I 

115TH CONGRESS 

1ST SESSION H. R. 493 

To amend the Dodd-Frank Wall Street Reform and Consumer Protection 

Act to require certain systemically important entities to account for 

the financial benefit they receive as a result of the expectations on 

the part of shareholders, creditors, and counterparties of such entities 

that the Government will shield them from losses in the event of failure, 

and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

JANUARY 12, 2017 

Mr. CAPUANO (for himself, Mr. LYNCH, and Mr. ELLISON) introduced the 

following bill; which was referred to the Committee on Financial Services 

A BILL 

To amend the Dodd-Frank Wall Street Reform and Consumer Protection Act to require certain systemically important entities to account for the financial benefit they 

receive as a result of the expectations on the part of 

shareholders, creditors, and counterparties of such entities that the Government will shield them from losses 

in the event of failure, 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 ‘‘Subsidy Reserve Act 

3 of 2017’’. 

4 SEC. 2. SUBSIDY RESERVE. 

5 Section 165 of the Dodd-Frank Wall Street Reform 

6 and Consumer Protection Act (12 U.S.C. 5365) is amend7 ed by adding at the end the following: 

8 ‘‘(l) SUBSIDY RESERVE.— 

9 ‘‘(1) IN GENERAL.—Each nonbank financial 

10 company supervised by the Board of Governors and 

11 each bank holding company with total consolidated 

12 assets equal to or greater than $500,000,000,000 

13 shall establish and maintain a capital account called 

14 the ‘Subsidy Reserve’. 

15 ‘‘(2) COMPUTATION OF BENEFIT.—The Board 

16 of Governors shall, in consultation with the Council 

17 and the Office of Financial Research, and after no18 tice and opportunity for a hearing, establish a for19 mula for determining the financial benefit received 

20 by a company described under paragraph (1) as a 

21 result of the expectations on the part of share22 holders, creditors, and counterparties of such com23 pany that the Government will shield such share24 holders, creditors, and counterparties from losses in 

25 the event of the failure of such company. 

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1 ‘‘(3) SUBSIDY RESERVE AMOUNT.—The Board 

2 of Governors shall require each company described 

3 under paragraph (1) to annually apply the formula 

4 established under paragraph (2) to its annual finan5 cial statement and maintain the resulting amount in 

6 the company’s Subsidy Reserve, in addition to any 

7 amounts so maintained from previous years. 

8 ‘‘(4) USE OF SUBSIDY RESERVE AMOUNTS.— 

9 The amount of funds in the Subsidy Reserve may 

10 only be decreased if a company makes a sale of as11 sets, spins off a subsidiary, or makes a similar dives12 titure, in which case the Subsidy Reserve may only 

13 be decreased in an amount, as determined by the 

14 Board of Governors, that reflects the amount of 

15 such sale, spin off, or similar divestiture, either on 

16 a pro rata basis or according to the risk weighting 

17 of the property sold, spun off, or divested. 

18 ‘‘(5) TREATMENT OF SUBSIDY RESERVE

19 AMOUNTS.—Amounts in the Subsidy Reserve may be 

20 taken into account when determining the capital of 

21 a company for purposes of meeting any regulatory 

22 capital requirements. 

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1 ‘‘(6) RULEMAKING.—The Board of Governors 

2 may issue such regulations and orders as it con3 siders necessary to carry out this subsection.’’. 

Æ 

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