I 

114TH CONGRESS 

1ST SESSION H. R. 3054 

To reduce risks to the financial system by limiting banks’ ability to engage 

in certain risky activities and limiting conflicts of interest, to reinstate 

certain Glass-Steagall Act protections that were repealed by the GrammLeach-Bliley Act, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

JULY 14, 2015 

Mr. CAPUANO (for himself, Mr. JONES, Ms. CLARK of Massachusetts, and Mr. 

YOHO) introduced the following bill; which was referred to the Committee 

on Financial Services, and in addition to the Committee on the Judiciary, 

for a period to be subsequently determined by the Speaker, in each case 

for consideration of such provisions as fall within the jurisdiction of the 

committee concerned 

A BILL 

To reduce risks to the financial system by limiting banks’ 

ability to engage in certain risky activities and limiting 

conflicts of interest, to reinstate certain Glass-Steagall 

Act protections that were repealed by the Gramm-LeachBliley Act, and for other purposes. 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. SHORT TITLE. 

4 This Act may be cited as the ‘‘21st Century Glass5 Steagall Act of 2015’’. 


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1 SEC. 2. FINDINGS AND PURPOSE. 

2 (a) FINDINGS.—Congress finds that— 

3 (1) in response to a financial crisis and the en4 suing Great Depression, Congress enacted the Bank5 ing Act of 1933, known as the ‘‘Glass-Steagall Act’’, 

6 to prohibit commercial banks from offering invest7 ment banking and insurance services; 

8 (2) a series of deregulatory decisions by the 

9 Board of Governors of the Federal Reserve System 

10 and the Office of the Comptroller of the Currency, 

11 in addition to decisions by Federal courts, permitted 

12 commercial banks to engage in an increasing num13 ber of risky financial activities that had previously 

14 been restricted under the Glass-Steagall Act, and 

15 also vastly expanded the meaning of the ‘‘business of 

16 banking’’ and ‘‘closely related activities’’ in banking 

17 law; 

18 (3) in 1999, Congress enacted the ‘‘Gramm19 Leach-Bliley Act’’, which repealed the Glass-Steagall 

20 Act separation between commercial and investment 

21 banking and allowed for complex cross-subsidies and 

22 interconnections between commercial and investment 

23 banks; 

24 (4) former Kansas City Federal Reserve Presi25 dent Thomas Hoenig observed that ‘‘with the elimi26 nation of Glass-Steagall, the largest institutions with 


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1 the greatest ability to leverage their balance sheets 

2 increased their risk profile by getting into trading, 

3 market making, and hedge fund activities, adding 

4 ever greater complexity to their balance sheets.’’; 

5 (5) the Financial Crisis Inquiry Report issued 

6 by the Financial Crisis Inquiry Commission con7 cluded that, in the years between the passage of 

8 Gramm-Leach Bliley and the global financial crisis, 

9 ‘‘regulation and supervision of traditional banking 

10 had been weakened significantly, allowing commer11 cial banks and thrifts to operate with fewer con12 straints and to engage in a wider range of financial 

13 activities, including activities in the shadow banking 

14 system.’’ The Commission also concluded that 

15 ‘‘[t]his deregulation made the financial system espe16 cially vulnerable to the financial crisis and exacer17 bated its effects.’’; 

18 (6) a report by the Financial Stability Over19 sight Council pursuant to section 123 of the Dodd20 Frank Wall Street Reform and Consumer Protection 

21 Act states that increased complexity and diversity of 

22 financial activities at financial institutions may 

23 ‘‘shift institutions towards more risk-taking, increase 

24 the level of interconnectedness among financial 

25 firms, and therefore may increase systemic default 


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1 risk. These potential costs may be exacerbated in 

2 cases where the market perceives diverse and com3 plex financial institutions as ‘too big to fail,’ which 

4 may lead to excessive risk taking and concerns about 

5 moral hazard.’’; 

6 (7) the Senate Permanent Subcommittee on In7 vestigations report, ‘‘Wall Street and the Financial 

8 Crisis: Anatomy of a Financial Collapse’’, states that 

9 repeal of Glass-Steagall ‘‘made it more difficult for 

10 regulators to distinguish between activities intended 

11 to benefit customers versus the financial institution 

12 itself. The expanded set of financial services invest13 ment banks were allowed to offer also contributed to 

14 the multiple and significant conflicts of interest that 

15 arose between some investment banks and their cli16 ents during the financial crisis.’’; 

17 (8) the Senate Permanent Subcommittee on In18 vestigations report, ‘‘JPMorgan Chase Whale 

19 Trades: A Case History of Derivatives Risks and 

20 Abuses’’, describes how traders at JPMorgan Chase 

21 made risky bets using excess deposits that were 

22 partly insured by the Federal Government; 

23 (9) in Europe, the Vickers Independent Com24 mission on Banking (for the United Kingdom) and 

25 the Liikanen Report (for the Euro area) have both 


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1 found that there is no inherent reason to bundle ‘‘re2 tail banking’’ with ‘‘investment banking’’ or other 

3 forms of relatively high risk securities trading, and 

4 European countries are set on a path of separating 

5 various activities that are currently bundled together 

6 in the business of banking; 

7 (10) private sector actors prefer having access 

8 to underpriced public sector insurance, whether ex9 plicit (for insured deposits) or implicit (for ‘‘too big 

10 to fail’’ financial institutions), to subsidize dan11 gerous levels of risk-taking, which, from a broader 

12 social perspective, is not an advantageous arrange13 ment; and 

14 (11) the financial crisis, and the regulatory re15 sponse to the crisis, has led to more mergers be16 tween financial institutions, creating greater finan17 cial sector consolidation and increasing the domi18 nance of a few large, complex financial institutions 

19 that are generally considered to be ‘‘too big to fail’’, 

20 and therefore are perceived by the markets as hav21 ing an implicit guarantee from the Federal Govern22 ment to bail them out in the event of their failure. 

23 (b) PURPOSES.—The purposes of this Act are— 


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1 (1) to reduce risks to the financial system by 

2 limiting the ability of banks to engage in activities 

3 other than socially valuable core banking activities; 

4 (2) to protect taxpayers and reduce moral haz5 ard by removing explicit and implicit government 

6 guarantees for high-risk activities outside of the core 

7 business of banking; and 

8 (3) to eliminate any conflict of interest that 

9 arises from banks engaging in activities from which 

10 their profits are earned at the expense of their cus11 tomers or clients. 

12 SEC. 3. SAFE AND SOUND BANKING. 

13 (a) INSURED DEPOSITORY INSTITUTIONS.—Section 

14 18(s) of the Federal Deposit Insurance Act (12 U.S.C. 

15 1828(s)) is amended by adding at the end the following: 

16 ‘‘(6) LIMITATIONS ON BANKING AFFILI17 ATIONS.— 

18 ‘‘(A) PROHIBITION ON AFFILIATIONS WITH

19 NONDEPOSITORY ENTITIES.—An insured depos20 itory institution may not— 

21 ‘‘(i) be or become an affiliate of any 

22 insurance company, securities entity, or 

23 swaps entity; 


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1 ‘‘(ii) be in common ownership or con2 trol with any insurance company, securities 

3 entity, or swaps entity; or 

4 ‘‘(iii) engage in any activity that 

5 would cause the insured depository institu6 tion to qualify as an insurance company, 

7 securities entity, or swaps entity. 

8 ‘‘(B) INDIVIDUALS ELIGIBLE TO SERVE ON

9 BOARDS OF DEPOSITORY INSTITUTIONS.— 

10 ‘‘(i) IN GENERAL.—An individual who 

11 is an officer, director, partner, or employee 

12 of any securities entity, insurance com13 pany, or swaps entity may not serve at the 

14 same time as an officer, director, employee, 

15 or other institution-affiliated party of any 

16 insured depository institution. 

17 ‘‘(ii) EXCEPTION.—Clause (i) shall 

18 not apply with respect to service by any in19 dividual which is otherwise prohibited 

20 under clause (i), if the appropriate Federal 

21 banking agency determines, by regulation 

22 with respect to a limited number of cases, 

23 that service by such an individual as an of24 ficer, director, employee, or other institu25 tion-affiliated party of an insured deposiVerDate Sep 11 2014 05:47 Jul 16, 2015 Jkt 049200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H3054.IH H3054

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1 tory institution would not unduly influ2 ence— 

3 ‘‘(I) the investment policies of 

4 the depository institution; or 

5 ‘‘(II) the advice that the institu6 tion provides to customers. 

7 ‘‘(iii) TERMINATION OF SERVICE.— 

8 Subject to a determination under clause 

9 (i), any individual described in clause (i) 

10 who, as of the date of enactment of the 

11 21st Century Glass-Steagall Act of 2015, 

12 is serving as an officer, director, employee, 

13 or other institution-affiliated party of any 

14 insured depository institution shall termi15 nate such service as soon as is practicable 

16 after such date of enactment, and in no 

17 event, later than the end of the 60-day pe18 riod beginning on that date of enactment. 

19 ‘‘(C) TERMINATION OF EXISTING AFFILI20 ATIONS AND ACTIVITIES.— 

21 ‘‘(i) ORDERLY TERMINATION OF EX22 ISTING AFFILIATIONS AND ACTIVITIES.— 

23 Any affiliation, common ownership or con24 trol, or activity of an insured depository in25 stitution with any securities entity, insurVerDate Sep 11 2014 05:47 Jul 16, 2015 Jkt 049200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H3054.IH H3054

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1 ance company, swaps entity, or any other 

2 person, as of the date of enactment of the 

3 21st Century Glass-Steagall Act of 2015, 

4 which is prohibited under subparagraph 

5 (A) shall be terminated as soon as is prac6 ticable, and in no event later than the end 

7 of the 5-year period beginning on that date 

8 of enactment. 

9 ‘‘(ii) EARLY TERMINATION.—The ap10 propriate Federal banking agency, at any 

11 time after opportunity for hearing, may 

12 order termination of an affiliation, common 

13 ownership or control, or activity prohibited 

14 by clause (i) before the end of the 5-year 

15 period described in clause (i), if the agency 

16 determines that such action— 

17 ‘‘(I) is necessary to prevent 

18 undue concentration of resources, de19 creased or unfair competition, con20 flicts of interest, or unsound banking 

21 practices; and 

22 ‘‘(II) is in the public interest. 

23 ‘‘(iii) EXTENSION.—Subject to a de24 termination under clause (ii), an appro25 priate Federal banking agency may extend 


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1 the 5-year period described in clause (i) as 

2 to any particular insured depository insti3 tution for not more than an additional 6 

4 months at a time, if— 

5 ‘‘(I) the agency certifies that 

6 such extension would promote the 

7 public interest and would not pose a 

8 significant threat to the stability of 

9 the banking system or financial mar10 kets in the United States; and 

11 ‘‘(II) such extension, in the ag12 gregate, does not exceed 1 year for 

13 any single insured depository institu14 tion. 

15 ‘‘(iv) REQUIREMENTS FOR ENTITIES

16 RECEIVING AN EXTENSION.—Upon receipt 

17 of an extension under clause (iii), the in18 sured depository institution shall notify 

19 shareholders of the insured depository in20 stitution and the general public that it has 

21 failed to comply with the requirements of 

22 clause (i). 

23 ‘‘(D) DEFINITIONS.—For purposes of this 

24 paragraph, the following definitions shall apply: 


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1 ‘‘(i) INSURANCE COMPANY.—The term 

2 ‘insurance company’ has the meaning given 

3 the term in section 2(q) of the Bank Hold4 ing Company Act of 1956 (12 U.S.C. 

5 1841(q)). 

6 ‘‘(ii) INSURED DEPOSITORY INSTITU7 TION.—The term ‘insured depository insti8 tution’— 

9 ‘‘(I) has the meaning given the 

10 term in section 3(c)(2); and 

11 ‘‘(II) does not include a savings 

12 association controlled by a savings 

13 and loan holding company, as de14 scribed in section 10(c)(9)(C) of the 

15 Home Owners’ Loan Act (12 U.S.C. 

16 1467a(c)(9)(C)). 

17 ‘‘(iii) SECURITIES ENTITY.—Except as 

18 provided in clause (iii), the term ‘securities 

19 entity’— 

20 ‘‘(I) includes any entity engaged 

21 in— 

22 ‘‘(aa) the issue, flotation, 

23 underwriting, public sale, or dis24 tribution of stocks, bonds, deben25 tures, notes, or other securities; 


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1 ‘‘(bb) market making; 

2 ‘‘(cc) activities of a broker 

3 or dealer, as those terms are de4 fined in section 3(a) of the Secu5 rities Exchange Act of 1934 (15 

6 U.S.C. 78c(a)); 

7 ‘‘(dd) activities of a futures 

8 commission merchant; 

9 ‘‘(ee) activities of an invest10 ment adviser or investment com11 pany, as those terms are defined 

12 in section 202(a) of the Invest13 ment Advisers Act of 1940 (15 

14 U.S.C. 80b–2(a)) and section 

15 3(a)(1) of the Investment Com16 pany Act of 1940 (15 U.S.C. 

17 80a-3(a)(1)), respectively; or 

18 ‘‘(ff) hedge fund or private 

19 equity investments in the securi20 ties of either privately or publicly 

21 held companies; and 

22 ‘‘(II) does not include a bank 

23 that, pursuant to its authorized trust 

24 and fiduciary activities— 


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1 ‘‘(aa) purchases and sells in2 vestments for the account of its 

3 customers; or 

4 ‘‘(bb) provides financial or 

5 investment advice to its cus6 tomers. 

7 ‘‘(iv) SWAPS ENTITY.—The term 

8 ‘swaps entity’ means any swap dealer, se9 curity-based swap dealer, major swap par10 ticipant, or major security-based swap par11 ticipant, that is registered under— 

12 ‘‘(I) the Commodity Exchange 

13 Act (7 U.S.C. 1 et seq.); or 

14 ‘‘(II) the Securities Exchange 

15 Act of 1934 (15 U.S.C. 78a et seq.).’’. 

16 (b) LIMITATION ON BANKING ACTIVITIES.—Section 

17 21 of the Banking Act of 1933 (12 U.S.C. 378) is amend18 ed by adding at the end the following: 

19 ‘‘(c) BUSINESS OF RECEIVING DEPOSITS.—For pur20 poses of this section, the term ‘business of receiving depos21 its’ includes the establishment and maintenance of any 

22 transaction account (as defined in section 19(b)(1)(C) of 

23 the Federal Reserve Act (12 U.S.C. 461(b)(1)(C)).’’. 

24 (c) PERMITTED ACTIVITIES OF NATIONAL BANKS.— 

25 The paragraph designated as ‘‘Seventh’’ of section 24 of 


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1 the Revised Statutes (12 U.S.C. 24) is amended to read 

2 as follows: 

3 ‘‘Seventh. (A) To exercise by its board of direc4 tors or duly authorized officers or agents, subject to 

5 law, all such powers as are necessary to carry on the 

6 business of banking. 

7 ‘‘(B) As used in this paragraph, the term ‘busi8 ness of banking’ shall be limited to the following 

9 core banking services: 

10 ‘‘(i) RECEIVING DEPOSITS.—A national 

11 banking association may engage in the business 

12 of receiving deposits. 

13 ‘‘(ii) EXTENSIONS OF CREDIT.—A national 

14 banking association may— 

15 ‘‘(I) extend credit to individuals, busi16 nesses, not for profit organizations, and 

17 other entities; 

18 ‘‘(II) discount and negotiate promis19 sory notes, drafts, bills of exchange, and 

20 other evidences of debt; and 

21 ‘‘(III) loan money on personal secu22 rity. 

23 ‘‘(iii) PAYMENT SYSTEMS.—A national 

24 banking association may participate in payment 

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1 dures, and interbank funds transfer systems 

2 that ensure the circulation of money. 

3 ‘‘(iv) COIN AND BULLION.—A national 

4 banking association may buy, sell, and exchange 

5 coin and bullion. 

6 ‘‘(v) INVESTMENTS IN SECURITIES.— 

7 ‘‘(I) IN GENERAL.—A national bank8 ing association may invest in investment 

9 securities, defined as marketable obliga10 tions evidencing indebtedness of any per11 son, copartnership, association, or corpora12 tion in the form of bonds, notes, or deben13 tures (commonly known as ‘investment se14 curities’), obligations of the Federal Gov15 ernment, or any State or subdivision there16 of, and includes the definition of ‘invest17 ment securities’, as may be jointly pre18 scribed by regulation by— 

19 ‘‘(aa) the Comptroller of the Cur20 rency; 

21 ‘‘(bb) the Federal Deposit Insur22 ance Corporation; and 

23 ‘‘(cc) the Board of Governors of 

24 the Federal Reserve System. 


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1 ‘‘(II) LIMITATIONS.—The business of 

2 dealing in securities and stock by the asso3 ciation shall be limited to— 

4 ‘‘(aa) purchasing and selling such 

5 securities and stock without recourse, 

6 solely upon the order, and for the ac7 count of, customers, and in no case 

8 for its own account, and the associa9 tion shall not underwrite any issue of 

10 securities or stock; and 

11 ‘‘(bb) purchasing for its own ac12 count investment securities under 

13 such limitations and restrictions as 

14 the Comptroller of the Currency, the 

15 Federal Deposit Insurance Corpora16 tion, and the Board of Governors of 

17 the Federal Reserve System may 

18 jointly prescribe, by regulation. 

19 ‘‘(III) PROHIBITION ON AMOUNT OF

20 INVESTMENT.—In no event shall the total 

21 amount of the investment securities of any 

22 single obligor or maker, held by the asso23 ciation for its own account, exceed 10 per24 cent of its capital stock actually paid in 

25 and unimpaired and 10 percent of its 


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1 unimpaired surplus fund, except that such 

2 limitation shall not require any association 

3 to dispose of any securities lawfully held by 

4 it on August 23, 1935. 

5 ‘‘(C) PROHIBITION AGAINST TRANSACTIONS IN6 VOLVING STRUCTURED OR SYNTHETIC PRODUCTS.— 

7 A national banking association may not— 

8 ‘‘(i) invest in a structured or synthetic 

9 product, a financial instrument in which a re10 turn is calculated based on the value of, or by 

11 reference to the performance of, a security, 

12 commodity, swap, other asset, or an entity, or 

13 any index or basket composed of securities, 

14 commodities, swaps, other assets, or entities, 

15 other than customarily determined interest 

16 rates; or 

17 ‘‘(ii) otherwise engage in the business of 

18 receiving deposits or extending credit for trans19 actions involving structured or synthetic prod20 ucts.’’. 

21 (d) PERMITTED ACTIVITIES OF FEDERAL SAVINGS

22 ASSOCIATIONS.—Section 5(c)(1) of the Home Owners’ 

23 Loan Act (12 U.S.C. 1464(c)(1)) is amended— 

24 (1) by striking subparagraph (Q); and 


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1 (2) by redesignating subparagraphs (R) 

2 through (U) as subparagraphs (Q) through (T), re3 spectively. 

4 (e) CLOSELY RELATED ACTIVITIES.—Section 4(c) of 

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

6 1843(c)) is amended— 

7 (1) in paragraph (8), by striking ‘‘had been de8 termined’’ and all that follows through the end and 

9 inserting the following: ‘‘are so closely related to 

10 banking so as to be a proper incident thereto, as 

11 provided under this paragraph or any rule or regula12 tion issued by the Board under this paragraph, pro13 vided that the following shall not be considered 

14 closely related for purposes of this paragraph: 

15 ‘‘(A) Serving as an investment adviser (as 

16 defined in section 2(a)(20) of the Investment 

17 Company Act of 1940 (15 U.S.C. 80a– 

18 2(a)(20))) to an investment company registered 

19 under that Act, including sponsoring, orga20 nizing, and managing a closed-end investment 

21 company. 

22 ‘‘(B) Agency transactional services for cus23 tomer investments, except that this subpara24 graph may not be construed as prohibiting pur25 chases and sales of investments for the account 


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1 of customers conducted by a bank (or sub2 sidiary thereof) pursuant to the bank’s trust 

3 and fiduciary powers. 

4 ‘‘(C) Investment transactions as principal, 

5 except for activities specifically allowed by para6 graph (14). 

7 ‘‘(D) Management consulting and coun8 seling activities.’’; 

9 (2) in paragraph (13), by striking ‘‘or’’ at the 

10 end; 

11 (3) by redesignating paragraph (14) as para12 graph (15); and 

13 (4) by inserting after paragraph (13) the fol14 lowing: 

15 ‘‘(14) purchasing, as an end user, any swap, to 

16 the extent that— 

17 ‘‘(A) the purchase of any such swap occurs 

18 contemporaneously with the underlying hedged 

19 item or hedged transaction; 

20 ‘‘(B) there is formal documentation identi21 fying the hedging relationship with particularity 

22 at the inception of the hedge; and 

23 ‘‘(C) the swap is being used to hedge 

24 against exposure to— 


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1 ‘‘(i) changes in the value of an indi2 vidual recognized asset or liability or an 

3 identified portion thereof that is attrib4 utable to a particular risk; 

5 ‘‘(ii) changes in interest rates; or 

6 ‘‘(iii) changes in the value of currency; 

7 or’’. 

8 (f) PROHIBITED ACTIVITIES.—Section 4(a) of the 

9 Bank Holding Company Act of 1956 (12 U.S.C. 1843(a)) 

10 is amended— 

11 (1) in paragraph (1), by striking ‘‘or’’ at the 

12 end and inserting a semicolon; 

13 (2) in paragraph (2), by striking the period at 

14 the end and inserting ‘‘; or’’; and 

15 (3) by inserting before the undesignated matter 

16 following paragraph (2) the following: 

17 ‘‘(3) with the exception of the activities per18 mitted under subsection (c), engage in the business 

19 of a ‘securities entity’ or a ‘swaps entity’, as those 

20 terms are defined in section 18(s)(6)(D) of the Fed21 eral Deposit Insurance Act (12 U.S.C. 

22 1828(s)(6)(D)), including dealing or making mar23 kets in securities, repurchase agreements, exchange 

24 traded and over-the-counter swaps, as defined by the 

25 Commodity Futures Trading Commission and the 


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1 Securities and Exchange Commission, or structured 

2 or synthetic products, as defined in the paragraph 

3 designated as ‘Seventh’ of section 24 of the Revised 

4 Statutes (12 U.S.C. 24), or any other over-the5 counter securities, swaps, contracts, or any other 

6 agreement that derives its value from, or takes on 

7 the form of, such securities, derivatives, or contracts; 

8 ‘‘(4) engage in proprietary trading, as provided 

9 by section 13, or any rule or regulation under that 

10 section; 

11 ‘‘(5) own, sponsor, or invest in a hedge fund, or 

12 private equity fund, or any other fund, as provided 

13 by section 13, or any rule or regulation under that 

14 section, or any other fund which exhibits the charac15 teristics of a fund that takes on proprietary trading 

16 activities or positions; 

17 ‘‘(6) hold ineligible securities or derivatives; 

18 ‘‘(7) engage in market-making; or 

19 ‘‘(8) engage in prime brokerage activities.’’. 

20 (g) ANTI-EVASION.— 

21 (1) IN GENERAL.—Any attempt to structure 

22 any contract, investment, instrument, or product in 

23 such a manner that the purpose or effect of such 

24 contract, investment, instrument, or product is to 

25 evade or attempt to evade the prohibitions described 


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1 in section 18(s)(6) of the Federal Deposit Insurance 

2 Act (12 U.S.C. 1828(s)(6)), section 21(c) of the 

3 Banking Act of 1933 (12 U.S.C. 378(c)), the para4 graph designated as ‘‘Seventh’’ of section 24 of the 

5 Revised Statutes, section 5(c)(1) of the Home Own6 ers’ Loan Act (12 U.S.C. 1464(c)(1)), or section 

7 4(a) of the Bank Holding Company Act of 1956 (12 

8 U.S.C. 1843(a)), as added or amended by this sec9 tion, shall be considered a violation of the Federal 

10 Deposit Insurance Act (12 U.S.C. 1811 et seq.), the 

11 Banking Act of 1933 (Public Law 73–66; 48 Stat. 

12 162), section 24 of the Revised Statutes (12 U.S.C. 

13 24), the Home Owners’ Loan Act (12 U.S.C. 1461 

14 et seq.), and the Bank Holding Company Act of 

15 1956 (12 U.S.C. 1841 et seq.), respectively. 

16 (2) TERMINATION.— 

17 (A) IN GENERAL.—Notwithstanding any 

18 other provision of law, if a Federal agency has 

19 reasonable cause to believe that an insured de20 pository institution, securities entity, swaps en21 tity, insurance company, bank holding company, 

22 or other entity over which that agency has reg23 ulatory authority has made an investment or 

24 engaged in an activity in a manner that func25 tions as an evasion of the prohibitions described 


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1 in paragraph (1) (including through an abuse 

2 of any permitted activity) or otherwise violates 

3 such prohibitions, the agency shall— 

4 (i) order, after due notice and oppor5 tunity for hearing, the entity to terminate 

6 the activity and, as relevant, dispose of the 

7 investment; 

8 (ii) order, after the procedures de9 scribed in clause (i), the entity to pay a 

10 penalty equal to 10 percent of the entity’s 

11 net profits, averaged over the previous 3 

12 years, into the United States Treasury; 

13 and 

14 (iii) initiate proceedings described in 

15 section 8(e) of the Federal Deposit Insur16 ance Act (12 U.S.C. 1818(e)) for individ17 uals involved in evading the prohibitions 

18 described in paragraph (1). 

19 (B) CONSTRUCTION.—Nothing in this 

20 paragraph shall be construed to limit the inher21 ent authority of any Federal agency or State 

22 regulatory authority to further restrict any in23 vestments or activities under otherwise applica24 ble provisions of law. 


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1 (3) REPORTING REQUIREMENT.—Not later than 

2 1 year after the date of enactment of this Act, and 

3 every year thereafter, each Federal agency having 

4 regulatory authority over any entity described in 

5 paragraph (2)(A) shall submit to the Committee on 

6 Banking, Housing, and Urban Affairs of the Senate 

7 and the Committee on Financial Services of the 

8 House of Representatives and make available to the 

9 public a report, which shall identify— 

10 (A) the number and character of any ac11 tivities that took place in the preceding year 

12 that function as an evasion of the prohibitions 

13 described in paragraph (1); 

14 (B) the names of the particular entities en15 gaged in those activities; and 

16 (C) the actions of the Federal agency 

17 taken under paragraph (2). 

18 (h) ATTESTATION.—Section 4 of the Bank Holding 

19 Company Act of 1956 (12 U.S.C. 1843), as amended by 

20 section 4(a)(1) of this Act, is amended by adding at the 

21 end the following: 

22 ‘‘(k) ATTESTATION.—Executives of any bank holding 

23 company or its affiliate shall attest in writing, under pen24 alty of perjury, that the bank holding company or affiliate 

25 is not engaged in any activity that is prohibited under subVerDate Sep 11 2014 05:47 Jul 16, 2015 Jkt 049200 PO 00000 Frm 00024 Fmt 6652 Sfmt 6201 E:\BILLS\H3054.IH H3054

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1 section (a), except to the extent that such activity is per2 mitted under subsection (c).’’. 

3 SEC. 4. REPEAL OF GRAMM-LEACH-BLILEY ACT PROVI4 SIONS. 

5 (a) TERMINATION OF FINANCIAL HOLDING COM6 PANY DESIGNATION.— 

7 (1) IN GENERAL.—Section 4 of the Bank Hold8 ing Company Act of 1956 (12 U.S.C. 1843) is 

9 amended by striking subsections (k), (l), (m), (n), 

10 and (o). 

11 (2) TRANSITION.— 

12 (A) ORDERLY TERMINATION OF EXISTING

13 AFFILIATION.—In the case of a bank holding 

14 company which, pursuant to the amendments 

15 made by paragraph (1), is no longer authorized 

16 to control or be affiliated with any entity that 

17 was permissible for a financial holding company 

18 on the day before the date of enactment of this 

19 Act, any affiliation, ownership or control, or ac20 tivity by the bank holding company which is not 

21 permitted for a bank holding company shall be 

22 terminated as soon as is practicable, and in no 

23 event later than the end of the 5-year period 

24 beginning on the date of enactment of this Act. 


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1 (B) EARLY TERMINATION.—The Board of 

2 Governors of the Federal Reserve System (in 

3 this section referred to as the ‘‘Board’’), after 

4 opportunity for hearing, at any time, may ter5 minate an affiliation prohibited by subpara6 graph (A) before the end of the 5-year period 

7 described in subparagraph (A), if the Board de8 termines that such action— 

9 (i) is necessary to prevent undue con10 centration of resources, decreased or unfair 

11 competition, conflicts of interest, or un12 sound banking practices; and 

13 (ii) is in the public interest. 

14 (C) EXTENSION.—Subject to a determina15 tion under subparagraph (B), the Board may 

16 extend the 5-year period described in subpara17 graph (A), as to any particular bank holding 

18 company, for not more than an additional 6 

19 months at a time, if— 

20 (i) the Board certifies that such ex21 tension would promote the public interest 

22 and would not pose a significant risk to 

23 the stability of the banking system or fi24 nancial markets of the United States; and 


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1 (ii) such extension, in the aggregate, 

2 does not exceed 1 year for any single bank 

3 holding company. 

4 (D) REQUIREMENTS FOR ENTITIES RE5 CEIVING AN EXTENSION.—Upon receipt of an 

6 extension under subparagraph (C), the bank 

7 holding company shall notify the shareholders 

8 of the bank holding company and the general 

9 public that it has failed to comply with the re10 quirements of subparagraph (A). 

11 (b) FINANCIAL SUBSIDIARIES OF NATIONAL BANKS

12 DISALLOWED.— 

13 (1) IN GENERAL.—Section 5136A of the Re14 vised Statutes (12 U.S.C. 24a) is repealed. 

15 (2) TRANSITION.— 

16 (A) ORDERLY TERMINATION OF EXISTING

17 AFFILIATION.—In the case of a national bank 

18 which, pursuant to the amendment made by 

19 paragraph (1), is no longer authorized to con20 trol or be affiliated with a financial subsidiary 

21 as of the date of enactment of this Act, such af22 filiation, ownership or control, or activity shall 

23 be terminated as soon as is practicable, and in 

24 no event later than the end of the 5-year period 

25 beginning on the date of enactment of this Act. 


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1 (B) EARLY TERMINATION.—The Comp2 troller of the Currency (in this section referred 

3 to as the ‘‘Comptroller’’), after opportunity for 

4 hearing, at any time, may terminate an affili5 ation prohibited by subparagraph (A) before the 

6 end of the 5-year period described in subpara7 graph (A), if the Comptroller determines, hav8 ing due regard for the purposes of this Act, 

9 that— 

10 (i) such action is necessary to prevent 

11 undue concentration of resources, de12 creased or unfair competition, conflicts of 

13 interest, or unsound banking practices; and 

14 (ii) is in the public interest. 

15 (C) EXTENSION.—Subject to a determina16 tion under subparagraph (B), the Comptroller 

17 may extend the 5-year period described in sub18 paragraph (A) as to any particular national 

19 bank for not more than an additional 6 months, 

20 if— 

21 (i) the Comptroller certifies that such 

22 extension would promote the public inter23 est and would not pose a significant risk to 

24 the stability of the banking system or fi25 nancial markets of the United States; and 


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1 (ii) such extension, in the aggregate, 

2 does not exceed 1 year for any single na3 tional bank. 

4 (D) REQUIREMENTS FOR ENTITIES RE5 CEIVING AN EXTENSION.—Upon receipt of an 

6 extension under subparagraph (C), the national 

7 bank shall notify its shareholders and the gen8 eral public that it has failed to comply with the 

9 requirements described in subparagraph (A). 

10 (3) CLERICAL AMENDMENT.—The table of sec11 tions for chapter one of title LXII of the Revised 

12 Statutes is amended by striking the item relating to 

13 section 5136A. 

14 (c) REPEAL OF PROVISION RELATING TO FOREIGN

15 BANKS FILING AS FINANCIAL HOLDING COMPANIES.— 

16 Section 8(c) of the International Banking Act of 1978 (12 

17 U.S.C. 3106(c)) is amended by striking paragraph (3). 

18 SEC. 5. REPEAL OF BANKRUPTCY PROVISIONS. 

19 Title 11, United States Code, is amended by repeal20 ing sections 555, 559, 560, and 562. 

21 SEC. 6. TECHNICAL AND CONFORMING AMENDMENTS. 

22 (a) BANK HOLDING COMPANY ACT OF 1956.—The 

23 Bank Holding Company Act of 1956 (12 U.S.C. 1841 et 

24 seq.) is amended— 

25 (1) in section 2 (12 U.S.C. 1841)— 


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1 (A) by striking subsection (p); and 

2 (B) by redesignating subsection (q) as sub3 section (p); and 

4 (2) in section 5 (12 U.S.C. 1844)— 

5 (A) in subsection (a), by striking the last 

6 sentence; 

7 (B) in subsection (c), by striking para8 graphs (3), (4), and (5); and 

9 (C) by striking subsection (g). 

10 (b) BANK HOLDING COMPANY ACT AMENDMENTS OF

11 1970.—Section 106(a) of the Bank Holding Company Act 

12 Amendments of 1970 (12 U.S.C. 1971(a)) is amended by 

13 striking the last sentence. 

14 (c) CLAYTON ACT.—Section 7A(c) of the Clayton Act 

15 (15 U.S.C. 18a(c)) is amended— 

16 (1) in paragraph (7), by striking ‘‘, except 

17 that’’ and all that follows and inserting a semicolon; 

18 and 

19 (2) in paragraph (8), by striking ‘‘, except 

20 that’’ and all that follows and inserting a semicolon. 

21 (d) COMMODITY EXCHANGE ACT.—Section 

22 2(h)(7)(C)(i)(VIII) of the Commodity Exchange Act (7 

23 U.S.C. 2(h)(7)(C)(i)(VIII)) is amended by striking ‘‘, as 

24 defined in section 4(k) of the Bank Holding Company Act 

25 of 1956’’. 


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1 (e) COMMUNITY REINVESTMENT ACT OF 1977.— 

2 Section 804 of the Community Reinvestment Act of 1977 

3 (12 U.S.C. 2903) is amended— 

4 (1) by striking subsection (c); and 

5 (2) by redesignating subsection (d) as sub6 section (c). 

7 (f) DODD-FRANK WALL STREET REFORM AND CON8 SUMER PROTECTION ACT.—Section 201(a)(11)(B) of the 

9 Dodd-Frank Wall Street Reform and Consumer Protec10 tion Act (12 U.S.C. 5381(a)(11)(B)) is amended by strik11 ing ‘‘for purposes of section 4(k) of the Bank Holding 

12 Company Act of 1956 (12 U.S.C. 1843(k))’’ each place 

13 that term appears. 

14 (g) FEDERAL DEPOSIT INSURANCE ACT.—The Fed15 eral Deposit Insurance Act (12 U.S.C. 1811 et seq.) is 

16 amended— 

17 (1) in section 8(b)(3) (12 U.S.C. 1818(b)(3)), 

18 by striking ‘‘section 50’’ and inserting ‘‘section 48’’; 

19 (2) in section 18(u)(1)(B) (12 U.S.C. 

20 1828(u)(1)(B)), by striking ‘‘or section 45 of this 

21 Act’’; 

22 (3) by striking sections 45 and 46 (12 U.S.C. 

23 1831v and 1831w); and 

24 (4) by redesignating sections 47 through 50 as 

25 sections 45 through 48, respectively. 


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1 (h) FEDERAL RESERVE ACT.—The Federal Reserve 

2 Act (12 U.S.C. 221 et seq.) is amended— 

3 (1) in the 20th undesignated paragraph of sec4 tion 9 (12 U.S.C. 335), by striking the last sentence; 

5 and 

6 (2) in section 23A (12 U.S.C. 371c)— 

7 (A) in subsection (b)(11), by striking ‘‘sub8 paragraph (H) or (I) of section 4(k)(4) of the 

9 Bank Holding Company Act of 1956 or’’; 

10 (B) by striking subsection (e); and 

11 (C) by redesignating subsection (f) as sub12 section (e). 

13 (i) FINANCIAL STABILITY ACT OF 2010.—The Fi14 nancial Stability Act of 2010 (12 U.S.C. 5301 et seq.) 

15 is amended— 

16 (1) in section 113(c)(5) (12 U.S.C. 5323(c)(5)), 

17 by striking ‘‘(as defined in section 4(k) of the Bank 

18 Holding Company Act of 1956)’’; 

19 (2) in section 163 (12 U.S.C. 5363)— 

20 (A) by striking subsection (b); and 

21 (B) in subsection (a), by striking ‘‘(a)’’ 

22 and all that follows through ‘‘For purposes’’ 

23 and inserting ‘‘For purposes’’; 

24 (3) in section 167(b) (12 U.S.C. 5367(b)), by 

25 striking ‘‘under section 4(k) of the Bank Holding 


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1 Company Act of 1956’’ each place that term ap2 pears; and 

3 (4) in section 171(b) (12 U.S.C. 5371(b))— 

4 (A) by striking paragraph (3); and 

5 (B) by redesignating paragraphs (4) 

6 through (7) as paragraphs (3) through (6), re7 spectively. 

8 (j) GRAMM-LEACH-BLILEY ACT.—The Gramm9 Leach-Bliley Act (Public Law 106–102; 113 Stat. 1338) 

10 is amended— 

11 (1) by striking section 115 (12 U.S.C. 1820a); 

12 (2) in section 505(c) (15 U.S.C. 6805(c))— 

13 (A) by striking ‘‘section 47(g)(2)(B)(iii) of 

14 the Federal Deposit Insurance Act’’ and insert15 ing ‘‘section 45(g)(2)(B)(iii) of the Federal De16 posit Insurance Act’’; and 

17 (B) by striking ‘‘section 47(a)’’ and insert18 ing ‘‘section 45(a)’’; and 

19 (3) in section 509(3)(A) (15 U.S.C. 

20 6809(3)(A)), by striking ‘‘as described in section 

21 4(k) of the Bank Holding Company Act of 1956’’. 

22 (k) HOME OWNERS’ LOAN ACT.—Section 10(c) of 

23 the Home Owners’ Loan Act (12 U.S.C. 1467a(c)) is 

24 amended— 


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1 (1) in paragraph (2), by striking subparagraph 

2 (H); and 

3 (2) in paragraph (9)(A), by striking ‘‘per4 mitted’’ and all that follows and inserting ‘‘per5 mitted under paragraph (1)(C) or (2) of this sub6 section.’’. 

7 (l) PAYMENT, CLEARING, AND SETTLEMENT SUPER8 VISION ACT OF 2010.—Section 803(5)(A) of the Payment, 

9 Clearing, and Settlement Supervision Act of 2010 (12 

10 U.S.C. 5462(5)(A)) is amended— 

11 (1) in clause (viii), by adding ‘‘and’’ at the end; 

12 (2) in clause (ix), by striking ‘‘; and’’ and in13 serting a period; and 

14 (3) by striking clause (x). 

15 (m) SECURITIES EXCHANGE ACT OF 1934.—The Se16 curities Exchange Act of 1934 (15 U.S.C. 78a et seq.) 

17 is amended— 

18 (1) in section 3(a)(4)(B)(vi) (15 U.S.C. 

19 78c(a)(4)(B)(vi)), by striking ‘‘other than’’ and all 

20 that follows through the period at the end and in21 serting ‘‘other than a registered broker or dealer.’’; 

22 and 

23 (2) in section 3C(g)(3)(A) (15 U.S.C. 78c– 

24 3(g)(3)(A))— 


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1 (A) in clause (vi), by adding ‘‘and’’ at the 

2 end; 

3 (B) in clause (vii), by striking the semi4 colon and inserting a period; and 

5 (C) by striking clause (viii). 

6 (n) TITLE 11.—Title 11, United States Code, is 

7 amended— 

8 (1) in section 101— 

9 (A) in paragraph (25)(E), by striking ‘‘, 

10 measured in accordance with section 562’’; 

11 (B) in paragraph (47)(A)(v), by striking ‘‘, 

12 measured in accordance with section 562 of this 

13 title’’; and 

14 (C) in paragraph (53B)(A)(vi), by striking 

15 ‘‘, measured in accordance with section 562’’; 

16 (2) in section 103(a), by striking ‘‘555 through 

17 557, and 559 through 562’’ and inserting ‘‘and 

18 555’’; 

19 (3) in section 362(b)— 

20 (A) in paragraph (6), by striking ‘‘555 or’’ 

21 each place that term appears; 

22 (B) in paragraph (7), by striking ‘‘(as de23 fined in section 559)’’ each place that term ap24 pears; 


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1 (C) in paragraph (17), by striking ‘‘(as de2 fined in section 560)’’ each place that term ap3 pears; and 

4 (D) in paragraph (27), by striking ‘‘(as de5 fined in section 555, 556, 559, or 560)’’ each 

6 place that term appears and inserting ‘‘(as de7 fined in section 556)’’; 

8 (4) in section 502(g)— 

9 (A) by striking ‘‘(1)’’ before ‘‘A claim’’; 

10 and 

11 (B) by striking paragraph (2); 

12 (5) in section 553— 

13 (A) in subsection (a)— 

14 (i) in paragraph (2)(B)(ii), by striking 

15 ‘‘555, 556, 559, 560, or 561’’ and insert16 ing ‘‘or 556’’; and 

17 (ii) in paragraph (3)(C), by striking 

18 ‘‘555, 556, 559, 560, or 561’’ and insert19 ing ‘‘or 556’’; and 

20 (B) in subsection (b)(1), by striking ‘‘555, 

21 556, 559, 560, 561’’ and inserting ‘‘556’’; 

22 (6) in section 561(b)(1), by striking ‘‘555, 556, 

23 559, or 560’’ and inserting ‘‘556’’; 

24 (7) in section 741(7)(A)(xi), by striking ‘‘, 

25 measured in accordance with section 562’’; 


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1 (8) in section 761(4)(J), by striking ‘‘, meas2 ured in accordance with section 562’’; and 

3 (9) in section 901(a), by striking ‘‘555, 556, 

4 557, 559, 560, 561, 562’’ and inserting ‘‘556, 557’’. 

Æ 


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