I 

116TH CONGRESS 

2D SESSION H. R. 7046 

To amend the Bank Holding Company Act of 1956 to place certain limitations 

on commodity ownership and to repeal the merchant banking authority, 

and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

MAY 28, 2020 

Mr. CASTEN of Illinois introduced the following bill; which was referred to the 

Committee on Financial Services 

A BILL 

To amend the Bank Holding Company Act of 1956 to place 

certain limitations on commodity ownership and to repeal 

the merchant banking authority, and for other purposes. 

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

3 SECTION 1. LIMITATIONS ON COMMODITY OWNERSHIP 

4 AND REPEAL OF THE MERCHANT BANKING 

5 AUTHORITY. 

6 (a) IN GENERAL.—Section 4 of the Bank Holding 

7 Company Act of 1956 (12 U.S.C. 1843) is amended— 

8 (1) in subsection (k)— 


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1 (A) in paragraph (1), by striking ‘‘(by reg2 ulation or order)’’ and inserting ‘‘, by regula3 tion’’; 

4 (B) in paragraph (2)— 

5 (i) in the heading, by striking ‘‘SEC6 RETARY OF THE TREASURY’’ and inserting 

7 ‘‘SECRETARY OF THE TREASURY AND THE

8 FEDERAL DEPOSIT INSURANCE CORPORA9 TION’’; and 

10 (ii) by adding at the end the fol11 lowing: 

12 ‘‘(C) JOINT DETERMINATION WITH THE

13 FEDERAL DEPOSIT INSURANCE CORPORA14 TION.—For purposes of paragraph (1), the 

15 Board may only make a determination that an 

16 activity is complementary to a financial activity 

17 and does not pose a substantial risk to the safe18 ty or soundness of depository institutions or the 

19 financial system generally, if such determina20 tion is made jointly, by rule, with the Federal 

21 Deposit Insurance Corporation.’’; 

22 (C) in paragraph (4)— 

23 (i) by striking subparagraph (H); and 

24 (ii) by redesignating subparagraph (I) 

25 as subparagraph (H); and 


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1 (D) by striking paragraph (7); 

2 (2) in subsection (l)— 

3 (A) in paragraph (1), by striking ‘‘sub4 section (k), (n), or (o)’’ each place such term 

5 appears and inserting ‘‘subsection (k) or (n)’’; 

6 and 

7 (B) in paragraph (2)(B), by striking ‘‘sub8 paragraph (H) or (I)’’ and inserting ‘‘subpara9 graph (H)’’; 

10 (3) in subsection (m)(1)(A), by striking ‘‘sub11 section (k), (n), or (o)’’ and inserting ‘‘subsection 

12 (k) or (n)’’; 

13 (4) in subsection (n)(5), by striking ‘‘subpara14 graph (H) or (I)’’ each place such term appears and 

15 inserting ‘‘subparagraph (H)’’; and 

16 (5) by striking subsection (o). 

17 (b) CONFORMING AMENDMENT.—Section 

18 3(a)(4)(B)(vi) of the Securities Exchange Act of 1934 (15 

19 U.S.C. 78c(a)(4)(B)(vi)) is amended by striking ‘‘other 

20 than’’ and all that follows through the end and inserting 

21 ‘‘other than a registered broker or dealer.’’. 

22 (c) RULEMAKING.—The Board of Governors of the 

23 Federal Reserve System shall— 

24 (1) issue rules to carry out the amendments 

25 made by this section; and 


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1 (2) provide for an appropriate transition period 

2 before persons are required to comply with the 

3 amendments made by this section, including allowing 

4 for the divestment of shares, assets, and ownership 

5 interests affected by such amendments. 

6 SEC. 2. FINALIZATION OF PROPOSED FINANCIAL HOLDING 

7 COMPANY RULE. 

8 (a) IN GENERAL.—The proposed financial holding 

9 company rule of the Board of Governors of the Federal 

10 Reserve System shall have the force and effect of law. 

11 (b) DEFINITION.—In this section, the term ‘‘pro12 posed financial holding company rule’’ means the proposed 

13 rule of the Board of Governors of the Federal Reserve Sys14 tem titled ‘‘Regulations Q and Y; Risk-Based Capital and 

15 Other Regulatory Requirements for Activities of Financial 

16 Holding Companies Related to Physical Commodities and 

17 Risk-Based Capital Requirements for Merchant Banking 

18 Investments’’ (81 Fed. Reg. 67220; published September 

19 30, 2016). 

Æ 


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