IIB 

115TH CONGRESS 

2D SESSION H. R. 4790 

IN THE SENATE OF THE UNITED STATES 

APRIL 16, 2018 

Received; read twice and referred to the Committee on Banking, Housing, and 

Urban Affairs 

AN ACT 

To amend the Volcker rule to give the Board of Governors 

of the Federal Reserve System sole rulemaking authority, 

to exclude community banks from the requirements of 

the Volcker rule, 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, 


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1 SECTION 1. SHORT TITLE. 

2 This Act may be cited as the ‘‘Volcker Rule Regu3 latory Harmonization Act’’. 

4 SEC. 2. RULEMAKING AUTHORITY UNDER THE VOLCKER 

5 RULE. 

6 (a) IN GENERAL.—Paragraph (2) of section 13(b) of 

7 the Bank Holding Company Act of 1956 (12 U.S.C. 

8 1851(b)(2)) is amended to read as follows: 

9 ‘‘(2) RULEMAKING.— 

10 ‘‘(A) IN GENERAL.—The Board may, as 

11 appropriate, consult with the Comptroller of the 

12 Currency, the Federal Deposit Insurance Cor13 poration, the Securities and Exchange Commis14 sion, or the Commodity Futures Trading Com15 mission to adopt rules or guidance to carry out 

16 this section, as provided in subparagraph (B). 

17 ‘‘(B) RULEMAKING REQUIREMENTS.—In 

18 adopting a rule or guidance under subpara19 graph (A), the Board— 

20 ‘‘(i) shall consider the findings of the 

21 report required in paragraph (1) and, as 

22 appropriate, subsequent reports; 

23 ‘‘(ii) shall assure, to the extent pos24 sible, that such rule or guidance provide 

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1 tion to avoid providing advantages or im2 posing disadvantages to the companies af3 fected by this subsection and to protect the 

4 safety and soundness of banking entities 

5 and nonbank financial companies super6 vised by the Board; and 

7 ‘‘(iii) shall include requirements to en8 sure compliance with this section, such as 

9 requirements regarding internal controls 

10 and recordkeeping. 

11 ‘‘(C) AUTHORITY.—The Board shall have 

12 sole authority to issue and amend rules under 

13 this section after the date of the enactment of 

14 this paragraph. 

15 ‘‘(D) CONFORMING AUTHORITY.— 

16 ‘‘(i) CONTINUITY OF REGULATIONS.— 

17 Any rules or guidance issued under this 

18 section prior to the date of enactment of 

19 this paragraph shall continue in effect 

20 until the Board issues a successor rule or 

21 guidance, or amends such rule or guidance, 

22 pursuant to subparagraph (C). 

23 ‘‘(ii) APPLICABLE GUIDANCE.—In per24 forming examinations or other supervisory 

25 duties, the appropriate Federal banking 


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1 agencies, the Securities and Exchange 

2 Commission, and the Commodity Futures 

3 Trading Commission, as appropriate, shall 

4 update any applicable policies and proce5 dures to ensure that such policies and pro6 cedures are consistent (to the extent prac7 ticable) with any rules or guidance issued 

8 pursuant to subparagraph (C).’’. 

9 (b) CONFORMING AMENDMENTS.—Section 13 of the 

10 Bank Holding Company Act of 1956 (12 U.S.C. 1851) 

11 is amended— 

12 (1) by striking ‘‘the appropriate Federal bank13 ing agencies, the Securities and Exchange Commis14 sion, and the Commodity Futures Trading Commis15 sion,’’ each place it appears and inserting ‘‘the 

16 Board’’; 

17 (2) by striking ‘‘appropriate Federal banking 

18 agencies, the Securities and Exchange Commission, 

19 and the Commodity Futures Trading Commission’’ 

20 each place it appears and inserting ‘‘Board’’; 

21 (3) in subsection (c)(5), by striking ‘‘Notwith22 standing paragraph (2)’’ and all that follows 

23 through ‘‘provided in subsection (b)(2),’’ and insert24 ing ‘‘The Board shall have the authority’’; and 

25 (4) in subsection (d)(1)— 


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1 (A) in subparagraph (F)(ii)— 

2 (i) by striking ‘‘the appropriate Fed3 eral banking agencies’’ and inserting ‘‘the 

4 Board’’; and 

5 (ii) by striking ‘‘have not jointly’’ and 

6 inserting ‘‘has not’’; and 

7 (B) in subparagraph (G)(viii), by striking 

8 ‘‘appropriate Federal banking agencies, the Se9 curities and Exchange Commission, or the Com10 modity Futures Trading Commission,’’ and in11 serting ‘‘Board,’’. 

12 SEC. 3. ENFORCEMENT; ANTI-EVASION. 

13 (a) IN GENERAL.—Subsection (e) of section 13 of the 

14 Bank Holding Company Act of 1956 (12 U.S.C. 1851(e)) 

15 is amended to read as follows: 

16 ‘‘(e) ENFORCEMENT; ANTI-EVASION.— 

17 ‘‘(1) APPROPRIATE FEDERAL BANKING AGEN18 CY.—Notwithstanding any other provision of law ex19 cept for any rules or guidance issued under sub20 section (b)(2), whenever the appropriate Federal 

21 banking agency has reasonable cause to believe that 

22 a banking entity or nonbank financial company su23 pervised by the Board has made an investment or 

24 engaged in an activity in a manner that either vio25 lates the restrictions under this section, or that 


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1 functions as an evasion of the requirements of this 

2 section (including through an abuse of any permitted 

3 activity), such appropriate Federal banking agency 

4 shall order, after due notice and opportunity for 

5 hearing, the banking entity or nonbank financial 

6 company supervised by the Board to terminate the 

7 activity and, as relevant, dispose of the investment. 

8 ‘‘(2) SECURITIES AND EXCHANGE COMMISSION

9 AND COMMODITY FUTURES TRADING COMMISSION.— 

10 ‘‘(A) IN GENERAL.—Notwithstanding any 

11 other provision of law except for any rules or 

12 guidance issued under subsection (b)(2), when13 ever the Securities and Exchange Commission 

14 or the Commodity Futures Trading Commis15 sion, as appropriate, has reasonable cause to 

16 believe that a covered nonbank financial com17 pany for which the respective agency is the pri18 mary Federal regulator has made an investment 

19 or engaged in an activity in a manner that ei20 ther violates the restrictions under this section, 

21 or that functions as an evasion of the require22 ments of this section (including through an 

23 abuse of any permitted activity), the Securities 

24 and Exchange Commission or the Commodity 

25 Futures Trading Commission, as appropriate, 


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1 shall order, after due notice and opportunity for 

2 hearing, the covered nonbank financial company 

3 to terminate the activity and, as relevant, dis4 pose of the investment. 

5 ‘‘(B) COVERED NONBANK FINANCIAL COM6 PANY DEFINED.—In this paragraph, the term 

7 ‘covered nonbank financial company’ means a 

8 nonbank financial company (as defined in sec9 tion 102 of the Financial Stability Act of 2010) 

10 supervised by the Securities and Exchange 

11 Commission or the Commodity Futures Trading 

12 Commission, as appropriate.’’. 

13 (b) RULE OF CONSTRUCTION.—Nothing in this sec14 tion shall be construed to abrogate, reduce, or eliminate 

15 the backup authority of the Federal Deposit Insurance 

16 Corporation authority under the Dodd-Frank Wall Street 

17 Reform and Consumer Protection Act (12 U.S.C. 5301 

18 et seq.), the Federal Deposit Insurance Act (12 U.S.C. 

19 1811), or Federal Deposit Insurance Corporation Im20 provement Act of 1991. 

21 SEC. 4. EXCLUSION OF COMMUNITY BANKS FROM VOLCKER 

22 RULE. 

23 Section 13(h)(1) of the Bank Holding Company Act 

24 of 1956 (12 U.S.C. 1851(h)(1)) is amended— 


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1 (1) in subparagraph (D), by redesignating 

2 clauses (i) and (ii) as subclauses (I) and (II), respec3 tively, and adjusting the margins accordingly; 

4 (2) by redesignating subparagraphs (A), (B), 

5 (C), and (D) as clauses (i), (ii), (iii), and (iv), re6 spectively, and adjusting the margins accordingly; 

7 (3) in the matter preceding clause (i), as so re8 designated, in the second sentence, by striking ‘‘in9 stitution that functions solely in a trust or fiduciary 

10 capacity, if—’’ and inserting the following: ‘‘institu11 tion— 

12 ‘‘(A) that functions solely in a trust or fi13 duciary capacity, if—’’; 

14 (4) in clause (iv)(II), as so redesignated, by 

15 striking the period at the end and inserting ‘‘; or’’; 

16 and 

17 (5) by adding at the end the following: 

18 ‘‘(B) that does not have and is not con19 trolled by a company that has— 

20 ‘‘(i) more than $10,000,000,000 in 

21 total consolidated assets; and 

22 ‘‘(ii) total trading assets and trading 

23 liabilities, as reported on the most recent 

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1 stitution, that are more than 5 percent of 

2 total consolidated assets.’’. 

Passed the House of Representatives April 13, 2018. 

Attest: KAREN L. HAAS, 

Clerk. 


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