institutions and combat high cost 
        small dollar lending.
    ``(b) Grants.--
            ``(1) Loan-loss reserve fund grants.--The Fund 
        shall make grants to community development financial 
        institutions or to any partnership between such 
        community development financial institutions and any 
        other federally insured depository institution with a 
        primary mission to serve targeted investment areas, as 
        such areas are defined under section 103(16), to enable 
        such institutions or any partnership of such 
        institutions to establish a loan-loss reserve fund in 
        order to defray the costs of a small dollar loan 
        program established or maintained by such institution.
            ``(2) Matching requirement.--A community 
        development financial institution or any partnership of 
        institutions established pursuant to paragraph (1) 
        shall provide non-Federal matching funds in an amount 
        equal to 50 percent of the amount of any grant received 
        under this section.
            ``(3) Use of funds.--Any grant amounts received by 
        a community development financial institution or any 
        partnership between or among such institutions under 
        paragraph (1)--
                    ``(A) may not be used by such institution 
                to provide direct loans to consumers;
                    ``(B) may be used by such institution to 
                help recapture a portion or all of a defaulted 
                loan made under the small dollar loan program 
                of such institution; and
                    ``(C) may be used to designate and utilize 
                a fiscal agent for services normally provided 
                by such an agent.
            ``(4) Technical assistance grants.--The Fund shall 
        make technical assistance grants to community 
        development financial institutions or any partnership 
        between or among such institutions to support and 
        maintain a small dollar loan program. Any grant amounts 
        received under this paragraph may be used for 
        technology, staff support, and other costs associated 
        with establishing a small dollar loan program.
    ``(c) Definitions.--For purposes of this section--
            ``(1) the term `consumer reporting agency that 
        compiles and maintains files on consumers on a 
        nationwide basis' has the same meaning given such term 
        in section 603(p) of the Fair Credit Reporting Act (15 
        U.S.C. 1681a(p)); and
            ``(2) the term `small dollar loan program' means a 
        loan program wherein a community development financial 
        institution or any partnership between or among such 
        institutions offers loans to consumers that--
                    ``(A) are made in amounts not exceeding 
                $2,500;
                    ``(B) must be repaid in installments;
                    ``(C) have no pre-payment penalty;
                    ``(D) the institution has to report 
                payments regarding the loan to at least 1 of 
                the consumer reporting agencies that compiles 
                and maintains files on consumers on a 
                nationwide basis; and
                    ``(E) meet any other affordability 
                requirements as may be established by the 
                Administrator.''.

SEC. 1207. PROCEDURAL PROVISIONS.

    An eligible entity desiring to participate in a program or 
obtain a grant under this title shall submit an application to 
the Secretary, in such form and containing such information as 
the Secretary may require.

SEC. 1208. AUTHORIZATION OF APPROPRIATIONS.

    (a) Authorization to the Secretary.--There are authorized 
to be appropriated to the Secretary, such sums as are necessary 
to both administer and fund the programs and projects 
authorized by this title, to remain available until expended.
    (b) Authorization to the Fund.--There is authorized to be 
appropriated to the Fund for each fiscal year beginning in 
fiscal year 2010, an amount equal to the amount of the 
administrative costs of the Fund for the operation of the grant 
program established under this title.

SEC. 1209. REGULATIONS.

    (a) In General.--The Secretary is authorized to promulgate 
regulations to implement and administer the grant programs and 
undertakings authorized by this title.
    (b) Regulatory Authority.--Regulations prescribed under 
this section may contain such classifications, 
differentiations, or other provisions, and may provide for such 
adjustments and exceptions for any class of grant programs, 
undertakings, or eligible entities, as, in the judgment of the 
Secretary, are necessary or proper to effectuate the purposes 
of this title, to prevent circumvention or evasion of this 
title, or to facilitate compliance with this title.

SEC. 1210. EVALUATION AND REPORTS TO CONGRESS.

    For each fiscal year in which a program or project is 
carried out under this title, the Secretary shall submit a 
report to the Committee on Banking, Housing, and Urban Affairs 
of the Senate and the Committee on Financial Services of the 
House of Representatives containing a description of the 
activities funded, amounts distributed, and measurable results, 
as appropriate and available.

                      TITLE XIII--PAY IT BACK ACT

SEC. 1301. SHORT TITLE.

    This title may be cited as the ``Pay It Back Act''.

SEC. 1302. AMENDMENT TO REDUCE TARP AUTHORIZATION.

    Section 115(a) of the Emergency Economic Stabilization Act 
of 2008 (12 U.S.C. 5225(a)) is amended--
            (1) in paragraph (3)--
                    (A) by striking ``, $700,000,000,000, as 
                such amount is reduced by $1,259,000,000, as 
                such amount is reduced by $1,244,000,000'' and 
                inserting ``$475,000,000,000''; and
                    (B) by striking ``outstanding at any one 
                time''; and
            (2) by adding at the end the following:
            ``(4) For purposes of this subsection, the amount 
        of authority considered to be exercised by the 
        Secretary shall not be reduced by--
                    ``(A) any amounts received by the Secretary 
                before, on, or after the date of enactment of 
                the Pay It Back Act from repayment of the 
                principal of financial assistance by an entity 
                that has received financial assistance under 
                the TARP or any other program enacted by the 
                Secretary under the authorities granted to the 
                Secretary under this Act;
                    ``(B) any amounts committed for any 
                guarantees pursuant to the TARP that became or 
                become uncommitted; or
                    ``(C) any losses realized by the Secretary.
            ``(5) No authority under this Act may be used to 
        incur any obligation for a program or initiative that 
        was not initiated prior to June 25, 2010.''.

SEC. 1303. REPORT.

    Section 106 of the Emergency Economic Stabilization Act of 
2008 (12 U.S.C. 5216) is amended by inserting at the end the 
following:
    ``(f) Report.--The Secretary of the Treasury shall report 
to Congress every 6 months on amounts received and transferred 
to the general fund under subsection (d).''.

SEC. 1304. AMENDMENTS TO HOUSING AND ECONOMIC RECOVERY ACT OF 2008.

    (a) Sale of Fannie Mae Obligations and Securities by the 
Treasury; Deficit Reduction.--Section 304(g)(2) of the Federal 
National Mortgage Association Charter Act (12 U.S.C. 
1719(g)(2)) is amended--
            (1) by redesignating subparagraph (C) as 
        subparagraph (D); and
            (2) by inserting after subparagraph (B) the 
        following:
                    ``(C) Deficit reduction.--The Secretary of 
                the Treasury shall deposit in the General Fund 
                of the Treasury any amounts received by the 
                Secretary from the sale of any obligation 
                acquired by the Secretary under this 
                subsection, where such amounts shall be--
                            ``(i) dedicated for the sole 
                        purpose of deficit reduction; and
                            ``(ii) prohibited from use as an 
                        offset for other spending increases or 
                        revenue reductions.''.
    (b) Sale of Freddie Mac Obligations and Securities by the 
Treasury; Deficit Reduction.--Section 306(l)(2) of the Federal 
Home Loan Mortgage Corporation Act (12 U.S.C. 1455(l)(2)) is 
amended--
            (1) by redesignating subparagraph (C) as 
        subparagraph (D); and
            (2) by inserting after subparagraph (B) the 
        following:
                    ``(C) Deficit reduction.--The Secretary of 
                the Treasury shall deposit in the General Fund 
                of the Treasury any amounts received by the 
                Secretary from the sale of any obligation 
                acquired by the Secretary under this 
                subsection, where such amounts shall be--
                            ``(i) dedicated for the sole 
                        purpose of deficit reduction; and
                            ``(ii) prohibited from use as an 
                        offset for other spending increases or 
                        revenue reductions.''.
    (c) Sale of Federal Home Loan Banks Obligations by the 
Treasury; Deficit Reduction.--Section 11(l)(2) of the Federal 
Home Loan Bank Act (12 U.S.C. 1431(l)(2)) is amended--
            (1) by redesignating subparagraph (C) as 
        subparagraph (D); and
            (2) by inserting after subparagraph (B) the 
        following:
                    ``(C) Deficit reduction.--The Secretary of 
                the Treasury shall deposit in the General Fund 
                of the Treasury any amounts received by the 
                Secretary from the sale of any obligation 
                acquired by the Secretary under this 
                subsection, where such amounts shall be--
                            ``(i) dedicated for the sole 
                        purpose of deficit reduction; and
                            ``(ii) prohibited from use as an 
                        offset for other spending increases or 
                        revenue reductions.''.
    (d) Repayment of Fees.--Any periodic commitment fee or any 
other fee or assessment paid by the Federal National Mortgage 
Association or Federal Home Loan Mortgage Corporation to the 
Secretary of the Treasury as a result of any preferred stock 
purchase agreement, mortgage-backed security purchase program, 
or any other program or activity authorized or carried out 
pursuant to the authorities granted to the Secretary of the 
Treasury under section 1117 of the Housing and Economic 
Recovery Act of 2008 (Public Law 110-289; 122 Stat. 2683), 
including any fee agreed to by contract between the Secretary 
and the Association or Corporation, shall be deposited in the 
General Fund of the Treasury where such amounts shall be--
            (1) dedicated for the sole purpose of deficit 
        reduction; and
            (2) prohibited from use as an offset for other 
        spending increases or revenue reductions.

SEC. 1305. FEDERAL HOUSING FINANCE AGENCY REPORT.

    The Director of the Federal Housing Finance Agency shall 
submit to Congress a report on the plans of the Agency to 
continue to support and maintain the Nation's vital housing 
industry, while at the same time guaranteeing that the American 
taxpayer will not suffer unnecessary losses.

SEC. 1306. REPAYMENT OF UNOBLIGATED ARRA FUNDS.

    (a) Rejection of ARRA Funds by State.--Section 1607 of the 
American Recovery and Reinvestment Act of 2009 (Public Law 111-
5; 123 Stat. 305) is amended by adding at the end the 
following:
    ``(d) Statewide Rejection of Funds.--If funds provided to 
any State in any division of this Act are not accepted for use 
by the Governor of the State pursuant to subsection (a) or by 
the State legislature pursuant to subsection (b), then all such 
funds shall be--
            ``(1) rescinded; and
            ``(2) deposited in the General Fund of the Treasury 
        where such amounts shall be--
                    ``(A) dedicated for the sole purpose of 
                deficit reduction; and
                    ``(B) prohibited from use as an offset for 
                other spending increases or revenue 
                reductions.''.
    (b) Withdrawal or Recapture of Unobligated Funds.--Title 
XVI of the American Recovery and Reinvestment Act of 2009 
(Public Law 111-5; 123 Stat. 302) is amended by adding at the 
end the following:

``SEC. 1613. WITHDRAWAL OR RECAPTURE OF UNOBLIGATED FUNDS.

    ``Notwithstanding any other provision of this Act, if the 
head of any executive agency withdraws or recaptures for any 
reason funds appropriated or otherwise made available under 
this division, and such funds have not been obligated by a 
State to a local government or for a specific project, such 
recaptured funds shall be--
            ``(1) rescinded; and
            ``(2) deposited in the General Fund of the Treasury 
        where such amounts shall be--
                    ``(A) dedicated for the sole purpose of 
                deficit reduction; and
                    ``(B) prohibited from use as an offset for 
                other spending increases or revenue 
                reductions.''.
    (c) Return of Unobligated Funds by End of 2012.--Section 
1603 of the American Recovery and Reinvestment Act of 2009 
(Public Law 111-5; 123 Stat. 302) is amended by--
            (1) striking ``All funds'' and inserting ``(a) In 
        General.--All funds''; and
            (2) adding at the end the following:
    ``(b) Repayment of Unobligated Funds.--Any discretionary 
appropriations made available in this division that have not 
been obligated as of December 31, 2012, are hereby rescinded, 
and such amounts shall be deposited in the General Fund of the 
Treasury where such amounts shall be--
            ``(1) dedicated for the sole purpose of deficit 
        reduction; and
            ``(2) prohibited from use as an offset for other 
        spending increases or revenue reductions.
    ``(c) Presidential Waiver Authority.--
            ``(1) In general.--The President may waive the 
        requirements under subsection (b), if the President 
        determines that it is not in the best interest of the 
        Nation to rescind a specific unobligated amount after 
        December 31, 2012.
            ``(2) Requests.--The head of an executive agency 
        may also apply to the President for a waiver from the 
        requirements under subsection (b).''.

       TITLE XIV--MORTGAGE REFORM AND ANTI-PREDATORY LENDING ACT

SEC. 1400. SHORT TITLE; DESIGNATION AS ENUMERATED CONSUMER LAW.

    (a) Short Title.--This title may be cited as the ``Mortgage 
Reform and Anti-Predatory Lending Act''.
    (b) Designation as Enumerated Consumer Law Under the 
Purview of the Bureau of Consumer Financial Protection.--
Subtitles A, B, C, and E and sections 1471, 1472, 1475, and 
1476, and the amendments made by such subtitles and sections, 
shall be enumerated consumer laws, as defined in section 1002, 
and come under the purview of the Bureau of Consumer Financial 
Protection for purposes of title X, including the transfer of 
functions and personnel under subtitle F of title X and the 
savings provisions of such subtitle.
    (c) Regulations; Effective Date.--
            (1) Regulations.--The regulations required to be 
        prescribed under this title or the amendments made by 
        this title shall--
                    (A) be prescribed in final form before the 
                end of the 18-month period beginning on the 
                designated transfer date; and
                    (B) take effect not later than 12 months 
                after the date of issuance of the regulations 
                in final form.
            (2) Effective date established by rule.--Except as 
        provided in paragraph (3), a section, or provision 
        thereof, of this title shall take effect on the date on 
        which the final regulations implementing such section, 
        or provision, take effect.
            (3) Effective date.--A section of this title for 
        which regulations have not been issued on the date that 
        is 18 months after the designated transfer date shall 
        take effect on such date.

      Subtitle A--Residential Mortgage Loan Origination Standards

SEC. 1401. DEFINITIONS.

    Section 103 of the Truth in Lending Act (15 U.S.C. 1602) is 
amended by adding at the end the following new subsection:
    ``(cc) Definitions Relating to Mortgage Origination and 
Residential Mortgage Loans.--
            ``(1) Commission.--Unless otherwise specified, the 
        term `Commission' means the Federal Trade Commission.
            ``(2) Mortgage originator.--The term `mortgage 
        originator'--
                    ``(A) means any person who, for direct or 
                indirect compensation or gain, or in the 
                expectation of direct or indirect compensation 
                or gain--
                            ``(i) takes a residential mortgage 
                        loan application;
                            ``(ii) assists a consumer in 
                        obtaining or applying to obtain a 
                        residential mortgage loan; or
                            ``(iii) offers or negotiates terms 
                        of a residential mortgage loan;
                    ``(B) includes any person who represents 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 person can 
                or will provide any of the services or perform 
                any of the activities described in subparagraph 
                (A);
                    ``(C) does not include any person who is 
                (i) not otherwise described in subparagraph (A) 
                or (B) and who performs purely administrative 
                or clerical tasks on behalf of a person who is 
                described in any such subparagraph, or (ii) an 
                employee of a retailer of manufactured homes 
                who is not described in clause (i) or (iii) of 
                subparagraph (A) and who does not advise a 
                consumer on loan terms (including rates, fees, 
                and other costs);
                    ``(D) 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 
                such person or entity is compensated by a 
                lender, a mortgage broker, or other mortgage 
                originator or by any agent of such lender, 
                mortgage broker, or other mortgage originator;
                    ``(E) does not include, with respect to a 
                residential mortgage loan, a person, estate, or 
                trust that provides mortgage financing for the 
                sale of 3 properties in any 12-month period to 
                purchasers of such properties, each of which is 
                owned by such person, estate, or trust and 
                serves as security for the loan, provided that 
                such loan--
                            ``(i) is not made by a person, 
                        estate, or trust that has constructed, 
                        or acted as a contractor for the 
                        construction of, a residence on the 
                        property in the ordinary course of 
                        business of such person, estate, or 
                        trust;
                            ``(ii) is fully amortizing;
                            ``(iii) is with respect to a sale 
                        for which the seller determines in good 
                        faith and documents that the buyer has 
                        a reasonable ability to repay the loan;
                            ``(iv) has a fixed rate or an 
                        adjustable rate that is adjustable 
                        after 5 or more years, subject to 
                        reasonable annual and lifetime 
                        limitations on interest rate increases; 
                        and
                            ``(v) meets any other criteria the 
                        Board may prescribe;
                    ``(F) does not include the creditor (except 
                the creditor in a table-funded transaction) 
                under paragraph (1), (2), or (4) of section 
                129B(c); and
                    ``(G) does not include a servicer or 
                servicer employees, agents and contractors, 
                including but not limited to those who offer or 
                negotiate terms of a residential mortgage loan 
                for purposes of renegotiating, modifying, 
                replacing and subordinating principal of 
                existing mortgages where borrowers are behind 
                in their payments, in default or have a 
                reasonable likelihood of being in default or 
                falling behind.
            ``(3) Nationwide mortgage licensing system and 
        registry.--The term `Nationwide Mortgage Licensing 
        System and Registry' has the same meaning as in the 
        Secure and Fair Enforcement for Mortgage Licensing Act 
        of 2008.
            ``(4) Other definitions relating to mortgage 
        originator.--For purposes of this subsection, a person 
        `assists a consumer in obtaining or applying to obtain 
        a residential mortgage loan' by, among other things, 
        advising on residential mortgage loan terms (including 
        rates, fees, and other costs), preparing residential 
        mortgage loan packages, or collecting information on 
        behalf of the consumer with regard to a residential 
        mortgage loan.
            ``(5) Residential mortgage loan.--The term 
        `residential mortgage loan' means any consumer credit 
        transaction that is secured by a mortgage, deed of 
        trust, or other equivalent consensual security interest 
        on a dwelling or on residential real property that 
        includes a dwelling, other than a consumer credit 
        transaction under an open end credit plan or, for 
        purposes of sections 129B and 129C and section 128(a) 
        (16), (17), (18), and (19), and sections 128(f) and 
        130(k), and any regulations promulgated thereunder, an 
        extension of credit relating to a plan described in 
        section 101(53D) of title 11, United States Code.
            ``(6) Secretary.--The term `Secretary', when used 
        in connection with any transaction or person involved 
        with a residential mortgage loan, means the Secretary 
        of Housing and Urban Development.
            ``(7) Servicer.--The term `servicer' has the same 
        meaning as in section 6(i)(2) of the Real Estate 
        Settlement Procedures Act of 1974 (12 U.S.C. 
        2605(i)(2)).''.

SEC. 1402. RESIDENTIAL MORTGAGE LOAN ORIGINATION.

    (a) In General.--Chapter 2 of the Truth in Lending Act (15 
U.S.C. 1631 et seq.) is amended--
            (1) by redesignating the 2nd of the 2 sections 
        designated as section 129 (15 U.S.C. 1639a) (relating 
        to duty of servicers of residential mortgages) as 
        section 129A; and
            (2) by inserting after section 129A (as so 
        redesignated) the following new section:

``Sec. 129B. Residential mortgage loan origination

    ``(a) Finding and Purpose.--
            ``(1) Finding.--The Congress finds that economic 
        stabilization would be enhanced by the protection, 
        limitation, and regulation of the terms of residential 
        mortgage credit and the practices related to such 
        credit, while ensuring that responsible, affordable 
        mortgage credit remains available to consumers.
            ``(2) Purpose.--It is the purpose of this section 
        and section 129C to assure that consumers are offered 
        and receive residential mortgage loans on terms that 
        reasonably reflect their ability to repay the loans and 
        that are understandable and not unfair, deceptive or 
        abusive.
    ``(b) Duty of Care.--
            ``(1) Standard.--Subject to regulations prescribed 
        under this subsection, each mortgage originator shall, 
        in addition to the duties imposed by otherwise 
        applicable provisions of State or Federal law--
                    ``(A) be qualified and, when required, 
                registered and licensed as a mortgage 
                originator in accordance with applicable State 
                or Federal law, including the Secure and Fair 
                Enforcement for Mortgage Licensing Act of 2008; 
                and
                    ``(B) include on all loan documents any 
                unique identifier of the mortgage originator 
                provided by the Nationwide Mortgage Licensing 
                System and Registry.
            ``(2) Compliance procedures required.--The Board 
        shall prescribe regulations requiring depository 
        institutions to establish and maintain procedures 
        reasonably designed to assure and monitor the 
        compliance of such depository institutions, the 
        subsidiaries of such institutions, and the employees of 
        such institutions or subsidiaries with the requirements 
        of this section and the registration procedures 
        established under section 1507 of the Secure and Fair 
        Enforcement for Mortgage Licensing Act of 2008.''.
    (b) Clerical Amendment.--The table of sections for chapter 
2 of the Truth in Lending Act is amended by inserting after the 
item relating to section 129 the following new items:

``129A. Fiduciary duty of servicers of pooled residential mortgages.
``129B. Residential mortgage loan origination.''.

SEC. 1403. PROHIBITION ON STEERING INCENTIVES.

    Section 129B of the Truth in Lending Act (as added by 
section 1402(a)) is amended by inserting after subsection (b) 
the following new subsection:
    ``(c) Prohibition on Steering Incentives.--
            ``(1) In general.--For any residential mortgage 
        loan, no mortgage originator shall receive from any 
        person and no person shall pay to a mortgage 
        originator, directly or indirectly, compensation that 
        varies based on the terms of the loan (other than the 
        amount of the principal).
            ``(2) Restructuring of financing origination fee.--
                    ``(A) In general.--For any mortgage loan, a 
                mortgage originator may not receive from any 
                person other than the consumer and no person, 
                other than the consumer, who knows or has 
                reason to know that a consumer has directly 
                compensated or will directly compensate a 
                mortgage originator may pay a mortgage 
                originator any origination fee or charge except 
                bona fide third party charges not retained by 
                the creditor, mortgage originator, or an 
                affiliate of the creditor or mortgage 
                originator.
                    ``(B) Exception.--Notwithstanding 
                subparagraph (A), a mortgage originator may 
                receive from a person other than the consumer 
                an origination fee or charge, and a person 
                other than the consumer may pay a mortgage 
                originator an origination fee or charge, if--
                            ``(i) the mortgage originator does 
                        not receive any compensation directly 
                        from the consumer; and
                            ``(ii) the consumer does not make 
                        an upfront payment of discount points, 
                        origination points, or fees, however 
                        denominated (other than bona fide third 
                        party charges not retained by the 
                        mortgage originator, creditor, or an 
                        affiliate of the creditor or 
                        originator), except that the Board may, 
                        by rule, waive or provide exemptions to 
                        this clause if the Board determines 
                        that such waiver or exemption is in the 
                        interest of consumers and in the public 
                        interest.
            ``(3) Regulations.--The Board shall prescribe 
        regulations to prohibit--
                    ``(A) mortgage originators from steering 
                any consumer to a residential mortgage loan 
                that--
                            ``(i) the consumer lacks a 
                        reasonable ability to repay (in 
                        accordance with regulations prescribed 
                        under section 129C(a)); or
                            ``(ii) has predatory 
                        characteristics or effects (such as 
                        equity stripping, excessive fees, or 
                        abusive terms);
                    ``(B) mortgage originators from steering 
                any consumer from a residential mortgage loan 
                for which the consumer is qualified that is a 
                qualified mortgage (as defined in section 
                129C(b)(2)) to a residential mortgage loan that 
                is not a qualified mortgage;
                    ``(C) abusive or unfair lending practices 
                that promote disparities among consumers of 
                equal credit worthiness but of different race, 
                ethnicity, gender, or age; and
                    ``(D) mortgage originators from--
                            ``(i) mischaracterizing the credit 
                        history of a consumer or the 
                        residential mortgage loans available to 
                        a consumer;
                            ``(ii) mischaracterizing or 
                        suborning the mischaracterization of 
                        the appraised value of the property 
                        securing the extension of credit; or
                            ``(iii) if unable to suggest, 
                        offer, or recommend to a consumer a 
                        loan that is not more expensive than a 
                        loan for which the consumer qualifies, 
                        discouraging a consumer from seeking a 
                        residential mortgage loan secured by a 
                        consumer's principal dwelling from 
                        another mortgage originator.
            ``(4) Rules of construction.--No provision of this 
        subsection shall be construed as--
                    ``(A) permitting any yield spread premium 
                or other similar compensation that would, for 
                any residential mortgage loan, permit the total 
                amount of direct and indirect compensation from 
                all sources permitted to a mortgage originator 
                to vary based on the terms of the loan (other 
                than the amount of the principal);
                    ``(B) limiting or affecting the amount of 
                compensation received by a creditor upon the 
                sale of a consummated loan to a subsequent 
                purchaser;
                    ``(C) restricting a consumer's ability to 
                finance, at the option of the consumer, 
                including through principal or rate, any 
                origination fees or costs permitted under this 
                subsection, or the mortgage originator's right 
                to receive such fees or costs (including 
                compensation) from any person, subject to 
                paragraph (2)(B), so long as such fees or costs 
                do not vary based on the terms of the loan 
                (other than the amount of the principal) or the 
                consumer's decision about whether to finance 
                such fees or costs; or
                    ``(D) prohibiting incentive payments to a 
                mortgage originator based on the number of 
                residential mortgage loans originated within a 
                specified period of time.''.

SEC. 1404. LIABILITY.

    Section 129B of the Truth in Lending Act is amended by 
inserting after subsection (c) (as added by section 1403) the 
following new subsection:
    ``(d) Liability for Violations.--
            ``(1) In general.--For purposes of providing a 
        cause of action for any failure by a mortgage 
        originator, other than a creditor, to comply with any 
        requirement imposed under this section and any 
        regulation prescribed under this section, section 130 
        shall be applied with respect to any such failure by 
        substituting `mortgage originator' for `creditor' each 
        place such term appears in each such subsection.
            ``(2) Maximum.--The maximum amount of any liability 
        of a mortgage originator under paragraph (1) to a 
        consumer for any violation of this section shall not 
        exceed the greater of actual damages or an amount equal 
        to 3 times the total amount of direct and indirect 
        compensation or gain accruing to the mortgage 
        originator in connection with the residential mortgage 
        loan involved in the violation, plus the costs to the 
        consumer of the action, including a reasonable 
        attorney's fee.''.

SEC. 1405. REGULATIONS.

    (a) Discretionary Regulatory Authority.--Section 129B of 
the Truth in Lending Act is amended by inserting after 
subsection (d) (as added by section 1404) the following new 
subsection:
    ``(e) Discretionary Regulatory Authority.--
            ``(1) In general.--The Board shall, by regulations, 
        prohibit or condition terms, acts or practices relating 
        to residential mortgage loans that the Board finds to 
        be abusive, unfair, deceptive, predatory, necessary or 
        proper to ensure that responsible, affordable mortgage 
        credit remains available to consumers in a manner 
        consistent with the purposes of this section and 
        section 129C, necessary or proper to effectuate the 
        purposes of this section and section 129C, to prevent 
        circumvention or evasion thereof, or to facilitate 
        compliance with such sections, or are not in the 
        interest of the borrower.
            ``(2) Application.--The regulations prescribed 
        under paragraph (1) shall be applicable to all 
        residential mortgage loans and shall be applied in the 
        same manner as regulations prescribed under section 
        105.
    ``(f) Section 129B and any regulations promulgated 
thereunder do not apply to an extension of credit relating to a 
plan described in section 101(53D) of title 11, United States 
Code.''.
    (b) Disclosures.--Notwithstanding any other provision of 
this title, in order to improve consumer awareness and 
understanding of transactions involving residential mortgage 
loans through the use of disclosures, the Board may, by rule, 
exempt from or modify disclosure requirements, in whole or in 
part, for any class of residential mortgage loans if the Board 
determines that such exemption or modification is in the 
interest of consumers and in the public interest.

SEC. 1406. STUDY OF SHARED APPRECIATION MORTGAGES.

    (a) Study.--The Secretary of Housing and Urban Development, 
in consultation with the Secretary of the Treasury and other 
relevant agencies, shall conduct a comprehensive study to 
determine prudent statutory and regulatory requirements 
sufficient to provide for the widespread use of shared 
appreciation mortgages to strengthen local housing markets, 
provide new opportunities for affordable homeownership, and 
enable homeowners at risk of foreclosure to refinance or modify 
their mortgages.
    (b) Report.--Not later than the expiration of the 6-month 
period beginning on the date of the enactment of this Act, the 
Secretary of Housing and Urban Development shall submit a 
report to the Congress on the results of the study, which shall 
include recommendations for the regulatory and legislative 
requirements referred to in subsection (a).

              Subtitle B--Minimum Standards For Mortgages

SEC. 1411. ABILITY TO REPAY.

    (a) In General.--
            (1) Rule of construction.--No regulation, order, or 
        guidance issued by the Bureau under this title shall be 
        construed as requiring a depository institution to 
        apply mortgage underwriting standards that do not meet 
        the minimum underwriting standards required by the 
        appropriate prudential regulator of the depository 
        institution.
            (2) Amendment to truth in lending act.--Chapter 2 
        of the Truth in Lending Act (15 U.S.C. 1631 et seq.) is 
        amended by inserting after section 129B (as added by 
        section 1402(a)) the following new section:

``Sec. 129C. Minimum standards for residential mortgage loans

    ``(a) Ability To Repay.--
            ``(1) In general.--In accordance with regulations 
        prescribed by the Board, no creditor may make a 
        residential mortgage loan unless the creditor makes a 
        reasonable and good faith determination based on 
        verified and documented information that, at the time 
        the loan is consummated, the consumer has a reasonable 
        ability to repay the loan, according to its terms, and 
        all applicable taxes, insurance (including mortgage 
        guarantee insurance), and assessments.
            ``(2) Multiple loans.--If the creditor knows, or 
        has reason to know, that 1 or more residential mortgage 
        loans secured by the same dwelling will be made to the 
        same consumer, the creditor shall make a reasonable and 
        good faith determination, based on verified and 
        documented information, that the consumer has a 
        reasonable ability to repay the combined payments of 
        all loans on the same dwelling according to the terms 
        of those loans and all applicable taxes, insurance 
        (including mortgage guarantee insurance), and 
        assessments.
            ``(3) Basis for determination.--A determination 
        under this subsection of a consumer's ability to repay 
        a residential mortgage loan shall include consideration 
        of the consumer's credit history, current income, 
        expected income the consumer is reasonably assured of 
        receiving, current obligations, debt-to-income ratio or 
        the residual income the consumer will have after paying 
        non-mortgage debt and mortgage-related obligations, 
        employment status, and other financial resources other 
        than the consumer's equity in the dwelling or real 
        property that secures repayment of the loan. A creditor 
        shall determine the ability of the consumer to repay 
        using a payment schedule that fully amortizes the loan 
        over the term of the loan.
            ``(4) Income verification.--A creditor making a 
        residential mortgage loan shall verify amounts of 
        income or assets that such creditor relies on to 
        determine repayment ability, including expected income 
        or assets, by reviewing the consumer's Internal Revenue 
        Service Form W-2, tax returns, payroll receipts, 
        financial institution records, or other third-party 
        documents that provide reasonably reliable evidence of 
        the consumer's income or assets. In order to safeguard 
        against fraudulent reporting, any consideration of a 
        consumer's income history in making a determination 
        under this subsection shall include the verification of 
        such income by the use of--
                    ``(A) Internal Revenue Service transcripts 
                of tax returns; or
                    ``(B) a method that quickly and effectively 
                verifies income documentation by a third party 
                subject to rules prescribed by the Board.
            ``(5) Exemption.--With respect to loans made, 
        guaranteed, or insured by Federal departments or 
        agencies identified in subsection (b)(3)(B)(ii), such 
        departments or agencies may exempt refinancings under a 
        streamlined refinancing from this income verification 
        requirement as long as the following conditions are 
        met:
                    ``(A) The consumer is not 30 days or more 
                past due on the prior existing residential 
                mortgage loan.
                    ``(B) The refinancing does not increase the 
                principal balance outstanding on the prior 
                existing residential mortgage loan, except to 
                the extent of fees and charges allowed by the 
                department or agency making, guaranteeing, or 
                insuring the refinancing.
                    ``(C) Total points and fees (as defined in 
                section 103(aa)(4), other than bona fide third 
                party charges not retained by the mortgage 
                originator, creditor, or an affiliate of the 
                creditor or mortgage originator) payable in 
                connection with the refinancing do not exceed 3 
                percent of the total new loan amount.
                    ``(D) The interest rate on the refinanced 
                loan is lower than the interest rate of the 
                original loan, unless the borrower is 
                refinancing from an adjustable rate to a fixed-
                rate loan, under guidelines that the department 
                or agency shall establish for loans they make, 
                guarantee, or issue.
                    ``(E) The refinancing is subject to a 
                payment schedule that will fully amortize the 
                refinancing in accordance with the regulations 
                prescribed by the department or agency making, 
                guaranteeing, or insuring the refinancing.
                    ``(F) The terms of the refinancing do not 
                result in a balloon payment, as defined in 
                subsection (b)(2)(A)(ii).
                    ``(G) Both the residential mortgage loan 
                being refinanced and the refinancing satisfy 
                all requirements of the department or agency 
                making, guaranteeing, or insuring the 
                refinancing.
            ``(6) Nonstandard loans.--
                    ``(A) Variable rate loans that defer 
                repayment of any principal or interest.--For 
                purposes of determining, under this subsection, 
                a consumer's ability to repay a variable rate 
                residential mortgage loan that allows or 
                requires the consumer to defer the repayment of 
                any principal or interest, the creditor shall 
                use a fully amortizing repayment schedule.
                    ``(B) Interest-only loans.--For purposes of 
                determining, under this subsection, a 
                consumer's ability to repay a residential 
                mortgage loan that permits or requires the 
                payment of interest only, the creditor shall 
                use the payment amount required to amortize the 
                loan by its final maturity.
                    ``(C) Calculation for negative 
                amortization.--In making any determination 
                under this subsection, a creditor shall also 
                take into consideration any balance increase 
                that may accrue from any negative amortization 
                provision.
                    ``(D) Calculation process.--For purposes of 
                making any determination under this subsection, 
                a creditor shall calculate the monthly payment 
                amount for principal and interest on any 
                residential mortgage loan by assuming--
                            ``(i) the loan proceeds are fully 
                        disbursed on the date of the 
                        consummation of the loan;
                            ``(ii) the loan is to be repaid in 
                        substantially equal monthly amortizing 
                        payments for principal and interest 
                        over the entire term of the loan with 
                        no balloon payment, unless the loan 
                        contract requires more rapid repayment 
                        (including balloon payment), in which 
                        case the calculation shall be made (I) 
                        in accordance with regulations 
                        prescribed by the Board, with respect 
                        to any loan which has an annual 
                        percentage rate that does not exceed 
                        the average prime offer rate for a 
                        comparable transaction, as of the date 
                        the interest rate is set, by 1.5 or 
                        more percentage points for a first lien 
                        residential mortgage loan; and by 3.5 
                        or more percentage points for a 
                        subordinate lien residential mortgage 
                        loan; or (II) using the contract's 
                        repayment schedule, with respect to a 
                        loan which has an annual percentage 
                        rate, as of the date the interest rate 
                        is set, that is at least 1.5 percentage 
                        points above the average prime offer 
                        rate for a first lien residential 
                        mortgage loan; and 3.5 percentage 
                        points above the average prime offer 
                        rate for a subordinate lien residential 
                        mortgage loan; and
                            ``(iii) the interest rate over the 
                        entire term of the loan is a fixed rate 
                        equal to the fully indexed rate at the 
                        time of the loan closing, without 
                        considering the introductory rate.
                    ``(E) Refinance of hybrid loans with 
                current lender.--In considering any application 
                for refinancing an existing hybrid loan by the 
                creditor into a standard loan to be made by the 
                same creditor in any case in which there would 
                be a reduction in monthly payment and the 
                mortgagor has not been delinquent on any 
                payment on the existing hybrid loan, the 
                creditor may--
                            ``(i) consider the mortgagor's good 
                        standing on the existing mortgage;
                            ``(ii) consider if the extension of 
                        new credit would prevent a likely 
                        default should the original mortgage 
                        reset and give such concerns a higher 
                        priority as an acceptable underwriting 
                        practice; and
                            ``(iii) offer rate discounts and 
                        other favorable terms to such mortgagor 
                        that would be available to new 
                        customers with high credit ratings 
                        based on such underwriting practice.
            ``(7) Fully-indexed rate defined.--For purposes of 
        this subsection, the term `fully indexed rate' means 
        the index rate prevailing on a residential mortgage 
        loan at the time the loan is made plus the margin that 
        will apply after the expiration of any introductory 
        interest rates.
            ``(8) Reverse mortgages and bridge loans.--This 
        subsection shall not apply with respect to any reverse 
        mortgage or temporary or bridge loan with a term of 12 
        months or less, including to any loan to purchase a new 
        dwelling where the consumer plans to sell a different 
        dwelling within 12 months.
            ``(9) Seasonal income.--If documented income, 
        including income from a small business, is a repayment 
        source for a residential mortgage loan, a creditor may 
        consider the seasonality and irregularity of such 
        income in the underwriting of and scheduling of 
        payments for such credit.''.
    (b) Clerical Amendment.--The table of sections for chapter 
2 of the Truth in Lending Act is amended by inserting after the 
item relating to section 129B (as added by section 1402(b)) the 
following new item:

``129C. Minimum standards for residential mortgage loans.''.

SEC. 1412. SAFE HARBOR AND REBUTTABLE PRESUMPTION.

    Section 129C of the Truth in Lending Act is amended by 
inserting after subsection (a) (as added by section 1411) the 
following new subsection:
    ``(b) Presumption of Ability To Repay.--
            ``(1) In general.--Any creditor with respect to any 
        residential mortgage loan, and any assignee of such 
        loan subject to liability under this title, may presume 
        that the loan has met the requirements of subsection 
        (a), if the loan is a qualified mortgage.
            ``(2) Definitions.--For purposes of this 
        subsection, the following definitions shall apply:
                    ``(A) Qualified mortgage.--The term 
                `qualified mortgage' means any residential 
                mortgage loan--
                            ``(i) for which the regular 
                        periodic payments for the loan may 
                        not--
                                    ``(I) result in an increase 
                                of the principal balance; or
                                    ``(II) except as provided 
                                in subparagraph (E), allow the 
                                consumer to defer repayment of 
                                principal;
                            ``(ii) except as provided in 
                        subparagraph (E), the terms of which do 
                        not result in a balloon payment, where 
                        a `balloon payment' is a scheduled 
                        payment that is more than twice as 
                        large as the average of earlier 
                        scheduled payments;
                            ``(iii) for which the income and 
                        financial resources relied upon to 
                        qualify the obligors on the loan are 
                        verified and documented;
                            ``(iv) in the case of a fixed rate 
                        loan, for which the underwriting 
                        process is based on a payment schedule 
                        that fully amortizes the loan over the 
                        loan term and takes into account all 
                        applicable taxes, insurance, and 
                        assessments;
                            ``(v) in the case of an adjustable 
                        rate loan, for which the underwriting 
                        is based on the maximum rate permitted 
                        under the loan during the first 5 
                        years, and a payment schedule that 
                        fully amortizes the loan over the loan 
                        term and takes into account all 
                        applicable taxes, insurance, and 
                        assessments;
                            ``(vi) that complies with any 
                        guidelines or regulations established 
                        by the Board relating to ratios of 
                        total monthly debt to monthly income or 
                        alternative measures of ability to pay 
                        regular expenses after payment of total 
                        monthly debt, taking into account the 
                        income levels of the borrower and such 
                        other factors as the Board may 
                        determine relevant and consistent with 
                        the purposes described in paragraph 
                        (3)(B)(i);
                            ``(vii) for which the total points 
                        and fees (as defined in subparagraph 
                        (C)) payable in connection with the 
                        loan do not exceed 3 percent of the 
                        total loan amount;
                            ``(viii) for which the term of the 
                        loan does not exceed 30 years, except 
                        as such term may be extended under 
                        paragraph (3), such as in high-cost 
                        areas; and
                            ``(ix) in the case of a reverse 
                        mortgage (except for the purposes of 
                        subsection (a) of section 129C, to the 
                        extent that such mortgages are exempt 
                        altogether from those requirements), a 
                        reverse mortgage which meets the 
                        standards for a qualified mortgage, as 
                        set by the Board in rules that are 
                        consistent with the purposes of this 
                        subsection.
                    ``(B) Average prime offer rate.--The term 
                `average prime offer rate' means the average 
                prime offer rate for a comparable transaction 
                as of the date on which the interest rate for 
                the transaction is set, as published by the 
                Board.
                    ``(C) Points and fees.--
                            ``(i) In general.--For purposes of 
                        subparagraph (A), the term `points and 
                        fees' means points and fees as defined 
                        by section 103(aa)(4) (other than bona 
                        fide third party charges not retained 
                        by the mortgage originator, creditor, 
                        or an affiliate of the creditor or 
                        mortgage originator).
                            ``(ii) Computation.--For purposes 
                        of computing the total points and fees 
                        under this subparagraph, the total 
                        points and fees shall exclude either of 
                        the amounts described in the following 
                        subclauses, but not both:
                                    ``(I) Up to and including 2 
                                bona fide discount points 
                                payable by the consumer in 
                                connection with the mortgage, 
                                but only if the interest rate 
                                from which the mortgage's 
                                interest rate will be 
                                discounted does not exceed by 
                                more than 1 percentage point 
                                the average prime offer rate.
                                    ``(II) Unless 2 bona fide 
                                discount points have been 
                                excluded under subclause (I), 
                                up to and including 1 bona fide 
                                discount point payable by the 
                                consumer in connection with the 
                                mortgage, but only if the 
                                interest rate from which the 
                                mortgage's interest rate will 
                                be discounted does not exceed 
                                by more than 2 percentage 
                                points the average prime offer 
                                rate.
                            ``(iii) Bona fide discount points 
                        defined.--For purposes of clause (ii), 
                        the term `bona fide discount points' 
                        means loan discount points which are 
                        knowingly paid by the consumer for the 
                        purpose of reducing, and which in fact 
                        result in a bona fide reduction of, the 
                        interest rate or time-price 
                        differential applicable to the 
                        mortgage.
                            ``(iv) Interest rate reduction.--
                        Subclauses (I) and (II) of clause (ii) 
                        shall not apply to discount points used 
                        to purchase an interest rate reduction 
                        unless the amount of the interest rate 
                        reduction purchased is reasonably 
                        consistent with established industry 
                        norms and practices for secondary 
                        mortgage market transactions.
                    ``(D) Smaller loans.--The Board shall 
                prescribe rules adjusting the criteria under 
                subparagraph (A)(vii) in order to permit 
                lenders that extend smaller loans to meet the 
                requirements of the presumption of compliance 
                under paragraph (1). In prescribing such rules, 
                the Board shall consider the potential impact 
                of such rules on rural areas and other areas 
                where home values are lower.
                    ``(E) Balloon loans.--The Board may, by 
                regulation, provide that the term `qualified 
                mortgage' includes a balloon loan--
                            ``(i) that meets all of the 
                        criteria for a qualified mortgage under 
                        subparagraph (A) (except clauses 
                        (i)(II), (ii), (iv), and (v) of such 
                        subparagraph);
                            ``(ii) for which the creditor makes 
                        a determination that the consumer is 
                        able to make all scheduled payments, 
                        except the balloon payment, out of 
                        income or assets other than the 
                        collateral;
                            ``(iii) for which the underwriting 
                        is based on a payment schedule that 
                        fully amortizes the loan over a period 
                        of not more than 30 years and takes 
                        into account all applicable taxes, 
                        insurance, and assessments; and
                            ``(iv) that is extended by a 
                        creditor that--
                                    ``(I) operates 
                                predominantly in rural or 
                                underserved areas;
                                    ``(II) together with all 
                                affiliates, has total annual 
                                residential mortgage loan 
                                originations that do not exceed 
                                a limit set by the Board;
                                    ``(III) retains the balloon 
                                loans in portfolio; and
                                    ``(IV) meets any asset size 
                                threshold and any other 
                                criteria as the Board may 
                                establish, consistent with the 
                                purposes of this subtitle.
            ``(3) Regulations.--
                    ``(A) In general.--The Board shall 
                prescribe regulations to carry out the purposes 
                of this subsection.
                    ``(B) Revision of safe harbor criteria.--
                            ``(i) In general.--The Board may 
                        prescribe regulations that revise, add 
                        to, or subtract from the criteria that 
                        define a qualified mortgage upon a 
                        finding that such regulations are 
                        necessary or proper to ensure that 
                        responsible, affordable mortgage credit 
                        remains available to consumers in a 
                        manner consistent with the purposes of 
                        this section, necessary and appropriate 
                        to effectuate the purposes of this 
                        section and section 129B, to prevent 
                        circumvention or evasion thereof, or to 
                        facilitate compliance with such 
                        sections.
                            ``(ii) Loan definition.--The 
                        following agencies shall, in 
                        consultation with the Board, prescribe 
                        rules defining the types of loans they 
                        insure, guarantee, or administer, as 
                        the case may be, that are qualified 
                        mortgages for purposes of paragraph 
                        (2)(A), and such rules may revise, add 
                        to, or subtract from the criteria used 
                        to define a qualified mortgage under 
                        paragraph (2)(A), upon a finding that 
                        such rules are consistent with the 
                        purposes of this section and section 
                        129B, to prevent circumvention or 
                        evasion thereof, or to facilitate 
                        compliance with such sections:
                                    ``(I) The Department of 
                                Housing and Urban Development, 
                                with regard to mortgages 
                                insured under the National 
                                Housing Act (12 U.S.C. 1707 et 
                                seq.).
                                    ``(II) The Department of 
                                Veterans Affairs, with regard 
                                to a loan made or guaranteed by 
                                the Secretary of Veterans 
                                Affairs.
                                    ``(III) The Department of 
                                Agriculture, with regard to 
                                loans guaranteed by the 
                                Secretary of Agriculture 
                                pursuant to 42 U.S.C. 1472(h).
                                    ``(IV) The Rural Housing 
                                Service, with regard to loans 
                                insured by the Rural Housing 
                                Service.''.

SEC. 1413. DEFENSE TO FORECLOSURE.

    Section 130 of the Truth in Lending Act (15 U.S.C. 1640) is 
amended by adding at the end the following new subsection:
    ``(k) Defense to Foreclosure.--
            ``(1) In general.--Notwithstanding any other 
        provision of law, when a creditor, assignee, or other 
        holder of a residential mortgage loan or anyone acting 
        on behalf of such creditor, assignee, or holder, 
        initiates a judicial or nonjudicial foreclosure of the 
        residential mortgage loan, or any other action to 
        collect the debt in connection with such loan, a 
        consumer may assert a violation by a creditor of 
        paragraph (1) or (2) of section 129B(c), or of section 
        129C(a), as a matter of defense by recoupment or set 
        off without regard for the time limit on a private 
        action for damages under subsection (e).
            ``(2) Amount of recoupment or setoff.--
                    ``(A) In general.--The amount of recoupment 
                or set-off under paragraph (1) shall equal the 
                amount to which the consumer would be entitled 
                under subsection (a) for damages for a valid 
                claim brought in an original action against the 
                creditor, plus the costs to the consumer of the 
                action, including a reasonable attorney's fee.
                    ``(B) Special rule.--Where such judgment is 
                rendered after the expiration of the applicable 
                time limit on a private action for damages 
                under subsection (e), the amount of recoupment 
                or set-off under paragraph (1) derived from 
                damages under subsection (a)(4) shall not 
                exceed the amount to which the consumer would 
                have been entitled under subsection (a)(4) for 
                damages computed up to the day preceding the 
                expiration of the applicable time limit.''.

SEC. 1414. ADDITIONAL STANDARDS AND REQUIREMENTS.

    (a) In General.--Section 129C of the Truth in Lending Act 
is amended by inserting after subsection (b) (as added by this 
title) the following new subsections:
    ``(c) Prohibition on Certain Prepayment Penalties.--
            ``(1) Prohibited on certain loans.--
                    ``(A) In general.--A residential mortgage 
                loan that is not a `qualified mortgage', as 
                defined under subsection (b)(2), may not 
                contain terms under which a consumer must pay a 
                prepayment penalty for paying all or part of 
                the principal after the loan is consummated.
                    ``(B) Exclusions.--For purposes of this 
                subsection, a `qualified mortgage' may not 
                include a residential mortgage loan that--
                            ``(i) has an adjustable rate; or
                            ``(ii) has an annual percentage 
                        rate that exceeds the average prime 
                        offer rate for a comparable 
                        transaction, as of the date the 
                        interest rate is set--
                                    ``(I) by 1.5 or more 
                                percentage points, in the case 
                                of a first lien residential 
                                mortgage loan having an 
                                original principal obligation 
                                amount that is equal to or less 
                                than the amount of the maximum 
                                limitation on the original 
                                principal obligation of 
                                mortgage in effect for a 
                                residence of the applicable 
                                size, as of the date of such 
                                interest rate set, pursuant to 
                                the 6th sentence of section 
                                305(a)(2) of the Federal Home 
                                Loan Mortgage Corporation Act 
                                (12 U.S.C. 1454(a)(2));
                                    ``(II) by 2.5 or more 
                                percentage points, in the case 
                                of a first lien residential 
                                mortgage loan having a original 
                                principal obligation amount 
                                that is more than the amount of 
                                the maximum limitation on the 
                                original principal obligation 
                                of mortgage in effect for a 
                                residence of the applicable 
                                size, as of the date of such 
                                interest rate set, pursuant to 
                                the 6th sentence of section 
                                305(a)(2) the Federal Home Loan 
                                Mortgage Corporation Act (12 
                                U.S.C. 1454(a)(2)); and
                                    ``(III) by 3.5 or more 
                                percentage points, in the case 
                                of a subordinate lien 
                                residential mortgage loan.
            ``(2)  Publication of average prime offer rate and 
        apr thresholds.--The Board--
                    ``(A) shall publish, and update at least 
                weekly, average prime offer rates;
                    ``(B) may publish multiple rates based on 
                varying types of mortgage transactions; and
                    ``(C) shall adjust the thresholds 
                established under subclause (I), (II), and 
                (III) of paragraph (1)(B)(ii) as necessary to 
                reflect significant changes in market 
                conditions and to effectuate the purposes of 
                the Mortgage Reform and Anti-Predatory Lending 
                Act.
            ``(3) Phased-out penalties on qualified 
        mortgages.--A qualified mortgage (as defined in 
        subsection (b)(2)) may not contain terms under which a 
        consumer must pay a prepayment penalty for paying all 
        or part of the principal after the loan is consummated 
        in excess of the following limitations:
                    ``(A) During the 1-year period beginning on 
                the date the loan is consummated, the 
                prepayment penalty shall not exceed an amount 
                equal to 3 percent of the outstanding balance 
                on the loan.
                    ``(B) During the 1-year period beginning 
                after the period described in subparagraph (A), 
                the prepayment penalty shall not exceed an 
                amount equal to 2 percent of the outstanding 
                balance on the loan.
                    ``(C) During the 1-year period beginning 
                after the 1-year period described in 
                subparagraph (B), the prepayment penalty shall 
                not exceed an amount equal to 1 percent of the 
                outstanding balance on the loan.
                    ``(D) After the end of the 3-year period 
                beginning on the date the loan is consummated, 
                no prepayment penalty may be imposed on a 
                qualified mortgage.
            ``(4) Option for no prepayment penalty required.--A 
        creditor may not offer a consumer a residential 
        mortgage loan product that has a prepayment penalty for 
        paying all or part of the principal after the loan is 
        consummated as a term of the loan without offering the 
        consumer a residential mortgage loan product that does 
        not have a prepayment penalty as a term of the loan.
    ``(d) Single Premium Credit Insurance Prohibited.--No 
creditor may finance, directly or indirectly, in connection 
with any residential mortgage loan or with any extension of 
credit under an open end consumer credit plan secured by the 
principal dwelling of the consumer, any credit life, credit 
disability, credit unemployment, or credit property insurance, 
or any other accident, loss-of-income, life, or health 
insurance, or any payments directly or indirectly for any debt 
cancellation or suspension agreement or contract, except that--
            ``(1) insurance premiums or debt cancellation or 
        suspension fees calculated and paid in full on a 
        monthly basis shall not be considered financed by the 
        creditor; and
            ``(2) this subsection shall not apply to credit 
        unemployment insurance for which the unemployment 
        insurance premiums are reasonable, the creditor 
        receives no direct or indirect compensation in 
        connection with the unemployment insurance premiums, 
        and the unemployment insurance premiums are paid 
        pursuant to another insurance contract and not paid to 
        an affiliate of the creditor.
    ``(e) Arbitration.--
            ``(1) In general.--No residential mortgage loan and 
        no extension of credit under an open end consumer 
        credit plan secured by the principal dwelling of the 
        consumer may include terms which require arbitration or 
        any other nonjudicial procedure as the method for 
        resolving any controversy or settling any claims 
        arising out of the transaction.
            ``(2) Post-controversy agreements.--Subject to 
        paragraph (3), paragraph (1) shall not be construed as 
        limiting the right of the consumer and the creditor or 
        any assignee to agree to arbitration or any other 
        nonjudicial procedure as the method for resolving any 
        controversy at any time after a dispute or claim under 
        the transaction arises.
            ``(3) No waiver of statutory cause of action.--No 
        provision of any residential mortgage loan or of any 
        extension of credit under an open end consumer credit 
        plan secured by the principal dwelling of the consumer, 
        and no other agreement between the consumer and the 
        creditor relating to the residential mortgage loan or 
        extension of credit referred to in paragraph (1), shall 
        be applied or interpreted so as to bar a consumer from 
        bringing an action in an appropriate district court of 
        the United States, or any other court of competent 
        jurisdiction, pursuant to section 130 or any other 
        provision of law, for damages or other relief in 
        connection with any alleged violation of this section, 
        any other provision of this title, or any other Federal 
        law.
    ``(f) Mortgages With Negative Amortization.--No creditor 
may extend credit to a borrower in connection with a consumer 
credit transaction under an open or closed end consumer credit 
plan secured by a dwelling or residential real property that 
includes a dwelling, other than a reverse mortgage, that 
provides or permits a payment plan that may, at any time over 
the term of the extension of credit, result in negative 
amortization unless, before such transaction is consummated--
            ``(1) the creditor provides the consumer with a 
        statement that--
                    ``(A) the pending transaction will or may, 
                as the case may be, result in negative 
                amortization;
                    ``(B) describes negative amortization in 
                such manner as the Board shall prescribe;
                    ``(C) negative amortization increases the 
                outstanding principal balance of the account; 
                and
                    ``(D) negative amortization reduces the 
                consumer's equity in the dwelling or real 
                property; and
            ``(2) in the case of a first-time borrower with 
        respect to a residential mortgage loan that is not a 
        qualified mortgage, the first-time borrower provides 
        the creditor with sufficient documentation to 
        demonstrate that the consumer received homeownership 
        counseling from organizations or counselors certified 
        by the Secretary of Housing and Urban Development as 
        competent to provide such counseling.''.
    (b) Conforming Amendment Relating to Enforcement.--Section 
108(a) of the Truth in Lending Act (15 U.S.C. 1607(a)) is 
amended by inserting after paragraph (6) the following new 
paragraph:
            ``(7) sections 21B and 21C of the Securities 
        Exchange Act of 1934, in the case of a broker or 
        dealer, other than a depository institution, by the 
        Securities and Exchange Commission.''.
    (c) Protection Against Loss of Anti-deficiency 
Protection.--Section 129C of the Truth in Lending Act is 
amended by inserting after subsection (f) (as added by 
subsection (a)) the following new subsection:
    ``(g) Protection Against Loss of Anti-deficiency 
Protection.--
            ``(1) Definition.--For purposes of this subsection, 
        the term `anti-deficiency law' means the law of any 
        State which provides that, in the event of foreclosure 
        on the residential property of a consumer securing a 
        mortgage, the consumer is not liable, in accordance 
        with the terms and limitations of such State law, for 
        any deficiency between the sale price obtained on such 
        property through foreclosure and the outstanding 
        balance of the mortgage.
            ``(2) Notice at time of consummation.--In the case 
        of any residential mortgage loan that is, or upon 
        consummation will be, subject to protection under an 
        anti-deficiency law, the creditor or mortgage 
        originator shall provide a written notice to the 
        consumer describing the protection provided by the 
        anti-deficiency law and the significance for the 
        consumer of the loss of such protection before such 
        loan is consummated.
            ``(3) Notice before refinancing that would cause 
        loss of protection.--In the case of any residential 
        mortgage loan that is subject to protection under an 
        anti-deficiency law, if a creditor or mortgage 
        originator provides an application to a consumer, or 
        receives an application from a consumer, for any type 
        of refinancing for such loan that would cause the loan 
        to lose the protection of such anti-deficiency law, the 
        creditor or mortgage originator shall provide a written 
        notice to the consumer describing the protection 
        provided by the anti-deficiency law and the 
        significance for the consumer of the loss of such 
        protection before any agreement for any such 
        refinancing is consummated.''.
    (d) Policy Regarding Acceptance of Partial Payment.--
Section 129C of the Truth in Lending Act is amended by 
inserting after subsection (g) (as added by subsection (c)) the 
following new subsection:
    ``(h) Policy Regarding Acceptance of Partial Payment.--In 
the case of any residential mortgage loan, a creditor shall 
disclose prior to settlement or, in the case of a person 
becoming a creditor with respect to an existing residential 
mortgage loan, at the time such person becomes a creditor--
            ``(1) the creditor's policy regarding the 
        acceptance of partial payments; and
            ``(2) if partial payments are accepted, how such 
        payments will be applied to such mortgage and if such 
        payments will be placed in escrow.
    ``(i) Timeshare Plans.--This section and any regulations 
promulgated under this section do not apply to an extension of 
credit relating to a plan described in section 101(53D) of 
title 11, United States Code.''.

SEC. 1415. RULE OF CONSTRUCTION.

    Except as otherwise expressly provided in section 129B or 
129C of the Truth in Lending Act (as added by this title), no 
provision of such section 129B or 129C shall be construed as 
superseding, repealing, or affecting any duty, right, 
obligation, privilege, or remedy of any person under any other 
provision of the Truth in Lending Act or any other provision of 
Federal or State law.

SEC. 1416. AMENDMENTS TO CIVIL LIABILITY PROVISIONS.

    (a) Increase in Amount of Civil Money Penalties for Certain 
Violations.--Section 130(a) of the Truth in Lending Act (15 
U.S.C. 1640(a)) is amended--
            (1) in paragraph (2)(A)(ii)--
                    (A) by striking ``$100'' and inserting 
                ``$200''; and
                    (B) by striking ``$1,000'' and inserting 
                ``$2,000'';
            (2) in paragraph (2)(B), by striking ``$500,000'' 
        and inserting ``$1,000,000''; and
            (3) in paragraph (4), by inserting ``, paragraph 
        (1) or (2) of section 129B(c), or section 129C(a)'' 
        after ``section 129''.
    (b) Statute of Limitations Extended for Section 129 
Violations.--Section 130(e) of the Truth in Lending Act (15 
U.S.C. 1640(e)) is amended--
            (1) in the first sentence, by striking ``Any 
        action'' and inserting ``Except as provided in the 
        subsequent sentence, any action''; and
            (2) by inserting after the first sentence the 
        following new sentence: ``Any action under this section 
        with respect to any violation of section 129, 129B, or 
        129C may be brought in any United States district 
        court, or in any other court of competent jurisdiction, 
        before the end of the 3-year period beginning on the 
        date of the occurrence of the violation.''.

SEC. 1417. LENDER RIGHTS IN THE CONTEXT OF BORROWER DECEPTION.

    Section 130 of the Truth in Lending Act (15 U.S.C. 1640) is 
amended by adding after subsection (k) (as added by this title) 
the following new subsection:
    ``(l) Exemption From Liability and Rescission in Case of 
Borrower Fraud or Deception.--In addition to any other remedy 
available by law or contract, no creditor or assignee shall be 
liable to an obligor under this section, if such obligor, or 
co-obligor has been convicted of obtaining by actual fraud such 
residential mortgage loan.''.

SEC. 1418. SIX-MONTH NOTICE REQUIRED BEFORE RESET OF HYBRID ADJUSTABLE 
                    RATE MORTGAGES.

    (a) In General.--Chapter 2 of the Truth in Lending Act (15 
U.S.C. 1631 et seq.) is amended by inserting after section 128 
the following new section:

``Sec. 128A. Reset of hybrid adjustable rate mortgages

    ``(a) Hybrid Adjustable Rate Mortgages Defined.--For 
purposes of this section, the term `hybrid adjustable rate 
mortgage' means a consumer credit transaction secured by the 
consumer's principal residence with a fixed interest rate for 
an introductory period that adjusts or resets to a variable 
interest rate after such period.
    ``(b) Notice of Reset and Alternatives.--During the 1-month 
period that ends 6 months before the date on which the interest 
rate in effect during the introductory period of a hybrid 
adjustable rate mortgage adjusts or resets to a variable 
interest rate or, in the case of such an adjustment or 
resetting that occurs within the first 6 months after 
consummation of such loan, at consummation, the creditor or 
servicer of such loan shall provide a written notice, separate 
and distinct from all other correspondence to the consumer, 
that includes the following:
            ``(1) Any index or formula used in making 
        adjustments to or resetting the interest rate and a 
        source of information about the index or formula.
            ``(2) An explanation of how the new interest rate 
        and payment would be determined, including an 
        explanation of how the index was adjusted, such as by 
        the addition of a margin.
            ``(3) A good faith estimate, based on accepted 
        industry standards, of the creditor or servicer of the 
        amount of the monthly payment that will apply after the 
        date of the adjustment or reset, and the assumptions on 
        which this estimate is based.
            ``(4) A list of alternatives consumers may pursue 
        before the date of adjustment or reset, and 
        descriptions of the actions consumers must take to 
        pursue these alternatives, including--
                    ``(A) refinancing;
                    ``(B) renegotiation of loan terms;
                    ``(C) payment forbearances; and
                    ``(D) pre-foreclosure sales.
            ``(5) The names, addresses, telephone numbers, and 
        Internet addresses of counseling agencies or programs 
        reasonably available to the consumer that have been 
        certified or approved and made publicly available by 
        the Secretary of Housing and Urban Development or a 
        State housing finance authority (as defined in section 
        1301 of the Financial Institutions Reform, Recovery, 
        and Enforcement Act of 1989).
            ``(6) The address, telephone number, and Internet 
        address for the State housing finance authority (as so 
        defined) for the State in which the consumer resides.
    ``(c) Savings Clause.--The Board may require the notice in 
paragraph (b) or other notice consistent with this Act for 
adjustable rate mortgage loans that are not hybrid adjustable 
rate mortgage loans.''.
    (b) Clerical Amendment.--The table of sections for chapter 
2 of the Truth in Lending Act is amended by inserting after the 
item relating to section 128 the following new item:

``128A. Reset of hybrid adjustable rate mortgages.''.

SEC. 1419. REQUIRED DISCLOSURES.

    Section 128(a) of Truth in Lending Act (15 U.S.C. 1638(a)) 
is amended by adding at the end the following new paragraphs:
            ``(16) In the case of a variable rate residential 
        mortgage loan for which an escrow or impound account 
        will be established for the payment of all applicable 
        taxes, insurance, and assessments--
                    ``(A) the amount of initial monthly payment 
                due under the loan for the payment of principal 
                and interest, and the amount of such initial 
                monthly payment including the monthly payment 
                deposited in the account for the payment of all 
                applicable taxes, insurance, and assessments; 
                and
                    ``(B) the amount of the fully indexed 
                monthly payment due under the loan for the 
                payment of principal and interest, and the 
                amount of such fully indexed monthly payment 
                including the monthly payment deposited in the 
                account for the payment of all applicable 
                taxes, insurance, and assessments.
            ``(17) In the case of a residential mortgage loan, 
        the aggregate amount of settlement charges for all 
        settlement services provided in connection with the 
        loan, the amount of charges that are included in the 
        loan and the amount of such charges the borrower must 
        pay at closing, the approximate amount of the wholesale 
        rate of funds in connection with the loan, and the 
        aggregate amount of other fees or required payments in 
        connection with the loan.
            ``(18) In the case of a residential mortgage loan, 
        the aggregate amount of fees paid to the mortgage 
        originator in connection with the loan, the amount of 
        such fees paid directly by the consumer, and any 
        additional amount received by the originator from the 
        creditor.
            ``(19) In the case of a residential mortgage loan, 
        the total amount of interest that the consumer will pay 
        over the life of the loan as a percentage of the 
        principal of the loan. Such amount shall be computed 
        assuming the consumer makes each monthly payment in 
        full and on-time, and does not make any over-
        payments.''.

SEC. 1420. DISCLOSURES REQUIRED IN MONTHLY STATEMENTS FOR RESIDENTIAL 
                    MORTGAGE LOANS.

    Section 128 of the Truth in Lending Act (15 U.S.C. 1638) is 
amended by adding at the end the following new subsection:
    ``(f) Periodic Statements for Residential Mortgage Loans.--
            ``(1) In general.--The creditor, assignee, or 
        servicer with respect to any residential mortgage loan 
        shall transmit to the obligor, for each billing cycle, 
        a statement setting forth each of the following items, 
        to the extent applicable, in a conspicuous and 
        prominent manner:
                    ``(A) The amount of the principal 
                obligation under the mortgage.
                    ``(B) The current interest rate in effect 
                for the loan.
                    ``(C) The date on which the interest rate 
                may next reset or adjust.
                    ``(D) The amount of any prepayment fee to 
                be charged, if any.
                    ``(E) A description of any late payment 
                fees.
                    ``(F) A telephone number and electronic 
                mail address that may be used by the obligor to 
                obtain information regarding the mortgage.
                    ``(G) The names, addresses, telephone 
                numbers, and Internet addresses of counseling 
                agencies or programs reasonably available to 
                the consumer that have been certified or 
                approved and made publicly available by the 
                Secretary of Housing and Urban Development or a 
                State housing finance authority (as defined in 
                section 1301 of the Financial Institutions 
                Reform, Recovery, and Enforcement Act of 1989).
                    ``(H) Such other information as the Board 
                may prescribe in regulations.
            ``(2) Development and use of standard form.--The 
        Board shall develop and prescribe a standard form for 
        the disclosure required under this subsection, taking 
        into account that the statements required may be 
        transmitted in writing or electronically.
            ``(3) Exception.--Paragraph (1) shall not apply to 
        any fixed rate residential mortgage loan where the 
        creditor, assignee, or servicer provides the obligor 
        with a coupon book that provides the obligor with 
        substantially the same information as required in 
        paragraph (1).''.

SEC. 1421. REPORT BY THE GAO.

    (a) Report Required.--The Comptroller General of the United 
States shall conduct a study to determine the effects the 
enactment of this Act will have on the availability and 
affordability of credit for consumers, small businesses, 
homebuyers, and mortgage lending, including the effect--
            (1) on the mortgage market for mortgages that are 
        not within the safe harbor provided in the amendments 
        made by this subtitle;
            (2) on the ability of prospective homebuyers to 
        obtain financing;
            (3) on the ability of homeowners facing resets or 
        adjustments to refinance--for example, do they have 
        fewer refinancing options due to the unavailability of 
        certain loan products that were available before the 
        enactment of this Act;
            (4) on minorities' ability to access affordable 
        credit compared with other prospective borrowers;
            (5) on home sales and construction;
            (6) of extending the rescission right, if any, on 
        adjustable rate loans and its impact on litigation;
            (7) of State foreclosure laws and, if any, an 
        investor's ability to transfer a property after 
        foreclosure;
            (8) of expanding the existing provisions of the 
        Home Ownership and Equity Protection Act of 1994;
            (9) of prohibiting prepayment penalties on high-
        cost mortgages; and
            (10) of establishing counseling services under the 
        Department of Housing and Urban Development and offered 
        through the Office of Housing Counseling.
    (b) Report.--Before the end of the 1-year period beginning 
on the date of the enactment of this Act, the Comptroller 
General shall submit a report to the Congress containing the 
findings and conclusions of the Comptroller General with 
respect to the study conducted pursuant to subsection (a).
    (c) Examination Related to Certain Credit Risk Retention 
Provisions.--The report required by subsection (b) shall also 
include an analysis by the Comptroller General of the effect on 
the capital reserves and funding of lenders of credit risk 
retention provisions for non-qualified mortgages, including an 
analysis of the exceptions and adjustments authorized in 
section 129C(b)(3) of the Truth in Lending Act and a 
recommendation on whether a uniform standard is needed.
    (d) Analysis of Credit Risk Retention Provisions.--The 
report required by subsection (b) shall also include--
            (1) an analysis by the Comptroller General of 
        whether the credit risk retention provisions have 
        significantly reduced risks to the larger credit market 
        of the repackaging and selling of securitized loans on 
        a secondary market; and
            (2) recommendations to the Congress on adjustments 
        that should be made, or additional measures that should 
        be undertaken.

SEC. 1422. STATE ATTORNEY GENERAL ENFORCEMENT AUTHORITY.

    Section 130(e) of the Truth in Lending Act (15 U.S.C. 
1640(e)) is amended by striking ``section 129 may also'' and 
inserting ``section 129, 129B, 129C, 129D, 129E, 129F, 129G, or 
129H of this Act may also''.

                    Subtitle C--High-Cost Mortgages

SEC. 1431. DEFINITIONS RELATING TO HIGH-COST MORTGAGES.

    (a) High-cost Mortgage Defined.--Section 103(aa) of the 
Truth in Lending Act (15 U.S.C. 1602(aa)) is amended by 
striking all that precedes paragraph (2) and inserting the 
following:
    ``(aa) High-cost Mortgage.--
            ``(1) Definition.--
                    ``(A) In general.--The term `high-cost 
                mortgage', and a mortgage referred to in this 
                subsection, means a consumer credit transaction 
                that is secured by the consumer's principal 
                dwelling, other than a reverse mortgage 
                transaction, if--
                            ``(i) in the case of a credit 
                        transaction secured--
                                    ``(I) by a first mortgage 
                                on the consumer's principal 
                                dwelling, the annual percentage 
                                rate at consummation of the 
                                transaction will exceed by more 
                                than 6.5 percentage points (8.5 
                                percentage points, if the 
                                dwelling is personal property 
                                and the transaction is for less 
                                than $50,000) the average prime 
                                offer rate, as defined in 
                                section 129C(b)(2)(B), for a 
                                comparable transaction; or
                                    ``(II) by a subordinate or 
                                junior mortgage on the 
                                consumer's principal dwelling, 
                                the annual percentage rate at 
                                consummation of the transaction 
                                will exceed by more than 8.5 
                                percentage points the average 
                                prime offer rate, as defined in 
                                section 129C(b)(2)(B), for a 
                                comparable transaction;
                            ``(ii) the total points and fees 
                        payable in connection with the 
                        transaction, other than bona fide third 
                        party charges not retained by the 
                        mortgage originator, creditor, or an 
                        affiliate of the creditor or mortgage 
                        originator, exceed--
                                    ``(I) in the case of a 
                                transaction for $20,000 or 
                                more, 5 percent of the total 
                                transaction amount; or
                                    ``(II) in the case of a 
                                transaction for less than 
                                $20,000, the lesser of 8 
                                percent of the total 
                                transaction amount or $1,000 
                                (or such other dollar amount as 
                                the Board shall prescribe by 
                                regulation); or
                            ``(iii) the credit transaction 
                        documents permit the creditor to charge 
                        or collect prepayment fees or penalties 
                        more than 36 months after the 
                        transaction closing or such fees or 
                        penalties exceed, in the aggregate, 
                        more than 2 percent of the amount 
                        prepaid.
                    ``(B) Introductory rates taken into 
                account.--For purposes of subparagraph (A)(i), 
                the annual percentage rate of interest shall be 
                determined based on the following interest 
                rate:
                            ``(i) In the case of a fixed-rate 
                        transaction in which the annual 
                        percentage rate will not vary during 
                        the term of the loan, the interest rate 
                        in effect on the date of consummation 
                        of the transaction.
                            ``(ii) In the case of a transaction 
                        in which the rate of interest varies 
                        solely in accordance with an index, the 
                        interest rate determined by adding the 
                        index rate in effect on the date of 
                        consummation of the transaction to the 
                        maximum margin permitted at any time 
                        during the loan agreement.
                            ``(iii) In the case of any other 
                        transaction in which the rate may vary 
                        at any time during the term of the loan 
                        for any reason, the interest charged on 
                        the transaction at the maximum rate 
                        that may be charged during the term of 
                        the loan.
                    ``(C) Mortgage insurance.--For the purposes 
                of computing the total points and fees under 
                paragraph (4), the total points and fees shall 
                exclude--
                            ``(i) any premium provided by an 
                        agency of the Federal Government or an 
                        agency of a State;
                            ``(ii) any amount that is not in 
                        excess of the amount payable under 
                        policies in effect at the time of 
                        origination under section 203(c)(2)(A) 
                        of the National Housing Act (12 U.S.C. 
                        1709(c)(2)(A)), provided that the 
                        premium, charge, or fee is required to 
                        be refundable on a pro-rated basis and 
                        the refund is automatically issued upon 
                        notification of the satisfaction of the 
                        underlying mortgage loan; and
                            ``(iii) any premium paid by the 
                        consumer after closing.''.
    (b) Adjustment of Percentage Points.--Section 103(aa)(2) of 
the Truth in Lending Act (15 U.S.C. 1602(aa)(2)) is amended by 
striking subparagraph (B) and inserting the following new 
subparagraph:
                    ``(B) An increase or decrease under 
                subparagraph (A)--
                            ``(i) may not result in the number 
                        of percentage points referred to in 
                        paragraph (1)(A)(i)(I) being less than 
                        6 percentage points or greater than 10 
                        percentage points; and
                            ``(ii) may not result in the number 
                        of percentage points referred to in 
                        paragraph (1)(A)(i)(II) being less than 
                        8 percentage points or greater than 12 
                        percentage points.''.
    (c) Points and Fees Defined.--
            (1) In general.--Section 103(aa)(4) of the Truth in 
        Lending Act (15 U.S.C. 1602(aa)(4)) is amended--
                    (A) by striking subparagraph (B) and 
                inserting the following:
                    ``(B) all compensation paid directly or 
                indirectly by a consumer or creditor to a 
                mortgage originator from any source, including 
                a mortgage originator that is also the creditor 
                in a table-funded transaction;'';
                    (B) by redesignating subparagraph (D) as 
                subparagraph (G); and
                    (C) by inserting after subparagraph (C) the 
                following new subparagraphs:
                    ``(D) premiums or other charges payable at 
                or before closing for any credit life, credit 
                disability, credit unemployment, or credit 
                property insurance, or any other accident, 
                loss-of-income, life or health insurance, or 
                any payments directly or indirectly for any 
                debt cancellation or suspension agreement or 
                contract, except that insurance premiums or 
                debt cancellation or suspension fees calculated 
                and paid in full on a monthly basis shall not 
                be considered financed by the creditor;
                    ``(E) the maximum prepayment fees and 
                penalties which may be charged or collected 
                under the terms of the credit transaction;
                    ``(F) all prepayment fees or penalties that 
                are incurred by the consumer if the loan 
                refinances a previous loan made or currently 
                held by the same creditor or an affiliate of 
                the creditor; and''.
            (2) Calculation of points and fees for open-end 
        consumer credit plans.--Section 103(aa) of the Truth in 
        Lending Act (15 U.S.C. 1602(aa)) is amended--
                    (A) by redesignating paragraph (5) as 
                paragraph (6); and
                    (B) by inserting after paragraph (4) the 
                following new paragraph:
            ``(5) Calculation of points and fees for open-end 
        consumer credit plans.--In the case of open-end 
        consumer credit plans, points and fees shall be 
        calculated, for purposes of this section and section 
        129, by adding the total points and fees known at or 
        before closing, including the maximum prepayment 
        penalties which may be charged or collected under the 
        terms of the credit transaction, plus the minimum 
        additional fees the consumer would be required to pay 
        to draw down an amount equal to the total credit 
        line.''.
    (d) Bona Fide Discount Loan Discount Points.--Section 103 
of the Truth in Lending Act (15 U.S.C. 1602) is amended by 
inserting after subsection (cc) (as added by section 1401) the 
following new subsection:
    ``(dd) Bona Fide Discount Points and Prepayment 
Penalties.--For the purposes of determining the amount of 
points and fees for purposes of subsection (aa), either the 
amounts described in paragraph (1) or (2) of the following 
paragraphs, but not both, shall be excluded:
            ``(1) Up to and including 2 bona fide discount 
        points payable by the consumer in connection with the 
        mortgage, but only if the interest rate from which the 
        mortgage's interest rate will be discounted does not 
        exceed by more than 1 percentage point--
                    ``(A) the average prime offer rate, as 
                defined in section 129C; or
                    ``(B) if secured by a personal property 
                loan, the average rate on a loan in connection 
                with which insurance is provided under title I 
                of the National Housing Act (12 U.S.C. 1702 et 
                seq.).
            ``(2) Unless 2 bona fide discount points have been 
        excluded under paragraph (1), up to and including 1 
        bona fide discount point payable by the consumer in 
        connection with the mortgage, but only if the interest 
        rate from which the mortgage's interest rate will be 
        discounted does not exceed by more than 2 percentage 
        points--
                    ``(A) the average prime offer rate, as 
                defined in section 129C; or
                    ``(B) if secured by a personal property 
                loan, the average rate on a loan in connection 
                with which insurance is provided under title I 
                of the National Housing Act (12 U.S.C. 1702 et 
                seq.).
            ``(3) For purposes of paragraph (1), the term `bona 
        fide discount points' means loan discount points which 
        are knowingly paid by the consumer for the purpose of 
        reducing, and which in fact result in a bona fide 
        reduction of, the interest rate or time-price 
        differential applicable to the mortgage.
            ``(4) Paragraphs (1) and (2) shall not apply to 
        discount points used to purchase an interest rate 
        reduction unless the amount of the interest rate 
        reduction purchased is reasonably consistent with 
        established industry norms and practices for secondary 
        mortgage market transactions.''.

SEC. 1432. AMENDMENTS TO EXISTING REQUIREMENTS FOR CERTAIN MORTGAGES.

    (a) Prepayment Penalty Provisions.--Section 129(c)(2) of 
the Truth in Lending Act (15 U.S.C. 1639(c)(2)) is hereby 
repealed.
    (b) No Balloon Payments.--Section 129(e) of the Truth in 
Lending Act (15 U.S.C. 1639(e)) is amended to read as follows:
    ``(e) No Balloon Payments.--No high-cost mortgage may 
contain a scheduled payment that is more than twice as large as 
the average of earlier scheduled payments. This subsection 
shall not apply when the payment schedule is adjusted to the 
seasonal or irregular income of the consumer.''.

SEC. 1433. ADDITIONAL REQUIREMENTS FOR CERTAIN MORTGAGES.

    (a) Additional Requirements for Certain Mortgages.--Section 
129 of the Truth in Lending Act (15 U.S.C. 1639) is amended--
            (1) by redesignating subsections (j), (k), (l) and 
        (m) as subsections (n), (o), (p), and (q) respectively; 
        and
            (2) by inserting after subsection (i) the following 
        new subsections:
    ``(j) Recommended Default.--No creditor shall recommend or 
encourage default on an existing loan or other debt prior to 
and in connection with the closing or planned closing of a 
high-cost mortgage that refinances all or any portion of such 
existing loan or debt.
    ``(k) Late Fees.--
            ``(1) In general.--No creditor may impose a late 
        payment charge or fee in connection with a high-cost 
        mortgage--
                    ``(A) in an amount in excess of 4 percent 
                of the amount of the payment past due;
                    ``(B) unless the loan documents 
                specifically authorize the charge or fee;
                    ``(C) before the end of the 15-day period 
                beginning on the date the payment is due, or in 
                the case of a loan on which interest on each 
                installment is paid in advance, before the end 
                of the 30-day period beginning on the date the 
                payment is due; or
                    ``(D) more than once with respect to a 
                single late payment.
            ``(2) Coordination with subsequent late fees.--If a 
        payment is otherwise a full payment for the applicable 
        period and is paid on its due date or within an 
        applicable grace period, and the only delinquency or 
        insufficiency of payment is attributable to any late 
        fee or delinquency charge assessed on any earlier 
        payment, no late fee or delinquency charge may be 
        imposed on such payment.
            ``(3) Failure to make installment payment.--If, in 
        the case of a loan agreement the terms of which provide 
        that any payment shall first be applied to any past due 
        principal balance, the consumer fails to make an 
        installment payment and the consumer subsequently 
        resumes making installment payments but has not paid 
        all past due installments, the creditor may impose a 
        separate late payment charge or fee for any principal 
        due (without deduction due to late fees or related 
        fees) until the default is cured.
    ``(l) Acceleration of Debt.--No high-cost mortgage may 
contain a provision which permits the creditor to accelerate 
the indebtedness, except when repayment of the loan has been 
accelerated by default in payment, or pursuant to a due-on-sale 
provision, or pursuant to a material violation of some other 
provision of the loan document unrelated to payment schedule.
    ``(m) Restriction on Financing Points and Fees.--No 
creditor may directly or indirectly finance, in connection with 
any high-cost mortgage, any of the following:
            ``(1) Any prepayment fee or penalty payable by the 
        consumer in a refinancing transaction if the creditor 
        or an affiliate of the creditor is the noteholder of 
        the note being refinanced.
            ``(2) Any points or fees.''.
    (b) Prohibitions on Evasions.--Section 129 of the Truth in 
Lending Act (15 U.S.C. 1639) is amended by inserting after 
subsection (q) (as so redesignated by subsection (a)(1)) the 
following new subsection:
    ``(r) Prohibitions on Evasions, Structuring of 
Transactions, and Reciprocal Arrangements.--A creditor may not 
take any action in connection with a high-cost mortgage--
            ``(1) to structure a loan transaction as an open-
        end credit plan or another form of loan for the purpose 
        and with the intent of evading the provisions of this 
        title; or
            ``(2) to divide any loan transaction into separate 
        parts for the purpose and with the intent of evading 
        provisions of this title.''.
    (c) Modification or Deferral Fees.--Section 129 of the 
Truth in Lending Act (15 U.S.C. 1639) is amended by inserting 
after subsection (r) (as added by subsection (b) of this 
section) the following new subsection:
    ``(s) Modification and Deferral Fees Prohibited.--A 
creditor, successor in interest, assignee, or any agent of any 
of the above, may not charge a consumer any fee to modify, 
renew, extend, or amend a high-cost mortgage, or to defer any 
payment due under the terms of such mortgage.''.
    (d) Payoff Statement.--Section 129 of the Truth in Lending 
Act (15 U.S.C. 1639) is amended by inserting after subsection 
(s) (as added by subsection (c) of this section) the following 
new subsection:
    ``(t) Payoff Statement.--
            ``(1) Fees.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), no creditor or servicer may 
                charge a fee for informing or transmitting to 
                any person the balance due to pay off the 
                outstanding balance on a high-cost mortgage.
                    ``(B) Transaction fee.--When payoff 
                information referred to in subparagraph (A) is 
                provided by facsimile transmission or by a 
                courier service, a creditor or servicer may 
                charge a processing fee to cover the cost of 
                such transmission or service in an amount not 
                to exceed an amount that is comparable to fees 
                imposed for similar services provided in 
                connection with consumer credit transactions 
                that are secured by the consumer's principal 
                dwelling and are not high-cost mortgages.
                    ``(C) Fee disclosure.--Prior to charging a 
                transaction fee as provided in subparagraph 
                (B), a creditor or servicer shall disclose that 
                payoff balances are available for free pursuant 
                to subparagraph (A).
                    ``(D) Multiple requests.--If a creditor or 
                servicer has provided payoff information 
                referred to in subparagraph (A) without charge, 
                other than the transaction fee allowed by 
                subparagraph (B), on 4 occasions during a 
                calendar year, the creditor or servicer may 
                thereafter charge a reasonable fee for 
                providing such information during the remainder 
                of the calendar year.
            ``(2) Prompt delivery.--Payoff balances shall be 
        provided within 5 business days after receiving a 
        request by a consumer or a person authorized by the 
        consumer to obtain such information.''.
    (e) Pre-Loan Counseling Required.--Section 129 of the Truth 
in Lending Act (15 U.S.C. 1639) is amended by inserting after 
subsection t) (as added by subsection (d) of this section) the 
following new subsection:
    ``(u) Pre-Loan Counseling.--
            ``(1) In general.--A creditor may not extend credit 
        to a consumer under a high-cost mortgage without first 
        receiving certification from a counselor that is 
        approved by the Secretary of Housing and Urban 
        Development, or at the discretion of the Secretary, a 
        State housing finance authority, that the consumer has 
        received counseling on the advisability of the 
        mortgage. Such counselor shall not be employed by the 
        creditor or an affiliate of the creditor or be 
        affiliated with the creditor.
            ``(2) Disclosures required prior to counseling.--No 
        counselor may certify that a consumer has received 
        counseling on the advisability of the high-cost 
        mortgage unless the counselor can verify that the 
        consumer has received each statement required (in 
        connection with such loan) by this section or the Real 
        Estate Settlement Procedures Act of 1974 with respect 
        to the transaction.
            ``(3) Regulations.--The Board may prescribe such 
        regulations as the Board determines to be appropriate 
        to carry out the requirements of paragraph (1).''.
    (f) Corrections and Unintentional Violations.--Section 129 
of the Truth in Lending Act (15 U.S.C. 1639) is amended by 
inserting after subsection (u) (as added by subsection (e)) the 
following new subsection:
    ``(v) Corrections and Unintentional Violations.--A creditor 
or assignee in a high-cost mortgage who, when acting in good 
faith, fails to comply with any requirement under this section 
will not be deemed to have violated such requirement if the 
creditor or assignee establishes that either--
            ``(1) within 30 days of the loan closing and prior 
        to the institution of any action, the consumer is 
        notified of or discovers the violation, appropriate 
        restitution is made, and whatever adjustments are 
        necessary are made to the loan to either, at the choice 
        of the consumer--
                    ``(A) make the loan satisfy the 
                requirements of this chapter; or
                    ``(B) in the case of a high-cost mortgage, 
                change the terms of the loan in a manner 
                beneficial to the consumer so that the loan 
                will no longer be a high-cost mortgage; or
            ``(2) within 60 days of the creditor's discovery or 
        receipt of notification of an unintentional violation 
        or bona fide error and prior to the institution of any 
        action, the consumer is notified of the compliance 
        failure, appropriate restitution is made, and whatever 
        adjustments are necessary are made to the loan to 
        either, at the choice of the consumer--
                    ``(A) make the loan satisfy the 
                requirements of this chapter; or
                    ``(B) in the case of a high-cost mortgage, 
                change the terms of the loan in a manner 
                beneficial so that the loan will no longer be a 
                high-cost mortgage.''.

                Subtitle D--Office of Housing Counseling

SEC. 1441. SHORT TITLE.

    This subtitle may be cited as the ``Expand and Preserve 
Home Ownership Through Counseling Act''.

SEC. 1442. ESTABLISHMENT OF OFFICE OF HOUSING COUNSELING.

    Section 4 of the Department of Housing and Urban 
Development Act (42 U.S.C. 3533) is amended by adding at the 
end the following new subsection:
    ``(g) Office of Housing Counseling.--
            ``(1) Establishment.--There is established, in the 
        Department, the Office of Housing Counseling.
            ``(2) Director.--There is established the position 
        of Director of Housing Counseling. The Director shall 
        be the head of the Office of Housing Counseling and 
        shall be appointed by, and shall report to, the 
        Secretary. Such position shall be a career-reserved 
        position in the Senior Executive Service.
            ``(3) Functions.--
                    ``(A) In general.--The Director shall have 
                primary responsibility within the Department 
                for all activities and matters relating to 
                homeownership counseling and rental housing 
                counseling, including--
                            ``(i) research, grant 
                        administration, public outreach, and 
                        policy development relating to such 
                        counseling; and
                            ``(ii) establishment, coordination, 
                        and administration of all regulations, 
                        requirements, standards, and 
                        performance measures under programs and 
                        laws administered by the Department 
                        that relate to housing counseling, 
                        homeownership counseling (including 
                        maintenance of homes), mortgage-related 
                        counseling (including home equity 
                        conversion mortgages and credit 
                        protection options to avoid 
                        foreclosure), and rental housing 
                        counseling, including the requirements, 
                        standards, and performance measures 
                        relating to housing counseling.
                    ``(B) Specific functions.--The Director 
                shall carry out the functions assigned to the 
                Director and the Office under this section and 
                any other provisions of law. Such functions 
                shall include establishing rules necessary 
                for--
                            ``(i) the counseling procedures 
                        under section 106(g)(1) of the Housing 
                        and Urban Development Act of 1968 (12 
                        U.S.C. 1701x(h)(1));
                            ``(ii) carrying out all other 
                        functions of the Secretary under 
                        section 106(g) of the Housing and Urban 
                        Development Act of 1968, including the 
                        establishment, operation, and 
                        publication of the availability of the 
                        toll-free telephone number under 
                        paragraph (2) of such section;
                            ``(iii) contributing to the 
                        distribution of home buying information 
                        booklets pursuant to section 5 of the 
                        Real Estate Settlement Procedures Act 
                        of 1974 (12 U.S.C. 2604);
                            ``(iv) carrying out the 
                        certification program under section 
                        106(e) of the Housing and Urban 
                        Development Act of 1968 (12 U.S.C. 
                        1701x(e));
                            ``(v) carrying out the assistance 
                        program under section 106(a)(4) of the 
                        Housing and Urban Development Act of 
                        1968, including criteria for selection 
                        of applications to receive assistance;
                            ``(vi) carrying out any functions 
                        regarding abusive, deceptive, or 
                        unscrupulous lending practices relating 
                        to residential mortgage loans that the 
                        Secretary considers appropriate, which 
                        shall include conducting the study 
                        under section 6 of the Expand and 
                        Preserve Home Ownership Through 
                        Counseling Act;
                            ``(vii) providing for operation of 
                        the advisory committee established 
                        under paragraph (4) of this subsection;
                            ``(viii) collaborating with 
                        community-based organizations with 
                        expertise in the field of housing 
                        counseling; and
                            ``(ix) providing for the building 
                        of capacity to provide housing 
                        counseling services in areas that lack 
                        sufficient services, including 
                        underdeveloped areas that lack basic 
                        water and sewer systems, electricity 
                        services, and safe, sanitary housing.
            ``(4) Advisory committee.--
                    ``(A) In general.--The Secretary shall 
                appoint an advisory committee to provide advice 
                regarding the carrying out of the functions of 
                the Director.
                    ``(B) Members.--Such advisory committee 
                shall consist of not more than 12 individuals, 
                and the membership of the committee shall 
                equally represent the mortgage and real estate 
                industry, including consumers and housing 
                counseling agencies certified by the Secretary.
                    ``(C) Terms.--Except as provided in 
                subparagraph (D), each member of the advisory 
                committee shall be appointed for a term of 3 
                years. Members may be reappointed at the 
                discretion of the Secretary.
                    ``(D) Terms of initial appointees.--As 
                designated by the Secretary at the time of 
                appointment, of the members first appointed to 
                the advisory committee, 4 shall be appointed 
                for a term of 1 year and 4 shall be appointed 
                for a term of 2 years.
                    ``(E) Prohibition of pay; travel 
                expenses.--Members of the advisory committee 
                shall serve without pay, but shall receive 
                travel expenses, including per diem in lieu of 
                subsistence, in accordance with applicable 
                provisions under subchapter I of chapter 57 of 
                title 5, United States Code.
                    ``(F) Advisory role only.--The advisory 
                committee shall have no role in reviewing or 
                awarding housing counseling grants.
            ``(5) Scope of homeownership counseling.--In 
        carrying out the responsibilities of the Director, the 
        Director shall ensure that homeownership counseling 
        provided by, in connection with, or pursuant to any 
        function, activity, or program of the Department 
        addresses the entire process of homeownership, 
        including the decision to purchase a home, the 
        selection and purchase of a home, issues arising during 
        or affecting the period of ownership of a home 
        (including refinancing, default and foreclosure, and 
        other financial decisions), and the sale or other 
        disposition of a home.''.

SEC. 1443. COUNSELING PROCEDURES.

    (a) In General.--Section 106 of the Housing and Urban 
Development Act of 1968 (12 U.S.C. 1701x) is amended by adding 
at the end the following new subsection:
    ``(g) Procedures and Activities.--
            ``(1) Counseling procedures.--
                    ``(A) In general.--The Secretary shall 
                establish, coordinate, and monitor the 
                administration by the Department of Housing and 
                Urban Development of the counseling procedures 
                for homeownership counseling and rental housing 
                counseling provided in connection with any 
                program of the Department, including all 
                requirements, standards, and performance 
                measures that relate to homeownership and 
                rental housing counseling.
                    ``(B) Homeownership counseling.--For 
                purposes of this subsection and as used in the 
                provisions referred to in this subparagraph, 
                the term `homeownership counseling' means 
                counseling related to homeownership and 
                residential mortgage loans. Such term includes 
                counseling related to homeownership and 
                residential mortgage loans that is provided 
                pursuant to--
                            ``(i) section 105(a)(20) of the 
                        Housing and Community Development Act 
                        of 1974 (42 U.S.C. 5305(a)(20));
                            ``(ii) in the United States Housing 
                        Act of 1937--
                                    ``(I) section 9(e) (42 
                                U.S.C. 1437g(e));
                                    ``(II) section 8(y)(1)(D) 
                                (42 U.S.C. 1437f(y)(1)(D));
                                    ``(III) section 18(a)(4)(D) 
                                (42 U.S.C. 1437p(a)(4)(D));
                                    ``(IV) section 23(c)(4) (42 
                                U.S.C. 1437u(c)(4));
                                    ``(V) section 32(e)(4) (42 
                                U.S.C. 1437z-4(e)(4));
                                    ``(VI) section 33(d)(2)(B) 
                                (42 U.S.C. 1437z-5(d)(2)(B));
                                    ``(VII) sections 302(b)(6) 
                                and 303(b)(7) (42 U.S.C. 
                                1437aaa-1(b)(6), 1437aaa-
                                2(b)(7)); and
                                    ``(VIII) section 304(c)(4) 
                                (42 U.S.C. 1437aaa-3(c)(4));
                            ``(iii) section 302(a)(4) of the 
                        American Homeownership and Economic 
                        Opportunity Act of 2000 (42 U.S.C. 
                        1437f note);
                            ``(iv) sections 233(b)(2) and 
                        258(b) of the Cranston-Gonzalez 
                        National Affordable Housing Act (42 
                        U.S.C. 12773(b)(2), 12808(b));
                            ``(v) this section and section 
                        101(e) of the Housing and Urban 
                        Development Act of 1968 (12 U.S.C. 
                        1701x, 1701w(e));
                            ``(vi) section 220(d)(2)(G) of the 
                        Low-Income Housing Preservation and 
                        Resident Homeownership Act of 1990 (12 
                        U.S.C. 4110(d)(2)(G));
                            ``(vii) sections 422(b)(6), 
                        423(b)(7), 424(c)(4), 442(b)(6), and 
                        443(b)(6) of the Cranston-Gonzalez 
                        National Affordable Housing Act (42 
                        U.S.C. 12872(b)(6), 12873(b)(7), 
                        12874(c)(4), 12892(b)(6), and 
                        12893(b)(6));
                            ``(viii) section 491(b)(1)(F)(iii) 
                        of the McKinney-Vento Homeless 
                        Assistance Act (42 U.S.C. 
                        11408(b)(1)(F)(iii));
                            ``(ix) sections 202(3) and 
                        810(b)(2)(A) of the Native American 
                        Housing and Self-Determination Act of 
                        1996 (25 U.S.C. 4132(3), 
                        4229(b)(2)(A));
                            ``(x) in the National Housing Act--
                                    ``(I) in section 203 (12 
                                U.S.C. 1709), the penultimate 
                                undesignated paragraph of 
                                paragraph (2) of subsection 
                                (b), subsection (c)(2)(A), and 
                                subsection (r)(4);
                                    ``(II) subsections (a) and 
                                (c)(3) of section 237 (12 
                                U.S.C. 1715z-2); and
                                    ``(III) subsections 
                                (d)(2)(B) and (m)(1) of section 
                                255 (12 U.S.C. 1715z-20);
                            ``(xi) section 502(h)(4)(B) of the 
                        Housing Act of 1949 (42 U.S.C. 
                        1472(h)(4)(B));
                            ``(xii) section 508 of the Housing 
                        and Urban Development Act of 1970 (12 
                        U.S.C. 1701z-7); and
                            ``(xiii) section 106 of the Energy 
                        Policy Act of 1992 (42 U.S.C. 12712 
                        note).
                    ``(C) Rental housing counseling.--For 
                purposes of this subsection, the term `rental 
                housing counseling' means counseling related to 
                rental of residential property, which may 
                include counseling regarding future 
                homeownership opportunities and providing 
                referrals for renters and prospective renters 
                to entities providing counseling and shall 
                include counseling related to such topics that 
                is provided pursuant to--
                            ``(i) section 105(a)(20) of the 
                        Housing and Community Development Act 
                        of 1974 (42 U.S.C. 5305(a)(20));
                            ``(ii) in the United States Housing 
                        Act of 1937--
                                    ``(I) section 9(e) (42 
                                U.S.C. 1437g(e));
                                    ``(II) section 18(a)(4)(D) 
                                (42 U.S.C. 1437p(a)(4)(D));
                                    ``(III) section 23(c)(4) 
                                (42 U.S.C. 1437u(c)(4));
                                    ``(IV) section 32(e)(4) (42 
                                U.S.C. 1437z-4(e)(4));
                                    ``(V) section 33(d)(2)(B) 
                                (42 U.S.C. 1437z-5(d)(2)(B)); 
                                and
                                    ``(VI) section 302(b)(6) 
                                (42 U.S.C. 1437aaa-1(b)(6));
                            ``(iii) section 233(b)(2) of the 
                        Cranston-Gonzalez National Affordable 
                        Housing Act (42 U.S.C. 12773(b)(2));
                            ``(iv) section 106 of the Housing 
                        and Urban Development Act of 1968 (12 
                        U.S.C. 1701x);
                            ``(v) section 422(b)(6) of the 
                        Cranston-Gonzalez National Affordable 
                        Housing Act (42 U.S.C. 12872(b)(6));
                            ``(vi) section 491(b)(1)(F)(iii) of 
                        the McKinney-Vento Homeless Assistance 
                        Act (42 U.S.C. 11408(b)(1)(F)(iii));
                            ``(vii) sections 202(3) and 
                        810(b)(2)(A) of the Native American 
                        Housing and Self-Determination Act of 
                        1996 (25 U.S.C. 4132(3), 
                        4229(b)(2)(A)); and
                            ``(viii) the rental assistance 
                        program under section 8 of the United 
                        States Housing Act of 1937 (42 U.S.C. 
                        1437f).
            ``(2) Standards for materials.--The Secretary, in 
        consultation with the advisory committee established 
        under subsection (g)(4) of the Department of Housing 
        and Urban Development Act, shall establish standards 
        for materials and forms to be used, as appropriate, by 
        organizations providing homeownership counseling 
        services, including any recipients of assistance 
        pursuant to subsection (a)(4).
            ``(3) Mortgage software systems.--
                    ``(A) Certification.--The Secretary shall 
                provide for the certification of various 
                computer software programs for consumers to use 
                in evaluating different residential mortgage 
                loan proposals. The Secretary shall require, 
                for such certification, that the mortgage 
                software systems take into account--
                            ``(i) the consumer's financial 
                        situation and the cost of maintaining a 
                        home, including insurance, taxes, and 
                        utilities;
                            ``(ii) the amount of time the 
                        consumer expects to remain in the home 
                        or expected time to maturity of the 
                        loan; and
                            ``(iii) such other factors as the 
                        Secretary considers appropriate to 
                        assist the consumer in evaluating 
                        whether to pay points, to lock in an 
                        interest rate, to select an adjustable 
                        or fixed rate loan, to select a 
                        conventional or government-insured or 
                        guaranteed loan and to make other 
                        choices during the loan application 
                        process.
                If the Secretary determines that available 
                existing software is inadequate to assist 
                consumers during the residential mortgage loan 
                application process, the Secretary shall 
                arrange for the development by private sector 
                software companies of new mortgage software 
                systems that meet the Secretary's 
                specifications.
                    ``(B) Use and initial availability.--Such 
                certified computer software programs shall be 
                used to supplement, not replace, housing 
                counseling. The Secretary shall provide that 
                such programs are initially used only in 
                connection with the assistance of housing 
                counselors certified pursuant to subsection 
                (e).
                    ``(C) Availability.--After a period of 
                initial availability under subparagraph (B) as 
                the Secretary considers appropriate, the 
                Secretary shall take reasonable steps to make 
                mortgage software systems certified pursuant to 
                this paragraph widely available through the 
                Internet and at public locations, including 
                public libraries, senior-citizen centers, 
                public housing sites, offices of public housing 
                agencies that administer rental housing 
                assistance vouchers, and housing counseling 
                centers.
                    ``(D) Budget compliance.--This paragraph 
                shall be effective only to the extent that 
                amounts to carry out this paragraph are made 
                available in advance in appropriations Acts.
            ``(4) National public service multimedia campaigns 
        to promote housing counseling.--
                    ``(A) In general.--The Director of Housing 
                Counseling shall develop, implement, and 
                conduct national public service multimedia 
                campaigns designed to make persons facing 
                mortgage foreclosure, persons considering a 
                subprime mortgage loan to purchase a home, 
                elderly persons, persons who face language 
                barriers, low-income persons, minorities, and 
                other potentially vulnerable consumers aware 
                that it is advisable, before seeking or 
                maintaining a residential mortgage loan, to 
                obtain homeownership counseling from an 
                unbiased and reliable sources and that such 
                homeownership counseling is available, 
                including through programs sponsored by the 
                Secretary of Housing and Urban Development.
                    ``(B) Contact information.--Each segment of 
                the multimedia campaign under subparagraph (A) 
                shall publicize the toll-free telephone number 
                and website of the Department of Housing and 
                Urban Development through which persons seeking 
                housing counseling can locate a housing 
                counseling agency in their State that is 
                certified by the Secretary of Housing and Urban 
                Development and can provide advice on buying a 
                home, renting, defaults, foreclosures, credit 
                issues, and reverse mortgages.
                    ``(C) Authorization of appropriations.--
                There are authorized to be appropriated to the 
                Secretary, not to exceed $3,000,000 for fiscal 
                years 2009, 2010, and 2011, for the 
                development, implementation, and conduct of 
                national public service multimedia campaigns 
                under this paragraph.
                    ``(D) Foreclosure rescue education 
                programs.--
                            ``(i) In general.--Ten percent of 
                        any funds appropriated pursuant to the 
                        authorization under subparagraph (C) 
                        shall be used by the Director of 
                        Housing Counseling to conduct an 
                        education program in areas that have a 
                        high density of foreclosure. Such 
                        program shall involve direct mailings 
                        to persons living in such areas 
                        describing--
                                    ``(I) tips on avoiding 
                                foreclosure rescue scams;
                                    ``(II) tips on avoiding 
                                predatory lending mortgage 
                                agreements;
                                    ``(III) tips on avoiding 
                                for-profit foreclosure 
                                counseling services; and
                                    ``(IV) local counseling 
                                resources that are approved by 
                                the Department of Housing and 
                                Urban Development.
                            ``(ii) Program emphasis.--In 
                        conducting the education program 
                        described under clause (i), the 
                        Director of Housing Counseling shall 
                        also place an emphasis on serving 
                        communities that have a high percentage 
                        of retirement communities or a high 
                        percentage of low-income minority 
                        communities.
                            ``(iii) Terms defined.--For 
                        purposes of this subparagraph:
                                    ``(I) High density of 
                                foreclosures.--An area has a 
                                `high density of foreclosures' 
                                if such area is one of the 
                                metropolitan statistical areas 
                                (as that term is defined by the 
                                Director of the Office of 
                                Management and Budget) with the 
                                highest home foreclosure rates.
                                    ``(II) High percentage of 
                                retirement communities.--An 
                                area has a `high percentage of 
                                retirement communities' if such 
                                area is one of the metropolitan 
                                statistical areas (as that term 
                                is defined by the Director of 
                                the Office of Management and 
                                Budget) with the highest 
                                percentage of residents aged 65 
                                or older.
                                    ``(III) High percentage of 
                                low-income minority 
                                communities.--An area has a 
                                `high percentage of low-income 
                                minority communities' if such 
                                area contains a higher-than-
                                normal percentage of residents 
                                who are both minorities and 
                                low-income, as defined by the 
                                Director of Housing Counseling.
            ``(5) Education programs.--The Secretary shall 
        provide advice and technical assistance to States, 
        units of general local government, and nonprofit 
        organizations regarding the establishment and operation 
        of, including assistance with the development of 
        content and materials for, educational programs to 
        inform and educate consumers, particularly those most 
        vulnerable with respect to residential mortgage loans 
        (such as elderly persons, persons facing language 
        barriers, low-income persons, minorities, and other 
        potentially vulnerable consumers), regarding home 
        mortgages, mortgage refinancing, home equity loans, 
        home repair loans, and where appropriate by region, any 
        requirements and costs associated with obtaining flood 
        or other disaster-specific insurance coverage.''.
    (b) Conforming Amendments to Grant Program for 
Homeownership Counseling Organizations.--Section 
106(c)(5)(A)(ii) of the Housing and Urban Development Act of 
1968 (12 U.S.C. 1701x(c)(5)(A)(ii)) is amended--
            (1) in subclause (III), by striking ``and'' at the 
        end;
            (2) in subclause (IV) by striking the period at the 
        end and inserting ``; and''; and
            (3) by inserting after subclause (IV) the following 
        new subclause:
                                    ``(V) notify the housing or 
                                mortgage applicant of the 
                                availability of mortgage 
                                software systems provided 
                                pursuant to subsection 
                                (g)(3).''.

SEC. 1444. GRANTS FOR HOUSING COUNSELING ASSISTANCE.

    Section 106(a) of the Housing and Urban Development Act of 
1968 (12 U.S.C. 1701x(a)) is amended by adding at the end the 
following new paragraph:
    ``(4) Homeownership and Rental Counseling Assistance.--
            ``(A) In general.--The Secretary shall make 
        financial assistance available under this paragraph to 
        HUD-approved housing counseling agencies and State 
        housing finance agencies.
            ``(B) Qualified entities.--The Secretary shall 
        establish standards and guidelines for eligibility of 
        organizations (including governmental and nonprofit 
        organizations) to receive assistance under this 
        paragraph, in accordance with subparagraph (D).
            ``(C) Distribution.--Assistance made available 
        under this paragraph shall be distributed in a manner 
        that encourages efficient and successful counseling 
        programs and that ensures adequate distribution of 
        amounts for rural areas having traditionally low levels 
        of access to such counseling services, including areas 
        with insufficient access to the Internet. In 
        distributing such assistance, the Secretary may give 
        priority consideration to entities serving areas with 
        the highest home foreclosure rates.
            ``(D) Limitation on distribution of assistance.--
                    ``(i) In general.--None of the amounts made 
                available under this paragraph shall be 
                distributed to--
                            ``(I) any organization which has 
                        been convicted for a violation under 
                        Federal law relating to an election for 
                        Federal office; or
                            ``(II) any organization which 
                        employs applicable individuals.
                    ``(ii) Definition of applicable 
                individuals.--In this subparagraph, the term 
                `applicable individual' means an individual 
                who--
                            ``(I) is--
                                    ``(aa) employed by the 
                                organization in a permanent or 
                                temporary capacity;
                                    ``(bb) contracted or 
                                retained by the organization; 
                                or
                                    ``(cc) acting on behalf of, 
                                or with the express or apparent 
                                authority of, the organization; 
                                and
                            ``(II) has been convicted for a 
                        violation under Federal law relating to 
                        an election for Federal office.
            ``(E) Grantmaking process.--In making assistance 
        available under this paragraph, the Secretary shall 
        consider appropriate ways of streamlining and improving 
        the processes for grant application, review, approval, 
        and award.
            ``(F) Authorization of appropriations.--There are 
        authorized to be appropriated $45,000,000 for each of 
        fiscal years 2009 through 2012 for--
                    ``(i) the operations of the Office of 
                Housing Counseling of the Department of Housing 
                and Urban Development;
                    ``(ii) the responsibilities of the Director 
                of Housing Counseling under paragraphs (2) 
                through (5) of subsection (g); and
                    ``(iii) assistance pursuant to this 
                paragraph for entities providing homeownership 
                and rental counseling.''.

SEC. 1445. REQUIREMENTS TO USE HUD-CERTIFIED COUNSELORS UNDER HUD 
                    PROGRAMS.

    Section 106(e) of the Housing and Urban Development Act of 
1968 (12 U.S.C. 1701x(e)) is amended--
            (1) by striking paragraph (1) and inserting the 
        following new paragraph:
            ``(1) Requirement for assistance.--An organization 
        may not receive assistance for counseling activities 
        under subsection (a)(1)(iii), (a)(2), (a)(4), (c), or 
        (d) of this section, or under section 101(e), unless 
        the organization, or the individuals through which the 
        organization provides such counseling, has been 
        certified by the Secretary under this subsection as 
        competent to provide such counseling.'';
            (2) in paragraph (2)--
                    (A) by inserting ``and for certifying 
                organizations'' before the period at the end of 
                the first sentence; and
                    (B) in the second sentence by striking 
                ``for certification'' and inserting ``, for 
                certification of an organization, that each 
                individual through which the organization 
                provides counseling shall demonstrate, and, for 
                certification of an individual,'';
            (3) in paragraph (3), by inserting ``organizations 
        and'' before ``individuals'';
            (4) by redesignating paragraph (3) as paragraph 
        (5); and
            (5) by inserting after paragraph (2) the following 
        new paragraphs:
            ``(3) Requirement under hud programs.--Any 
        homeownership counseling or rental housing counseling 
        (as such terms are defined in subsection (g)(1)) 
        required under, or provided in connection with, any 
        program administered by the Department of Housing and 
        Urban Development shall be provided only by 
        organizations or counselors certified by the Secretary 
        under this subsection as competent to provide such 
        counseling.
            ``(4) Outreach.--The Secretary shall take such 
        actions as the Secretary considers appropriate to 
        ensure that individuals and organizations providing 
        homeownership or rental housing counseling are aware of 
        the certification requirements and standards of this 
        subsection and of the training and certification 
        programs under subsection (f).''.

SEC. 1446. STUDY OF DEFAULTS AND FORECLOSURES.

    The Secretary of Housing and Urban Development shall 
conduct an extensive study of the root causes of default and 
foreclosure of home loans, using as much empirical data as are 
available. The study shall also examine the role of escrow 
accounts in helping prime and nonprime borrowers to avoid 
defaults and foreclosures, and the role of computer registries 
of mortgages, including those used for trading mortgage loans. 
Not later than 12 months after the date of the enactment of 
this Act, the Secretary shall submit to the Congress a 
preliminary report regarding the study. Not later than 24 
months after such date of enactment, the Secretary shall submit 
a final report regarding the results of the study, which shall 
include any recommended legislation relating to the study, and 
recommendations for best practices and for a process to 
identify populations that need counseling the most.

SEC. 1447. DEFAULT AND FORECLOSURE DATABASE.

    (a) Establishment.--The Secretary of Housing and Urban 
Development and the Director of the Bureau, 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
            (6) such other information as the Secretary of 
        Housing and Urban Development and the Director of the 
        Bureau 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 Director of 
the Bureau 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.

SEC. 1448. DEFINITIONS FOR COUNSELING-RELATED PROGRAMS.

    Section 106 of the Housing and Urban Development Act of 
1968 (12 U.S.C. 1701x), as amended by the preceding provisions 
of this subtitle, is amended by adding at the end the following 
new subsection:
    ``(h) Definitions.--For purposes of this section:
            ``(1) Nonprofit organization.--The term `nonprofit 
        organization' has the meaning given such term in 
        section 104(5) of the Cranston-Gonzalez National 
        Affordable Housing Act (42 U.S.C. 12704(5)), except 
        that subparagraph (D) of such section shall not apply 
        for purposes of this section.
            ``(2) State.--The term `State' means each of the 
        several States, the Commonwealth of Puerto Rico, the 
        District of Columbia, the Commonwealth of the Northern 
        Mariana Islands, Guam, the Virgin Islands, American 
        Samoa, the Trust Territories of the Pacific, or any 
        other possession of the United States.
            ``(3) Unit of general local government.--The term 
        `unit of general local government' means any city, 
        county, parish, town, township, borough, village, or 
        other general purpose political subdivision of a State.
            ``(4) HUD-approved counseling agency.--The term 
        `HUD-approved counseling agency' means a private or 
        public nonprofit organization that is--
                    ``(A) exempt from taxation under section 
                501(c) of the Internal Revenue Code of 1986; 
                and
                    ``(B) certified by the Secretary to provide 
                housing counseling services.
            ``(5) State housing finance agency.--The term 
        `State housing finance agency' means any public body, 
        agency, or instrumentality specifically created under 
        State statute that is authorised to finance activities 
        designed to provide housing and related facilities 
        throughout an entire State through land acquisition, 
        construction, or rehabilitation.''.

SEC. 1449. ACCOUNTABILITY AND TRANSPARENCY FOR GRANT RECIPIENTS.

    Section 106 of the Housing and Urban Development Act of 
1968 (12 U.S.C. 1701x), as amended by the preceding provisions 
of this subtitle, is amended by adding at the end the 
following:
    ``(i) Accountability for Recipients of Covered 
Assistance.--
            ``(1) Tracking of funds.--The Secretary shall--
                    ``(A) develop and maintain a system to 
                ensure that any organization or entity that 
                receives any covered assistance uses all 
                amounts of covered assistance in accordance 
                with this section, the regulations issued under 
                this section, and any requirements or 
                conditions under which such amounts were 
                provided; and
                    ``(B) require any organization or entity, 
                as a condition of receipt of any covered 
                assistance, to agree to comply with such 
                requirements regarding covered assistance as 
                the Secretary shall establish, which shall 
                include--
                            ``(i) appropriate periodic 
                        financial and grant activity reporting, 
                        record retention, and audit 
                        requirements for the duration of the 
                        covered assistance to the organization 
                        or entity to ensure compliance with the 
                        limitations and requirements of this 
                        section, the regulations under this 
                        section, and any requirements or 
                        conditions under which such amounts 
                        were provided; and
                            ``(ii) any other requirements that 
                        the Secretary determines are necessary 
                        to ensure appropriate administration 
                        and compliance.
            ``(2) Misuse of funds.--If any organization or 
        entity that receives any covered assistance is 
        determined by the Secretary to have used any covered 
        assistance in a manner that is materially in violation 
        of this section, the regulations issued under this 
        section, or any requirements or conditions under which 
        such assistance was provided--
                    ``(A) the Secretary shall require that, 
                within 12 months after the determination of 
                such misuse, the organization or entity shall 
                reimburse the Secretary for such misused 
                amounts and return to the Secretary any such 
                amounts that remain unused or uncommitted for 
                use; and
                    ``(B) such organization or entity shall be 
                ineligible, at any time after such 
                determination, to apply for or receive any 
                further covered assistance.
        The remedies under this paragraph are in addition to 
        any other remedies that may be available under law.
            ``(3) Covered assistance.--For purposes of this 
        subsection, the term `covered assistance' means any 
        grant or other financial assistance provided under this 
        section.''.

SEC. 1450. UPDATING AND SIMPLIFICATION OF MORTGAGE INFORMATION BOOKLET.

    Section 5 of the Real Estate Settlement Procedures Act of 
1974 (12 U.S.C. 2604) is amended--
            (1) in the section heading, by striking ``special'' 
        and inserting ``home buying'';
            (2) by striking subsections (a) and (b) and 
        inserting the following new subsections:
    ``(a) Preparation and Distribution.--The Director of the 
Bureau of Consumer Financial Protection (hereafter in this 
section referred to as the `Director') shall prepare, at least 
once every 5 years, a booklet to help consumers applying for 
federally related mortgage loans to understand the nature and 
costs of real estate settlement services. The Director shall 
prepare the booklet in various languages and cultural styles, 
as the Director determines to be appropriate, so that the 
booklet is understandable and accessible to homebuyers of 
different ethnic and cultural backgrounds. The Director shall 
distribute such booklets to all lenders that make federally 
related mortgage loans. The Director 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 Director shall prescribe and, in addition to such 
other information as the Director 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 Director, or to any 
        suitable substitute of such booklet that the Director 
        may subsequently adopt pursuant to such section.
            ``(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 
        Department of Housing and Urban Development has made 
        publicly available a brochure regarding loan fraud and 
        a World Wide Web address and toll-free telephone number 
        for obtaining the brochure.
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.'';
            (3) in subsection (c), by inserting at the end the 
        following new sentence: ``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.''; and
            (4) in subsection (d), by inserting after the 
        period at the end of the first sentence the following: 
        ``The lender shall provide the booklet in the version 
        that is most appropriate for the person receiving 
        it.''.

SEC. 1451. HOME INSPECTION COUNSELING.

    (a) Public Outreach.--
            (1) In general.--The Secretary of Housing and Urban 
        Development (in this section referred to as the 
        ``Secretary'') shall take such actions as may be 
        necessary to inform potential homebuyers of the 
        availability and importance of obtaining an independent 
        home inspection. Such actions shall include--
                    (A) publication of the HUD/FHA form HUD 
                92564-CN entitled ``For Your Protection: Get a 
                Home Inspection'', in both English and Spanish 
                languages;
                    (B) publication of the HUD/FHA booklet 
                entitled ``For Your Protection: Get a Home 
                Inspection'', in both English and Spanish 
                languages;
                    (C) development and publication of a HUD 
                booklet entitled ``For Your Protection--Get a 
                Home Inspection'' that does not reference FHA-
                insured homes, in both English and Spanish 
                languages; and
                    (D) publication of the HUD document 
                entitled ``Ten Important Questions To Ask Your 
                Home Inspector'', in both English and Spanish 
                languages.
            (2) Availability.--The Secretary shall make the 
        materials specified in paragraph (1) available for 
        electronic access and, where appropriate, inform 
        potential homebuyers of such availability through home 
        purchase counseling public service announcements and 
        toll-free telephone hotlines of the Department of 
        Housing and Urban Development. The Secretary shall give 
        special emphasis to reaching first-time and low-income 
        homebuyers with these materials and efforts.
            (3) Updating.--The Secretary may periodically 
        update and revise such materials, as the Secretary 
        determines to be appropriate.
    (b) Requirement for FHA-approved Lenders.--Each mortgagee 
approved for participation in the mortgage insurance programs 
under title II of the National Housing Act shall provide 
prospective homebuyers, at first contact, whether upon pre-
qualification, pre-approval, or initial application, the 
materials specified in subparagraphs (A), (B), and (D) of 
subsection (a)(1).
    (c) Requirements for HUD-approved Counseling Agencies.--
Each counseling agency certified pursuant by the Secretary to 
provide housing counseling services shall provide each of their 
clients, as part of the home purchase counseling process, the 
materials specified in subparagraphs (C) and (D) of subsection 
(a)(1).
    (d) Training.--Training provided the Department of Housing 
and Urban Development for housing counseling agencies, whether 
such training is provided directly by the Department or 
otherwise, shall include--
            (1) providing information on counseling potential 
        homebuyers of the availability and importance of 
        getting an independent home inspection;
            (2) providing information about the home inspection 
        process, including the reasons for specific inspections 
        such as radon and lead-based paint testing;
            (3) providing information about advising potential 
        homebuyers on how to locate and select a qualified home 
        inspector; and
            (4) review of home inspection public outreach 
        materials of the Department.

SEC. 1452. WARNINGS TO HOMEOWNERS OF FORECLOSURE RESCUE SCAMS.

    (a) Assistance to NRC.--Notwithstanding any other provision 
of law, of any amounts made available for any fiscal year 
pursuant to section 106(a)(4)(F) of the Housing and Urban 
Development Act of 1968 (12 U.S.C. 1701x(a)(4)(F)) (as added by 
section 1444), 10 percent shall be used only for assistance to 
the Neighborhood Reinvestment Corporation for activities, in 
consultation with servicers of residential mortgage loans, to 
provide notice to borrowers under such loans who are delinquent 
with respect to payments due under such loans that makes such 
borrowers aware of the dangers of fraudulent activities 
associated with foreclosure.
    (b) Notice.--The Neighborhood Reinvestment Corporation, in 
consultation with servicers of residential mortgage loans, 
shall use the amounts provided pursuant to subsection (a) to 
carry out activities to inform borrowers under residential 
mortgage loans--
            (1) that the foreclosure process is complex and can 
        be confusing;
            (2) that the borrower may be approached during the 
        foreclosure process by persons regarding saving their 
        home and they should use caution in any such dealings;
            (3) that there are Federal Government and nonprofit 
        agencies that may provide information about the 
        foreclosure process, including the Department of 
        Housing and Urban Development;
            (4) that they should contact their lender 
        immediately, contact the Department of Housing and 
        Urban Development to find a housing counseling agency 
        certified by the Department to assist in avoiding 
        foreclosure, or visit the Department's website 
        regarding tips for avoiding foreclosure; and
            (5) of the telephone number of the loan servicer or 
        successor, the telephone number of the Department of 
        Housing and Urban Development housing counseling line, 
        and the Uniform Resource Locators (URLs) for the 
        Department of Housing and Urban Development Web sites 
        for housing counseling and for tips for avoiding 
        foreclosure.

                     Subtitle E--Mortgage Servicing

SEC. 1461. ESCROW AND IMPOUND ACCOUNTS RELATING TO CERTAIN CONSUMER 
                    CREDIT TRANSACTIONS.

    (a) In General.--Chapter 2 of the Truth in Lending Act (15 
U.S.C. 1631 et seq.) is amended by inserting after section 129C 
(as added by section 1411) the following new section:

``Sec. 129D. Escrow or impound accounts relating to certain consumer 
                    credit transactions

    ``(a) In General.--Except as provided in subsection (b), 
(c), (d), or (e), a creditor, in connection with the 
consummation of a consumer credit transaction secured by a 
first lien on the principal dwelling of the consumer, other 
than a consumer credit transaction under an open end credit 
plan or a reverse mortgage, shall establish, before the 
consummation of such transaction, an escrow or impound account 
for the payment of taxes and hazard insurance, and, if 
applicable, flood insurance, mortgage insurance, ground rents, 
and any other required periodic payments or premiums with 
respect to the property or the loan terms, as provided in, and 
in accordance with, this section.
    ``(b) When Required.--No impound, trust, or other type of 
account for the payment of property taxes, insurance premiums, 
or other purposes relating to the property may be required as a 
condition of a real property sale contract or a loan secured by 
a first deed of trust or mortgage on the principal dwelling of 
the consumer, other than a consumer credit transaction under an 
open end credit plan or a reverse mortgage, except when--
            ``(1) any such impound, trust, or other type of 
        escrow or impound account for such purposes is required 
        by Federal or State law;
            ``(2) a loan is made, guaranteed, or insured by a 
        State or Federal governmental lending or insuring 
        agency;
            ``(3) the transaction is secured by a first 
        mortgage or lien on the consumer's principal dwelling 
        having an original principal obligation amount that--
                    ``(A) does not exceed the amount of the 
                maximum limitation on the original principal 
                obligation of mortgage in effect for a 
                residence of the applicable size, as of the 
                date such interest rate set, pursuant to the 
                sixth sentence of section 305(a)(2) the Federal 
                Home Loan Mortgage Corporation Act (12 U.S.C. 
                1454(a)(2)), and the annual percentage rate 
                will exceed the average prime offer rate as 
                defined in section 129C by 1.5 or more 
                percentage points; or
                    ``(B) exceeds the amount of the maximum 
                limitation on the original principal obligation 
                of mortgage in effect for a residence of the 
                applicable size, as of the date such interest 
                rate set, pursuant to the sixth sentence of 
                section 305(a)(2) the Federal Home Loan 
                Mortgage Corporation Act (12 U.S.C. 
                1454(a)(2)), and the annual percentage rate 
                will exceed the average prime offer rate as 
                defined in section 129C by 2.5 or more 
                percentage points; or
            ``(4) so required pursuant to regulation.
    ``(c) Exemptions.--The Board may, by regulation, exempt 
from the requirements of subsection (a) a creditor that--
            ``(1) operates predominantly in rural or 
        underserved areas;
            ``(2) together with all affiliates, has total 
        annual mortgage loan originations that do not exceed a 
        limit set by the Board;
            ``(3) retains its mortgage loan originations in 
        portfolio; and
            ``(4) meets any asset size threshold and any other 
        criteria the Board may establish, consistent with the 
        purposes of this subtitle.
    ``(d) Duration of Mandatory Escrow or Impound Account.--An 
escrow or impound account established pursuant to subsection 
(b) shall remain in existence for a minimum period of 5 years, 
beginning with the date of the consummation of the loan, unless 
and until--
            ``(1) such borrower has sufficient equity in the 
        dwelling securing the consumer credit transaction so as 
        to no longer be required to maintain private mortgage 
        insurance;
            ``(2) such borrower is delinquent;
            ``(3) such borrower otherwise has not complied with 
        the legal obligation, as established by rule; or
            ``(4) the underlying mortgage establishing the 
        account is terminated.
    ``(e) Limited Exemptions for Loans Secured by Shares in a 
Cooperative or in Which an Association Must Maintain a Master 
Insurance Policy.--Escrow accounts need not be established for 
loans secured by shares in a cooperative. Insurance premiums 
need not be included in escrow accounts for loans secured by 
dwellings or units, where the borrower must join an association 
as a condition of ownership, and that association has an 
obligation to the dwelling or unit owners to maintain a master 
policy insuring the dwellings or units.
    ``(f) Clarification on Escrow Accounts for Loans Not 
Meeting Statutory Test.--For mortgages not covered by the 
requirements of subsection (b), no provision of this section 
shall be construed as precluding the establishment of an 
impound, trust, or other type of account for the payment of 
property taxes, insurance premiums, or other purposes relating 
to the property--
            ``(1) on terms mutually agreeable to the parties to 
        the loan;
            ``(2) at the discretion of the lender or servicer, 
        as provided by the contract between the lender or 
        servicer and the borrower; or
            ``(3) pursuant to the requirements for the 
        escrowing of flood insurance payments for regulated 
        lending institutions in section 102(d) of the Flood 
        Disaster Protection Act of 1973.
    ``(g) Administration of Mandatory Escrow or Impound 
Accounts.--
            ``(1) In general.--Except as may otherwise be 
        provided for in this title or in regulations prescribed 
        by the Board, escrow or impound accounts established 
        pursuant to subsection (b) shall be established in a 
        federally insured depository institution or credit 
        union.
            ``(2) Administration.--Except as provided in this 
        section or regulations prescribed under this section, 
        an escrow or impound account subject to this section 
        shall be administered in accordance with--
                    ``(A) the Real Estate Settlement Procedures 
                Act of 1974 and regulations prescribed under 
                such Act;
                    ``(B) the Flood Disaster Protection Act of 
                1973 and regulations prescribed under such Act; 
                and
                    ``(C) the law of the State, if applicable, 
                where the real property securing the consumer 
                credit transaction is located.
            ``(3) Applicability of payment of interest.--If 
        prescribed by applicable State or Federal law, each 
        creditor shall pay interest to the consumer on the 
        amount held in any impound, trust, or escrow account 
        that is subject to this section in the manner as 
        prescribed by that applicable State or Federal law.
            ``(4) Penalty coordination with respa.--Any action 
        or omission on the part of any person which constitutes 
        a violation of the Real Estate Settlement Procedures 
        Act of 1974 or any regulation prescribed under such Act 
        for which the person has paid any fine, civil money 
        penalty, or other damages shall not give rise to any 
        additional fine, civil money penalty, or other damages 
        under this section, unless the action or omission also 
        constitutes a direct violation of this section.
    ``(h) Disclosures Relating to Mandatory Escrow or Impound 
Account.--In the case of any impound, trust, or escrow account 
that is required under subsection (b), the creditor shall 
disclose by written notice to the consumer at least 3 business 
days before the consummation of the consumer credit transaction 
giving rise to such account or in accordance with timeframes 
established in prescribed regulations the following 
information:
            ``(1) The fact that an escrow or impound account 
        will be established at consummation of the transaction.
            ``(2) The amount required at closing to initially 
        fund the escrow or impound account.
            ``(3) The amount, in the initial year after the 
        consummation of the transaction, of the estimated taxes 
        and hazard insurance, including flood insurance, if 
        applicable, and any other required periodic payments or 
        premiums that reflects, as appropriate, either the 
        taxable assessed value of the real property securing 
        the transaction, including the value of any 
        improvements on the property or to be constructed on 
        the property (whether or not such construction will be 
        financed from the proceeds of the transaction) or the 
        replacement costs of the property.
            ``(4) The estimated monthly amount payable to be 
        escrowed for taxes, hazard insurance (including flood 
        insurance, if applicable) and any other required 
        periodic payments or premiums.
            ``(5) The fact that, if the consumer chooses to 
        terminate the account in the future, the consumer will 
        become responsible for the payment of all taxes, hazard 
        insurance, and flood insurance, if applicable, as well 
        as any other required periodic payments or premiums on 
        the property unless a new escrow or impound account is 
        established.
            ``(6) Such other information as the Board 
        determines necessary for the protection of the 
        consumer.
    ``(i) Definitions.--For purposes of this section, the 
following definitions shall apply:
            ``(1) Flood insurance.--The term `flood insurance' 
        means flood insurance coverage provided under the 
        national flood insurance program pursuant to the 
        National Flood Insurance Act of 1968.
            ``(2) Hazard insurance.--The term `hazard 
        insurance' shall have the same meaning as provided for 
        `hazard insurance', `casualty insurance', `homeowner's 
        insurance', or other similar term under the law of the 
        State where the real property securing the consumer 
        credit transaction is located.''.
    (b) Exemptions and Modifications.--The Board may prescribe 
rules that revise, add to, or subtract from the criteria of 
section 129D(b) of the Truth in Lending Act if the Board 
determines that such rules are in the interest of consumers and 
in the public interest.
    (c) Clerical Amendment.--The table of sections for chapter 
2 of the Truth in Lending Act is amended by inserting after the 
item relating to section 129C (as added by section 1411) the 
following new item:

``129D. Escrow or impound accounts relating to certain consumer credit 
          transactions.''.

SEC. 1462. DISCLOSURE NOTICE REQUIRED FOR CONSUMERS WHO WAIVE ESCROW 
                    SERVICES.

    Section 129D of the Truth in Lending Act (as added by 
section 1461) is amended by adding at the end the following new 
subsection:
    ``(j) Disclosure Notice Required for Consumers Who Waive 
Escrow Services.--
            ``(1) In general.--If--
                    ``(A) an impound, trust, or other type of 
                account for the payment of property taxes, 
                insurance premiums, or other purposes relating 
                to real property securing a consumer credit 
                transaction is not established in connection 
                with the transaction; or
                    ``(B) a consumer chooses, and provides 
                written notice to the creditor or servicer of 
                such choice, at any time after such an account 
                is established in connection with any such 
                transaction and in accordance with any statute, 
                regulation, or contractual agreement, to close 
                such account,
        the creditor or servicer shall provide a timely and 
        clearly written disclosure to the consumer that advises 
        the consumer of the responsibilities of the consumer 
        and implications for the consumer in the absence of any 
        such account.
            ``(2) Disclosure requirements.--Any disclosure 
        provided to a consumer under paragraph (1) shall 
        include the following:
                    ``(A) Information concerning any applicable 
                fees or costs associated with either the non-
                establishment of any such account at the time 
                of the transaction, or any subsequent closure 
                of any such account.
                    ``(B) A clear and prominent statement that 
                the consumer is responsible for personally and 
                directly paying the non-escrowed items, in 
                addition to paying the mortgage loan payment, 
                in the absence of any such account, and the 
                fact that the costs for taxes, insurance, and 
                related fees can be substantial.
                    ``(C) A clear explanation of the 
                consequences of any failure to pay non-escrowed 
                items, including the possible requirement for 
                the forced placement of insurance by the 
                creditor or servicer and the potentially higher 
                cost (including any potential commission 
                payments to the servicer) or reduced coverage 
                for the consumer in the event of any such 
                creditor-placed insurance.
                    ``(D) Such other information as the Board 
                determines necessary for the protection of the 
                consumer.''.

SEC. 1463. REAL ESTATE SETTLEMENT PROCEDURES ACT OF 1974 AMENDMENTS.

    (a) Servicer Prohibitions.--Section 6 of the Real Estate 
Settlement Procedures Act of 1974 (12 U.S.C. 2605) is amended 
by adding at the end the following new subsections:
    ``(k) Servicer Prohibitions.--
            ``(1) In general.--A servicer of a federally 
        related mortgage shall not--
                    ``(A) obtain force-placed hazard insurance 
                unless there is a reasonable basis to believe 
                the borrower has failed to comply with the loan 
                contract's requirements to maintain property 
                insurance;
                    ``(B) charge fees for responding to valid 
                qualified written requests (as defined in 
                regulations which the Bureau of Consumer 
                Financial Protection shall prescribe) under 
                this section;
                    ``(C) fail to take timely action to respond 
                to a borrower's requests to correct errors 
                relating to allocation of payments, final 
                balances for purposes of paying off the loan, 
                or avoiding foreclosure, or other standard 
                servicer's duties;
                    ``(D) fail to respond within 10 business 
                days to a request from a borrower to provide 
                the identity, address, and other relevant 
                contact information about the owner or assignee 
                of the loan; or
                    ``(E) fail to comply with any other 
                obligation found by the Bureau of Consumer 
                Financial Protection, by regulation, to be 
                appropriate to carry out the consumer 
                protection purposes of this Act.
            ``(2) Force-placed insurance defined.--For purposes 
        of this subsection and subsections (l) and (m), the 
        term `force-placed insurance' means hazard insurance 
        coverage obtained by a servicer of a federally related 
        mortgage when the borrower has failed to maintain or 
        renew hazard insurance on such property as required of 
        the borrower under the terms of the mortgage.
    ``(l) Requirements for Force-placed Insurance.--A servicer 
of a federally related mortgage shall not be construed as 
having a reasonable basis for obtaining force-placed insurance 
unless the requirements of this subsection have been met.
            ``(1) Written notices to borrower.--A servicer may 
        not impose any charge on any borrower for force-placed 
        insurance with respect to any property securing a 
        federally related mortgage unless--
                    ``(A) the servicer has sent, by first-class 
                mail, a written notice to the borrower 
                containing--
                            ``(i) a reminder of the borrower's 
                        obligation to maintain hazard insurance 
                        on the property securing the federally 
                        related mortgage;
                            ``(ii) a statement that the 
                        servicer does not have evidence of 
                        insurance coverage of such property;
                            ``(iii) a clear and conspicuous 
                        statement of the procedures by which 
                        the borrower may demonstrate that the 
                        borrower already has insurance 
                        coverage; and
                            ``(iv) a statement that the 
                        servicer may obtain such coverage at 
                        the borrower's expense if the borrower 
                        does not provide such demonstration of 
                        the borrower's existing coverage in a 
                        timely manner;
                    ``(B) the servicer has sent, by first-class 
                mail, a second written notice, at least 30 days 
                after the mailing of the notice under 
                subparagraph (A) that contains all the 
                information described in each clause of such 
                subparagraph; and
                    ``(C) the servicer has not received from 
                the borrower any demonstration of hazard 
                insurance coverage for the property securing 
                the mortgage by the end of the 15-day period 
                beginning on the date the notice under 
                subparagraph (B) was sent by the servicer.
            ``(2) Sufficiency of demonstration.--A servicer of 
        a federally related mortgage shall accept any 
        reasonable form of written confirmation from a borrower 
        of existing insurance coverage, which shall include the 
        existing insurance policy number along with the 
        identity of, and contact information for, the insurance 
        company or agent, or as otherwise required by the 
        Bureau of Consumer Financial Protection.
            ``(3) Termination of force-placed insurance.--
        Within 15 days of the receipt by a servicer of 
        confirmation of a borrower's existing insurance 
        coverage, the servicer shall--
                    ``(A) terminate the force-placed insurance; 
                and
                    ``(B) refund to the consumer all force-
                placed insurance premiums paid by the borrower 
                during any period during which the borrower's 
                insurance coverage and the force-placed 
                insurance coverage were each in effect, and any 
                related fees charged to the consumer's account 
                with respect to the force-placed insurance 
                during such period.
            ``(4) Clarification with respect to flood disaster 
        protection act.--No provision of this section shall be 
        construed as prohibiting a servicer from providing 
        simultaneous or concurrent notice of a lack of flood 
        insurance pursuant to section 102(e) of the Flood 
        Disaster Protection Act of 1973.
    ``(m) Limitations on Force-placed Insurance Charges.--All 
charges, apart from charges subject to State regulation as the 
business of insurance, related to force-placed insurance 
imposed on the borrower by or through the servicer shall be 
bona fide and reasonable.''.
    (b) Increase in Penalty Amounts.--Section 6(f) of the Real 
Estate Settlement Procedures Act of 1974 (12 U.S.C. 2605(f)) is 
amended--
            (1) in paragraphs (1)(B) and (2)(B), by striking 
        ``$1,000'' each place such term appears and inserting 
        ``$2,000''; and
            (2) in paragraph (2)(B)(i), by striking 
        ``$500,000'' and inserting ``$1,000,000''.
    (c) Decrease in Response Times.--Section 6(e) of the Real 
Estate Settlement Procedures Act of 1974 (12 U.S.C. 2605(e)) is 
amended--
            (1) in paragraph (1)(A), by striking ``20 days'' 
        and inserting ``5 days'';
            (2) in paragraph (2), by striking ``60 days'' and 
        inserting ``30 days''; and
            (3) by adding at the end the following new 
        paragraph:
            ``(4) Limited extension of response time.--The 30-
        day period described in paragraph (2) may be extended 
        for not more than 15 days if, before the end of such 
        30-day period, the servicer notifies the borrower of 
        the extension and the reasons for the delay in 
        responding.''.
    (d) Prompt Refund of Escrow Accounts Upon Payoff.--Section 
6(g) of the Real Estate Settlement Procedures Act of 1974 (12 
U.S.C. 2605(g)) is amended by adding at the end the following 
new sentence: ``Any balance in any such account that is within 
the servicer's control at the time the loan is paid off shall 
be promptly returned to the borrower within 20 business days or 
credited to a similar account for a new mortgage loan to the 
borrower with the same lender.''.

SEC. 1464. TRUTH IN LENDING ACT AMENDMENTS.

    (a) Requirements for Prompt Crediting of Home Loan 
Payments.--Chapter 2 of the Truth in Lending Act (15 U.S.C. 
1631 et seq.) is amended by inserting after section 129E (as 
added by section 1472) the following new section:

``Sec. 129F. Requirements for prompt crediting of home loan payments

    ``(a) In General.--In connection with a consumer credit 
transaction secured by a consumer's principal dwelling, no 
servicer shall fail to credit a payment to the consumer's loan 
account as of the date of receipt, except when a delay in 
crediting does not result in any charge to the consumer or in 
the reporting of negative information to a consumer reporting 
agency, except as required in subsection (b).
    ``(b) Exception.--If a servicer specifies in writing 
requirements for the consumer to follow in making payments, but 
accepts a payment that does not conform to the requirements, 
the servicer shall credit the payment as of 5 days after 
receipt.''.
    (b) Requests for Payoff Amounts.--Chapter 2 of the Truth in 
Lending Act (15 U.S.C. 1631 et seq.), as amended by this title, 
is amended by inserting after section 129F (as added by 
subsection (a)) the following new section:

``Sec. 129G. Requests for payoff amounts of home loan

    ``A creditor or servicer of a home loan shall send an 
accurate payoff balance within a reasonable time, but in no 
case more than 7 business days, after the receipt of a written 
request for such balance from or on behalf of the borrower.''.

SEC. 1465. ESCROWS INCLUDED IN REPAYMENT ANALYSIS.

    Section 128(b) of the Truth in Lending Act (15 U.S.C. 
1638(b)) is amended by adding at the end the following new 
paragraph:
            ``(4) Repayment analysis required to include escrow 
        payments.--
                    ``(A) In general.--In the case of any 
                consumer credit transaction secured by a first 
                mortgage or lien on the principal dwelling of 
                the consumer, other than a consumer credit 
                transaction under an open end credit plan or a 
                reverse mortgage, for which an impound, trust, 
                or other type of account has been or will be 
                established in connection with the transaction 
                for the payment of property taxes, hazard and 
                flood (if any) insurance premiums, or other 
                periodic payments or premiums with respect to 
                the property, the information required to be 
                provided under subsection (a) with respect to 
                the number, amount, and due dates or period of 
                payments scheduled to repay the total of 
                payments shall take into account the amount of 
                any monthly payment to such account for each 
                such repayment in accordance with section 
                10(a)(2) of the Real Estate Settlement 
                Procedures Act of 1974.
                    ``(B) Assessment value.--The amount taken 
                into account under subparagraph (A) for the 
                payment of property taxes, hazard and flood (if 
                any) insurance premiums, or other periodic 
                payments or premiums with respect to the 
                property shall reflect the taxable assessed 
                value of the real property securing the 
                transaction after the consummation of the 
                transaction, including the value of any 
                improvements on the property or to be 
                constructed on the property (whether or not 
                such construction will be financed from the 
                proceeds of the transaction), if known, and the 
                replacement costs of the property for hazard 
                insurance, in the initial year after the 
                transaction.''.

                    Subtitle F--Appraisal Activities

SEC. 1471. PROPERTY APPRAISAL REQUIREMENTS.

    Chapter 2 of the Truth in Lending Act (15 U.S.C. 1631 et 
seq.) is amended by inserting after 129G (as added by section 
1464(b)) the following new section:

``Sec. 129H. Property appraisal requirements

    ``(a) In General.--A creditor may not extend credit in the 
form of a higher-risk mortgage to any consumer without first 
obtaining a written appraisal of the property to be mortgaged 
prepared in accordance with the requirements of this section.
    ``(b) Appraisal Requirements.--
            ``(1) Physical property visit.--Subject to the 
        rules prescribed under paragraph (4), an appraisal of 
        property to be secured by a higher-risk mortgage does 
        not meet the requirement of this section unless it is 
        performed by a certified or licensed appraiser who 
        conducts a physical property visit of the interior of 
        the mortgaged property.
            ``(2) Second appraisal under certain 
        circumstances.--
                    ``(A) In general.--If the purpose of a 
                higher-risk mortgage is to finance the purchase 
                or acquisition of the mortgaged property from a 
                person within 180 days of the purchase or 
                acquisition of such property by that person at 
                a price that was lower than the current sale 
                price of the property, the creditor shall 
                obtain a second appraisal from a different 
                certified or licensed appraiser. The second 
                appraisal shall include an analysis of the 
                difference in sale prices, changes in market 
                conditions, and any improvements made to the 
                property between the date of the previous sale 
                and the current sale.
                    ``(B) No cost to applicant.--The cost of 
                any second appraisal required under 
                subparagraph (A) may not be charged to the 
                applicant.
            ``(3) Certified or licensed appraiser defined.--For 
        purposes of this section, the term `certified or 
        licensed appraiser' means a person who--
                    ``(A) is, at a minimum, certified or 
                licensed by the State in which the property to 
                be appraised is located; and
                    ``(B) performs each appraisal in conformity 
                with the Uniform Standards of Professional 
                Appraisal Practice and title XI of the 
                Financial Institutions Reform, Recovery, and 
                Enforcement Act of 1989, and the regulations 
                prescribed under such title, as in effect on 
                the date of the appraisal.
            ``(4) Regulations.--
                    ``(A) In general.--The Board, the 
                Comptroller of the Currency, the Federal 
                Deposit Insurance Corporation, the National 
                Credit Union Administration Board, the Federal 
                Housing Finance Agency, and the Bureau shall 
                jointly prescribe regulations to implement this 
                section.
                    ``(B) Exemption.--The agencies listed in 
                subparagraph (A) may jointly exempt, by rule, a 
                class of loans from the requirements of this 
                subsection or subsection (a) if the agencies 
                determine that the exemption is in the public 
                interest and promotes the safety and soundness 
                of creditors.
    ``(c) Free Copy of Appraisal.--A creditor shall provide 1 
copy of each appraisal conducted in accordance with this 
section in connection with a higher-risk mortgage to the 
applicant without charge, and at least 3 days prior to the 
transaction closing date.
    ``(d) Consumer Notification.--At the time of the initial 
mortgage application, the applicant shall be provided with a 
statement by the creditor that any appraisal prepared for the 
mortgage is for the sole use of the creditor, and that the 
applicant may choose to have a separate appraisal conducted at 
the expense of the applicant.
    ``(e) Violations.--In addition to any other liability to 
any person under this title, a creditor found to have willfully 
failed to obtain an appraisal as required in this section shall 
be liable to the applicant or borrower for the sum of $2,000.
    ``(f) Higher-risk Mortgage Defined.--For purposes of this 
section, the term `higher-risk mortgage' means a residential 
mortgage loan, other than a reverse mortgage loan that is a 
qualified mortgage, as defined in section 129C, secured by a 
principal dwelling--
            ``(1) that is not a qualified mortgage, as defined 
        in section 129C; and
            ``(2) with an annual percentage rate that exceeds 
        the average prime offer rate for a comparable 
        transaction, as defined in section 129C, as of the date 
        the interest rate is set--
                    ``(A) by 1.5 or more percentage points, in 
                the case of a first lien residential mortgage 
                loan having an original principal obligation 
                amount that does not exceed the amount of the 
                maximum limitation on the original principal 
                obligation of mortgage in effect for a 
                residence of the applicable size, as of the 
                date of such interest rate set, pursuant to the 
                sixth sentence of section 305(a)(2) the Federal 
                Home Loan Mortgage Corporation Act (12 U.S.C. 
                1454(a)(2));
                    ``(B) by 2.5 or more percentage points, in 
                the case of a first lien residential mortgage 
                loan having an original principal obligation 
                amount that exceeds the amount of the maximum 
                limitation on the original principal obligation 
                of mortgage in effect for a residence of the 
                applicable size, as of the date of such 
                interest rate set, pursuant to the sixth 
                sentence of section 305(a)(2) the Federal Home 
                Loan Mortgage Corporation Act (12 U.S.C. 
                1454(a)(2)); and
                    ``(C) by 3.5 or more percentage points for 
                a subordinate lien residential mortgage 
                loan.''.

SEC. 1472. APPRAISAL INDEPENDENCE REQUIREMENTS.

    (a) In General.--Chapter 2 of the Truth in Lending Act (15 
U.S.C. 1631 et seq.) is amended by inserting after section 129D 
(as added by section 1461(a)) the following new section:

``Sec. 129E. Appraisal independence requirements

    ``(a) In General.--It shall be unlawful, in extending 
credit or in providing any services for a consumer credit 
transaction secured by the principal dwelling of the consumer, 
to engage in any act or practice that violates appraisal 
independence as described in or pursuant to regulations 
prescribed under this section.
    ``(b) Appraisal Independence.--For purposes of subsection 
(a), acts or practices that violate appraisal independence 
shall include--
            ``(1) any appraisal of a property offered as 
        security for repayment of the consumer credit 
        transaction that is conducted in connection with such 
        transaction in which a person with an interest in the 
        underlying transaction compensates, coerces, extorts, 
        colludes, instructs, induces, bribes, or intimidates a 
        person, appraisal management company, firm, or other 
        entity conducting or involved in an appraisal, or 
        attempts, to compensate, coerce, extort, collude, 
        instruct, induce, bribe, or intimidate such a person, 
        for the purpose of causing the appraised value 
        assigned, under the appraisal, to the property to be 
        based on any factor other than the independent judgment 
        of the appraiser;
            ``(2) mischaracterizing, or suborning any 
        mischaracterization of, the appraised value of the 
        property securing the extension of the credit;
            ``(3) seeking to influence an appraiser or 
        otherwise to encourage a targeted value in order to 
        facilitate the making or pricing of the transaction; 
        and
            ``(4) withholding or threatening to withhold timely 
        payment for an appraisal report or for appraisal 
        services rendered when the appraisal report or services 
        are provided for in accordance with the contract 
        between the parties.
    ``(c) Exceptions.--The requirements of subsection (b) shall 
not be construed as prohibiting a mortgage lender, mortgage 
broker, mortgage banker, real estate broker, appraisal 
management company, employee of an appraisal management 
company, consumer, or any other person with an interest in a 
real estate transaction from asking an appraiser to undertake 1 
or more of the following:
            ``(1) Consider additional, appropriate property 
        information, including the consideration of additional 
        comparable properties to make or support an appraisal.
            ``(2) Provide further detail, substantiation, or 
        explanation for the appraiser's value conclusion.
            ``(3) Correct errors in the appraisal report.
    ``(d) Prohibitions on Conflicts of Interest.--No certified 
or licensed appraiser conducting, and no appraisal management 
company procuring or facilitating, an appraisal in connection 
with a consumer credit transaction secured by the principal 
dwelling of a consumer may have a direct or indirect interest, 
financial or otherwise, in the property or transaction 
involving the appraisal.
    ``(e) Mandatory Reporting.--Any mortgage lender, mortgage 
broker, mortgage banker, real estate broker, appraisal 
management company, employee of an appraisal management 
company, or any other person involved in a real estate 
transaction involving an appraisal in connection with a 
consumer credit transaction secured by the principal dwelling 
of a consumer who has a reasonable basis to believe an 
appraiser is failing to comply with the Uniform Standards of 
Professional Appraisal Practice, is violating applicable laws, 
or is otherwise engaging in unethical or unprofessional 
conduct, shall refer the matter to the applicable State 
appraiser certifying and licensing agency.
    ``(f) No Extension of Credit.--In connection with a 
consumer credit transaction secured by a consumer's principal 
dwelling, a creditor who knows, at or before loan consummation, 
of a violation of the appraisal independence standards 
established in subsections (b) or (d) shall not extend credit 
based on such appraisal unless the creditor documents that the 
creditor has acted with reasonable diligence to determine that 
the appraisal does not materially misstate or misrepresent the 
value of such dwelling.
    ``(g) Rules and Interpretive Guidelines.--
            ``(1) In general.--Except as provided under 
        paragraph (2), the Board, the Comptroller of the 
        Currency, the Federal Deposit Insurance Corporation, 
        the National Credit Union Administration Board, the 
        Federal Housing Finance Agency, and the Bureau may 
        jointly issue rules, interpretive guidelines, and 
        general statements of policy with respect to acts or 
        practices that violate appraisal independence in the 
        provision of mortgage lending services for a consumer 
        credit transaction secured by the principal dwelling of 
        the consumer and mortgage brokerage services for such a 
        transaction, within the meaning of subsections (a), 
        (b), (c), (d), (e), (f), (h), and (i).
            ``(2) Interim final regulations.--The Board shall, 
        for purposes of this section, prescribe interim final 
        regulations no later than 90 days after the date of 
        enactment of this section defining with specificity 
        acts or practices that violate appraisal independence 
        in the provision of mortgage lending services for a 
        consumer credit transaction secured by the principal 
        dwelling of the consumer or mortgage brokerage services 
        for such a transaction and defining any terms in this 
        section or such regulations. Rules prescribed by the 
        Board under this paragraph shall be deemed to be rules 
        prescribed by the agencies jointly under paragraph (1).
    ``(h) Appraisal Report Portability.--Consistent with the 
requirements of this section, the Board, the Comptroller of the 
Currency, the Federal Deposit Insurance Corporation, the 
National Credit Union Administration Board, the Federal Housing 
Finance Agency, and the Bureau may jointly issue regulations 
that address the issue of appraisal report portability, 
including regulations that ensure the portability of the 
appraisal report between lenders for a consumer credit 
transaction secured by a 1-4 unit single family residence that 
is the principal dwelling of the consumer, or mortgage 
brokerage services for such a transaction.
    ``(i) Customary and Reasonable Fee.--
            ``(1) In general.--Lenders and their agents shall 
        compensate fee appraisers at a rate that is customary 
        and reasonable for appraisal services performed in the 
        market area of the property being appraised. Evidence 
        for such fees may be established by objective third-
        party information, such as government agency fee 
        schedules, academic studies, and independent private 
        sector surveys. Fee studies shall exclude assignments 
        ordered by known appraisal management companies.
            ``(2) Fee appraiser definition.--For purposes of 
        this section, the term `fee appraiser' means a person 
        who is not an employee of the mortgage loan originator 
        or appraisal management company engaging the appraiser 
        and is--
                    ``(A) a State licensed or certified 
                appraiser who receives a fee for performing an 
                appraisal and certifies that the appraisal has 
                been prepared in accordance with the Uniform 
                Standards of Professional Appraisal Practice; 
                or
                    ``(B) a company not subject to the 
                requirements of section 1124 of the Financial 
                Institutions Reform, Recovery, and Enforcement 
                Act of 1989 (12 U.S.C. 3331 et seq.) that 
                utilizes the services of State licensed or 
                certified appraisers and receives a fee for 
                performing appraisals in accordance with the 
                Uniform Standards of Professional Appraisal 
                Practice.
            ``(3) Exception for complex assignments.--In the 
        case of an appraisal involving a complex assignment, 
        the customary and reasonable fee may reflect the 
        increased time, difficulty, and scope of the work 
        required for such an appraisal and include an amount 
        over and above the customary and reasonable fee for 
        non-complex assignments.
    ``(j) Sunset.--Effective on the date the interim final 
regulations are promulgated pursuant to subsection (g), the 
Home Valuation Code of Conduct announced by the Federal Housing 
Finance Agency on December 23, 2008, shall have no force or 
effect.
    ``(k) Penalties.--
            ``(1) First violation.--In addition to the 
        enforcement provisions referred to in section 130, each 
        person who violates this section shall forfeit and pay 
        a civil penalty of not more than $10,000 for each day 
        any such violation continues.
            ``(2) Subsequent violations.--In the case of any 
        person on whom a civil penalty has been imposed under 
        paragraph (1), paragraph (1) shall be applied by 
        substituting `$20,000' for `$10,000' with respect to 
        all subsequent violations.
            ``(3) Assessment.--The agency referred to in 
        subsection (a) or (c) of section 108 with respect to 
        any person described in paragraph (1) shall assess any 
        penalty under this subsection to which such person is 
        subject.''.
    (b) Clerical Amendment.--The table of sections for chapter 
2 of the Truth in Lending Act is amended by inserting after the 
item relating to section 129D (as added by section 1461(c)) the 
following new items:

``129E. Appraisal independence requirements.
``129F. Requirements for prompt crediting of home loan payments.
``129G. Requests for payoff amounts of home loan.
``129H. Property appraisal requirements.''.

    (c) Deference.--Section 105 of the Truth in Lending Act (15 
U.S.C. 1604) is amended by adding at the end the following:
    ``(h) Deference.--Notwithstanding any power granted to any 
Federal agency under this title, the deference that a court 
affords to the Bureau with respect to a determination made by 
the Bureau relating to the meaning or interpretation of any 
provision of this title, other than section 129E or 129H, shall 
be applied as if the Bureau were the only agency authorized to 
apply, enforce, interpret, or administer the provisions of this 
title.''.
    (d) Conforming Amendments in Title X Not Applicable to 
Sections 129E and 129H.--Notwithstanding section 1099A, the 
term ``Board'' in sections 129E and 129H, as added by this 
subtitle, shall not be substituted by the term ``Bureau''.

SEC. 1473. AMENDMENTS RELATING TO APPRAISAL SUBCOMMITTEE OF FFIEC, 
                    APPRAISER INDEPENDENCE MONITORING, APPROVED 
                    APPRAISER EDUCATION, APPRAISAL MANAGEMENT 
                    COMPANIES, APPRAISER COMPLAINT HOTLINE, AUTOMATED 
                    VALUATION MODELS, AND BROKER PRICE OPINIONS.

    (a) Threshold Levels.--Section 1112(b) of the Financial 
Institutions Reform, Recovery, and Enforcement Act of 1989 (12 
U.S.C. 3341(b)) is amended by inserting before the period the 
following: ``, and receives concurrence from the Bureau of 
Consumer Financial Protection that such threshold level 
provides reasonable protection for consumers who purchase 1-4 
unit single-family residences''.
    (b) Annual Report of Appraisal Subcommittee.--Section 
1103(a) of the Financial Institutions Reform, Recovery, and 
Enforcement Act of 1989 (12 U.S.C. 3332(a)) is amended at the 
end by inserting the following new paragraph:
            ``(5) transmit an annual report to the Congress not 
        later than June 15 of each year that describes the 
        manner in which each function assigned to the Appraisal 
        Subcommittee has been carried out during the preceding 
        year. The report shall also detail the activities of 
        the Appraisal Subcommittee, including the results of 
        all audits of State appraiser regulatory agencies, and 
        provide an accounting of disapproved actions and 
        warnings taken in the previous year, including a 
        description of the conditions causing the disapproval 
        and actions taken to achieve compliance.''.
    (c) Open Meetings.--Section 1104(b) of the Financial 
Institutions Reform, Recovery, and Enforcement Act of 1989 (12 
U.S.C. 3333(b)) is amended--
            (1) by inserting ``in public session after notice 
        in the Federal Register, but may close certain portions 
        of these meetings related to personnel and review of 
        preliminary State audit reports,'' after ``shall 
        meet''; and
            (2) by adding after the final period the following: 
        ``The subject matter discussed in any closed or 
        executive session shall be described in the Federal 
        Register notice of the meeting.''.
    (d) Regulations.--Section 1106 of the Financial 
Institutions Reform, Recovery, and Enforcement Act of 1989 (12 
U.S.C. 3335) is amended--
            (1) by inserting ``prescribe regulations in 
        accordance with chapter 5 of title 5, United States 
        Code (commonly referred to as the Administrative 
        Procedures Act) after notice and opportunity for 
        comment,'' after ``hold hearings''; and
            (2) at the end by inserting ``Any regulations 
        prescribed by the Appraisal Subcommittee shall (unless 
        otherwise provided in this title) be limited to the 
        following functions: temporary practice, national 
        registry, information sharing, and enforcement. For 
        purposes of prescribing regulations, the Appraisal 
        Subcommittee shall establish an advisory committee of 
        industry participants, including appraisers, lenders, 
        consumer advocates, real estate agents, and government 
        agencies, and hold meetings as necessary to support the 
        development of regulations.''.
    (e) Appraisal Reviews and Complex Appraisals.--
            (1) Section 1110.--Section 1110 of the Financial 
        Institutions Reform, Recovery, and Enforcement Act of 
        1989 (12 U.S.C. 3339) is amended--
                    (A) in paragraph (1), by striking ``and'';
                    (B) in paragraph (2), by striking the 
                period at the end and inserting ``; and''; and
                    (C) by inserting after paragraph (2) the 
                following:
            ``(3) that such appraisals shall be subject to 
        appropriate review for compliance with the Uniform 
        Standards of Professional Appraisal Practice.''.
            (2) Section 1113.--Section 1113 of the Financial 
        Institutions and Reform, Recovery, and Enforcement Act 
        of 1989 (12 U.S.C. 3342) is amended by inserting before 
        the period the following: ``, where a complex 1- to 4-
        unit single family residential appraisal means an 
        appraisal for which the property to be appraised, the 
        form of ownership, the property characteristics, or the 
        market conditions are atypical''.
    (f) Appraisal Management Services.--
            (1) Supervision of third-party providers of 
        appraisal management services.--Section 1103(a) of the 
        Financial Institutions Reform, Recovery, and 
        Enforcement Act of 1989 (12 U.S.C. 3332(a)) (as 
        previously amended by this section) is amended--
                    (A) by amending paragraph (1) to read as 
                follows:
            ``(1) monitor the requirements established by 
        States--
                    ``(A) for the certification and licensing 
                of individuals who are qualified to perform 
                appraisals in connection with federally related 
                transactions, including a code of professional 
                responsibility; and
                    ``(B) for the registration and supervision 
                of the operations and activities of an 
                appraisal management company;''; and
                    (B) by adding at the end the following new 
                paragraph:
            ``(6) maintain a national registry of appraisal 
        management companies that either are registered with 
        and subject to supervision of a State appraiser 
        certifying and licensing agency or are operating 
        subsidiaries of a Federally regulated financial 
        institution.''.
            (2) Appraisal management company minimum 
        requirements.--Title XI of the Financial Institutions 
        Reform, Recovery, and Enforcement Act of 1989 (12 
        U.S.C. 3331 et seq.) is amended by adding at the end 
        the following new section (and amending the table of 
        contents accordingly):

``SEC. 1124. APPRAISAL MANAGEMENT COMPANY MINIMUM REQUIREMENTS.

    ``(a) In General.--The Board of Governors of the Federal 
Reserve System, the Comptroller of the Currency, the Federal 
Deposit Insurance Corporation, the National Credit Union 
Administration Board, the Federal Housing Finance Agency, and 
the Bureau of Consumer Financial Protection shall jointly, by 
rule, establish minimum requirements to be applied by a State 
in the registration of appraisal management companies. Such 
requirements shall include a requirement that such companies--
            ``(1) register with and be subject to supervision 
        by a State appraiser certifying and licensing agency in 
        each State in which such company operates;
            ``(2) verify that only licensed or certified 
        appraisers are used for federally related transactions;
            ``(3) require that appraisals coordinated by an 
        appraisal management company comply with the Uniform 
        Standards of Professional Appraisal Practice; and
            ``(4) require that appraisals are conducted 
        independently and free from inappropriate influence and 
        coercion pursuant to the appraisal independence 
        standards established under section 129E of the Truth 
        in Lending Act.
    ``(b) Relation to State Law.--Nothing in this section shall 
be construed to prevent States from establishing requirements 
in addition to any rules promulgated under subsection (a).
    ``(c) Federally Regulated Financial Institutions.--The 
requirements of subsection (a) shall apply to an appraisal 
management company that is a subsidiary owned and controlled by 
a financial institution and regulated by a Federal financial 
institution regulatory agency. An appraisal management company 
that is a subsidiary owned and controlled by a financial 
institution regulated by a Federal financial institution 
regulatory agency shall not be required to register with a 
State.
    ``(d) Registration Limitations.--An appraisal management 
company shall not be registered by a State or included on the 
national registry if such company, in whole or in part, 
directly or indirectly, is owned by any person who has had an 
appraiser license or certificate refused, denied, cancelled, 
surrendered in lieu of revocation, or revoked in any State. 
Additionally, each person that owns more than 10 percent of an 
appraisal management company shall be of good moral character, 
as determined by the State appraiser certifying and licensing 
agency, and shall submit to a background investigation carried 
out by the State appraiser certifying and licensing agency.
    ``(e) Reporting.--The Board of Governors of the Federal 
Reserve System, the Comptroller of the Currency, the Federal 
Deposit Insurance Corporation, the National Credit Union 
Administration Board, the Federal Housing Finance Agency, and 
the Bureau of Consumer Financial Protection shall jointly 
promulgate regulations for the reporting of the activities of 
appraisal management companies to the Appraisal Subcommittee in 
determining the payment of the annual registry fee.
    ``(f) Effective Date.--
            ``(1) In general.--No appraisal management company 
        may perform services related to a federally related 
        transaction in a State after the date that is 36 months 
        after the date on which the regulations required to be 
        prescribed under subsection (a) are prescribed in final 
        form unless such company is registered with such State 
        or subject to oversight by a Federal financial 
        institutions regulatory agency.
            ``(2) Extension of effective date.--Subject to the 
        approval of the Council, the Appraisal Subcommittee may 
        extend by an additional 12 months the requirements for 
        the registration and supervision of appraisal 
        management companies if it makes a written finding that 
        a State has made substantial progress in establishing a 
        State appraisal management company registration and 
        supervision system that appears to conform with the 
        provisions of this title.''.
            (3) State appraiser certifying and licensing agency 
        authority.--Section 1117 of the Financial Institutions 
        Reform, Recovery, and Enforcement Act of 1989 (12 
        U.S.C. 3346) is amended by adding at the end the 
        following: ``The duties of such agency may additionally 
        include the registration and supervision of appraisal 
        management companies and the addition of information 
        about the appraisal management company to the national 
        registry.''.
            (4) Appraisal management company definition.--
        Section 1121 of the Financial Institutions Reform, 
        Recovery, and Enforcement Act of 1989 (12 U.S.C. 3350) 
        is amended by adding at the end the following:
            ``(11) Appraisal management company.--The term 
        `appraisal management company' means, in connection 
        with valuing properties collateralizing mortgage loans 
        or mortgages incorporated into a securitization, any 
        external third party authorized either by a creditor of 
        a consumer credit transaction secured by a consumer's 
        principal dwelling or by an underwriter of or other 
        principal in the secondary mortgage markets, that 
        oversees a network or panel of more than 15 certified 
        or licensed appraisers in a State or 25 or more 
        nationally within a given year--
                    ``(A) to recruit, select, and retain 
                appraisers;
                    ``(B) to contract with licensed and 
                certified appraisers to perform appraisal 
                assignments;
                    ``(C) to manage the process of having an 
                appraisal performed, including providing 
                administrative duties such as receiving 
                appraisal orders and appraisal reports, 
                submitting completed appraisal reports to 
                creditors and underwriters, collecting fees 
                from creditors and underwriters for services 
                provided, and reimbursing appraisers for 
                services performed; or
                    ``(D) to review and verify the work of 
                appraisers.''.
    (g) State Agency Reporting Requirement.--Section 1109(a) of 
the Financial Institutions Reform, Recovery, and Enforcement 
Act of 1989 (12 U.S.C. 3338(a)) is amended--
            (1) by striking ``and'' after the semicolon in 
        paragraph (1);
            (2) by redesignating paragraph (2) as paragraph 
        (4); and
            (3) by inserting after paragraph (1) the following 
        new paragraphs:
            ``(2) transmit reports on the issuance and renewal 
        of licenses and certifications, sanctions, disciplinary 
        actions, license and certification revocations, and 
        license and certification suspensions on a timely basis 
        to the national registry of the Appraisal Subcommittee;
            ``(3) transmit reports on a timely basis of 
        supervisory activities involving appraisal management 
        companies or other third-party providers of appraisals 
        and appraisal management services, including 
        investigations initiated and disciplinary actions 
        taken; and''.
    (h) Registry Fees Modified.--
            (1) In general.--Section 1109(a) of the Financial 
        Institutions Reform, Recovery, and Enforcement Act of 
        1989 (12 U.S.C. 3338(a)) is amended--
                    (A) by amending paragraph (4) (as modified 
                by section 1473(g)) to read as follows:
            ``(4) collect--
                    ``(A) from such individuals who perform or 
                seek to perform appraisals in federally related 
                transactions, an annual registry fee of not 
                more than $40, such fees to be transmitted by 
                the State agencies to the Council on an annual 
                basis; and
                    ``(B) from an appraisal management company 
                that either has registered with a State 
                appraiser certifying and licensing agency in 
                accordance with this title or operates as a 
                subsidiary of a federally regulated financial 
                institution, an annual registry fee of--
                            ``(i) in the case of such a company 
                        that has been in existence for more 
                        than a year, $25 multiplied by the 
                        number of appraisers working for or 
                        contracting with such company in such 
                        State during the previous year, but 
                        where such $25 amount may be adjusted, 
                        up to a maximum of $50, at the 
                        discretion of the Appraisal 
                        Subcommittee, if necessary to carry out 
                        the Subcommittee's functions under this 
                        title; and
                            ``(ii) in the case of such a 
                        company that has not been in existence 
                        for more than a year, $25 multiplied by 
                        an appropriate number to be determined 
                        by the Appraisal Subcommittee, and 
                        where such number will be used for 
                        determining the fee of all such 
                        companies that were not in existence 
                        for more than a year, but where such 
                        $25 amount may be adjusted, up to a 
                        maximum of $50, at the discretion of 
                        the Appraisal Subcommittee, if 
                        necessary to carry out the 
                        Subcommittee's functions under this 
                        title.''; and
                    (B) by amending the matter following 
                paragraph (4), as redesignated, to read as 
                follows:
``Subject to the approval of the Council, the Appraisal 
Subcommittee may adjust the dollar amount of registry fees 
under paragraph (4)(A), up to a maximum of $80 per annum, as 
necessary to carry out its functions under this title. The 
Appraisal Subcommittee shall consider at least once every 5 
years whether to adjust the dollar amount of the registry fees 
to account for inflation. In implementing any change in 
registry fees, the Appraisal Subcommittee shall provide 
flexibility to the States for multi-year certifications and 
licenses already in place, as well as a transition period to 
implement the changes in registry fees. In establishing the 
amount of the annual registry fee for an appraisal management 
company, the Appraisal Subcommittee shall have the discretion 
to impose a minimum annual registry fee for an appraisal 
management company to protect against the under reporting of 
the number of appraisers working for or contracted by the 
appraisal management company.''.
            (2) Incremental revenues.--Incremental revenues 
        collected pursuant to the increases required by this 
        subsection shall be placed in a separate account at the 
        United States Treasury, entitled the ``Appraisal 
        Subcommittee Account''.
    (i) Grants and Reports.--Section 1109(b) of the Financial 
Institutions Reform, Recovery, and Enforcement Act of 1989 (12 
U.S.C. 3338(b)) is amended--
            (1) by striking ``and'' after the semicolon in 
        paragraph (3);
            (2) by striking the period at the end of paragraph 
        (4) and inserting a semicolon;
            (3) by adding at the end the following new 
        paragraphs:
            ``(5) to make grants to State appraiser certifying 
        and licensing agencies, in accordance with policies to 
        be developed by the Appraisal Subcommittee, to support 
        the efforts of such agencies to comply with this title, 
        including--
                    ``(A) the complaint process, complaint 
                investigations, and appraiser enforcement 
                activities of such agencies; and
                    ``(B) the submission of data on State 
                licensed and certified appraisers and appraisal 
                management companies to the National appraisal 
                registry, including information affirming that 
                the appraiser or appraisal management company 
                meets the required qualification criteria and 
                formal and informal disciplinary actions; and
            ``(6) to report to all State appraiser certifying 
        and licensing agencies when a license or certification 
        is surrendered, revoked, or suspended.''.
Obligations authorized under this subsection may not exceed 75 
percent of the fiscal year total of incremental increase in 
fees collected and deposited in the ``Appraisal Subcommittee 
Account'' pursuant to subsection (h).
    (j) Criteria.--Section 1116 of the Financial Institutions 
Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 3345) 
is amended--
            (1) in subsection (c), by inserting ``whose 
        criteria for the licensing of a real estate appraiser 
        currently meet or exceed the minimum criteria issued by 
        the Appraisal Qualifications Board of The Appraisal 
        Foundation for the licensing of real estate 
        appraisers'' before the period at the end; and
            (2) by striking subsection (e) and inserting the 
        following new subsection:
    ``(e) Minimum Qualification Requirements.--Any requirements 
established for individuals in the position of `Trainee 
Appraiser' and `Supervisory Appraiser' shall meet or exceed the 
minimum qualification requirements of the Appraiser 
Qualifications Board of The Appraisal Foundation. The Appraisal 
Subcommittee shall have the authority to enforce these 
requirements.''.
    (k) Monitoring of State Appraiser Certifying and Licensing 
Agencies.--Section 1118 of the Financial Institutions Reform, 
Recovery, and Enforcement Act of 1989 (12 U.S.C. 3347) is 
amended--
            (1) by amending subsection (a) to read as follows:
    ``(a) In General.--The Appraisal Subcommittee shall monitor 
each State appraiser certifying and licensing agency for the 
purposes of determining whether such agency--
            ``(1) has policies, practices, funding, staffing, 
        and procedures that are consistent with this title;
            ``(2) processes complaints and completes 
        investigations in a reasonable time period;
            ``(3) appropriately disciplines sanctioned 
        appraisers and appraisal management companies;
            ``(4) maintains an effective regulatory program; 
        and
            ``(5) reports complaints and disciplinary actions 
        on a timely basis to the national registries on 
        appraisers and appraisal management companies 
        maintained by the Appraisal Subcommittee.
The Appraisal Subcommittee shall have the authority to remove a 
State licensed or certified appraiser or a registered appraisal 
management company from a national registry on an interim 
basis, not to exceed 90 days, pending State agency action on 
licensing, certification, registration, and disciplinary 
proceedings. The Appraisal Subcommittee and all agencies, 
instrumentalities, and Federally recognized entities under this 
title shall not recognize appraiser certifications and licenses 
from States whose appraisal policies, practices, funding, 
staffing, or procedures are found to be inconsistent with this 
title. The Appraisal Subcommittee shall have the authority to 
impose sanctions, as described in this section, against a State 
agency that fails to have an effective appraiser regulatory 
program. In determining whether such a program is effective, 
the Appraisal Subcommittee shall include an analysis of the 
licensing and certification of appraisers, the registration of 
appraisal management companies, the issuance of temporary 
licenses and certifications for appraisers, the receiving and 
tracking of submitted complaints against appraisers and 
appraisal management companies, the investigation of 
complaints, and enforcement actions against appraisers and 
appraisal management companies. The Appraisal Subcommittee 
shall have the authority to impose interim actions and 
suspensions against a State agency as an alternative to, or in 
advance of, the derecognition of a State agency.''.
            (2) in subsection (b)(2), by inserting after 
        ``authority'' the following: ``or sufficient funding''.
    (l) Reciprocity.--Subsection (b) of section 1122 of the 
Financial Institutions Reform, Recovery, and Enforcement Act of 
1989 (12 U.S.C. 3351(b)) is amended to read as follows:
    ``(b) Reciprocity.--Notwithstanding any other provisions of 
this title, a federally related transaction shall not be 
appraised by a certified or licensed appraiser unless the State 
appraiser certifying or licensing agency of the State 
certifying or licensing such appraiser has in place a policy of 
issuing a reciprocal certification or license for an individual 
from another State when--
            ``(1) the appraiser licensing and certification 
        program of such other State is in compliance with the 
        provisions of this title; and
            ``(2) the appraiser holds a valid certification 
        from a State whose requirements for certification or 
        licensing meet or exceed the licensure standards 
        established by the State where an individual seeks 
        appraisal licensure.''.
    (m) Consideration of Professional Appraisal Designations.--
Section 1122(d) of the Financial Institutions Reform, Recovery, 
and Enforcement Act of 1989 (12 U.S.C. 3351(d)) is amended by 
striking ``shall not exclude'' and all that follows through the 
end of the subsection and inserting the following: ``may 
include education achieved, experience, sample appraisals, and 
references from prior clients. Membership in a nationally 
recognized professional appraisal organization may be a 
criteria considered, though lack of membership therein shall 
not be the sole bar against consideration for an assignment 
under these criteria.''.
    (n) Appraiser Independence.--Section 1122 of the Financial 
Institutions Reform, Recovery, and Enforcement Act of 1989 (12 
U.S.C. 3351) is amended by adding at the end the following new 
subsection:
    ``(g) Appraiser Independence Monitoring.--The Appraisal 
Subcommittee shall monitor each State appraiser certifying and 
licensing agency for the purpose of determining whether such 
agency's policies, practices, and procedures are consistent 
with the purposes of maintaining appraiser independence and 
whether such State has adopted and maintains effective laws, 
regulations, and policies aimed at maintaining appraiser 
independence.''.
    (o) Appraiser Education.--Section 1122 of the Financial 
Institutions Reform, Recovery, and Enforcement Act of 1989 (12 
U.S.C. 3351) is amended by inserting after subsection (g) (as 
added by subsection (l) of this section) the following new 
subsection:
    ``(h) Approved Education.--The Appraisal Subcommittee shall 
encourage the States to accept courses approved by the 
Appraiser Qualification Board's Course Approval Program.''.
    (p) Appraisal Complaint Hotline.--Section 1122 of the 
Financial Institutions Reform, Recovery, and Enforcement Act of 
1989 (12 U.S.C. 3351), as amended by this section, is amended 
by adding at the end the following new subsection:
    ``(i) Appraisal Complaint National Hotline.--If, 6 months 
after the date of the enactment of this subsection, the 
Appraisal Subcommittee determines that no national hotline 
exists to receive complaints of non-compliance with appraisal 
independence standards and Uniform Standards of Professional 
Appraisal Practice, including complaints from appraisers, 
individuals, or other entities concerning the improper 
influencing or attempted improper influencing of appraisers or 
the appraisal process, the Appraisal Subcommittee shall 
establish and operate such a national hotline, which shall 
include a toll-free telephone number and an email address. If 
the Appraisal Subcommittee operates such a national hotline, 
the Appraisal Subcommittee shall refer complaints for further 
action to appropriate governmental bodies, including a State 
appraiser certifying and licensing agency, a financial 
institution regulator, or other appropriate legal authorities. 
For complaints referred to State appraiser certifying and 
licensing agencies or to Federal regulators, the Appraisal 
Subcommittee shall have the authority to follow up such 
complaint referrals in order to determine the status of the 
resolution of the complaint.''.
    (q) Automated Valuation Models.--Title XI of the Financial 
Institutions Reform, Recovery, and Enforcement Act of 1989 (12 
U.S.C. 3331 et seq.), as amended by this section, is amended by 
adding at the end the following new section (and amending the 
table of contents accordingly):

``SEC. 1125. AUTOMATED VALUATION MODELS USED TO ESTIMATE COLLATERAL 
                    VALUE FOR MORTGAGE LENDING PURPOSES.

    ``(a) In General.--Automated valuation models shall adhere 
to quality control standards designed to--
            ``(1) ensure a high level of confidence in the 
        estimates produced by automated valuation models;
            ``(2) protect against the manipulation of data;
            ``(3) seek to avoid conflicts of interest;
            ``(4) require random sample testing and reviews; 
        and
            ``(5) account for any other such factor that the 
        agencies listed in subsection (b) determine to be 
        appropriate.
    ``(b) Adoption of Regulations.--The Board, the Comptroller 
of the Currency, the Federal Deposit Insurance Corporation, the 
National Credit Union Administration Board, the Federal Housing 
Finance Agency, and the Bureau of Consumer Financial 
Protection, in consultation with the staff of the Appraisal 
Subcommittee and the Appraisal Standards Board of the Appraisal 
Foundation, shall promulgate regulations to implement the 
quality control standards required under this section.
    ``(c) Enforcement.--Compliance with regulations issued 
under this subsection shall be enforced by--
            ``(1) with respect to a financial institution, or 
        subsidiary owned and controlled by a financial 
        institution and regulated by a Federal financial 
        institution regulatory agency, the Federal financial 
        institution regulatory agency that acts as the primary 
        Federal supervisor of such financial institution or 
        subsidiary; and
            ``(2) with respect to other participants in the 
        market for appraisals of 1-to-4 unit single family 
        residential real estate, the Federal Trade Commission, 
        the Bureau of Consumer Financial Protection, and a 
        State attorney general.
    ``(d) Automated Valuation Model Defined.--For purposes of 
this section, the term `automated valuation model' means any 
computerized model used by mortgage originators and secondary 
market issuers to determine the collateral worth of a mortgage 
secured by a consumer's principal dwelling.''.
    (r) Broker Price Opinions.--Title XI of the Financial 
Institutions Reform, Recovery, and Enforcement Act of 1989 (12 
U.S.C. 3331 et seq.), as amended by this section, is amended by 
adding at the end the following new section (and amending the 
table of contents accordingly):

``SEC. 1126. BROKER PRICE OPINIONS.

    ``(a) General Prohibition.--In conjunction with the 
purchase of a consumer's principal dwelling, broker price 
opinions may not be used as the primary basis to determine the 
value of a piece of property for the purpose of a loan 
origination of a residential mortgage loan secured by such 
piece of property.
    ``(b) Broker Price Opinion Defined.--For purposes of this 
section, the term `broker price opinion' means an estimate 
prepared by a real estate broker, agent, or sales person that 
details the probable selling price of a particular piece of 
real estate property and provides a varying level of detail 
about the property's condition, market, and neighborhood, and 
information on comparable sales, but does not include an 
automated valuation model, as defined in section 1125(c).''.
    (s) Amendments to Appraisal Subcommittee.--Section 1011 of 
the Federal Financial Institutions Examination Council Act of 
1978 (12 U.S.C. 3310) is amended--
            (1) in the first sentence, by adding before the 
        period the following: ``, the Bureau of Consumer 
        Financial Protection, and the Federal Housing Finance 
        Agency''; and
            (2) by inserting at the end the following: ``At all 
        times at least one member of the Appraisal Subcommittee 
        shall have demonstrated knowledge and competence 
        through licensure, certification, or professional 
        designation within the appraisal profession.''.
    (t) Technical Corrections.--
            (1) Section 1119(a)(2) of the Financial 
        Institutions Reform, Recovery, and Enforcement Act of 
        1989 (12 U.S.C. 3348(a)(2)) is amended by striking 
        ``council,'' and inserting ``Council,''.
            (2) Section 1121(6) of the Financial Institutions 
        Reform, Recovery, and Enforcement Act of 1989 (12 
        U.S.C. 3350(6)) is amended by striking 
        ``Corporations,'' and inserting ``Corporation,''.
            (3) Section 1121(8) of the Financial Institutions 
        Reform, Recovery, and Enforcement Act of 1989 (12 
        U.S.C. 3350(8)) is amended by striking ``council'' and 
        inserting ``Council''.
            (4) Section 1122 of the Financial Institutions 
        Reform, Recovery, and Enforcement Act of 1989 (12 
        U.S.C. 3351) is amended--
                    (A) in subsection (a)(1) by moving the left 
                margin of subparagraphs (A), (B), and (C) 2 ems 
                to the right; and
                    (B) in subsection (c)--
                            (i) by striking ``Federal Financial 
                        Institutions Examination Council'' and 
                        inserting ``Financial Institutions 
                        Examination Council''; and
                            (ii) by striking ``the council's 
                        functions'' and inserting ``the 
                        Council's functions''.

SEC. 1474. EQUAL CREDIT OPPORTUNITY ACT AMENDMENT.

    Subsection (e) of section 701 of the Equal Credit 
Opportunity Act (15 U.S.C. 1691) is amended to read as follows:
    ``(e) Copies Furnished to Applicants.--
            ``(1) In general.--Each creditor shall furnish to 
        an applicant a copy of any and all written appraisals 
        and valuations developed in connection with the 
        applicant's application for a loan that is secured or 
        would have been secured by a first lien on a dwelling 
        promptly upon completion, but in no case later than 3 
        days prior to the closing of the loan, whether the 
        creditor grants or denies the applicant's request for 
        credit or the application is incomplete or withdrawn.
            ``(2) Waiver.--The applicant may waive the 3 day 
        requirement provided for in paragraph (1), except where 
        otherwise required in law.
            ``(3) Reimbursement.--The applicant may be required 
        to pay a reasonable fee to reimburse the creditor for 
        the cost of the appraisal, except where otherwise 
        required in law.
            ``(4) Free copy.--Notwithstanding paragraph (3), 
        the creditor shall provide a copy of each written 
        appraisal or valuation at no additional cost to the 
        applicant.
            ``(5) Notification to applicants.--At the time of 
        application, the creditor shall notify an applicant in 
        writing of the right to receive a copy of each written 
        appraisal and valuation under this subsection.
            ``(6) Valuation defined.--For purposes of this 
        subsection, the term `valuation' shall include any 
        estimate of the value of a dwelling developed in 
        connection with a creditor's decision to provide 
        credit, including those values developed pursuant to a 
        policy of a government sponsored enterprise or by an 
        automated valuation model, a broker price opinion, or 
        other methodology or mechanism.''.

SEC. 1475. REAL ESTATE SETTLEMENT PROCEDURES ACT OF 1974 AMENDMENT 
                    RELATING TO CERTAIN APPRAISAL FEES.

    Section 4 of the Real Estate Settlement Procedures Act of 
1974 is amended by adding at the end the following new 
subsection:
    ``(c) The standard form described in subsection (a) may 
include, in the case of an appraisal coordinated by an 
appraisal management company (as such term is defined in 
section 1121(11) of the Financial Institutions Reform, 
Recovery, and Enforcement Act of 1989 (12 U.S.C. 3350(11))), a 
clear disclosure of--
            ``(1) the fee paid directly to the appraiser by 
        such company; and
            ``(2) the administration fee charged by such 
        company.''.

SEC. 1476. GAO STUDY ON THE EFFECTIVENESS AND IMPACT OF VARIOUS 
                    APPRAISAL METHODS, VALUATION MODELS AND 
                    DISTRIBUTIONS CHANNELS, AND ON THE HOME VALUATION 
                    CODE OF CONDUCT AND THE APPRAISAL SUBCOMMITTEE.

    (a) In General.--The Government Accountability Office shall 
conduct a study on--
            (1) the effectiveness and impact of--
                    (A) appraisal methods, including the cost 
                approach, the comparative sales approach, the 
                income approach, and others that may be 
                available;
                    (B) appraisal valuation models, including 
                licensed and certified appraisals, broker-
                priced opinions, and automated valuation 
                models; and
                    (C) appraisal distribution channels, 
                including appraisal management companies, 
                independent appraisal operations within 
                mortgage originators, and fee-for-service 
                appraisers;
            (2) the Home Valuation Code of Conduct; and
            (3) the Appraisal Subcommittee's functions pursuant 
        to title XI of the Financial Institutions Reform, 
        Recovery, and Enforcement Act of 1989.
    (b) Study.--Not later than--
            (1) 12 months after the date of enactment of this 
        Act, the Government Accountability Office shall submit 
        a study to the Committee on Banking, Housing, and Urban 
        Affairs of the Senate and the Committee on Financial 
        Services of the House of Representatives; and
            (2) 90 days after the date of enactment of this 
        Act, the Government Accountability Office shall provide 
        a report on the status of the study and any preliminary 
        findings to the Committee on Banking, Housing, and 
        Urban Affairs of the Senate and the Committee on 
        Financial Services of the House of Representatives.
    (c) Content of Study.--The study required by this section 
shall include an examination of the following:
            (1) Appraisal approaches, valuation models, and 
        distribution channels.--
                    (A) The prevalence, alone or in 
                combination, of certain appraisal approaches, 
                models, and channels in purchase-money and 
                refinance mortgage transactions.
                    (B) The accuracy of these approaches, 
                models, and channels in assessing the property 
                as collateral.
                    (C) Whether and how these approaches, 
                models, and channels contributed to price 
                speculation during the previous cycle.
                    (D) The costs to consumers of these 
                approaches, models, and channels.
                    (E) The disclosure of fees to consumers in 
                the appraisal process.
                    (F) To what extent the usage of these 
                approaches, models, and channels may be 
                influenced by a conflict of interest between 
                the mortgage lender and the appraiser and the 
                mechanism by which the lender selects and 
                compensates the appraiser.
                    (G) The suitability of these approaches, 
                models, and channels in rural versus urban 
                areas.
            (2) Home valuation code of conduct (hvcc).--
                    (A) How the HVCC affects mortgage lenders' 
                selection of appraisers.
                    (B) How the HVCC affects State regulation 
                of appraisers and appraisal distribution 
                channels.
                    (C) How the HVCC affects the quality and 
                cost of appraisals and the length of time to 
                obtain an appraisal.
                    (D) How the HVCC affects mortgage brokers, 
                small businesses, and consumers.
    (d) Additional Study Required.--
            (1) In general.--Not later than 18 months after the 
        date of enactment of this Act, the Government 
        Accountability Office shall submit a study to the 
        Committee on Banking, Housing, and Urban Affairs of the 
        Senate and the Committee on Financial Services of the 
        House of Representatives.
            (2) Content of additional study.--The study 
        required under paragraph (1) shall include--
                    (A) an examination of--
                            (i) the Appraisal Subcommittee's 
                        ability to monitor and enforce State 
                        and Federal certification requirements 
                        and standards, including by providing a 
                        summary with a statistical breakdown of 
                        enforcement actions taken during the 
                        last 10 years;
                            (ii) whether existing Federal 
                        financial institutions regulatory 
                        agency exemptions on appraisals for 
                        federally related transactions needs to 
                        be revised; and
                            (iii) whether new means of data 
                        collection, such as the establishment 
                        of a national repository, would benefit 
                        the Appraisal Subcommittee's ability to 
                        perform its functions; and
                    (B) recommendations from this examination 
                for administrative and legislative action at 
                the Federal and State level.

            Subtitle G--Mortgage Resolution and Modification

SEC. 1481. MULTIFAMILY MORTGAGE RESOLUTION PROGRAM.

    (a) Establishment.--The Secretary of Housing and Urban 
Development shall develop a program under this subsection to 
ensure the protection of current and future tenants and at-risk 
multifamily properties, where feasible, based on criteria that 
may include--
            (1) creating sustainable financing of such 
        properties, that may take into consideration such 
        factors as--
                    (A) the rental income generated by such 
                properties; and
                    (B) the preservation of adequate operating 
                reserves;
            (2) maintaining the level of Federal, State, and 
        city subsidies in effect as of the date of the 
        enactment of this Act;
            (3) providing funds for rehabilitation; and
            (4) facilitating the transfer of such properties, 
        when appropriate and with the agreement of owners, to 
        responsible new owners and ensuring affordability of 
        such properties.
    (b) Coordination.--The Secretary of Housing and Urban 
Development may, in carrying out the program developed under 
this section, coordinate with the Secretary of the Treasury, 
the Federal Deposit Insurance Corporation, the Board of 
Governors of the Federal Reserve System, the Federal Housing 
Finance Agency, and any other Federal Government agency that 
the Secretary considers appropriate.
    (c) Definition.--For purposes of this section, the term 
``multifamily properties'' means a residential structure that 
consists of 5 or more dwelling units.
    (d) Prevention of Qualification for Criminal Applicants.--
            (1) In general.--No person shall be eligible to 
        begin receiving assistance from the Making Home 
        Affordable Program authorized under the Emergency 
        Economic Stabilization Act of 2008 (12 U.S.C. 5201 et 
        seq.), or any other mortgage assistance program 
        authorized or funded by that Act, on or after 60 days 
        after the date of the enactment of this Act, if such 
        person, in connection with a mortgage or real estate 
        transaction, has been convicted, within the last 10 
        years, of any one of the following:
                    (A) Felony larceny, theft, fraud, or 
                forgery.
                    (B) Money laundering.
                    (C) Tax evasion.
            (2) Procedures.--The Secretary shall establish 
        procedures to ensure compliance with this subsection.
            (3) Report.--The Secretary shall report to the 
        Committee on Financial Services of the House of 
        Representatives and the Committee on Banking, Housing, 
        and Urban Affairs of the Senate regarding the 
        implementation of this provision. The report shall also 
        describe the steps taken to implement this subsection.

SEC. 1482. HOME AFFORDABLE MODIFICATION PROGRAM GUIDELINES.

    (a) Net Present Value Input Data.--The Secretary of the 
Treasury (in this section referred to as the ``Secretary'') 
shall revise the supplemental directives and other guidelines 
for the Home Affordable Modification Program of the Making Home 
Affordable initiative of the Secretary of the Treasury, 
authorized under the Emergency Economic Stabilization Act of 
2008 (Public Law 110-343), to require each mortgage servicer 
participating in such program to provide each borrower under a 
mortgage whose request for a mortgage modification under the 
Program is denied with all borrower-related and mortgage-
related input data used in any net present value (NPV) analyses 
performed in connection with the subject mortgage. Such input 
data shall be provided to the borrower at the time of such 
denial.
    (b) Web-based Site for NPV Calculator and Application.--
            (1) NPV calculator.--In carrying out the Home 
        Affordable Modification Program, the Secretary shall 
        establish and maintain a site on the World Wide Web 
        that provides a calculator for net present value 
        analyses of a mortgage, based on the Secretary's 
        methodology for calculating such value, that mortgagors 
        can use to enter information regarding their own 
        mortgages and that provides a determination after 
        entering such information regarding a mortgage of 
        whether such mortgage would be accepted or rejected for 
        modification under the Program, using such methodology.
            (2) Disclosure.--Such Web site shall also 
        prominently disclose that each mortgage servicer 
        participating in such Program may use a method for 
        calculating net present value of a mortgage that is 
        different than the method used by such calculator.
            (3) Application.--The Secretary shall make a 
        reasonable effort to include on such World Wide Web 
        site a method for homeowners to apply for a mortgage 
        modification under the Home Affordable Modification 
        Program.
    (c) Public Availability of NPV Methodology, Computer Model, 
and Variables.--The Secretary shall make publicly available, 
including by posting on a World Wide Web site of the 
Secretary--
            (1) the Secretary's methodology and computer model, 
        including all formulae used in such computer model, 
        used for calculating net present value of a mortgage 
        that is used by the calculator established pursuant to 
        subsection (b); and
            (2) all non-proprietary variables used in such net 
        present value analysis.

SEC. 1483. PUBLIC AVAILABILITY OF INFORMATION OF MAKING HOME AFFORDABLE 
                    PROGRAM.

    (a) Revisions to Program Guidelines.--The Secretary of the 
Treasury (in this section referred to as the ``Secretary'') 
shall revise the guidelines for the Home Affordable 
Modification Program of the Making Home Affordable initiative 
of the Secretary of the Treasury, authorized under the 
Emergency Economic Stabilization Act of 2008 (Public Law 110-
343), to provide that the data being collected by the Secretary 
from each mortgage servicer and lender participating in the 
Program is made public in accordance with subsection (b).
    (b) Public Availability.--Data shall be made available 
according to the following guidelines:
            (1) Not more than 14 days after each monthly 
        deadline for submission of data by mortgage servicers 
        and lenders participating in the Program, reports shall 
        be made publicly available by means of a World Wide Web 
        site of the Secretary, and by submitting a report to 
        the Congress, that shall include the following 
        information:
                    (A) The number of requests for mortgage 
                modifications under the Program that the 
                servicer or lender has received.
                    (B) The number of requests for mortgage 
                modifications under the Program that the 
                servicer or lender has processed.
                    (C) The number of requests for mortgage 
                modifications under the Program that the 
                servicer or lender has approved.
                    (D) The number of requests for mortgage 
                modifications under the Program that the 
                servicer or lender has denied.
            (2) Not more than 60 days after each monthly 
        deadline for submission of data by mortgage servicers 
        and lenders participating in the Program, the Secretary 
        shall make data tables available to the public at the 
        individual record level. The Secretary shall issue 
        regulations prescribing--
                    (A) the procedures for disclosing such data 
                to the public; and
                    (B) such deletions as the Secretary may 
                determine to be appropriate to protect any 
                privacy interest of any mortgage modification 
                applicant, including the deletion or alteration 
                of the applicant's name and identification 
                number.

SEC. 1484. PROTECTING TENANTS AT FORECLOSURE EXTENSION AND 
                    CLARIFICATION.

    The Protecting Tenants at Foreclosure Act is amended--
            (1) in section 702 (12 U.S.C. 5220 note)--
                    (A) in subsection (a)(2), by striking ``, 
                as of the date of such notice of foreclosure''; 
                and
                    (B) in subsection (c), by inserting after 
                the period the following: ``For purposes of 
                this section, the date of a notice of 
                foreclosure shall be deemed to be the date on 
                which complete title to a property is 
                transferred to a successor entity or person as 
                a result of an order of a court or pursuant to 
                provisions in a mortgage, deed of trust, or 
                security deed.''; and
            (2) in section 704 (12 U.S.C. 5201 note), by 
        striking ``2012'' and inserting ``2014''.

                  Subtitle H--Miscellaneous Provisions

SEC. 1491. SENSE OF CONGRESS REGARDING THE IMPORTANCE OF GOVERNMENT-
                    SPONSORED ENTERPRISES REFORM TO ENHANCE THE 
                    PROTECTION, LIMITATION, AND REGULATION OF THE TERMS 
                    OF RESIDENTIAL MORTGAGE CREDIT.

    (a) Findings.--The Congress finds as follows:
            (1) The Government-sponsored enterprises, Federal 
        National Mortgage Association (Fannie Mae) and the 
        Federal Home Loan Mortgage Corporation (Freddie Mac), 
        were chartered by Congress to ensure a reliable and 
        affordable supply of mortgage funding, but enjoy a dual 
        legal status as privately owned corporations with 
        Government mandated affordable housing goals.
            (2) In 1996, the Department of Housing and Urban 
        Development required that 42 percent of Fannie Mae's 
        and Freddie Mac's mortgage financing should go to 
        borrowers with income levels below the median for a 
        given area.
            (3) In 2004, the Department of Housing and Urban 
        Development revised those goals, increasing them to 56 
        percent of their overall mortgage purchases by 2008, 
        and additionally mandated that 12 percent of all 
        mortgage purchases by Fannie Mae and Freddie Mac be 
        ``special affordable'' loans made to borrowers with 
        incomes less than 60 percent of an area's median 
        income, a target that ultimately increased to 28 
        percent for 2008.
            (4) To help fulfill those mandated affordable 
        housing goals, in 1995 the Department of Housing and 
        Urban Development authorized Fannie Mae and Freddie Mac 
        to purchase subprime securities that included loans 
        made to low-income borrowers.
            (5) After this authorization to purchase subprime 
        securities, subprime and near-prime loans increased 
        from 9 percent of securitized mortgages in 2001 to 40 
        percent in 2006, while the market share of conventional 
        mortgages dropped from 78.8 percent in 2003 to 50.1 
        percent by 2007 with a corresponding increase in 
        subprime and Alt-A loans from 10.1 percent to 32.7 
        percent over the same period.
            (6) In 2004 alone, Fannie Mae and Freddie Mac 
        purchased $175,000,000,000 in subprime mortgage 
        securities, which accounted for 44 percent of the 
        market that year, and from 2005 through 2007, Fannie 
        Mae and Freddie Mac purchased approximately 
        $1,000,000,000,000 in subprime and Alt-A loans, while 
        Fannie Mae's acquisitions of mortgages with less than 
        10 percent down payments almost tripled.
            (7) According to data from the Federal Housing 
        Finance Agency (FHFA) for the fourth quarter of 2008, 
        Fannie Mae and Freddie Mac own or guarantee 75 percent 
        of all newly originated mortgages, and Fannie Mae and 
        Freddie Mac currently own 13.3 percent of outstanding 
        mortgage debt in the United States and have issued 
        mortgage-backed securities for 31.0 percent of the 
        residential debt market, a combined total of 44.3 
        percent of outstanding mortgage debt in the United 
        States.
            (8) On September 7, 2008, the FHFA placed Fannie 
        Mae and Freddie Mac into conservatorship, with the 
        Treasury Department subsequently agreeing to purchase 
        at least $200,000,000,000 of preferred stock from each 
        enterprise in exchange for warrants for the purchase of 
        79.9 percent of each enterprise's common stock.
            (9) The conservatorship for Fannie Mae and Freddie 
        Mac has potentially exposed taxpayers to upwards of 
        $5,300,000,000,000 worth of risk.
            (10) The hybrid public-private status of Fannie Mae 
        and Freddie Mac is untenable and must be resolved to 
        assure that consumers are offered and receive 
        residential mortgage loans on terms that reasonably 
        reflect their ability to repay the loans and that are 
        understandable and not unfair, deceptive, or abusive.
    (b) Sense of the Congress.--It is the sense of the Congress 
that efforts to enhance by the protection, limitation, and 
regulation of the terms of residential mortgage credit and the 
practices related to such credit would be incomplete without 
enactment of meaningful structural reforms of Fannie Mae and 
Freddie Mac.

SEC. 1492. GAO STUDY REPORT ON GOVERNMENT EFFORTS TO COMBAT MORTGAGE 
                    FORECLOSURE RESCUE SCAMS AND LOAN MODIFICATION 
                    FRAUD.

    (a) Study.--The Comptroller General of the United States 
shall conduct a study of the current inter-agency efforts of 
the Secretary of the Treasury, the Secretary of Housing and 
Urban Development, the Attorney General, and the Federal Trade 
Commission to crack down on mortgage foreclosure rescue scams 
and loan modification fraud in order to advise the Congress to 
the risks and vulnerabilities of emerging schemes in the loan 
modification arena.
    (b) Report.--
            (1) In general.--The Comptroller General shall 
        submit a report to the Congress on the study conducted 
        under subsection (a) containing such recommendations 
        for legislative and administrative actions as the 
        Comptroller General may determine to be appropriate in 
        addition to the recommendations required under 
        paragraph (2).
            (2) Specific topics.--The report made under 
        paragraph (1) shall include--
                    (A) an evaluation of the effectiveness of 
                the inter-agency task force current efforts to 
                combat mortgage foreclosure rescue scams and 
                loan modification fraud scams;
                    (B) specific recommendations on agency or 
                legislative action that are essential to 
                properly protect homeowners from mortgage 
                foreclosure rescue scams and loan modification 
                fraud scams; and
                    (C) the adequacy of financial resources 
                that the Federal Government is allocating to--
                            (i) crackdown on loan modification 
                        and foreclosure rescue scams; and
                            (ii) the education of homeowners 
                        about fraudulent scams relating to loan 
                        modification and foreclosure rescues.

SEC. 1493. REPORTING OF MORTGAGE DATA BY STATE.

    (a) In General.--Section 104(a) of the Helping Families 
Save Their Homes Act of 2009 (division A of Public Law 111-22) 
is amended--
            (1) in paragraph (2), by striking ``resulting'' and 
        inserting ``in each State that result'';
            (2) in paragraph (3), by inserting ``each State 
        for'' after ``modifications in''; and
            (3) in paragraph (4), by inserting ``in each 
        State'' after ``total number of loans''.
    (b) Conforming Amendment.--Section 104(b)(1)(A) of such Act 
is amended by adding at the end the following sentence: ``Not 
later than 60 days after the date of the enactment of the Dodd-
Frank Wall Street Reform and Consumer Protection Act, the 
Comptroller of the Currency and the Director of the Office of 
Thrift Supervision shall update such requirements to reflect 
amendments made to this section by such Act.''.

SEC. 1494. STUDY OF EFFECT OF DRYWALL PRESENCE ON FORECLOSURES.

    (a) Study.--The Secretary of Housing and Urban Development, 
in consultation with the Secretary of the Treasury, shall 
conduct a study of the effect on residential mortgage loan 
foreclosures of--
            (1) the presence in residential structures subject 
        to such mortgage loans of drywall that was imported 
        from China during the period beginning with 2004 and 
        ending at the end of 2007; and
            (2) the availability of property insurance for 
        residential structures in which such drywall is 
        present.
    (b) Report.--Not later than the expiration of the 120-day 
period beginning on the date of the enactment of this Act, the 
Secretary of Housing and Urban Development shall submit to the 
Congress a report on the study conducted under subsection (a) 
containing its findings, conclusions, and recommendations.

SEC. 1495. DEFINITION.

    For purposes of this title, the term ``designated transfer 
date'' means the date established under section 1062 of this 
Act.

SEC. 1496. EMERGENCY MORTGAGE RELIEF.

    (a) Emergency Homeowners' Relief Fund.--Effective October 
1, 2010, and notwithstanding any other provision of law, there 
is hereby made available to the Secretary of Housing and Urban 
Development such sums as are necessary to provide 
$1,000,000,000 in assistance through the Emergency Homeowners' 
Relief Fund, which such Secretary shall establish pursuant to 
section 107 of the Emergency Housing Act of 1975 (12 U.S.C. 
2706), as such Act is amended by this section, for use for 
emergency mortgage assistance in accordance with title I of 
such Act.
    (b) Reauthorization of Emergency Mortgage Relief Program.--
Title I of the Emergency Housing Act of 1975 is amended--
            (1) in section 103 (12 U.S.C. 2702)--
                    (A) in paragraph (2)--
                            (i) by striking ``have indicated'' 
                        and all that follows through 
                        ``regulation of the holder'' and insert 
                        ``have certified'';
                            (ii) by striking ``(such as the 
                        volume of delinquent loans in its 
                        portfolio)''; and
                            (iii) by striking ``, except that 
                        such statement'' and all that follows 
                        through ``purposes of this title''; and
                    (B) in paragraph (4), by inserting ``or 
                medical conditions'' after ``adverse economic 
                conditions'';
            (2) in section 104 (12 U.S.C. 2703)--
                    (A) in subsection (b), by striking ``, but 
                such assistance'' and all that follows through 
                the period at the end and inserting the 
                following: ``. The amount of assistance 
                provided to a homeowner under this title shall 
                be an amount that the Secretary determines is 
                reasonably necessary to supplement such amount 
                as the homeowner is capable of contributing 
                toward such mortgage payment, except that the 
                aggregate amount of such assistance provided 
                for any homeowner shall not exceed $50,000.'';
                    (B) in subsection (d), by striking 
                ``interest on a loan or advance'' and all that 
                follows through the end of the subsection and 
                inserting the following: ``(1) the rate of 
                interest on any loan or advance of credit 
                insured under this title shall be fixed for the 
                life of the loan or advance of credit and shall 
                not exceed the rate of interest that is 
                generally charged for mortgages on single-
                family housing insured by the Secretary of 
                Housing and Urban Development under title II of 
                the National Housing Act at the time such loan 
                or advance of credit is made, and (2) no 
                interest shall be charged on interest which is 
                deferred on a loan or advance of credit made 
                under this title. In establishing rates, terms 
                and conditions for loans or advances of credit 
                made under this title, the Secretary shall take 
                into account a homeowner's ability to repay 
                such loan or advance of credit.''; and
                    (C) in subsection (e), by inserting after 
                the period at the end of the first sentence the 
                following: ``Any eligible homeowner who 
                receives a grant or an advance of credit under 
                this title may repay the loan in full, without 
                penalty, by lump sum or by installment payments 
                at any time before the loan becomes due and 
                payable.'';
            (3) in section 105 (12 U.S.C. 2704)--
                    (A) by striking subsection (b);
                    (B) in subsection (e)--
                            (i) by inserting ``and emergency 
                        mortgage relief payments made under 
                        section 106'' after ``insured under 
                        this section''; and
                            (ii) by striking ``$1,500,000,000 
                        at any one time'' and inserting 
                        ``$3,000,000,000'';
                    (C) by redesignating subsections (c), (d), 
                and (e) as subsections (b), (c), and (d), 
                respectively; and
                    (D) by adding at the end the following new 
                subsection:
    ``(e) The Secretary shall establish underwriting guidelines 
or procedures to allocate amounts made available for loans and 
advances insured under this section and for emergency relief 
payments made under section 106 based on the likelihood that a 
mortgagor will be able to resume mortgage payments, pursuant to 
the requirement under section 103(5).'';
            (4) in section 107--
                    (A) by striking ``(a)''; and
                    (B) by striking subsection (b);
            (5) in section 108 (12 U.S.C. 2707), by adding at 
        the end the following new subsection:
    ``(d) Coverage of Existing Programs.--The Secretary shall 
allow funds to be administered by a State that has an existing 
program that is determined by the Secretary to provide 
substantially similar assistance to homeowners. After such 
determination is made such State shall not be required to 
modify such program to comply with the provisions of this 
title.'';
            (6) in section 109 (12 U.S.C. 2708)--
                    (A) in the section heading, by striking 
                ``authorization and'';
                    (B) by striking subsection (a);
                    (C) by striking ``(b)''; and
                    (D) by striking ``1977'' and inserting 
                ``2011'';
            (7) by striking sections 110, 111, and 113 (12 
        U.S.C. 2709, 2710, 2712); and
            (8) by redesignating section 112 (12 U.S.C. 2711) 
        as section 110.

SEC. 1497. ADDITIONAL ASSISTANCE FOR NEIGHBORHOOD STABILIZATION 
                    PROGRAM.

    (a) In General.--Effective October 1, 2010, out of funds in 
the Treasury not otherwise appropriated, there is hereby made 
available to the Secretary of Housing and Urban Development 
$1,000,000,000, and the Secretary of Housing and Urban 
Development shall use such amounts for assistance to States and 
units of general local government for the redevelopment of 
abandoned and foreclosed homes, in accordance with the same 
provisions applicable under the second undesignated paragraph 
under the heading ``Community Planning and Development--
Community Development Fund'' in title XII of division A of the 
American Recovery and Reinvestment Act of 2009 (Public Law 111-
5; 123 Stat. 217) to amounts made available under such second 
undesignated paragraph, except as follows:
            (1) Notwithstanding the matter of such second 
        undesignated paragraph that precedes the first proviso, 
        amounts made available by this section shall remain 
        available until expended.
            (2) The 3rd, 4th, 5th, 6th, 7th, and 15th provisos 
        of such second undesignated paragraph shall not apply 
        to amounts made available by this section.
            (3) Amounts made available by this section shall be 
        allocated based on a funding formula for such amounts 
        established by the Secretary in accordance with section 
        2301(b) of the Housing and Economic Recovery Act of 
        2008 (42 U.S.C. 5301 note), except that--
                    (A) notwithstanding paragraph (2) of such 
                section 2301(b), the formula shall be 
                established not later than 30 days after the 
                date of the enactment of this Act;
                    (B) notwithstanding such section 2301(b), 
                each State shall receive, at a minimum, not 
                less than 0.5 percent of funds made available 
                under this section;
                    (C) the Secretary may establish a minimum 
                grant amount for direct allocations to units of 
                general local government located within a 
                State, which shall not exceed $1,000,000;
                    (D) each State and local government 
                receiving grant amounts shall establish 
                procedures to create preferences for the 
                development of affordable rental housing for 
                properties assisted with amounts made available 
                by this section; and
                    (E) the Secretary may use not more than 2 
                percent of the funds made available under this 
                section for technical assistance to grantees.
            (4) Paragraph (1) of section 2301(c) of the Housing 
        and Economic Recovery Act of 2008 shall not apply to 
        amounts made available by this section.
            (5) The fourth proviso from the end of such second 
        undesignated paragraph shall be applied to amounts made 
        available by this section by substituting ``2013'' for 
        ``2012''.
            (6) Notwithstanding section 2301(a) of the Housing 
        and Economic Recovery Act of 2008, the term ``State'' 
        means any State, as defined in section 102 of the 
        Housing and Community Development Act of 1974 (42 
        U.S.C. 5302), and the District of Columbia, for 
        purposes of this section and this title, as applied to 
        amounts made available by this section.
            (7)(A) None of the amounts made available by this 
        section shall be distributed to--
                    (i) any organization which has been 
                convicted for a violation under Federal law 
                relating to an election for Federal office; or
                    (ii) any organization which employs 
                applicable individuals.
            (B) In this paragraph, the term ``applicable 
        individual'' means an individual who--
                    (i) is--
                            (I) employed by the organization in 
                        a permanent or temporary capacity;
                            (II) contracted or retained by the 
                        organization; or
                            (III) acting on behalf of, or with 
                        the express or apparent authority of, 
                        the organization; and
                    (ii) has been convicted for a violation 
                under Federal law relating to an election for 
                Federal office.
            (8) An eligible entity receiving a grant under this 
        section shall, to the maximum extent feasible, provide 
        for the hiring of employees who reside in the vicinity, 
        as such term is defined by the Secretary, of projects 
        funded under this section or contract with small 
        businesses that are owned and operated by persons 
        residing in the vicinity of such projects.
    (b) Additional Amendments.--
            (1) Section 2301.--Section 2301(f)(3)(A)(ii) of the 
        Housing and Economic Recovery Act of 2008 (42 U.S.C. 
        5301(f)(3)(A)(ii))--
                    (A) is amended by striking ``for the 
                purchase and redevelopment of abandoned and 
                foreclosed upon homes or residential properties 
                that will be used''; and
                    (B) shall apply with respect to any 
                unexpended or unobligated balances, including 
                recaptured and reallocated funds made available 
                under this Act, section 2301 of the Housing and 
                Economic Recovery Act of 2008 (42 U.S.C. 5301), 
                and the heading ``Community Planning and 
                Development--Community Development Fund'' in 
                title XII of division A of the American 
                Recovery and Reinvestment Act of 2009 (Public 
                Law 111-5; 123 Stat. 217).
            (2) Notice of foreclosure.--For any amounts made 
        available under this section, under division B, title 
        III of the Housing and Economic Recovery Act of 2008 
        (42 U.S.C. 5301), or under the heading ``Community 
        Planning and Development--Community Development Fund'' 
        in title XII of division A of the American Recovery and 
        Reinvestment Act of 2009 (Public Law 111-5; 123 Stat. 
        217), the date of a notice of foreclosure shall be 
        deemed to be the date on which complete title to a 
        property is transferred to a successor entity or person 
        as a result of an order of a court or pursuant to 
        provisions in a mortgage, deed of trust, or security 
        deed.

SEC. 1498. LEGAL ASSISTANCE FOR FORECLOSURE-RELATED ISSUES.

    (a) Establishment.--The Secretary of Housing and Urban 
Development (hereafter in this section referred to as the 
``Secretary'') shall establish a program for making grants for 
providing a full range of foreclosure legal assistance to low- 
and moderate-income homeowners and tenants related to home 
ownership preservation, home foreclosure prevention, and 
tenancy associated with home foreclosure.
    (b) Competitive Allocation.--The Secretary shall allocate 
amounts made available for grants under this section to State 
and local legal organizations on the basis of a competitive 
process. For purposes of this subsection ``State and local 
legal organizations'' are those State and local organizations 
whose primary business or mission is to provide legal 
assistance.
    (c) Priority to Certain Areas.--In allocating amounts in 
accordance with subsection (b), the Secretary shall give 
priority consideration to State and local legal organizations 
that are operating in the 125 metropolitan statistical areas 
(as that term is defined by the Director of the Office of 
Management and Budget) with the highest home foreclosure rates.
    (d) Legal Assistance.--
            (1) In general.--Any State or local legal 
        organization that receives financial assistance 
        pursuant to this section may use such amounts only to 
        assist--
                    (A) homeowners of owner-occupied homes with 
                mortgages in default, in danger of default, or 
                subject to or at risk of foreclosure; and
                    (B) tenants at risk of or subject to 
                eviction as a result of foreclosure of the 
                property in which such tenant resides.
            (2) Commence use within 90 days.--Any State or 
        local legal organization that receives financial 
        assistance pursuant to this section shall begin using 
        any financial assistance received under this section 
        within 90 days after receipt of the assistance.
            (3) Prohibition on class actions.--No funds 
        provided to a State or local legal organization under 
        this section may be used to support any class action 
        litigation.
            (4) Limitation on legal assistance.--Legal 
        assistance funded with amounts provided under this 
        section shall be limited to mortgage-related default, 
        eviction, or foreclosure proceedings, without regard to 
        whether such foreclosure is judicial or nonjudicial.
            (5) Effective date.--Notwithstanding any other 
        provision of this Act, this subsection shall take 
        effect on the date of the enactment of this Act.
    (e) Limitation on Distribution of Assistance.--
            (1) In general.--None of the amounts made available 
        under this section shall be distributed to--
                    (A) any organization which has been 
                convicted for a violation under Federal law 
                relating to an election for Federal office; or
                    (B) any organization which employs 
                applicable individuals.
            (2) Definition of applicable individuals.--In this 
        subsection, the term ``applicable individual'' means an 
        individual who--
                    (A) is--
                            (i) employed by the organization in 
                        a permanent or temporary capacity;
                            (ii) contracted or retained by the 
                        organization; or
                            (iii) acting on behalf of, or with 
                        the express or apparent authority of, 
                        the organization; and
                    (B) has been convicted for a violation 
                under Federal law relating to an election for 
                Federal office.
    (f) Authorization of Appropriations.--There are authorized 
to be appropriated to the Secretary $35,000,000 for each of 
fiscal years 2011 through 2012 for grants under this section.

                   TITLE XV--MISCELLANEOUS PROVISIONS

SEC. 1501. RESTRICTIONS ON USE OF UNITED STATES FUNDS FOR FOREIGN 
                    GOVERNMENTS; PROTECTION OF AMERICAN TAXPAYERS.

    The Bretton Woods Agreements Act (22 U.S.C. 286 et seq.) is 
amended by adding at the end the following:

``SEC. 68. RESTRICTIONS ON USE OF UNITED STATES FUNDS FOR FOREIGN 
                    GOVERNMENTS; PROTECTION OF AMERICAN TAXPAYERS.

    ``(a) In General.--The Secretary of the Treasury shall 
instruct the United States Executive Director at the 
International Monetary Fund--
            ``(1) to evaluate, prior to consideration by the 
        Board of Executive Directors of the Fund, any proposal 
        submitted to the Board for the Fund to make a loan to a 
        country if--
                    ``(A) the amount of the public debt of the 
                country exceeds the gross domestic product of 
                the country as of the most recent year for 
                which such information is available; and
                    ``(B) the country is not eligible for 
                assistance from the International Development 
                Association.
            ``(2) Opposition to loans unlikely to be repaid in 
        full.--If any such evaluation indicates that the 
        proposed loan is not likely to be repaid in full, the 
        Secretary of the Treasury shall instruct the United 
        States Executive Director at the Fund to use the voice 
        and vote of the United States to oppose the proposal.
    ``(b) Reports to Congress.--Within 30 days after the Board 
of Executive Directors of the Fund approves a proposal 
described in subsection (a), and annually thereafter by June 
30, for the duration of any program approved under such 
proposals, the Secretary of the Treasury shall report in 
writing to the Committee on Financial Services of the House of 
Representatives and the Committee on Foreign Relations and the 
Committee on Banking, Housing, and Urban Affairs of the Senate 
assessing the likelihood that loans made pursuant to such 
proposals will be repaid in full, including--
            ``(1) the borrowing country's current debt status, 
        including, to the extent possible, its maturity 
        structure, whether it has fixed or floating rates, 
        whether it is indexed, and by whom it is held;
            ``(2) the borrowing country's external and internal 
        vulnerabilities that could potentially affect its 
        ability to repay; and
            ``(3) the borrowing country's debt management 
        strategy.''.

SEC. 1502. CONFLICT MINERALS.

    (a) Sense of Congress on Exploitation and Trade of Conflict 
Minerals Originating in the Democratic Republic of the Congo.--
It is the sense of Congress that the exploitation and trade of 
conflict minerals originating in the Democratic Republic of the 
Congo is helping to finance conflict characterized by extreme 
levels of violence in the eastern Democratic Republic of the 
Congo, particularly sexual- and gender-based violence, and 
contributing to an emergency humanitarian situation therein, 
warranting the provisions of section 13(p) of the Securities 
Exchange Act of 1934, as added by subsection (b).
    (b) Disclosure Relating to Conflict Minerals Originating in 
the Democratic Republic of the Congo.--Section 13 of the 
Securities Exchange Act of 1934 (15 U.S.C. 78m), as amended by 
this Act, is amended by adding at the end the following new 
subsection:
    ``(p) Disclosures Relating to Conflict Minerals Originating 
in the Democratic Republic of the Congo.--
            ``(1) Regulations.--
                    ``(A) In general.--Not later than 270 days 
                after the date of the enactment of this 
                subsection, the Commission shall promulgate 
                regulations requiring any person described in 
                paragraph (2) to disclose annually, beginning 
                with the person's first full fiscal year that 
                begins after the date of promulgation of such 
                regulations, whether conflict minerals that are 
                necessary as described in paragraph (2)(B), in 
                the year for which such reporting is required, 
                did originate in the Democratic Republic of the 
                Congo or an adjoining country and, in cases in 
                which such conflict minerals did originate in 
                any such country, submit to the Commission a 
                report that includes, with respect to the 
                period covered by the report--
                            ``(i) a description of the measures 
                        taken by the person to exercise due 
                        diligence on the source and chain of 
                        custody of such minerals, which 
                        measures shall include an independent 
                        private sector audit of such report 
                        submitted through the Commission that 
                        is conducted in accordance with 
                        standards established by the 
                        Comptroller General of the United 
                        States, in accordance with rules 
                        promulgated by the Commission, in 
                        consultation with the Secretary of 
                        State; and
                            ``(ii) a description of the 
                        products manufactured or contracted to 
                        be manufactured that are not DRC 
                        conflict free (`DRC conflict free' is 
                        defined to mean the products that do 
                        not contain minerals that directly or 
                        indirectly finance or benefit armed 
                        groups in the Democratic Republic of 
                        the Congo or an adjoining country), the 
                        entity that conducted the independent 
                        private sector audit in accordance with 
                        clause (i), the facilities used to 
                        process the conflict minerals, the 
                        country of origin of the conflict 
                        minerals, and the efforts to determine 
                        the mine or location of origin with the 
                        greatest possible specificity.
                    ``(B) Certification.--The person submitting 
                a report under subparagraph (A) shall certify 
                the audit described in clause (i) of such 
                subparagraph that is included in such report. 
                Such a certified audit shall constitute a 
                critical component of due diligence in 
                establishing the source and chain of custody of 
                such minerals.
                    ``(C) Unreliable determination.--If a 
                report required to be submitted by a person 
                under subparagraph (A) relies on a 
                determination of an independent private sector 
                audit, as described under subparagraph (A)(i), 
                or other due diligence processes previously 
                determined by the Commission to be unreliable, 
                the report shall not satisfy the requirements 
                of the regulations promulgated under 
                subparagraph (A)(i).
                    ``(D) DRC conflict free.--For purposes of 
                this paragraph, a product may be labeled as 
                `DRC conflict free' if the product does not 
                contain conflict minerals that directly or 
                indirectly finance or benefit armed groups in 
                the Democratic Republic of the Congo or an 
                adjoining country.
                    ``(E) Information available to the 
                public.--Each person described under paragraph 
                (2) shall make available to the public on the 
                Internet website of such person the information 
                disclosed by such person under subparagraph 
                (A).
            ``(2) Person described.--A person is described in 
        this paragraph if--
                    ``(A) the person is required to file 
                reports with the Commission pursuant to 
                paragraph (1)(A); and
                    ``(B) conflict minerals are necessary to 
                the functionality or production of a product 
                manufactured by such person.
            ``(3) Revisions and waivers.--The Commission shall 
        revise or temporarily waive the requirements described 
        in paragraph (1) if the President transmits to the 
        Commission a determination that--
                    ``(A) such revision or waiver is in the 
                national security interest of the United States 
                and the President includes the reasons 
                therefor; and
                    ``(B) establishes a date, not later than 2 
                years after the initial publication of such 
                exemption, on which such exemption shall 
                expire.
            ``(4) Termination of disclosure requirements.--The 
        requirements of paragraph (1) shall terminate on the 
        date on which the President determines and certifies to 
        the appropriate congressional committees, but in no 
        case earlier than the date that is one day after the 
        end of the 5-year period beginning on the date of the 
        enactment of this subsection, that no armed groups 
        continue to be directly involved and benefitting from 
        commercial activity involving conflict minerals.
            ``(5) Definitions.--For purposes of this 
        subsection, the terms `adjoining country', `appropriate 
        congressional committees', `armed group', and `conflict 
        mineral' have the meaning given those terms under 
        section 1502 of the Dodd-Frank Wall Street Reform and 
        Consumer Protection Act.''.
    (c) Strategy and Map To Address Linkages Between Conflict 
Minerals and Armed Groups.--
            (1) Strategy.--
                    (A) In general.--Not later than 180 days 
                after the date of the enactment of this Act, 
                the Secretary of State, in consultation with 
                the Administrator of the United States Agency 
                for International Development, shall submit to 
                the appropriate congressional committees a 
                strategy to address the linkages between human 
                rights abuses, armed groups, mining of conflict 
                minerals, and commercial products.
                    (B) Contents.--The strategy required by 
                subparagraph (A) shall include the following:
                            (i) A plan to promote peace and 
                        security in the Democratic Republic of 
                        the Congo by supporting efforts of the 
                        Government of the Democratic Republic 
                        of the Congo, including the Ministry of 
                        Mines and other relevant agencies, 
                        adjoining countries, and the 
                        international community, in particular 
                        the United Nations Group of Experts on 
                        the Democratic Republic of Congo, to--
                                    (I) monitor and stop 
                                commercial activities involving 
                                the natural resources of the 
                                Democratic Republic of the 
                                Congo that contribute to the 
                                activities of armed groups and 
                                human rights violations in the 
                                Democratic Republic of the 
                                Congo; and
                                    (II) develop stronger 
                                governance and economic 
                                institutions that can 
                                facilitate and improve 
                                transparency in the cross-
                                border trade involving the 
                                natural resources of the 
                                Democratic Republic of the 
                                Congo to reduce exploitation by 
                                armed groups and promote local 
                                and regional development.
                            (ii) A plan to provide guidance to 
                        commercial entities seeking to exercise 
                        due diligence on and formalize the 
                        origin and chain of custody of conflict 
                        minerals used in their products and on 
                        their suppliers to ensure that conflict 
                        minerals used in the products of such 
                        suppliers do not directly or indirectly 
                        finance armed conflict or result in 
                        labor or human rights violations.
                            (iii) A description of punitive 
                        measures that could be taken against 
                        individuals or entities whose 
                        commercial activities are supporting 
                        armed groups and human rights 
                        violations in the Democratic Republic 
                        of the Congo.
            (2) Map.--
                    (A) In general.--Not later than 180 days 
                after the date of the enactment of this Act, 
                the Secretary of State shall, in accordance 
                with the recommendation of the United Nations 
                Group of Experts on the Democratic Republic of 
                the Congo in their December 2008 report--
                            (i) produce a map of mineral-rich 
                        zones, trade routes, and areas under 
                        the control of armed groups in the 
                        Democratic Republic of the Congo and 
                        adjoining countries based on data from 
                        multiple sources, including--
                                    (I) the United Nations 
                                Group of Experts on the 
                                Democratic Republic of the 
                                Congo;
                                    (II) the Government of the 
                                Democratic Republic of the 
                                Congo, the governments of 
                                adjoining countries, and the 
                                governments of other Member 
                                States of the United Nations; 
                                and
                                    (III) local and 
                                international nongovernmental 
                                organizations;
                            (ii) make such map available to the 
                        public; and
                            (iii) provide to the appropriate 
                        congressional committees an explanatory 
                        note describing the sources of 
                        information from which such map is 
                        based and the identification, where 
                        possible, of the armed groups or other 
                        forces in control of the mines 
                        depicted.
                    (B) Designation.--The map required under 
                subparagraph (A) shall be known as the 
                ``Conflict Minerals Map'', and mines located in 
                areas under the control of armed groups in the 
                Democratic Republic of the Congo and adjoining 
                countries, as depicted on such Conflict 
                Minerals Map, shall be known as ``Conflict Zone 
                Mines''.
                    (C) Updates.--The Secretary of State shall 
                update the map required under subparagraph (A) 
                not less frequently than once every 180 days 
                until the date on which the disclosure 
                requirements under paragraph (1) of section 
                13(p) of the Securities Exchange Act of 1934, 
                as added by subsection (b), terminate in 
                accordance with the provisions of paragraph (4) 
                of such section 13(p).
                    (D) Publication in federal register.--The 
                Secretary of State shall add minerals to the 
                list of minerals in the definition of conflict 
                minerals under section 1502, as appropriate. 
                The Secretary shall publish in the Federal 
                Register notice of intent to declare a mineral 
                as a conflict mineral included in such 
                definition not later than one year before such 
                declaration.
    (d) Reports.--
            (1) Baseline report.--Not later than 1 year after 
        the date of the enactment of this Act and annually 
        thereafter until the termination of the disclosure 
        requirements under section 13(p) of the Securities 
        Exchange Act of 1934, the Comptroller General of the 
        United States shall submit to appropriate congressional 
        committees a report that includes an assessment of the 
        rate of sexual- and gender-based violence in war-torn 
        areas of the Democratic Republic of the Congo and 
        adjoining countries.
            (2) Regular report on effectiveness.--Not later 
        than 2 years after the date of the enactment of this 
        Act and annually thereafter, the Comptroller General of 
        the United States shall submit to the appropriate 
        congressional committees a report that includes the 
        following:
                    (A) An assessment of the effectiveness of 
                section 13(p) of the Securities Exchange Act of 
                1934, as added by subsection (b), in promoting 
                peace and security in the Democratic Republic 
                of the Congo and adjoining countries.
                    (B) A description of issues encountered by 
                the Securities and Exchange Commission in 
                carrying out the provisions of such section 
                13(p).
                    (C)(i) A general review of persons 
                described in clause (ii) and whether 
                information is publicly available about--
                            (I) the use of conflict minerals by 
                        such persons; and
                            (II) whether such conflict minerals 
                        originate from the Democratic Republic 
                        of the Congo or an adjoining country.
                    (ii) A person is described in this clause 
                if--
                            (I) the person is not required to 
                        file reports with the Securities and 
                        Exchange Commission pursuant to section 
                        13(p)(1)(A) of the Securities Exchange 
                        Act of 1934, as added by subsection 
                        (b); and
                            (II) conflict minerals are 
                        necessary to the functionality or 
                        production of a product manufactured by 
                        such person.
            (3) Report on private sector auditing.--Not later 
        than 30 months after the date of the enactment of this 
        Act, and annually thereafter, the Secretary of Commerce 
        shall submit to the appropriate congressional 
        committees a report that includes the following:
                    (A) An assessment of the accuracy of the 
                independent private sector audits and other due 
                diligence processes described under section 
                13(p) of the Securities Exchange Act of 1934.
                    (B) Recommendations for the processes used 
                to carry out such audits, including ways to--
                            (i) improve the accuracy of such 
                        audits; and
                            (ii) establish standards of best 
                        practices.
                    (C) A listing of all known conflict mineral 
                processing facilities worldwide.
    (e) Definitions.--For purposes of this section:
            (1) Adjoining country.--The term ``adjoining 
        country'', with respect to the Democratic Republic of 
        the Congo, means a country that shares an 
        internationally recognized border with the Democratic 
        Republic of the Congo.
            (2) Appropriate congressional committees.--The term 
        ``appropriate congressional committees'' means--
                    (A) the Committee on Appropriations, the 
                Committee on Foreign Affairs, the Committee on 
                Ways and Means, and the Committee on Financial 
                Services of the House of Representatives; and
                    (B) the Committee on Appropriations, the 
                Committee on Foreign Relations, the Committee 
                on Finance, and the Committee on Banking, 
                Housing, and Urban Affairs of the Senate.
            (3) Armed group.--The term ``armed group'' means an 
        armed group that is identified as perpetrators of 
        serious human rights abuses in the annual Country 
        Reports on Human Rights Practices under sections 116(d) 
        and 502B(b) of the Foreign Assistance Act of 1961 (22 
        U.S.C. 2151n(d) and 2304(b)) relating to the Democratic 
        Republic of the Congo or an adjoining country.
            (4) Conflict mineral.--The term ``conflict 
        mineral'' means--
                    (A) columbite-tantalite (coltan), 
                cassiterite, gold, wolframite, or their 
                derivatives; or
                    (B) any other mineral or its derivatives 
                determined by the Secretary of State to be 
                financing conflict in the Democratic Republic 
                of the Congo or an adjoining country.
            (5) Under the control of armed groups.--The term 
        ``under the control of armed groups'' means areas 
        within the Democratic Republic of the Congo or 
        adjoining countries in which armed groups--
                    (A) physically control mines or force labor 
                of civilians to mine, transport, or sell 
                conflict minerals;
                    (B) tax, extort, or control any part of 
                trade routes for conflict minerals, including 
                the entire trade route from a Conflict Zone 
                Mine to the point of export from the Democratic 
                Republic of the Congo or an adjoining country; 
                or
                    (C) tax, extort, or control trading 
                facilities, in whole or in part, including the 
                point of export from the Democratic Republic of 
                the Congo or an adjoining country.

SEC. 1503. REPORTING REQUIREMENTS REGARDING COAL OR OTHER MINE SAFETY.

    (a) Reporting Mine Safety Information.--Each issuer that is 
required to file reports pursuant to section 13(a) or 15(d) of 
the Securities Exchange Act of 1934 (15 U.S.C. 78m, 78o) and 
that is an operator, or that has a subsidiary that is an 
operator, of a coal or other mine shall include, in each 
periodic report filed with the Commission under the securities 
laws on or after the date of enactment of this Act, the 
following information for the time period covered by such 
report:
            (1) For each coal or other mine of which the issuer 
        or a subsidiary of the issuer is an operator--
                    (A) the total number of violations of 
                mandatory health or safety standards that could 
                significantly and substantially contribute to 
                the cause and effect of a coal or other mine 
                safety or health hazard under section 104 of 
                the Federal Mine Safety and Health Act of 1977 
                (30 U.S.C. 814) for which the operator received 
                a citation from the Mine Safety and Health 
                Administration;
                    (B) the total number of orders issued under 
                section 104(b) of such Act (30 U.S.C. 814(b));
                    (C) the total number of citations and 
                orders for unwarrantable failure of the mine 
                operator to comply with mandatory health or 
                safety standards under section 104(d) of such 
                Act (30 U.S.C. 814(d));
                    (D) the total number of flagrant violations 
                under section 110(b)(2) of such Act (30 U.S.C. 
                820(b)(2));
                    (E) the total number of imminent danger 
                orders issued under section 107(a) of such Act 
                (30 U.S.C. 817(a));
                    (F) the total dollar value of proposed 
                assessments from the Mine Safety and Health 
                Administration under such Act (30 U.S.C. 801 et 
                seq.); and
                    (G) the total number of mining-related 
                fatalities.
            (2) A list of such coal or other mines, of which 
        the issuer or a subsidiary of the issuer is an 
        operator, that receive written notice from the Mine 
        Safety and Health Administration of--
                    (A) a pattern of violations of mandatory 
                health or safety standards that are of such 
                nature as could have significantly and 
                substantially contributed to the cause and 
                effect of coal or other mine health or safety 
                hazards under section 104(e) of such Act (30 
                U.S.C. 814(e)); or
                    (B) the potential to have such a pattern.
            (3) Any pending legal action before the Federal 
        Mine Safety and Health Review Commission involving such 
        coal or other mine.
    (b) Reporting Shutdowns and Patterns of Violations.--
Beginning on and after the date of enactment of this Act, each 
issuer that is an operator, or that has a subsidiary that is an 
operator, of a coal or other mine shall file a current report 
with the Commission on Form 8-K (or any successor form) 
disclosing the following regarding each coal or other mine of 
which the issuer or subsidiary is an operator:
            (1) The receipt of an imminent danger order issued 
        under section 107(a) of the Federal Mine Safety and 
        Health Act of 1977 (30 U.S.C. 817(a)).
            (2) The receipt of written notice from the Mine 
        Safety and Health Administration that the coal or other 
        mine has--
                    (A) a pattern of violations of mandatory 
                health or safety standards that are of such 
                nature as could have significantly and 
                substantially contributed to the cause and 
                effect of coal or other mine health or safety 
                hazards under section 104(e) of such Act (30 
                U.S.C. 814(e)); or
                    (B) the potential to have such a pattern.
    (c) Rule of Construction.--Nothing in this section shall be 
construed to affect any obligation of a person to make a 
disclosure under any other applicable law in effect before, on, 
or after the date of enactment of this Act.
    (d) Commission Authority.--
            (1) Enforcement.--A violation by any person of this 
        section, or any rule or regulation of the Commission 
        issued under this section, shall be treated for all 
        purposes in the same manner as a violation of the 
        Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.) 
        or the rules and regulations issued thereunder, 
        consistent with the provisions of this section, and any 
        such person shall be subject to the same penalties, and 
        to the same extent, as for a violation of such Act or 
        the rules or regulations issued thereunder.
            (2) Rules and regulations.--The Commission is 
        authorized to issue such rules or regulations as are 
        necessary or appropriate for the protection of 
        investors and to carry out the purposes of this 
        section.
    (e) Definitions.--In this section--
            (1) the terms ``issuer'' and ``securities laws'' 
        have the meaning given the terms in section 3 of the 
        Securities Exchange Act of 1934 (15 U.S.C. 78c);
            (2) the term ``coal or other mine'' means a coal or 
        other mine, as defined in section 3 of the Federal Mine 
        Safety and Health Act of 1977 (30 U.S.C. 802), that is 
        subject to the provisions of such Act (30 U.S.C. 801 et 
        seq.); and
            (3) the term ``operator'' has the meaning given the 
        term in section 3 of the Federal Mine Safety and Health 
        Act of 1977 (30 U.S.C. 802).
    (f) Effective Date.--This section shall take effect on the 
day that is 30 days after the date of enactment of this Act.

SEC. 1504. DISCLOSURE OF PAYMENTS BY RESOURCE EXTRACTION ISSUERS.

    Section 13 of the Securities Exchange Act of 1934 (15 
U.S.C. 78m), as amended by this Act, is amended by adding at 
the end the following:
    ``(q) Disclosure of Payments by Resource Extraction 
Issuers.--
            ``(1) Definitions.--In this subsection--
                    ``(A) the term `commercial development of 
                oil, natural gas, or minerals' includes 
                exploration, extraction, processing, export, 
                and other significant actions relating to oil, 
                natural gas, or minerals, or the acquisition of 
                a license for any such activity, as determined 
                by the Commission;
                    ``(B) the term `foreign government' means a 
                foreign government, a department, agency, or 
                instrumentality of a foreign government, or a 
                company owned by a foreign government, as 
                determined by the Commission;
                    ``(C) the term `payment'--
                            ``(i) means a payment that is--
                                    ``(I) made to further the 
                                commercial development of oil, 
                                natural gas, or minerals; and
                                    ``(II) not de minimis; and
                            ``(ii) includes taxes, royalties, 
                        fees (including license fees), 
                        production entitlements, bonuses, and 
                        other material benefits, that the 
                        Commission, consistent with the 
                        guidelines of the Extractive Industries 
                        Transparency Initiative (to the extent 
                        practicable), determines are part of 
                        the commonly recognized revenue stream 
                        for the commercial development of oil, 
                        natural gas, or minerals;
                    ``(D) the term `resource extraction issuer' 
                means an issuer that--
                            ``(i) is required to file an annual 
                        report with the Commission; and
                            ``(ii) engages in the commercial 
                        development of oil, natural gas, or 
                        minerals;
                    ``(E) the term `interactive data format' 
                means an electronic data format in which pieces 
                of information are identified using an 
                interactive data standard; and
                    ``(F) the term `interactive data standard' 
                means standardized list of electronic tags that 
                mark information included in the annual report 
                of a resource extraction issuer.
            ``(2) Disclosure.--
                    ``(A) Information required.--Not later than 
                270 days after the date of enactment of the 
                Dodd-Frank Wall Street Reform and Consumer 
                Protection Act, the Commission shall issue 
                final rules that require each resource 
                extraction issuer to include in an annual 
                report of the resource extraction issuer 
                information relating to any payment made by the 
                resource extraction issuer, a subsidiary of the 
                resource extraction issuer, or an entity under 
                the control of the resource extraction issuer 
                to a foreign government or the Federal 
                Government for the purpose of the commercial 
                development of oil, natural gas, or minerals, 
                including--
                            ``(i) the type and total amount of 
                        such payments made for each project of 
                        the resource extraction issuer relating 
                        to the commercial development of oil, 
                        natural gas, or minerals; and
                            ``(ii) the type and total amount of 
                        such payments made to each government.
                    ``(B) Consultation in rulemaking.--In 
                issuing rules under subparagraph (A), the 
                Commission may consult with any agency or 
                entity that the Commission determines is 
                relevant.
                    ``(C) Interactive data format.--The rules 
                issued under subparagraph (A) shall require 
                that the information included in the annual 
                report of a resource extraction issuer be 
                submitted in an interactive data format.
                    ``(D) Interactive data standard.--
                            ``(i) In general.--The rules issued 
                        under subparagraph (A) shall establish 
                        an interactive data standard for the 
                        information included in the annual 
                        report of a resource extraction issuer.
                            ``(ii) Electronic tags.--The 
                        interactive data standard shall include 
                        electronic tags that identify, for any 
                        payments made by a resource extraction 
                        issuer to a foreign government or the 
                        Federal Government--
                                    ``(I) the total amounts of 
                                the payments, by category;
                                    ``(II) the currency used to 
                                make the payments;
                                    ``(III) the financial 
                                period in which the payments 
                                were made;
                                    ``(IV) the business segment 
                                of the resource extraction 
                                issuer that made the payments;
                                    ``(V) the government that 
                                received the payments, and the 
                                country in which the government 
                                is located;
                                    ``(VI) the project of the 
                                resource extraction issuer to 
                                which the payments relate; and
                                    ``(VII) such other 
                                information as the Commission 
                                may determine is necessary or 
                                appropriate in the public 
                                interest or for the protection 
                                of investors.
                    ``(E) International transparency efforts.--
                To the extent practicable, the rules issued 
                under subparagraph (A) shall support the 
                commitment of the Federal Government to 
                international transparency promotion efforts 
                relating to the commercial development of oil, 
                natural gas, or minerals.
                    ``(F) Effective date.--With respect to each 
                resource extraction issuer, the final rules 
                issued under subparagraph (A) shall take effect 
                on the date on which the resource extraction 
                issuer is required to submit an annual report 
                relating to the fiscal year of the resource 
                extraction issuer that ends not earlier than 1 
                year after the date on which the Commission 
                issues final rules under subparagraph (A).
            ``(3) Public availability of information.--
                    ``(A) In general.--To the extent 
                practicable, the Commission shall make 
                available online, to the public, a compilation 
                of the information required to be submitted 
                under the rules issued under paragraph (2)(A).
                    ``(B) Other information.--Nothing in this 
                paragraph shall require the Commission to make 
                available online information other than the 
                information required to be submitted under the 
                rules issued under paragraph (2)(A).
            ``(4) Authorization of appropriations.--There are 
        authorized to be appropriated to the Commission such 
        sums as may be necessary to carry out this 
        subsection.''.

SEC. 1505. STUDY BY THE COMPTROLLER GENERAL.

    (a) In General.--Not later than 1 year after the date of 
enactment of this Act, the Comptroller General of the United 
States shall issue a report assessing the relative 
independence, effectiveness, and expertise of presidentially 
appointed inspectors general and inspectors general of 
designated Federal entities, as such term is defined under 
section 8G of the Inspector General Act of 1978, and the 
effects on independence of the amendments to the Inspector 
General Act of 1978 made by this Act.
    (b) Report.--The report required by subsection (a) shall be 
issued to the Committees on Financial Services and Oversight 
and Government Reform of the House of Representatives and the 
Committees on Banking, Housing, and Urban Affairs and Homeland 
Security and Governmental Affairs of the Senate.

SEC. 1506. STUDY ON CORE DEPOSITS AND BROKERED DEPOSITS.

    (a) Study.--The Corporation shall conduct a study to 
evaluate--
            (1) the definition of core deposits for the purpose 
        of calculating the insurance premiums of banks;
            (2) the potential impact on the Deposit Insurance 
        Fund of revising the definitions of brokered deposits 
        and core deposits to better distinguish between them;
            (3) an assessment of the differences between core 
        deposits and brokered deposits and their role in the 
        economy and banking sector of the United States;
            (4) the potential stimulative effect on local 
        economies of redefining core deposits; and
            (5) the competitive parity between large 
        institutions and community banks that could result from 
        redefining core deposits.
    (b) Report to Congress.--Not later than 1 year after the 
date of enactment of this Act, the Corporation 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 a report on the results of the study under 
subsection (a) that includes legislative recommendations, if 
any, to address concerns arising in connection with the 
definitions of core deposits and brokered deposits.

                   TITLE XVI--SECTION 1256 CONTRACTS

SEC. 1601. CERTAIN SWAPS, ETC., NOT TREATED AS SECTION 1256 CONTRACTS.

    (a) In General.--Subsection (b) of section 1256 of the 
Internal Revenue Code of 1986 is amended--
            (1) by redesignating paragraphs (1) through (5) as 
        subparagraphs (A) through (E), respectively, and by 
        indenting such subparagraphs (as so redesignated) 
        accordingly,
            (2) by striking ``For purposes of'' and inserting 
        the following:
            ``(1) In general.--For purposes of'', and
            (3) by striking the last sentence and inserting the 
        following new paragraph:
            ``(2) Exceptions.--The term `section 1256 contract' 
        shall not include--
                    ``(A) any securities futures contract or 
                option on such a contract unless such contract 
                or option is a dealer securities futures 
                contract, or
                    ``(B) any interest rate swap, currency 
                swap, basis swap, interest rate cap, interest 
                rate floor, commodity swap, equity swap, equity 
                index swap, credit default swap, or similar 
                agreement.''.
    (b) Effective Date.--The amendments made by this section 
shall apply to taxable years beginning after the date of the 
enactment of this Act.
      And the Senate agree to the same.
      That the House recede from its disagreement to the 
amendment of the Senate to the title of the bill, and agree to 
the same.

                From the Committee on Financial Services, for 
                consideration of the House bill and the Senate 
                amendment, and modifications committed to 
                conference:
                                   Barney Frank of Massachusetts,
                                   Paul E. Kanjorski,
                                   Maxine Waters,
                                   Carolyn B. Maloney,
                                   Luis V. Gutierrez,
                                   Melvin L. Watt,
                                   Gregory W. Meeks of New York,
                                   Dennis Moore of Kansas,
                                   Mary Jo Kilroy,
                                   Gary C. Peters,
                From the Committee on Agriculture, for 
                consideration of subtitles A and B of title I, 
                secs. 1303, 1609, 1702, 1703, title III (except 
                secs. 3301 and 3302), secs. 4205(c), 
                4804(b)(8)(B), 5008, and 7509 of the House 
                bill, and sec. 102, subtitle A of title I, 
                secs. 406, 604(h), title VII, title VIII, secs. 
                983, 989E, 1027(j), 1088(a)(8), 1098, and 1099 
                of the Senate amendment, and modifications 
                committed to conference:
                                   Collin C. Peterson,
                                   Leonard L. Boswell,
                From the Committee on Energy and Commerce, for 
                consideration of secs. 3009, 3102(a)(2), 4001, 
                4002, 4101-4114, 4201, 4202, 4204-4210, 4301-
                4311, 4314, 4401-4403, 4410, 4501-4509, 4601-
                4606, 4815, 4901, and that portion of sec. 
                8002(a)(3) which adds a new sec. 313(d) to 
                title 31, United States Code, of the House 
                bill, and that portion of sec. 502(a)(3) which 
                adds a new sec. 313(d) to title 31, United 
                States Code, secs. 722(e), 1001, 1002, 1011-
                1018, 1021-1024, 1027-1029, 1031-1034, 1036, 
                1037, 1041, 1042, 1048, 1051-1058, 1061-1067, 
                1101, and 1105 of the Senate amendment, and 
                modifications committed to conference:
                                   Bobby L. Rush,
                From the Committee on Judiciary, for 
                consideration of secs. 1101(e)(2), 1103(e)(2), 
                1104(i)(5) and (i)(6), 1105(h) and (i), 1110(c) 
                and (d), 1601, 1605, 1607, 1609, 1610, 1612(a), 
                3002(c)(3) and (c)(4), 3006, 3119, 3206, 
                4205(n), 4306(b), 4501-4509, 4603, 
                4804(b)(8)(A), 4901(c)(8)(D) and (e), 6003, 
                7203(a), 7205, 7207, 7209, 7210, 7213-7216, 
                7220, 7302, 7507, 7508, 9004, 9104, 9105, 
                9106(a), 9110(b), 9111, 9118, 9203(c), and 
                9403(b) of the House bill, and secs. 
                112(b)(5)(B), 113(h), 153(f), 201, 202, 205, 
                208-210, 211(a) and (b), 316, 502(a)(3), 
                712(c), 718(b), 723(a)(3), 724(b), 725(c), 728, 
                731, 733, 735(b), 744, 748, 753, 763(a), (c) 
                and (i), 764, 767, 809(f), 922, 924, 929B, 932, 
                991(b)(5), (c)(2)(G) and (c)(3)(H), 1023(c)(7) 
                and (c)(8), 1024(c)(3)(B), 1027(e), 1042, 
                1044(a), 1046(a), 1047, 1051-1058, 1063, 
                1088(a)(7)(A), 1090, 1095, 1096, 1098, 1104, 
                1151(b), and 1156(c) of the Senate amendment, 
                and modifications committed to conference:
                                   John Conyers, Jr.,
                                   Howard L. Berman,
                From the Committee on Oversight and Government 
                Reform, for consideration of secs. 1000A, 1007, 
                1101(e)(3), 1203(d), 1212, 1217, 1254(c), 
                1609(h)(8)(B), 1611(d), 3301, 3302, 3304, 
                4106(b)(2) and (g)(4)(D), 4604, 4801, 4802, 
                5004, 7203(a), 7409, and 8002(a)(3) of the 
                House bill, and secs. 111(g), (i) and (j), 
                152(d)(2), (g) and (k), 210(h)(8), 319, 322, 
                404, 502(a)(3), 723(a)(3), 748, 763(a), 809(g), 
                922(a), 988, 989B, 989C, 989D, 989E, 1013(a), 
                1022(c)(6), 1064, 1152, and 1159(a) and (b) of 
                the Senate amendment, and modifications 
                committed to conference:
                                   Edolphus Towns,
                                   Elijah E. Cummings,
                From the Committee on Small Business, for 
                consideration of secs. 1071 and 1104 of the 
                Senate amendment, and modifications committed 
                to conference:
                                   Nydia M. Velazquez,
                                   Heath Shuler,
                                 Managers on the Part of the House.

                                   Christopher J. Dodd,
                                   Tim Johnson,
                                   Jack Reed,
                                   Charles E. Schumer,
                From the Committee on Agriculture, Nutrition, 
                and Forestry:
                                   Blanche L. Lincoln,
                                   Patrick J. Leahy,
                                   Tom Harkin,
                                Managers on the Part of the Senate.
       JOINT EXPLANATORY STATEMENT OF THE COMMITTEE OF CONFERENCE

        The managers on the part of the House and the Senate at 
the conference on the disagreeing votes of the two Houses on 
the amendment of the Senate to the bill H.R. 4173, to provide 
for financial regulatory reform, to protect consumers and 
investors, to enhance Federal understanding of insurance 
issues, to regulate the over-the-counter derivatives markets, 
and for other purposes, submit the following joint statement to 
the House and the Senate in explanation of the effect of the 
action agreed upon by the managers and recommended in the 
accompanying conference report:
        The Senate amendment struck all of the House bill after 
the enacting clause and inserted a substitute text.
        The House recedes from its disagreement to the 
amendment of the Senate with an amendment that is a substitute 
for the House bill and the Senate amendment. The differences 
between the House bill, the Senate amendment, and the 
substitute agreed to in conference are noted below, except for 
clerical corrections, conforming changes made necessary by 
agreements reached by the conferees, and minor drafting and 
clarifying changes.

                      TITLE I--FINANCIAL STABILITY

        Title I, which establishes a specific framework for 
ensuring financial stability, consists of three subtitles. 
Subtitle A establishes a Financial Stability Oversight Council 
to monitor potential threats to the financial system and 
provide for more stringent regulation of nonbank financial 
companies and financial activities that the Council determines, 
based on consideration of risk-related factors, pose risks to 
financial stability. Subtitle B establishes an Office of 
Financial Research that supports the Council by collecting 
information, conducting research, and analyzing data. Subtitle 
C provides a specific, more stringent supervisory framework for 
regulating large, interconnected bank holding companies, 
nonbank financial companies that the Council subjects to more 
stringent regulation, and activities and practices that the 
Council determines may pose systemic threats.

                TITLE II--ORDERLY LIQUIDATION AUTHORITY

        Title II establishes an orderly liquidation authority 
that may be used only if the Secretary of the Treasury (in 
consultation with the President), based on the written 
recommendation of two other federal regulators, agrees that 
doing so is necessary to mitigate serious adverse effects on 
financial stability in the United States. When the authority is 
used, the FDIC is appointed receiver and must liquidate the 
company in a manner that mitigates significant risks to 
financial stability and minimizes moral hazard. All costs of an 
orderly liquidation under this title are borne first by 
shareholders and unsecured creditors, and, if necessary, by 
risk-based assessments on large financial companies. Taxpayers 
specifically are protected from losses associated with use of 
this authority.

 TITLE III--TRANSFER OF POWERS TO THE COMPTROLLER OF THE CURRENCY, THE 
                CORPORATION, AND THE BOARD OF GOVERNORS

                   Prudential Regulator Restructuring

        Title III of the conference report transfers the 
functions of the Office of Thrift Supervision to the Office of 
the Comptroller of the Currency, which will now supervise 
federal thrifts, to the Federal Deposit Insurance Corporation 
(``FDIC''), which will supervise state-chartered thrifts, and 
to the Federal Reserve Board, which will supervise thrift 
holding companies.
        The conference report also protects employees affected 
by the regulatory streamlining by preserving pay and benefits, 
and protecting them from involuntary separation or relocation 
for a period of time. Title III requires comprehensive 
coordination of the integration of the agencies, and reporting 
to the House Financial Services Committee and Senate Banking 
Committee regarding the implementation of the merger.

                   Federal Deposit Insurance Reforms

        The title revises the FDIC's assessment base for 
deposit insurance, maintaining the risk-based nature of the 
assessment structure but transitioning to a broader assessment 
base for bank premiums based on total assets (minus tangible 
equity). The conference report also includes additional reforms 
that will enhance FDIC's ability to manage the Deposit 
Insurance Fund.
        The title makes permanent the increase in deposit 
insurance to $250,000, and makes the increase retroactive to 
January 1, 2008. Full insurance of noninterest-bearing 
transaction accounts is also extended for an additional two 
years and a comparable program is authorized for credit unions.

                 Office of Minority and Women Inclusion

        The title requires the establishment of offices of 
Minority and Women Inclusion by the Treasury Department, and 
the financial regulators, to coordinate technical assistance to 
minority-owned and women-owned businesses and to promote 
diversity in the workforce of the regulators.

       TITLE IV--REGULATION OF ADVISERS TO HEDGE FUNDS AND OTHERS

        The conference report eliminates the ``private 
adviser'' exemption in the Investment Advisers Act of 1940 
(``IAA'') thus registering advisers to private funds with the 
U.S. Securities and Exchange Commission (``SEC''). It expands 
the advisers' reporting requirements to the SEC as necessary or 
appropriate in the public interest and for the protection of 
investors or for the assessment of risk by the Financial 
Stability Oversight Council. The SEC is authorized to take into 
account the size, governance, and investment strategy of an 
adviser to the fund to determine if the fund poses a systemic 
risk. The conference report also amends the IAA to allow the 
SEC to require investment advisers to disclose the identity, 
investments, or affairs of their clients for purposes of 
systemic risk.
        The report includes exemptions for certain private fund 
advisers. It provides an exemption from registration 
requirements for advisers of private funds, each with less than 
$150 million in assets under management, while maintaining 
reporting requirements as directed by the SEC; an SEC reporting 
requirement for advisers to venture capital funds, as defined 
by the SEC and otherwise exempt from the framework; and an 
exemption for Family Offices. The conference report raises the 
assets threshold for federal regulation of investment advisers 
from $30 million to $100 million. Those advisers who qualify to 
register with their home state must register with the SEC 
should the adviser operate in more than 15 states.
        Finally, the report clarifies the SEC's authority to 
make rules necessary for the exercise of the powers conferred 
upon the SEC by the IAA. The SEC must adjust for the effects of 
inflation any dollar amount measures used in making 
determinations of the qualified client standard.
        Advisers must comply with the new provisions within one 
year of enactment of the conference report, though the report 
allows advisers to register earlier with the SEC.

                           TITLE V--INSURANCE

        Subtitle A, the Federal Insurance Office Act of 2010, 
creates a Federal Insurance Office (FIO) in the Treasury 
Department to provide the Executive Branch and the Congress 
with a source of information on the national insurance 
marketplace. FIO is not a federal regulator or supervisor of 
insurance. Rather, its functions include collecting information 
about the insurance industry; monitoring for systemic risk in 
the insurance industry, including serving in an advisory 
capacity to the Financial Stability Oversight Council; and 
administering the Terrorism Risk Insurance Program. Further, 
FIO will consult with the states regarding insurance matters of 
national importance and prudential insurance matters of 
international importance. FIO will also coordinate federal 
efforts and develop federal policy on prudential aspects of 
international insurance matters, including representing the 
United States in international insurance fora, and assisting 
the Treasury Secretary in negotiations of international 
insurance agreements with respect to the business of insurance 
or reinsurance. FIO will have a narrow and limited preemption 
power over state insurance measures that are inconsistent with 
such international insurance agreements.
        The Federal Insurance Office Act of 2010 expressly 
provides the Secretary of the Treasury, jointly with the USTR, 
the authority to negotiate and enter into international 
insurance agreements. To assure uniform, national application 
of prudential measures such as reinsurance collateral 
requirements, the Federal Insurance Office Act provides the 
Director with the authority to identify and narrowly preempt 
state insurance measures inconsistent with a defined category 
of international insurance agreements.
        Subtitle B, the Nonadmitted and Reinsurance Reform Act 
of 2010, will reform and modernize two important sectors of the 
commercial insurance marketplace, nonadmitted insurance (also 
known as `surplus lines' insurance) and reinsurance. 
Specifically, the Nonadmitted and Reinsurance Reform Act of 
2010 creates a uniform system for nonadmitted insurance premium 
tax payments based upon the home state of the policyholder, 
encourages the states to develop a compact or other procedural 
mechanism for uniform tax allocation, and establishes 
regulatory deference for the home state of the insured. The Act 
adopts uniform eligibility requirements for nonadmitted 
insurers as developed and promulgated by the National 
Association of Insurance Commissioners (NAIC) in the 
Nonadmitted Insurance Model Act. The Nonadmitted and 
Reinsurance Reform Act of 2010 will allow direct access to the 
nonadmitted insurance markets for certain sophisticated 
commercial purchasers. The Nonadmitted and Reinsurance Reform 
Act also streamlines the regulation of reinsurance by applying 
single state regulation for financial solvency and credit for 
reinsurance. Credit for reinsurance determinations will be 
controlled by the state of domicile of the ceding insurer. 
Reinsurance solvency regulation will be controlled by the state 
of domicile of the reinsurer provided such state is NAIC-
accredited or has financial solvency requirements substantially 
similar to the requirements necessary for NAIC accreditation. 
Under the Act, non-domiciliary states are specifically 
prohibited from applying their reinsurance laws in an extra-
territorial manner.

 TITLE VI--IMPROVEMENTS TO REGULATION OF BANK AND SAVINGS ASSOCIATION 
             HOLDING COMPANIES AND DEPOSITORY INSTITUTIONS

        Title VI improves prudential regulation of banks, 
saving associations, and their holding companies. The 
improvements include significant limitations on proprietary 
trading and sponsoring or investing in hedge funds or private 
equity funds by banking entities through the Volcker rule, 
better supervision of nonbank subsidiaries of holding 
companies, enhanced restrictions on transactions with 
affiliates, limits on derivatives and securities lending credit 
exposure, and a requirement that any company that controls an 
insured depository institution serve as a source of financial 
strength to the institution.

         TITLE VII--WALL STREET TRANSPARENCY AND ACCOUNTABILITY

        The conference report establishes a new regulatory 
framework to cover a broad range of participants and 
institutions in the over-the-counter derivatives market. The 
Commodity Futures Trading Commission (``CFTC'') and the 
Securities and Exchange Commission (``SEC'') are authorized to 
write rules for the swaps and security-based swaps markets, 
respectively. The Commissions shall consult and coordinate on 
rules and include the prudential regulators, to the extent 
possible, to assure regulatory consistency and comparability. 
The Commissions will register participants in the market 
including dealers, major participants, clearing agencies and 
organizations, exchanges, swap execution facilities, and trade 
repositories. Exemptions and exclusions from registration will 
apply as outlined in the report or at the discretion of the 
regulators. The Commissions will have enforcement authority in 
their jurisdictions while the prudential regulators maintain 
exclusive authority to enforce provisions for capital and 
margin for banks and branches or agencies of foreign banks.
        The report provides definitions for terms used in the 
Commodity Exchange Act and Securities Exchange Act of 1934. The 
regulatory framework outlines provisions for:
            Mandatory clearing of swaps and security-based 
        swaps for those trades that are eligible for clearing 
        as determined by both the clearing houses and the 
        regulators;
            Mandatory trading on an exchange or swap (or 
        security based swap) execution facility should the 
        transactions be cleared and a facility will accept it 
        for trading;
            Public trade reporting of all cleared and uncleared 
        swaps and security-based swaps;
            Regulators have authority to impose capital on 
        dealers and major swap participants;
            Regulators have authority to impose margin 
        requirements only on dealers and major participants for 
        uncleared swaps, adding safeguards to the system by 
        ensuring dealers and major swap participants have 
        adequate financial resources to meet obligations;
            Position limits on swaps contracts that perform or 
        affect a significant price discovery function and 
        requirements to aggregate limits across markets; and
            Prohibitions against market manipulation.
        The report includes a prohibition of federal assistance 
to swaps and security-based swap entities, including federal 
deposit insurance, access to the Federal Reserve discount 
window or Federal Reserve credit facility, to swaps entities in 
connection with their trading in swaps or securities-based 
swaps.
        The report establishes a code of conduct for all 
registered swap dealers and major swap participants requiring 
them to disclose to the swap entity the material risks and 
characteristics of a swap and any conflicts of interest or 
material incentives. When acting as counterparties to a pension 
fund, endowment fund, or state or local government, dealers are 
to have a reasonable basis to believe that the fund or 
governmental entity has an independent representative advising 
them.
        The report requires a number of studies, including 
studies on international swap regulation, the regulation of 
carbon markets, stable value contracts, and the effect of 
position limits on exchanges.

       TITLE VIII--PAYMENT, CLEARING, AND SETTLEMENT SUPERVISION

        Title VIII establishes a specific framework for 
promoting uniform risk-management standards for systemically 
important financial market utilities (FMUs) and systemically 
important payment, clearing, and settlement (PCS) activities 
conducted by financial institutions. The Board of Governors of 
the Federal Reserve System (Board), the Securities and Exchange 
Commission (SEC), or the Commodity Futures Trading Commission 
(CFTC), as appropriate, is primarily responsible for 
establishing and enforcing risk-management standards for FMUs 
and PCS activities that the Council identifies as systemically 
important. If the Board determines that the standards imposed 
by the SEC or the CFTC or the enforcement actions of such 
agencies are insufficient, then the Council can require the SEC 
or CFTC to impose additional standards or take additional 
enforcement actions.

 TITLE IX--INVESTOR PROTECTIONS AND IMPROVEMENTS TO THE REGULATION OF 
                               SECURITIES

        Subtitle A--Increasing Investor Protection establishes 
mechanisms to assist investors in their dealings with the SEC 
by creating an Office of Investor Advocate and an Ombudsman. It 
also creates an Investor Advisory Committee at the SEC, and 
clarifies the authority of the SEC to engage in investor 
testing. Subtitle A directs the SEC to study the standards of 
care applicable to broker-dealers and investment advisers 
giving investment advice to retail customers, and it authorizes 
the SEC to promulgate rules imposing a fiduciary duty on 
broker-dealers and investment advisers to protect retail 
customers. In addition, the subtitle streamlines filing 
procedures for self-regulatory organizations. Subtitle A also 
clarifies the authority of the SEC to require investor 
disclosures before purchase of investment products and 
services. Finally, the subtitle requires studies on the 
enhancement of investment adviser examinations, financial 
literacy, mutual fund advertising, conflicts of interest, 
improved investor access to information on investment advisers 
and broker-dealers, and financial planners and the use of 
financial designations.
        Subtitle B--Increasing Regulatory Enforcement and 
Remedies strengthens the SEC's authority to conduct 
investigations, impose liability on control persons, and assess 
penalties for violations of the securities laws. It also makes 
clear that the intent standard in SEC enforcement actions for 
aiding and abetting is recklessness, and it requires a study 
regarding the issue of aiding and abetting liability in private 
actions. Under subtitle B, the SEC has the authority to 
restrict pre-dispute mandatory arbitration. The subtitle 
further enhances incentives and protections for whistleblowers 
providing information leading to successful SEC enforcement 
actions. Awards to whistleblowers will range from 10 percent to 
30 percent of the amounts collected by the SEC in actions where 
the SEC obtained monetary sanctions exceeding $1 million. The 
subtitle also works to protect the confidentiality of 
whistleblowers.
        The subtitle further enhances the ability of the SEC to 
ban violators from all parts of the securities industry, 
disqualifies felons and other bad actors from using the 
Regulation D offering exemption, and provides for the equal 
treatment of self-regulatory organization (SRO) rules. It 
streamlines SRO rule filing procedures by requiring the SEC to 
complete the process of reviewing and taking action on proposed 
SRO rules within specified time frames. The subtitle enhances 
the ability of the SEC to issue subpoenas, bring cases against 
individuals, and share information with other authorities. It 
also updates the law governing the Securities Investor 
Protection Corporation (SIPC). These reforms include increasing 
the minimum assessments on SIPC members; raising penalties for 
fraud; and establishing civil and criminal penalties against 
any person who misrepresents membership in SIPC. Subtitle B 
gives the SEC authority to enhance public reporting of 
aggregate information on short selling, prohibits manipulative 
short sales, and requires notification to customers that they 
may choose not to allow their securities to be used in 
connection with short sales. The subtitle further establishes 
procedures to notify investors about missing securities, and it 
requires the SEC to complete investigations and examinations 
within certain time frames, subject to exceptions for complex 
cases. Finally, the subtitle requires a study regarding the 
issue of aiding and abetting liability in private actions for 
securities fraud.
        Subtitle C--Improvement to the Regulation of Credit 
Rating Agencies gives broader powers to the SEC to regulate 
nationally recognized statistical rating organizations 
(``NRSROs''). A new Office of Credit Ratings (``Office'') is 
required to examine NRSROs at least once a year and make key 
findings public. The Office will write new rules, including 
requiring NRSROs to (1) set up internal controls over the 
process for determining credit ratings; (2) establish an 
independent board of directors; (3) make greater disclosures to 
the public and investors; and (4) develop universal ratings 
across asset classes and types of issuer. The report also gives 
the Office the authority to deregister an NRSRO for providing 
bad ratings over time. New professional standards are 
established that require ratings analysts to pass qualifying 
exams and have continuing education.
        The report includes provisions to address conflicts of 
interest. It prohibits compliance officers from working on 
ratings, methodologies, or sales and prevents other employees 
from both marketing ratings services and performing the ratings 
of securities. The subtitle includes on additional conflict of 
interest mitigation including a new requirement for NRSROs to 
conduct a one-year look-back review when an NRSRO employee goes 
to work for an obligor or underwriter of a security or money 
market instrument subject to a rating by that NRSRO; and report 
to the SEC when certain employees of the NRSRO go to work for 
an entity that the NRSRO has rated in the previous twelve 
months. The SEC shall make such reports publicly available.
        To reduce the reliance on ratings, the report amends 
several statutes to remove references to credit ratings, credit 
rating agencies and NRSROs. The subtitle includes a requirement 
that all Federal agencies review their regulations, policies 
and practices that reference credit ratings, credit rating 
agencies, and NRSROs. After identifying where the agency relies 
on or makes these references, the agencies shall modify their 
regulations by striking these references and substituting a 
standard of creditworthiness to be established by the agencies.
        New provisions address information gathering. NRSROs 
must consider information in their ratings that comes to their 
attention from a source other than the organizations being 
rated, if they find it credible. In addition, the subtitle 
includes an elimination of the credit rating agency exemption 
from Regulation Fair Disclosure, commonly known as Reg FD.
        The report also addresses liability measures for the 
NRSRO. The report allows investors to bring private rights of 
action against credit rating agencies for a knowing or reckless 
failure to conduct a reasonable investigation of the facts or 
to obtain analysis from an independent source. The report also 
nullifies Rule 436(g) which provides an exemption for credit 
ratings provided by NRSROs from being considered a part of the 
registration statement prepared or certified by a person under 
the ``expert liability'' regime of Section 7 and Section 11 of 
the Securities Act of 1933. The subtitle requires all 
references to ``furnish'' be replaced with the word ``file'' in 
existing law. Information that is ``furnished'' to the SEC is 
subject to a lower standard of accuracy and liability than 
information ``filed'' with the SEC.
        The report also directs the SEC to establish a system 
that prohibits issuers of structured finance from selecting the 
NRSRO that will provide the initial credit rating. The system 
would mandate that initial rating assignments for structured 
finance securities be made on a random or semi-random basis, 
unless the SEC determines, after study, that an alternative 
system of assigning ratings would better protect investors and 
serve the public interest.
        Subtitle D--Improvements to Asset-Backed Securitization 
Process requires securitizers to retain an economic interest in 
a material portion of the credit risk for any asset that 
securitizers transfer, sell, or convey to a third party. Risk 
retention requirements and exemptions will be determined by 
regulators, which will include setting risk retention 
requirements for different asset classes that are securitized 
and allocating risk retention obligations between securitizers 
and originators. An exemption is provided for qualified 
residential mortgages, as defined by the regulators, but which 
can be no broader than the definition of qualified mortgage in 
Title XIV. Regulators may tailor risk retention requirements as 
appropriate to the structure of collateralized debt obligations 
and other complex asset-backed securities. Subtitle D also 
requires enhanced disclosure by issuers of asset-backed 
securities, including data related to the underlying loans or 
assets. Express exemptions are provided for the Farm Credit 
System and any residential, multifamily, or health care 
facility mortgage loan asset or securitization which is insured 
or guaranteed by the United States or an agency of the United 
States. Regulators also are required to issue total or partial 
exemptions from risk retention and disclosure requirements for 
municipal securities and for securitizations of assets issued 
or guaranteed by federal agencies, as long as the exemption is 
in the public interest and for the protection of investors.
        Subtitle E--Accountability and Executive Compensation 
is designed to address shareholder rights and executive 
compensation practices. In this subtitle, Congress provides 
shareholders in a public company with a vote on executive 
compensation and additional disclosures involving compensation 
practices. Under the conference report, at least every three 
years shareholders can cast an advisory vote to approve the 
compensation of executives and, where appropriate, golden 
parachutes for executives. Also under this subtitle, (i) board 
committees that set compensation policy will consist only of 
directors who are independent; (ii) companies will tell 
shareholders about the relationship between the executive 
compensation the company paid and the company's financial 
performance; (iii) companies will be required to have a policy 
to recover money erroneously paid to executives based on 
financials that later have to be restated due to an accounting 
error; and (iv) companies will be required to disclose in the 
annual proxy statement whether employees or members of the 
board may hedge or offset any decrease in the market value of 
equity securities granted. This subtitle also requires federal 
financial regulators to monitor incentive-based payment 
arrangements of federally regulated financial institutions 
larger than $1 billion and prohibit incentive-based payment 
arrangements that the regulators determine jointly could 
threaten financial institutions' safety and soundness or could 
have serious adverse effects on economic conditions or 
financial stability. Finally, subtitle E prohibits brokers who 
are not beneficial owners of a security from voting through 
company proxies unless the beneficial owner has instructed the 
broker to vote on the owner's behalf.
        Subtitle F--Improvements to the Management of the 
Securities and Exchange Commission requires several reports 
designed to assess SEC performance and provide recommendations 
for improvements. These involve assessment of the management of 
the SEC related to internal supervisory controls, personnel 
management, financial controls, and oversight of national 
securities associations. Subtitle F also creates a suggestion 
program for SEC employees and requires the Divisions of Trading 
and Markets and Investment Management to have examiners on 
their staffs. It requires the SEC to hire a consultant to study 
the SEC's operations and determine whether there is a need for 
comprehensive reform. Finally, Subtitle F requires the GAO to 
study issues surrounding employees who leave the SEC to work in 
the securities industry.
        Subtitle G--Strengthening Corporate Governance 
authorizes the SEC to write rules allowing shareholders to 
nominate candidates for an issuer's board of directors, and to 
have such candidates listed on the issuer's own proxy 
materials. In writing such rules, the SEC must consider the 
burden on small issuers, and may issue exemptions from proxy 
access rules. Issuers must also disclose why the issuer has 
chosen to have a single person, or different individuals, serve 
as CEO and Chairman of the board of the company.
        Subtitle H--Municipal Securities requires the 
registration of municipal financial advisors and subjects them 
to rules to be promulgated by the Municipal Securities 
Rulemaking Board (MSRB), which will be enforced by the SEC. An 
Office of Municipal Securities is created within the SEC. The 
MSRB will be reconstituted, so that a majority of members are 
independent of the municipal securities industry. Municipal 
advisors will have a fiduciary duty to municipal entities. 
Subtitle H calls for studies of municipal securities markets, 
and ways to increase disclosure to investors. It also provides 
a certain source of funding for the Government Accounting 
Standards Board.
        Subtitle I--Public Company Accounting Oversight Board, 
Portfolio Margining, and Other Matters, subtitle I allows the 
Public Company Accounting Oversight Board (PCAOB) to examine 
the auditors of broker-dealers. It further authorizes the PCAOB 
to share information with foreign authorities. The conference 
report also authorizes portfolio margining for accounts that 
hold both securities and futures. In response to problems 
related to securities borrowing and lending, the conference 
report requires more transparency. It also raises the dollar 
threshold that triggers a full ``material loss review'' by 
federal banking regulators' inspectors general. Subtitle I 
improves the coordination, activities, flexibility, and 
accountability of inspectors general at Federal financial 
agencies. Subtitle I also exempts small issuers (those with 
less than $75,000,000 in market capitalization) from the 
external audit of internal controls requirements of Sarbanes-
Oxley Section 404(b), and requires studies on the impact of 
such an exemption and the exemption for mid-sized companies. 
The subtitle also creates an exemption for certain annuities 
from federal securities regulation. Further, it makes numerous 
technical and conforming changes to Federal securities laws.
        Subtitle J--Securities and Exchange Commission Match 
Funding maintains the role of the Appropriations Committees in 
setting the Securities and Exchange Commission's annual budgets 
on and after FY2012. Transaction fee receipts would be treated 
as offsetting collections equal to the amount of the 
appropriation. Any excess collections would go to the Treasury 
as general revenue and not offset any current or future 
appropriations. Subtitle J sets annual registration fee targets 
that will produce $5 billion of revenues over ten years that 
will go to the Treasury general fund. It also requires SEC's 
budget to be submitted to Congress concurrent with the earliest 
submission to the Office of Management and Budget and submitted 
unaltered by the President; builds in flexibility for multi-
year budget authority and unanticipated needs; and authorizes 
graduated funding level increases for the SEC for FYs 2011-
2015.

            TITLE X--BUREAU OF CONSUMER FINANCIAL PROTECTION

        Title X establishes the Bureau of Consumer Financial 
Protection (Bureau), which will be an independent bureau within 
the Federal Reserve System. It will be run by a Director who is 
Presidentially appointed and Senate confirmed. The Bureau will 
have the authority and accountability to ensure that existing 
consumer protection laws and regulations are comprehensive, 
fair, and vigorously enforced.
        The Bureau will have authority to issue rules 
applicable to all financial institutions, including depository 
institutions that offer financial products and services to 
consumers. It will also have authority to issue rules under 
existing consumer banking statutes, including the Truth in 
Lending Act, the Equal Credit Opportunity Act, and the Real 
Estate Settlement Procedures Act. Furthermore, the Bureau will 
have authority to regulate unfair, deceptive and abusive 
practices and consumer products that it identifies (UDAP 
authority). The Bureau also may issue regulations relating to 
disclosures about consumer financial products and services.
        Title X also establishes the Bureau as the federal 
agency with examination and enforcement authority over very 
large banks and nonbank financial institutions for compliance 
with the consumer protection laws. The prudential regulators 
will retain this authority for insured depository institutions 
and credit unions with assets of $10 billion or less. 
Exclusions from supervision and enforcement are provided for 
nonfinancial companies, including merchants, retailers, 
attorneys, accountants, and real estate brokers, that finance 
the purchase of their nonfinancial consumer products and 
services under certain conditions and where the nonfinancial 
company is not significantly engaged in such financing. There 
is also an exclusion from the authority of the Bureau for 
automobile dealers, for which the Federal Reserve Board will 
continue to write regulations under the enumerated federal 
consumer laws, to be enforced by the Federal Trade Commission 
(FTC). The FTC will also be able to write rules proscribing 
unfair or deceptive acts or practices with regard to auto 
dealers under the procedures set out under the Administrative 
Procedures Act.
        The conference report also revises the standard the OCC 
will use to preempt state consumer protection laws. It codifies 
the standard in the 1996 Supreme Court case Barnett Bank of 
Marion County, N.A. v. Nelson to allow for the preemption of 
State consumer financial laws that prevent or significantly 
interfere with national banks' exercise of their powers. State 
Attorneys General also are given authority to enforce the UDAP 
and other authorities of the Bureau against banks and savings 
associations.
        To address consumer protection and fair lending 
matters, Title X establishes the Office of Fair Lending and 
Equal Opportunity within the Bureau. This Office will oversee 
the enforcement of federal laws intended to ensure fair, 
equitable and nondiscriminatory access to credit for 
individuals and communities, including the Equal Credit 
Opportunity Act (ECOA) and Home Mortgage Disclosure Act (HMDA). 
The Office will promote coordination of fair lending 
enforcement efforts with other federal agencies and State 
regulators, as appropriate, to provide consistent, efficient 
and effective enforcement of federal fair lending laws.
        The Bureau will also include an Office for Financial 
Education and an Office the Financial Protection of Older 
Americans. In addition, Title X provides for enhanced data 
collection required by HMDA and ECOA.

              TITLE XI--FEDERAL RESERVE SYSTEM PROVISIONS

                           Liquidity Programs

        The Federal Reserve will be able to make 13(3) 
emergency loans only through widely available programs approved 
by the Secretary of the Treasury, and not to individual firms. 
FDIC programs to guarantee short-term debt during financial 
crises will be limited to solvent depository institutions and 
their holding companies, and can be created only after meeting 
several conditions including Congressional approval.

                Federal Reserve Governance and Oversight

        The Government Accountability Office will conduct an 
audit of Federal Reserve 13(3) emergency lending since December 
1, 2007, and the Federal Reserve will publish details about 
such lending on December 1, 2010. The GAO will have ongoing 
audit authority over Federal Reserve discount window and open 
market operation transactions, and emergency lending. The 
Federal Reserve will publicly disclose data on discount window 
and open market operations, and details about emergency 
lending, after a delay that will allow these tools to function 
effectively.
        The position of Vice Chairman for Supervision on the 
Federal Reserve Board of Governors is established, and the 
Federal Reserve is formally prohibited from delegating its 
functions for establishing regulatory or supervisory policy to 
Federal Reserve banks. The presidents of each Federal Reserve 
Bank will be elected by the directors selected to represent the 
public (Class B and C directors), and the directors 
representing the member banks (Class A directors) will no 
longer be authorized to vote.

    TITLE XII--IMPROVING ACCESS TO MAINSTREAM FINANCIAL INSTITUTIONS

        This title will expand access to safe and affordable 
bank accounts, credit and financial information for low-income, 
minority and other underserved families. Specifically, the 
title would address the following challenges facing low- and 
moderate-income families with three authorized programs:
            authorizes a program to help low- and moderate-
        income individuals open low-cost checking or savings 
        accounts at banks or credit unions;
            increases access to objective advice through non-
        profits and others aiding in offering financial advice 
        to consumers; and
            creates a pool of capital to enable community 
        development financial institutions (CDFIs) to establish 
        and maintain small dollar loan programs, creating an 
        alternative to pay day or car title loans in local 
        communities.

                      TITLE XIII--PAY IT BACK ACT

        Title XIII, the TARP Pay it Back Act, reduces the 
amount authorized under the Troubled Asset Repurchase Program 
to $475 billion, from the original $700 billion; prohibits 
Treasury from using repaid TARP funds; and prohibits Treasury 
from initiating new programs under TARP.

       TITLE XIV--MORTGAGE REFORM AND ANTI-PREDATORY LENDING ACT

        Title XIV enacts the Mortgage Reform and Anti-Predatory 
Lending Act. It sets minimum standards for mortgages by 
requiring lenders to establish that consumers have a reasonable 
ability to repay at the time the mortgage is consummated. It 
provides that certain high-quality, low-cost loans (defined as 
Qualified Mortgages) are presumed to meet this standard.
        The Act also prohibits financial incentives (including 
payments known as ``yield spread premiums'') that may encourage 
mortgage originators, including mortgage brokers and loan 
officers of lending institutions, to steer consumers to higher-
cost and more abusive mortgages. In addition, it prohibits 
prepayment penalties for any adjustable rate mortgage and other 
mortgages that do not meet the definition of Qualified 
Mortgage; limits prepayment penalties charged to borrowers who 
wish to prepay their mortgages (typically to refinance on more 
affordable terms); bans single premium credit insurance and 
prohibits mandatory arbitration clauses; and includes 
protections for renters of foreclosed properties. Finally, 
title XIV authorizes funds to provide legal assistance to 
homeowners and renters who are experiencing problems related to 
foreclosure.
        Title XIV enhances and expands the scope of consumer 
protections for high-cost loans under the Home Ownership and 
Equity Protection Act (HOEPA) and requires additional 
disclosures to consumers. This title revises the benchmarks for 
determining loans subject to the heightened HOEPA standards. It 
also prohibits the financing of points and fees; excessive fees 
for payoff information, modifications, or late payments; and 
practices that increase the risk of foreclosure, such as 
balloon payments, encouraging a borrower to default, and call 
provisions. The title adds a requirement for pre-loan 
counseling.
        The Act establishes an Office of Housing Counseling at 
HUD that will carry out and coordinate homeownership and rental 
housing counseling programs; requires the launch of a national 
public-service, multimedia campaign to promote housing 
counseling and the establishment of a website and toll-free 
hotline; authorizes the issuance of homeownership and rental 
housing counseling grants to HUD-approved housing counseling 
agencies and State housing finance agencies; and requires HUD 
to update the Mortgage Information Booklet to provide consumers 
with a greater understanding of the terms of the home buying 
process. Additionally, the title requires increased information 
to consumers about the need for home inspections and ways to 
avoid foreclosure scams.
        Moreover, Title XIV requires all higher-cost mortgage 
borrowers to have escrow accounts established. It also requires 
lenders to provide written disclosures about the need to pay 
taxes and insurance premiums to all borrowers if they opt out 
of creating escrow accounts. With respect to mortgage servicing 
reforms, Title XIV updates the Real Estate Settlement 
Procedures Act to create new consumer protections related to 
force-placed insurance, swifter responses to inquiries, 
increased penalties, prompt crediting of payments, and the 
timely receipt of payoff statement quotes.
        Concerning appraisal practices, Title XIV prohibits 
lenders from making a higher-cost mortgage without first 
obtaining a written appraisal. Lenders must additionally 
provide mortgage applicants with copies of any and all written 
appraisal reports and valuations developed in connection with a 
mortgage transaction at least 3 days before the scheduled 
closing date on the property. Title XIV further creates 
enforceable Federal appraisal independence standards with 
penalties within the Truth in Lending Act. These standards 
prohibit the parties involved in a real estate transaction from 
influencing the independent judgment of an appraiser through 
collusion, coercion, and bribery, among other activities. The 
bill also reforms the Federal oversight of the State appraisal 
regulatory system.
        The Act provides $1 billion for ``Emergency Mortgage 
Relief,'' in the form of loans to homeowners who lose their 
jobs, to help make mortgage payments while the homeowner is out 
of work. The Act also provides $1 billion for a third round of 
funding for the Neighborhood Stabilization Program to enable 
state and local governments to finance the purchase and 
redevelopment of foreclosed homes and residential properties. 
In addition, the Act authorizes a HUD-administered grant-making 
program to help entities that provide legal assistance to low- 
and moderate-income recipients on home ownership preservation, 
foreclosure prevention, and the rights of tenants associated 
with home foreclosure.

                   TITLE XV--MISCELLANEOUS PROVISIONS

        Title XV of the conference report includes:

       Restrictions on use of U.S. Funds for Foreign Governments

        The conference report requires the Administration to 
evaluate any proposed loan by the IMF to a middle-income 
country if that country's public debt exceeds its annual Gross 
Domestic Product, and to oppose the loan if it cannot certify 
to Congress that the loan is likely to be repaid.

                   Extractive Industries Transparency

        The conference report requires public disclosure to the 
SEC of any payment relating to the commercial development of 
oil, natural gas, and minerals made by any person to the U.S. 
or a foreign government, and includes as a ``payment'' taxes, 
royalties, fees, licenses, production entitlements, bonuses, 
and other material benefits, as determined by the Securities 
and Exchange Commission.
        The conference report amends the Securities Exchange 
Act of 1934 to require the SEC to issue rules requiring each 
resource extraction issuer (an issuer that engages in the 
commercial development of oil, natural gas, or minerals) to 
include in an annual report information relating to any payment 
made by the issuer, a subsidiary or partner, or an entity under 
its control to the U.S. or a foreign government for the purpose 
of such commercial development. Requires such rules, to the 
extent practicable, to support the U.S. commitment to 
international transparency promotion efforts relating to such 
commercial development.

                           Conflict Minerals

        The conference report requires disclosure to the SEC by 
all persons otherwise required to file with the SEC for whom 
minerals originating in the Democratic Republic of Congo and 
adjoining countries are necessary to the functionality or 
production of a product manufactured by such person. Such a 
public disclosure report by the person must describe the 
measures taken to exercise due diligence on the source and 
chain of custody of such materials, the products manufactured, 
and other matters; requires an independent audit of the report.
        The conference report requires that the Department of 
State, in consultation with others, submit to Congress a 
strategy to address the illicit minerals trade in the region, 
and a map to address linkages between conflict minerals and 
armed groups.
        Section 1503 requires mining companies to disclose 
mining safety violations that are material to investors.

                   TITLE XVI--SECTION 1256 CONTRACTS

        The title contains a provision to address the 
recharacterization of income as a result of increased exchange-
trading of derivatives contracts by clarifying that section 
1256 of the Internal Revenue Code does not apply to certain 
derivatives contracts transacted on exchanges.
        Compliance with clause 9 of Rule XXI.--Pursuant to 
clause 9 of rule XXI of the Rules of the House of 
Representatives, neither this conference report nor the 
accompanying joint statement of managers contains any 
congressional earmarks, limited tax benefits, or limited tariff 
benefits as defined in clause 9 of rule XXI.

                From the Committee on Financial Services, for 
                consideration of the House bill and the Senate 
                amendment, and modifications committed to 
                conference:
                                   Barney Frank of Massachusetts,
                                   Paul E. Kanjorski,
                                   Maxine Waters,
                                   Carolyn B. Maloney,
                                   Luis V. Gutierrez,
                                   Melvin L. Watt,
                                   Gregory W. Meeks of New York,
                                   Dennis Moore of Kansas,
                                   Mary Jo Kilroy,
                                   Gary C. Peters,
                From the Committee on Agriculture, for 
                consideration of subtitles A and B of title I, 
                secs. 1303, 1609, 1702, 1703, title III (except 
                secs. 3301 and 3302), secs. 4205(c), 
                4804(b)(8)(B), 5008, and 7509 of the House 
                bill, and sec. 102, subtitle A of title I, 
                secs. 406, 604(h), title VII, title VIII, secs. 
                983, 989E, 1027(j), 1088(a)(8), 1098, and 1099 
                of the Senate amendment, and modifications 
                committed to conference:
                                   Collin C. Peterson,
                                   Leonard L. Boswell,
                From the Committee on Energy and Commerce, for 
                consideration of secs. 3009, 3102(a)(2), 4001, 
                4002, 4101-4114, 4201, 4202, 4204-4210, 4301-
                4311, 4314, 4401-4403, 4410, 4501-4509, 4601-
                4606, 4815, 4901, and that portion of sec. 
                8002(a)(3) which adds a new sec.313(d) to title 
                31, United States Code, of the House bill, and 
                that portion of sec. 502(a)(3) which adds a new 
                sec. 313(d) to title 31, United States Code, 
                secs. 722(e), 1001, 1002, 1011-1018, 1021-1024, 
                1027-1029, 1031-1034, 1036, 1037, 1041, 1042, 
                1048, 1051-1058, 1061-1067, 1101, and 1105 of 
                the Senate amendment, and modifications 
                committed to conference:
                                   Bobby L. Rush,
                From the Committee on the Judiciary, for 
                consideration of secs. 1101(e)(2), 1103(e)(2), 
                1104(i)(5) and (i)(6), 1105(h) and (i), 1110(c) 
                and (d), 1601, 1605, 1607, 1609, 1610, 1612(a), 
                3002(c)(3) and (c)(4), 3006, 3119, 3206, 
                4205(n), 4306(b), 4501-4509, 4603, 
                4804(b)(8)(A), 4901(c)(8)(D) and (e), 6003, 
                7203(a), 7205, 7207, 7209, 7210, 7213-7216, 
                7220, 7302, 7507, 7508, 9004, 9104, 9105, 
                9106(a), 9110(b), 9111, 9118, 9203(c), and 
                9403(b) of the House bill, and secs. 
                112(b)(5)(B), 113(h), 153(f), 201, 202, 205, 
                208-210, 211(a) and (b), 316, 502(a)(3), 
                712(c), 718(b), 723(a)(3), 724(b), 725(c), 728, 
                731, 733, 735(b), 744, 748, 753, 763(a), (c) 
                and (i), 764, 767, 809(f), 922, 924, 929B, 932, 
                991(b)(5), (c)(2)(G) and (c)(3)(H), 1023(c)(7) 
                and (c)(8), 1024(c)(3)(B), 1027(e), 1042, 
                1044(a), 1046(a), 1047, 1051-1058, 1063, 
                1088(a)(7)(A), 1090, 1095, 1096, 1098, 1104, 
                1151(b), and 1156(c) of the Senate amendment, 
                and modifications committed to conference:
                                   John Conyers, Jr.,
                                   Howard L. Berman,
                From the Committee on Oversight and Government 
                Reform, for consideration of secs. 1000A, 1007, 
                1101(e)(3), 1203(d), 1212, 1217, 1254(c), 
                1609(h)(8)(B), 1611(d), 3301, 3302, 3304, 
                4106(b)(2) and (g)(4)(D), 4604, 4801, 4802, 
                5004, 7203(a), 7409, and 8002(a)(3) of the 
                House bill, and secs. 111(g), (i) and (j), 
                152(d)(2), (g) and (k), 210(h)(8), 319, 322, 
                404, 502(a)(3), 723(a)(3), 748, 763(a), 809(g), 
                922(a), 988, 989B, 989C, 989D, 989E, 1013(a), 
                1022(c)(6), 1064, 1152, and 1159(a) and (b) of 
                the Senate amendment, and modifications 
                committed to conference:
                                   Edolphus Towns,
                                   Elijah E. Cummings,
                From the Committee on Small Business, for 
                consideration of secs. 1071 and 1104 of the 
                Senate amendment, and modifications committed 
                to conference:
                                   Nydia M. Velazquez,
                                   Heath Shuler,
                                 Managers on the Part of the House.

                                   Christopher J. Dodd,
                                   Tim Johnson,
                                   Jack Reed,
                                   Charles E. Schumer,
                From the Committee on Agriculture, Nutrition, 
                and Forestry:
                                   Blanche L. Lincoln,
                                   Patrick J. Leahy,
                                   Tom Harkin,
                                Managers on the Part of the Senate.

                                  
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