II 

114TH CONGRESS 

1ST SESSION S. 1320 

To amend the Federal Reserve Act to reform the Federal Reserve System. 

IN THE SENATE OF THE UNITED STATES 

MAY 13, 2015 

Ms. WARREN (for herself and Mr. VITTER) introduced the following bill; which 

was read twice and referred to the Committee on Banking, Housing, and 

Urban Affairs 

A BILL 

To amend the Federal Reserve Act to reform the Federal 

Reserve System. 

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 ‘‘Bailout Prevention Act 

5 of 2015’’. 

6 SEC. 2. DISCOUNTS FOR INDIVIDUALS, PARTNERSHIPS, 

7 AND CORPORATIONS. 

8 Section 13(3)(B) of the Federal Reserve Act (12 

9 U.S.C. 343(3)(B)) is amended by striking clauses (ii) and 

10 (iii) and inserting the following: 


emcdonald on DSK67QTVN1PROD with BILLS
2 

•S 1320 IS

1 ‘‘(ii)(I) The Board shall establish proce2 dures to prohibit borrowing from programs and 

3 facilities by borrowers that are insolvent. A bor4 rower shall not be eligible to borrow from any 

5 emergency lending program or facility unless 

6 the Board and all Federal banking regulators 

7 with jurisdiction over the borrower certify that, 

8 at the time the borrower initially borrows under 

9 the program or facility, the borrower is not in10 solvent. Solvency shall be assessed by examining 

11 the last 4 months of relevant financial data and 

12 determining whether the fair value of the bor13 rower’s assets exceeds the fair value of the bor14 rower’s liabilities, with appropriate adjustment 

15 for temporary illiquidity in relevant markets. 

16 ‘‘(II) A borrower shall be considered insol17 vent for purposes of this subparagraph if the 

18 borrower is— 

19 ‘‘(aa) in bankruptcy, resolution under 

20 title II of the Dodd-Frank Wall Street Re21 form and Consumer Protection Act (12 

22 U.S.C. 5381 et seq.), or any other Federal 

23 or State insolvency proceeding; or 

24 ‘‘(bb) a bridge financial company (as 

25 defined in section 201(a) of the DoddVerDate Sep 11 2014 04:52 May 16, 2015 Jkt 049200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S1320.IS S1320

emcdonald on DSK67QTVN1PROD with BILLS
3 

•S 1320 IS

1 Frank Wall Street Reform and Consumer 

2 Protection Act (12 U.S.C. 5381(a))) or a 

3 bridge depository institution (as defined in 

4 section 3 of the Federal Deposit Insurance 

5 Act (12 U.S.C. 1813)). 

6 ‘‘(III) If the Board or any other banking 

7 regulator makes a certification of solvency, the 

8 Board or banking regulator, as applicable, shall 

9 issue a contemporaneous public statement pro10 viding a detailed explanation of the certification 

11 decision. 

12 ‘‘(iii) A program or facility shall be consid13 ered a program or facility with broad-based eli14 gibility only if not fewer than 5 companies are 

15 eligible to participate in the program or facility 

16 in a significant manner.’’. 

17 SEC. 3. PENALTY RATE REQUIREMENT; CONGRESSIONAL 

18 APPROVAL REQUIREMENT. 

19 Section 13(3) of the Federal Reserve Act (12 U.S.C. 

20 343(3)) is amended by adding at the end the following: 

21 ‘‘(F) Any emergency lending under this 

22 paragraph shall be provided at an annual inter23 est rate not less than 500 basis points greater 

24 than the cost of borrowing for the United 

25 States Treasury for a commensurate loan term. 


emcdonald on DSK67QTVN1PROD with BILLS
4 

•S 1320 IS

1 ‘‘(G)(i) If the Board determines that the 

2 Board shall create an emergency lending pro3 gram or facility that does not comply with the 

4 broad-based eligibility requirement described in 

5 subparagraph (B)(iii) or the penalty rate re6 quirement described in subparagraph (F), the 

7 Board— 

8 ‘‘(I) may create such a program or fa9 cility; and 

10 ‘‘(II) not later than 3 days after the 

11 date on which a program or facility is cre12 ated under clause (i), shall submit to Con13 gress a report that describes the reasons 

14 why the Board is unable to comply with 

15 any requirement described in the matter 

16 preceding subclause (I). 

17 ‘‘(ii)(I) A program or facility created under 

18 clause (i)(I) shall terminate on the date that is 

19 30 calendar days after the date on which Con20 gress receives a report described in clause 

21 (i)(II) unless there is enacted into law a joint 

22 resolution approving the program or facility not 

23 later than 30 calendar days after the date on 

24 which the report is received. Any loan offered 

25 through the program or facility that are outVerDate Sep 11 2014 04:52 May 16, 2015 Jkt 049200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S1320.IS S1320

emcdonald on DSK67QTVN1PROD with BILLS
5 

•S 1320 IS

1 standing as of the date on which the facility is 

2 terminated shall be repaid in full not later than 

3 30 calendar days after the date on which the 

4 program or facility is terminated. 

5 ‘‘(II) For the purpose of this section, the 

6 term ‘joint resolution’ means only a joint reso7 lution— 

8 ‘‘(aa) that is introduced not later than 

9 3 calendar days after the date on which 

10 the report referred to in clause (i)(I) is re11 ceived by Congress; 

12 ‘‘(bb) that does not have a preamble; 

13 ‘‘(cc) the title of which is as follows: 

14 ‘Joint resolution relating to the approval of 

15 a program or facility created by the Board 

16 of Governors of the Federal Reserve Sys17 tem’; and 

18 ‘‘(dd) the matter after the resolving 

19 clause of which is as follows: ‘That Con20 gress approves the program or facility cre21 ated by the Board of Governors of the 

22 Federal Reserve System on 

23 llllllllll.’ (The blank space 

24 being appropriately filled in). 


emcdonald on DSK67QTVN1PROD with BILLS
6 

•S 1320 IS

1 ‘‘(III)(aa) Upon receipt of a report under 

2 subsection (a)(3), the Speaker, if the House 

3 would otherwise be adjourned, shall notify the 

4 Members of the House that, pursuant to this 

5 section, the House shall convene not later than 

6 the second calendar day after receipt of such 

7 report. 

8 ‘‘(bb) Any committee of the House of Rep9 resentatives to which a joint resolution is re10 ferred shall report it to the House not later 

11 than 5 calendar days after the date of receipt 

12 of the report described in clause (i)(II). If a 

13 committee fails to report the joint resolution 

14 within that period, the committee shall be dis15 charged from further consideration of the joint 

16 resolution and the joint resolution shall be re17 ferred to the appropriate calendar. 

18 ‘‘(cc) After each committee authorized to 

19 consider a joint resolution reports it to the 

20 House or has been discharged from its consid21 eration, it shall be in order, not later than the 

22 sixth day after Congress receives the report de23 scribed in clause (i)(II), to move to proceed to 

24 consider the joint resolution in the House. All 

25 points of order against the motion are waived. 


emcdonald on DSK67QTVN1PROD with BILLS
7 

•S 1320 IS

1 Such a motion shall not be in order after the 

2 House has disposed of a motion to proceed on 

3 the joint resolution. The previous question shall 

4 be considered as ordered on the motion to its 

5 adoption without intervening motion. The mo6 tion shall not be debatable. A motion to recon7 sider the vote by which the motion is disposed 

8 of shall not be in order. 

9 ‘‘(dd) The joint resolution shall be consid10 ered as read. All points of order against the 

11 joint resolution and against its consideration 

12 are waived. The previous question shall be con13 sidered as ordered on the joint resolution to its 

14 passage without intervening motion except 2 

15 hours of debate equally divided and controlled 

16 by the proponent and an opponent. A motion to 

17 reconsider the vote on passage of the joint reso18 lution shall not be in order. 

19 ‘‘(IV)(aa) Upon receipt of a report under clause 

20 (i)(II), if the Senate has adjourned or recessed for 

21 more than 2 days, the majority leader of the Senate, 

22 after consultation with the minority leader of the 

23 Senate, shall notify the Members of the Senate that, 

24 pursuant to this subparagraph, the Senate shall conVerDate Sep 11 2014 04:52 May 16, 2015 Jkt 049200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S1320.IS S1320

emcdonald on DSK67QTVN1PROD with BILLS
8 

•S 1320 IS

1 vene not later than the second calendar day after re2 ceipt of such message. 

3 ‘‘(bb) Upon introduction in the Senate, the 

4 joint resolution shall be placed immediately on the 

5 calendar. 

6 ‘‘(cc)(AA) Notwithstanding Rule XXII of the 

7 Standing Rules of the Senate, it is in order at any 

8 time during the period beginning on the fourth day 

9 after the date on which Congress receives a report 

10 described in clause (i)(II) and ending on the sixth 

11 day after the date on which Congress receives the 

12 report (even though a previous motion to the same 

13 effect has been disagreed to) to move to proceed to 

14 the consideration of the joint resolution, and all 

15 points of order against the joint resolution (and 

16 against consideration of the joint resolution) are 

17 waived. The motion to proceed is not debatable. The 

18 motion is not subject to a motion to postpone. A mo19 tion to reconsider the vote by which the motion is 

20 agreed to or disagreed to shall not be in order. If 

21 a motion to proceed to the consideration of the reso22 lution is agreed to, the joint resolution shall remain 

23 the unfinished business until disposed of. 

24 ‘‘(BB) Debate on the joint resolution, and on 

25 all debatable motions and appeals in connection 


emcdonald on DSK67QTVN1PROD with BILLS
9 

•S 1320 IS

1 therewith, shall be limited to not more than 10 

2 hours, which shall be divided equally between the 

3 majority and minority leaders or their designees. A 

4 motion further to limit debate is in order and not 

5 debatable. An amendment to, or a motion to post6 pone, or a motion to proceed to the consideration of 

7 other business, or a motion to recommit the joint 

8 resolution is not in order. 

9 ‘‘(CC) The vote on passage shall occur imme10 diately following the conclusion of the debate on a 

11 joint resolution, and a single quorum call at the con12 clusion of the debate if requested in accordance with 

13 the rules of the Senate. 

14 ‘‘(DD) Appeals from the decisions of the Chair 

15 relating to the application of the rules of the Senate, 

16 as the case may be, to the procedure relating to a 

17 joint resolution shall be decided without debate. 

18 ‘‘(V)(aa) If, before the passage by one House of a 

19 joint resolution of that House, that House receives from 

20 the other House a joint resolution, then the following pro21 cedures shall apply: 

22 ‘‘(AA) The joint resolution of the other House 

23 shall not be referred to a committee. 

24 ‘‘(BB) With respect to a joint resolution of the 

25 House receiving the resolution— 


emcdonald on DSK67QTVN1PROD with BILLS
10 

•S 1320 IS

1 ‘‘(CC) the procedure in that House shall be the 

2 same as if no joint resolution had been received from 

3 the other House; but 

4 ‘‘(DD) the vote on passage shall be on the joint 

5 resolution of the other House. 

6 ‘‘(bb) If one House fails to introduce or consider a 

7 joint resolution under this section, the joint resolution of 

8 the other House shall be entitled to expedited floor proce9 dures under this section. 

10 ‘‘(cc) If, following passage of the joint resolution in 

11 the Senate, the Senate then receives the companion meas12 ure from the House of Representatives, the companion 

13 measure shall not be debatable. 

14 ‘‘(dd) If the President vetoes the joint resolution, the 

15 period beginning on the date the President vetoes the joint 

16 resolution and ending on the date the Congress receives 

17 the veto message with respect to the joint resolution shall 

18 be disregarded in computing the 30-calendar day period 

19 described in subclause (I) and debate on a veto message 

20 in the Senate under this section shall be 1 hour equally 

21 divided between the majority and minority leaders or their 

22 designees. 

23 ‘‘(ee) This subclause and subclauses (II), (III), and 

24 (IV) are enacted by Congress— 


emcdonald on DSK67QTVN1PROD with BILLS
11 

•S 1320 IS

1 ‘‘(AA) as an exercise of the rulemaking power 

2 of the Senate and House of Representatives, respec3 tively, and as such it is deemed a part of the rules 

4 of each House, respectively, but applicable only with 

5 respect to the procedure to be followed in that 

6 House in the case of a joint resolution, and it super7 sedes other rules only to the extent that it is incon8 sistent with such rules; and 

9 ‘‘(BB) with full recognition of the constitutional 

10 right of either House to change the rules (so far as 

11 relating to the procedure of that House) at any time, 

12 in the same manner, and to the same extent as in 

13 the case of any other rule of that House.’’. 

14 SEC. 4. REGULATION OF CERTAIN FINANCIAL HOLDING 

15 COMPANIES. 

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

17 Company Act of 1956 (12 U.S.C. 1843) is amended by 

18 striking subsection (o). 

19 (b) EFFECTIVE DATE.—The amendment made by 

20 subsection (a) shall take effect on the date that is 5 years 

21 after the date of enactment of this Act. 

Æ 


emcdonald on DSK67QTVN1PROD with BILLS