I 

111TH CONGRESS 

1ST SESSION H. R. 3996 

To improve financial stability, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

NOVEMBER 3, 2009 

Mr. FRANK of Massachusetts introduced the following bill; which was referred 

to the Committee on Financial Services, and in addition to the Committees on the Judiciary, Agriculture, and Ways and Means, 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 improve financial stability, 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 TITLE I—FINANCIAL STABILITY 

4 IMPROVEMENT 

5 SEC. 1000. SHORT TITLE; DEFINITIONS; TABLE OF CON6 TENTS. 

7 (a) SHORT TITLE.—This title may be cited as the 

8 ‘‘Financial Stability Improvement Act of 2009’’. 

9 (b) DEFINITIONS.—For purposes of this Act, the fol10 lowing definitions shall apply: 


wwoods2 on DSK1DXX6B1PROD with BILLS
2 

•HR 3996 IH

1 (1) The term ‘‘Board’’ means the Board of 

2 Governors of the Federal Reserve System. 

3 (2) The term ‘‘Council’’ means the Financial 

4 Services Oversight Council established under section 

5 1001 of this Act. 

6 (3) The term ‘‘Federal financial regulatory 

7 agency’’ means any agency that has a voting mem8 ber of the Council as set forth in section 1001(b)(1). 

9 (4) The term ‘‘financial company’’ means a 

10 company or other entity— 

11 (A) that is— 

12 (i) incorporated or organized under 

13 the laws of the United States or any State, 

14 territory, or possession of the United 

15 States, the District of Columbia, Common16 wealth of Puerto Rico, Commonwealth of 

17 Northern Mariana Islands, Guam, Amer18 ican Samoa, or the United States Virgin 

19 Islands; 

20 (ii) a Federal or State branch or 

21 agency of a foreign bank as such terms are 

22 defined in the International Banking Act 

23 of 1978 (12 U.S.C. 3101(b)); or 

24 (iii) a United States affiliate or other 

25 United States operating entity of a comVerDate Nov 24 2008 00:06 Nov 20, 2009 Jkt 089200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H3996.IH H3996

wwoods2 on DSK1DXX6B1PROD with BILLS
3 

•HR 3996 IH

1 pany that is incorporated or organized in 

2 a country other than the United States; 

3 and 

4 (B) that is, in whole or in part, directly or 

5 indirectly, engaged in financial activities. 

6 (5) The term ‘‘identified financial holding com7 pany’’ means a financial company that the Council 

8 has identified for heightened prudential standards 

9 under subtitle B of this Act, unless such financial 

10 company is required to establish an intermediate 

11 holding company under section 6 of the Bank Hold12 ing Company Act, in which case the ‘‘identified fi13 nancial holding company’’ is such section 6 holding 

14 company through which the financial company is re15 quired to conduct its financial activities. 

16 (6) The term ‘‘primary financial regulatory 

17 agency’’ means the following: 

18 (A) The Comptroller of the Currency, with 

19 respect to any national bank, any Federal 

20 branch or Federal agency of a foreign bank, 

21 and, after the date on which the functions of 

22 the Office of Thrift Supervision and the Direc23 tor of the Office of Thrift Supervision are 

24 transferred under subtitle C, a Federal savings 

25 association. 


wwoods2 on DSK1DXX6B1PROD with BILLS
4 

•HR 3996 IH

1 (B) The Board, with respect to— 

2 (i) a State member bank; 

3 (ii) any bank holding company and 

4 any subsidiary of such company (as such 

5 terms are defined in the Bank Holding 

6 Company Act), other than a subsidiary 

7 that is described in any other subpara8 graph of this paragraph to the extent that 

9 the subsidiary is engaged in an activity de10 scribed in such subparagraph; 

11 (iii) any identified financial holding 

12 company and any subsidiary (as such term 

13 is defined in the Bank Holding Company 

14 Act) of such company, other than a sub15 sidiary that is described in any other sub16 paragraph of this paragraph to the extent 

17 that the subsidiary is engaged in an activ18 ity described in such subparagraph; 

19 (iv) after the date on which the func20 tions of the Office of Thrift Supervision 

21 are transferred under subtitle C, any sav22 ings and loan holding company (as defined 

23 in section 10(a)(1)(D) of the Home Own24 ers’ Loan Act) and any subsidiary (as such 

25 term is defined in the Bank Holding ComVerDate Nov 24 2008 00:06 Nov 20, 2009 Jkt 089200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H3996.IH H3996

wwoods2 on DSK1DXX6B1PROD with BILLS
5 

•HR 3996 IH

1 pany Act) of a such company, other than 

2 a subsidiary that is described in any other 

3 subparagraph of this paragraph, to the ex4 tent that the subsidiary is engaged in an 

5 activity described in such subparagraph; 

6 (v) any organization organized and 

7 operated under section 25 or 25A of the 

8 Federal Reserve Act (12 U.S.C. 601 et 

9 seq. or 611 et seq.); and 

10 (vi) any foreign bank or company that 

11 is treated as a bank holding company 

12 under subsection (a) of section 8 of the 

13 International Banking Act of 1978 applies 

14 and any subsidiary (other than a bank or 

15 other subsidiary that is described in any 

16 other subparagraph of this paragraph) of 

17 any such foreign bank or company. 

18 (C) The Federal Deposit Insurance Cor19 poration, with respect to a State nonmember 

20 bank, any insured State branch of a foreign 

21 bank (as such terms are defined in section 3 of 

22 the Federal Deposit Insurance Act), and, after 

23 the date on which the functions of the Office of 

24 Thrift Supervision are transferred under sub25 title C, any State savings association. 


wwoods2 on DSK1DXX6B1PROD with BILLS
6 

•HR 3996 IH

1 (D) The National Credit Union Adminis2 tration, with respect to any insured credit union 

3 under the Federal Credit Union Act (12 U.S.C. 

4 1751 et seq.). 

5 (E) The Securities and Exchange Commis6 sion, with respect to— 

7 (i) any broker or dealer registered 

8 with the Securities and Exchange Commis9 sion under the Securities Exchange Act of 

10 1934 (15 U.S.C. 78a et seq.); 

11 (ii) any investment company reg12 istered with the Securities and Exchange 

13 Commission under the Investment Com14 pany Act of 1940 (15 U.S.C. 80a–1 et 

15 seq.); 

16 (iii) any investment adviser registered 

17 with the Securities and Exchange Commis18 sion under the Investment Advisers Act of 

19 1940 (15 U.S.C. 80b–1 et seq.) with re20 spect to the investment advisory activities 

21 of such company and activities incidental 

22 to such advisory activities; and 

23 (iv) any clearing agency registered 

24 with the Securities and Exchange CommisVerDate Nov 24 2008 00:06 Nov 20, 2009 Jkt 089200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H3996.IH H3996

wwoods2 on DSK1DXX6B1PROD with BILLS
7 

•HR 3996 IH

1 sion under the Securities Exchange Act of 

2 1934 (15 U.S.C. 78a et seq.). 

3 (F) The Commodity Futures Trading 

4 Commission, with respect to— 

5 (i) any futures commission merchant, 

6 any commodity trading adviser, and any 

7 commodity pool operator registered with 

8 the Commodity Futures Trading Commis9 sion under the Commodity Exchange Act 

10 (7 U.S.C. 1 et seq.) with respect to the 

11 commodities activities of such entity and 

12 activities incidental to such commodities 

13 activities; and øText missing?¿ 

14 (G) The Federal Housing Finance Agency 

15 with respect to the Federal National Mortgage 

16 Association or the Federal Home Loan Mort17 gage Corporation, and the Federal home loan 

18 banks. 

19 (H) The State insurance authority of the 

20 State in which an insurance company is domi21 ciled, with respect to the insurance activities 

22 and activities incidental to such insurance ac23 tivities of an insurance company that is subject 

24 to supervision by the State insurance authority 

25 under State insurance law. 


wwoods2 on DSK1DXX6B1PROD with BILLS
8 

•HR 3996 IH

1 (I) The Office of Thrift Supervision, with 

2 respect to any Federal savings association, 

3 State savings association, or savings and loan 

4 holding company, until the date on which the 

5 functions of the Office of Thrift Supervision are 

6 transferred under subtitle C. 

7 (7) TERMS DEFINED IN OTHER LAWS.— 

8 (A) AFFILIATE.—The term ‘‘affiliate’’ has 

9 the meaning given such term in section 2(k) of 

10 the Bank Holding Company Act of 1956. 

11 (B) STATE MEMBER BANK, STATE NON12 MEMBER BANK.—The terms ‘‘State member 

13 bank’’ and ‘‘State nonmember bank’’ have the 

14 same meanings as in subsections (d)(2) and 

15 (e)(2), respectively, of section 3 of the Federal 

16 Deposit Insurance Act. 

17 (c) TABLE OF CONTENTS.—The table of contents for 

18 this Act is as follows: 

Sec. 1000. Short title; definitions; table of contents. 

Subtitle A—The Financial Services Oversight Council 

Sec. 1001. Financial Services Oversight Council established. 

Sec. 1002. Resolution of disputes among Federal financial regulatory agencies. 

Sec. 1003. Technical and professional advisory committees. 

Sec. 1004. Financial Services Oversight Council meetings and council governance. 

Sec. 1005. Council staff and funding. 

Sec. 1006. Reports to the Congress. 

Sec. 1007. Applicability of certain Federal laws. 

Subtitle B—Prudential Regulation of Companies and Activities for Financial 

Stability Purposes 

Sec. 1101. Council and Board authority to obtain information. 


wwoods2 on DSK1DXX6B1PROD with BILLS
9 

•HR 3996 IH

Sec. 1102. Council prudential regulation recommendations to primary regulators. 

Sec. 1103. Identification of financial companies for heightened prudential 

standards for financial stability purposes. 

Sec. 1104. Regulation of identified financial holding companies for financial 

stability purposes. 

Sec. 1105. Authority to file involuntary petition for bankruptcy. 

Sec. 1106. Identification of activities or practices for heightened prudential 

standards and safeguards for financial stability purposes. 

Sec. 1107. Regulation of identified activities for financial stability purposes. 

Sec. 1108. Effect of rescission of identification. 

Sec. 1109. Emergency financial stabilization. 

Sec. 1110. Examinations and enforcement actions for insurance and resolutions 

purposes. 

Sec. 1111. Rule of construction. 

Subtitle C—Improvements to Supervision and Regulation of Federal 

Depository Institutions 

Sec. 1201. Definitions. 

Sec. 1202. Amendments to the Home Owners’ Loan Act relating to transfer of 

functions. 

Sec. 1203. Amendments to the revised statutes. 

Sec. 1204. Power and duties transferred. 

Sec. 1205. Transfer date. 

Sec. 1206. Office of Thrift Supervision abolished. 

Sec. 1207. Savings provisions. 

Sec. 1208. Regulations and orders. 

Sec. 1209. Coordination of transition activities. 

Sec. 1210. Interim responsibilities of office of the comptroller of the currency 

and office of thrift supervision. 

Sec. 1211. Employees transferred. 

Sec. 1212. Property transferred. 

Sec. 1213. Funds transferred. 

Sec. 1214. Disposition of affairs. 

Sec. 1215. Continuation of services. 

Sec. 1216. Treatment of savings and loan holding companies. 

Sec. 1217. Practices of certain mutual thrift holding companies preserved. 

Sec. 1218. Composition of board of directors of the Federal Deposit Insurance 

Corporation. 

Sec. 1219. Amendments to section 3. 

Sec. 1220. Amendments to section 7. 

Sec. 1221. Amendments to section 8. 

Sec. 1222. Amendments to section 11. 

Sec. 1223. Amendments to section 13. 

Sec. 1224. Amendments to section 18. 

Sec. 1225. Amendments to section 28. 

Sec. 1226. Amendments to the Alternative Mortgage Transaction Parity Act of 

1982. 

Sec. 1227. Amendments to the Bank Holding Company Act of 1956. 

Sec. 1228. Amendments to the Bank Protection Act of 1968. 

Sec. 1229. Amendments to the Bank Service Company Act. 

Sec. 1230. Amendments to the Community Reinvestment Act of 1977. 

Sec. 1231. Amendments to the Depository Institution Management Interlocks 

Act. 


wwoods2 on DSK1DXX6B1PROD with BILLS
10 

•HR 3996 IH

Sec. 1232. Amendments to the Emergency Homeowner’s Relief Act. 

Sec. 1233. Amendments to the Equal Credit Opportunity Act. 

Sec. 1234. Amendments to the Federal Credit Union Act. 

Sec. 1235. Amendments to the Federal Financial Institutions Examination 

Council Act of 1978. 

Sec. 1236. Amendments to the Federal Home Loan Bank Act. 

Sec. 1237. Amendments to the Federal Reserve Act. 

Sec. 1238. Amendments to the Financial Institutions Reform, Recovery, and 

Enforcement Act of 1989. 

Sec. 1239. Amendments to the Housing Act of 1948. 

Sec. 1240. Amendments to the Housing and Community Development Act of 

1992. 

Sec. 1241. Amendments to the Housing and Urban-Rural Recovery Act of 

1983. 

Sec. 1242. Amendments to the National Housing Act. 

Sec. 1243. Amendments to the Right to Financial Privacy Act of 1978. 

Sec. 1244. Amendments to the Balanced Budget and Emergency Deficit Control Act of 1985. 

Sec. 1245. Amendments to the Crime Control Act of 1990. 

Sec. 1246. Amendment to the Flood Disaster Protection Act of 1973. 

Sec. 1247. Amendments to the Investment Company Act of 1940. 

Sec. 1248. Amendments to the Neighborhood Reinvestment Corporation Act. 

Sec. 1249. Amendments to the Securities Exchange Act of 1934. 

Sec. 1250. Amendments to title 18, United States Code. 

Sec. 1251. Amendments to title 31, United States Code. 

Subtitle D—Further Improvements to the Regulation of Bank Holding 

Companies and Depository Institutions 

Sec. 1301. Treatment of credit card banks, industrial loan companies, and certain other companies under the Bank Holding Company Act. 

Sec. 1302. Registration of certain companies as bank holding companies. 

Sec. 1303. Reports and examinations of bank holding companies; regulation of 

functionally regulated subsidiaries. 

Sec. 1304. Requirements for financial holding companies to remain well capitalized and well managed. 

Sec. 1305. Standards for interstate acquisitions. 

Sec. 1306. Enhancing existing restrictions on bank transactions with affiliates. 

Sec. 1307. Eliminating exceptions for transactions with financial subsidiaries. 

Sec. 1308. Lending limits applicable to credit exposure on derivative transactions, repurchase agreements, reverse repurchase agreements, and securities lending and borrowing transactions. 

Sec. 1309. Application of national bank lending limits to insured State banks. 

Sec. 1310. Restriction on conversions of troubled banks. 

Sec. 1311. Lending limits to insiders. 

Sec. 1312. Limitations on purchases of assets from insiders. 

Sec. 1313. Rules regarding capital levels of bank holding companies. 

Sec. 1314. Enhancements to factors to be considered in certain acquisitions. 

Sec. 1315 Elimination of elective investment bank holding company framework. 

Sec. 1316. Examination fees for large bank holding companies. 

Subtitle E—Payment, Clearing, and Settlement Supervision 

Sec. 1401. Short title. 

Sec. 1402. Findings and purposes. 

Sec. 1403. Definitions. 


wwoods2 on DSK1DXX6B1PROD with BILLS
11 

•HR 3996 IH

Sec. 1404. Identification of systemically important financial market utilities 

and payment, clearing, and settlement activities. 

Sec. 1405. Standards for systemically important financial market utilities and 

payment, clearing, or settlement activities. 

Sec. 1406. Operations and changes to rules, procedures, or operations of identified financial market utilities. 

Sec. 1407. Examination of and enforcement actions against identified financial 

market utilities. 

Sec. 1407. Examination of and enforcement actions against identified financial 

market utilities. 

Sec. 1408. Examination of and enforcement actions against financial institutions subject to standards for identified activities. 

Sec. 1409. Provision of information, reports, or records. 

Sec. 1410. Rulemaking. 

Sec. 1411. Other authority. 

Sec. 1412. Effective date. 

Subtitle F—Improvements to the Asset-backed Securitization Process 

Sec. 1501. Short title. 

Sec. 1502. Credit risk retention. 

Sec. 1503. Periodic and other reporting under the Securities Exchange Act of 

1934 for asset-backed securities. 

Sec. 1504. Representations and warranties in asset-backed offerings. 

Sec. 1505. Exempted transactions under the Securities Act of 1933. 

Subtitle G—Enhanced Resolution Authority 

Sec. 1601. Short title. 

Sec. 1602. Definitions. 

Sec. 1603. Systemic risk determination. 

Sec. 1604. Resolution; stabilization. 

Sec. 1605. Judicial review. 

Sec. 1606. Directors not liable for acquiescing in appointment of receiver or 

qualified receiver. 

Sec. 1607. Termination and exclusion of other actions. 

Sec. 1608. Rulemaking. 

Sec. 1609 Powers and duties of corporation. 

Sec. 1610. Clarification of prohibition regarding concealment of assets from 

qualified receiver, receiver, or liquidating agent. 

Sec. 1611. Miscellaneous provisions. 

Subtitle H—Additional Improvements for Financial Crisis Management 

Sec. 1701. Additional improvements for financial crisis management. 


wwoods2 on DSK1DXX6B1PROD with BILLS
12 

•HR 3996 IH

1 Subtitle A—The Financial Services 

2 Oversight Council 

3 SEC. 1001. FINANCIAL SERVICES OVERSIGHT COUNCIL ES4 TABLISHED. 

5 (a) ESTABLISHMENT.—Immediately upon enactment 

6 of this title, there is established a Financial Services Over7 sight Council. 

8 (b) MEMBERSHIP.—The Council shall consist of the 

9 following: 

10 (1) VOTING MEMBERS.—Voting members, who 

11 shall each have one vote on the Council, as follows: 

12 (A) The Secretary of the Treasury, who 

13 shall serve as the Chairman of the Council. 

14 (B) The Chairman of the Board of Gov15 ernors of the Federal Reserve System. 

16 (C) The Comptroller of the Currency. 

17 (D) The Director of the Office of Thrift 

18 Supervision, until the functions of the Director 

19 of the Office of Thrift Supervision are trans20 ferred to pursuant to subtitle C of this title. 

21 (E) The Chairman of the Securities and 

22 Exchange Commission. 

23 (F) The Chairman of the Commodity Fu24 tures Trading Commission. 


wwoods2 on DSK1DXX6B1PROD with BILLS
13 

•HR 3996 IH

1 (G) The Chairperson of the Federal De2 posit Insurance Corporation. 

3 (H) The Director of the Federal Housing 

4 Finance Agency. 

5 (I) The Chairman of the National Credit 

6 Union Administration. 

7 (2) NONVOTING MEMBERS.—Nonvoting mem8 bers, who shall serve in an advisory capacity: 

9 (A) A State insurance commissioner, to be 

10 designated by a selection process determined by 

11 the State insurance commissioners, provided 

12 that the term for which a State insurance com13 missioner may serve shall last no more than the 

14 2-year period beginning on the date that the 

15 commissioner is selected. 

16 (B) A State banking supervisor, to be des17 ignated by a selection process determined by 

18 the State bank supervisors, provided that the 

19 term for which a State banking supervisor may 

20 serve shall last no more than the 2-year period 

21 beginning on the date that the supervisor is se22 lected. 

23 (c) DUTIES.—The Council shall have the following 

24 duties. 


wwoods2 on DSK1DXX6B1PROD with BILLS
14 

•HR 3996 IH

1 (1) To advise the Congress on financial regula2 tion and make recommendations that will enhance 

3 the integrity, efficiency, orderliness, competitiveness, 

4 and stability of the United States financial markets. 

5 (2) To monitor the financial services market6 place to identify potential threats to the stability of 

7 the United States financial system. 

8 (3) To identify financial companies and finan9 cial activities that should be subject to heightened 

10 prudential standards in order to promote financial 

11 stability and mitigate systemic risk in accordance 

12 with sections subtitles B and E of this title. 

13 (4) To issue formal recommendations that a 

14 Council member agency adopt heightened prudential 

15 standards for firms it regulates to mitigate systemic 

16 risk in accordance with subtitle B of this title. 

17 (5) To facilitate information sharing and co18 ordination among the members of the Council re19 garding financial services policy development, 

20 rulemakings, examinations, reporting requirements, 

21 and enforcement actions. 

22 (6) To provide a forum for discussion and anal23 ysis of emerging market developments and financial 

24 regulatory issues among its members. 


wwoods2 on DSK1DXX6B1PROD with BILLS
15 

•HR 3996 IH

1 (7) At the request of an agency that is a Coun2 cil member, to resolve a jurisdictional or regulatory 

3 dispute between that agency and another agency 

4 that is a Council member in accordance with section 

5 1002 of this subtitle. 

6 SEC. 1002. RESOLUTION OF DISPUTES AMONG FEDERAL FI7 NANCIAL REGULATORY AGENCIES. 

8 (a) REQUEST FOR DISPUTE RESOLUTION.—The 

9 Council shall resolve a dispute among 2 or more Federal 

10 financial regulatory agencies if— 

11 (1) a Federal financial regulatory agency has a 

12 dispute with another Federal financial regulatory 

13 agency about the agencies’ respective jurisdiction 

14 over a particular financial company or financial ac15 tivity or product (excluding matters for which an16 other dispute mechanism specifically has been pro17 vided under Federal law); 

18 (2) the disputing agencies cannot, after a dem19 onstrated good faith effort, resolve the dispute 

20 among themselves; and 

21 (3) any of the Federal financial regulatory 

22 agencies involved in the dispute— 

23 (A) provides all other disputants prior no24 tice of its intent to request dispute resolution 

25 by the Council; and 


wwoods2 on DSK1DXX6B1PROD with BILLS
16 

•HR 3996 IH

1 (B) requests in writing, no earlier than 14 

2 days after providing the notice described in 

3 paragraph (A), that the Council resolve the dis4 pute. 

5 (b) COUNCIL DECISION.—The Council shall decide 

6 the dispute— 

7 (1) within a reasonable time after receiving the 

8 dispute resolution request; 

9 (2) after consideration of relevant information 

10 provided by each party to the dispute; and 

11 (3) by agreeing with 1 of the disputants regard12 ing the entirety of the matter or by determining a 

13 compromise position. 

14 (c) FORM AND BINDING EFFECT.—A Council deci15 sion under this section shall be in writing and include an 

16 explanation and shall be binding on all Federal financial 

17 regulatory agencies that are parties to the dispute. 

18 SEC. 1003. TECHNICAL AND PROFESSIONAL ADVISORY 

19 COMMITTEES. 

20 The Council is authorized to appoint— 

21 (1) subsidiary working groups composed of 

22 Council members and their staff, Council staff, or a 

23 combination; and 

24 (2) such temporary special advisory, technical, 

25 or professional committees as may be useful in carVerDate Nov 24 2008 00:06 Nov 20, 2009 Jkt 089200 PO 00000 Frm 00016 Fmt 6652 Sfmt 6201 E:\BILLS\H3996.IH H3996

wwoods2 on DSK1DXX6B1PROD with BILLS
17 

•HR 3996 IH

1 rying out its functions, which may be composed of 

2 Council members and their staff, other persons, or 

3 a combination. 

4 SEC. 1004. FINANCIAL SERVICES OVERSIGHT COUNCIL 

5 MEETINGS AND COUNCIL GOVERNANCE. 

6 (a) MEETINGS.—The Council shall meet as fre7 quently as the Chairman deems necessary, but not less 

8 than quarterly. 

9 (b) VOTING.—Unless otherwise provided, the Council 

10 shall make all decisions the Council is required or author11 ized to make by a majority of the total voting membership 

12 of the Council under section 1001(b)(1). 

13 SEC. 1005. COUNCIL STAFF AND FUNDING. 

14 (a) DEPARTMENT OF THE TREASURY.—The Sec15 retary of the Treasury shall— 

16 (1) detail permanent staff from the Department 

17 of the Treasury to provide the Council (and any 

18 temporary special advisory, technical, or professional 

19 committees appointed by the Council) with profes20 sional and expert support; and 

21 (2) provide such other services and facilities 

22 necessary for the performance of the Council’s func23 tions and fulfillment of the duties and mission of the 

24 Council. 


wwoods2 on DSK1DXX6B1PROD with BILLS
18 

•HR 3996 IH

1 (b) OTHER DEPARTMENTS AND AGENCIES.—In addi2 tion to the assistance prescribed in subsection (a), depart3 ments and agencies of the United States may, with the 

4 approval of the Secretary of the Treasury— 

5 (1) detail department or agency staff on a tem6 porary basis to provide additional support to the 

7 Council (and any special advisory, technical, or pro8 fessional committees appointed by the Council); and 

9 (2) provide such services, and facilities as the 

10 other departments or agencies may determine advis11 able. 

12 (c) STAFF STATUS; COUNCIL FUNDING.— 

13 (1) STATUS.—Staff detailed to the Council by 

14 the Secretary of the Treasury and other United 

15 States departments or agencies shall— 

16 (A) report to and be subject to oversight 

17 by the Council during their assignment to the 

18 Council; and 

19 (B) be compensated by the department of 

20 agency from which the stall was detailed. 

21 (2) FUNDING.—The administrative expense of 

22 the Council shall be paid by the departments and 

23 agencies represented by voting members of the 

24 Council on an equal basis. 


wwoods2 on DSK1DXX6B1PROD with BILLS
19 

•HR 3996 IH

1 SEC. 1006. REPORTS TO THE CONGRESS. 

2 (a) IN GENERAL.—The Council shall submit an an3 nual report to the Committee on Financial Services of the 

4 House of Representatives and the Committee on Banking, 

5 Housing, and Urban Affairs of the Senate that— 

6 (1) describes significant financial market devel7 opments and potential emerging threats to the sta8 bility of the financial system; 

9 (2) recommends actions that will improve finan10 cial stability; 

11 (3) describes any company or activity identifica12 tions made under subtitles B and E; and 

13 (4) describes any dispute resolutions under14 taken under section 1002 and the result of such res15 olutions. 

16 (b) CONFIDENTIALITY.—The Committees of the Con17 gress receiving the Council’s report shall maintain the con18 fidentiality of the identity of companies described in ac19 cordance with subsection (a)(3) and the information relat20 ing to dispute resolutions described in accordance with 

21 subsection (a)(4). 

22 SEC. 1007. APPLICABILITY OF CERTAIN FEDERAL LAWS. 

23 (a) The Federal Advisory Committee Act shall not 

24 apply to the Financial Services Oversight Council, or any 

25 special advisory, technical, or professional committees ap26 pointed by the Council (except that, if an advisory, techVerDate Nov 24 2008 00:06 Nov 20, 2009 Jkt 089200 PO 00000 Frm 00019 Fmt 6652 Sfmt 6201 E:\BILLS\H3996.IH H3996

wwoods2 on DSK1DXX6B1PROD with BILLS
20 

•HR 3996 IH

1 nical, or professional committee has one or more members 

2 who are not employees of or affiliated with the United 

3 States Government, the Council shall publish a list of the 

4 names of the members of such committee). 

5 (b) The Council shall not be deemed an ‘‘agency’’ for 

6 purposes of any State or Federal law. 

7 Subtitle B—Prudential Regulation 

8 of Companies and Activities for 

9 Financial Stability Purposes 

10 SEC. 1101. COUNCIL AND BOARD AUTHORITY TO OBTAIN 

11 INFORMATION. 

12 (a) IN GENERAL.—The Council and the Board are 

13 authorized to receive, and may request the production of, 

14 any data or information from members of the Council, as 

15 necessary— 

16 (1) to monitor the financial services market17 place to identify potential threats to the stability of 

18 the United States financial system; or 

19 (2) to otherwise carry out any of the provisions 

20 of this title, including to ascertain a primary finan21 cial regulatory agency’s implementation of rec22 ommended prudential standards under this subtitle. 

23 (b) SUBMISSION BY COUNCIL MEMBERS.—Notwith24 standing any provision of law, any voting or nonvoting 

25 member of the Council is authorized to provide informaVerDate Nov 24 2008 00:06 Nov 20, 2009 Jkt 089200 PO 00000 Frm 00020 Fmt 6652 Sfmt 6201 E:\BILLS\H3996.IH H3996

wwoods2 on DSK1DXX6B1PROD with BILLS
21 

•HR 3996 IH

1 tion to the Council, and the members of the Council shall 

2 maintain the confidentiality of such information. 

3 (c) FINANCIAL DATA COLLECTION.— 

4 (1) IN GENERAL.—The Council or the Board 

5 may require the submission of periodic and other re6 ports from any financial company solely for the pur7 pose of assessing the extent to which a financial ac8 tivity or financial market in which the financial com9 pany participates, or the company itself, poses a 

10 threat to financial stability. 

11 (2) MITIGATION OF REPORT BURDEN.—Before 

12 requiring the submission of reports from financial 

13 companies that are regulated by the Federal finan14 cial regulatory agencies, the Council or the Board 

15 shall coordinate with such agencies and shall, when16 ever possible, rely on information already being col17 lected by such agencies. 

18 (d) CONSULTATION WITH AGENCIES AND ENTI19 TIES.—The Council or the Board, as appropriate, may 

20 consult with Federal and State agencies and other entities 

21 to carry out any of the provisions of this subtitle. 

22 SEC. 1102. COUNCIL PRUDENTIAL REGULATION REC23 OMMENDATIONS TO PRIMARY REGULATORS. 

24 (a) IN GENERAL.—The Council is authorized to issue 

25 formal recommendations, publicly or privately, that a FedVerDate Nov 24 2008 00:06 Nov 20, 2009 Jkt 089200 PO 00000 Frm 00021 Fmt 6652 Sfmt 6201 E:\BILLS\H3996.IH H3996

wwoods2 on DSK1DXX6B1PROD with BILLS
22 

•HR 3996 IH

1 eral financial regulatory agency adopt heightened pruden2 tial standards for firms it regulates to mitigate systemic 

3 risk. 

4 (b) AGENCY AUTHORITY TO IMPLEMENT STAND5 ARDS.—A Federal financial regulatory agency specifically 

6 is authorized to impose, require reports regarding, exam7 ine for compliance with, and enforce heightened prudential 

8 standards and safeguards for the firms it regulates to 

9 mitigate systemic risk. This authority is in addition to and 

10 does not limit any other authority of the Federal financial 

11 regulatory agencies. Compliance by an entity with actions 

12 taken by a Federal financial regulatory agency under this 

13 section shall be enforceable in accordance with the statutes 

14 governing the respective Federal financial regulatory 

15 agency’s jurisdiction over the entity as if the agency action 

16 were taken under those statutes. 

17 (c) AGENCY NOTICE TO COUNCIL.—A Federal finan18 cial regulatory agency shall, within 60 days of receiving 

19 a Council recommendation under this section, notify the 

20 Council in writing regarding— 

21 (1) the actions the Federal financial regulatory 

22 agency has taken in response to the Council’s rec23 ommendation; or 


wwoods2 on DSK1DXX6B1PROD with BILLS
23 

•HR 3996 IH

1 (2) the reason the Federal financial regulatory 

2 agency has failed to respond to the Council’s re3 quest. 

4 SEC. 1103. IDENTIFICATION OF FINANCIAL COMPANIES 

5 FOR HEIGHTENED PRUDENTIAL STANDARDS 

6 FOR FINANCIAL STABILITY PURPOSES. 

7 (a) IN GENERAL.—The Council may subject a finan8 cial company to heightened prudential standards under 

9 section 1104 if the Council determines that— 

10 (1) material financial distress at the company 

11 could pose a threat to financial stability or the econ12 omy; or 

13 (2) the nature, scope, or mix of the company’s 

14 activities could pose a threat to financial stability or 

15 the economy. 

16 (b) CRITERIA.—In making a determination under 

17 subsection (a), the Council shall consider the following cri18 teria: 

19 (1) The amount and nature of the company’s fi20 nancial assets. 

21 (2) The amount and nature of the company’s li22 abilities, including the degree of reliance on short23 term funding. 

24 (3) The extent and nature of the company’s off25 balance sheet exposures. 


wwoods2 on DSK1DXX6B1PROD with BILLS
24 

•HR 3996 IH

1 (4) The extent and nature of the company’s 

2 transactions and relationships with other financial 

3 companies. 

4 (5) The company’s importance as a source of 

5 credit for households, businesses, and State and 

6 local governments and as a source of liquidity for 

7 the financial system. 

8 (6) The nature, scope, and mix of the com9 pany’s activities. 

10 (7) Any other factors that the Council deems 

11 appropriate. 

12 (c) PERIODIC REVIEW AND RESCISSION OF FIND13 INGS.— 

14 (1) SUBMISSION OF ASSESSMENT.—The Board 

15 shall periodically submit a report to the Council con16 taining an assessment of whether each company sub17 jected to heightened prudential standards should 

18 continue to be subject to such standards. 

19 (2) REVIEW AND RESCISSION.—The Council 

20 shall— 

21 (A) review the assessment submitted pur22 suant to paragraph (1) and any information or 

23 recommendation submitted by members of the 

24 Council regarding whether an identified finanVerDate Nov 24 2008 00:06 Nov 20, 2009 Jkt 089200 PO 00000 Frm 00024 Fmt 6652 Sfmt 6201 E:\BILLS\H3996.IH H3996

wwoods2 on DSK1DXX6B1PROD with BILLS
25 

•HR 3996 IH

1 cial holding company continues to merit height2 ened prudential standards; and 

3 (B) rescind the action subjecting a com4 pany to heightened prudential supervision if the 

5 Council determines that the company no longer 

6 meets the conditions for identification in sub7 sections (a) and (b). 

8 (d) PROCEDURE FOR IDENTIFYING OR RESCINDING

9 IDENTIFICATION OF A COMPANY.— 

10 (1) COUNCIL AND BOARD COORDINATION.—The 

11 Council shall inform the Board if the Council is con12 sidering whether to identify or cease to identify a 

13 company under this section. 

14 (2) NOTICE AND OPPORTUNITY FOR CONSIDER15 ATION OF WRITTEN MATERIALS.— 

16 (A) IN GENERAL.—The Board shall, in an 

17 executive capacity on behalf of the Council, in18 form a financial company that the Council is 

19 considering whether to identify or cease to iden20 tify such company under this section, including 

21 an explanation of the basis of the Council’s con22 sideration, and shall provide such financial com23 pany 30 days to submit written materials to in24 form the Council’s decision. The Council shall 

25 make its decision, and the Board shall notify 


wwoods2 on DSK1DXX6B1PROD with BILLS
26 

•HR 3996 IH

1 the company of the Council’s decision by order, 

2 within 60 days of the due date for such written 

3 materials 

4 (B) EMERGENCY EXCEPTION TO PROCESS

5 REQUIREMENTS.—The Council may waive or 

6 modify the requirements of subparagraph (A) 

7 with respect to a company if the Council deter8 mines that such waiver or modification is nec9 essary or appropriate to prevent or mitigate 

10 threats posed by the company to financial sta11 bility. The Board shall, in an executive capacity 

12 on behalf of the Council, provide notice of such 

13 waiver or modification to the financial company 

14 concerned as soon as practicable, which shall be 

15 no later than 24 hours after the waiver or 

16 modification. 

17 (3) CONSULTATION.—If a financial company 

18 being considered for identification under this section 

19 is, or has one or more subsidiaries that are, subject 

20 to regulation by a Federal financial regulatory agen21 cy, as such subsidiaries are described in øsection 

22 2(6)¿ of this subtitle, the Council shall consult with 

23 the relevant Federal financial regulatory agency for 

24 each such subsidiary before making any decision 

25 under this section. 


wwoods2 on DSK1DXX6B1PROD with BILLS
27 

•HR 3996 IH

1 (4) EMERGENCY EXCEPTION TO MAJORITY

2 VOTE OF COUNCIL REQUIREMENT.—If each of the 

3 Secretary of the Treasury, the Board, and the Fed4 eral Deposit Insurance Corporation determines that 

5 a financial company must be subjected to heightened 

6 prudential standards under this section immediately 

7 to prevent destabilization of the financial system or 

8 economy, the Secretary, the Board, and the Corpora9 tion may identify a financial company under this 

10 section upon certification by the President of the 

11 United States. 

12 (e) EFFECT OF IDENTIFICATION.— 

13 (1) APPLICATION OF THE BANK HOLDING COM14 PANY ACT.—A financial company that is not a bank 

15 holding company as defined in the Bank Holding 

16 Company Act at the time of its identification under 

17 this section, shall— 

18 (A) if such company conducts at the time 

19 of its identification only activities that are de20 termined to be financial in nature or incidental 

21 thereto under section 4(k) of the Bank Holding 

22 Company Act, be treated as a bank holding 

23 company that has elected to be a financial hold24 ing company for purposes of the Bank Holding 

25 Company Act of 1956, as amended, the Federal 


wwoods2 on DSK1DXX6B1PROD with BILLS
28 

•HR 3996 IH

1 Deposit Insurance Act, as amended, and all 

2 other Federal laws and regulations governing 

3 bank holding companies and financial holding 

4 companies; or 

5 (B) if such company conducts at the time 

6 of its identification activities other than those 

7 that are determined to be financial in nature or 

8 incidental thereto under section 4(k) of the 

9 Bank Holding Company Act, be required to es10 tablish and conduct all its activities that are de11 termined to be financial in nature or incidental 

12 thereto under section 4(k) of the Bank Holding 

13 Company Act in an intermediate holding com14 pany established under section 6 of the Bank 

15 Holding Company Act, which intermediate hold16 ing company shall be the ‘‘identified financial 

17 holding company’’ for purposes of this subtitle. 

18 (2) EXEMPTIVE AUTHORITY.—Notwithstanding 

19 any provision of the Bank Holding Company Act, 

20 the Board may, if it determines such action is nec21 essary to ensure appropriate heightened prudential 

22 supervision, issue such exemptions from that Act as 

23 may be necessary with regard to identified financial 

24 holding companies that do not control an insured de25 pository institution. 


wwoods2 on DSK1DXX6B1PROD with BILLS
29 

•HR 3996 IH

1 (3) HEIGHTENED PRUDENTIAL REGULATION.— 

2 The Board shall apply heightened prudential stand3 ards to each identified financial holding company 

4 subject to this title. 

5 (f) NO PUBLIC LIST OF IDENTIFIED COMPANIES.— 

6 The Council and the Board may not publicly release a list 

7 of companies identified under this section. 

8 SEC. 1104. REGULATION OF IDENTIFIED FINANCIAL HOLD9 ING COMPANIES FOR FINANCIAL STABILITY 

10 PURPOSES. 

11 (a) PRUDENTIAL STANDARDS FOR IDENTIFIED FI12 NANCIAL HOLDING COMPANIES.— 

13 (1) IN GENERAL.—To mitigate risks to finan14 cial stability and the economy posed by an identified 

15 financial holding company, the Board shall impose 

16 heightened prudential standards on such company. 

17 Such standards shall be designed to maximize finan18 cial stability taking costs to long-term financial and 

19 economic growth into account, be heightened when 

20 compared to the standards that otherwise would 

21 apply to financial holding companies that are not 

22 identified pursuant to this subtitle (including by ad23 dressing additional or different types of risks than 

24 otherwise applicable standards), and reflect the poVerDate Nov 24 2008 00:06 Nov 20, 2009 Jkt 089200 PO 00000 Frm 00029 Fmt 6652 Sfmt 6201 E:\BILLS\H3996.IH H3996

wwoods2 on DSK1DXX6B1PROD with BILLS
30 

•HR 3996 IH

1 tential risk posed to financial stability by the identi2 fied financial holding company. 

3 (2) STANDARDS.— 

4 (A) REQUIRED STANDARDS.—The height5 ened standards imposed by the Board under 

6 this section shall include— 

7 (i) risk-based capital requirements; 

8 (ii) leverage limits; 

9 (iii) liquidity requirements; 

10 (iv) concentration requirements (as 

11 specified in subsection (c)); 

12 (v) prompt corrective action require13 ments (as specified in subsection (d)); 

14 (vi) resolution plan requirements (as 

15 specified in subsection (e)); and 

16 (vii) overall risk management require17 ments. 

18 (B) ADDITIONAL STANDARDS.—The 

19 heightened standards imposed by the Board 

20 under this section also may include any other 

21 prudential standards that the Board deems ad22 visable, including taking actions to mitigate sys23 temic risk (as specified in paragraph (5). 

24 (3) APPLICATION OF REQUIRED STANDARDS.— 

25 In imposing prudential standards under this subVerDate Nov 24 2008 00:06 Nov 20, 2009 Jkt 089200 PO 00000 Frm 00030 Fmt 6652 Sfmt 6201 E:\BILLS\H3996.IH H3996

wwoods2 on DSK1DXX6B1PROD with BILLS
31 

•HR 3996 IH

1 section, the Board may differentiate among identi2 fied financial holding companies on an individual 

3 basis or by category, taking into consideration their 

4 capital structure, risk, complexity, financial activi5 ties, the financial activities of their subsidiaries, and 

6 any other factors that the Board deems appropriate. 

7 (4) WELL CAPITALIZED AND WELL MAN8 AGED.—An identified financial holding company 

9 shall at all times after it files its registration state10 ment as an identified financial holding company be 

11 well capitalized and well managed as defined by the 

12 Board. 

13 (5) MITIGATION OF SYSTEMIC RISK.—If the 

14 Board determines, after notice and an opportunity 

15 for hearing, that the size of an identified financial 

16 holding company or the scope or nature of activities 

17 directly or indirectly conducted by an identified fi18 nancial holding company poses a threat to the safety 

19 and soundness of such company or to the financial 

20 stability of the United States, the Board may re21 quire the identified financial holding company to sell 

22 or otherwise transfer assets or off-balance sheet 

23 items to unaffiliated firms, to terminate one or more 

24 activities, or to impose conditions on the manner in 


wwoods2 on DSK1DXX6B1PROD with BILLS
32 

•HR 3996 IH

1 which the identified financial holding company con2 ducts one or more activities. 

3 (6) APPLICATION TO FOREIGN FINANCIAL COM4 PANIES.—The Board shall prescribe regulations re5 garding the application of heightened prudential 

6 standards to financial companies that are organized 

7 or incorporated in a country other than the United 

8 States, and that own or control a Federal or State 

9 branch, subsidiary, or operating entity that is an 

10 identified financial holding company, giving due re11 gard to the principle of national treatment and 

12 equality of competitive opportunity. 

13 (b) PRUDENTIAL STANDARDS AT FUNCTIONALLY

14 REGULATED SUBSIDIARIES AND SUBSIDIARY DEPOSI15 TORY INSTITUTIONS.— 

16 (1) BOARD AUTHORITY TO RECOMMEND STAND17 ARDS.—With respect to a functionally regulated sub18 sidiary (as such term is defined in section 5 of the 

19 Bank Holding Company Act) or a subsidiary deposi20 tory institution of an identified financial holding 

21 company, the Board may recommend that the rel22 evant primary financial regulatory agency for such 

23 functionally regulated subsidiary or subsidiary de24 pository institution prescribe heightened prudential 

25 standards on such functionally regulated subsidiary 


wwoods2 on DSK1DXX6B1PROD with BILLS
33 

•HR 3996 IH

1 or subsidiary depository institution. Any standards 

2 recommended by the Board under this section shall 

3 be of the same type as those described in subsection 

4 (a)(2) that the Board is required or authorized to 

5 impose directly on the identified financial holding 

6 company. 

7 (2) AGENCY AUTHORITY TO IMPLEMENT

8 HEIGHTENED STANDARDS AND SAFEGUARDS.—Each 

9 primary financial regulatory agency that receives a 

10 Board recommendation under paragraph (1) is au11 thorized to impose, require reports regarding, exam12 ine for compliance with, and enforce standards 

13 under this subsection with respect to the entities de14 scribed in øsection 2(6)¿ for which it is the primary 

15 financial regulatory agency. This authority is in ad16 dition to and does not limit any other authority of 

17 the primary financial regulatory agencies. Compli18 ance by an entity with actions taken by a primary 

19 financial regulatory agency under this section shall 

20 be enforceable in accordance with the statutes gov21 erning the respective agency’s jurisdiction over the 

22 entity as if the agency action were taken under those 

23 statutes. 

24 (3) IMPOSITION OF STANDARDS.—Standards 

25 imposed by a primary financial regulatory agency 


wwoods2 on DSK1DXX6B1PROD with BILLS
34 

•HR 3996 IH

1 under this subsection shall be the standards rec2 ommended by the Board or any other similar stand3 ards that the Board deems acceptable after consulta4 tion between the Board and the primary financial 

5 regulatory agency. 

6 (4) FAILURE TO ADOPT STANDARDS; NOTICE

7 TO COUNCIL AND BOARD.—If a primary financial 

8 regulatory agency fails to implement the prudential 

9 standards recommended by the Board or other simi10 lar standards that are acceptable to the Board with11 in 60 days of the Board’s recommendation, the 

12 agency shall justify in writing the failure of such 

13 agency to act to the Council and the Board within 

14 that same time period. 

15 (5) BACKUP AUTHORITY OF THE BOARD.— 

16 (A) IN GENERAL.—When notified that a 

17 primary financial regulatory agency has failed 

18 to impose the heightened prudential standards 

19 recommended by the Board for financial sta20 bility purposes under this subsection, the Board 

21 is authorized to directly impose, require reports 

22 regarding, examine for compliance with, and en23 force such heightened prudential standards 

24 under this subsection with respect to a func25 tionally regulated subsidiary for which the priVerDate Nov 24 2008 00:06 Nov 20, 2009 Jkt 089200 PO 00000 Frm 00034 Fmt 6652 Sfmt 6201 E:\BILLS\H3996.IH H3996

wwoods2 on DSK1DXX6B1PROD with BILLS
35 

•HR 3996 IH

1 mary financial regulatory agency ordinarily is 

2 responsible. 

3 (B) LIMITATIONS ON BOARD BACKUP AU4 THORITY.—The Board’s standard-imposition, 

5 report-related, examination, and enforcement 

6 activities under this subsection shall be limited 

7 to the heightened prudential standards imposed 

8 under this subsection. 

9 (c) CONCENTRATION LIMITS FOR IDENTIFIED FI10 NANCIAL HOLDING COMPANIES.— 

11 (1) STANDARDS.—In order to limit the risks 

12 that the failure of any company could pose to an 

13 identified financial holding company and to the sta14 bility of the United States financial system, the 

15 Board, by regulation, shall prescribe standards that 

16 limit the risks posed by the exposure of an identified 

17 financial holding company to any other company. 

18 (2) LIMITATION ON CREDIT EXPOSURE.—The 

19 regulations prescribed by the Board shall prohibit 

20 each identified financial holding company from hav21 ing credit exposure to any unaffiliated company that 

22 exceeds 25 percent of the identified financial holding 

23 company’s capital stock and surplus or such lower 

24 amount as the Board may determine by regulation 


wwoods2 on DSK1DXX6B1PROD with BILLS
36 

•HR 3996 IH

1 to be necessary to mitigate risks to financial sta2 bility. 

3 (3) CREDIT EXPOSURE.—For purposes of this 

4 subsection, an identified financial holding company’s 

5 ‘‘credit exposure’’ to a company means— 

6 (A) all extensions of credit to the company, 

7 including loans, deposits, and lines of credit; 

8 (B) all repurchase agreements and reverse 

9 repurchase agreement with the company; 

10 (C) all securities borrowing and lending 

11 transactions with the company to the extent 

12 that such transactions create credit exposure of 

13 the identified financial holding company to the 

14 company; 

15 (D) all guarantees, acceptances, or letters 

16 of credit (including endorsement or standby let17 ters of credit) issued on behalf of the company; 

18 (E) all purchases of or investment in secu19 rities issued by the company; 

20 (F) counterparty credit exposure to the 

21 company in connection with a derivative trans22 action between the identified financial holding 

23 company and the company; and 


wwoods2 on DSK1DXX6B1PROD with BILLS
37 

•HR 3996 IH

1 (G) any other similar transactions that the 

2 Board by regulation determines to be a credit 

3 exposure for purposes of this section. 

4 (4) ATTRIBUTION RULE.—For purposes of this 

5 subsection, any transaction by an identified financial 

6 holding company with any person is deemed a trans7 action with a company to the extent that the pro8 ceeds of the transaction are used for the benefit of, 

9 or transferred to, that company. 

10 (5) RULEMAKING.—The Board may issue such 

11 regulations and orders, including definitions con12 sistent with this subsection, as may be necessary to 

13 administer and carry out the purpose of this sub14 section. 

15 (6) EXEMPTIONS.—The Board may, by regula16 tion or order, exempt transactions, in whole or in 

17 part, from the definition of credit exposure if it finds 

18 that the exemption is in the public interest and con19 sistent with the purpose of this subsection. 

20 (7) TRANSITION PERIOD.—This subsection and 

21 any regulations and orders of the Board under the 

22 authority of this subsection shall not be effective 

23 until three years from the effective date of this sub24 section. The Board can extend the effective date for 


wwoods2 on DSK1DXX6B1PROD with BILLS
38 

•HR 3996 IH

1 up to two additional years to promote financial sta2 bility. 

3 (d) PROMPT CORRECTIVE ACTION FOR IDENTIFIED

4 FINANCIAL HOLDING COMPANIES.— 

5 (1) PROMPT CORRECTIVE ACTION REQUIRED.— 

6 The Board shall take prompt corrective action to re7 solve the problems of identified financial holding 

8 companies. 

9 (2) DEFINITIONS.—For purposes of this sec10 tion— 

11 (A) CAPITAL CATEGORIES.— 

12 (i) WELL CAPITALIZED.—An identi13 fied financial holding company is ‘‘well 

14 capitalized’’ if it exceeds the required min15 imum level for each relevant capital meas16 ure. 

17 (ii) UNDERCAPITALIZED.—An identi18 fied financial holding company is ‘‘under19 capitalized’’ if it fails to meet the required 

20 minimum level for any relevant capital 

21 measure. 

22 (iii) SIGNIFICANTLY UNDERCAPITAL23 IZED.—An identified financial holding 

24 company is ‘‘significantly undercapitalized’’ 

25 if it is significantly below the required minVerDate Nov 24 2008 00:06 Nov 20, 2009 Jkt 089200 PO 00000 Frm 00038 Fmt 6652 Sfmt 6201 E:\BILLS\H3996.IH H3996

wwoods2 on DSK1DXX6B1PROD with BILLS
39 

•HR 3996 IH

1 imum level for any relevant capital meas2 ure. 

3 (iv) CRITICALLY UNDERCAPITAL4 IZED.—An identified financial holding 

5 company is ‘‘critically undercapitalized’’ if 

6 it fails to meet any level specified in para7 graph (4)(C)(i). 

8 (3) OTHER DEFINITIONS.— 

9 (A) AVERAGE.—The ‘‘average’’ of an ac10 counting item (such as total assets or tangible 

11 equity) during a given period means the sum of 

12 that item at the close of business on each busi13 ness day during that period divided by the total 

14 number of business days in that period. 

15 (B) CAPITAL DISTRIBUTION.—The term 

16 ‘‘capital distribution’’ means— 

17 (i) a distribution of cash or other 

18 property by an identified financial holding 

19 company to its owners made on account of 

20 that ownership, but not including any divi21 dend consisting only of shares of the iden22 tified financial holding company or rights 

23 to purchase such shares; 

24 (ii) a payment by an identified finan25 cial holding company to repurchase, reVerDate Nov 24 2008 00:06 Nov 20, 2009 Jkt 089200 PO 00000 Frm 00039 Fmt 6652 Sfmt 6201 E:\BILLS\H3996.IH H3996

wwoods2 on DSK1DXX6B1PROD with BILLS
40 

•HR 3996 IH

1 deem, retire, or otherwise acquire any of 

2 its shares or other ownership interests, in3 cluding any extension of credit to finance 

4 any person’s acquisition of those shares or 

5 interests; or 

6 (iii) a transaction that the Board de7 termines, by order or regulation, to be in 

8 substance a distribution of capital to the 

9 owners of the identified financial holding 

10 company. 

11 (C) CAPITAL RESTORATION PLAN.—The 

12 term ‘‘capital restoration plan’’ means a plan 

13 submitted under paragraph (6)(B). 

14 (D) COMPENSATION.—The term ‘‘com15 pensation’’ includes any payment of money or 

16 provision of any other thing of value in consid17 eration of employment. 

18 (E) RELEVANT CAPITAL MEASURE.—The 

19 term ‘‘relevant capital measure’’ means the 

20 measures described in paragraph (4). 

21 (F) REQUIRED MINIMUM LEVEL.—The 

22 term ‘‘required minimum level’’ means, with re23 spect to each relevant capital measure, the min24 imum acceptable capital level specified by the 

25 Board by regulation. 


wwoods2 on DSK1DXX6B1PROD with BILLS
41 

•HR 3996 IH

1 (G) SENIOR EXECUTIVE OFFICER.—The 

2 term ‘‘senior executive officer’’ has the same 

3 meaning as the term ‘‘executive officer’’ in sec4 tion 22(h) of the Federal Reserve Act (12 

5 U.S.C. 375b). 

6 (4) CAPITAL STANDARDS.— 

7 (A) RELEVANT CAPITAL MEASURES.— 

8 (i) IN GENERAL.—Except as provided 

9 in clause (ii)(II), the capital standards pre10 scribed by the Board under subsection 6(c) 

11 of the Bank Holding Company Act of 1956 

12 (12 U.S.C. 1845(c)) shall include— 

13 (I) a leverage limit; and 

14 (II) a risk-based capital require15 ment. 

16 (ii) OTHER CAPITAL MEASURES.—The 

17 Board may by regulation— 

18 (I) establish any additional rel19 evant capital measures to carry out 

20 this section; or 

21 (II) rescind any relevant capital 

22 measure required under clause (i) 

23 upon determining that the measure is 

24 no longer an appropriate means for 

25 carrying out this section. 


wwoods2 on DSK1DXX6B1PROD with BILLS
42 

•HR 3996 IH

1 (B) CAPITAL CATEGORIES GENERALLY.— 

2 The Board shall, by regulation, specify for each 

3 relevant capital measure the levels at which an 

4 identified financial holding company is well cap5 italized, undercapitalized, and significantly 

6 undercapitalized. 

7 (C) CRITICAL CAPITAL.— 

8 (i) BOARD TO SPECIFY LEVEL.— 

9 (I) LEVERAGE LIMIT.—The 

10 Board shall, by regulation, specify the 

11 ratio of tangible equity to total assets 

12 at which an identified financial hold13 ing company is critically undercapital14 ized. 

15 (II) OTHER RELEVANT CAPITAL

16 MEASURES.—The Board may, by reg17 ulation, specify for 1 or more other 

18 relevant capital measures, the level at 

19 which an identified financial holding 

20 company is critically undercapitalized. 

21 (ii) LEVERAGE LIMIT RANGE.—The 

22 level specified under clause (i)(I) shall re23 quire tangible equity in an amount— 

24 (I) not less than 2 percent of 

25 total assets; and 


wwoods2 on DSK1DXX6B1PROD with BILLS
43 

•HR 3996 IH

1 (II) except as provided in sub2 clause (I), not more than 65 percent 

3 of the required minimum level of cap4 ital under the leverage limit. 

5 (5) CAPITAL DISTRIBUTIONS RESTRICTED.— 

6 (A) IN GENERAL.—An identified financial 

7 holding company shall make no capital distribu8 tion if, after making the distribution, the identi9 fied financial holding company would be under10 capitalized. 

11 (B) EXCEPTION.—Notwithstanding sub12 paragraph (A), the Board may permit an iden13 tified financial holding company to repurchase, 

14 redeem, retire, or otherwise acquire shares or 

15 ownership interests if the repurchase, redemp16 tion, retirement, or other acquisition— 

17 (i) is made in connection with the 

18 issuance of additional shares or obligations 

19 of the identified financial holding company 

20 in at least an equivalent amount; and 

21 (ii) will reduce the identified financial 

22 holding company’s financial obligations or 

23 otherwise improve the identified financial 

24 holding company’s financial condition. 


wwoods2 on DSK1DXX6B1PROD with BILLS
44 

•HR 3996 IH

1 (6) PROVISIONS APPLICABLE TO UNDER2 CAPITALIZED IDENTIFIED FINANCIAL COMPANIES.— 

3 (A) MONITORING REQUIRED.—The Board 

4 shall— 

5 (i) closely monitor the condition of 

6 any undercapitalized identified financial 

7 holding company; 

8 (ii) closely monitor compliance by any 

9 undercapitalized identified financial hold10 ing company with capital restoration plans, 

11 restrictions, and requirements imposed 

12 under this section; and 

13 (iii) periodically review the plan, re14 strictions, and requirements applicable to 

15 any undercapitalized identified financial 

16 holding company to determine whether the 

17 plan, restrictions, and requirements are ef18 fective. 

19 (B) CAPITAL RESTORATION PLAN RE20 QUIRED.— 

21 (i) IN GENERAL.—Any undercapital22 ized identified financial holding company 

23 shall submit an acceptable capital restora24 tion plan to the Board within the time al25 lowed by the Board under clause (iv). 


wwoods2 on DSK1DXX6B1PROD with BILLS
45 

•HR 3996 IH

1 (ii) CONTENTS OF PLAN.—The capital 

2 restoration plan shall— 

3 (I) specify— 

4 (aa) the steps the identified 

5 financial holding company will 

6 take to become well capitalized; 

7 (bb) the levels of capital to 

8 be attained by the identified fi9 nancial holding company during 

10 each year in which the plan will 

11 be in effect; 

12 (cc) how the identified fi13 nancial holding company will 

14 comply with the restrictions or 

15 requirements then in effect under 

16 this section; and 

17 (dd) the types and levels of 

18 activities in which the identified 

19 financial holding company will 

20 engage; and 

21 (II) contain such other informa22 tion that the Board may require. 

23 (iii) CRITERIA FOR ACCEPTING

24 PLAN.—The Board shall not accept a capVerDate Nov 24 2008 00:06 Nov 20, 2009 Jkt 089200 PO 00000 Frm 00045 Fmt 6652 Sfmt 6201 E:\BILLS\H3996.IH H3996

wwoods2 on DSK1DXX6B1PROD with BILLS
46 

•HR 3996 IH

1 ital restoration plan unless it determines 

2 that the plan— 

3 (I) complies with subparagraph 

4 (B); 

5 (II) is based on realistic assump6 tions, and is likely to succeed in re7 storing the identified financial holding 

8 company’s capital; and 

9 (III) would not appreciably in10 crease the risk (including credit risk, 

11 interest-rate risk, and other types of 

12 risk) to which the identified financial 

13 holding company is exposed. 

14 (iv) DEADLINES FOR SUBMISSION AND

15 REVIEW OF PLANS.—The Board shall, by 

16 regulation, establish deadlines that— 

17 (I) provide identified financial 

18 holding companies with reasonable 

19 time to submit capital restoration 

20 plans, and generally require an identi21 fied financial holding company to sub22 mit a plan not later than 45 days 

23 after it becomes undercapitalized; and 

24 (II) require the Board to act on 

25 capital restoration plans expeditiously, 


wwoods2 on DSK1DXX6B1PROD with BILLS
47 

•HR 3996 IH

1 and generally not later than 60 days 

2 after the plan is submitted. 

3 (C) ASSET GROWTH RESTRICTED.—An 

4 undercapitalized identified financial holding 

5 company shall not permit its average total as6 sets during any calendar quarter to exceed its 

7 average total assets during the preceding cal8 endar quarter unless— 

9 (i) the Board has accepted the identi10 fied financial holding company’s capital 

11 restoration plan; 

12 (ii) any increase in total assets is con13 sistent with the plan; and 

14 (iii) the identified financial holding 

15 company’s ratio of tangible equity to total 

16 assets increases during the calendar quar17 ter at a rate sufficient to enable it to be18 come well capitalized within a reasonable 

19 time. 

20 (D) PRIOR APPROVAL REQUIRED FOR AC21 QUISITIONS AND NEW LINES OF BUSINESS.—An 

22 undercapitalized identified financial holding 

23 company shall not, directly or indirectly, ac24 quire any interest in any company or insured 


wwoods2 on DSK1DXX6B1PROD with BILLS
48 

•HR 3996 IH

1 depository institution, or engage in any new line 

2 of business, unless— 

3 (i) the Board has accepted the identi4 fied financial holding company’s capital 

5 restoration plan, the identified financial 

6 holding company is implementing the plan, 

7 and the Board determines that the pro8 posed action is consistent with and will 

9 further the achievement of the plan; 

10 (ii) the Board determines that the 

11 specific proposed action is appropriate; or 

12 (iii) the Board has exempted the iden13 tified financial holding company from the 

14 requirements of this paragraph with re15 spect to the class of acquisitions that in16 cludes the proposed action. 

17 (E) DISCRETIONARY SAFEGUARDS.—The 

18 Board may, with respect to any undercapital19 ized identified financial holding company, take 

20 actions described in any subparagraph of para21 graph (7)(B) if the Board determines that 

22 those actions are necessary. 

23 (7) PROVISIONS APPLICABLE TO SIGNIFICANTLY

24 UNDERCAPITALIZED IDENTIFIED FINANCIAL HOLD25 ING COMPANIES AND UNDERCAPITALIZED IDENTIVerDate Nov 24 2008 00:06 Nov 20, 2009 Jkt 089200 PO 00000 Frm 00048 Fmt 6652 Sfmt 6201 E:\BILLS\H3996.IH H3996

wwoods2 on DSK1DXX6B1PROD with BILLS
49 

•HR 3996 IH

1 FIED FINANCIAL HOLDING COMPANIES THAT FAIL

2 TO SUBMIT AND IMPLEMENT CAPITAL RESTORATION

3 PLANS.— 

4 (A) IN GENERAL.—This paragraph shall 

5 apply with respect to any identified financial 

6 holding company that— 

7 (i) is significantly undercapitalized; or 

8 (ii) is undercapitalized and— 

9 (I) fails to submit an acceptable 

10 capital restoration plan within the 

11 time allowed by the Board under sub12 section (e)(2)(D); or 

13 (II) fails in any material respect 

14 to implement a capital restoration 

15 plan accepted by the Board. 

16 (B) SPECIFIC ACTIONS AUTHORIZED.—The 

17 Board shall carry out this paragraph by taking 

18 1 or more of the following actions: 

19 (i) REQUIRING RECAPITALIZATION.— 

20 Doing one or more of the following— 

21 (I) Requiring the identified fi22 nancial holding company to sell 

23 enough shares or obligations of the 

24 identified financial holding company 

25 so that the identified financial holding 


wwoods2 on DSK1DXX6B1PROD with BILLS
50 

•HR 3996 IH

1 company will be well capitalized after 

2 the sale. 

3 (II) Further requiring that in4 struments sold under clause (I) be 

5 voting shares. 

6 (III) Requiring the identified fi7 nancial holding company to be ac8 quired by or combine with another 

9 company. 

10 (ii) RESTRICTING TRANSACTIONS

11 WITH AFFILIATES.— 

12 (I) Requiring the identified fi13 nancial holding company to comply 

14 with section 23A of the Federal Re15 serve Act (12 U.S.C. 371c), as if it 

16 were a member bank. 

17 (II) Further restricting the iden18 tified financial holding company’s 

19 transactions with affiliates and insid20 ers. 

21 (iii) RESTRICTING ASSET GROWTH.— 

22 Restricting the identified financial holding 

23 company’s asset growth more stringently 

24 than subsection (6)(C), or requiring the 


wwoods2 on DSK1DXX6B1PROD with BILLS
51 

•HR 3996 IH

1 identified financial holding company to re2 duce its total assets. 

3 (iv) RESTRICTING ACTIVITIES.—Re4 quiring the identified financial holding 

5 company or any of its subsidiaries to alter, 

6 reduce, or terminate any activity that the 

7 Board determines poses excessive risk to 

8 the identified financial holding company. 

9 (v) IMPROVING MANAGEMENT.—Doing 

10 one or more of the following: 

11 (I) NEW ELECTION OF DIREC12 TORS.—Ordering a new election for 

13 the identified financial holding com14 pany’s board of directors. 

15 (II) DISMISSING DIRECTORS OR

16 SENIOR EXECUTIVE OFFICERS.—Re17 quiring the identified financial holding 

18 company to dismiss from office any 

19 director or senior executive officer 

20 who had held office for more than 180 

21 days immediately before the identified 

22 financial holding company became 

23 undercapitalized. Dismissal under this 

24 clause shall not be construed to be a 

25 removal under section 8 of the FedVerDate Nov 24 2008 00:06 Nov 20, 2009 Jkt 089200 PO 00000 Frm 00051 Fmt 6652 Sfmt 6201 E:\BILLS\H3996.IH H3996

wwoods2 on DSK1DXX6B1PROD with BILLS
52 

•HR 3996 IH

1 eral Deposit Insurance Act (12 U.S.C. 

2 1818). 

3 (III) EMPLOYING QUALIFIED

4 SENIOR EXECUTIVE OFFICERS.—Re5 quiring the identified financial holding 

6 company to employ qualified senior 

7 executive officers (who, if the Board 

8 so specifies, shall be subject to ap9 proval by the Board). 

10 (vi) REQUIRING DIVESTITURE.—Re11 quiring the identified financial holding 

12 company to divest itself of or liquidate any 

13 subsidiary if the Board determines that the 

14 subsidiary is in danger of becoming insol15 vent, poses a significant risk to the identi16 fied financial holding company, or is likely 

17 to cause a significant dissipation of the 

18 identified financial holding company’s as19 sets or earnings. 

20 (vii) REQUIRING OTHER ACTION.—Re21 quiring the Identified financial company to 

22 take any other action that the Board de23 termines will better carry out the purpose 

24 of this section than any of the actions de25 scribed in this paragraph. 


wwoods2 on DSK1DXX6B1PROD with BILLS
53 

•HR 3996 IH

1 (C) PRESUMPTION IN FAVOR OF CERTAIN

2 ACTIONS.—In complying with subparagraph 

3 (B), the Board shall take the following actions, 

4 unless the Board determines that the actions 

5 would not be appropriate— 

6 (i) The action described in subclause 

7 (I) or (II) of subparagraph (B)(i) (relating 

8 to requiring the sale of shares or obliga9 tions, or requiring the identified financial 

10 holding company to be acquired by or com11 bine with another company). 

12 (ii) The action described in paragraph 

13 (B)(ii)(I) (relating to restricting trans14 actions with affiliates). 

15 (D) SENIOR EXECUTIVE OFFICERS’ COM16 PENSATION RESTRICTED.— 

17 (i) IN GENERAL.—The identified fi18 nancial holding company shall not do any 

19 of the following without the prior written 

20 approval of the Board: 

21 (I) Pay any bonus to any senior 

22 executive officer. 

23 (II) Provide compensation to any 

24 senior executive officer at a rate ex25 ceeding that officer’s average rate of 


wwoods2 on DSK1DXX6B1PROD with BILLS
54 

•HR 3996 IH

1 compensation (excluding bonuses, 

2 stock options, and profit-sharing) dur3 ing the 12 calendar months preceding 

4 the calendar month in which the iden5 tified financial holding company be6 came undercapitalized. 

7 (ii) FAILING TO SUBMIT PLAN.—The 

8 Board shall not grant any approval under 

9 clause (i) with respect to an identified fi10 nancial holding company that has failed to 

11 submit an acceptable capital restoration 

12 plan. 

13 (E) CONSULTATION WITH OTHER REGU14 LATORS.—Before the Board makes a deter15 mination under subparagraph (B)(vi) with re16 spect to a subsidiary that is a broker, dealer, 

17 government securities broker, government secu18 rities dealer, investment company, or invest19 ment adviser, the Board shall consult with the 

20 Securities and Exchange Commission and, in 

21 the case of any other subsidiary which is sub22 ject to any financial responsibility or capital re23 quirement, any other appropriate regulator of 

24 such subsidiary with respect to the proposed deVerDate Nov 24 2008 00:06 Nov 20, 2009 Jkt 089200 PO 00000 Frm 00054 Fmt 6652 Sfmt 6201 E:\BILLS\H3996.IH H3996

wwoods2 on DSK1DXX6B1PROD with BILLS
55 

•HR 3996 IH

1 termination of the Board and actions pursuant 

2 to such determination. 

3 (8) MORE STRINGENT TREATMENT BASED ON

4 OTHER SUPERVISORY CRITERIA.— 

5 (A) IN GENERAL.—If the Board deter6 mines (after notice and an opportunity for 

7 hearing) that an identified financial holding 

8 company is in an unsafe or unsound condition 

9 or, pursuant to section 8(b)(8) of the Federal 

10 Deposit Insurance Act (12 U.S.C. 1818(b)(8)), 

11 deems the identified financial holding company 

12 to be engaging in an unsafe or unsound prac13 tice, the Board may— 

14 (i) if the identified financial holding 

15 company is well capitalized, require the 

16 identified financial holding company to 

17 comply with one or more provisions of 

18 paragraphs (5) and (6), as if the institu19 tion were undercapitalized; or 

20 (ii) if the identified financial holding 

21 company is undercapitalized, take any one 

22 or more actions authorized under para23 graph (7)(B) as if the identified financial 

24 holding company were significantly under25 capitalized. 


wwoods2 on DSK1DXX6B1PROD with BILLS
56 

•HR 3996 IH

1 (B) CONTENTS OF PLAN.—A plan that 

2 may be required pursuant to subparagraph 

3 (A)(i) shall specify the steps that the identified 

4 financial holding company will take to correct 

5 the unsafe or unsound condition or practice. 

6 (9) MANDATORY BANKRUPTCY PETITION FOR

7 CRITICALLY UNDERCAPITALIZED IDENTIFIED FINAN8 CIAL COMPANIES.—The Board shall, not later than 

9 90 days after an identified financial holding com10 pany becomes critically undercapitalized— 

11 (A) require the identified financial holding 

12 company to file a petition for bankruptcy under 

13 section 301 of title 11, United States Code; or 

14 (B) file a petition for bankruptcy against 

15 the identified financial holding company under 

16 section 303 of title 11, United States Code. 

17 (10) IMPLEMENTATION.—The Board shall pre18 scribe such regulations, issue such orders, and take 

19 such other actions the Board determines to be nec20 essary to carry out this section. 

21 (11) OTHER AUTHORITY NOT AFFECTED.—This 

22 section does not limit any authority of the Board, 

23 any other Federal regulatory agency, or a State to 

24 take action in addition to (but not in derogation of) 

25 that required under this section. 


wwoods2 on DSK1DXX6B1PROD with BILLS
57 

•HR 3996 IH

1 (12) CONSULTATION.—The Board and the Sec2 retary of the Treasury shall consult with their for3 eign counterparties and through appropriate multi4 lateral organizations to reach agreement to extend 

5 comprehensive and robust prudential supervision and 

6 regulation to all highly leveraged and substantially 

7 interconnected financial companies. 

8 (13) ADMINISTRATIVE REVIEW OF DISMISSAL

9 ORDERS.— 

10 (A) TIMELY PETITION REQUIRED.—A di11 rector or senior executive officer dismissed pur12 suant to an order under paragraph 

13 (7)(B)(v)(II) may obtain review of that order 

14 by filing a written petition for reinstatement 

15 with the Board not later than 10 days after re16 ceiving notice of the dismissal. 

17 (B) PROCEDURE.— 

18 (i) HEARING REQUIRED.—The Board 

19 shall give the petitioner an opportunity 

20 to— 

21 (I) submit written materials in 

22 support of the petition; and 

23 (II) appear, personally or 

24 through counsel, before 1 or more 


wwoods2 on DSK1DXX6B1PROD with BILLS
58 

•HR 3996 IH

1 members of the Board or designated 

2 employees of the Board. 

3 (ii) DEADLINE FOR HEARING.—The 

4 Board shall— 

5 (I) schedule the hearing referred 

6 to in clause (i)(II) promptly after the 

7 petition is filed; and 

8 (II) hold the hearing not later 

9 than 30 days after the petition is 

10 filed, unless the petitioner requests 

11 that the hearing be held at a later 

12 time. 

13 (iii) DEADLINE FOR DECISION.—Not 

14 later than 60 days after the date of the 

15 hearing, the Board shall— 

16 (I) by order, grant or deny the 

17 petition; 

18 (II) if the order is adverse to the 

19 petitioner, set forth the basis for the 

20 order; and 

21 (III) notify the petitioner of the 

22 order. 

23 (C) STANDARD FOR REVIEW OF DISMISSAL

24 ORDERS.—The petitioner shall bear the burden 

25 of proving that the petitioner’s continued emVerDate Nov 24 2008 00:06 Nov 20, 2009 Jkt 089200 PO 00000 Frm 00058 Fmt 6652 Sfmt 6201 E:\BILLS\H3996.IH H3996

wwoods2 on DSK1DXX6B1PROD with BILLS
59 

•HR 3996 IH

1 ployment would materially strengthen the iden2 tified financial holding company’s ability— 

3 (i) to become well capitalized, to the 

4 extent that the order is based on the iden5 tified financial holding company’s capital 

6 level or failure to submit or implement a 

7 capital restoration plan; and 

8 (ii) to correct the unsafe or unsound 

9 condition or unsafe or unsound practice, to 

10 the extent that the order is based on para11 graph (8)(A). 

12 (e) REPORTS REGARDING RAPID AND ORDERLY RES13 OLUTION AND CREDIT EXPOSURE.— 

14 (1) IN GENERAL.—The Board shall require 

15 each identified financial holding company to report 

16 periodically to the Board on— 

17 (A) its plan for rapid and orderly resolu18 tion in the event of severe financial distress; 

19 (B) the nature and extent to which the 

20 identified financial holding company has credit 

21 exposure to other significant financial compa22 nies; and 

23 (C) the nature and extent to which other 

24 significant financial companies have credit exVerDate Nov 24 2008 00:06 Nov 20, 2009 Jkt 089200 PO 00000 Frm 00059 Fmt 6652 Sfmt 6201 E:\BILLS\H3996.IH H3996

wwoods2 on DSK1DXX6B1PROD with BILLS
60 

•HR 3996 IH

1 posure to the identified financial holding com2 pany. 

3 (2) NO LIMITING EFFECT ON RECEIVER OR

4 QUALIFIED RECEIVER.—A rapid resolution plan sub5 mitted in accordance with this subsection shall not 

6 be binding on a receiver or qualified receiver ap7 pointed under subtitle G, a bankruptcy court, or any 

8 other authority that is authorized or required to re9 solve the identified financial holding company or any 

10 of its subsidiaries or affiliates. 

11 (f) AVOIDING DUPLICATION.—The Board shall take 

12 any action the Board deems appropriate to avoid imposing 

13 duplicative requirements under this chapter for identified 

14 financial holding companies that are also bank holding 

15 companies. 

16 SEC. 1105. AUTHORITY TO FILE INVOLUNTARY PETITION 

17 FOR BANKRUPTCY. 

18 Section 303 of title 11, United States Code is amend19 ed— 

20 ø(1) in subsection (h)—¿ 

21 ø(A) by striking ‘‘or’’ at the end of para22 graph (1); and¿ 

23 ø(B) by striking the period at the end of 

24 paragraph (2) and inserting ‘‘; or’’; and¿ 

25 (2) by adding the following new subsection: 


wwoods2 on DSK1DXX6B1PROD with BILLS
61 

•HR 3996 IH

1 ‘‘(m) Notwithstanding subsections (a) and (b) of this 

2 section, an involuntary case may be commenced by the 

3 Board of Governors of the Federal Reserve System 

4 against an identified financial holding company as defined 

5 in section 2(t) of the Bank Holding Company Act of 1956. 

6 Such involuntary case may be commenced on the ground 

7 that the identified financial holding company is critically 

8 undercapitalized as defined in section 6A(b) of the Bank 

9 Holding Company Act of 1956.’’. 

10 SEC. 1106. IDENTIFICATION OF ACTIVITIES OR PRACTICES 

11 FOR HEIGHTENED PRUDENTIAL STANDARDS 

12 AND SAFEGUARDS FOR FINANCIAL STA13 BILITY PURPOSES. 

14 (a) IN GENERAL.—The Council may subject a finan15 cial activity or practice to heightened prudential standards 

16 and safeguards under section 1107 if the Council deter17 mines that the conduct of such activity or practice could 

18 create or increase the risk of significant liquidity, credit, 

19 or other problems spreading among financial institutions 

20 or markets and thereby threaten the stability of the finan21 cial system. 

22 (b) PERIODIC REVIEW OF ACTIVITY IDENTIFICA23 TIONS.— 

24 (1) SUBMISSION OF ASSESSMENT.—The Board 

25 shall periodically submit a report to the Council conVerDate Nov 24 2008 00:06 Nov 20, 2009 Jkt 089200 PO 00000 Frm 00061 Fmt 6652 Sfmt 6201 E:\BILLS\H3996.IH H3996

wwoods2 on DSK1DXX6B1PROD with BILLS
62 

•HR 3996 IH

1 taining an assessment of whether each activity or 

2 practice subjected to heightened prudential stand3 ards should continue to be subject to such stand4 ards. 

5 (2) REVIEW AND RECISION.—The Council 

6 shall— 

7 (A) review the assessment submitted pur8 suant to paragraph (1) and any information or 

9 recommendation submitted by members of the 

10 Council regarding whether an identified finan11 cial activity continues to merit heightened pru12 dential standards; and 

13 (B) rescind the action subjecting an activ14 ity to heightened prudential supervision if the 

15 Council determines that the activity no longer 

16 meets the criteria in subsection (a). 

17 (c) PROCEDURE FOR IDENTIFYING OR RESCINDING

18 IDENTIFICATION OF AN ACTIVITY OR PRACTICE.— 

19 (1) COUNCIL AND BOARD COORDINATION.—The 

20 Council shall inform the Board if the Council is con21 sidering whether to identify or cease to identify an 

22 activity under this section. 

23 (2) NOTICE AND OPPORTUNITY FOR CONSIDER24 ATION OF WRITTEN MATERIALS.— 


wwoods2 on DSK1DXX6B1PROD with BILLS
63 

•HR 3996 IH

1 (A) IN GENERAL.—The Board shall, in an 

2 executive capacity on behalf of the Council, pro3 vide notice to financial companies that the 

4 Council is considering whether to identify an 

5 activity or practice for heightened prudential 

6 regulation, and shall provide a financial com7 pany engaged in such activity or practice 30 

8 days to submit written materials to inform the 

9 Council’s decision. The Council shall decide, 

10 and the Board shall provide notice of the Coun11 cil’s decision, within 60 days of the due date for 

12 such written materials. 

13 (B) EMERGENCY EXCEPTION.—The Coun14 cil may waive or modify the requirements of 

15 subparagraph (A) if the Council determines 

16 that such waiver or modification is necessary or 

17 appropriate to prevent or mitigate threats posed 

18 by an activity to financial stability. The Board 

19 shall, in an executive capacity on behalf of the 

20 Council, provide notice of such waiver or modi21 fication to financial companies as soon as prac22 ticable, which shall be no later than 24 hours 

23 after the waiver or modification. 

24 (3) FORM OF DECISION.—The Board shall pro25 vide all notices required under this subsection by 


wwoods2 on DSK1DXX6B1PROD with BILLS
64 

•HR 3996 IH

1 posting a notice on the Board’s Web site and pub2 lishing a notice in the Federal Register. 

3 (d) EFFECT OF IDENTIFICATION.—The Board shall, 

4 in accordance with section 1107, recommend to the appro5 priate primary financial regulatory agencies specific 

6 heightened prudential standards to be applied to an activ7 ity or practice that the Council or the Board identifies 

8 under this section. 

9 SEC. 1107. REGULATION OF IDENTIFIED ACTIVITIES FOR 

10 FINANCIAL STABILITY PURPOSES. 

11 (a) LIMITATIONS ON IDENTIFIED FINANCIAL ACTIVI12 TIES AND PRACTICES.— 

13 (1) RECOMMENDATIONS.—To mitigate the risks 

14 to United States financial stability and the United 

15 States economy posed by financial activities and 

16 practices that the Council or the Board identifies for 

17 heightened prudential scrutiny in accordance with 

18 section 1103, the Board shall recommend prudential 

19 standards to the appropriate primary financial regu20 latory agencies to apply to such identified activities 

21 and practices. 

22 (2) CRITERIA.—The actions recommended 

23 under paragraph (1)— 


wwoods2 on DSK1DXX6B1PROD with BILLS
65 

•HR 3996 IH

1 (A) shall be designed to maximize financial 

2 stability, taking costs to long-term financial and 

3 economic growth into account; and 

4 (B) may include prescribing the conduct of 

5 the activity or practice in specific ways (such as 

6 by limiting its scope, or applying particular cap7 ital or risk-management requirements to the 

8 conduct of the activity) or prohibiting the activ9 ity or practice altogether. 

10 (b) IMPLEMENTATION OF RECOMMENDED STAND11 ARDS.— 

12 (1) ROLE OF PRIMARY FINANCIAL REGULATORY

13 AGENCY.—Each primary financial regulatory agency 

14 is authorized to impose, require reports regarding, 

15 examine for compliance with, and enforce standards 

16 in accordance with this section with respect to those 

17 entities described in øsection 2(6)¿ for which it is 

18 the primary financial regulatory agency. This au19 thority is in addition to and does not limit any other 

20 authority of the primary financial regulatory agen21 cies. Compliance by an entity with actions taken by 

22 a primary financial regulatory agency under this sec23 tion shall be enforceable in accordance with the stat24 utes governing the respective primary financial reguVerDate Nov 24 2008 00:06 Nov 20, 2009 Jkt 089200 PO 00000 Frm 00065 Fmt 6652 Sfmt 6201 E:\BILLS\H3996.IH H3996

wwoods2 on DSK1DXX6B1PROD with BILLS
66 

•HR 3996 IH

1 latory agency’s jurisdiction over the entity as if the 

2 agency action were taken under those statutes. 

3 (2) IMPOSITION OF STANDARDS.—Standards 

4 imposed under this subsection shall be the standards 

5 recommended by the Board in accordance with sub6 section (a) or any other similar standards that the 

7 Board deems acceptable after consultation between 

8 the Board and the primary financial regulatory 

9 agency. 

10 (3) FAILURE TO ADOPT STANDARDS; NOTICE

11 TO COUNCIL AND BOARD.—If a primary financial 

12 regulatory agency fails to implement the prudential 

13 standards recommended by the Board or other simi14 lar standards that are acceptable to the Board with15 in 60 days of the Board’s recommendation, the pri16 mary financial regulatory agency shall justify the 

17 failure of such agency to act in writing to the Coun18 cil and the Board within that same time period. 

19 (4) BACKUP AUTHORITY OF THE BOARD.— 

20 (A) IN GENERAL.—When notified that a 

21 primary financial regulatory agency has failed 

22 to impose heightened prudential standards rec23 ommended by the Board for financial stability 

24 purposes under this section, the Board is au25 thorized to directly impose, require reports reVerDate Nov 24 2008 00:06 Nov 20, 2009 Jkt 089200 PO 00000 Frm 00066 Fmt 6652 Sfmt 6201 E:\BILLS\H3996.IH H3996

wwoods2 on DSK1DXX6B1PROD with BILLS
67 

•HR 3996 IH

1 garding, examine for compliance with, and en2 force such heightened prudential standards 

3 under this section with respect to entities de4 scribed in section 2(6) for which the primary fi5 nancial regulatory agency ordinarily is respon6 sible. 

7 (B) LIMITATION ON BOARD BACKUP AU8 THORITY.—The Board’s standard-imposition, 

9 report-related, examination, and enforcement 

10 activities under this subsection shall be limited 

11 to heightened prudential standards imposed 

12 under this section and shall be done in coordi13 nation with the primary financial regulatory 

14 agency. 

15 SEC. 1108. EFFECT OF RESCISSION OF IDENTIFICATION. 

16 (a) NOTICE.—When the Council or the Board deter17 mines that a company or activity no longer is identified 

18 for heightened prudential scrutiny, the Board shall inform 

19 the relevant primary financial regulatory agency or agen20 cies (if different from the Board) of that finding. 

21 (b) DETERMINATION OF PRIMARY FINANCIAL REGU22 LATORY AGENCY TO CONTINUE.—A primary financial 

23 regulatory agency that has imposed heightened prudential 

24 standards for financial stability purposes under this subVerDate Nov 24 2008 00:06 Nov 20, 2009 Jkt 089200 PO 00000 Frm 00067 Fmt 6652 Sfmt 6201 E:\BILLS\H3996.IH H3996

wwoods2 on DSK1DXX6B1PROD with BILLS
68 

•HR 3996 IH

1 title shall determine whether standards that it has im2 posed under this subtitle should remain in effect. 

3 SEC. 1109. EMERGENCY FINANCIAL STABILIZATION. 

4 (a) IN GENERAL.—Upon the written approval of the 

5 Board of Governors of the Federal Reserve System (which 

6 approval shall be made upon a vote of not less than two7 thirds of the members of such Board then serving) and 

8 the Board of Directors of the Corporation (which approval 

9 shall be made upon a vote of not less than two-thirds of 

10 the members of such Board then serving), and with the 

11 written consent of the Secretary of the Treasury (after 

12 consulting with the President), the Corporation may ex13 tend credit to or guarantee obligations of solvent insured 

14 depository institutions or other solvent companies that are 

15 predominantly engaged in activities that are financial in 

16 nature, if necessary to prevent financial instability during 

17 times of severe economic distress, provided that a credit 

18 extension or guarantee of obligations under this section 

19 shall not include provision of equity in any form. 

20 (b) POLICIES AND PROCEDURES.—Prior to exercising 

21 any authority under this section, the Corporation shall es22 tablish policies and procedures governing the extension of 

23 credit and the issuance of guarantees. The terms and con24 ditions of any extensions of credit or guarantees issued 

25 shall be established by the Corporation with the approval 


wwoods2 on DSK1DXX6B1PROD with BILLS
69 

•HR 3996 IH

1 of the Secretary of the Treasury and the Board of Gov2 ernors of the Federal Reserve System. 

3 (c) FUNDING.—There shall be available to the Cor4 poration to carry out this section amounts in the Treasury 

5 not otherwise appropriated, including for the payment of 

6 reasonable administrative expenses. Notwithstanding sec7 tion 7(d) of the Federal Deposit Insurance Act (12 U.S.C. 

8 1817(d)), such amounts shall be subject to apportionment 

9 for the purposes of chapter 15 of title 31, United States 

10 Code. Amounts received by the Corporation from assess11 ments imposed under subsection (d), extensions of credit, 

12 and guarantees, including payments of principal, interest, 

13 and guarantee fees, shall be covered into the Treasury as 

14 miscellaneous receipts. 

15 (d) RECOUPMENT; ASSESSMENT.—Any losses in16 curred by the Corporation pursuant to subsection (a) shall 

17 be recovered from Corporation assessments on large finan18 cial companies in the manner provided in section 1609(o) 

19 of the Resolution Authority for Large, Interconnected Fi20 nancial Companies Act of 2009. 

21 (e) DEFINITIONS.—For purposes of this section, the 

22 following definitions apply: 

23 (1) ACTIVITIES THAT ARE FINANCIAL IN NA24 TURE.—The term ‘‘activities that are financial in 

25 nature’’ means activities that are determined to be 


wwoods2 on DSK1DXX6B1PROD with BILLS
70 

•HR 3996 IH

1 financial in nature under section 4(k) of the Bank 

2 Holding Company Act of 1956 (12 U.S.C. 1843(k)) 

3 and activities that are identified for heightened pru4 dential standards under section 1106 of this title. 

5 (2) COMPANY.—The term ‘‘company’’ means 

6 any entity other than a natural person that is incor7 porated or organized under Federal law or the laws 

8 of any State. 

9 (3) CORPORATION.—The term ‘‘Corporation’’ 

10 means the Federal Deposit Insurance Corporation. 

11 (4) INSURED DEPOSITORY INSTITUTION.—The 

12 term ‘‘insured depository institution’’ shall have the 

13 same meaning as in section 3 of the Federal Deposit 

14 Insurance Act (12 U.S.C. 1813). 

15 (5) SOLVENT.—The term ‘‘solvent’’ means as16 sets are more than the obligations to creditors. 

17 SEC. 1110. EXAMINATIONS AND ENFORCEMENT ACTIONS 

18 FOR INSURANCE AND RESOLUTIONS PUR19 POSES. 

20 (a) EXAMINATIONS FOR INSURANCE AND RESOLU21 TIONS PURPOSES.—Section 10(b)(3) of the Federal De22 posit Insurance Act (12 U.S.C. 1820(b)(3)) is amended 

23 by striking beginning ‘‘whenever the Board of Directors 

24 determines’’ through the period and inserting ‘‘or identi25 fied financial holding company (as defined in section 2(5)) 


wwoods2 on DSK1DXX6B1PROD with BILLS
71 

•HR 3996 IH

1 whenever the Board of Directors determines a special ex2 amination of any such depository institution is necessary 

3 to determine the condition of such depository institution 

4 for insurance or such identified financial holding company 

5 for resolution purposes.’’. 

6 (b) ENFORCEMENT AUTHORITY.—Section 8(t) of the 

7 Federal Deposit Insurance Act (12 U.S.C. 1818(t)) is 

8 amended— 

9 (1) at the end of subparagraph (B) by striking 

10 ‘‘or’’; 

11 (2) at the end of subparagraph (C) by striking 

12 the period and inserting ‘‘; or’’; 

13 (3) by inserting new subparagraph (D), as fol14 lows: 

15 ‘‘(D) the conduct or threatened conduct 

16 (including any acts or omissions) of the deposi17 tory institution holding company poses a risk to 

18 the Deposit Insurance Fund.’’; and 

19 (4) by adding new paragraph (6) at the end as 

20 follows— 

21 ‘‘(6) For purposes of this subsection: 

22 ‘‘(A) The Corporation shall have the same 

23 powers with respect to a depository institution 

24 holding company and its affiliates as the approVerDate Nov 24 2008 00:06 Nov 20, 2009 Jkt 089200 PO 00000 Frm 00071 Fmt 6652 Sfmt 6201 E:\BILLS\H3996.IH H3996

wwoods2 on DSK1DXX6B1PROD with BILLS
72 

•HR 3996 IH

1 priate Federal banking agency has with respect 

2 to the holding company and its affiliates; and 

3 ‘‘(B) the holding company and its affiliates 

4 shall have the same duties and obligations with 

5 respect to the Corporation as the holding com6 pany and its affiliates have with respect to the 

7 appropriate Federal banking agency.’’ 

8 SEC. 1111. RULE OF CONSTRUCTION. 

9 The authorities granted to agencies under this sub10 title are in addition to any rulemaking, report-related, ex11 amination, enforcement, or other authority that such 

12 agencies may have under other law and in no way shall 

13 be construed to limit such other authority, except that any 

14 standards imposed for financial stability purposes under 

15 this subtitle shall supersede any conflicting less stringent 

16 requirements of the primary financial regulatory agency 

17 but only the extent of the conflict. 

18 Subtitle C—Improvements to Su19 pervision and Regulation of 

20 Federal Depository Institutions 

21 SEC. 1201. DEFINITIONS. 

22 For purposes of this subtitle, the following definitions 

23 shall apply: 


wwoods2 on DSK1DXX6B1PROD with BILLS
73 

•HR 3996 IH

1 (1) BOARD OF GOVERNORS.—The term ‘‘Board 

2 of Governors’’ means the Board of Governors of the 

3 Federal Reserve System. 

4 (2) CORPORATION.—The term ‘‘Corporation’’ 

5 means the Federal Deposit Insurance Corporation. 

6 (3) OFFICE OF THE COMPTROLLER OF THE

7 CURRENCY.—The term ‘‘Office of the Comptroller of 

8 the Currency’’ means the office established by sec9 tion 324 of the Revised Statutes (12 U.S.C. 1). 

10 (4) OFFICE OF THRIFT SUPERVISION.—The 

11 term ‘‘Office of Thrift Supervision’’ means the office 

12 established by section 3 of the Home Owners’ Loan 

13 Act (12 U.S.C. 1462a). 

14 (5) SECRETARY.—The term ‘‘Secretary’’ means 

15 the Secretary of the Treasury. 

16 (6) TRANSFER DATE.—The term ‘‘transfer 

17 date’’ has the meaning provided in section 1205. 

18 (7) CERTAIN OTHER TERMS.—The terms ‘‘affil19 iate’’, ‘‘bank holding company’’, ‘‘control’’ (when 

20 used with respect to a depository institution), ‘‘de21 pository institution’’, ‘‘Federal banking agency’’, 

22 ‘‘Federal savings association’’, ‘‘including’’, ‘‘insured 

23 branch’’, ‘‘insured depository institution’’, ‘‘savings 

24 association’’, ‘‘State savings association’’, and ‘‘subVerDate Nov 24 2008 00:06 Nov 20, 2009 Jkt 089200 PO 00000 Frm 00073 Fmt 6652 Sfmt 6201 E:\BILLS\H3996.IH H3996

wwoods2 on DSK1DXX6B1PROD with BILLS
74 

•HR 3996 IH

1 sidiary’’ have the same meanings as in section 3 of 

2 the Federal Deposit Insurance Act. 

3 SEC. 1202. AMENDMENTS TO THE HOME OWNERS’ LOAN 

4 ACT RELATING TO TRANSFER OF FUNCTIONS. 

5 (a) AMENDMENTS TO SECTION 2.—Section 2 of the 

6 Home Owners’ Loan Act (12 U.S.C. 1462) is amended 

7 by amending paragraph (1) to read as follows: 

8 ‘‘(1) BOARD OF GOVERNORS.—The term ‘Board 

9 of Governors’ means the Board of Governors of the 

10 Federal Reserve System.’’. 

11 (b) AMENDMENTS TO SECTION 3.—Section 3 of the 

12 Home Owners’ Loan Act (12 U.S.C. 1462a) is amended— 

13 (1) by striking subsection (a) and inserting the 

14 following new subsection: 

15 ‘‘(a) ESTABLISHMENT OF DIVISION OF THRIFT SU16 PERVISION.—To carry out the purposes of this Act, there 

17 is hereby established the Division of Thrift Supervision, 

18 which shall be a division within the Office of the Comp19 troller of the Currency.’’; 

20 (2) in subsection (b)— 

21 (A) by striking paragraph (1) and insert22 ing the following new paragraph: 

23 ‘‘(1) IN GENERAL.—The Division of Thrift Su24 pervision shall be headed by a Deputy Comptroller 


wwoods2 on DSK1DXX6B1PROD with BILLS
75 

•HR 3996 IH

1 of the Currency who shall be subject to the general 

2 oversight of the Comptroller of the Currency.’’; 

3 (B) in paragraph (2), by striking ‘‘Direc4 tor’’ and inserting ‘‘Comptroller of the Cur5 rency’’; and 

6 (C) by striking paragraph (3) and (4); 

7 (3) by striking subsections (c), (d), and (e) and 

8 inserting the following new subsection: 

9 ‘‘(c) POWERS OF THE COMPTROLLER OF THE CUR10 RENCY.—The Comptroller of the Currency shall have all 

11 the powers, duties, and functions transferred by the Fi12 nancial Stability Improvement Act of 2009 to the Comp13 troller of the Currency to carry out this Act.’’; 

14 (4) by redesignating subsections (f) and (i) as 

15 subsections (d) and (e), respectively; 

16 (5) in subsection (d) (as so redesignated), by 

17 striking ‘‘Director’’ each place such term appears 

18 and inserting ‘‘Comptroller of the Currency’’; 

19 (6) by striking subsections (g), (h), and (j); and 

20 (7) in subsection (e) (as so redesignated), by 

21 striking ‘‘compensation of the Director and other 

22 employees of the Office and all other expenses there23 of’’ and inserting ‘‘expenses incurred by the Comp24 troller of the Currency in carrying out this Act’’. 


wwoods2 on DSK1DXX6B1PROD with BILLS
76 

•HR 3996 IH

1 (c) AMENDMENTS TO SECTION 4.—Section 4 of the 

2 Home Owners’ Loan Act (12 U.S.C. 1463) is amended 

3 by striking ‘‘Director’’ every time it appears and inserting 

4 ‘‘Comptroller of the Currency’’. 

5 (d) AMENDMENTS TO SECTION 5.— 

6 (1) UNIVERSAL.—Section 5 of the Home Own7 ers’ Loan Act (12 U.S.C. 1464) is amended— 

8 (A) by striking ‘‘Director’’ and ‘‘Director 

9 of the Office of Thrift Supervision’’ each place 

10 such term appears and inserting ‘‘Comptroller 

11 of the Currency’’; and 

12 (B) by striking ‘‘Director’s’’ each place 

13 such term appears and inserting ‘‘Comptroller 

14 of the Currency’s’’. 

15 (2) SPECIFIC PROVISIONS.— 

16 (A) Section 5(d)(2)(E) of the Home Own17 ers’ Loan Act is amended by striking ‘‘or the 

18 Resolution Trust Corporation, as appropriate,’’ 

19 each place such term appears. 

20 (B) Section 5(d)(3)(B) of the Home Own21 ers’ Loan Act is amended by striking ‘‘or the 

22 Resolution Trust Corporation’’. 

23 (e) AMENDMENTS TO SECTIONS 8 AND 9.—Sections 

24 8 and 9 of the Home Owners’ Loan Act (12 U.S.C. 

25 11466a, 1467) are each amended by striking ‘‘Director’’ 


wwoods2 on DSK1DXX6B1PROD with BILLS
77 

•HR 3996 IH

1 each place such term appears and inserting ‘‘Comptroller 

2 of the Currency’’. 

3 (f) TECHNICAL AND CONFORMING AMENDMENTS.— 

4 (1) DEFINITIONS.—Section 2 of the Home 

5 Owners’ Loan Act (12 U.S.C. 1462) is amended— 

6 (A) by striking paragraph (1) and (3); and 

7 (B) by redesignating paragraphs (2), (4), 

8 (5), (6), (7), (8), and (9) as paragraphs (1), 

9 (2), (3), (4), (5), (6), (7), and (8), respectively. 

10 (2) SECTION 3.— 

11 (A) The heading for section 3 of the Home 

12 Owners’ Loan Act is amended by striking ‘‘DI13 RECTOR OF THE OFFICE OF THRIFT SU14 PERVISION’’ and inserting ‘‘DIVISION OF

15 THRIFT SUPERVISION’’. 

16 (B) The heading for subsection (e) of sec17 tion (3) of the Home Owners’ Loan Act is 

18 amended by striking ‘‘DIRECTOR’’ and inserting 

19 ‘‘COMPTROLLER OF THE CURRENCY’’. 

20 (3) SECTION 5.—The heading for paragraph 

21 (2)(E)(ii) of section 5(d) of the Home Owners’ Loan 

22 Act and the heading for paragraph (3)(B) of such 

23 section are each amended by striking ‘‘OR RTC’’. 

24 (g) CLERICAL AMENDMENT.—The table of contents 

25 section for the Home Owners’ Loan Act is amended by 


wwoods2 on DSK1DXX6B1PROD with BILLS
78 

•HR 3996 IH

1 striking the item relating to section 3 and inserting the 

2 following new item: 

‘‘Sec. 3. Division of Thrift Supervision.’’. 

3 SEC. 1203. AMENDMENTS TO THE REVISED STATUTES. 

4 (a) AMENDMENT TO SECTION 324.—Section 324 of 

5 the Revised Statutes of the United States (12 U.S.C. 1) 

6 is amended to read as follows: 

7 ‘‘SEC. 324. COMPTROLLER OF THE CURRENCY. 

8 ‘‘There shall be in the Department of the Treasury 

9 a bureau, the chief officer of which bureau shall be called 

10 the Comptroller of the Currency, and shall perform the 

11 duties of the Comptroller of the Currency under the gen12 eral direction of the Secretary of the Treasury. The Comp13 troller of the Currency shall have the same authority over 

14 matters as were vested in the Director of the Office of 

15 Thrift Supervision or the Office of Thrift Supervision on 

16 the day before the date of enactment of the Financial Sta17 bility Improvement Act of 2009. The Secretary of the 

18 Treasury may not delay or prevent the issuance of any 

19 rule or the promulgation of any regulation by the Comp20 troller of the Currency.’’. 

21 (b) AMENDMENTS TO SECTION 327.—Section 327 of 

22 the Revised Statutes of the United States (12 U.S.C. 4) 

23 is amended to read as follows: 


wwoods2 on DSK1DXX6B1PROD with BILLS
79 

•HR 3996 IH

1 ‘‘SEC. 327 DEPUTY COMPTROLLERS. 

2 ‘‘(a) APPOINTMENT.—The Secretary of the Treasury 

3 shall appoint no more than 5 Deputy Comptrollers of the 

4 Currency— 

5 ‘‘(1) 1 of whom shall be designated First Dep6 uty Comptroller of the Currency; and 

7 ‘‘(2) 1 of whom shall be designated the Deputy 

8 Comptroller of the Division of Thrift Supervision. 

9 ‘‘(b) PAY.—The Secretary of the Treasury shall fix 

10 the compensation of the Deputy Comptrollers of the Cur11 rency and provide such other benefits as the Secretary 

12 may determine to be appropriate. 

13 ‘‘(c) OATH OF OFFICE; DUTIES.—Each Deputy 

14 Comptroller shall take the oath of office and shall perform 

15 such duties as the Comptroller of the Currency shall di16 rect. 

17 ‘‘(d) SERVICE AS ACTING COMPTROLLER.—During a 

18 vacancy in the office or during the absence or disability 

19 of the Comptroller, each Deputy Comptroller shall possess 

20 the power and perform the duties attached by law to the 

21 Office of the Comptroller under such order of succession 

22 following the First Deputy Comptroller as the Comptroller 

23 shall direct.’’. 

24 (c) AMENDMENT TO SECTION 329.—Section 329 of 

25 the Revised Statutes of the United States (12 U.S.C. 11) 


wwoods2 on DSK1DXX6B1PROD with BILLS
80 

•HR 3996 IH

1 is amended by inserting ‘‘or any Federal savings associa2 tion’’ before the period at the end. 

3 (d) AMENDMENT TO SECTION 481.—The fourth sen4 tence of the second undesignated paragraph of Section 

5 5240 of the Revised Statutes of the United States (12 

6 U.S.C. 481) is amended by striking ‘‘Secretary of the 

7 Treasury;’’ and all that follows through the end of the sen8 tence, and inserting ‘‘Secretary of the Treasury; the em9 ployment and compensation of examiners, chief examiners, 

10 reviewing examiners, assistant examiners, and of the other 

11 employees of the office of the Comptroller of the Currency 

12 whose compensation is and shall be paid from assessments 

13 on banks or affiliates thereof or from other fees or charges 

14 imposed pursuant to this subchapter shall be set and ad15 justed pursuant to chapter 71 of title five, United States 

16 Code and without regard to the provisions of other laws 

17 applicable to officers or employees of the United States.’’. 

18 (e) AMENDMENT TO SECTION 482.—The first sen19 tence in the first undesignated paragraph of Section 5240 

20 of the Revised Statutes of the United States (12 U.S.C. 

21 482) is amended by inserting ‘‘pursuant to chapter 71 of 

22 title five, United States Code,’’ after ‘‘shall,’’. 

23 SEC. 1204. POWER AND DUTIES TRANSFERRED. 

24 (a) DIRECTOR OF THE OFFICE OF THRIFT SUPER25 VISION.— 


wwoods2 on DSK1DXX6B1PROD with BILLS
81 

•HR 3996 IH

1 (1) TRANSFER OF FUNCTIONS.—Except as oth2 erwise provided in this subtitle, all functions of the 

3 Director of the Office of Thrift Supervision are 

4 transferred to the Office of the Comptroller of the 

5 Currency. 

6 (2) COMPTROLLER’S AUTHORITY.—Except as 

7 otherwise provided in this subtitle, the Comptroller 

8 of the Currency shall succeed to all powers, authori9 ties, rights, and duties that were vested in the Direc10 tor of the Office of Thrift Supervision under Federal 

11 law, including the Home Owners’ Loan Act, on the 

12 day before the transfer date. 

13 (3) FUNCTIONS RELATING TO SUPERVISION OF

14 STATE SAVINGS ASSOCIATIONS.— 

15 (A) TRANSFER OF FUNCTIONS.—All func16 tions of the Director of the Office of Thrift Su17 pervision relating to the supervision and regula18 tion of State savings associations are trans19 ferred to the Corporation. 

20 (B) CORPORATION’S AUTHORITY.—The 

21 Corporation shall succeed to all powers, au22 thorities, rights, and duties that were vested in 

23 the Director of the Office of Thrift Supervision 

24 under Federal law, including the Home Owners’ 

25 Loan Act, on the day before the transfer date, 


wwoods2 on DSK1DXX6B1PROD with BILLS
82 

•HR 3996 IH

1 relating to the supervision and regulation of 

2 State savings associations. 

3 (b) APPROPRIATE FEDERAL BANKING AGENCY.— 

4 Section 3 of the Federal Deposit Insurance Act (12 U.S.C. 

5 1813) is amended in subsection (q)— 

6 (1) by amending paragraph (1) to read as fol7 lows: 

8 ‘‘(1) the Comptroller of the Currency in the 

9 case of any national bank, Federal savings associa10 tion or any Federal branch or agency of a foreign 

11 bank;’’; 

12 (2) by amending paragraph (3) to read as fol13 lows: 

14 ‘‘(3) the Federal Deposit Insurance Corporation 

15 in the case of a State nonmember insured bank, a 

16 State savings association or a foreign bank having 

17 an insured branch.’’; and 

18 (3) by striking paragraph (4). 

19 (c) TRANSFER OF CONSUMER FINANCIAL PROTEC20 TION FUNCTIONS.—Nothing in subsection (a) or (b) shall 

21 affect any transfer of consumer financial protection func22 tions of the Comptroller of the Currency and the Director 

23 of the Office of Thrift Supervision to the Consumer Finan24 cial Protection Agency as provided in the Consumer Fi25 nancial Protection Agency Act of 2009. 


wwoods2 on DSK1DXX6B1PROD with BILLS
83 

•HR 3996 IH

1 (d) EFFECTIVE DATE.—Subsections (a) and (b) shall 

2 become effective on the transfer date. 

3 SEC. 1205. TRANSFER DATE. 

4 (a) IN GENERAL.—Except as provided in subsection 

5 (b), the date for the transfer of functions to the Office 

6 of the Comptroller of the Currency and the Corporation 

7 under section 1204 shall be 1 year after the date of enact8 ment of this Act. 

9 (b) EXTENSION PERMITTED.— 

10 (1) NOTICE REQUIRED.—The Secretary, in con11 sultation with the Comptroller of the Currency and 

12 the Director of the Office of Thrift Supervision, may 

13 designate a calendar date for the transfer of func14 tions of the Office of Thrift Supervision to the Of15 fice of the Comptroller of the Currency, and the Cor16 poration under section 1204 that is later than 1 

17 year after the date of enactment of this Act if the 

18 Secretary— 

19 (A) transmits to the Committee on Bank20 ing, Housing, and Urban Affairs of the Senate 

21 and the Committee on Financial Services of the 

22 House of Representatives— 

23 (i) a written determination that or24 derly implementation of this title is not 


wwoods2 on DSK1DXX6B1PROD with BILLS
84 

•HR 3996 IH

1 feasible on the date that is 1 year after the 

2 date of enactment of this Act; 

3 (ii) an explanation of why an exten4 sion is necessary for the orderly implemen5 tation of this title; and 

6 (iii) a description of the steps that will 

7 be taken to effect an orderly and timely 

8 implementation of this title within the ex9 tended time period; and 

10 (B) publishes notice of that designated 

11 later date in the Federal Register. 

12 (2) EXTENSION LIMITED.—In no case shall any 

13 date designated under paragraph (1) be later than 

14 18 months after the date of enactment of this Act. 

15 (3) EFFECT ON REFERENCES TO ‘‘TRANSFER

16 DATE’’.—If the Secretary takes the actions provided 

17 in paragraph (1) for designating a date for the 

18 transfer of functions to the Office of the Comptroller 

19 of the Currency, and the Corporation under section 

20 1204, references in this title to ‘‘transfer date’’ shall 

21 mean the date designated by the Secretary. 

22 SEC. 1206. OFFICE OF THRIFT SUPERVISION ABOLISHED. 

23 Effective 90 days after the transfer date, the position 

24 of Director of the Office of Thrift Supervision and the Of25 fice of Thrift Supervision are abolished. 


wwoods2 on DSK1DXX6B1PROD with BILLS
85 

•HR 3996 IH

1 SEC. 1207. SAVINGS PROVISIONS. 

2 (a) OFFICE OF THRIFT SUPERVISION.— 

3 (1) EXISTING RIGHTS, DUTIES, AND OBLIGA4 TIONS NOT AFFECTED.—Sections 1204(a)(1) and 

5 1206 shall not affect the validity of any right, duty, 

6 or obligation of the United States, the Director of 

7 the Office of Thrift Supervision, the Office of Thrift 

8 Supervision, or any other person, that existed on the 

9 day before the transfer date. 

10 (2) CONTINUATION OF SUITS.—This Act shall 

11 not abate any action or proceeding commenced by or 

12 against the Director of the Office of Thrift Super13 vision or the Office of Thrift Supervision before the 

14 transfer date, except that— 

15 (A) for any action or proceeding arising 

16 out of a function of the Director of the Office 

17 of Thrift Supervision transferred to the Comp18 troller of the Currency by this title, the Comp19 troller of the Currency or the Office of the 

20 Comptroller of the Currency shall be sub21 stituted for the Director of the Office of Thrift 

22 Supervision or the Office of Thrift Supervision, 

23 as the case may be, as a party to the action or 

24 proceeding as of the transfer date; or 

25 (B) for any action or proceeding arising 

26 out of a function of the Director of the Office 


wwoods2 on DSK1DXX6B1PROD with BILLS
86 

•HR 3996 IH

1 of Thrift Supervision transferred to the Cor2 poration by this title, the Chairman of the Cor3 poration shall be substituted for the Director of 

4 the Office of Thrift Supervision as a party to 

5 the action or proceeding as of the transfer date. 

6 (b) CONTINUATION OF EXISTING OTS ORDERS, RES7 OLUTIONS, DETERMINATIONS, AGREEMENTS, REGULA8 TIONS, ETC.—All orders, resolutions, determinations, 

9 agreements, and regulations, interpretative rules, other in10 terpretations, guidelines, procedures, and other advisory 

11 materials, that have been issued, made, prescribed, or al12 lowed to become effective by the Office of Thrift Super13 vision, or by a court of competent jurisdiction, in the per14 formance of functions that are transferred by this title and 

15 that are in effect on the day before the transfer date, shall 

16 continue in effect according to the terms of those orders, 

17 resolutions, determinations, agreements, and regulations, 

18 interpretative rules, other interpretations, guidelines, pro19 cedures, and other advisory materials, and shall be en20 forceable by or against— 

21 (1) the Office of the Comptroller of the Cur22 rency, in the case of a function of the Director of 

23 the Office of Thrift Supervision transferred to the 

24 Comptroller of the Currency, until modified, termi25 nated, set aside, or superseded in accordance with 


wwoods2 on DSK1DXX6B1PROD with BILLS
87 

•HR 3996 IH

1 applicable law by the Office of the Comptroller of 

2 the Currency, by any court of competent jurisdic3 tion, or by operation of law; or 

4 (2) the Corporation, in the case of a function 

5 of the Director of the Office of Thrift Supervision 

6 transferred to the Corporation, until modified, termi7 nated, set aside, or superseded in accordance with 

8 applicable law by the Corporation, by any court of 

9 competent jurisdiction, or by operation of law. 

10 (c) IDENTIFICATION OF REGULATIONS CONTIN11 UED.— 

12 (1) BY OFFICE OF THE COMPTROLLER OF THE

13 CURRENCY.—Not later than the transfer date, the 

14 Comptroller of the Currency shall— 

15 (A) after consultation with the Chairperson 

16 of the Corporation, identify the regulations con17 tinued under subsection (c) that will be en18 forced by the Office of the Comptroller of the 

19 Currency; and 

20 (B) publish a list of such regulations in the 

21 Federal Register. 

22 (2) BY THE CORPORATION.—Not later than the 

23 transfer date, the Corporation shall— 

24 (A) after consultation with the Office of 

25 the Comptroller of the Currency, identify the 


wwoods2 on DSK1DXX6B1PROD with BILLS
88 

•HR 3996 IH

1 regulations continued under subsection (c) that 

2 will be enforced by the Corporation; and 

3 (B) publish a list of such regulations in the 

4 Federal Register. 

5 (d) STATUS OF REGULATIONS PROPOSED OR NOT

6 YET EFFECTIVE.— 

7 (1) PROPOSED REGULATIONS.—Any proposed 

8 regulation of the Office of Thrift Supervision, which 

9 that agency, in performing functions transferred by 

10 this title, has proposed before the transfer date but 

11 has not published as a final regulation before that 

12 date, shall be deemed to be a proposed regulation of 

13 the Office of the Comptroller of the Currency, or the 

14 Corporation, as appropriate, according to its terms. 

15 (2) REGULATIONS NOT YET EFFECTIVE.—Any 

16 interim or final regulation of the Office of Thrift Su17 pervision, which that agency, in performing func18 tions transferred by this title, has published before 

19 the transfer date but which has not become effective 

20 before that date, shall become effective as a regula21 tion of the Office of the Comptroller of the Cur22 rency, or the Corporation, as appropriate, according 

23 to its terms. 


wwoods2 on DSK1DXX6B1PROD with BILLS
89 

•HR 3996 IH

1 SEC. 1208. REGULATIONS AND ORDERS. 

2 In addition to any powers transferred to the Comp3 troller of the Currency by this title, the Comptroller of 

4 the Currency may prescribe such regulations and issue 

5 such orders as the Comptroller of the Currency determines 

6 to be appropriate to carry out this title and the powers 

7 and duties transferred to the Comptroller of the Currency 

8 by this title. 

9 SEC. 1209. COORDINATION OF TRANSITION ACTIVITIES. 

10 Before the transfer date, the Comptroller of the Cur11 rency shall— 

12 (1) consult and cooperate with the Office of 

13 Thrift Supervision to facilitate the orderly transfer 

14 of functions to the Comptroller of the Currency; 

15 (2) determine and redetermine, from time to 

16 time— 

17 (A) the amount of funds necessary to pay 

18 any expenses associated with the transfer of 

19 functions (including expenses for personnel, 

20 property, and administrative services) during 

21 the period beginning on the date of enactment 

22 of this Act and ending on the transfer date; 

23 (B) what personnel are appropriate to fa24 cilitate the orderly transfer of functions by this 

25 title; and 


wwoods2 on DSK1DXX6B1PROD with BILLS
90 

•HR 3996 IH

1 (C) what property and administrative serv2 ices are necessary to support the Office of the 

3 Comptroller of the Currency during the period 

4 beginning on the date of enactment of this Act 

5 and ending on the transfer date; and 

6 (3) take such actions as may be necessary to 

7 provide for the orderly implementation of this title. 

8 SEC. 1210. INTERIM RESPONSIBILITIES OF OFFICE OF THE 

9 COMPTROLLER OF THE CURRENCY AND OF10 FICE OF THRIFT SUPERVISION. 

11 (a) IN GENERAL.—When requested by the Comp12 troller of the Currency to do so before the transfer date, 

13 the Office of Thrift Supervision shall— 

14 (1) pay to the Comptroller of the Currency, 

15 from funds obtained by the Office of Thrift Super16 vision through assessments, fees, or other charges 

17 that the Office of Thrift Supervision is authorized 

18 by law to impose, such amounts that the Comp19 troller of the Currency determines to be necessary 

20 under section 1209(2)(A); 

21 (2) detail to the Office of the Comptroller of the 

22 Currency such personnel as the Comptroller of the 

23 Currency determines to be appropriate under section 

24 1209(2)(B); and 


wwoods2 on DSK1DXX6B1PROD with BILLS
91 

•HR 3996 IH

1 (3) make available to the Office of the Comp2 troller of the Currency such property and provide 

3 the Office of the Comptroller of the Currency such 

4 administrative services as the Comptroller of the 

5 Currency determines to be necessary under section 

6 1209(2)(C). 

7 (b) NOTICE REQUIRED.—The Comptroller of the 

8 Currency shall give the Office of Thrift Supervision rea9 sonable prior notice of any request that the Office of the 

10 Comptroller of the Currency intends to make under sub11 section (a). 

12 SEC. 1211. EMPLOYEES TRANSFERRED. 

13 (a) IN GENERAL.— 

14 (1) OTS EMPLOYEES.— 

15 (A) IN GENERAL.—All employees of the 

16 Office of Thrift Supervision shall be transferred 

17 to either the Comptroller of the Currency or the 

18 Corporation for employment. 

19 (B) ALLOCATING EMPLOYEES FOR TRANS20 FER TO RECEIVING AGENCIES.—The Director of 

21 the Office of Thrift Supervision, the Comp22 troller of the Currency, and the Chairperson of 

23 the Corporation shall— 


wwoods2 on DSK1DXX6B1PROD with BILLS
92 

•HR 3996 IH

1 (i) jointly determine the number of 

2 employees of the Office of Thrift Super3 vision necessary to perform or support— 

4 (I) the functions of the Office of 

5 Thrift Supervision that are trans6 ferred to the Office of the Comptroller 

7 of the Currency by this title; and 

8 (II) the functions of the Office of 

9 Thrift Supervision that are trans10 ferred to the Corporation by this title; 

11 and 

12 (ii) consistent with the numbers deter13 mined under clause (ii), jointly identify 

14 employees of the Office of Thrift Super15 vision for transfer to the Office of the 

16 Comptroller of the Currency or the Cor17 poration in a manner that the Director of 

18 the Office of Thrift Supervision, the Comp19 troller of the Currency, and the Chair20 person of the Corporation, in their discre21 tion, deem equitable. 

22 (2) TRANSFER OF EMPLOYEES PERFORMING

23 CONSUMER FINANCIAL PROTECTION FUNCTIONS.— 

24 Nothing in paragraph (1) shall affect the transfer of 

25 employees performing or supporting consumer finanVerDate Nov 24 2008 00:06 Nov 20, 2009 Jkt 089200 PO 00000 Frm 00092 Fmt 6652 Sfmt 6201 E:\BILLS\H3996.IH H3996

wwoods2 on DSK1DXX6B1PROD with BILLS
93 

•HR 3996 IH

1 cial protection functions of the Comptroller of the 

2 Currency and the Director of the Office of Thrift 

3 Supervision to the Consumer Financial Protection 

4 Agency as provided in the Consumer Financial Pro5 tection Agency Act of 2009. 

6 (3) APPOINTMENT AUTHORITY FOR EXCEPTED

7 SERVICE TRANSFERRED.— 

8 (A) IN GENERAL.—In the case of employ9 ees occupying positions in the excepted service, 

10 any appointment authority established pursuant 

11 to law or regulations of the Office of Personnel 

12 Management for filling such positions shall be 

13 transferred, subject to subparagraph (B). 

14 (B) DECLINING TRANSFERS ALLOWED.— 

15 The Office of the Comptroller of the Currency 

16 and the Corporation may decline to accept a 

17 transfer of authority under subparagraph (A) 

18 (and the employees appointed pursuant thereto) 

19 to the extent that such authority relates to posi20 tions excepted from the competitive service be21 cause of their confidential, policy-making, pol22 icy-determining, or policy-advocating character. 

23 (b) TIMING OF TRANSFERS AND POSITION ASSIGN24 MENTS.—Each employee to be transferred under this sec25 tion shall— 


wwoods2 on DSK1DXX6B1PROD with BILLS
94 

•HR 3996 IH

1 (1) be transferred not later than 90 days after 

2 the transfer date; and 

3 (2) receive notice of his or her position assign4 ment not later than 120 days after the effective date 

5 of his or her transfer. 

6 (c) TRANSFER OF FUNCTION.— 

7 (1) IN GENERAL.—Notwithstanding any other 

8 provision of law, the transfer of employees shall be 

9 deemed a transfer of functions for the purpose of 

10 section 3503 of title 5, United States Code. 

11 (2) PRIORITY OF THIS ACT.—If any provision 

12 of this title conflicts with any protection provided to 

13 transferred employees under section 3503 of title 5, 

14 United States Code, the provisions of this title shall 

15 control. 

16 (d) EMPLOYEES’ STATUS AND ELIGIBILITY.—The 

17 transfer of functions and employees under this title, and 

18 the abolition of the Office of Thrift Supervision, shall not 

19 affect the status of the transferred employees as employ20 ees of an agency of the United States under any provision 

21 of law. 

22 (e) EQUAL STATUS AND TENURE POSITIONS.—Each 

23 employee transferred from the Office of Thrift Supervision 

24 shall be placed in a position at either the Office of the 

25 Comptroller of the Currency or the Corporation with the 


wwoods2 on DSK1DXX6B1PROD with BILLS
95 

•HR 3996 IH

1 same status and tenure as he or she held on the day before 

2 the transfer date. 

3 (f) NO ADDITIONAL CERTIFICATION REQUIRE4 MENTS.—Examiners transferred to the Office of the 

5 Comptroller of the Currency or the Corporation shall not 

6 be subject to any additional certification requirements be7 fore being placed in a comparable examiner’s position at 

8 the Office of the Comptroller of the Currency or the Cor9 poration examining the same types of institutions as they 

10 examined before they were transferred. 

11 (g) PERSONNEL ACTIONS LIMITED.— 

12 (1) 1-YEAR PROTECTION.—Except as provided 

13 in paragraph (2), each employee transferred from 

14 the Office of Thrift Supervision holding a permanent 

15 position on the day before the transfer date shall 

16 not, during the 1-year period beginning on the 

17 transfer date, be involuntarily separated, or involun18 tarily reassigned outside his or her locality pay area 

19 as defined by the Office of Personnel Management. 

20 (2) EXCEPTIONS.—Paragraph (1) does not 

21 limit the right of the Office of the Comptroller of the 

22 Currency or the Corporation to— 

23 (A) separate an employee for cause or for 

24 unacceptable performance; or 


wwoods2 on DSK1DXX6B1PROD with BILLS
96 

•HR 3996 IH

1 (B) terminate an appointment to a position 

2 excepted from the competitive service because of 

3 its confidential policy-making, policy-deter4 mining, or policy-advocating character. 

5 (h) PAY.— 

6 (1) 1-YEAR PROTECTION.—Except as provided 

7 in paragraph (2), each employee transferred from 

8 the Office of Thrift Supervision shall, during the 1- 

9 year period beginning on the transfer date, receive 

10 pay at a rate not less than the basic rate of pay (in11 cluding any geographic differential) that the em12 ployee received during the 1-year period immediately 

13 before the transfer. 

14 (2) EXCEPTIONS.—Paragraph (1) does not 

15 limit the right of the Office of the Comptroller of the 

16 Currency or the Corporation to reduce a transferred 

17 employee’s rate of basic pay— 

18 (A) for cause; 

19 (B) for unacceptable performance; or 

20 (C) with the employee’s consent. 

21 (3) PROTECTION ONLY WHILE EMPLOYED.— 

22 Paragraph (1) applies to a transferred employee 

23 only while that employee remains employed by the 

24 Office of the Comptroller of the Currency or the 

25 Corporation. 


wwoods2 on DSK1DXX6B1PROD with BILLS
97 

•HR 3996 IH

1 (4) PAY INCREASES PERMITTED.—Paragraph 

2 (1) does not limit the authority of the Office of the 

3 Comptroller of the Currency or the Corporation to 

4 increase a transferred employee’s pay. 

5 (i) BENEFITS.— 

6 (1) RETIREMENT BENEFITS FOR TRANSFERRED

7 EMPLOYEES.— 

8 (A) IN GENERAL.— 

9 (i) CONTINUATION OF EXISTING RE10 TIREMENT PLAN.—Each employee trans11 ferred from the Office of Thrift Super12 vision may remain enrolled in his or her 

13 existing retirement plan or plans as long as 

14 he or she remains employed by the Office 

15 of the Comptroller of the Currency. 

16 (ii) EMPLOYER’S CONTRIBUTION.— 

17 The Office of the Comptroller of the Cur18 rency or the Corporation shall pay any em19 ployer contributions to the existing retire20 ment plan of each employee transferred 

21 from the Office of Thrift Supervision as 

22 required under that plan. 

23 (B) DEFINITION.—For purposes of this 

24 paragraph, the term ‘‘existing retirement plan’’ 

25 means, with respect to any employee transVerDate Nov 24 2008 00:06 Nov 20, 2009 Jkt 089200 PO 00000 Frm 00097 Fmt 6652 Sfmt 6201 E:\BILLS\H3996.IH H3996

wwoods2 on DSK1DXX6B1PROD with BILLS
98 

•HR 3996 IH

1 ferred under this section, the particular retire2 ment plan (including the Financial Institutions 

3 Retirement Fund) and any associated thrift 

4 savings plan of the agency from which the em5 ployee was transferred, which the employee was 

6 enrolled in on the day before the transfer date. 

7 (2) BENEFITS OTHER THAN RETIREMENT BEN8 EFITS.— 

9 (A) DURING 1ST YEAR.— 

10 (i) EXISTING PLANS CONTINUE.— 

11 Each transferred employee may, for 1 year 

12 after the transfer date, retain membership 

13 in any other employee benefit program of 

14 the Office of Thrift Supervision, including 

15 a dental, vision, long-term care, or life in16 surance program, to which the employee 

17 belonged on the day before the transfer 

18 date. 

19 (ii) EMPLOYER’S CONTRIBUTION.— 

20 The Office of the Comptroller of the Cur21 rency or the Corporation shall pay any em22 ployer cost in continuing to extend cov23 erage in the benefit program to the em24 ployee as required under that program or 

25 negotiated agreements. 


wwoods2 on DSK1DXX6B1PROD with BILLS
99 

•HR 3996 IH

1 (B) DENTAL, VISION, OR LIFE INSURANCE

2 AFTER 1ST YEAR.—If, after the 1-year period 

3 beginning on the transfer date, the Office of the 

4 Comptroller of the Currency or the Corporation 

5 decides not to continue participation in any 

6 dental, vision, or life insurance program of the 

7 Office of Thrift Supervision, an employee trans8 ferred from the Office of Thrift Supervision 

9 pursuant to this title who is a member of such 

10 a program may, before the decision of the Of11 fice of the Comptroller of the Currency or the 

12 Corporation takes effect, elect to enroll, without 

13 regard to any regularly scheduled open season, 

14 in— 

15 (i) the enhanced dental benefits pro16 gram established by chapter 89A of title 5, 

17 United States Code; 

18 (ii) the enhanced vision benefits estab19 lished by chapter 89B of title 5, United 

20 States Code; and 

21 (iii) the Federal Employees Group 

22 Life Insurance Program established by 

23 chapter 87 of title 5, United States Code, 

24 without regard to any requirement of in25 surability. 


wwoods2 on DSK1DXX6B1PROD with BILLS
100 

•HR 3996 IH

1 (C) LONG-TERM CARE INSURANCE AFTER

2 1ST YEAR.—If, after the 1-year period begin3 ning on the transfer date, the Office of the 

4 Comptroller of the Currency or the Corporation 

5 decides not to continue participation in any 

6 long-term care insurance program of the Office 

7 of Thrift Supervision, an employee transferred 

8 from the Office of Thrift Supervision pursuant 

9 to this title who is a member of such a program 

10 may, before the decision of the Office of the 

11 Comptroller of the Currency or the Corporation 

12 takes effect, elect to apply for coverage under 

13 the Federal Long-Term Care Insurance Pro14 gram established by chapter 90 of title 5, 

15 United States Code, under the underwriting re16 quirements applicable to a new active workforce 

17 member (as defined in part 875, title 5, Code 

18 of Federal Regulations). 

19 (D) EMPLOYEE’S CONTRIBUTION.— 

20 (i) IN GENERAL.—Subject to clause 

21 (ii), an individual enrolled in the Federal 

22 Employees Health Benefits program under 

23 this subparagraph shall pay any employee 

24 contribution required by the plan. 


wwoods2 on DSK1DXX6B1PROD with BILLS
101 

•HR 3996 IH

1 (ii) COST DIFFERENTIAL.—The dif2 ference in costs between the benefits that 

3 the Office of Thrift Supervision is pro4 viding on the date of enactment of this Act 

5 and the benefits provided by this section 

6 shall be paid by the Comptroller of the 

7 Currency or the Corporation. 

8 (iii) FUNDS TRANSFER.—The Office 

9 of the Comptroller of the Currency or the 

10 Corporation shall transfer to the Federal 

11 Employees Health Benefits Fund estab12 lished under section 8909 of title 5, United 

13 States Code, an amount determined by the 

14 Director of the Office of Personnel Man15 agement, after consultation with the Office 

16 of the Comptroller of the Currency or the 

17 Corporation and the Office of Management 

18 and Budget, to be necessary to reimburse 

19 the Fund for the cost to the Fund of pro20 viding benefits under this subparagraph 

21 not otherwise paid for by the employee 

22 under clause (i). 

23 (E) SPECIAL PROVISIONS TO ENSURE CON24 TINUATION OF LIFE INSURANCE BENEFITS.— 


wwoods2 on DSK1DXX6B1PROD with BILLS
102 

•HR 3996 IH

1 (i) IN GENERAL.—An annuitant (as 

2 defined in section 8901(3) of title 5, 

3 United States Code) who is enrolled in a 

4 life insurance plan administered by the Of5 fice of Thrift Supervision on the day before 

6 the transfer date shall be eligible for cov7 erage by a life insurance plan under sec8 tions 8706(b), 8714a, 8714b, and 8714c of 

9 title 5, United States Code, or in a life in10 surance plan established by the Office of 

11 the Comptroller of the Currency or the 

12 Corporation, without regard to any regu13 larly scheduled open season and require14 ment of insurability. 

15 (ii) EMPLOYEE’S CONTRIBUTION.— 

16 (I) IN GENERAL.—Subject to 

17 subclause (II), an individual enrolled 

18 in a life insurance plan under this 

19 clause shall pay any employee con20 tribution required by the plan. 

21 (II) COST DIFFERENTIAL.—The 

22 difference in costs between the bene23 fits that the Office of Thrift Super24 vision is providing on the date of en25 actment of this Act and the benefits 


wwoods2 on DSK1DXX6B1PROD with BILLS
103 

•HR 3996 IH

1 provided by this section shall be paid 

2 by the Comptroller of the Currency or 

3 the Corporation. 

4 (III) FUNDS TRANSFER.—The 

5 Office of the Comptroller of the Cur6 rency or the Corporation shall trans7 fer to the Employees’ Life Insurance 

8 Fund established under section 8714 

9 of title 5, United States Code, an 

10 amount determined by the Director of 

11 the Office of Personnel Management, 

12 after consultation with the Office of 

13 the Comptroller of the Currency or 

14 the Corporation and the Office of 

15 Management and Budget, to be nec16 essary to reimburse the Fund for the 

17 cost to the Fund of providing benefits 

18 under this subparagraph not other19 wise paid for by the employee under 

20 subclause (I). 

21 (IV) CREDIT FOR TIME EN22 ROLLED IN OTHER PLANS.—For em23 ployees transferred under this section, 

24 enrollment in a life insurance plan ad25 ministered by the Office of the CompVerDate Nov 24 2008 00:06 Nov 20, 2009 Jkt 089200 PO 00000 Frm 00103 Fmt 6652 Sfmt 6201 E:\BILLS\H3996.IH H3996

wwoods2 on DSK1DXX6B1PROD with BILLS
104 

•HR 3996 IH

1 troller of the Currency, the Office of 

2 Thrift Supervision, or the Corporation 

3 immediately before enrollment in a life 

4 insurance plan under chapter 87 of 

5 title 5, United States Code, shall be 

6 considered as enrollment in a life in7 surance plan under that chapter for 

8 purposes of section 8706(b)(1)(A) of 

9 title 5, United States Code. 

10 (j) EQUITABLE TREATMENT.—In administering the 

11 provisions of this section, the Office of the Comptroller 

12 of the Currency and the Corporation— 

13 (1) shall take no action that would unfairly dis14 advantage transferred employees relative to other 

15 employees of the Office of the Comptroller of the 

16 Currency based on their prior employment by the 

17 Office of Thrift Supervision; 

18 (2) may take such action as is appropriate in 

19 individual cases so that employees transferred under 

20 this section receive equitable treatment, with respect 

21 to those employees’ status, tenure, pay, benefits 

22 (other than benefits under programs administered by 

23 the Office of Personnel Management), and accrued 

24 leave or vacation time, for prior periods of service 

25 with any Federal agency. 


wwoods2 on DSK1DXX6B1PROD with BILLS
105 

•HR 3996 IH

1 SEC. 1212. PROPERTY TRANSFERRED. 

2 (a) IN GENERAL.—Not later than 90 days after the 

3 transfer date, all property of the Office of Thrift Super4 vision shall be transferred to the Office of the Comptroller 

5 of the Currency or the Corporation, allocated in a manner 

6 consistent with section 1211(a). 

7 (b) CONTRACTS RELATED TO PROPERTY TRANS8 FERRED.—All contracts, agreements, leases, licenses, per9 mits, and similar arrangements relating to property trans10 ferred to the Office of the Comptroller of the Currency 

11 or the Corporation by this section shall be transferred to 

12 the Office of the Comptroller of the Currency or the Cor13 poration together with that property. 

14 (c) PRESERVATION OF PROPERTY.—Property identi15 fied for transfer under this section shall not be altered, 

16 destroyed, or deleted before transfer under this section. 

17 (d) PROPERTY DEFINED.—For purposes of this sec18 tion, the term ‘‘property’’ includes all real property (in19 cluding leaseholds) and all personal property (including 

20 computers, furniture, fixtures, equipment, books, ac21 counts, records, reports, files, memoranda, paper, reports 

22 of examination, work papers and correspondence related 

23 to such reports, and any other information or materials). 

24 SEC. 1213. FUNDS TRANSFERRED. 

25 Except to the extent needed to dispose of affairs 

26 under section 1214, all funds that, on the day before the 


wwoods2 on DSK1DXX6B1PROD with BILLS
106 

•HR 3996 IH

1 transfer date, are available to the Director of the Office 

2 of Thrift Supervision to pay the expenses of the Office 

3 of Thrift Supervision shall be transferred to the Office of 

4 the Comptroller of the Currency or the Corporation, allo5 cated in a manner consistent with section 1211(a), on the 

6 transfer date. 

7 SEC. 1214. DISPOSITION OF AFFAIRS. 

8 (a) IN GENERAL.—During the 90-day period begin9 ning on the transfer date, the Director of the Office of 

10 Thrift Supervision— 

11 (1) shall, solely for the purpose of winding up 

12 the affairs of the agency related to any function 

13 transferred to the Office of the Comptroller of the 

14 Currency or the Corporation by this title— 

15 (A) manage any employees of the Office of 

16 Thrift Supervision and provide for the payment 

17 of the compensation and benefits of any such 

18 employees that accrue before the transfer date; 

19 and 

20 (B) manage any property of the Office of 

21 Thrift Supervision until the property is trans22 ferred under section 1212; and 

23 (2) may take any other action necessary to 

24 wind up the affairs of the Office of Thrift Super25 vision relating to the transferred functions. 


wwoods2 on DSK1DXX6B1PROD with BILLS
107 

•HR 3996 IH

1 (b) AUTHORITY AND STATUS OF DIRECTOR.— 

2 (1) IN GENERAL.—Notwithstanding the trans3 fers of functions under this title, the Director of the 

4 Office of Thrift Supervision shall, during the 90-day 

5 period beginning on the transfer date, retain and 

6 may exercise any authority vested in the Director on 

7 the day before the transfer date that is necessary to 

8 carry out the requirements of this title during that 

9 period. 

10 (2) OTHER PROVISIONS.—For purposes of 

11 paragraph (1), the Director of the Office of Thrift 

12 Supervision shall, during the 90-day period begin13 ning on the transfer date, continue to be— 

14 (A) treated as an officer of the United 

15 States; and 

16 (B) entitled to receive compensation at the 

17 same annual rate of basic pay that he or she 

18 was receiving on the day before the transfer 

19 date. 

20 SEC. 1215. CONTINUATION OF SERVICES. 

21 Any agency, department, or other instrumentality of 

22 the United States, and any successor to any such agency, 

23 department, or instrumentality, that was, before the trans24 fer date, providing support services to the Office of Thrift 


wwoods2 on DSK1DXX6B1PROD with BILLS
108 

•HR 3996 IH

1 Supervision in connection with functions to be transferred 

2 to the Office of the Comptroller of the Currency, shall— 

3 (1) continue to provide those services, subject to 

4 reimbursement, until the transfer of those functions 

5 is complete; and 

6 (2) consult with any such agency to coordinate 

7 and facilitate a prompt and orderly transition. 

8 SEC. 1216. TREATMENT OF SAVINGS AND LOAN HOLDING 

9 COMPANIES. 

10 (a) Section 2 of the Home Owners’ Loan Act (12 

11 U.S.C. 1462) is amended in paragraph (1) by striking 

12 ‘‘DIRECTOR.—The term ‘Director’ means the Director of 

13 the Office of Thrift Supervision’’ and inserting ‘‘COMP14 TROLLER.—The term ‘Comptroller’ means the Comp15 troller of the Currency’’. 

16 (b) Section 10 of the Home Owners’ Loan Act (12 

17 U.S.C. 1467a) is amended as follows: 

18 (1) In subsection (a)(1)(A) by striking ‘‘Direc19 tor’’ and inserting ‘‘Comptroller of the Currency’’; 

20 (2) In subsection (m) as follows: 

21 (A) in paragraph (2) by striking ‘‘Direc22 tor’’ and inserting ‘‘Comptroller’’; 

23 (B) in paragraph (2) by striking ‘‘Director 

24 may grant’’ and inserting ‘‘Comptroller of the 

25 Currency may grant’’; 


wwoods2 on DSK1DXX6B1PROD with BILLS
109 

•HR 3996 IH

1 (C) in paragraph (2) by striking ‘‘the Di2 rector deems’’ and inserting ‘‘the Comptroller 

3 deems’’; 

4 (D) in paragraph (2)(A) by striking ‘‘Di5 rector’’ and inserting ‘‘Comptroller’’; 

6 (E) in paragraph (2)(B) by striking ‘‘Di7 rector’’ and inserting ‘‘Comptroller’’; 

8 (F) in paragraph (2)(B)(iii) by striking 

9 ‘‘Director’’ and inserting ‘‘Comptroller’’; 

10 (G) in paragraph (4)(D) by striking ‘‘Di11 rector’’ and inserting ‘‘Comptroller’’; 

12 (H) in paragraph (4)(E) by striking ‘‘Di13 rector’’ and inserting ‘‘Comptroller’’; and 

14 (I) in paragraph (7)(B) by striking ‘‘Direc15 tor’’ and inserting ‘‘Comptroller’’; 

16 (3) In subsection (o) as follows: 

17 (A) in paragraph (3) in the heading by 

18 striking ‘‘DIRECTOR’’ and inserting ‘‘BOARD’’; 

19 (B) in paragraph (3)(A) by striking ‘‘Di20 rector’’ and inserting ‘‘Board’’; 

21 (C) in paragraph (3)(B) by striking ‘‘Di22 rector’’ and inserting ‘‘Board’’; 

23 (D) in paragraph (3)(C) by striking ‘‘Di24 rector’’ and inserting ‘‘Board’’; 


wwoods2 on DSK1DXX6B1PROD with BILLS
110 

•HR 3996 IH

1 (E) in paragraph (3)(D) by striking ‘‘Di2 rector’’ and inserting ‘‘Comptroller’’; 

3 (F) in paragraph (7) by striking ‘‘char4 tered by the Director’’ and inserting ‘‘chartered 

5 by the Comptroller’’; and 

6 (G) in paragraph (7) by striking ‘‘regula7 tions as the Director may’’ and inserting ‘‘regu8 lations as the Board may’’; and 

9 ø(4) by striking subsections ‘‘(a)’’ through 

10 ‘‘(n)’’, and ‘‘(p)’’ through ‘‘(t)’’, and redesignating 

11 current subsections ‘‘(m)’’ and ‘‘(o)’’ as ‘‘(a)’’ and 

12 ‘‘(b)’’, respectively.¿ 

13 SEC. 1217. PRACTICES OF CERTAIN MUTUAL THRIFT HOLD14 ING COMPANIES PRESERVED. 

15 (a) TREATMENT OF DIVIDENDS BY CERTAIN MU16 TUAL HOLDING COMPANIES.—Section 3(g) of the Bank 

17 Holding Company Act (12 U.S.C. 1842(g)) is amended 

18 by inserting new paragraphs (3) through (7) as follows: 

19 ‘‘(3) DECLARATION OF DIVIDENDS.—Every 

20 subsidiary savings association of a mutual holding 

21 company shall give the Board not less than 30 days’ 

22 advance notice of the proposed declaration by its di23 rectors of any dividend on its guaranty, permanent, 

24 or other nonwithdrawable stock. Such notice period 

25 shall commence to run from the date of receipt of 


wwoods2 on DSK1DXX6B1PROD with BILLS
111 

•HR 3996 IH

1 such notice by the Board. Any such dividend de2 clared within such period, or without the giving of 

3 such notice to the Board, shall be invalid and shall 

4 confer no rights or benefits upon the holder of any 

5 such stock. 

6 ‘‘(4) WAIVER OF DIVIDENDS.—Any mutual 

7 thrift holding company organized under section 

8 10(b) of the Home Owners’ Loan Act shall be per9 mitted to waive such company’s right to receive any 

10 dividend declared by a subsidiary, if— 

11 ‘‘(A) no insider of the mutual holding com12 pany, associate of an insider, or tax-qualified or 

13 non-tax-qualified employee stock benefit plan of 

14 the mutual holding company holds any share of 

15 the stock in the class of stock to which the 

16 waiver would apply; 

17 ‘‘(B) the mutual holding company provides 

18 the Board with written notice of its intent to 

19 waive its right to receive dividends 30 days 

20 prior to the proposed date of payment of the 

21 dividend; and 

22 ‘‘(C) the Board does not object. 

23 ‘‘(5) STANDARDS FOR WAIVER OF DIVIDEND.— 

24 The Board shall not object to a notice of intent to 

25 waive dividends under paragraph (4) if— 


wwoods2 on DSK1DXX6B1PROD with BILLS
112 

•HR 3996 IH

1 ‘‘(A) the waiver would not be detrimental 

2 to the safe and sound operation of the savings 

3 association; and 

4 ‘‘(B) the board of directors of the mutual 

5 holding company expressly determines that a 

6 waiver of the dividend by the mutual holding 

7 company is consistent with the directors’ fidu8 ciary duties to the mutual members of such 

9 company. 

10 ‘‘(6) RESOLUTION INCLUDED IN WAIVER NO11 TICE.—A dividend waiver notice shall include a copy 

12 of the resolution of the board of directors of the mu13 tual holding company, in form and substance satis14 factory to the Board, together with any supporting 

15 materials relied upon by the board of directors, con16 cluding that the proposed dividend waiver is con17 sistent with the board of director’s fiduciary duties 

18 to the mutual members of the mutual holding com19 pany. 

20 ‘‘(7) VALUATION.—The Board will not consider 

21 waived dividends in determining an appropriate ex22 change ratio in the event of a full conversion to 

23 stock form.’’. 


wwoods2 on DSK1DXX6B1PROD with BILLS
113 

•HR 3996 IH

1 SEC. 1218. COMPOSITION OF BOARD OF DIRECTORS OF THE 

2 FEDERAL DEPOSIT INSURANCE CORPORA3 TION. 

4 Section 2 of the Federal Deposit Insurance Act (12 

5 U.S.C. 1812) is amended— 

6 (1) in subsection (a)(1)— 

7 (A) in subparagraph (B), by striking ‘‘Di8 rector of the Office of Thrift Supervision’’ and 

9 inserting ‘‘Chairman of the Board of Governors 

10 of the Federal Reserve System, or such other 

11 member of the Board of Governors as the 

12 Chairman of the Board of Governors shall des13 ignate’’; 

14 (2) by amending subsection (d)(2) to read as 

15 follows: 

16 ‘‘(2) ACTING OFFICIALS MAY SERVE.—In the 

17 event of a vacancy in the office of the Comptroller 

18 of the Currency and pending the appointment of a 

19 successor, or during the absence or disability of the 

20 Comptroller of the Currency, the acting Comptroller 

21 of the Currency shall be a member of the Board of 

22 Directors in the place of the Comptroller of the Cur23 rency.’’; and 

24 (3) in subsection (f)(2), by striking ‘‘or of the 

25 Office of Thrift Supervision’’. 


wwoods2 on DSK1DXX6B1PROD with BILLS
114 

•HR 3996 IH

1 SEC. 1219. AMENDMENTS TO SECTION 3. 

2 Section 3 of the Federal Deposit Insurance Act (12 

3 U.S.C. 1813) is amended— 

4 (1) in subsection (b)(1)(C) (relating to the defi5 nition of the term ‘‘savings association’’), by striking 

6 ‘‘Director of the Office of Thrift Supervision’’ and 

7 inserting ‘‘Comptroller of the Currency’’; 

8 (2) in subsection (l)(5) (relating to the defini9 tion of the term ‘‘deposit’’), in the introductory text, 

10 by striking ‘‘, Director of the Office of Thrift Super11 vision,’’ and inserting ‘‘, and’’; 

12 (3) in subsection (q) (relating to the definition 

13 of the term ‘‘appropriate Federal banking agen14 cy’’)— 

15 (A) by amending paragraph (1) to read as 

16 follows: 

17 ‘‘(1) the Comptroller of the Currency, in the 

18 case of any national bank, any Federal branch or 

19 agency of a foreign bank, or any savings association 

20 or savings and loan holding company;’’; 

21 (B) in paragraph (2)(F), by adding ‘‘and’’ 

22 at the end after the semicolon; 

23 (C) in paragraph (3), by striking ‘‘; and’’ 

24 and inserting a period; 

25 (D) by amending paragraph (3) to read as 

26 follows: 


wwoods2 on DSK1DXX6B1PROD with BILLS
115 

•HR 3996 IH

1 ‘‘(3) the Federal Deposit Insurance Corporation 

2 in the case of a State nonmember insured bank, 

3 State savings association, or a foreign bank having 

4 an insured branch.’’; and 

5 (E) by striking paragraph (4); and 

6 (4) in subsection (z) (relating to the definition 

7 of the term ‘‘Federal banking agency’’), by striking 

8 ‘‘the Director of the Office of Thrift Supervision,’’. 

9 SEC. 1220. AMENDMENTS TO SECTION 7. 

10 Section 7(a) of the Federal Deposit Insurance Act 

11 (12 U.S.C. 1817) is amended— 

12 (1) in paragraph (2)— 

13 (A) in subparagraph (A)— 

14 (i) in the first sentence, by striking 

15 ‘‘the Director of the Office of Thrift Su16 pervision’’; and 

17 (ii) in the second sentence, by striking 

18 ‘‘the Director of the Office of Thrift Su19 pervision’’; and 

20 (B) in subparagraph (B), by striking 

21 ‘‘Comptroller of the Currency, the Board of 

22 Governors of the Federal Reserve System, and 

23 the Director of the Office of Thrift Super24 vision,’’ and inserting ‘‘Comptroller of the CurVerDate Nov 24 2008 00:06 Nov 20, 2009 Jkt 089200 PO 00000 Frm 00115 Fmt 6652 Sfmt 6201 E:\BILLS\H3996.IH H3996

wwoods2 on DSK1DXX6B1PROD with BILLS
116 

•HR 3996 IH

1 rency and the Board of Governors of the Fed2 eral Reserve System,’’; 

3 (2) in paragraph (3), in the first sentence, by 

4 striking ‘‘Comptroller of the Currency, the Chairman 

5 of the Board of Governors of the Federal Reserve 

6 System, and the Director of the Office of Thrift Su7 pervision’’ and inserting ‘‘Comptroller of the Cur8 rency and the Chairman of the Board of Governors 

9 of the Federal Reserve System’’; and 

10 (3) in paragraph (7), by striking ‘‘Director of 

11 the Office of Thrift Supervision,’’. 

12 SEC. 1221. AMENDMENTS TO SECTION 8. 

13 Section 8 of the Federal Deposit Insurance Act (12 

14 U.S.C. 1818) is amended— 

15 (1) in subsection (a)(8)(B)(ii), in the last sen16 tence— 

17 (A) by striking ‘‘Director of the Office of 

18 Thrift Supervision’’ each place it appears and 

19 inserting ‘‘Comptroller of the Currency’’; and 

20 (B) by inserting ‘‘the Office of Thrift Su21 pervision, as successor to’’ after ‘‘as a successor 

22 to’’ and before ‘‘the Federal Savings and Loan 

23 Insurance Corporation’’; 

24 (2) in subsection (o)— 


wwoods2 on DSK1DXX6B1PROD with BILLS
117 

•HR 3996 IH

1 (A) by striking ‘‘Director of the Office of 

2 Thrift Supervision’’ and inserting ‘‘Comptroller 

3 of the Currency’’; and 

4 (3) in subsection (w)(3)(A), by striking ‘‘Office 

5 of Thrift Supervision’’ and inserting ‘‘Office of the 

6 Comptroller of the Currency’’. 

7 SEC. 1222. AMENDMENTS TO SECTION 11. 

8 Section 11 of the Federal Deposit Insurance Act (12 

9 U.S.C. 1821) is amended— 

10 (1) in subsection (c)(6) — 

11 (A) in the heading, by striking ‘‘DIRECTOR

12 OF THE OFFICE OF THRIFT SUPERVISION’’ and 

13 inserting ‘‘COMPTROLLER OF THE CURRENCY’’; 

14 (B) in subparagraph (A), by striking ‘‘Di15 rector of the Office of Thrift Supervision’’ and 

16 inserting ‘‘Comptroller of the Currency’’; and 

17 (C) in subparagraph (B), by striking ‘‘Di18 rector of the Office of Thrift Supervision’’ and 

19 inserting ‘‘Comptroller of the Currency’’; and 

20 (2) in subsection (d)— 

21 (A) in paragraph (2)(F)(i), by striking 

22 ‘‘Director of the Office of Thrift Supervision’’ 

23 and inserting ‘‘Comptroller of the Currency’’; 

24 (B) in paragraph (17)(A)— 


wwoods2 on DSK1DXX6B1PROD with BILLS
118 

•HR 3996 IH

1 (i) by striking ‘‘Comptroller of the 

2 Currency’’; and 

3 (ii) by striking ‘‘appropriate’’; and 

4 (C) in paragraph (18)(B), by striking ‘‘or 

5 the Director of the Office of Thrift Super6 vision’’. 

7 SEC. 1223. AMENDMENTS TO SECTION 13. 

8 Section 13(k)(1)(A)(iv) of the Federal Deposit Insur9 ance Act (12 U.S.C. 1823(k)(1)(A)(iv)) is amended by 

10 striking ‘‘Director of the Office of Thrift Supervision’’ and 

11 inserting ‘‘Comptroller of the Currency’’. 

12 SEC. 1224. AMENDMENTS TO SECTION 18. 

13 Section 18 of the Federal Deposit Insurance Act (12 

14 U.S.C. 1828) is amended— 

15 (1) in subsection (c)(2)— 

16 (A) in subparagraph (A), by striking 

17 ‘‘bank;’’ and inserting ‘‘bank or a savings asso18 ciation;’’; 

19 (B) in subparagraph (B), by inserting 

20 ‘‘and’’ at the end after the semicolon; 

21 (C) in subparagraph (C), by striking 

22 ‘‘bank (except a savings bank supervised by the 

23 Director of the Office of Thrift Supervision); 

24 and’’ and inserting ‘‘bank or State savings as25 sociation.’’; and 


wwoods2 on DSK1DXX6B1PROD with BILLS
119 

•HR 3996 IH

1 (D) by striking subparagraph (D); 

2 (2) in subsection (g)(1), by striking ‘‘Director 

3 of the Office of Thrift Supervision’’ and inserting 

4 ‘‘Comptroller of the Currency’’; 

5 (3) in subsection (i)(2)— 

6 (A) by striking subparagraph (B) and in7 serting the following new subparagraph: 

8 ‘‘(B) the Corporation, if the resulting insti9 tution is to be a State nonmember insured bank 

10 or insured State savings association.’’; and 

11 (B) by striking subparagraph (C); 

12 (4) in subsection (m)— 

13 (A) in paragraph (1)— 

14 (i) in subparagraph (A), by striking 

15 ‘‘Director of the Office of Thrift Super16 vision’’ and inserting ‘‘Comptroller of the 

17 Currency’’; and 

18 (ii) in subparagraph (B), by striking 

19 ‘‘Director of the Office of Thrift Super20 vision’’ and inserting ‘‘Comptroller of the 

21 Currency’’; 

22 (B) in paragraph (2)— 

23 (i) in subparagraph (A), by striking 

24 ‘‘Director of the Office of Thrift SuperVerDate Nov 24 2008 00:06 Nov 20, 2009 Jkt 089200 PO 00000 Frm 00119 Fmt 6652 Sfmt 6201 E:\BILLS\H3996.IH H3996

wwoods2 on DSK1DXX6B1PROD with BILLS
120 

•HR 3996 IH

1 vision’’ and inserting ‘‘Comptroller of the 

2 Currency’’; and 

3 (ii) in subparagraph (B), by striking 

4 ‘‘Director of the Office of Thrift Super5 vision’’ each place it appears and inserting 

6 ‘‘Comptroller of the Currency’’; and 

7 (C) in paragraph (3)— 

8 (i) in subparagraph (A), by striking 

9 ‘‘Director of the Office of Thrift Super10 vision’’ and inserting ‘‘Comptroller of the 

11 Currency’’; and 

12 (ii) in subparagraph (B), by striking 

13 ‘‘Office of Thrift Supervision’’ and insert14 ing ‘‘Comptroller of the Currency’’. 

15 SEC. 1225. AMENDMENTS TO SECTION 28. 

16 Section 28 of the Federal Deposit Insurance Act (12 

17 U.S.C. 1831e) is amended— 

18 (1) in subsection (e)— 

19 (A) in paragraph (2)— 

20 (i) in subparagraph (A)(ii), by strik21 ing ‘‘Director of the Office of Thrift Su22 pervision’’ and inserting ‘‘Comptroller of 

23 the Currency’’; 

24 (ii) in subparagraph (C), by striking 

25 ‘‘Director of the Office of Thrift SuperVerDate Nov 24 2008 00:06 Nov 20, 2009 Jkt 089200 PO 00000 Frm 00120 Fmt 6652 Sfmt 6201 E:\BILLS\H3996.IH H3996

wwoods2 on DSK1DXX6B1PROD with BILLS
121 

•HR 3996 IH

1 vision’’ and inserting ‘‘Comptroller of the 

2 Currency’’; and 

3 (iii) in subparagraph (F), by striking 

4 ‘‘Director of the Office of Thrift Super5 vision’’ and inserting ‘‘Comptroller of the 

6 Currency’’; and 

7 (B) in paragraph (3)— 

8 (i) in subparagraph (A), by striking 

9 ‘‘Director of the Office of Thrift Super10 vision’’ and inserting ‘‘Comptroller of the 

11 Currency’’; and 

12 (ii) in subparagraph (B), by striking 

13 ‘‘Director of the Office of Thrift Super14 vision’’ and inserting ‘‘Comptroller of the 

15 Currency’’; and 

16 (2) in subsection (h)(2), by striking ‘‘Director 

17 of the Office of Thrift Supervision’’ and inserting 

18 ‘‘Comptroller of the Currency’’. 

19 SEC. 1226. AMENDMENTS TO THE ALTERNATIVE MORT20 GAGE TRANSACTION PARITY ACT OF 1982. 

21 (a) AMENDMENTS TO SECTION 802.—Section 

22 802(a)(3) of the Alternative Mortgage Transaction Parity 

23 Act of 1982 (12 U.S.C. 3801) is amended— 


wwoods2 on DSK1DXX6B1PROD with BILLS
122 

•HR 3996 IH

1 (1) by striking ‘‘Comptroller of the Currency,’’ 

2 and inserting ‘‘Comptroller of the Currency and’’; 

3 and 

4 (2) by striking ‘‘, and the Director of the Office 

5 of Thrift Supervision’’. 

6 (b) AMENDMENTS TO SECTION 804.—Section 804(a) 

7 of the Alternative Mortgage Transaction Parity Act of 

8 1982 (12 U.S.C. 3803) is amended— 

9 (1) by amending paragraph (1) to read as fol10 lows: 

11 ‘‘(1) with respect to banks, savings associations, 

12 mutual savings banks, and savings banks, only to 

13 transactions made in accordance with regulations 

14 governing alternative mortgage transactions as pre15 scribed by the Comptroller of the Currency to the 

16 extent that such regulations are authorized by rule17 making authority granted to the Comptroller of the 

18 Currency under laws other than this section.’’; and 

19 (2) by striking paragraph (3). 

20 SEC. 1227. AMENDMENTS TO THE BANK HOLDING COM21 PANY ACT OF 1956. 

22 Section 4(f)(12)(A) of the Bank Holding Company 

23 Act of 1956 (12 U.S.C. 1843) is amended striking ‘‘Reso24 lution Trust Corporation’’. 


wwoods2 on DSK1DXX6B1PROD with BILLS
123 

•HR 3996 IH

1 SEC. 1228. AMENDMENTS TO THE BANK PROTECTION ACT 

2 OF 1968. 

3 Section 2 of the Bank Protection Act of 1968 (12 

4 U.S.C. 1881) is amended— 

5 (1) in paragraph (1), by striking ‘‘national 

6 banks,’’ and inserting ‘‘national banks and federal 

7 savings associations.’’; 

8 (2) in paragraph (2), by inserting ‘‘and’’ at the 

9 end; 

10 (3) in paragraph (3), by striking ‘‘, and’’ at the 

11 end and inserting a period; and 

12 (4) by striking paragraph (4). 

13 SEC. 1229. AMENDMENTS TO THE BANK SERVICE COMPANY 

14 ACT. 

15 Section 1(b) of the Bank Service Company Act (12 

16 U.S.C. 1861(b)) is amended— 

17 (1) in paragraph (4), by striking ‘‘insured 

18 bank,’’ and inserting ‘‘insured bank or’’; 

19 (2) by striking ‘‘Office of Thrift Supervision’’ 

20 and inserting ‘‘Office of the Comptroller of the Cur21 rency’’; and 

22 (3) by striking ‘‘, the Federal Savings and Loan 

23 Insurance Corporation,’’. 


wwoods2 on DSK1DXX6B1PROD with BILLS
124 

•HR 3996 IH

1 SEC. 1230. AMENDMENTS TO THE COMMUNITY REINVEST2 MENT ACT OF 1977. 

3 Section 803(1) of the Community Reinvestment Act 

4 of 1977 (12 U.S.C. 2902(1)) is amended— 

5 (1) in subparagraph (A), by striking ‘‘national 

6 banks’’ and inserting ‘‘national banks or savings as7 sociations (the deposits of which are insured by the 

8 Federal Deposit Insurance Corporation)’’; 

9 (2) in subparagraph (B), by striking ‘‘and bank 

10 holding companies;’’ and inserting ‘‘, bank holding 

11 companies and savings and loan holding compa12 nies;’’; and 

13 (3) by striking subparagraph (D). 

14 SEC. 1231. AMENDMENTS TO THE DEPOSITORY INSTITU15 TION MANAGEMENT INTERLOCKS ACT. 

16 (a) AMENDMENT TO SECTION 207.—Section 207 of 

17 the Depository Institution Management Interlocks Act (12 

18 U.S.C. 3206) is amended— 

19 (1) in paragraph (1), by striking ‘‘national 

20 banks,’’ and inserting ‘‘national banks and Federal 

21 savings associations (the deposits of which are in22 sured by the Federal Deposit Insurance Corpora23 tion),’’; 

24 ø(2) in paragraph (2), by striking ‘‘and bank 

25 holding companies,’’ and inserting ‘‘, bank holding 


wwoods2 on DSK1DXX6B1PROD with BILLS
125 

•HR 3996 IH

1 companies, and savings and loan holding compa2 nies,’’;¿ 

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

4 (4) by redesignating paragraphs (5) and (6) as 

5 paragraphs (4) and (5), respectively. 

6 (b) AMENDMENT TO SECTION 209.—Section 209 of 

7 the Depository Institution Management Interlocks Act (12 

8 U.S.C. 3207) is amended— 

9 (1) in paragraph (1), by striking ‘‘national 

10 banks,’’ and inserting ‘‘national banks and Federal 

11 savings associations (the deposits of which are in12 sured by the Federal Deposit Insurance Corpora13 tion),’’; 

14 (2) in paragraph (2), by striking ‘‘and bank 

15 holding companies,’’ and inserting ‘‘, bank holding 

16 companies, and savings and loan holding compa17 nies,’’; 

18 (3) at the end of paragraph (3), by inserting 

19 ‘‘and’’ after the comma; 

20 (4) by striking paragraph (4); and 

21 (5) by redesignating paragraph (5) as para22 graph (4). 

23 (c) AMENDMENT TO SECTION 210.—Subsection 

24 210(a) of the Depository Institution Management Inter25 locks Act (12 U.S.C. 3208(a)) is amended— 


wwoods2 on DSK1DXX6B1PROD with BILLS
126 

•HR 3996 IH

1 (1) by striking ‘‘his’’ and inserting ‘‘the’’; and 

2 (2) by inserting ‘‘of the attorney General’’ after 

3 ‘‘enforcement functions’’. 

4 SEC. 1232. AMENDMENTS TO THE EMERGENCY HOME5 OWNER’S RELIEF ACT. 

6 Section 110 of the Emergency Homeowner’s Relief 

7 Act (12 U.S.C. 2709) is amended— 

8 (1) by striking the ‘‘Federal Home Loan bank 

9 Board’’ and inserting ‘‘Federal Housing Finance 

10 Agency’’; and 

11 (2) by striking ‘‘the Federal Savings and Loan 

12 Insurance Corporation’’. 

13 SEC. 1233. AMENDMENTS TO THE EQUAL CREDIT OPPOR14 TUNITY ACT. 

15 Section 704 of the Equal Credit Opportunity Act (15 

16 U.S.C. 1691c) is amended in subsection (a)— 

17 (1) in paragraph (1)(A), by striking ‘‘and Fed18 eral branches and Federal agencies of foreign 

19 banks,’’ and inserting ‘‘, Federal branches and Fed20 eral agencies of foreign banks, or a savings associa21 tion the deposits of which are insured by the Federal 

22 Deposit Insurance Corporation;’’; 

23 (2) by striking paragraph (2); and 

24 (3) by redesignating paragraphs (3) through 

25 (9) as paragraphs (2) through (8). 


wwoods2 on DSK1DXX6B1PROD with BILLS
127 

•HR 3996 IH

1 SEC. 1234. AMENDMENTS TO THE FEDERAL CREDIT UNION 

2 ACT. 

3 (a) AMENDMENTS TO SECTION 206.—Section 

4 206(g)(7) of the Federal Credit Union Act (12 U.S.C. 

5 1786(g)(7)) is amended— 

6 (1) in subparagraph (A)— 

7 ø(A) by inserting ‘‘and’’ after the semi8 colon at the end of clause (v);¿ 

9 (B) in clause (vi)— 

10 (i) by striking ‘‘Federal Housing Fi11 nance Board’’ and inserting ‘‘Federal 

12 Housing Finance Agency’’; and 

13 (ii) by striking ‘‘; and’’ after the semi14 colon and inserting a period; and 

15 (C) by striking clause (vii); 

16 (2) in subparagraph (D)— 

17 ø(A) by inserting ‘‘and’’ after the semi18 colon at the end of clause (iii);¿ 

19 (B) by striking ‘‘; and’’ at the end of 

20 clause (iv) and inserting a period; and 

21 (C) striking clause (v). 


wwoods2 on DSK1DXX6B1PROD with BILLS
128 

•HR 3996 IH

1 SEC. 1235. AMENDMENTS TO THE FEDERAL FINANCIAL IN2 STITUTIONS EXAMINATION COUNCIL ACT OF 

3 1978. 

4 (a) AMENDMENT TO SECTION 1002.—Section 1002 

5 of the Federal Financial Institutions Examination Council 

6 Act of 1978 (12 U.S.C. 3301) is amended— 

7 (1) by striking ‘‘Federal Home Loan Bank 

8 Board’’ and inserting ‘‘Federal Housing Finance 

9 Agency’’. 

10 (b) AMENDMENT TO SECTION 1003.—Section 

11 1003(1) of the Federal Financial Institutions Examina12 tion Council Act of 1978 (12 U.S.C. 3302(1)) is amended 

13 by striking ‘‘the Office of Thrift Supervision’’. 

14 (c) AMENDMENTS TO SECTION 1004.—Section 

15 1004(a) of the Federal Financial Institutions Examina16 tion Council Act of 1978 (12 U.S.C. 3303) is amended— 

17 (1) by striking paragraph (4); and 

18 (2) by redesignating paragraph (5) as para19 graph (4). 

20 SEC. 1236. AMENDMENTS TO THE FEDERAL HOME LOAN 

21 BANK ACT. 

22 (a) AMENDMENTS TO SECTION 18.—Section 18(c) of 

23 the Federal Home Loan Bank Act (12 U.S.C. 1438(c)) 

24 is amended— 


wwoods2 on DSK1DXX6B1PROD with BILLS
129 

•HR 3996 IH

1 (1) by striking ‘‘Director of the Office of Thrift 

2 Supervision’’ each place it appears and inserting 

3 ‘‘Comptroller of the Currency’’; 

4 (2) in paragraph (1)(B), by striking ‘‘and the 

5 agencies under its administration or supervision’’; 

6 and 

7 (3) in paragraph (5), by striking ‘‘and such 

8 agencies’’. 

9 (b) AMENDMENTS TO SECTION 21A.—Section 21A of 

10 the Federal Home Loan Bank Act (12 U.S.C. 1441a) is 

11 repealed. 

12 SEC. 1237. AMENDMENTS TO THE FEDERAL RESERVE ACT. 

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

14 461(b)) is amended— 

15 (1) in paragraph (1)(F), by striking ‘‘the Direc16 tor of the Office of Thrift Supervision’’ and insert17 ing ‘‘the Comptroller of the Currency’’; and 

18 (2) in paragraph (4)(B), by striking ‘‘the Direc19 tor of the Office of Thrift Supervision’’ and insert20 ing ‘‘the Comptroller of the Currency’’. 

21 SEC. 1238. AMENDMENTS TO THE FINANCIAL INSTITUTIONS 

22 REFORM, RECOVERY, AND ENFORCEMENT 

23 ACT OF 1989. 

24 (a) AMENDMENTS TO SECTION 302.—Section 302(1) 

25 of the Financial Institutions Reform, Recovery, and EnVerDate Nov 24 2008 00:06 Nov 20, 2009 Jkt 089200 PO 00000 Frm 00129 Fmt 6652 Sfmt 6201 E:\BILLS\H3996.IH H3996

wwoods2 on DSK1DXX6B1PROD with BILLS
130 

•HR 3996 IH

1 forcement Act of 1989 (12 U.S.C. 1467a nt.) is amended 

2 by striking ‘‘Director of the Office of Thrift Supervision’’ 

3 and inserting ‘‘Comptroller of the Currency’’. 

4 (b) AMENDMENT TO SECTION 305.—Section 

5 305(b)(1) of the Financial Institutions Reform, Recovery, 

6 and Enforcement Act of 1989 (12 U.S.C. 1464(b)(1) nt.) 

7 is amended by striking ‘‘Director of the Office of Thrift 

8 Supervision’’ and inserting ‘‘Comptroller of the Cur9 rency’’. 

10 (c) AMENDMENT TO SECTION 308.—Section 308(a) 

11 of the Financial Institutions Reform, Recovery, and En12 forcement Act of 1989 (12 U.S.C. 1463 nt.) is amended 

13 by striking ‘‘Director of the Office of Supervision’’ and 

14 ‘‘Comptroller of the Currency’’. 

15 (d) AMENDMENTS TO SECTION 402.—Section 402 of 

16 the Financial Institutions Reform, Recovery, and Enforce17 ment Act of 1989 (12 U.S.C. 1437 nt.) is amended— 

18 (1) in subsection (a), by striking ‘‘Director of 

19 the Office of Thrift Supervision’’ and inserting 

20 ‘‘Comptroller of the Currency’’; 

21 (2) in subsection (b), by striking ‘‘Director of 

22 the Office of Thrift Supervision’’ and inserting 

23 ‘‘Comptroller of the Currency’’; and 

24 (3) in subsection (e)— 


wwoods2 on DSK1DXX6B1PROD with BILLS
131 

•HR 3996 IH

1 (A) in paragraph (1), by striking ‘‘the Of2 fice of Thrift Supervision’’ and inserting ‘‘Of3 fice of the Comptroller of the Currency’’; 

4 (B) in paragraph (2), by striking ‘‘Director 

5 of the Office of Thrift Supervision’’ each place 

6 it appears and inserting ‘‘Comptroller of the 

7 Currency’’; 

8 (C) in paragraph (3), by striking ‘‘Director 

9 of the Office of Thrift Supervision’’ and insert10 ing ‘‘Comptroller of the Currency’’; and 

11 (D) in paragraph (4), by striking ‘‘Direc12 tor of the Office of Thrift Supervision’’ and in13 serting ‘‘Comptroller of the Currency’’. 

14 (e) AMENDMENT TO SECTION 1103.—Section 

15 1103(a) of the Financial Institutions Reform, Recovery, 

16 and Enforcement Act of 1989 (12 U.S.C. 3332(a)) is 

17 amended by striking ‘‘and the Resolution Trust Corpora18 tion’’. 

19 (f) AMENDMENTS TO SECTION 1205.—Subsection 

20 1205(b) of the Financial Institutions Reform, Recovery, 

21 and Enforcement Act of 1989 (12 U.S.C. 1818 nt.) is 

22 amended— 

23 (1) in paragraph (1)— 


wwoods2 on DSK1DXX6B1PROD with BILLS
132 

•HR 3996 IH

1 (A) in subparagraph (B), by striking ‘‘Di2 rector of the Office of Thrift Supervision’’ and 

3 inserting ‘‘Comptroller of the Currency’’; 

4 (B) by striking subparagraph (D); and 

5 (C) by redesignating subparagraphs (E) 

6 and (F) as paragraphs (D) and (E), respec7 tively; 

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

9 (1)(F)’’ and inserting ‘‘paragraph (1)(E)’’; and 

10 (3) in paragraph (5), by striking ‘‘through (E)’’ 

11 and inserting ‘‘through (D)’’. 

12 (g) AMENDMENTS TO SECTION 1206.—Section 1206 

13 of the Financial Institutions Reform, Recovery, and En14 forcement Act of 1989 (12 U.S.C. 1833b) is amended— 

15 (1) by striking ‘‘the Thrift Depositor Protection 

16 Oversight Board of the Resolution Trust Corpora17 tion’’; 

18 (2) by inserting ‘‘and’’ after ‘‘the Federal 

19 Housing Finance Board’’ and before ‘‘the Farm 

20 Credit Administration’’; and 

21 (3) by striking ‘‘, and the Office of Thrift Su22 pervision’’. 

23 (h) AMENDMENTS TO SECTION 1216.—Section 1216 

24 of the Financial Institutions Reform, Recovery, and En25 forcement Act of 1989 (12 U.S.C. 1833e) is amended— 


wwoods2 on DSK1DXX6B1PROD with BILLS
133 

•HR 3996 IH

1 (1) in subsection (a)— 

2 (A) by striking paragraphs (2), (5), and 

3 (6); and 

4 (B) by redesignating paragraphs (3), and 

5 (4), as paragraphs (2), and (3), respectively; 

6 (2) in subsection (c)— 

7 (A) by striking ‘‘the Director of the Office 

8 of Thrift Supervision,’’ and inserting ‘‘, and’’; 

9 and 

10 (B) by striking ‘‘the Thrift Depositor pro11 tection Oversight Board of the Resolution Trust 

12 Corporation, and the Resolution Trust Corpora13 tion’’; and 

14 (3) in subsection (d)— 

15 (A) by striking paragraphs (3), (5) and 

16 (6); and 

17 (B) by redesignating paragraphs (4), (7), 

18 and (8) as paragraphs (3), (4), and (5), respec19 tively. 

20 SEC. 1239. AMENDMENTS TO THE HOUSING ACT OF 1948. 

21 Section 502(c) of the Housing Act of 1948 (12 

22 U.S.C. 1701c(c)) is amended in the introductory text by 

23 striking ‘‘Director of the Office of Thrift Supervision’’ and 

24 inserting ‘‘Comptroller of the Currency’’. 


wwoods2 on DSK1DXX6B1PROD with BILLS
134 

•HR 3996 IH

1 SEC. 1240. AMENDMENTS TO THE HOUSING AND COMMU2 NITY DEVELOPMENT ACT OF 1992. 

3 (a) AMENDMENTS TO SECTION 543.—Section 543 of 

4 the Housing and Community Development Act of 1992 

5 (12 U.S.C. 1707 nt.) is amended— 

6 (1) in subsection (c)(1)— 

7 (A) by amending subparagraph (C) to read 

8 as follows: 

9 ‘‘(C) Comptroller of the Currency’’; 

10 (B) by striking subparagraphs (D) through 

11 (F); and 

12 (C) by redesignating subparagraphs (G) 

13 and (H) as subparagraphs (D) and (E), respec14 tively; and 

15 (2) in subsection (f)— 

16 (A) in paragraph (2)— 

17 (i) by striking ‘‘the Office of Thrift 

18 Supervision,’’; and 

19 (ii) in subparagraph (D), by striking 

20 ‘‘Office of Thrift Supervision,’’ and insert21 ing ‘‘Comptroller of the Currency,’’; and 

22 (B) in paragraph (3)— 

23 (i) by striking ‘‘the Office of Thrift 

24 Supervision,’’ and inserting ‘‘Comptroller 

25 of the Currency,’’; and 


wwoods2 on DSK1DXX6B1PROD with BILLS
135 

•HR 3996 IH

1 (ii) in subparagraph (D), by striking 

2 ‘‘Office of Thrift Supervision,’’ and insert3 ing ‘‘Comptroller of the Currency,’’. 

4 (b) AMENDMENT TO SECTION 1315.—Section 

5 1315(b) of the Housing and Community Development Act 

6 of 1992 (12 U.S.C. 4515(b)) is amended by striking ‘‘the 

7 Federal Deposit Insurance Corporation, and the Office of 

8 Thrift Supervision.’’ and inserting ‘‘and the Federal De9 posit Insurance Corporation.’’. 

10 (c) AMENDMENT TO SECTION 1317.—Section 

11 1317(c) of the Housing and Community Development Act 

12 of 1992 (12 U.S.C. 4517(c)) is amended by striking ‘‘the 

13 Federal Deposit Insurance Corporation, or the Director 

14 of the Office of Thrift Supervision’’ and inserting ‘‘or the 

15 Federal Deposit Insurance Corporation.’’ 

16 SEC. 1241. AMENDMENTS TO THE HOUSING AND URBAN17 RURAL RECOVERY ACT OF 1983. 

18 Section 469 of the Housing and Urban-Rural Recov19 ery Act of 1983 (12 U.S.C. 1701p–1) is amended in the 

20 first sentence by striking ‘‘Federal Home Loan Bank 

21 Board’’ and inserting ‘‘Federal Housing Finance Agency’’. 

22 SEC. 1242. AMENDMENTS TO THE NATIONAL HOUSING ACT. 

23 Section 203(s) of the National Housing Act (12 

24 U.S.C. 1709(s)) is amended— 


wwoods2 on DSK1DXX6B1PROD with BILLS
136 

•HR 3996 IH

1 (1) in paragraph (5), by revising the paragraph 

2 to read as follows: 

3 ‘‘if the mortgagee is a national bank, a subsidiary or 

4 affiliate of such a bank, a Federal savings associa5 tion or a subsidiary or affiliate of a savings associa6 tion, the Comptroller of the Currency;’’ 

7 (2) in paragraph (7) by inserting ‘‘or State sav8 ings association’’ after ‘‘State bank’’; and 

9 (3) by striking paragraph (8). 

10 SEC. 1243. AMENDMENTS TO THE RIGHT TO FINANCIAL 

11 PRIVACY ACT OF 1978. 

12 Section 11(7) of the Right to Financial Privacy Act 

13 of 1978 (12 U.S.C. 3401(7)) is amended— 

14 (1) by striking subparagraph (B); and 

15 (2) by redesignating subparagraphs (C) through 

16 (I) as subparagraphs (B) through (H), respectively. 

17 SEC. 1244. AMENDMENTS TO THE BALANCED BUDGET AND 

18 EMERGENCY DEFICIT CONTROL ACT OF 1985. 

19 (a) AMENDMENTS TO SECTION 255.—Section 

20 255(g)(1)(A) of the Balanced Budget and Emergency 

21 Deficit Control Act of 1985 (2 U.S.C. 905(g)(1)(A)) is 

22 amended by striking ‘‘Director of the Office of Thrift Su23 pervision’’. 


wwoods2 on DSK1DXX6B1PROD with BILLS
137 

•HR 3996 IH

1 (b) AMENDMENTS TO SECTION 256.—Section 

2 256(h)(4) of the Balanced Budget and Emergency Deficit 

3 Control Act of 1985 (2 U.S.C. 906(h)(4)) is amended— 

4 (1) by striking subparagraphs (C) and (G); and 

5 (2) by redesignating subparagraphs (D), (E), 

6 (F), and (H) as subparagraphs (C) through (G), re7 spectively. 

8 SEC. 1245. AMENDMENTS TO THE CRIME CONTROL ACT OF 

9 1990. 

10 (a) AMENDMENTS TO SECTION 2539.—Section 

11 2539(c)(2) of the Crime Control Act of 1990 (Public Law 

12 101–647) is amended by striking subparagraph (F) and 

13 redesignating subparagraphs (G) and (H) as subpara14 graphs (F) through (G), respectively. 

15 (b) AMENDMENT TO SECTION 2554.—Section 

16 2554(b)(2) of the Crime Control Act of 1990 (Public Law 

17 101–647) is amended by striking ‘‘Director of the Office 

18 of Thrift Supervision’’ and inserting ‘‘Comptroller of the 

19 Currency’’. 

20 SEC. 1246. AMENDMENT TO THE FLOOD DISASTER PROTEC21 TION ACT OF 1973. 

22 Section 3(a)(5) of the Flood Disaster Protection Act 

23 of 1973, as amended (42 U.S.C. 4003(a)(5)) is amended 

24 by striking ‘‘the Office of Thrift Supervision’’. 


wwoods2 on DSK1DXX6B1PROD with BILLS
138 

•HR 3996 IH

1 SEC. 1247. AMENDMENTS TO THE INVESTMENT COMPANY 

2 ACT OF 1940. 

3 Section 6(a)(3) of the Investment Company Act of 

4 1940 (15 U.S.C. 80a–6(a)(3)) is amended by striking 

5 ‘‘Federal Savings and Loan Insurance Corporation’’ and 

6 inserting ‘‘Comptroller of the Currency’’. 

7 SEC. 1248. AMENDMENTS TO THE NEIGHBORHOOD REIN8 VESTMENT CORPORATION ACT. 

9 The Neighborhood Reinvestment Corporation Act (42 

10 U.S.C. 8105(c)(3)) is amended by striking the ‘‘Federal 

11 Home Loan Bank Board’’ and inserting ‘‘Federal Housing 

12 Finance Agency’’. 

13 SEC. 1249. AMENDMENTS TO THE SECURITIES EXCHANGE 

14 ACT OF 1934. 

15 (a) AMENDMENTS TO SECTION 3.—Section 3(a)(34) 

16 of the Securities Exchange Act of 1934 (15 U.S.C. 

17 78c(a)(34)) is amended— 

18 (1) in subparagraph (A)— 

19 (A) in clause (i), by striking ‘‘bank;’’ and 

20 inserting ‘‘bank, or a savings association (as de21 fined in section 3(b) of the Federal Deposit In22 surance Act (12 U.S.C. 1813(b))), the deposits 

23 of which are insured by the Federal Deposit In24 surance Corporation, a subsidiary or a depart25 ment or division of any such savings associa26 tion, or a savings and loan holding;’’; 


wwoods2 on DSK1DXX6B1PROD with BILLS
139 

•HR 3996 IH

1 (B) by striking clause (iv); and 

2 (C) by redesignating clause (v) as clause 

3 (iv); 

4 (2) in subparagraph (B)— 

5 (A) in clause (i), by striking ‘‘bank;’’ and 

6 inserting ‘‘bank, or a savings association (as de7 fined in section 3(b) of the Federal Deposit In8 surance Act (12 U.S.C. 1813(b))), the deposits 

9 of which are insured by the Federal Deposit In10 surance Corporation, a subsidiary or a depart11 ment or division of any such savings associa12 tion, or a savings and loan holding;’’; 

13 (B) by striking clause (iv); and 

14 (C) by redesignating clause (v) as clause 

15 (iv); 

16 (3) in subparagraph (C)— 

17 (A) in clause (i), by striking ‘‘bank;’’ and 

18 inserting ‘‘bank, or a savings association (as de19 fined in section 3(b) of the Federal Deposit In20 surance Act (12 U.S.C. 1813(b))), the deposits 

21 of which are insured by the Federal Deposit In22 surance Corporation, a subsidiary or a depart23 ment or division of any such savings associa24 tion, or a savings and loan holding;’’; 

25 (B) by striking clause (iv); and 


wwoods2 on DSK1DXX6B1PROD with BILLS
140 

•HR 3996 IH

1 (C) by redesignating clause (v) as clause 

2 (iv); and 

3 (4) in subparagraph (F)— 

4 (A) in clause (i), by striking ‘‘bank;’’ and 

5 inserting ‘‘or a savings association (as defined 

6 in section 3(b) of the Federal Deposit Insur7 ance Act (12 U.S.C. 1813(b))), the deposits of 

8 which are insured by the Federal Deposit In9 surance Corporation;’’ 

10 (B) by striking clause (ii); and 

11 (C) redesignating clauses (iii), (iv), and (v) 

12 as clauses (ii), (iii) and (iv), respectively. 

13 (b) AMENDMENTS TO SECTION 15C.—Section 15C of 

14 the Securities Exchange Act of 1934 (15 U.S.C. 78o–5) 

15 is amended in subsection (g)(1) by striking ‘‘the Director 

16 of the Office of Thrift Supervision, the Federal Savings 

17 and Loan Insurance Corporation,’’. 

18 SEC. 1250. AMENDMENTS TO TITLE 18, UNITED STATES 

19 CODE. 

20 (a) AMENDMENT TO SECTION 212.—Section 

21 212(c)(2) of title 18, United States Code, is amended— 

22 (1) by striking subparagraph (C); and 

23 (2) by redesignating subparagraphs (D) 

24 through (H) as subparagraphs (C) through (G), re25 spectively. 


wwoods2 on DSK1DXX6B1PROD with BILLS
141 

•HR 3996 IH

1 (b) AMENDMENT TO SECTION 657.—Section 657 of 

2 title 18, United States Code, is amended by striking ‘‘Of3 fice of Thrift Supervision, the Resolution Trust Corpora4 tion’’. 

5 (c) AMENDMENT TO SECTION 981.—Section 

6 981(a)(1)(D) of title 18, United States Code, is amend7 ed— 

8 (1) by striking ‘‘Resolution Trust Corporation’’; 

9 and 

10 (2) by striking ‘‘or the Office of Thrift Super11 vision’’. 

12 (d) AMENDMENT TO SECTION 982.—Section 

13 982(a)(3) of title 18, United States Code, is amended— 

14 (1) by striking ‘‘Resolution Trust Corporation’’; 

15 and 

16 (2) by striking ‘‘or the Office of Thrift Super17 vision’’. 

18 (e) AMENDMENT TO SECTION 1006.—Section 1006 

19 of title 18, United States Code, is amended— 

20 (1) by striking ‘‘Office of Thrift Supervision’’; 

21 and 

22 (2) by striking ‘‘the Resolution Trust Corpora23 tion’’. 

24 (f) AMENDMENT TO SECTION 1014.—Section 1014 

25 of title 18, United States Code, is amended— 


wwoods2 on DSK1DXX6B1PROD with BILLS
142 

•HR 3996 IH

1 (1) by striking ‘‘Office of Thrift Supervision’’; 

2 and 

3 (2) by striking ‘‘Resolution Trust Corporation’’. 

4 (g) AMENDMENT TO SECTION 1032.—Section 1032 

5 of title 18, United States Code, is amended— 

6 (1) by striking ‘‘or the Director of the Office of 

7 Thrift Supervision’’; and 

8 (2) by striking ‘‘the Resolution Trust Corpora9 tion’’. 

10 SEC. 1251. AMENDMENTS TO TITLE 31, UNITED STATES 

11 CODE. 

12 (a) AMENDMENT TO SECTION 309.—Section 309 of 

13 title 31, United States Code, is amended to read as fol14 lows: 

15 ‘‘§ 309. Division of Thrift Supervision 

16 ‘‘The Division of Thrift Supervision established 

17 under section 3(a) of the Home Owners’ Loan Act shall 

18 be a division in the Office of the Comptroller of the Cur19 rency.’’. 

20 (b) AMENDMENTS TO SECTION 321.—Section 321 of 

21 title 31, United States Code, is amended— 

22 (1) by inserting ‘‘and’’ at the end of subsection 

23 (c)(1); 


wwoods2 on DSK1DXX6B1PROD with BILLS
143 

•HR 3996 IH

1 (2) in subsection (c)(2) by striking ‘‘Comp2 troller of the Currency; and’’ and inserting ‘‘Comp3 troller of the Currency.’’; and 

4 (3) by striking subsection (e). 

5 (c) AMENDMENTS TO SECTION 714.—Section 714 of 

6 title 31, United States Code, is amended in subsection (a) 

7 by striking ‘‘the Office of the Comptroller of the Currency, 

8 and the Office of Thrift Supervision.’’ and inserting ‘‘and 

9 the Office of the Comptroller of the Currency.’’. 

10 Subtitle D—Further Improvements 

11 to the Regulation of Bank Hold12 ing Companies and Depository 

13 Institutions 

14 SEC. 1301. TREATMENT OF CREDIT CARD BANKS, INDUS15 TRIAL LOAN COMPANIES, AND CERTAIN 

16 OTHER COMPANIES UNDER THE BANK HOLD17 ING COMPANY ACT. 

18 (a) DEFINITIONS.—Section 2 of the Bank Holding 

19 Company Act of 1956 (12 U.S.C. 1841), is amended— 

20 (1) in subsection (a)(5), by adding at the end 

21 the following new subparagraph: 

22 ‘‘(G) No company is a bank holding com23 pany by virtue of its ownership or control of a 

24 section six holding company or any subsidiary 

25 of a section six holding company, so long as the 


wwoods2 on DSK1DXX6B1PROD with BILLS
144 

•HR 3996 IH

1 requirements of sections 4(p) and 6 of this Act 

2 are met, as applicable, by the section six hold3 ing company;’’ 

4 (2) in subsection (c)(1)(A), by striking ‘‘insured 

5 bank’’ and inserting ‘‘insured depository institu6 tion’’, and by striking ‘‘section 3(h) of the Federal 

7 Deposit Insurance Act’’ and inserting ‘‘section 

8 3(c)(2) of the Federal Deposit Insurance Act.’’; 

9 (3) in subsection (c)(2)— 

10 (A) by striking subparagraph (B); 

11 (B) by striking subparagraphs (F) and 

12 (H); and 

13 (C) by redesignating existing subpara14 graphs (C), (D), (E), and (G) as subparagraphs 

15 (B), (C), (D), and (E), respectively; and 

16 (4) at the end of section 2, adding the following 

17 new subsection: 

18 ‘‘(r) SECTION SIX HOLDING COMPANIES.—A ‘section 

19 six holding company’ means a company that is required 

20 to be established as an intermediate holding company 

21 under section 6 of this Act.’’. 

22 (b) NONBANKING ACTIVITIES EXCEPTIONS.—Section 

23 4 of the Bank Holding Company Act of 1956 (12 U.S.C. 

24 1843) is amended— 


wwoods2 on DSK1DXX6B1PROD with BILLS
145 

•HR 3996 IH

1 (1) in subsection (f)(1)(B) by striking ‘‘for pur2 poses of this Act’’ and inserting ‘‘for purposes of 

3 section 4(a)’’; and 

4 (2) by adding after subsection (f)(2)(C) the fol5 lowing: 

6 ‘‘(D) such company fails to— 

7 ‘‘(i) establish and register a section 

8 six holding company pursuant to section 6 

9 of this Act within 90 days after the date 

10 of enactment of the Financial Stability Im11 provement Act of 2009, unless the Board 

12 grants an extension of such period for 

13 compliance which shall not exceed 180 ad14 ditional days; and 

15 ‘‘(ii) conduct all its activities which 

16 are financial in nature or incidental thereto 

17 as determined under section 4(k) through 

18 such section six holding company, in ac19 cordance with regulations prescribed by or 

20 orders issued by the Board, pursuant to 

21 section 6 of this Act.’’; and 

22 (3) by inserting at the end the following new 

23 subsection: 

24 ‘‘(p) CERTAIN COMPANIES NOT SUBJECT TO THIS

25 ACT.— 


wwoods2 on DSK1DXX6B1PROD with BILLS
146 

•HR 3996 IH

1 ‘‘(1) IN GENERAL.—Except as provided in para2 graphs (6) and (7), any company which— 

3 ‘‘(A)(i) was— 

4 ‘‘(I) a unitary savings and loan 

5 holding company on May 4 1999, or 

6 became a unitary savings and loan 

7 holding company pursuant to an ap8 plication pending before the Office of 

9 Thrift Supervision on of before that 

10 date, and that— 

11 ‘‘(aa) on June 30, 2009, 

12 continued to control not fewer 

13 than one savings association that 

14 it controlled on May 4, 1999, 

15 which became a bank for pur16 poses of the Bank Holding Com17 pany Act as a result of the enact18 ment of section 1301(a)(2)(A); 

19 and 

20 ‘‘(bb) on June 30, 2009, 

21 and the date of enactment of the 

22 Financial Stability Improvement 

23 Act of 2009, such savings asso24 ciation subsidiary was and re25 mains a qualified thrift lender 


wwoods2 on DSK1DXX6B1PROD with BILLS
147 

•HR 3996 IH

1 (as determined by section 10 of 

2 the Home Owners’ Loan Act); or 

3 ‘‘(ii) on June 30, 2009, controlled— 

4 ‘‘(I) an institution which became a 

5 bank as a result of the enactment of sec6 tion 1301(a)(2)(B) of the Financial Sta7 bility Improvement Act of 2009, or 

8 ‘‘(II) an institution it has continu9 ously controlled since March 5, 1987, 

10 which became a bank as a result of the en11 actment of the Competitive Equality Bank12 ing Act of 1987, pursuant to subsection 

13 (f); 

14 ‘‘(B) was not on June 30, 2009— 

15 ‘‘(aa) a bank holding company; 

16 or 

17 ‘‘(bb) subject to the Bank Hold18 ing Company Act by reason of section 

19 8(a) of the International Banking Act 

20 of 1978 (12 U.S.C. 3106(a)); and 

21 ‘‘(C) on June 30, 2009, directly or indi22 rectly controlled shares or engaged in activities 

23 that did not, on the day before the date of en24 actment of the Financial Stability Act of 2009 

25 comply with the activity or investment restricVerDate Nov 24 2008 00:06 Nov 20, 2009 Jkt 089200 PO 00000 Frm 00147 Fmt 6652 Sfmt 6201 E:\BILLS\H3996.IH H3996

wwoods2 on DSK1DXX6B1PROD with BILLS
148 

•HR 3996 IH

1 tions on financial holding companies in section 

2 4 in accordance with regulations prescribed by 

3 the Board, that did not, on the day before the 

4 date of enactment of the Financial Stability Act 

5 of 2009 comply with the activity or investment 

6 restrictions on financial holding companies in 

7 section 4 in accordance with regulations pre8 scribed by the Board, shall not be treated as a 

9 bank holding company for purposes of this Act 

10 solely by virtue of such company’s control of 

11 such institution and control of a section six 

12 holding company established pursuant to sec13 tion 6. 

14 ‘‘(2) LOSS OF EXEMPTION.—A company de15 scribed in paragraph (1) shall no longer qualify for 

16 the exemption provided under that paragraph if— 

17 ‘‘(A) such company fails to— 

18 ‘‘(i) establish and register a section 

19 six holding company pursuant to section 6 

20 of this Act within 90 days after the date 

21 of enactment of the Financial Stability Im22 provement Act of 2009, unless the Board 

23 grants an extension of such period for 

24 compliance which shall not exceed 180 ad25 ditional days; and 


wwoods2 on DSK1DXX6B1PROD with BILLS
149 

•HR 3996 IH

1 ‘‘(ii) maintain a section six holding 

2 company in compliance with all the re3 quirements for a section six holding com4 pany under section 6 of this Act; 

5 ‘‘(B) such company directly or indirectly 

6 (including through the section six holding com7 pany it must form pursuant to this subsection 

8 and section 6 of this Act) acquires ownership or 

9 control of more than 5 percent of the shares or 

10 assets of an additional bank or insured deposi11 tory institution after June 30, 2009, other 

12 than— 

13 ‘‘(i) shares held as a bona fide fidu14 ciary (whether with or without the sole dis15 cretion to vote such shares); 

16 ‘‘(ii) shares held by any person as a 

17 bona fide fiduciary solely for the benefit of 

18 employees of either the company described 

19 in paragraph (1) or any subsidiary of that 

20 company and the beneficiaries of those em21 ployees; 

22 ‘‘(iii) shares held temporarily pursu23 ant to an underwriting commitment in the 

24 normal course of an underwriting business; 


wwoods2 on DSK1DXX6B1PROD with BILLS
150 

•HR 3996 IH

1 ‘‘(iv) shares held in an account solely 

2 for trading purposes; 

3 ‘‘(v) shares over which no control is 

4 held other than control of voting rights ac5 quired in the normal course of a proxy so6 licitation; 

7 ‘‘(vi) loans or other accounts receiv8 able acquired from an insured depository 

9 institution in the normal course of busi10 ness; and 

11 ‘‘(vii) shares or assets acquired in se12 curing or collecting a debt previously con13 tracted in good faith, during the 2-year pe14 riod beginning on the date of such acquisi15 tion or for such additional time (not ex16 ceeding 3 years) as the Board may permit 

17 if the Board determines that such an ex18 tension will not be detrimental to the pub19 lic interest; 

20 ‘‘(C)(i) the section six holding company re21 quired to be established by such company, or 

22 any subsidiary bank of such company undergoes 

23 a change in control after the date of enactment 

24 of the Financial Stability Improvement Act of 

25 2009, other than— 


wwoods2 on DSK1DXX6B1PROD with BILLS
151 

•HR 3996 IH

1 ‘‘(I) the merger or whole acquisition 

2 of such parent company in a bona fide 

3 merger or acquisition (as shall be deter4 mined by the Board, which is authorized to 

5 find that a transaction is not a bona fide 

6 merger or acquisition and thus results in 

7 the loss of exemption), with a company 

8 that is predominantly engaged in activities 

9 not permissible for a financial holding com10 pany pursuant to section 4(k), or 

11 ‘‘(II) the acquisition of additional 

12 shares by a company that owned or con13 trolled 7.5 percent or more of any class of 

14 such parent company’s outstanding voting 

15 stock on or before June 30, 2009, and con16 tinuously owned or controlled at least such 

17 7.5 percent since June 30, 2009; 

18 ‘‘(ii) nothing in this subparagraph shall be 

19 construed as preventing the Board from requir20 ing compliance with this subsection, section 6 

21 or the requirements of the Change in Bank 

22 Control Act (12 U.S.C. 1817(j)), as applicable 

23 to a company that is permitted to acquire con24 trol without loss of the exemption in this sub25 section 4(p)(2); or 


wwoods2 on DSK1DXX6B1PROD with BILLS
152 

•HR 3996 IH

1 ‘‘(D) any subsidiary bank of such company 

2 engages in any activity after the date of enact3 ment of the Financial Stability Improvement 

4 Act of 2009 which would have caused such in5 stitution to be a bank (as defined in section 

6 2(c) of this Act, as in effect before such date) 

7 if such activities had been engaged in before 

8 such date. 

9 ‘‘(3) DIVESTITURE IN CASE OF LOSS OF EX10 EMPTION.—If any company described in paragraph 

11 (1) fails to qualify for the exemption provided under 

12 paragraph (1) by operation of paragraph (2), such 

13 exemption shall cease to apply to such company and 

14 such company shall divest control of each bank it 

15 controls before the end of the 180-day period begin16 ning on the date on which the company receives no17 tice from the Board that the company has failed to 

18 continue to qualify for such exemption, unless, be19 fore the end of such 180-day period, the company 

20 has— 

21 ‘‘(A) either— 

22 ‘‘(i) corrected the condition or ceased 

23 the activity that caused the company to 

24 fail to continue to qualify for the exemp25 tion; or 


wwoods2 on DSK1DXX6B1PROD with BILLS
153 

•HR 3996 IH

1 ‘‘(ii) submitted a plan to the Board 

2 for approval to cease the activity or correct 

3 the condition in a timely manner (which 

4 shall not exceed 1 year); and 

5 ‘‘(B) implemented procedures that are rea6 sonably adapted to avoid the reoccurrence of 

7 such condition or activity. 

8 ‘‘(4) SUBSECTION CEASES TO APPLY UNDER

9 CERTAIN CIRCUMSTANCES.—This subsection shall 

10 cease to apply to any company described in para11 graph (1) if such company— 

12 ‘‘(A) registers as a bank holding company 

13 under section 2(a) of this Act; 

14 ‘‘(B) immediately upon such registration, 

15 complies with all of the requirements of this 

16 chapter, and regulations prescribed by the 

17 Board pursuant to this chapter, including the 

18 nonbanking restrictions of this section; and 

19 ‘‘(C) does not, at the time of such registra20 tion, control banks in more than one State, the 

21 acquisition of which would be prohibited by sec22 tion 3(d) of this Act if an application for such 

23 acquisition by such company were filed under 

24 section 3(a) of this Act. 


wwoods2 on DSK1DXX6B1PROD with BILLS
154 

•HR 3996 IH

1 ‘‘(5) INFORMATION REQUIREMENT.—Each com2 pany described in paragraph (1) shall, within 60 

3 days after the date of enactment of the Financial 

4 Stability Improvement Act of 2009, provide the 

5 Board with the name and address of such company, 

6 the name and address of each bank such company 

7 controls, and a description of each such bank’s ac8 tivities. 

9 ‘‘(6) EXAMINATIONS AND REPORTS.—The 

10 Board may, from time to time, examine a company 

11 described in paragraph (1) or a bank controlled by 

12 such a company, and may require reports under 

13 oath from a company described in paragraph (1), 

14 and appropriate officers or directors of such com15 pany, in each case solely for purposes of assuring 

16 compliance with the provisions of this subsection and 

17 enforcing such compliance. 

18 ‘‘(7) LIMITED ENFORCEMENT.— 

19 ‘‘(A) IN GENERAL.—In addition to any 

20 other power of the Board, the Board may en21 force compliance with the provisions of this sub22 section which are applicable to any company de23 scribed in paragraph (1), and any bank con24 trolled by such company, under section 8 of the 

25 Federal Deposit Insurance Act, and such comVerDate Nov 24 2008 00:06 Nov 20, 2009 Jkt 089200 PO 00000 Frm 00154 Fmt 6652 Sfmt 6201 E:\BILLS\H3996.IH H3996

wwoods2 on DSK1DXX6B1PROD with BILLS
155 

•HR 3996 IH

1 pany or bank shall be subject to such section 

2 (for such purposes) in the same manner and to 

3 the same extent as if such company were a 

4 bank holding company. 

5 ‘‘(B) APPLICATION OF OTHER ACT.—Any 

6 violation of this subsection by any company de7 scribed in paragraph (1) or any bank controlled 

8 by such a company, may also be treated as a 

9 violation of the Federal Deposit Insurance Act 

10 for purposes of subparagraph (A). 

11 ‘‘(C) NO EFFECT ON OTHER AUTHOR12 ITY.—No provision of this paragraph shall be 

13 construed as limiting any authority of the 

14 Board or any other Federal agency under any 

15 other provision of law.’’. 

16 (c) SECTION SIX HOLDING COMPANIES.—The Bank 

17 Holding Company Act (12 U.S.C. 1841 et seq.) is amend18 ed by inserting after section 5 the following new section: 

19 ‘‘SEC. 6. SPECIAL-PURPOSE HOLDING COMPANIES. 

20 ‘‘(a) ESTABLISHMENT, PURPOSE AND REQUIRE21 MENTS OF SPECIAL PURPOSE HOLDING COMPANIES.— 

22 ‘‘(1) REQUIREMENT.—A special purpose hold23 ing company (hereafter in this section referred to as 

24 a ‘section 6 holding company’) shall be established 

25 and maintained by a company— 


wwoods2 on DSK1DXX6B1PROD with BILLS
156 

•HR 3996 IH

1 ‘‘(A) described in section 4(f)(1) as re2 quired by section 4(f)(2)(D) of this Act; 

3 ‘‘(B) described in section 4(p)(1) as re4 quired by section 4(p)(2)(A) of this Act; or 

5 ‘‘(C) that— 

6 ‘‘(i) is subject to heightened pruden7 tial standards under Subtitle B of the Fi8 nancial Stability Improvement Act of 

9 2009; 

10 ‘‘(ii) is not— 

11 ‘‘(I) a bank holding company, or 

12 ‘‘(II) subject to the Bank Hold13 ing Company Act by reason of section 

14 8(a) of the International Banking Act 

15 of 1978 (12 U.S.C. 3106(a)); and 

16 ‘‘(iii) directly or indirectly controlled 

17 shares or engaged in activities that did 

18 not, on the date the company is first sub19 ject to heightened prudential standards 

20 pursuant to subtitle B of the Financial 

21 Stability Improvement Act of 2009, comply 

22 with the activity or investment restrictions 

23 on financial holding companies in section 4 

24 in accordance with regulations prescribed 

25 by the Board. 


wwoods2 on DSK1DXX6B1PROD with BILLS
157 

•HR 3996 IH

1 ‘‘(2) PURPOSE.— 

2 ‘‘(A) A company that is required to form 

3 a section 6 holding company shall conduct all of 

4 its activities that are determined to be financial 

5 in nature or incidental thereto under section 

6 4(k) and shall hold any shares of a bank or in7 sured depository institution controlled by such 

8 company, through the section 6 holding com9 pany, unless the Board specifically determines 

10 otherwise in accordance with paragraph (6). 

11 ‘‘(B) A section 6 holding company shall be 

12 prohibited from conducting any activities or in13 vesting in any companies other than those per14 missible for a financial holding company under 

15 section 4, unless the Board specifically deter16 mines otherwise in accordance with paragraph 

17 (6). 

18 ‘‘(3) REGISTRATION.— 

19 ‘‘(A) A section 6 holding company required 

20 to be established by a company described in 

21 subparagraph (1)(A) shall be established, and 

22 such company shall register with the Board as 

23 a bank holding company, pursuant to the re24 quirements in section 4(f). 


wwoods2 on DSK1DXX6B1PROD with BILLS
158 

•HR 3996 IH

1 ‘‘(B) A section 6 holding company required 

2 to be established by a company described in 

3 subparagraph (1)(B) shall be established, and 

4 such company shall register with the Board as 

5 a bank holding company, pursuant to the re6 quirements in section 4(p). 

7 ‘‘(C) A section 6 holding company required 

8 to be established by a company described in 

9 paragraph (1)(C) shall be— 

10 ‘‘(i) established, and such company 

11 shall register with the Board, as a bank 

12 holding company within 90 days after such 

13 company or such company’s parent holding 

14 company has been notified by the Board 

15 that such company is subject to heightened 

16 prudential standards under Subtitle B of 

17 the Financial Stability Improvement Act of 

18 2009, unless the Board grants an exten19 sion of such period for compliance which 

20 shall not exceed 180 additional days; 

21 ‘‘(ii) treated as a financial holding 

22 company under this Act; and 

23 ‘‘(iii) subject to the authority of the 

24 Board to enforce compliance with the pro25 visions of this section under section 8 of 


wwoods2 on DSK1DXX6B1PROD with BILLS
159 

•HR 3996 IH

1 the Federal Deposit Insurance Act in the 

2 same manner and to the same extent as if 

3 such company were a bank holding com4 pany. 

5 ‘‘(4) RULE OF CONSTRUCTION.—For purposes 

6 of this section, designation of an already established 

7 intermediate holding company that will serve as the 

8 section 6 holding company shall satisfy the require9 ment to establish a section 6 holding company, pro10 vided that such existing intermediate holding com11 pany complies with all other provisions applicable to 

12 a section 6 holding company. 

13 ‘‘(5) LIMITATIONS ON AUTHORITY OF COMMER14 CIAL PARENT.—A company that is not a bank hold15 ing company or treated as a bank holding company 

16 pursuant to section 8(a) of the International Bank 

17 Act of 1978 that has been notified that it is an iden18 tified financial holding company, pursuant to sub19 title A of the Financial Stability Improvement Act of 

20 2009, shall— 

21 ‘‘(A) not be deemed to be, or treated as, a 

22 bank holding company, solely because of its 

23 ownership or control of a section 6 holding com24 pany; and 


wwoods2 on DSK1DXX6B1PROD with BILLS
160 

•HR 3996 IH

1 ‘‘(B) not be subject to this Act, except for 

2 such provisions as are explicitly made applicable 

3 in this section. 

4 ‘‘(6) BOARD AUTHORITY.— 

5 ‘‘(A) RULES AND EXEMPTIONS.—In addi6 tion to any other authority of the Board, the 

7 Board may, at its discretion, prescribe rules 

8 and regulations or issue orders regarding: 

9 ‘‘(i) the establishment and operation 

10 of section 6 holding companies; 

11 ‘‘(ii) exemptions from the requirement 

12 to conduct all activities that are financial 

13 or incidental thereto, as defined in section 

14 4(k), through the section 6 holding com15 pany if such exemption— 

16 ‘‘(I) would not threaten the safe17 ty and soundness of the section 6 

18 holding company or any subsidiary of 

19 the section 6 holding company; 

20 ‘‘(II) would not increase systemic 

21 risk or threaten the stability of the 

22 overall financial system; and 

23 ‘‘(III) would not result in unfair 

24 competitive advantage to the parent 


wwoods2 on DSK1DXX6B1PROD with BILLS
161 

•HR 3996 IH

1 company of such section 6 holding 

2 company; and 

3 ‘‘(iii) exemptions from the affiliate 

4 transaction requirements of subsection (b) 

5 if such exemption— 

6 ‘‘(I) is consistent with the pur7 poses of this section, and section 23A 

8 and section 23B of the Federal Re9 serve Act; 

10 ‘‘(II) would not threaten the 

11 safety and soundness of the section 6 

12 holding company or any subsidiary of 

13 the section 6 holding company; 

14 ‘‘(III) would not increase sys15 temic risk or threaten the stability of 

16 the overall financial system; and 

17 ‘‘(IV) would not result in unfair 

18 competitive advantage to the parent 

19 company of such section 6 holding 

20 company. 

21 ‘‘(B) PARENT COMPANY REPORTS.—The 

22 Board may, from time to time, require reports 

23 under oath from a company that controls a sec24 tion 6 holding company, and appropriate offi25 cers or directors of such company, solely for 


wwoods2 on DSK1DXX6B1PROD with BILLS
162 

•HR 3996 IH

1 purposes of ensuring compliance with the provi2 sions of this section (including assessing the 

3 company’s ability to serve as a source of finan4 cial strength pursuant to subsection (g)) and 

5 enforcing such compliance. 

6 ‘‘(C) LIMITED PARENT COMPANY EN7 FORCEMENT.— 

8 ‘‘(i) IN GENERAL.—In addition to any 

9 other power of the Board, the Board may 

10 enforce compliance with the provisions of 

11 this subsection which are applicable to any 

12 company described in paragraph (1), and 

13 any bank controlled by such company, 

14 under section 8 of the Federal Deposit In15 surance Act and such company or bank 

16 shall be subject to such section (for such 

17 purposes) in the same manner and to the 

18 same extent as if such company were a 

19 bank holding company. 

20 ‘‘(ii) APPLICATION OF OTHER ACT.— 

21 Any violation of this subsection by any 

22 company that controls a section 6 holding 

23 company or any bank controlled by such a 

24 company, may also be treated as a violaVerDate Nov 24 2008 00:06 Nov 20, 2009 Jkt 089200 PO 00000 Frm 00162 Fmt 6652 Sfmt 6201 E:\BILLS\H3996.IH H3996

wwoods2 on DSK1DXX6B1PROD with BILLS
163 

•HR 3996 IH

1 tion of the Federal Deposit Insurance Act 

2 for purposes of clause (i). 

3 ‘‘(iii) NO EFFECT ON OTHER AUTHOR4 ITY.—No provision of this subparagraph 

5 shall be construed as limiting any author6 ity of the Board or any other Federal 

7 agency under any other provision of law. 

8 ‘‘(b) RESTRICTIONS ON AFFILIATE TRANS9 ACTIONS.— 

10 ‘‘(1) SECTION 23A AND 23B APPLICABILITY.— 

11 ‘‘(A) IN GENERAL.—Transactions between 

12 a section 6 holding company established under 

13 this section (including any subsidiary of such 

14 company) and any affiliate of such company 

15 that is not a subsidiary of the section 6 holding 

16 company shall be subject to the restrictions and 

17 limitations contained in section 23A and section 

18 23B of the Federal Reserve Act as if the sec19 tion 6 holding company were a member bank. 

20 ‘‘(B) COVERED TRANSACTIONS.— 

21 ‘‘(i) A depository institution controlled 

22 by a section 6 holding company may not 

23 engage in a covered transaction (as defined 

24 in section 23A(b)(7) of the Federal Re25 serve Act) with any affiliate that is not the 


wwoods2 on DSK1DXX6B1PROD with BILLS
164 

•HR 3996 IH

1 section 6 holding company or a subsidiary 

2 of the section 6 holding company. 

3 ‘‘(ii) For purposes of this subpara4 graph (B), any transaction by a depository 

5 institution controlled by a section 6 hold6 ing company with any person shall be 

7 deemed to be a transaction with an affil8 iate that is not the section 6 holding com9 pany or a subsidiary of the section 6 hold10 ing company to the extent that the pro11 ceeds of the transaction are used for the 

12 benefit of, or transferred to, that affiliate. 

13 ‘‘(2) RULE OF CONSTRUCTION.—No provision 

14 of this subsection shall be construed as exempting 

15 any subsidiary insured depository institution of a 

16 section 6 holding company from compliance with sec17 tion 23A or 23B of the Federal Reserve Act with re18 spect to each affiliate of such institution (as defined 

19 in section 23A or 23B of the Federal Reserve Act), 

20 including any affiliate that is the section 6 holding 

21 company or subsidiary of the section 6 holding com22 pany. 

23 ‘‘(c) TYING PROVISIONS.—A company that directly or 

24 indirectly controls a section 6 holding company shall be— 


wwoods2 on DSK1DXX6B1PROD with BILLS
165 

•HR 3996 IH

1 ‘‘(1) treated as a bank holding company for 

2 purposes of section 106 of the Bank Holding Com3 pany Act Amendments of 1970 and section 22(h) of 

4 the Federal Reserve Act and any regulation pre5 scribed under any such section; and 

6 ‘‘(2) subject to the restrictions of section 106 of 

7 the Bank Holding Company Act Amendments of 

8 1970, in connection with any transaction involving 

9 the products or services of such company or affiliate 

10 and those of a bank affiliate, as if such company or 

11 affiliate were a bank and such bank were a sub12 sidiary of a bank holding company. 

13 ‘‘(d) CROSS MARKETING RESTRICTIONS APPLICABLE

14 TO COMMERCIAL ACTIVITIES.— 

15 ‘‘(1) IN GENERAL.—A section 6 holding com16 pany shall not— 

17 ‘‘(A) offer or market, directly or through 

18 any arrangement, any product or service of an 

19 affiliate that is not a subsidiary of the section 

20 6 holding company; or 

21 ‘‘(B) permit any of the products or services 

22 of the section 6 holding company or any sub23 sidiary thereof to be offered or marketed, di24 rectly or through any arrangement, by or 


wwoods2 on DSK1DXX6B1PROD with BILLS
166 

•HR 3996 IH

1 through any affiliate that is not a subsidiary of 

2 the section 6 holding company. 

3 ‘‘(2) BOARD AUTHORITY TO GRANT EXEMP4 TIONS.—The Board may grant exemptions from the 

5 restrictions in this subsection if— 

6 ‘‘(A) the arrangement does not violate sec7 tion 106 of the Bank Holding Company Act 

8 Amendments of 1970; and 

9 ‘‘(B) the Board determines that the ar10 rangement is in the public interest, does not 

11 undermine the separation of banking and com12 merce, and is consistent with the safety and 

13 soundness of the section 6 holding company. 

14 ‘‘(e) FINANCIAL HOLDING COMPANY REQUIRE15 MENTS.—A section 6 holding company shall be subject 

16 to— 

17 ‘‘(1) the conditions for engaging in expanded fi18 nancial activities in section 4(l); and 

19 ‘‘(2) the provisions applicable to financial hold20 ing companies that fail to meet certain requirements 

21 in section 4(m). 

22 ‘‘(f) INDEPENDENCE OF SECTION 6 HOLDING COM23 PANY.— 

24 ‘‘(1) No less than 25 percent of the members 

25 of the board of directors of a section 6 holding comVerDate Nov 24 2008 00:06 Nov 20, 2009 Jkt 089200 PO 00000 Frm 00166 Fmt 6652 Sfmt 6201 E:\BILLS\H3996.IH H3996

wwoods2 on DSK1DXX6B1PROD with BILLS
167 

•HR 3996 IH

1 pany, and each subsidiary of a section 6 holding 

2 company shall be independent of the parent com3 pany of the section 6 holding company and any sub4 sidiary of such parent company. For purposes of this 

5 subsection, a director shall be independent of the 

6 parent company if such person is not currently serv7 ing, and has not within the previous two-year period 

8 served, as a director, officer, or employee of any af9 filiate of the section 6 holding company that is not 

10 a subsidiary of the section 6 holding company. 

11 ‘‘(2) No executive officer of a section 6 holding 

12 company or any subsidiary of a section 6 holding 

13 company may serve as a director, officer, or em14 ployee of an affiliate of the section 6 holding com15 pany that is not a subsidiary of the section 6 holding 

16 company. 

17 ‘‘(3) The Board shall issue regulations that re18 quire effective legal and operational separation of 

19 the functions of a section 6 holding company from 

20 its affiliates that are not subsidiaries of such section 

21 6 holding company. 

22 ‘‘(g) SOURCE OF STRENGTH.—A company that di23 rectly or indirectly controls a section 6 holding company 

24 shall serve as a source of financial strength to its sub25 sidiary section 6 holding company.’’. 


wwoods2 on DSK1DXX6B1PROD with BILLS
168 

•HR 3996 IH

1 (d) CONFORMING CHANGES.—Section 4(h) of the 

2 Bank Holding Company Act of 1956 (12 U.S.C. 1843(h)), 

3 is amended— 

4 (1) in paragraph (1), by striking ‘‘subpara5 graph (D), (F), (G), or (H)’’ and inserting ‘‘sub6 paragraph (C) or (D)’’; and 

7 (2) in paragraph (2), by striking ‘‘subpara8 graph (D), (F), (G), or (H)’’ and inserting ‘‘sub9 paragraph (C) or (D)’’. 

10 SEC. 1302. REGISTRATION OF CERTAIN COMPANIES AS 

11 BANK HOLDING COMPANIES. 

12 Section 5 of the Bank Holding Company Act of 1956 

13 (12 U.S.C. 1844) is amended by inserting at the end the 

14 following new subsection: 

15 ‘‘(h) CONVERSION TO BANK HOLDING COMPANY BY

16 OPERATION OF LAW.— 

17 ‘‘(1) CONVERSION BY OPERATION OF LAW.—A 

18 company that, on the day before the date of enact19 ment of the Financial Stability Improvement Act of 

20 2009, was not a bank holding company but which, 

21 by reason of sections 4(p) and 6 becomes a bank 

22 holding company by operation of law, shall register 

23 as a bank holding company with the Board in ac24 cordance with section 5(a) within 90 days of the 

25 date of enactment of that Act. 


wwoods2 on DSK1DXX6B1PROD with BILLS
169 

•HR 3996 IH

1 ‘‘(2) COMPLIANCE WITH BANK HOLDING COM2 PANY ACT.—With respect to any company described 

3 in paragraph (1), the Board may grant temporary 

4 exemptions or provide other appropriate temporary 

5 relief to permit such company to implement meas6 ures necessary to comply with the requirements 

7 under the Bank Holding Company Act.’’. 

8 SEC. 1303. REPORTS AND EXAMINATIONS OF BANK HOLD9 ING COMPANIES; REGULATION OF FUNCTION10 ALLY REGULATED SUBSIDIARIES. 

11 (a) REPORTS OF BANK HOLDING COMPANIES.—Sec12 tions 5(c)(1) (A) and (B) of the Bank Holding Company 

13 Act of 1956 (12 U.S.C. 1844(c)(1) (A) and (B)) are 

14 amended to read as follows: 

15 ‘‘(A) IN GENERAL.—The Board, from time 

16 to time, may require a bank holding company 

17 and any subsidiary of such company to submit 

18 reports under oath that the Board determines 

19 are necessary or appropriate for the Board to 

20 carry out the purposes of this chapter, prevent 

21 evasions thereof, and monitor compliance by the 

22 company or subsidiary with the applicable pro23 visions of law. 

24 ‘‘(B) USE OF EXISTING REPORTS.— 


wwoods2 on DSK1DXX6B1PROD with BILLS
170 

•HR 3996 IH

1 ‘‘(i) IN GENERAL.—The Board shall, 

2 to the fullest extent possible, use: 

3 ‘‘(I) reports that a bank holding 

4 company or any subsidiary of such 

5 company has been required to provide 

6 to other Federal or State regulatory 

7 agencies; 

8 ‘‘(II) information that is other9 wise required to be reported publicly; 

10 and 

11 ‘‘(III) externally audited financial 

12 statements. 

13 ‘‘(ii) AVAILABILITY.—A bank holding 

14 company or a subsidiary of such company 

15 shall promptly provide to the Board, at the 

16 request of the Board, a report referred to 

17 in clause (i)(I).’’. 

18 (b) FUNCTIONALLY REGULATED SUBSIDIARY.—Sec19 tion 5(c)(1) of the Bank Holding Company Act of 1956 

20 (12 U.S.C. 1844(c)(1)) is amended by inserting at the end 

21 the following new subparagraph: 

22 ‘‘(C) DEFINITION.—For purposes of this 

23 subsection and section 6, the term ‘functionally 

24 regulated subsidiary’ means any subsidiary 


wwoods2 on DSK1DXX6B1PROD with BILLS
171 

•HR 3996 IH

1 (other than a depository institution) of a bank 

2 holding company that is— 

3 ‘‘(i) a broker or dealer registered with 

4 the Securities and Exchange Commission 

5 under the Securities Exchange Act of 

6 1934, for which the Securities and Ex7 change Commission is the Federal regu8 latory agency; 

9 ‘‘(ii) an investment company reg10 istered with the Securities and Exchange 

11 Commission under the Investment Com12 pany Act of 1940, for which the Securities 

13 and Exchange Commission is the Federal 

14 regulatory agency; 

15 ‘‘(iii) an investment adviser registered 

16 with the Securities and Exchange Commis17 sion under the Investment Advisers Act of 

18 1940, for which the Securities and Ex19 change Commission is the Federal regu20 latory agency, with respect to the invest21 ment advisory activities of such investment 

22 adviser and activities incidental to such in23 vestment advisory activities; and 

24 ‘‘(iv) a futures commission merchant, 

25 commodity trading advisor, and commodity 


wwoods2 on DSK1DXX6B1PROD with BILLS
172 

•HR 3996 IH

1 pool operator registered with the Com2 modity Futures Trading Commission 

3 under the Commodity Exchange Act, for 

4 which the Commodity Futures Trading 

5 Commission is the Federal regulatory 

6 agency, with respect to the commodities 

7 activities of such entity and activities inci8 dental to such commodities activities.’’. 

9 (c) EXAMINATIONS OF BANK HOLDING COMPA10 NIES.—Sections 5(c)(2) (A) and (B) of the Bank Holding 

11 Company Act of 1956 (12 U.S.C. 1844(c)(2) (A) and (B)) 

12 are amended to read as follows: 

13 ‘‘(A) IN GENERAL.—The Board may make 

14 examinations of a bank holding company and 

15 any subsidiary of such a company to carry out 

16 the purposes of this chapter, prevent evasions 

17 thereof, and monitor compliance by the com18 pany or subsidiary with applicable provisions of 

19 law. 

20 ‘‘(B) FUNCTIONALLY REGULATED AND DE21 POSITORY INSTITUTION SUBSIDIARIES.—The 

22 Board shall, to the fullest extent possible, use 

23 reports of examination of functionally regulated 

24 subsidiaries and subsidiary depository instituVerDate Nov 24 2008 00:06 Nov 20, 2009 Jkt 089200 PO 00000 Frm 00172 Fmt 6652 Sfmt 6201 E:\BILLS\H3996.IH H3996

wwoods2 on DSK1DXX6B1PROD with BILLS
173 

•HR 3996 IH

1 tions made by other Federal or State regulatory 

2 authorities.’’. 

3 (d) REGULATION OF FINANCIAL HOLDING COMPA4 NIES.—Section 5(c)(2) of the Bank Holding Company Act 

5 of 1956 (12 U.S.C. 1844(c)) is amended by striking sub6 paragraphs (C), (D), and (E). 

7 (e) AUTHORITY TO REGULATE FUNCTIONALLY REG8 ULATED SUBSIDIARIES OF BANK HOLDING COMPA9 NIES.—The Bank Holding Company Act of 1956 (12 

10 U.S.C. 1841 et seq.) is amended by striking section 10A 

11 (12 U.S.C. 1848a). 

12 SEC. 1304. REQUIREMENTS FOR FINANCIAL HOLDING COM13 PANIES TO REMAIN WELL CAPITALIZED AND 

14 WELL MANAGED. 

15 Section 4(l)(1) of the Bank Holding Company Act of 

16 1956 (12 U.S.C. 1843(l)(1)) is amended— 

17 (1) in subparagraph (B), by striking ‘‘and’’; 

18 (2) by redesignating subparagraph (C) as sub19 paragraph (D); 

20 (3) by inserting after subparagraph (B) the fol21 lowing new subparagraph: 

22 ‘‘(C) the bank holding company is well 

23 capitalized and well managed; and’’; and 


wwoods2 on DSK1DXX6B1PROD with BILLS
174 

•HR 3996 IH

1 (4) in subparagraph (D) (as so redesignated) 

2 by striking clause (ii) and inserting the following 

3 new clause: 

4 ‘‘(i) a certification that the company 

5 meets the requirements of subparagraphs 

6 (A) through (C).’’. 

7 SEC. 1305. STANDARDS FOR INTERSTATE ACQUISITIONS. 

8 (a) BANK HOLDING COMPANY ACT OF 1956 AMEND9 MENT.—Section 3(d)(1)(A) of the Bank Holding Company 

10 Act of 1956 (12 U.S.C. 1842(d)(1)(A)) is amended— 

11 (1) by striking ‘‘adequately capitalized’’ and in12 serting ‘‘well capitalized’’; and 

13 (2) by striking ‘‘adequately managed’’ and in14 serting ‘‘well managed’’. 

15 (b) FEDERAL DEPOSIT INSURANCE ACT AMEND16 MENT.—Section 44(b)(4)(B) of the Federal Deposit In17 surance Act (12 U.S.C. 1831u(b)(4)(B)) is amended to 

18 read as follows: 

19 ‘‘(B) the responsible agency determines 

20 that the resulting bank will be well capitalized 

21 and well managed upon the consummation of 

22 the transaction.’’. 


wwoods2 on DSK1DXX6B1PROD with BILLS
175 

•HR 3996 IH

1 SEC. 1306. ENHANCING EXISTING RESTRICTIONS ON BANK 

2 TRANSACTIONS WITH AFFILIATES. 

3 (a) Section 23A of the Federal Reserve Act (12 

4 U.S.C. 371c) is amended— 

5 (1) in subsection (b)(1), by striking subpara6 graph (D) and inserting the following new subpara7 graph: 

8 ‘‘(D) any investment fund with respect to 

9 which a member bank or affiliate thereof is an 

10 investment adviser; and’’; 

11 (2) in subsection (b)(7)(A), by inserting ‘‘(in12 cluding a purchase of assets subject to an agreement 

13 to repurchase)’’ after ‘‘affiliate’’; 

14 (3) in subsection (b)(7)(C), by striking ‘‘, in15 cluding assets subject to an agreement to repur16 chase,’’; 

17 (4) in subsection (b)(7)(D)— 

18 (A) by inserting ‘‘or other debt obliga19 tions’’ after ‘‘acceptance of securities’’, and 

20 (B) by striking ‘‘or’’ after the semicolon; 

21 (5) in subsection (b)(7), by inserting at the end 

22 the following new subparagraphs: 

23 ‘‘(F) any securities borrowing and lending 

24 transactions with an affiliate to the extent that 

25 the transactions create credit exposure of the 

26 member bank to the affiliate; or 


wwoods2 on DSK1DXX6B1PROD with BILLS
176 

•HR 3996 IH

1 ‘‘(G) current and potential future credit 

2 exposure to the affiliate on derivative trans3 actions with the affiliate;’’; 

4 (6) in subsection (c)(1), by striking ‘‘at the 

5 time of the transaction,’’ and inserting ‘‘at all 

6 times’’; 

7 (7) in subsection (c)— 

8 (A) by striking paragraph (2); 

9 (B) by redesignating paragraphs (3), (4), 

10 and (5) as paragraphs (2), (3), and (4), respec11 tively; 

12 (8) in subsection (c)(3) (as so redesignated by 

13 paragraph (7)), by inserting ‘‘or other debt obliga14 tions’’ after ‘‘securities’’; 

15 (9) in subsection (f)(2), by inserting at the end 

16 the following: ‘‘The Board may not, by regulation or 

17 order, grant an exemption under this section unless 

18 the Board obtains the concurrence of the Chairman 

19 of the Federal Deposit Insurance Corporation.’’; and 

20 (10) in subsection (f)— 

21 (A) by redesignating paragraph (3) as 

22 paragraph (4); and 

23 (B) and inserting after paragraph (2) the 

24 following new paragraph: 


wwoods2 on DSK1DXX6B1PROD with BILLS
177 

•HR 3996 IH

1 ‘‘(3) CONCURRENCE OF THE COMPTROLLER OF

2 THE CURRENCY.—With respect to a transaction or 

3 relationship involving a national bank or Federal 

4 savings association, the Board may not grant an ex5 emption under this section unless the Board obtains 

6 the concurrence of the Comptroller of the Currency 

7 (in addition to obtaining the concurrence of the 

8 Chairman of the Federal Deposit Insurance Cor9 poration under paragraph (2)).’’. 

10 (b) TECHNICAL AND CONFORMING AMENDMENT.— 

11 Section 23B(e) of the Federal Reserve Act (12 U.S.C. 

12 371–1(e)), is amended by inserting at the end the fol13 lowing new paragraph: 

14 ‘‘(3) The Board may not grant an exemption or 

15 exclusion under this section unless the Board ob16 tains the concurrence of the Chairman of the Fed17 eral Deposit Insurance Corporation.’’. 

18 SEC. 1307. ELIMINATING EXCEPTIONS FOR TRANSACTIONS 

19 WITH FINANCIAL SUBSIDIARIES. 

20 Section 23A(e) of the Federal Reserve Act (12 U.S.C. 

21 371c(e)) is amended— 

22 (1) by striking paragraph (3); and 

23 (2) by redesignating paragraph (4) as para24 graph (3). 


wwoods2 on DSK1DXX6B1PROD with BILLS
178 

•HR 3996 IH

1 SEC. 1308. LENDING LIMITS APPLICABLE TO CREDIT EXPO2 SURE ON DERIVATIVE TRANSACTIONS, RE3 PURCHASE AGREEMENTS, REVERSE REPUR4 CHASE AGREEMENTS, AND SECURITIES 

5 LENDING AND BORROWING TRANSACTIONS. 

6 Section 5200 of the Revised Statutes of the United 

7 States (12 U.S.C. 84) is amended— 

8 (1) in subsection (b)(1), by striking ‘‘shall in9 clude all direct or indirect’’ and all that follows in 

10 that paragraph through ‘‘commitment;’’ and insert11 ing: ‘‘shall include— 

12 ‘‘(A) all direct or indirect advances of 

13 funds to a person made on the basis of any ob14 ligation of that person to repay the funds or re15 payable from specific property pledged by or on 

16 behalf of the person; 

17 ‘‘(B) to the extent specified by the Comp18 troller of the Currency, such term shall also in19 clude any liability of a national banking associa20 tion to advance funds to or on behalf of a per21 son pursuant to a contractual commitment; and 

22 ‘‘(C) credit exposure to a person arising 

23 from a derivative transaction, repurchase agree24 ment, reverse repurchase agreement, securities 

25 lending transaction, or securities borrowing 


wwoods2 on DSK1DXX6B1PROD with BILLS
179 

•HR 3996 IH

1 transaction between the national banking asso2 ciation and the person;’’; 

3 (2) in subsection (b)(2) by striking the period 

4 at the end and inserting ‘‘; and’’; 

5 (3) in subsection (b), by inserting after para6 graph (2) the following new paragraph: 

7 ‘‘(3) the term ‘derivative transaction’ means 

8 any transaction that is a contract, agreement, swap, 

9 warrant, note, or option that is based, in whole or 

10 in part, on the value of, any interest in, or any 

11 quantitative measure or the occurrence of any event 

12 relating to, one or more commodities, securities, cur13 rencies, interest or other rates, indices, or other as14 sets.’’; and 

15 (4) in subsection (d), by inserting after para16 graph (2) the following new paragraph: 

17 ‘‘(3) The Comptroller of the Currency shall pre18 scribe rules to administer and carry out the pur19 poses of this section with respect to credit exposures 

20 arising from any derivative transaction, repurchase 

21 agreement, reverse repurchase agreement, securities 

22 lending transaction, or securities borrowing trans23 action. Rules required to be prescribed under this 

24 paragraph (3) shall take effect, in final form, not 


wwoods2 on DSK1DXX6B1PROD with BILLS
180 

•HR 3996 IH

1 later than 180 days after the date of enactment of 

2 the Financial Stability Improvement Act of 2009.’’. 

3 SEC. 1309. APPLICATION OF NATIONAL BANK LENDING LIM4 ITS TO INSURED STATE BANKS. 

5 Section 18 of the Federal Deposit Insurance Act (12 

6 U.S.C. 1828) is amended by adding at the end a new sub7 section: 

8 ‘‘(y) APPLICATION OF LENDING LIMITS TO INSURED

9 STATE BANKS.—Section 84 of this title shall apply to 

10 every insured depository institution in the same manner 

11 and to the same extent as if the insured depository institu12 tion were a national banking association.’’. 

13 SEC. 1310. RESTRICTION ON CONVERSIONS OF TROUBLED 

14 BANKS. 

15 (a) CONVERSION OF A NATIONAL BANKING ASSOCIA16 TION TO A STATE BANK.—The National Bank Consolida17 tion and Merger Act (12 U.S.C. 215 et seq.) is amended 

18 by redesignating section 7 as section 8 and by inserting 

19 after section 6 the following: 

20 ‘‘SEC. 7. PROHIBITION ON CERTAIN CONVERSIONS. 

21 ‘‘A national bank may not convert to a State bank 

22 during any period of time in which it is subject to a Cease 

23 and Desist order, memorandum of understanding, or other 

24 enforcement action entered into with or issued by the 

25 Comptroller of the Currency.’’ 


wwoods2 on DSK1DXX6B1PROD with BILLS
181 

•HR 3996 IH

1 (b) CONVERSION OF A STATE BANK TO A NATIONAL

2 BANK.—Section 5154 of the Revised Statutes (12 U.S.C. 

3 35) is amended by adding at the end the following new 

4 sentence: ‘‘The Comptroller of the Currency shall not ap5 prove the conversion of a State bank to a national bank 

6 during any period of time in which the State bank is sub7 ject to a Cease and Desist order, memorandum of under8 standing, or other enforcement action entered into or 

9 issued by a State bank supervisor, the Federal Deposit 

10 Insurance Corporation, the Board of Governors of the 

11 Federal Reserve System or a Federal Reserve Bank.’’. 

12 SEC. 1311. LENDING LIMITS TO INSIDERS. 

13 Section 22(h)(9)(D)(ii) of the Federal Reserve Act 

14 (12 U.S.C. 375b(h)(9)(D)(ii)) is amended by inserting ‘‘, 

15 except that a member bank shall be deemed to have ex16 tended credit to a person if the member bank has credit 

17 exposure to the person arising from a derivative trans18 action, repurchase agreement, reverse repurchase agree19 ment, securities lending transaction, or securities bor20 rowing transaction between the member bank and the per21 son.’’ before the period at the end. 

22 SEC. 1312. LIMITATIONS ON PURCHASES OF ASSETS FROM 

23 INSIDERS. 

24 (a) Section 18 of the Federal Deposit Insurance Act 

25 (12 U.S.C. 1828) is amended by inserting after subsection 


wwoods2 on DSK1DXX6B1PROD with BILLS
182 

•HR 3996 IH

1 (y) (as added by section 1408) the following new sub2 section: 

3 ‘‘(z) GENERAL PROHIBITION.—An insured depository 

4 institution shall not purchase an asset from, or sell an 

5 asset to, one of its executive officers, directors, or principal 

6 shareholders or any related interest of such person (as 

7 such terms are defined in 22(h) of Federal Reserve Act) 

8 unless the transaction is on market terms and, if the 

9 transaction represents more than 10 percent of the insti10 tution’s capital stock and surplus, the transaction has 

11 been approved in advance by a majority of the institution’s 

12 board of directors (with interested directors of the insured 

13 depository institution not participating in the approval of 

14 the transaction).’’. 

15 (b) FDIC RULEMAKING AUTHORITY.—The Federal 

16 Deposit Insurance Corporation may prescribe rules to im17 plement the requirements of section (a). 

18 (c) AMENDMENTS TO THE FEDERAL RESERVE

19 ACT.—Section 22 of the Federal Reserve Act (12 U.S.C. 

20 375) is amended by striking subsection (d). 

21 SEC. 1313. RULES REGARDING CAPITAL LEVELS OF BANK 

22 HOLDING COMPANIES. 

23 Section 5(b) of the Bank Holding Company Act of 

24 1956 (12 U.S.C. 1844(b)) is amended by inserting ‘‘, inVerDate Nov 24 2008 00:06 Nov 20, 2009 Jkt 089200 PO 00000 Frm 00182 Fmt 6652 Sfmt 6201 E:\BILLS\H3996.IH H3996

wwoods2 on DSK1DXX6B1PROD with BILLS
183 

•HR 3996 IH

1 cluding regulations relating to the capital levels of bank 

2 holding companies’’ before the period at the end. 

3 SEC. 1314. ENHANCEMENTS TO FACTORS TO BE CONSID4 ERED IN CERTAIN ACQUISITIONS. 

5 (a) BANK ACQUISITIONS.—Section 3(c) of the Bank 

6 Holding Company Act of 1956 (12 U.S.C. 1842(c)) is 

7 amended by inserting at the end the following new para8 graph: 

9 ‘‘(7) FINANCIAL STABILITY.—In every case, the 

10 Board shall take into consideration the extent to 

11 which the proposed acquisition, merger, or consolida12 tion may pose risk to the stability of the United 

13 States financial system or the economy of the 

14 United States.’’. 

15 (b) NONBANK ACQUISITIONS.— 

16 (1) Section 4(j)(2)(A) of the Bank Holding 

17 Company is amended by— 

18 (A) striking ‘‘or’’ before ‘‘unsound banking 

19 practices’’; and 

20 (B) inserting before the period at the end 

21 ‘‘, or risk to the stability of the United States 

22 financial system or the economy of the United 

23 States’’. 


wwoods2 on DSK1DXX6B1PROD with BILLS
184 

•HR 3996 IH

1 (2) Section 4(k)(6) of the Bank Holding Com2 pany Act is amended by striking subparagraph (B) 

3 and inserting the following new subparagraph: 

4 ‘‘(B) A financial holding company may 

5 commence any activity or acquire any company, 

6 pursuant to paragraph (4) or any regulation 

7 prescribed or order issued under paragraph (5), 

8 without prior approval of the Board, except— 

9 ‘‘(i) for a transaction in which the 

10 total assets to be acquired by the financial 

11 holding company exceed $25 billion; and 

12 ‘‘(ii) as provided in subsection (j) with 

13 regard to the acquisition of a savings asso14 ciation.’’. 

15 (c) BANK MERGER ACT TRANSACTIONS.—Section 

16 8(c)(5) of the Federal Deposit Insurance Act (12 U.S.C. 

17 1828(c)(5)) is amended by— 

18 (1) striking ‘‘and’’ before ‘‘the convenience and 

19 needs of the community to be served’’; and 

20 (2) inserting before the period at the end ‘‘, and 

21 the risk to the stability of the United States finan22 cial system and the economy of the United States’’. 


wwoods2 on DSK1DXX6B1PROD with BILLS
185 

•HR 3996 IH

1 SEC. 1315. ELIMINATION OF ELECTIVE INVESTMENT BANK 

2 HOLDING COMPANY FRAMEWORK. 

3 Section 17 of the Securities Exchange Act of 1934 

4 (15 U.S.C. 78q) is amended by striking subsection (i) and 

5 redesignating the following subsections accordingly. 

6 SEC. 1316. EXAMINATION FEES FOR LARGE BANK HOLDING 

7 COMPANIES. 

8 The Bank Holding Company Act is amended by add9 ing a new section 5A: 

10 ‘‘SEC. 5A. EXAMINATION FEES. 

11 ‘‘The Board of Governors of the Federal Reserve Sys12 tem or the Federal Reserve Banks shall assess fees on 

13 bank holding companies with total consolidated assets of 

14 $10 billion or more. Such fees shall be sufficient to defray 

15 the cost of the examination of such bank holding compa16 nies.’’. 

17 Subtitle E—Payment, Clearing, and 

18 Settlement Supervision 

19 SEC. 1401. SHORT TITLE. 

20 This subtitle may be cited as the ‘‘Payment, Clearing, 

21 and Settlement Supervision Act of 2009’’. 

22 SEC. 1402. FINDINGS AND PURPOSES. 

23 (a) FINDINGS.—The Congress finds the following: 

24 (1) The proper functioning of the financial mar25 kets is dependent upon safe and efficient arrangeVerDate Nov 24 2008 00:06 Nov 20, 2009 Jkt 089200 PO 00000 Frm 00185 Fmt 6652 Sfmt 6201 E:\BILLS\H3996.IH H3996

wwoods2 on DSK1DXX6B1PROD with BILLS
186 

•HR 3996 IH

1 ments for the clearing and settlement of payment, 

2 securities and other financial transactions. 

3 (2) Financial market utilities that conduct or 

4 support multilateral payment, clearing, or settlement 

5 activities may reduce risks for their participants and 

6 the broader financial system, but such utilities may 

7 also concentrate and create new risks and thus must 

8 be well designed and operated in a safe and sound 

9 manner. 

10 (3) Payment, clearing and settlement activities 

11 conducted by financial institutions also present im12 portant risks to the participating financial institu13 tions and to the financial system. 

14 (4) Enhancements to the regulation and super15 vision of systemically important financial market 

16 utilities and the conduct of systemically important 

17 payment, clearing, and settlement activities by finan18 cial institutions are necessary to provide consistency, 

19 to promote robust risk management and safety and 

20 soundness, to reduce systemic risks, and to support 

21 the stability of the broader financial system. 

22 (b) PURPOSES.—The purposes of this subtitle are to 

23 mitigate systemic risk in the financial system and promote 

24 financial stability by— 


wwoods2 on DSK1DXX6B1PROD with BILLS
187 

•HR 3996 IH

1 (1) authorizing the Board of Governors of the 

2 Federal Reserve System to prescribe uniform stand3 ards for the management of risks by systemically 

4 important financial market utilities and for the con5 duct of systemically important payment, clearing 

6 and settlement activities by financial institutions; 

7 (2) providing for appropriate supervision and 

8 enforcement of such risk management standards for 

9 systemically important financial market utilities and 

10 payment, clearing, and settlement activities; and 

11 (3) strengthening the liquidity of systemically 

12 important financial market utilities. 

13 SEC. 1403. DEFINITIONS. 

14 For purposes of this subtitle, the following definitions 

15 shall apply: 

16 (1) AFFILIATE.—The term ‘‘affiliate’’ means 

17 any company that controls, is controlled by, or is 

18 under common control with another company. 

19 (2) APPROPRIATE FINANCIAL REGULATOR.— 

20 The term ‘‘appropriate financial regulator’’ means 

21 the following: 

22 (A) The Comptroller of the Currency, with 

23 respect to— 


wwoods2 on DSK1DXX6B1PROD with BILLS
188 

•HR 3996 IH

1 (i) any national banks or a Federal 

2 branch or Federal agency of a foreign 

3 bank; and 

4 (ii) after the functions of the Director 

5 of the Office of Thrift Supervision are 

6 transferred under subtitle C, any Federal 

7 savings association. 

8 (B) the Board of Directors of the Corpora9 tion, with respect to— 

10 (i) any insured State nonmember 

11 bank or any insured branch of a foreign 

12 bank (other than a Federal branch); and 

13 (ii) after the functions of the Director 

14 of the Office of Thrift Supervision are 

15 transferred under subtitle C, any State 

16 savings association. 

17 (C) The Director of the Office of Thrift 

18 Supervision, with respect to any savings asso19 ciation and any savings and loan holding com20 pany, until the functions of the Director of the 

21 Office of Thrift Supervision are transferred 

22 under subtitle C. 

23 (D) The Board, with respect to— 

24 (i) any State member bank; 


wwoods2 on DSK1DXX6B1PROD with BILLS
189 

•HR 3996 IH

1 (ii) any branch or agency of a foreign 

2 bank (other than any Federal branch, Fed3 eral agency, or insured State branch of a 

4 foreign bank); 

5 (iii) any commercial lending company 

6 owned or controlled by a foreign bank; 

7 (iv) any organization operating under 

8 section 25 or 25A of the Federal Reserve 

9 Act (12 U.S.C. 601 et seq. or 611 et seq.); 

10 (v) any bank holding company and 

11 any nondepository subsidiary of a bank 

12 holding company (other than any broker, 

13 dealer, investment company, or investment 

14 adviser registered with the Securities and 

15 Exchange Commission, or any futures 

16 commission merchant, commodity trading 

17 advisor, or commodity pool operator reg18 istered with the Commodity Futures Trad19 ing Commission); and 

20 (vi) after the functions of the Director 

21 of Thrift Supervision are transferred under 

22 subtitle C, any savings and loan holding 

23 company and any non-depository sub24 sidiary of a savings and loan holding com25 pany (other than any broker, dealer, inVerDate Nov 24 2008 00:06 Nov 20, 2009 Jkt 089200 PO 00000 Frm 00189 Fmt 6652 Sfmt 6201 E:\BILLS\H3996.IH H3996

wwoods2 on DSK1DXX6B1PROD with BILLS
190 

•HR 3996 IH

1 vestment company, or investment adviser 

2 registered with the Securities and Ex3 change Commission, or any futures com4 mission merchant, commodity trading advi5 sor, or commodity pool operator registered 

6 with the Commodity Futures Trading 

7 Commission). 

8 (E) The National Credit Union Adminis9 tration Board, with respect to any insured cred10 it union under the Federal Credit Union Act 

11 (12 U.S.C. 1751 et seq.). 

12 (F) The Securities and Exchange Commis13 sion, with respect to— 

14 (i) any broker or dealer registered 

15 with the Securities and Exchange Commis16 sion under the Securities Exchange Act of 

17 1934 (15 U.S.C. 78a et seq.); 

18 (ii) any investment company reg19 istered with the Securities and Exchange 

20 Commission under the Investment Com21 pany Act of 1940 (15 U.S.C. 80a–1 et 

22 seq.); and 

23 (iii) any investment adviser registered 

24 with the Securities and Exchange CommisVerDate Nov 24 2008 00:06 Nov 20, 2009 Jkt 089200 PO 00000 Frm 00190 Fmt 6652 Sfmt 6201 E:\BILLS\H3996.IH H3996

wwoods2 on DSK1DXX6B1PROD with BILLS
191 

•HR 3996 IH

1 sion under the Investment Advisers Act of 

2 1940 (15 U.S.C. 80b–1 et seq.). 

3 (G) The Commodity Futures Trading 

4 Commission, with respect to futures commission 

5 merchants, commodity trading advisors, and 

6 commodity pool operators registered with the 

7 Commodity Futures Trading Commission under 

8 the Commodity Exchange Act (7 U.S.C. 1 et 

9 seq.). 

10 (H) The State insurance authority of the 

11 State in which an insurance company is domi12 ciled, with respect to any financial institution 

13 engaged in providing insurance under State in14 surance law. 

15 (I) The Board, with respect to any other 

16 financial institution engaged in an identified ac17 tivity. 

18 (3) BOARD.—The term ‘‘Board’’ means the 

19 Board of Governors of the Federal Reserve System. 

20 (4) CORPORATION.—The term ‘‘Corporation’’ 

21 means the Federal Deposit Insurance Corporation. 

22 (5) FINANCIAL INSTITUTION.—The term ‘‘fi23 nancial institution’’ means an entity other than a fi24 nancial market utility that is— 


wwoods2 on DSK1DXX6B1PROD with BILLS
192 

•HR 3996 IH

1 (A) a depository institution (as defined in 

2 section 3 of the Federal Deposit Insurance Act) 

3 (12 U.S.C. 1813); 

4 (B) a branch or agency of a foreign bank 

5 (as defined in section 1(b) of the International 

6 Banking Act of 1978) (12 U.S.C. 3101); 

7 (C) an organization operating under sec8 tion 25 or 25A of the Federal Reserve Act (12 

9 U.S.C. 601 et seq. and 611 et seq.); 

10 (D) a credit union (as defined in section 

11 101 of the Federal Credit Union Act) (12 

12 U.S.C. 1752); 

13 (E) a broker or dealer (as defined in sec14 tion 3 of the Securities Exchange Act of 1934) 

15 (15 U.S.C. 78c); 

16 (F) an investment company (as defined in 

17 section 3 of the Investment Company Act of 

18 1940) (15 U.S.C. 80a–3); 

19 (G) an insurance company (as defined in 

20 section 2 of the Investment Company Act of 

21 1940) (15 U.S.C. 80a–2); 

22 (H) an investment adviser (as defined in 

23 section 202 of the Investment Advisers Act of 

24 1940) (15 U.S.C. 80b–2); 


wwoods2 on DSK1DXX6B1PROD with BILLS
193 

•HR 3996 IH

1 (I) a futures commission merchant, com2 modity trading advisor, or commodity pool oper3 ator (as defined in section 1a of the Commodity 

4 Exchange Act) (7 U.S.C. 1a); and 

5 (J) any company engaged in activities that 

6 are financial in nature or incidental to a finan7 cial activity, as described in section 4 of the 

8 Bank Holding Company Act of 1956 (12 

9 U.S.C. 1843(k)). 

10 (6) FINANCIAL MARKET UTILITY.—The term 

11 ‘‘financial market utility’’ means any person that 

12 manages or operates a multilateral system for the 

13 purpose of transferring, clearing, or settling pay14 ments, securities, or other financial transactions 

15 among financial institutions or between financial in16 stitutions and the person. 

17 (7) IDENTIFIED ACTIVITY.—The term ‘‘identi18 fied activity’’ means a payment, clearing, or settle19 ment activity that the Council has identified as sys20 temically important under section 1404. 

21 (8) IDENTIFIED FINANCIAL MARKET UTILITY.— 

22 The term ‘‘identified financial market utility’’ means 

23 a financial market utility that the Council has iden24 tified as systemically important under section 1404. 


wwoods2 on DSK1DXX6B1PROD with BILLS
194 

•HR 3996 IH

1 (9) PAYMENT, CLEARING, OR SETTLEMENT AC2 TIVITY.— 

3 (A) IN GENERAL.—The term ‘‘payment, 

4 clearing, or settlement activity’’ means one of 

5 the following activities carried out by one or 

6 more financial institutions after the parties to 

7 a financial transaction agree to the transaction 

8 to facilitate the completion of the financial 

9 transaction: the calculation and communication 

10 of unsettled financial transactions between fi11 nancial institutions; netting or aggregating of 

12 financial transactions; provision and mainte13 nance of trade, contract, or instrument infor14 mation; the management of risks associated 

15 with unsettled financial transactions; trans16 mittal and storage of payment instructions; 

17 movement of funds; final settlement of financial 

18 transactions; and other similar activities that 

19 the Board may determine by rule or order. 

20 ‘‘Payment, clearing, or settlement activity’’ does 

21 not include, among other things, activities in22 clusive of or prior to trade execution. 

23 (B) FINANCIAL TRANSACTION.—For pur24 poses of subparagraph (A), the term ‘‘financial 

25 transaction’’ means a funds transfer, securities 


wwoods2 on DSK1DXX6B1PROD with BILLS
195 

•HR 3996 IH

1 contract, contract of sale of a commodity for fu2 ture delivery, forward contract, repurchase 

3 agreement, swap agreement, foreign exchange 

4 contract, financial derivatives contract, and any 

5 similar transaction that the Board determines, 

6 by rule or order, to be a financial transaction 

7 for purposes of this subtitle. 

8 (10) PERSON.—The term ‘‘person’’ means any 

9 corporation, company, association, firm, partnership, 

10 society, joint stock company, or other legal entity 

11 other than a natural person. 

12 (11) SECRETARY.—The term ‘‘Secretary’’ 

13 means the Secretary of the Treasury. 

14 (12) STATE.—The term ‘‘State’’ means any 

15 State, commonwealth, territory, or possession of the 

16 United States, the District of Columbia, the Com17 monwealth of Puerto Rico, the Commonwealth of the 

18 Northern Mariana Islands, American Samoa, Guam, 

19 or the United States Virgin Islands. 

20 (13) SUPERVISORY AGENCY.—The term ‘‘Su21 pervisory Agency’’ means the Federal agency that 

22 has primary jurisdiction over an identified financial 

23 market utility under Federal banking, securities, or 

24 commodity futures laws, including— 


wwoods2 on DSK1DXX6B1PROD with BILLS
196 

•HR 3996 IH

1 (A) the Securities and Exchange Commis2 sion, with respect to an identified financial mar3 ket utility that is a clearing agency registered 

4 with the Securities and Exchange Commission; 

5 (B) the Commodity Futures Trading Com6 mission, with respect to an identified financial 

7 market utility that is a derivatives clearing or8 ganization registered with the Commodity Fu9 tures Trading Commission; 

10 (C) the Board of Directors of the Corpora11 tion, with respect to an identified financial mar12 ket utility that is— 

13 (i) an insured State nonmember bank 

14 or an insured branch of a foreign bank; 

15 and 

16 (ii) after the functions of the Director 

17 of the Office of Thrift Supervision are 

18 transferred under subtitle C, a State sav19 ings association; 

20 (D) the Comptroller of the Currency, with 

21 respect to an identified financial market utility 

22 that is— 

23 (i) a national bank or a Federal 

24 branch (other than an insured branch) or 

25 a Federal agency of a foreign bank; and 


wwoods2 on DSK1DXX6B1PROD with BILLS
197 

•HR 3996 IH

1 (ii) after the functions of the Director 

2 of the Office of Thrift Supervision are 

3 transferred under subtitle C, a Federal 

4 savings association; 

5 (E) the Board, with respect to an identi6 fied financial market utility that is— 

7 (i) a State member bank; 

8 (ii) a branch or agency of a foreign 

9 bank (other than any Federal branch, Fed10 eral agency, or insured State branch of a 

11 foreign bank); 

12 (iii) a commercial lending company 

13 owned or controlled by a foreign bank; 

14 (iv) an organization operating under 

15 section 25 or 25A of the Federal Reserve 

16 Act (12 U.S.C. 601 et seq. or 611 et seq.); 

17 (v) a bank holding company and any 

18 non-depository subsidiary of a bank hold19 ing company (other than any broker, deal20 er, investment company, or investment ad21 viser registered with the Securities and Ex22 change Commission, or any futures com23 mission merchant, commodity trading advi24 sor, or commodity pool operator registered 


wwoods2 on DSK1DXX6B1PROD with BILLS
198 

•HR 3996 IH

1 with the Commodity Futures Trading 

2 Commission); and 

3 (vi) after the functions of the Director 

4 of the Office of Thrift Supervision are 

5 transferred under subtitle C, any savings 

6 and loan holding company and any non-de7 pository subsidiary of a savings and loan 

8 holding company (other than any broker, 

9 dealer, investment company, or investment 

10 adviser registered with the Securities and 

11 Exchange Commission, or any futures 

12 commission merchant, commodity trading 

13 advisor, or commodity pool operator reg14 istered with the Commodity Futures Trad15 ing Commission); and 

16 (F) the Director of the Office of Thrift Su17 pervision, with respect to an identified financial 

18 market utility that is a savings association or a 

19 savings and loan holding company, until the 

20 functions of the Director of the Office of Thrift 

21 Supervision are transferred under subtitle C. 

22 If a financial market utility is subject to supervision 

23 by more than one agency listed in paragraphs (A) 

24 through (F), and those agencies cannot agree which 

25 has primary jurisdiction, the Council shall decide 


wwoods2 on DSK1DXX6B1PROD with BILLS
199 

•HR 3996 IH

1 which agency is the Supervisory Agency for purposes 

2 of this subtitle. 

3 (14) SYSTEMICALLY IMPORTANT AND SYSTEMIC

4 IMPORTANCE.—The terms ‘‘systemically important’’ 

5 and ‘‘systemic importance’’ mean a situation in 

6 which the failure of or a disruption to the func7 tioning of a financial market utility or the conduct 

8 of a payment, clearing, or settlement activity could 

9 create, or increase, the risk of significant liquidity, 

10 credit, or other problems spreading among financial 

11 institutions or markets and thereby threaten the sta12 bility of the financial system. 

13 SEC. 1404. IDENTIFICATION OF SYSTEMICALLY IMPORTANT 

14 FINANCIAL MARKET UTILITIES AND PAY15 MENT, CLEARING, AND SETTLEMENT ACTIVI16 TIES. 

17 (a) IN GENERAL.—The Council shall, at its own ini18 tiative or at the request of the Board, consider whether 

19 to identify a financial market utility or a payment, clear20 ing, or settlement activity as systemically important. 

21 (b) CRITERIA FOR IDENTIFICATION.—The Council 

22 shall identify a financial market utility or payment, clear23 ing, or settlement activity if the Council determines that 

24 such financial market utility or activity is, or is likely to 


wwoods2 on DSK1DXX6B1PROD with BILLS
200 

•HR 3996 IH

1 become, systemically important, based on consideration of 

2 the following: 

3 (1) The aggregate monetary value of the trans4 actions processed by the financial market utility or 

5 carried out through the payment, clearing, or settle6 ment activity. 

7 (2) The aggregate exposure of counterparties to 

8 the financial market utility. 

9 (3) The relationship, interdependencies, or 

10 other interactions of the financial market utility or 

11 payment, clearing, or settlement activity with other 

12 financial market utilities or payment, clearing, or 

13 settlement activities. 

14 (4) The effect that the failure of or a disruption 

15 to the financial market utility or payment, clearing, 

16 or settlement activity would have on critical markets, 

17 financial institutions, or the broader financial sys18 tem. 

19 (5) Any other factors that the Council deems 

20 appropriate. 

21 (c) PERIODIC REVIEW AND RESCISSION OF IDENTI22 FICATIONS.—The Council shall, at its own initiative or at 

23 the request of the Board— 


wwoods2 on DSK1DXX6B1PROD with BILLS
201 

•HR 3996 IH

1 (1) review periodically whether a financial mar2 ket utility or a payment, clearing, or settlement ac3 tivity continues to be systemically important; and 

4 (2) rescind identification of a financial market 

5 utility or a payment, clearing, or settlement activity 

6 that it determines no longer should be identified. 

7 (d) PROCEDURE FOR IDENTIFYING OR RESCINDING

8 A SYSTEMICALLY IMPORTANT IDENTIFICATION.— 

9 (1) CONSULTATION.—Before making any deter10 mination under this section, the Council shall con11 sult with the Board, and in the case of a determina12 tion regarding identification or rescission of identi13 fication of a financial market utility, the Council 

14 shall consult with the relevant Supervisory Agency. 

15 (2) NOTICE AND OPPORTUNITY FOR CONSIDER16 ATION OF WRITTEN MATERIALS.— 

17 (A) IN GENERAL.—The Board shall, in an 

18 executive capacity on behalf of the Council, pro19 vide notice to a financial market utility or, in 

20 the case of a payment, clearing, or settlement 

21 activity, financial institutions, that the Council 

22 is considering whether to identify or cease to 

23 identify such financial market utility or such 

24 payment, clearing, or settlement activity, in25 cluding an explanation of the basis of the CounVerDate Nov 24 2008 00:06 Nov 20, 2009 Jkt 089200 PO 00000 Frm 00201 Fmt 6652 Sfmt 6201 E:\BILLS\H3996.IH H3996

wwoods2 on DSK1DXX6B1PROD with BILLS
202 

•HR 3996 IH

1 cil’s consideration, and provide such financial 

2 market utilities or financial institutions 30 days 

3 to submit written materials to inform the Coun4 cil’s decision. The Council shall make its deci5 sion, and the Board shall notify the financial 

6 market utility or financial institutions of the 

7 Council’s decision, within 60 days of the due 

8 date for such written materials. 

9 (B) EMERGENCY EXCEPTION.—The Coun10 cil may waive or modify the requirements of 

11 subparagraph (A) if the Council determines 

12 that the waiver or modification is necessary or 

13 appropriate to prevent or mitigate an imme14 diate threat to financial stability posed by the 

15 financial market utility or the payment, clear16 ing, or settlement activity. The Board shall, in 

17 an executive capacity on behalf of the Council, 

18 notify the financial market utility concerned or, 

19 in the case of a payment, clearing, or settle20 ment activity, financial institutions, as soon as 

21 practicable, which shall be no later than 24 

22 hours after the waiver or modification in the 

23 case of a financial market utility. 

24 (3) FORM OF NOTIFICATION.—The Board shall, 

25 in an executive capacity on behalf of the Council, 


wwoods2 on DSK1DXX6B1PROD with BILLS
203 

•HR 3996 IH

1 provide notice of a decision under this section re2 garding— 

3 (A) a financial market utility to such fi4 nancial market utility by order; and 

5 (B) a payment, clearing, or settlement ac6 tivity to financial institutions by posting a no7 tice on the Board’s Web site and by publishing 

8 a notice in the Federal Register. 

9 SEC. 1405. STANDARDS FOR SYSTEMICALLY IMPORTANT FI10 NANCIAL MARKET UTILITIES AND PAYMENT, 

11 CLEARING, OR SETTLEMENT ACTIVITIES. 

12 (a) BOARD REQUIREMENT TO PRESCRIBE STAND13 ARDS.—The Board shall, by regulation or order and in 

14 consultation with the Council and relevant supervisory 

15 agencies, prescribe or issue risk management standards 

16 governing the operations of identified financial market 

17 utilities and the conduct of identified activities by financial 

18 institutions, taking into consideration relevant inter19 national standards and existing prudential requirements 

20 applicable to such financial market utilities and payment, 

21 clearing, or settlement activities. 

22 (b) OBJECTIVES AND PRINCIPLES.—The objectives 

23 and principles for the risk management standards pre24 scribed under subsection (a) shall be to— 

25 (1) promote robust risk management; 


wwoods2 on DSK1DXX6B1PROD with BILLS
204 

•HR 3996 IH

1 (2) promote safety and soundness; 

2 (3) reduce systemic risks; and 

3 (4) support the stability of the broader financial 

4 system. 

5 (c) SCOPE.— 

6 (1) IN GENERAL.—The standards prescribed 

7 under subsection (a) may address areas such as risk 

8 management policies and procedures; margin and 

9 collateral requirements; participant or counterparty 

10 default policies and procedures; the ability to com11 plete timely clearing and settlement of financial 

12 transactions; capital and financial resource require13 ments for identified financial market utilities; and 

14 other areas that the Board determines, by rule or 

15 order, are necessary to achieve the objectives and 

16 principles in subsection (b). 

17 (2) INTERACTION WITH EXISTING STAND18 ARDS.—The standards prescribed under this section 

19 may— 

20 (A) be different than existing standards 

21 that address the same or similar subject areas; 

22 and 

23 (B) may address subject areas that are not 

24 covered by existing regulations. 


wwoods2 on DSK1DXX6B1PROD with BILLS
205 

•HR 3996 IH

1 (3) THRESHOLD LEVEL.—The standards pre2 scribed under subsection (a) governing the conduct 

3 of identified activities shall, where appropriate, es4 tablish a threshold as to the level or significance of 

5 engagement in the activity at which a financial insti6 tution will become subject to the standards with re7 spect to that activity. 

8 (4) CATEGORIZATION AND TIERING.—In pre9 scribing or issuing standards under subsection (a) 

10 governing the conduct of identified activities and the 

11 operations of identified financial market utilities, the 

12 Board shall, where appropriate, differentiate among 

13 identified financial market utilities and identified ac14 tivities by taking into consideration their risk, com15 plexity, leverage, frequency and dollar amount, inter16 connectedness to the financial system, and any other 

17 factors the Board deems appropriate. 

18 (d) COMPLIANCE REQUIRED.—Identified financial 

19 market utilities and financial institutions engaged in iden20 tified activities shall conduct their operations in compli21 ance with the applicable risk management standards pre22 scribed by the Board. 


wwoods2 on DSK1DXX6B1PROD with BILLS
206 

•HR 3996 IH

1 SEC. 1406. OPERATIONS AND CHANGES TO RULES, PROCE2 DURES, OR OPERATIONS OF IDENTIFIED FI3 NANCIAL MARKET UTILITIES. 

4 (a) REFERENCE.—For purposes of paragraphs (b) 

5 and (c), all references to the phrase ‘‘Supervisory Agency 

6 or the Board’’ mean ‘‘Supervisory Agency or, in the ab7 sence of a Supervisory Agency, the Board’’. 

8 (b) ADVANCE NOTICE OF PROPOSED CHANGES.— 

9 (1) ADVANCE NOTICE REQUIRED.—Subject to 

10 subsection (c), an identified financial market utility 

11 shall provide at least 60 days advance notice to the 

12 Supervisory Agency or the Board of any proposed 

13 change to its rules, procedures, or operations that 

14 could, as defined in rules of the Board, materially 

15 affect the nature or level of risks presented by the 

16 identified financial market utility. 

17 (2) TERMS AND STANDARDS PRESCRIBED BY

18 THE BOARD.—The Board shall prescribe regulations 

19 that define and describe the standards for deter20 mining when notice is required to be provided under 

21 paragraph (1). 

22 (3) CONSULTATION AND AVOIDANCE OF DUPLI23 CATION.—In prescribing regulations under para24 graph (2), the Board shall— 

25 (A) consult with the Commodity Futures 

26 Trading Commission and the Securities and 


wwoods2 on DSK1DXX6B1PROD with BILLS
207 

•HR 3996 IH

1 Exchange Commission regarding the extent to 

2 which the regulations of those agencies already 

3 require advance notice of rule, procedural, or 

4 operational changes; and 

5 (B) seek to avoid duplicative requirements 

6 under this section whenever possible. 

7 (4) CONTENTS OF NOTICE.—Any notice of a 

8 proposed change provided by an identified financial 

9 market utility under paragraph (1) shall describe— 

10 (A) the nature of the change; 

11 (B) any expected effects on risks to the 

12 identified financial market utility, its partici13 pants, or the market; and 

14 (C) the manner in which the identified fi15 nancial market utility plans to manage any 

16 identified risks. 

17 (5) ADDITIONAL INFORMATION.—The Super18 visory Agency or the Board may require an identi19 fied financial market utility to provide any informa20 tion necessary to assess— 

21 (A) the effect the proposed change would 

22 have on the nature or level of risks associated 

23 with the identified financial market utility’s 

24 payment, clearing, or settlement activities; and 


wwoods2 on DSK1DXX6B1PROD with BILLS
208 

•HR 3996 IH

1 (B) the sufficiency of any proposed risk 

2 management techniques. 

3 (6) NOTICE OF OBJECTION.—The Supervisory 

4 Agency or the Board will notify the identified finan5 cial market utility of any objection regarding the 

6 proposed change before the end of the 60-day period 

7 beginning on the later of— 

8 (A) the date that the notice of the pro9 posed change is received; or 

10 (B) the date any further information re11 quested for consideration of the notice is re12 ceived. 

13 (7) CHANGE NOT ALLOWED IF OBJECTION.—An 

14 identified financial market utility shall not imple15 ment a change to which the Supervisory Agency or 

16 Board has an objection. 

17 (8) CHANGE ALLOWED IF NO OBJECTION WITH18 IN 60 DAYS.—An identified financial market utility 

19 may implement a change if it has not received an 

20 objection to the proposed change before the end of 

21 the 60-day period beginning on the later of— 

22 (A) the date that the Supervisory Agency 

23 or the Board receives the notice of proposed 

24 change; or 


wwoods2 on DSK1DXX6B1PROD with BILLS
209 

•HR 3996 IH

1 (B) the date the Supervisory Agency or the 

2 Board receives any further information that the 

3 Supervisory Agency or the Board requests for 

4 consideration of the notice. 

5 (9) REVIEW EXTENSION FOR NOVEL OR COM6 PLEX ISSUES.— 

7 (A) IN GENERAL.—The Supervisory Agen8 cy or the Board may, during the 60-day review 

9 period, extend the review period for an addi10 tional 60 days for proposed changes that raise 

11 novel or complex issues, subject to the Super12 visory Agency or the Board providing the iden13 tified financial market utility with prompt writ14 ten notice of the extension. 

15 (B) EXTENSION OF OTHER TIME PERI16 ODS.—Any time period referred to under para17 graphs (6) and (8) shall be extended by the 

18 amount of any extension of time under clause 

19 (A). 

20 (10) CHANGE ALLOWED EARLIER IF NOTIFIED

21 OF NO OBJECTION.—An identified financial market 

22 utility may implement a change in less than 60 days 

23 from the date of receipt of the notice of proposed 

24 change by the Supervisory Agency or the Board, or 


wwoods2 on DSK1DXX6B1PROD with BILLS
210 

•HR 3996 IH

1 the date the Supervisory Agency or the Board re2 ceives any further information it requested, if— 

3 (A) the Supervisory Agency or the Board 

4 notifies the identified financial market utility in 

5 writing that it does not object to the proposed 

6 change; and 

7 (B) authorizes the identified financial mar8 ket utility to implement the change on an ear9 lier date, subject to any conditions imposed by 

10 the Supervisory Agency or the Board. 

11 (c) EMERGENCY CHANGES.— 

12 (1) IN GENERAL.—An identified financial mar13 ket utility may implement a change that would oth14 erwise require advance notice under this subsection 

15 if it determines that— 

16 (A) an emergency exists; and 

17 (B) immediate implementation of the 

18 change is necessary for the identified financial 

19 market utility to continue to provide its services 

20 in a safe and sound manner. 

21 (2) NOTICE REQUIRED WITHIN 24 HOURS.—Any 

22 identified financial market utility that implements a 

23 change pursuant to a determination under para24 graph (1) shall provide notice of such an emergency 

25 change to its Supervisory Agency or the Board as 


wwoods2 on DSK1DXX6B1PROD with BILLS
211 

•HR 3996 IH

1 soon as practicable, which shall be no later than 24 

2 hours after implementation of the change. 

3 (3) CONTENTS OF EMERGENCY NOTICE.—In 

4 addition to the information required under sub5 section (b) for any change requiring an advance no6 tice, the notice under paragraph (2) of an emergency 

7 change must describe— 

8 (A) the nature of the emergency; and 

9 (B) the reason the change was necessary 

10 for the identified financial market utility to con11 tinue to provide its services in a safe and sound 

12 manner. 

13 (4) MODIFICATION OR RESCISSION OF CHANGE

14 MAY BE REQUIRED.—The Supervisory Agency or the 

15 Board may require a modification or a rescission of 

16 any change of which the Supervisory Agency or the 

17 Board receives notice under this subsection if the 

18 Supervisory Agency or the Board finds that the 

19 change is not consistent with the purposes of this 

20 subtitle or any regulations, orders, or standards pre21 scribed, issued, or established by the Board here22 under. 

23 (d) COORDINATION BETWEEN AGENCIES AND THE

24 BOARD.—In the case of an identified financial market 


wwoods2 on DSK1DXX6B1PROD with BILLS
212 

•HR 3996 IH

1 utility that has a Supervisory Agency other than the 

2 Board, the Supervisory Agency shall— 

3 (1) provide the Board concurrently with a com4 plete copy of any notice, request, or other informa5 tion such agency issues, submits, or receives under 

6 this subsection with respect to such utility; and 

7 (2) consult with the Board before taking any 

8 action on or completing any review of a change pro9 posed by an identified financial market utility. 

10 SEC. 1407. EXAMINATION OF AND ENFORCEMENT ACTIONS 

11 AGAINST IDENTIFIED FINANCIAL MARKET 

12 UTILITIES. 

13 (a) EXAMINATION.—Notwithstanding any other pro14 vision of law and subject to subsection (d), the Supervisory 

15 Agency shall conduct examinations of an identified finan16 cial market utility at least annually in order to inform 

17 itself of— 

18 (1) the nature of the operations of, and the 

19 risks borne by, the identified financial market util20 ity; 

21 (2) the financial and operational risks presented 

22 by the identified financial market utility to financial 

23 institutions, critical markets, or the broader finan24 cial system; 


wwoods2 on DSK1DXX6B1PROD with BILLS
213 

•HR 3996 IH

1 (3) the resources and capabilities of the identi2 fied financial market utility to monitor and control 

3 such risks; 

4 (4) the safety and soundness of the identified 

5 financial market utility; and 

6 (5) the identified financial market utility’s com7 pliance with this subtitle and the rules and orders 

8 prescribed by the Board under this subtitle. 

9 (b) SERVICE PROVIDERS.— 

10 (1) Whenever a service integral to the operation 

11 of an identified financial market utility is performed 

12 for the identified financial market utility by another 

13 entity, whether an affiliate or non-affiliate and 

14 whether on or off the premises of the identified fi15 nancial market utility, the Supervisory Agency may 

16 examine whether the provision of that service is in 

17 compliance with applicable law, rules, orders, and 

18 standards to the same extent as if the identified fi19 nancial market utility were performing the service 

20 on its own premises. 

21 (c) ENFORCEMENT.—Except as provided in sub22 sections (e) and (g), an identified financial market utility 

23 shall be subject to the provisions of subsections (b) 

24 through (n) of section 8 of the Federal Deposit Insurance 

25 Act (12 U.S.C. 1818) in the same manner and to the same 


wwoods2 on DSK1DXX6B1PROD with BILLS
214 

•HR 3996 IH

1 extent as if the identified financial market utility were an 

2 insured depository institution for which the Supervisory 

3 Agency is the appropriate Federal banking agency as de4 fined in section 3 of the Federal Deposit Insurance Act 

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

6 (d) BOARD INVOLVEMENT IN EXAMINATIONS.— 

7 (1) BOARD CONSULTATION ON EXAMINATION

8 PLANNING.—The Supervisory Agency shall consult 

9 with the Board regarding the scope and methodology 

10 of any examination conducted under subsections (a) 

11 and (b). 

12 (2) BOARD PARTICIPATION IN EXAMINATION.— 

13 The Board may, in its discretion, participate in any 

14 examination led by a Supervisory Agency and con15 ducted under subsections (a) and (b). 

16 (e) BOARD ENFORCEMENT RECOMMENDATIONS.— 

17 (1) RECOMMENDATION.—The Board may at 

18 any time recommend to the Supervisory Agency that 

19 it take enforcement action against an identified fi20 nancial market utility. The recommendation shall be 

21 in writing and shall provide a detailed analysis sup22 porting the Board’s recommendation. 

23 (2) CONSIDERATION.—The Supervisory Agency 

24 shall consider the Board’s recommendation and sub25 mit a response to the Board within 30 days. 


wwoods2 on DSK1DXX6B1PROD with BILLS
215 

•HR 3996 IH

1 (3) MEDIATION.—If the Supervisory Agency re2 jects, in whole or in the part, the Board’s rec3 ommendation, then the Council shall mediate be4 tween the parties and encourage them to reach 

5 agreement on whether an enforcement action should 

6 be brought, and if so by which agency. 

7 (4) ENFORCEMENT ACTION.—If the Super8 visory Agency fails to respond to the Board’s rec9 ommendation in accordance with paragraph (2), if 

10 the Supervisory Agency reaches agreement with the 

11 Board that the Board should take an enforcement 

12 action, or if the Supervisory Agency rejects the 

13 Board’s recommendation and the Council is unable 

14 to resolve the dispute under paragraph (3), then the 

15 Board may exercise the enforcement authority ref16 erenced in subsection (c) as if it were the Super17 visory Agency and take enforcement action against 

18 the identified financial market utility. 

19 (f) IDENTIFIED FINANCIAL MARKET UTILITIES

20 WITHOUT A SUPERVISORY AGENCY.—In the case of an 

21 identified financial market utility that is not under the pri22 mary jurisdiction of a Supervisory Agency, the Board shall 

23 have examination and enforcement authority under sub24 sections (a) through (c) with respect to the identified fi25 nancial market utility and any service providers in the 


wwoods2 on DSK1DXX6B1PROD with BILLS
216 

•HR 3996 IH

1 same manner and to the same extent as if the Board were 

2 the Supervisory Agency. 

3 (g) EMERGENCY ENFORCEMENT ACTIONS BY THE

4 BOARD.— 

5 (1) IMMINENT RISK OF SUBSTANTIAL HARM.— 

6 The Board may, after consulting with the Super7 visory Agency, take enforcement action against an 

8 identified financial market utility if the Board has 

9 reasonable cause to believe that— 

10 (A) either— 

11 (i) an action engaged in, or con12 templated by, an identified financial mar13 ket utility (including any change proposed 

14 by the identified financial market utility to 

15 its rules, procedures, or operations that 

16 would otherwise be subject to section 

17 1406(b) or (c)); or 

18 (ii) the condition of an identified fi19 nancial market utility, poses an imminent 

20 risk of substantial harm to financial insti21 tutions, critical markets, or the broader fi22 nancial system; and 

23 (B) the imminent risk of substantial harm 

24 precludes the Board’s use of the procedures in 

25 subsection (e). 


wwoods2 on DSK1DXX6B1PROD with BILLS
217 

•HR 3996 IH

1 (2) ENFORCEMENT AUTHORITY.—The Board is 

2 authorized to take action under paragraph (1) 

3 against an identified financial market utility as if 

4 the identified financial market utility were an in5 sured depository institution for which the Board is 

6 the appropriate Federal banking agency as defined 

7 in section 3 of the Federal Deposit Insurance Act 

8 (12 U.S.C. 1813). 

9 (3) PROMPT NOTICE TO SUPERVISORY AGENCY

10 OF ENFORCEMENT ACTION.—Within 24 hours of 

11 taking an enforcement action under this subsection, 

12 the Board shall provide written notice to the identi13 fied financial market utility’s Supervisory Agency 

14 containing a detailed analysis of the Board’s action, 

15 with supporting documentation included. 

16 SEC. 1407. EXAMINATION OF AND ENFORCEMENT ACTIONS 

17 AGAINST IDENTIFIED FINANCIAL MARKET 

18 UTILITIES. 

19 (a) EXAMINATION.—Notwithstanding any other pro20 vision of law and subject to subsection (d), the Supervisory 

21 Agency shall conduct examinations of an identified finan22 cial market utility at least annually in order to inform 

23 itself of— 


wwoods2 on DSK1DXX6B1PROD with BILLS
218 

•HR 3996 IH

1 (1) the nature of the operations of, and the 

2 risks borne by, the identified financial market util3 ity; 

4 (2) the financial and operational risks presented 

5 by the identified financial market utility to financial 

6 institutions, critical markets, or the broader finan7 cial system; 

8 (3) the resources and capabilities of the identi9 fied financial market utility to monitor and control 

10 such risks; 

11 (4) the safety and soundness of the identified 

12 financial market utility; and 

13 (5) the identified financial market utility’s com14 pliance with this subtitle and the rules and orders 

15 prescribed by the Board under this subtitle. 

16 (b) SERVICE PROVIDERS.—Whenever a service inte17 gral to the operation of an identified financial market util18 ity is performed for the identified financial market utility 

19 by another entity, whether an affiliate or nonaffiliate and 

20 whether on or off the premises of the identified financial 

21 market utility, the Supervisory Agency may examine 

22 whether the provision of that service is in compliance with 

23 applicable law, rules, orders, and standards to the same 

24 extent as if the identified financial market utility were per25 forming the service on its own premises. 


wwoods2 on DSK1DXX6B1PROD with BILLS
219 

•HR 3996 IH

1 (c) ENFORCEMENT.—Except as provided in sub2 sections (e) and (g), an identified financial market utility 

3 shall be subject to the provisions of subsections (b) 

4 through (n) of section 8 of the Federal Deposit Insurance 

5 Act (12 U.S.C. 1818) in the same manner and to the same 

6 extent as if the identified financial market utility were an 

7 insured depository institution for which the Supervisory 

8 Agency is the appropriate Federal banking agency as de9 fined in section 3 of the Federal Deposit Insurance Act 

10 (12 U.S.C. 1813). 

11 (d) BOARD INVOLVEMENT IN EXAMINATIONS.— 

12 (1) BOARD CONSULTATION ON EXAMINATION

13 PLANNING.—The Supervisory Agency shall consult 

14 with the Board regarding the scope and methodology 

15 of any examination conducted under subsections (a) 

16 and (b). 

17 (2) BOARD PARTICIPATION IN EXAMINATION.— 

18 The Board may, in its discretion, participate in any 

19 examination led by a Supervisory Agency and con20 ducted under subsections (a) and (b). 

21 (e) BOARD ENFORCEMENT RECOMMENDATIONS.— 

22 (1) RECOMMENDATION.—The Board may at 

23 any time recommend to the Supervisory Agency that 

24 it take enforcement action against an identified fi25 nancial market utility. The recommendation shall be 


wwoods2 on DSK1DXX6B1PROD with BILLS
220 

•HR 3996 IH

1 in writing and shall provide a detailed analysis sup2 porting the Board’s recommendation. 

3 (2) CONSIDERATION.—The Supervisory Agency 

4 shall consider the Board’s recommendation and sub5 mit a response to the Board within 30 days. 

6 (3) MEDIATION.—If the Supervisory Agency re7 jects, in whole or in the part, the Board’s rec8 ommendation, then the Council shall mediate be9 tween the parties and encourage them to reach 

10 agreement on whether an enforcement action should 

11 be brought, and if so by which agency. 

12 (4) ENFORCEMENT ACTION.—If the Super13 visory Agency fails to respond to the Board’s rec14 ommendation in accordance with paragraph (2), if 

15 the Supervisory Agency reaches agreement with the 

16 Board that the Board should take an enforcement 

17 action, or if the Supervisory Agency rejects the 

18 Board’s recommendation and the Council is unable 

19 to resolve the dispute under paragraph (3), then the 

20 Board may exercise the enforcement authority ref21 erenced in subsection (c) as if it were the Super22 visory Agency and take enforcement action against 

23 the identified financial market utility. 

24 (f) IDENTIFIED FINANCIAL MARKET UTILITIES

25 WITHOUT A SUPERVISORY AGENCY.—In the case of an 


wwoods2 on DSK1DXX6B1PROD with BILLS
221 

•HR 3996 IH

1 identified financial market utility that is not under the pri2 mary jurisdiction of a Supervisory Agency, the Board shall 

3 have examination and enforcement authority under sub4 sections (a) through (c) with respect to the identified fi5 nancial market utility and any service providers in the 

6 same manner and to the same extent as if the Board were 

7 the Supervisory Agency. 

8 (g) EMERGENCY ENFORCEMENT ACTIONS BY THE

9 BOARD.— 

10 (1) IMMINENT RISK OF SUBSTANTIAL HARM.— 

11 The Board may, after consulting with the Super12 visory Agency, take enforcement action against an 

13 identified financial market utility if the Board has 

14 reasonable cause to believe that— 

15 (A) either— 

16 (i) an action engaged in, or con17 templated by, an identified financial mar18 ket utility (including any change proposed 

19 by the identified financial market utility to 

20 its rules, procedures, or operations that 

21 would otherwise be subject to section 

22 1406(b) or (c)); or 

23 (ii) the condition of an identified fi24 nancial market utility, poses an imminent 

25 risk of substantial harm to financial instiVerDate Nov 24 2008 00:06 Nov 20, 2009 Jkt 089200 PO 00000 Frm 00221 Fmt 6652 Sfmt 6201 E:\BILLS\H3996.IH H3996

wwoods2 on DSK1DXX6B1PROD with BILLS
222 

•HR 3996 IH

1 tutions, critical markets, or the broader fi2 nancial system; and 

3 (B) the imminent risk of substantial harm 

4 precludes the Board’s use of the procedures in 

5 subsection (e). 

6 (2) ENFORCEMENT AUTHORITY.—The Board is 

7 authorized to take action under paragraph (1) 

8 against an identified financial market utility as if 

9 the identified financial market utility were an in10 sured depository institution for which the Board is 

11 the appropriate Federal banking agency as defined 

12 in section 3 of the Federal Deposit Insurance Act 

13 (12 U.S.C. 1813). 

14 (3) PROMPT NOTICE TO SUPERVISORY AGENCY

15 OF ENFORCEMENT ACTION.—Within 24 hours of 

16 taking an enforcement action under this subsection, 

17 the Board shall provide written notice to the identi18 fied financial market utility’s Supervisory Agency 

19 containing a detailed analysis of the Board’s action, 

20 with supporting documentation included. 

21 SEC. 1408. EXAMINATION OF AND ENFORCEMENT ACTIONS 

22 AGAINST FINANCIAL INSTITUTIONS SUBJECT 

23 TO STANDARDS FOR IDENTIFIED ACTIVITIES. 

24 (a) EXAMINATION.—The appropriate financial regu25 lator shall periodically conduct examinations of a financial 


wwoods2 on DSK1DXX6B1PROD with BILLS
223 

•HR 3996 IH

1 institution that is subject to the standards prescribed by 

2 the Board for an identified activity in order to inform the 

3 appropriate financial regulator of the following: 

4 (1) the nature and scope of the identified activi5 ties engaged in by the financial institution; 

6 (2) the financial and operational risks the iden7 tified activities engaged in by the financial institu8 tion may pose to the safety and soundness of the fi9 nancial institution; 

10 (3) the financial and operational risks the iden11 tified activities engaged in by the financial institu12 tion may pose to other financial institutions, critical 

13 markets, or the broader financial system; 

14 (4) the resources available to and the capabili15 ties of the financial institution to monitor and con16 trol the risks described in paragraphs (2) and (3); 

17 and 

18 (5) the financial institution’s compliance with 

19 this subtitle and the rules and orders prescribed by 

20 the Board under this subtitle. 

21 (b) ENFORCEMENT.—The appropriate financial regu22 lator shall take such actions that it deems necessary to 

23 ensure that a financial institution that is subject to the 

24 standards prescribed by the Board for an identified activVerDate Nov 24 2008 00:06 Nov 20, 2009 Jkt 089200 PO 00000 Frm 00223 Fmt 6652 Sfmt 6201 E:\BILLS\H3996.IH H3996

wwoods2 on DSK1DXX6B1PROD with BILLS
224 

•HR 3996 IH

1 ity complies with this subtitle and the rules and orders 

2 prescribed by the Board under this subtitle. 

3 (c) TECHNICAL ASSISTANCE.—The Board shall con4 sult with and provide such technical assistance as may be 

5 required by the appropriate financial regulators to ensure 

6 that the Board’s rules and orders prescribed under this 

7 subtitle are interpreted and applied in as consistent and 

8 uniform a manner as practicable. 

9 (d) DELEGATION.— 

10 (1) EXAMINATION.— 

11 (A) REQUEST TO BOARD.—The appro12 priate financial regulator may request the 

13 Board to conduct, or to participate in, an exam14 ination of a financial institution subject to the 

15 standards prescribed by the Board for an iden16 tified activity in order to assess the financial in17 stitution’s compliance with this subtitle or the 

18 Board’s rules or orders prescribed under this 

19 subtitle. 

20 (B) EXAMINATION BY BOARD.—Upon re21 ceipt of an appropriate written request, the 

22 Board will conduct the examination under such 

23 terms and conditions to which the Board and 

24 the appropriate financial regulator mutually 

25 agree. 


wwoods2 on DSK1DXX6B1PROD with BILLS
225 

•HR 3996 IH

1 (2) ENFORCEMENT.— 

2 (A) REQUEST TO BOARD.—An appropriate 

3 financial regulator may request the Board to 

4 enforce this subtitle or the rules or orders pre5 scribed by the Board under this subtitle against 

6 a financial institution subject to the standards 

7 prescribed by the Board for an identified activ8 ity. 

9 (B) ENFORCEMENT BY BOARD.—Upon re10 ceipt of an appropriate written request, the 

11 Board shall— 

12 (i) determine whether an enforcement 

13 action is warranted; and 

14 (ii) if so, it shall enforce compliance 

15 with this subtitle or the rules or orders 

16 prescribed by the Board under this sub17 title. 

18 (C) ENFORCEMENT AUTHORITY.—For pur19 poses of carrying out subparagraph (B), the 

20 Board shall have authority under subsections 

21 (b) through (n) of section 8 of the Federal De22 posit Insurance Act with respect to a financial 

23 institution in the same manner and to the same 

24 extent as if the financial institution were an in25 sured depository institution for which the Board 


wwoods2 on DSK1DXX6B1PROD with BILLS
226 

•HR 3996 IH

1 is the appropriate Federal banking agency (as 

2 defined in section 3 of such Act). 

3 (e) BACK-UP AUTHORITY OF THE BOARD.— 

4 (1) EXAMINATION AND ENFORCEMENT.—Not5 withstanding any other provision of law, the Board 

6 may— 

7 (A) conduct an examination of any finan8 cial institution that is subject to the standards 

9 prescribed by the Board for an identified activ10 ity; and 

11 (B) enforce the provisions of this subtitle 

12 or any rules or orders prescribed by the Board 

13 under this subtitle against any financial institu14 tion subject to the standards prescribed by the 

15 Board for an identified activity. 

16 (2) LIMITATIONS.— 

17 (A) EXAMINATION.—The Board may exer18 cise the authority described in paragraph (1)(A) 

19 only if the Board has— 

20 (i) reasonable cause to believe that a 

21 financial institution is not in compliance 

22 with this subtitle or the rules or orders 

23 prescribed by the Board under this subtitle 

24 with respect to an identified activity; 


wwoods2 on DSK1DXX6B1PROD with BILLS
227 

•HR 3996 IH

1 (ii) notified, in writing, the appro2 priate financial regulator of its belief under 

3 clause (i) with supporting documentation 

4 included; 

5 (iii) requested the appropriate finan6 cial regulator to conduct a prompt exam7 ination of the financial institution; and 

8 (iv) either— 

9 (I) not been afforded a reason10 able opportunity to participate in an 

11 examination of the financial institu12 tion by the appropriate financial regu13 lator within 30 days after the date of 

14 the Board’s notification under clause 

15 (ii); or 

16 (II) reasonable cause to believe 

17 that the financial institution’s non18 compliance with this subtitle or the 

19 rules or orders prescribed by the 

20 Board under this subtitle poses a sub21 stantial risk to other financial institu22 tions, critical markets, or the broader 

23 financial system, subject to the Board 

24 affording the appropriate financial 


wwoods2 on DSK1DXX6B1PROD with BILLS
228 

•HR 3996 IH

1 regulator a reasonable opportunity to 

2 participate in the examination. 

3 (B) ENFORCEMENT.—The Board may ex4 ercise the authority described in paragraph 

5 (1)(B) only if the Board has— 

6 (i) reasonable cause to believe that a 

7 financial institution is not in compliance 

8 with this subtitle or the rules or orders 

9 prescribed by the Board under this subtitle 

10 with respect to an identified activity; 

11 (ii) notified, in writing, the appro12 priate financial regulator of its belief under 

13 clause (i) with supporting documentation 

14 included and with a recommendation that 

15 the appropriate financial regulator take 

16 one or more specific enforcement actions 

17 against the financial institution; and 

18 (iii) either— 

19 (I) not been notified, in writing, 

20 by the appropriate financial regulator 

21 of the commencement of an enforce22 ment action recommended by the 

23 Board against the financial institution 

24 within 30 days from the date of the 

25 notification under clause (ii); or 


wwoods2 on DSK1DXX6B1PROD with BILLS
229 

•HR 3996 IH

1 (II) reasonable cause to believe 

2 that the financial institution’s non3 compliance with this subtitle or the 

4 rules or orders prescribed by the 

5 Board under this subtitle poses a sub6 stantial risk to other financial institu7 tions, critical markets, or the broader 

8 financial system, subject to the Board 

9 notifying the appropriate financial 

10 regulator of the Board’s enforcement 

11 action. 

12 (3) ENFORCEMENT PROVISIONS.—The Board 

13 shall have authority under subsections (b) through 

14 (n) of section 8 of the Federal Deposit Insurance 

15 Act (12 U.S.C. 1818) with respect to a financial in16 stitution subject to the standards prescribed by the 

17 Board for an identified activity in the same manner 

18 and to the same extent as if the financial institution 

19 were an insured depository institution for which the 

20 Board is the appropriate Federal banking agency (as 

21 defined in section 3 of such Act). 

22 SEC. 1409. PROVISION OF INFORMATION, REPORTS, OR 

23 RECORDS. 

24 (a) INFORMATION TO ASSESS SYSTEMIC IMPOR25 TANCE.— 


wwoods2 on DSK1DXX6B1PROD with BILLS
230 

•HR 3996 IH

1 (1) FINANCIAL MARKET UTILITIES.—The Coun2 cil is authorized to require any financial market util3 ity to submit such information as the Council may 

4 require for the purpose of assessing whether that fi5 nancial market utility is systemically important if 

6 the Council has reasonable cause to believe that the 

7 financial market utility meets the standards for sys8 temic importance set out in section 1404 of this sub9 title. 

10 (2) FINANCIAL INSTITUTIONS ENGAGED IN PAY11 MENT, CLEARING, OR SETTLEMENT ACTIVITIES.— 

12 The Council is authorized to require any financial 

13 institution to submit such information as the Coun14 cil may require for the purpose of assessing whether 

15 any payment, clearing, or settlement activity en16 gaged in or supported by a financial institution is 

17 systemically important if the Council has reasonable 

18 cause to believe that the activity meets the standards 

19 for systemic importance set out in section 1404 of 

20 this subtitle. 

21 (b) REPORTING AFTER IDENTIFICATION.— 

22 (1) IDENTIFIED FINANCIAL MARKET UTILI23 TIES.—The Board may require an identified finan24 cial market utility to submit reports or data to the 

25 Board in such frequency and form as deemed necVerDate Nov 24 2008 00:06 Nov 20, 2009 Jkt 089200 PO 00000 Frm 00230 Fmt 6652 Sfmt 6201 E:\BILLS\H3996.IH H3996

wwoods2 on DSK1DXX6B1PROD with BILLS
231 

•HR 3996 IH

1 essary by the Board in order to assess the safety 

2 and soundness of the utility and the systemic risk 

3 that the utility’s operations pose to the financial sys4 tem. 

5 (2) FINANCIAL INSTITUTIONS SUBJECT TO THE

6 STANDARDS PRESCRIBED BY THE BOARD.—The 

7 Board may require 1 or more financial institutions 

8 subject to the standards prescribed by the Board for 

9 an identified activity to submit, in such frequency 

10 and form as deemed necessary by the Board, reports 

11 and data to the Board solely with respect to the con12 duct of the identified activity and solely to assess 

13 whether— 

14 (A) any regulation, order, standard, or 

15 guideline prescribed by the Board with respect 

16 to the identified activity appropriately address 

17 the risks to the financial system presented by 

18 such activity; and 

19 (B) the financial institutions are in compli20 ance with this subtitle and the rules and orders 

21 prescribed by the Board under this subtitle with 

22 respect to the identified activity. 

23 (c) COORDINATION WITH APPROPRIATE FEDERAL

24 SUPERVISORY AGENCY.— 


wwoods2 on DSK1DXX6B1PROD with BILLS
232 

•HR 3996 IH

1 (1) ADVANCE COORDINATION.—Before directly 

2 requesting any material information from, or impos3 ing reporting or recordkeeping requirements on, any 

4 financial market utility or any financial institution 

5 engaged in a payment, clearing, or settlement activ6 ity, the Council and the Board shall coordinate with 

7 the Supervisory Agency for a financial market utility 

8 or the appropriate financial regulator for a financial 

9 institution to determine if the information is avail10 able from or may be obtained by the agency in the 

11 form, format, or detail required by the Council or 

12 the Board. 

13 (2) SUPERVISORY REPORTS.—Notwithstanding 

14 any other provision of law, the Supervisory Agencies, 

15 the appropriate financial regulators, the Council, 

16 and the Board are authorized to disclose to each 

17 other a copy of the relevant portion of any examina18 tion report or similar report regarding any financial 

19 market utility or any financial institution engaged in 

20 payment, clearing, or settlement activities. 

21 (d) TIMING OF RESPONSE FROM APPROPRIATE FED22 ERAL SUPERVISORY AGENCY.—If the information, report, 

23 records, or data requested by the Council or the Board 

24 under subsection (c)(1) are not provided in full by the Su25 pervisory Agency or the appropriate financial regulator 


wwoods2 on DSK1DXX6B1PROD with BILLS
233 

•HR 3996 IH

1 within 30 days after the date on which the material is 

2 requested, the Council or the Board may request the infor3 mation or impose recordkeeping or reporting requirements 

4 directly on such persons as provided in subsections (a) and 

5 (b) with notice to the Supervisory Agency or the appro6 priate financial regulator. 

7 (e) SHARING OF INFORMATION.— 

8 (1) MATERIAL CONCERNS.—Notwithstanding 

9 any other provision of law, the Council, the Board, 

10 the appropriate financial regulator, and any Super11 visory Agency are authorized to— 

12 (A) promptly notify each other of material 

13 concerns about an identified financial market 

14 utility or any financial institution subject to the 

15 standards prescribed by the Board for an iden16 tified activity; and 

17 (B) share appropriate reports, information 

18 or data relating to such concerns. 

19 (2) OTHER.—Notwithstanding any other provi20 sion of law, the Council or the Board may, under 

21 such terms and conditions it deems appropriate and 

22 subject to reasonable assurances of confidentiality, 

23 provide confidential supervisory information and 

24 other information obtained under this subtitle to 

25 other persons it deems appropriate, including the 


wwoods2 on DSK1DXX6B1PROD with BILLS
234 

•HR 3996 IH

1 Secretary, State financial institution supervisory 

2 agencies, foreign financial supervisors, foreign cen3 tral banks, and foreign finance ministries. 

4 (f) PRIVILEGE MAINTAINED.—The Council, the 

5 Board, the appropriate financial regulator, the Super6 visory Agency, and any financial market utility or finan7 cial institution providing reports or data under this section 

8 shall not be deemed to have waived any privilege applicable 

9 to those reports or data, or any portion thereof, by pro10 viding the reports or data to the other party or by permit11 ting the reports or data, or any copies thereof, to be used 

12 by the other party. 

13 (g) DISCLOSURE EXEMPTION.— 

14 (1) IN GENERAL.—Information obtained by the 

15 Board under this section and any materials prepared 

16 by the Board in connection with its supervision of 

17 identified financial market utilities and identified ac18 tivities, shall be confidential supervisory information 

19 exempt from disclosure under section 552 of title 5, 

20 United States Code. 

21 (2) For purposes of section 552 of title 5, 

22 United States Code, this subsection shall be consid23 ered a statute described in subsection (b)(3) of sec24 tion 552. 


wwoods2 on DSK1DXX6B1PROD with BILLS
235 

•HR 3996 IH

1 SEC. 1410. RULEMAKING. 

2 The Board is authorized to prescribe such rules and 

3 issue such orders as may be necessary to administer and 

4 carry out the purposes of this subtitle and prevent eva5 sions thereof. 

6 SEC. 1411. OTHER AUTHORITY. 

7 The authorities granted to agencies under this sub8 title are in addition to any rulemaking, examination, en9 forcement, or other authorities that those agencies may 

10 have under other law and in no way shall be construed 

11 to limit such other authority, except that any standards 

12 imposed by the Board under section 1405 shall supersede 

13 any less stringent requirements established under other 

14 authority to the extent of any conflict. 

15 SEC. 1412. EFFECTIVE DATE. 

16 This subtitle is effective as of the date of enactment. 

17 Subtitle F—Improvements to the 

18 Asset-backed Securitization 

19 Process 

20 SEC. 1501. SHORT TITLE. 

21 This subtitle may be cited as the ‘‘Credit Risk Reten22 tion Act of 2009’’. 

23 SEC. 1502. CREDIT RISK RETENTION. 

24 The Securities Act of 1933 (15 U.S.C. 77a et seq.) 

25 is amended by inserting after section 28 the following new 

26 section: 


wwoods2 on DSK1DXX6B1PROD with BILLS
236 

•HR 3996 IH

1 ‘‘SEC. 29. CREDIT RISK RETENTION. 

2 ‘‘(a) IN GENERAL.— 

3 ‘‘(1) INTEREST IN LOANS MADE BY CREDI4 TORS.—Within 180 days of the date of the enact5 ment of this section, the Federal banking agencies 

6 and the Commission shall jointly prescribe regula7 tions to require any creditor that makes a loan to 

8 retain an economic interest in a material portion of 

9 the credit risk of any such loan that the creditor 

10 transfers, sells, or conveys to a third party, including 

11 for the purpose of including such loan in a pool of 

12 loans backing an issuance of asset-backed securities. 

13 ‘‘(2) INTEREST IN ASSETS BACKING

14 ASSETBACKED SECURITIES.—The Federal banking 

15 agencies and the Commission shall prescribe regula16 tions to require any securitizer of asset-backed secu17 rities that are backed by assets not described in 

18 paragraph (1) to retain an economic interest in a 

19 material portion of any such asset used to back an 

20 issuance of securities. 

21 ‘‘(b) ALTERNATIVE RISK RETENTION FOR CREDIT

22 SECURITIZERS.—The Federal banking agencies and the 

23 Commission may jointly apply the risk retention require24 ments of this section to securitizers of loans or particular 

25 types of loans in addition to or in substitution for any 

26 or all of the requirements that apply to creditors that 


wwoods2 on DSK1DXX6B1PROD with BILLS
237 

•HR 3996 IH

1 make such loans or types of loans, if the agencies jointly 

2 determine that applying the requirements to such 

3 securitizers would— 

4 ‘‘(1) be consistent with helping to ensure high 

5 quality underwriting standards for creditors, taking 

6 into account other applicable laws, regulations, and 

7 standards; and 

8 ‘‘(2) facilitate appropriate risk management 

9 practices by such creditors, improve access of con10 sumers to credit on reasonable terms, or otherwise 

11 serve the public interest. 

12 ‘‘(c) STANDARDS FOR REGULATION.—Regulations 

13 prescribed under subsections (a) and (b) shall— 

14 ‘‘(1) prohibit a creditor or securitizer from di15 rectly or indirectly hedging or otherwise transferring 

16 the credit risk such creditor or securitizer is required 

17 to retain under the regulations; 

18 ‘‘(2) require a creditor or securitizer to retain 

19 10 percent of the credit risk on any loan that is 

20 transferred, sold, or conveyed by such creditor or 

21 securitized by such securitizer except— 

22 ‘‘(A) if the Federal banking agencies and 

23 the Commission determine the credit under24 writing by the creditor or the due diligence by 

25 the securitizer meets such standards as the 


wwoods2 on DSK1DXX6B1PROD with BILLS
238 

•HR 3996 IH

1 Federal banking agencies and the Commission 

2 shall specify, the percentage of risk retention 

3 may be less than 10 percent of the credit risk, 

4 but in no case less than 5 percent of credit risk; 

5 and 

6 ‘‘(B) if the Federal banking agencies and 

7 the Commission determine the underwriting by 

8 the creditor or due diligence by the securitizer 

9 is insufficient, the percentage of risk retention 

10 may be higher than 10 percent; 

11 ‘‘(3) specify that the credit risk retained must 

12 be no less at risk for loss than the average of the 

13 credit risk not so retained; and 

14 ‘‘(4) set the minimum duration of the required 

15 risk retention. 

16 ‘‘(d) EXEMPTIONS AND ADJUSTMENTS.— 

17 ‘‘(1) IN GENERAL.—The Federal banking agen18 cies and the Commission shall have authority to 

19 jointly provide exemptions or adjustments to the re20 quirements of this section, including exemptions or 

21 adjustments relating to the 10 percent risk retention 

22 threshold and the hedging prohibition. 

23 ‘‘(2) APPLICABLE STANDARDS.—Any exemp24 tions or adjustments provided under paragraph (1) 

25 shall— 


wwoods2 on DSK1DXX6B1PROD with BILLS
239 

•HR 3996 IH

1 ‘‘(A) be consistent with the purpose of en2 suring high quality underwriting standards for 

3 creditors, taking into account other applicable 

4 laws, regulations, or standards; and 

5 ‘‘(B) facilitate appropriate risk manage6 ment practices by such creditors, improve ac7 cess for consumers to credit on reasonable 

8 terms, or otherwise serve the public interest. 

9 ‘‘(e) ENFORCEMENT.— 

10 ‘‘(1) Compliance with the requirements imposed 

11 under this subchapter shall be enforced under— 

12 ‘‘(A) section 8 of the Federal Deposit In13 surance Act (12 U.S.C. 1818), in the case of— 

14 ‘‘(i) national banks, and Federal 

15 branches and Federal agencies of foreign 

16 banks, by the Office of the Comptroller of 

17 the Currency; 

18 ‘‘(ii) member banks of the Federal 

19 Reserve System (other than national 

20 banks), branches and agencies of foreign 

21 banks (other than Federal branches, Fed22 eral agencies, and insured State branches 

23 of foreign banks), commercial lending com24 panies owned or controlled by foreign 

25 banks, and organizations operating under 


wwoods2 on DSK1DXX6B1PROD with BILLS
240 

•HR 3996 IH

1 section 25 or 25(a) of the Federal Reserve 

2 Act (12 U.S.C. 601 et seq., 611 et seq.), 

3 bank holding companies, and subsidiaries 

4 of bank holding companies (other than in5 sured depository institutions), by the 

6 Board; and 

7 ‘‘(iii) banks insured by the Federal 

8 Deposit Insurance Corporation (other than 

9 members of the Federal Reserve System) 

10 and insured State branches of foreign 

11 banks, by the Board of Directors of the 

12 Federal Deposit Insurance Corporation; 

13 ‘‘(B) section 8 of the Federal Deposit In14 surance Act (12 U.S.C. 1818), by the Director 

15 of the Office of Thrift Supervision, in the case 

16 of a savings association the deposits of which 

17 are insured by the Federal Deposit Insurance 

18 Corporation and a savings and loan holding 

19 company and to any subsidiary (other than a 

20 bank or subsidiary of that bank); and 

21 ‘‘(C) the Federal Credit Union Act (12 

22 U.S.C. 1751 et seq.), by the National Credit 

23 Union Administration Board with respect to 

24 any Federal credit union. 


wwoods2 on DSK1DXX6B1PROD with BILLS
241 

•HR 3996 IH

1 ‘‘(2) Except to the extent that enforcement of 

2 the requirements imposed under this subchapter is 

3 specifically committed to some other Government 

4 agency under subparagraph (1), the Commission 

5 shall enforce such requirements. 

6 ‘‘(3) The authority of the Commission under 

7 this section shall be in addition to its existing au8 thority to enforce the securities laws. 

9 ‘‘(f) DEFINITIONS.—For purposes of this section: 

10 ‘‘(1) The term ‘asset-backed security’ has the 

11 meaning given such term in section 229.1101(c) of 

12 title 17, Code of Federal Regulations, or any suc13 cessor thereto. 

14 ‘‘(2) The term ‘Federal banking agencies’ 

15 means the Board of Governors of the Federal Re16 serve System, the Office of the Comptroller of the 

17 Currency, the Office of Thrift Supervision, and the 

18 Federal Deposit Insurance Corporation. 

19 ‘‘(3) The term ‘insured depository institution’ 

20 has the meaning given such term in section 3(c) of 

21 the Federal Deposit Insurance Act (12 U.S.C. 

22 1813(c)). 

23 ‘‘(4) The term ‘securitization vehicle’ means a 

24 trust, corporation, partnership, limited liability enti25 ty, special purpose entity, or other structure that— 


wwoods2 on DSK1DXX6B1PROD with BILLS
242 

•HR 3996 IH

1 ‘‘(A) is the issuer, or is created by the 

2 issuer, of pass-through certificates, participa3 tion certificates, asset-backed securities, or 

4 other similar securities backed by a pool of as5 sets that includes loans; and 

6 ‘‘(B) holds such loans. 

7 ‘‘(5) The term ‘securitizer’ means the person 

8 that transfers, conveys, or assigns, or causes the 

9 transfer, conveyance, or assignment of, loans, includ10 ing through a special purpose vehicle, to any 

11 securitization vehicle, excluding any trustee that 

12 holds such loans for the benefit of the securitization 

13 vehicle.’’. 

14 SEC. 1503. PERIODIC AND OTHER REPORTING UNDER THE 

15 SECURITIES EXCHANGE ACT OF 1934 FOR 

16 ASSET-BACKED SECURITIES. 

17 Section 15(d) of Securities Exchange Act of 1934 (15 

18 U.S.C. 78o(d)) is amended— 

19 (1) by inserting ‘‘, other than securities of any 

20 class of asset-backed security (as defined in section 

21 229.1101(c) of title 17, Code of Federal Regula22 tions, or any successor thereto),’’ after ‘‘securities of 

23 each class’’; 

24 (2) by inserting at the end the following: ‘‘The 

25 Commission may by rules and regulations provide 


wwoods2 on DSK1DXX6B1PROD with BILLS
243 

•HR 3996 IH

1 for the suspension or termination of the duty to file 

2 under this subsection for any class of issuer of asset3 backed security upon such terms and conditions and 

4 for such period or periods as it deems necessary or 

5 appropriate in the public interest or for the protec6 tion of investors. The Commission may, for the pur7 poses of this subsection, classify issuers and pre8 scribe requirements appropriate for each class of 

9 issuer of asset-backed security.’’; and 

10 (3) by inserting after the fifth sentence the fol11 lowing: ‘‘The Commission shall adopt regulations 

12 under this subsection requiring each issuer of an 

13 asset-backed security to disclose, for each tranche or 

14 class of security, information regarding the assets 

15 backing that security. In adopting regulations under 

16 this subsection, the Commission shall set standards 

17 for the format of the data provided by issuers of an 

18 asset-backed security, which shall, to the extent fea19 sible, facilitate comparison of such data across secu20 rities in similar types of asset classes. The Commis21 sion shall require issuers of asset-backed securities 

22 at a minimum to disclose asset-level or loan-level 

23 data necessary for investors to independently per24 form due diligence. Asset-level or loan-level data 

25 shall include data with unique identifiers relating to 


wwoods2 on DSK1DXX6B1PROD with BILLS
244 

•HR 3996 IH

1 loan brokers or originators, the nature and extent of 

2 the compensation of the broker or originator of the 

3 assets backing the security, and the amount of risk 

4 retention of the originator or the securitizer of such 

5 assets.’’. 

6 SEC. 1504. REPRESENTATIONS AND WARRANTIES IN ASSET7 BACKED OFFERINGS. 

8 The Commission shall prescribe regulations on the 

9 use of representations and warranties in the asset-backed 

10 securities market that— 

11 (1) require credit rating agencies to include in 

12 reports accompanying credit ratings a description of 

13 the representations, warranties, and enforcement 

14 mechanisms available to investors and how they dif15 fer from representations, warranties, and enforce16 ment mechanisms in similar issuances; and 

17 (2) require disclosure on fulfilled repurchase re18 quests across all trusts aggregated by originator, so 

19 that investors may identify asset originators with 

20 clear underwriting deficiencies. 

21 SEC. 1505. EXEMPTED TRANSACTIONS UNDER THE SECURI22 TIES ACT OF 1933. 

23 (a) IN GENERAL.—Section 4 of the Securities Act of 

24 1933 (15 U.S.C. 77d) is amended— 

25 (1) by striking paragraph (5); and 


wwoods2 on DSK1DXX6B1PROD with BILLS
245 

•HR 3996 IH

1 (2) by redesignating paragraph (6) as para2 graph (5). 

3 (b) CONFORMING AMENDMENT.—Section 

4 3(a)(4)(B)(vii)(I) of the Securities Exchange Act of 1934 

5 (15 U.S.C. 78c(a)(4)(B)(vii)(I)) is amended by striking 

6 ‘‘4(6)’’ and inserting ‘‘4(5)’’. 

7 Subtitle G—Enhanced Resolution 

8 Authority 

9 SEC. 1601. SHORT TITLE. 

10 This subtitle may be cited as the ‘‘Resolution Author11 ity for Large, Interconnected Financial Companies Act of 

12 2009’’. 

13 SEC. 1602. DEFINITIONS. 

14 For purposes of this subtitle, the following definitions 

15 shall apply: 

16 (1) APPROPRIATE FEDERAL REGULATORY

17 AGENCY.— 

18 (A) CORPORATION AND COMMISSION.—The 

19 term ‘‘appropriate Federal regulatory agency’’ 

20 means— 

21 (i) the Corporation; and 

22 (ii) the Commission, if the financial 

23 company, or an affiliate thereof, is a 

24 broker or dealer registered with the Com25 mission under section 15(b) of the SecuriVerDate Nov 24 2008 00:06 Nov 20, 2009 Jkt 089200 PO 00000 Frm 00245 Fmt 6652 Sfmt 6201 E:\BILLS\H3996.IH H3996

wwoods2 on DSK1DXX6B1PROD with BILLS
246 

•HR 3996 IH

1 ties Exchange Act of 1934 (15 U.S.C. 

2 78o(b) (other than an insured depository 

3 institution)). 

4 (B) RULES OF CONSTRUCTION.—More 

5 than 1 agency may be an appropriate Federal 

6 regulatory agency with respect to any given fi7 nancial company. In such instances, the Com8 mission shall be the appropriate Federal regu9 latory agency for purposes of section 1603 if 

10 the largest subsidiary of the financial company 

11 is a broker or dealer as measured by total as12 sets as of the end of the previous calendar 

13 quarter, and otherwise the Corporation shall be 

14 the appropriate Federal regulatory agency for 

15 purposes of section 1603. 

16 (2) BRIDGE FINANCIAL COMPANY.—The term 

17 ‘‘bridge financial company’’ means a new financial 

18 company organized in accordance with section 

19 1609(h) by the Corporation. 

20 (3) COMMISSION.—The term ‘‘Commission’’ 

21 means the Securities and Exchange Commission. 

22 (4) CORPORATION.—The term ‘‘Corporation’’ 

23 means the Federal Deposit Insurance Corporation. 

24 (5) COVERED FINANCIAL COMPANY.—The term 

25 ‘‘covered financial company’’ means a financial comVerDate Nov 24 2008 00:06 Nov 20, 2009 Jkt 089200 PO 00000 Frm 00246 Fmt 6652 Sfmt 6201 E:\BILLS\H3996.IH H3996

wwoods2 on DSK1DXX6B1PROD with BILLS
247 

•HR 3996 IH

1 pany for which a determination has been made pur2 suant to and in accordance with section 1603(b). 

3 (6) COVERED SUBSIDIARY.—The term ‘‘covered 

4 subsidiary’’ means a subsidiary covered in paragraph 

5 (9)(B)(iv) of this section. 

6 (7) CUSTOMER PROPERTY.—The term ‘‘cus7 tomer property’’ has the meaning ascribed to it in 

8 the Securities Investor Protection Act of 1970. 

9 (8) FEDERAL RESERVE BOARD.—The term 

10 ‘‘Federal Reserve Board’’ means the Board of Gov11 ernors of the Federal Reserve System. 

12 (9) FINANCIAL COMPANY.—The term ‘‘financial 

13 company’’ means any company that— 

14 (A) is incorporated or organized under 

15 Federal law or the laws of any State; and 

16 (B) is— 

17 (i) a bank holding company as defined 

18 in section 2(a) of the Bank Holding Com19 pany Act of 1956 (12 U.S.C. 1841(a)); 

20 (ii) any identified financial holding 

21 company, as defined in section 1000(b)(5), 

22 that has been subjected to heightened pru23 dential regulation; 

24 (iii) any company predominantly en25 gaged in activities that are financial in naVerDate Nov 24 2008 00:06 Nov 20, 2009 Jkt 089200 PO 00000 Frm 00247 Fmt 6652 Sfmt 6201 E:\BILLS\H3996.IH H3996

wwoods2 on DSK1DXX6B1PROD with BILLS
248 

•HR 3996 IH

1 ture or incidental thereto for purposes of 

2 section 4(k) of the Bank Holding Company 

3 Act of 1956 (12 U.S.C. 1843(k)) or that 

4 have been identified for heightened pruden5 tial standards under section 1106 of this 

6 title; or 

7 (iv) any subsidiary of companies de8 scribed in clauses (i) through (iii) (other 

9 than an insured depository institution, any 

10 broker or dealer registered with the Com11 mission under section 15(b) of the Securi12 ties Exchange Act of 1934 (15 U.S.C. 

13 78o(b)) that is a member of the Securities 

14 Investor Protection Corporation, or an in15 surance company). 

16 (10) FUND.—The term ‘‘Fund’’ means the Sys17 temic Resolution Fund established in accordance 

18 with section 1609(n). 

19 (11) IDENTIFIED FINANCIAL HOLDING COM20 PANY.—The term ‘‘identified financial holding com21 pany’’ means a financial company that is subject to 

22 heightened prudential standards, as defined in sec23 tion 1000(b)(5) of this Act. 

24 (12) INSURANCE COMPANY.—The term ‘‘insur25 ance company’’ means a domestic insurance comVerDate Nov 24 2008 00:06 Nov 20, 2009 Jkt 089200 PO 00000 Frm 00248 Fmt 6652 Sfmt 6201 E:\BILLS\H3996.IH H3996

wwoods2 on DSK1DXX6B1PROD with BILLS
249 

•HR 3996 IH

1 pany, as that term is defined for purposes of title 11 

2 of the United States Code. 

3 (13) SECRETARY.—The term ‘‘Secretary’’ shall 

4 mean the Secretary of the Treasury. 

5 (14) STATE.—The term ‘‘State’’ means any 

6 State, commonwealth, territory, or possession of the 

7 United States, the District of Columbia, the Com8 monwealth of Puerto Rico, the Commonwealth of the 

9 Northern Mariana Islands, American Samoa, Guam, 

10 and the United States Virgin Islands. 

11 (15) CERTAIN OTHER TERMS.—The terms ‘‘af12 filiate’’, ‘‘company’’, ‘‘control’’, ‘‘deposit’’, ‘‘deposi13 tory institution’’, ‘‘foreign bank’’, ‘‘insured deposi14 tory institution’’, and ‘‘subsidiary’’ have the same 

15 meanings as in section 3 of the Federal Deposit In16 surance Act (12 U.S.C. 1813). 

17 SEC. 1603. SYSTEMIC RISK DETERMINATION. 

18 (a) WRITTEN RECOMMENDATION OF THE FEDERAL

19 RESERVE BOARD AND THE APPROPRIATE FEDERAL REG20 ULATORY AGENCY.— 

21 (1) VOTE REQUIRED.—At the request of the 

22 Secretary or the Chairman of the Federal Reserve 

23 Board or, in cases where an financial company has 

24 a broker or dealer as its largest subsidiary as meas25 ured by total assets as of the end of the previous 


wwoods2 on DSK1DXX6B1PROD with BILLS
250 

•HR 3996 IH

1 calendar quarter, the Commission, the Federal Re2 serve Board and the appropriate Federal regulatory 

3 agency shall, or on their own initiative the Federal 

4 Reserve Board and the appropriate Federal regu5 latory agency may, consider whether to make the 

6 written recommendation provided for in paragraph 

7 (2) with respect to a financial company that is an 

8 identified financial holding company, which rec9 ommendation shall be made upon a vote of not less 

10 than two-thirds of the members of the Federal Re11 serve Board then serving and two-thirds of the mem12 bers of the board or of the commission then serving 

13 of the appropriate Federal regulatory agency, as ap14 plicable. 

15 (2) RECOMMENDATION REQUIRED.—Any writ16 ten recommendations made by the Federal Reserve 

17 Board and the appropriate Federal regulatory agen18 cy under paragraph (1) shall contain the following: 

19 (A) A description of the effect that the de20 fault of the identified financial holding company 

21 would have on economic conditions or financial 

22 stability in the United States. 

23 (B) A recommendation regarding the na24 ture and the extent of actions that the Board 

25 and the appropriate Federal regulatory agency 


wwoods2 on DSK1DXX6B1PROD with BILLS
251 

•HR 3996 IH

1 recommend be taken under section 1604 re2 garding the identified financial holding com3 pany. 

4 (b) DETERMINATION BY THE SECRETARY.—Notwith5 standing any other provision of Federal law or the law 

6 of any State, if, upon the written recommendation of the 

7 Federal Reserve Board and the board of directors or com8 mission of the appropriate Federal regulatory agency as 

9 provided for in subsection (a)(1), the Secretary (in con10 sultation with the President) determines that— 

11 (1) the identified financial holding company is 

12 in default or is in danger of default; 

13 (2) the failure of the identified financial holding 

14 company and its resolution under otherwise applica15 ble Federal or State law would have serious adverse 

16 effects on financial stability or economic conditions 

17 in the United States; and 

18 (3) any action under section 1604 would avoid 

19 or mitigate such adverse effects, taking into consid20 eration the effectiveness of the action in mitigating 

21 potential adverse effects on the financial system or 

22 economic conditions, the cost to the general fund of 

23 the Treasury, and the potential to increase moral 

24 hazard on the part of creditors, counterparties, and 


wwoods2 on DSK1DXX6B1PROD with BILLS
252 

•HR 3996 IH

1 shareholders in the identified financial holding com2 pany, 

3 then the Secretary must take action under section 

4 1604(a), the Corporation must act in accordance with sec5 tion 1604(b), and the Corporation may take one or more 

6 actions specified in section 1604(c) in accordance with the 

7 requirements of that subsection. 

8 (c) DOCUMENTATION AND REVIEW.— 

9 (1) IN GENERAL.—The Secretary shall— 

10 (A) document any determination under 

11 subsection (b); and 

12 (B) retain the documentation for review 

13 under paragraph (2). 

14 (2) GAO REVIEW.—The Comptroller General of 

15 the United States shall review and report to the 

16 Congress on any determination under subsection (b), 

17 including— 

18 (A) the basis for the determination; 

19 (B) the purpose for which any action was 

20 taken pursuant thereto; and 

21 (C) the likely effect of the determination 

22 and such action on the incentives and conduct 

23 of identified financial holding companies and 

24 their creditors, counterparties, and share25 holders. 


wwoods2 on DSK1DXX6B1PROD with BILLS
253 

•HR 3996 IH

1 (3) REPORT TO CONGRESS.—Within 30 days 

2 after a determination is made under subsection (b), 

3 the Secretary shall provide written notice of the de4 termination to the Committee on Banking, Housing, 

5 and Urban Affairs of the Senate and the Committee 

6 on Financial Services of the House of Representa7 tives. The notice shall include a description of the 

8 basis for the determination. 

9 (d) DEFAULT OR IN DANGER OF DEFAULT.—For 

10 purposes of subsection (b), an identified financial holding 

11 company shall be considered to be in default or in danger 

12 of default if any of the following conditions exist, as deter13 mined in accordance with that subsection: 

14 (1) A case has been, or likely will promptly be, 

15 commenced with respect to the identified financial 

16 holding company under title 11, United States Code. 

17 (2) The identified financial holding company is 

18 critically undercapitalized, as such term has been or 

19 may be defined by the Federal Reserve Board. 

20 (3) The identified financial holding company 

21 has incurred, or is likely to incur, losses that will de22 plete all or substantially all of its capital, and there 

23 is no reasonable prospect for the company to avoid 

24 such depletion without assistance under section 

25 1604. 


wwoods2 on DSK1DXX6B1PROD with BILLS
254 

•HR 3996 IH

1 (4) The identified financial holding company’s 

2 assets are, or are likely to be, less than its obliga3 tions to creditors and others. 

4 (5) The identified financial holding company is, 

5 or is likely to be, unable to pay its obligations (other 

6 than those subject to a bona fide dispute) in the nor7 mal course of business. 

8 SEC. 1604. RESOLUTION; STABILIZATION. 

9 (a) APPOINTMENT OF RECEIVER.—Upon the Sec10 retary making a determination in accordance with section 

11 1603(b), the Secretary shall appoint the Corporation as 

12 receiver or qualified receiver for the covered financial com13 pany. There shall be a strong presumption that the Sec14 retary will appoint the Corporation as receiver. The pre15 sumption may be overcome only if the Secretary, the Fed16 eral Reserve Board, and the Corporation agree that the 

17 appointment of a qualified receiver is necessary to avoid 

18 or mitigate serious adverse effects on financial stability. 

19 (b) CONSULTATION.—The Corporation, as receiver or 

20 qualified receiver— 

21 (1) shall consult with the regulators of the cov22 ered financial company and its covered subsidiaries 

23 for purposes of ensuring an orderly resolution of the 

24 covered financial company; 


wwoods2 on DSK1DXX6B1PROD with BILLS
255 

•HR 3996 IH

1 (2) may consult with, or under section 

2 1609(a)(1)(B)(v) or section 1609(a)(1)(K) acquire 

3 services of, any outside experts as appropriate to in4 form and aid the Corporation in the resolution proc5 ess; and 

6 (3) shall consult with the primary regulators of 

7 any subsidiaries of the covered financial company 

8 that are not covered subsidiaries as described in sec9 tion 1602(9)(B)(iv) and coordinate with such regu10 lators regarding the treatment of such solvent sub11 sidiaries and the separate resolution of any such in12 solvent subsidiaries under other governmental au13 thority, as appropriate. 

14 (c) EMERGENCY STABILIZATION AFTER APPOINT15 MENT OF RECEIVER OR QUALIFIED RECEIVER.—Upon 

16 the Secretary appointing the Corporation as receiver or 

17 qualified receiver under subsection (a), the Corporation 

18 may, in its corporate capacity and as an agency of the 

19 United States, with the approval of the Secretary and sub20 ject to the conditions in subsections (d) through (e), take 

21 the following actions under such terms and conditions that 

22 the Corporation and the Secretary jointly deem appro23 priate: 


wwoods2 on DSK1DXX6B1PROD with BILLS
256 

•HR 3996 IH

1 (1) Making loans to, or purchasing any debt ob2 ligation of, the covered financial company or any 

3 covered subsidiary. 

4 (2) Purchasing assets of the covered financial 

5 company or any covered subsidiary directly or 

6 through an entity established by the Corporation for 

7 such purpose. 

8 (3) Assuming or guaranteeing the obligations of 

9 the covered financial company or any covered sub10 sidiary to one or more third parties. 

11 (4) Acquiring any type of equity interest or se12 curity of the covered financial company or any cov13 ered subsidiary. 

14 (5) Taking a lien on any or all assets of the 

15 covered financial company or any covered subsidiary, 

16 including a first priority lien on all unencumbered 

17 assets of the company or any covered subsidiary to 

18 secure repayment of any transactions conducted 

19 under this subsection. 

20 (6) Selling or transferring all, or any part 

21 thereof, of such acquired assets, liabilities, obliga22 tions, equity interests or securities of the covered fi23 nancial company or any covered subsidiary. 

24 (d) MANDATORY TERMS AND CONDITIONS FOR ALL

25 STABILIZATION ACTIONS.—The Corporation as receiver or 


wwoods2 on DSK1DXX6B1PROD with BILLS
257 

•HR 3996 IH

1 qualified receiver is authorized to take the stabilization ac2 tions listed in subsection (c) only if— 

3 (1) the Secretary and the Corporation deter4 mine that such action is necessary for the purpose 

5 of financial stability and not for the purpose of pre6 serving the covered financial company; 

7 (2) the Corporation ensures that the share8 holders of a covered financial company do not re9 ceive payment until after all other claims are fully 

10 paid; 

11 (3) the Corporation ensures that unsecured 

12 creditors bear losses; and 

13 (4) the Corporation ensures that management 

14 responsible for the failed condition of the covered fi15 nancial company is removed (if such management 

16 has not already been removed at the time the Cor17 poration is appointed as receiver or qualified re18 ceiver). 

19 (e) RECOUPMENT OF FUNDS EXPENDED FOR SYS20 TEMIC STABILIZATION PURPOSES.—Amounts expended 

21 from the Fund by the Corporation under this section shall 

22 be repaid in full to the Fund from the following sources: 

23 (1) RESOLUTION PROCESS.—Amounts attrib24 utable to— 


wwoods2 on DSK1DXX6B1PROD with BILLS
258 

•HR 3996 IH

1 (A) the proceeds of the sale of, or income 

2 from, the assets of the covered financial com3 pany; and 

4 (B) the proceeds of the transfer of any se5 curities obtained under subsection (c). 

6 (2) INDUSTRY ASSESSMENTS.—If the sources 

7 described in paragraph (1) are insufficient to repay 

8 the amount of the stabilization action in full, the dif9 ference shall be recouped through assessments on fi10 nancial companies in accordance with section 

11 1609(o). 

12 SEC. 1605. JUDICIAL REVIEW. 

13 If a receiver or qualified receiver is appointed, the 

14 covered financial company may, not later than 30 days 

15 thereafter, bring an action in the United States district 

16 court for the judicial district in which the home office of 

17 such covered financial company is located, or in the United 

18 States District Court for the District of Columbia, for an 

19 order requiring that the receiver or qualified receiver be 

20 removed, and the court shall, upon the merits, dismiss 

21 such action or direct the receiver or qualified receiver to 

22 be removed. Review of such an action shall be limited to 

23 the appointment of a receiver or qualified receiver under 

24 section 1604. 


wwoods2 on DSK1DXX6B1PROD with BILLS
259 

•HR 3996 IH

1 SEC. 1606. DIRECTORS NOT LIABLE FOR ACQUIESCING IN 

2 APPOINTMENT OF RECEIVER OR QUALIFIED 

3 RECEIVER. 

4 The members of the board of directors (or body per5 forming similar functions) of a covered financial company 

6 shall not be liable to the covered financial company’s 

7 shareholders or creditors for acquiescing in or consenting 

8 in good faith to— 

9 (1) the Secretary’s appointment of the Corpora10 tion as receiver or qualified receiver for the covered 

11 financial company under section 1604; or 

12 (2) an acquisition, combination, or transfer of 

13 assets or liabilities under section 1609. 

14 SEC. 1607. TERMINATION AND EXCLUSION OF OTHER AC15 TIONS. 

16 The Corporation’s acting as receiver or qualified re17 ceiver for a covered financial company under this title 

18 shall immediately, and by operation of law, terminate any 

19 case commenced with respect to the covered financial com20 pany under title 11, United States Code, or any pro21 ceeding under any State insolvency law with respect to the 

22 covered financial company, and no such case or proceeding 

23 may be commenced with respect to the covered financial 

24 company at any time while the Corporation acts as re25 ceiver or qualified receiver for the covered financial com26 pany. 


wwoods2 on DSK1DXX6B1PROD with BILLS
260 

•HR 3996 IH

1 SEC. 1608. RULEMAKING. 

2 The Corporation may prescribe such rules or regula3 tions it considers necessary or appropriate to implement 

4 the provisions of this title. 

5 SEC. 1609 POWERS AND DUTIES OF CORPORATION. 

6 (a) POWERS AND AUTHORITIES.— 

7 (1) GENERAL POWERS.— 

8 (A) SUCCESSOR TO COVERED FINANCIAL

9 COMPANY.—The Corporation shall, upon ap10 pointment as receiver or qualified receiver for a 

11 covered financial company under section 1604, 

12 and by operation of law, succeed to— 

13 (i) all rights, titles, powers, and privi14 leges of the covered financial company, and 

15 of any stockholder, member, officer, or di16 rector of such institution with respect to 

17 the covered financial company and the as18 sets of the covered financial company; and 

19 (ii) title to the books, records, and as20 sets of any previous receiver or other legal 

21 custodian of such covered financial com22 pany. 

23 (B) OPERATE THE COVERED FINANCIAL

24 COMPANY.—The Corporation as receiver or 

25 qualified receiver for a covered financial com26 pany may— 


wwoods2 on DSK1DXX6B1PROD with BILLS
261 

•HR 3996 IH

1 (i) take over the assets of and operate 

2 the covered financial company with all the 

3 powers of the members or shareholders, 

4 the directors, and the officers of the cov5 ered financial company and conduct all 

6 business of the covered financial company; 

7 (ii) collect all obligations and money 

8 due the covered financial company; 

9 (iii) perform all functions of the cov10 ered financial company in the name of the 

11 covered financial company; 

12 (iv) preserve and conserve the assets 

13 and property of the covered financial com14 pany; and 

15 (v) provide by contract for assistance 

16 in fulfilling any function, activity, action, 

17 or duty of the Corporation as receiver or 

18 qualified receiver. 

19 (C) FUNCTIONS OF COVERED FINANCIAL

20 COMPANY’S OFFICERS, DIRECTORS, AND SHARE21 HOLDERS.— 

22 (i) IN GENERAL.—The Corporation 

23 may provide for the exercise of any func24 tion by any member or stockholder, direc25 tor, or officer of any covered financial comVerDate Nov 24 2008 00:06 Nov 20, 2009 Jkt 089200 PO 00000 Frm 00261 Fmt 6652 Sfmt 6201 E:\BILLS\H3996.IH H3996

wwoods2 on DSK1DXX6B1PROD with BILLS
262 

•HR 3996 IH

1 pany for which the Corporation has been 

2 appointed as receiver or qualified receiver 

3 under this section. 

4 (ii) PRESUMPTION.—There shall be a 

5 strong presumption that the Corporation, 

6 as receive or qualified receiver, will remove 

7 management responsible for the failed con8 dition of the covered financial company (if 

9 such management has not already been re10 moved at the time the Corporation is ap11 pointed as receiver or qualified receiver). 

12 (D) POWERS OF AND DURATION AS QUALI13 FIED RECEIVER.— 

14 (i) IN GENERAL.—The Corporation 

15 may, as qualified receiver, and subject to 

16 all legally enforceable and perfected secu17 rity interests in the assets of the covered 

18 financial company, take such action as 

19 may be— 

20 (I) necessary to put the covered 

21 financial company in a sound and sol22 vent condition; and 

23 (II) appropriate to carry on the 

24 business of the covered financial com25 pany and preserve and conserve the 


wwoods2 on DSK1DXX6B1PROD with BILLS
263 

•HR 3996 IH

1 assets and property of the covered fi2 nancial company. 

3 (ii) DURATION.—The status of the 

4 Corporation as qualified receiver shall ter5 minate at the end of the 2-year period fol6 lowing the date of its appointment as 

7 qualified receiver, unless the Corporation, 

8 with the approval of the Secretary and the 

9 Federal Reserve Board, terminates the 

10 qualified receivership before the end of the 

11 2-year period. At the end of the two-year 

12 period, the qualified receivership shall be13 come a receivership with the Corporation 

14 as receiver. 

15 (iii) EXTENSION OF QUALIFIED RE16 CEIVERSHIP.—The Corporation may, with 

17 the approval of the Secretary and the Fed18 eral Reserve Board, extend the qualified 

19 receivership for 3 additional 1-year periods 

20 beyond the initial two-year period if nec21 essary to promote financial stability. 

22 (E) ADDITIONAL POWERS AS RECEIVER.— 

23 The Corporation may, as receiver, and subject 

24 to all legally enforceable and perfected security 

25 interests, place the covered financial company 


wwoods2 on DSK1DXX6B1PROD with BILLS
264 

•HR 3996 IH

1 in liquidation and proceed to realize upon the 

2 assets of the covered financial company in such 

3 manner as the Corporation deems appropriate, 

4 including through the sale of assets, the trans5 fer of assets to a bridge financial company es6 tablished under subsection (h), or the exercise 

7 of any other rights or privileges granted to the 

8 receiver under this section. 

9 (F) ORGANIZATION OF NEW COMPANIES.— 

10 The Corporation as receiver may organize a 

11 bridge financial company under subsection (h). 

12 (G) MERGER; TRANSFER OF ASSETS AND

13 LIABILITIES.— 

14 (i) IN GENERAL.—Subject to clause 

15 (ii), the Corporation as receiver or quali16 fied receiver may— 

17 (I) merge the covered financial 

18 company with another company; or 

19 (II) transfer any asset or liability 

20 of the covered financial company (in21 cluding assets and liabilities associ22 ated with any trust or custody busi23 ness) without obtaining any approval, 

24 assignment, or consent with respect to 

25 such transfer. 


wwoods2 on DSK1DXX6B1PROD with BILLS
265 

•HR 3996 IH

1 (ii) FEDERAL AGENCY APPROVAL; 

2 ANTITRUST REVIEW.— 

3 (I) IN GENERAL.—If a trans4 action described in clause (i) requires 

5 approval by a Federal agency, the 

6 transaction may not be consummated 

7 before the 5th calendar day after the 

8 date of approval by the Federal agen9 cy responsible for such approval with 

10 respect thereto. If, in connection with 

11 any such approval, a report on com12 petitive factors is required, the Fed13 eral agency responsible for such ap14 proval shall promptly notify the Attor15 ney General of the proposed trans16 action and the Attorney General shall 

17 provide the required report within 10 

18 days of the request. If a filing is re19 quired under the Hart Scott-Rodino 

20 Antitrust Improvements Act of 1976 

21 with the Department of Justice or the 

22 Federal Trade Commission, the wait23 ing period shall expire not later than 

24 the 30th day following such filing not25 withstanding any other provision of 


wwoods2 on DSK1DXX6B1PROD with BILLS
266 

•HR 3996 IH

1 Federal law or any attempt by any 

2 Federal agency to extend such waiting 

3 period, and no further request for in4 formation by any Federal agency shall 

5 be permitted. 

6 (II) EMERGENCY.—If the Sec7 retary in consultation with the Chair8 man of the Federal Reserve Board 

9 has found that the Corporation must 

10 act immediately to prevent the prob11 able failure of 1 or more of the cov12 ered financial companies involved, the 

13 approvals and filings referred to in 

14 subclause (I) shall not be required 

15 and the transactions may be con16 summated immediately by the Cor17 poration. 

18 (H) PAYMENT OF VALID OBLIGATIONS.— 

19 The Corporation, as receiver or qualified re20 ceiver, shall, to the extent funds are available, 

21 pay all valid obligations of the covered financial 

22 company that are due and payable at the time 

23 of the appointment of the Corporation as re24 ceiver or qualified receiver in accordance with 

25 the prescriptions and limitations of this title. 


wwoods2 on DSK1DXX6B1PROD with BILLS
267 

•HR 3996 IH

1 (I) SUBPOENA AUTHORITY.— 

2 (i) IN GENERAL.—The Corporation 

3 may, for purposes of carrying out any 

4 power, authority, or duty with respect to a 

5 covered financial company (including deter6 mining any claim against the covered fi7 nancial company and determining and real8 izing upon any asset of any person in the 

9 course of collecting money due the covered 

10 financial company), exercise any power es11 tablished under section 8(n) of the Federal 

12 Deposit Insurance Act as if the covered fi13 nancial company were an insured deposi14 tory institution. 

15 (ii) RULE OF CONSTRUCTION.—This 

16 section shall not be construed as limiting 

17 any rights that the Corporation, in any ca18 pacity, might otherwise have to exercise 

19 any powers described in clause (i) under 

20 any other provision of law. 

21 (J) INCIDENTAL POWERS.—The Corpora22 tion, as receiver or qualified receiver, may— 

23 (i) exercise all powers and authorities 

24 specifically granted to receivers or qualified 

25 receivers under this section and such inciVerDate Nov 24 2008 00:06 Nov 20, 2009 Jkt 089200 PO 00000 Frm 00267 Fmt 6652 Sfmt 6201 E:\BILLS\H3996.IH H3996

wwoods2 on DSK1DXX6B1PROD with BILLS
268 

•HR 3996 IH

1 dental powers as shall be necessary to 

2 carry out such powers; and 

3 (ii) take any action authorized by this 

4 section, which the Corporation determines 

5 is in the best interests of the covered fi6 nancial company, its customers, its credi7 tors, its counterparties, or the stability of 

8 the financial system. 

9 (K) UTILIZATION OF PRIVATE SECTOR.— 

10 In carrying out its responsibilities in the man11 agement and disposition of assets from a cov12 ered financial company, the Corporation, as re13 ceiver or qualified receiver, may utilize the serv14 ices of private persons, including real estate and 

15 loan portfolio asset management, property man16 agement, auction marketing, legal, and broker17 age services, if such services are available in the 

18 private sector and the Corporation determines 

19 utilization of such services is practicable, effi20 cient, and cost effective. 

21 (L) SHAREHOLDERS AND CREDITORS OF

22 COVERED FINANCIAL COMPANY.—Notwith23 standing any other provision of law, the Cor24 poration as receiver or qualified receiver for a 

25 covered financial company pursuant to this secVerDate Nov 24 2008 00:06 Nov 20, 2009 Jkt 089200 PO 00000 Frm 00268 Fmt 6652 Sfmt 6201 E:\BILLS\H3996.IH H3996

wwoods2 on DSK1DXX6B1PROD with BILLS
269 

•HR 3996 IH

1 tion and its succession, by operation of law, to 

2 the rights, titles, powers, and privileges de3 scribed in subparagraph (A) shall terminate all 

4 rights and claims that the stockholders and 

5 creditors of the covered financial company may 

6 have against the assets of the covered financial 

7 company or the Corporation arising out of their 

8 status as stockholders or creditors, except for 

9 their right to payment, resolution, or other sat10 isfaction of their claims, as permitted under 

11 this section. The Corporation shall ensure that 

12 shareholders and unsecured creditors bear 

13 losses, consistent with the priority of claims 

14 provision s in section 1609(b). 

15 (M) COORDINATION WITH FOREIGN FINAN16 CIAL AUTHORITIES.—The Corporation as re17 ceiver or qualified receiver for a covered finan18 cial company shall coordinate with the appro19 priate foreign financial authorities regarding 

20 the resolution of subsidiaries of the covered fi21 nancial company that are established in a coun22 try other than the United States. 

23 (2) AUTHORITY OF CORPORATION TO DETER24 MINE CLAIMS.— 


wwoods2 on DSK1DXX6B1PROD with BILLS
270 

•HR 3996 IH

1 (A) IN GENERAL.—The Corporation may, 

2 as receiver, determine claims in accordance with 

3 the requirements of this subsection and regula4 tions prescribed under paragraph (3). 

5 (B) NOTICE REQUIREMENTS.—The re6 ceiver, in any case involving the liquidation or 

7 winding up of the affairs of a covered financial 

8 company, shall— 

9 (i) promptly publish a notice to the 

10 covered financial company’s creditors to 

11 present their claims, together with proof, 

12 to the receiver by a date specified in the 

13 notice which shall be not less than 90 days 

14 after the publication of such notice; and 

15 (ii) republish such notice approxi16 mately 1 month and 2 months, respec17 tively, after the publication under clause 

18 (i). 

19 (C) MAILING REQUIRED.—The receiver 

20 shall mail a notice similar to the notice pub21 lished under subparagraph (B)(i) at the time of 

22 such publication to any creditor shown on the 

23 covered financial company’s books— 

24 (i) at the creditor’s last address ap25 pearing in such books; or 


wwoods2 on DSK1DXX6B1PROD with BILLS
271 

•HR 3996 IH

1 (ii) upon discovery of the name and 

2 address of a claimant not appearing on the 

3 covered financial company’s books, within 

4 30 days after the discovery of such name 

5 and address. 

6 (3) RULEMAKING AUTHORITY RELATING TO DE7 TERMINATION OF CLAIMS.— 

8 (A) IN GENERAL.—Subject to subsection 

9 (b), the Corporation shall prescribe rules and 

10 regulations regarding the allowance or disallow11 ance of claims by the Corporation and providing 

12 for administrative determination of claims and 

13 review of such determination. 

14 (B) EXISTING RULES.—The Corporation 

15 may elect to use the regulations adopted pursu16 ant to the provisions of section 11 of the Fed17 eral Deposit Insurance Act with respect to the 

18 determination of claims for a covered financial 

19 company as if the covered financial company 

20 were an insured depository institution. 

21 (4) PROCEDURES FOR DETERMINATION OF

22 CLAIMS.— 

23 (A) DETERMINATION PERIOD.— 

24 (i) IN GENERAL.—Before the end of 

25 the 180-day period beginning on the date 


wwoods2 on DSK1DXX6B1PROD with BILLS
272 

•HR 3996 IH

1 any claim against a covered financial com2 pany is filed with the Corporation as re3 ceiver, the Corporation shall determine 

4 whether to allow or disallow the claim and 

5 shall notify the claimant of any determina6 tion with respect to such claim. 

7 (ii) EXTENSION OF TIME.—The period 

8 described in clause (i) may be extended by 

9 a written agreement between the claimant 

10 and the Corporation. 

11 (iii) MAILING OF NOTICE SUFFI12 CIENT.—The requirements of clause (i) 

13 shall be deemed to be satisfied if the notice 

14 of any determination with respect to any 

15 claim is mailed to the last address of the 

16 claimant which appears— 

17 (I) on the covered financial com18 pany’s books; 

19 (II) in the claim filed by the 

20 claimant; or 

21 (III) in documents submitted in 

22 proof of the claim. 

23 (iv) CONTENTS OF NOTICE OF DIS24 ALLOWANCE.—If any claim filed under 


wwoods2 on DSK1DXX6B1PROD with BILLS
273 

•HR 3996 IH

1 clause (i) is disallowed, the notice to the 

2 claimant shall contain— 

3 (I) a statement of each reason 

4 for the disallowance; and 

5 (II) the procedures available for 

6 obtaining agency review of the deter7 mination to disallow the claim or judi8 cial determination of the claim. 

9 (B) ALLOWANCE OF PROVEN CLAIM.—The 

10 Corporation shall allow any claim received on or 

11 before the date specified in the notice published 

12 under paragraph (2)(B)(i) by the Corporation 

13 from any claimant which is proved to the satis14 faction of the Corporation. 

15 (C) DISALLOWANCE OF CLAIMS FILED

16 AFTER END OF FILING PERIOD.— 

17 (i) IN GENERAL.—Except as provided 

18 in clause (ii), claims filed after the date 

19 specified in the notice published under 

20 paragraph (2)(B)(i) shall be disallowed 

21 and such disallowance shall be final. 

22 (ii) CERTAIN EXCEPTIONS.—Clause 

23 (i) shall not apply with respect to any 

24 claim filed by any claimant after the date 

25 specified in the notice published under 


wwoods2 on DSK1DXX6B1PROD with BILLS
274 

•HR 3996 IH

1 paragraph (2)(B)(i) and such claim may 

2 be considered by the receiver if— 

3 (I) the claimant did not receive 

4 notice of the appointment of the re5 ceiver in time to file such claim before 

6 such date; and 

7 (II) such claim is filed in time to 

8 permit payment of such claim. 

9 (D) AUTHORITY TO DISALLOW CLAIMS.— 

10 (i) IN GENERAL.—The Corporation 

11 may disallow any portion of any claim by 

12 a creditor or claim of security, preference, 

13 or priority which is not proved to the satis14 faction of the Corporation. 

15 (ii) PAYMENTS TO LESS THAN FULLY

16 SECURED CREDITORS.—In the case of a 

17 claim of a creditor against a covered finan18 cial company which is secured by any prop19 erty or other asset of such covered finan20 cial company, the receiver— 

21 (I) may treat the portion of such 

22 claim which exceeds an amount equal 

23 to the fair market value of such prop24 erty or other asset as an unsecured 


wwoods2 on DSK1DXX6B1PROD with BILLS
275 

•HR 3996 IH

1 claim against the covered financial 

2 company; and 

3 (II) may not make any payment 

4 with respect to such unsecured por5 tion of the claim other than in connec6 tion with the disposition of all claims 

7 of unsecured creditors of the covered 

8 financial company. 

9 (iii) EXCEPTIONS.—No provision of 

10 this paragraph shall apply with respect 

11 to— 

12 (I) any extension of credit from 

13 any Federal Reserve bank, or the Cor14 poration, to any covered financial 

15 company; or 

16 (II) subject to clause (ii), any le17 gally enforceable or perfected security 

18 interest in the assets of the covered fi19 nancial company securing any such 

20 extension of credit. 

21 (E) NO JUDICIAL REVIEW OF DETERMINA22 TION PURSUANT TO SUBPARAGRAPH (D).—No 

23 court may review the Corporation determination 

24 pursuant to subparagraph (D) to disallow a 

25 claim. 


wwoods2 on DSK1DXX6B1PROD with BILLS
276 

•HR 3996 IH

1 (F) LEGAL EFFECT OF FILING.— 

2 (i) STATUTE OF LIMITATION

3 TOLLED.—For purposes of any applicable 

4 statute of limitations, the filing of a claim 

5 with the Corporation shall constitute a 

6 commencement of an action. 

7 (ii) NO PREJUDICE TO OTHER AC8 TIONS.—Subject to paragraph (9), the fil9 ing of a claim with the Corporation shall 

10 not prejudice any right of the claimant to 

11 continue any action which was filed before 

12 the appointment of the Corporation as re13 ceiver for the covered financial company. 

14 (5) PROVISION FOR JUDICIAL DETERMINATION

15 OF CLAIMS.— 

16 (A) IN GENERAL.—Before the end of the 

17 60-day period beginning on the earlier of— 

18 (i) the end of the period described in 

19 paragraph (4)(A)(i) (or, if extended by 

20 agreement of the Corporation and the 

21 claimant, the period described in para22 graph (4)(A)(ii)) with respect to any claim 

23 against a covered financial company for 

24 which the Corporation is receiver; or 


wwoods2 on DSK1DXX6B1PROD with BILLS
277 

•HR 3996 IH

1 (ii) the date of any notice of disallow2 ance of such claim pursuant to paragraph 

3 (4)(A)(i), 

4 the claimant may file suit on a claim (or con5 tinue an action commenced before the appoint6 ment of the receiver) in the district or terri7 torial court of the United States for the district 

8 within which the covered financial company’s 

9 principal place of business is located or the 

10 United States District Court for the District of 

11 Columbia (and such court shall have jurisdic12 tion to hear such claim). 

13 (B) STATUTE OF LIMITATIONS.—If any 

14 claimant fails to file suit on such claim (or con15 tinue an action commenced before the appoint16 ment of the receiver) before the end of the 60- 

17 day period described in subparagraph (A), the 

18 claim shall be deemed to be disallowed (other 

19 than any portion of such claim which was al20 lowed by the receiver) as of the end of such pe21 riod, such disallowance shall be final, and the 

22 claimant shall have no further rights or rem23 edies with respect to such claim. 

24 (6) EXPEDITED DETERMINATION OF CLAIMS.— 


wwoods2 on DSK1DXX6B1PROD with BILLS
278 

•HR 3996 IH

1 (A) ESTABLISHMENT REQUIRED.—The 

2 Corporation shall establish a procedure for ex3 pedited relief outside of the routine claims proc4 ess established under paragraph (4) for claim5 ants who— 

6 (i) allege the existence of legally valid 

7 and enforceable or perfected security inter8 ests in assets of any covered financial com9 pany for which the Corporation has been 

10 appointed as receiver; and 

11 (ii) allege that irreparable injury will 

12 occur if the routine claims procedure is fol13 lowed. 

14 (B) DETERMINATION PERIOD.—Before the 

15 end of the 90-day period beginning on the date 

16 any claim is filed in accordance with the proce17 dures established pursuant to subparagraph 

18 (A), the Corporation shall— 

19 (i) determine— 

20 (I) whether to allow or disallow 

21 such claim; or 

22 (II) whether such claim should be 

23 determined pursuant to the proce24 dures established pursuant to para25 graph (4); and 


wwoods2 on DSK1DXX6B1PROD with BILLS
279 

•HR 3996 IH

1 (ii) notify the claimant of the deter2 mination, and if the claim is disallowed, 

3 provide a statement of each reason for the 

4 disallowance and the procedure for obtain5 ing judicial determination. 

6 (C) PERIOD FOR FILING OR RENEWING

7 SUIT.—Any claimant who files a request for ex8 pedited relief shall be permitted to file a suit, 

9 or to continue such a suit filed before the ap10 pointment of the Corporation as receiver, seek11 ing a determination of the claimant’s rights 

12 with respect to such security interest after the 

13 earlier of— 

14 (i) the end of the 90-day period begin15 ning on the date of the filing of a request 

16 for expedited relief; or 

17 (ii) the date the Corporation denies 

18 the claim. 

19 (D) STATUTE OF LIMITATIONS.—If an ac20 tion described in subparagraph (C) is not filed, 

21 or the motion to renew a previously filed suit is 

22 not made, before the end of the 30-day period 

23 beginning on the date on which such action or 

24 motion may be filed in accordance with sub25 paragraph (B), the claim shall be deemed to be 


wwoods2 on DSK1DXX6B1PROD with BILLS
280 

•HR 3996 IH

1 disallowed as of the end of such period (other 

2 than any portion of such claim which was al3 lowed by the receiver), such disallowance shall 

4 be final, and the claimant shall have no further 

5 rights or remedies with respect to such claim. 

6 (E) LEGAL EFFECT OF FILING.— 

7 (i) STATUTE OF LIMITATION

8 TOLLED.—For purposes of any applicable 

9 statute of limitations, the filing of a claim 

10 with the receiver shall constitute a com11 mencement of an action. 

12 (ii) NO PREJUDICE TO OTHER AC13 TIONS.—Subject to paragraph (9), the fil14 ing of a claim with the receiver shall not 

15 prejudice any right of the claimant to con16 tinue any action which was filed before the 

17 appointment of the Corporation as receiver 

18 for the covered financial company. 

19 (7) AGREEMENTS AGAINST INTEREST OF THE

20 RECEIVER.—No agreement that tends to diminish or 

21 defeat the interest of the Corporation as receiver in 

22 any asset acquired by the receiver under this section 

23 shall be valid against the receiver unless such agree24 ment is in writing and executed by an authorized ofVerDate Nov 24 2008 00:06 Nov 20, 2009 Jkt 089200 PO 00000 Frm 00280 Fmt 6652 Sfmt 6201 E:\BILLS\H3996.IH H3996

wwoods2 on DSK1DXX6B1PROD with BILLS
281 

•HR 3996 IH

1 ficer or representative of the covered financial com2 pany. 

3 (8) PAYMENT OF CLAIMS.— 

4 (A) IN GENERAL.—The Corporation as re5 ceiver may, in its discretion and to the extent 

6 funds are available, pay creditor claims, in such 

7 manner and amounts as are authorized under 

8 this section, which are— 

9 (i) allowed by the receiver; 

10 (ii) approved by the Corporation pur11 suant to a final determination pursuant to 

12 paragraph (6); or 

13 (iii) determined by the final judgment 

14 of any court of competent jurisdiction. 

15 (B) PAYMENT OF DIVIDENDS ON

16 CLAIMS.—The receiver may, in the receiver’s 

17 sole discretion and to the extent otherwise per18 mitted by this section, pay dividends on proven 

19 claims at any time, and no liability shall attach 

20 to the Corporation (in the Corporation’s capac21 ity as receiver), by reason of any such payment, 

22 for failure to pay dividends to a claimant whose 

23 claim is not proved at the time of any such pay24 ment. 


wwoods2 on DSK1DXX6B1PROD with BILLS
282 

•HR 3996 IH

1 (C) RULEMAKING AUTHORITY OF COR2 PORATION.—The Corporation may prescribe 

3 such rules, including definitions of terms, as it 

4 deems appropriate to establish a single uniform 

5 interest rate for, or to make payments of post 

6 insolvency interest to creditors holding proven 

7 claims against the receivership estates of a cov8 ered financial company following satisfaction by 

9 the receiver of the principal amount of all cred10 itor claims. 

11 (9) SUSPENSION OF LEGAL ACTIONS.— 

12 (A) IN GENERAL.—After the appointment 

13 of the Corporation as receiver or qualified re14 ceiver for a covered financial company, the Cor15 poration may request a stay for a period not to 

16 exceed— 

17 (i) 45 days, in the case of any quali18 fied receiver; and 

19 (ii) 90 days, in the case of any re20 ceiver, 

21 in any noncriminal judicial action or proceeding 

22 to which such covered financial company is or 

23 becomes a party. 

24 (B) GRANT OF STAY BY ALL COURTS RE25 QUIRED.—Upon receipt of a request by the CorVerDate Nov 24 2008 00:06 Nov 20, 2009 Jkt 089200 PO 00000 Frm 00282 Fmt 6652 Sfmt 6201 E:\BILLS\H3996.IH H3996

wwoods2 on DSK1DXX6B1PROD with BILLS
283 

•HR 3996 IH

1 poration pursuant to subparagraph (A) for a 

2 stay of any non-criminal judicial action or pro3 ceeding in any court with jurisdiction of such 

4 action or proceeding, the court shall grant such 

5 stay as to all parties. 

6 (10) ADDITIONAL RIGHTS AND DUTIES.— 

7 (A) PRIOR FINAL ADJUDICATION.—The 

8 Corporation shall abide by any final 

9 unappealable judgment of any court of com10 petent jurisdiction which was rendered before 

11 the appointment of the Corporation as receiver 

12 or qualified receiver. 

13 (B) RIGHTS AND REMEDIES OF RE14 CEIVER.—In the event of any appealable judg15 ment, the Corporation as receiver or qualified 

16 receiver shall— 

17 (i) have all the rights and remedies 

18 available to the covered financial company 

19 (before the appointment of the receiver or 

20 qualified receiver under section 1604) and 

21 the Corporation, including but not limited 

22 to removal to Federal court and all appel23 late rights; and 

24 (ii) not be required to post any bond 

25 in order to pursue such remedies. 


wwoods2 on DSK1DXX6B1PROD with BILLS
284 

•HR 3996 IH

1 (C) NO ATTACHMENT OR EXECUTION.—No 

2 attachment or execution may issue by any court 

3 upon assets in the possession of the receiver. 

4 (D) LIMITATION ON JUDICIAL REVIEW.— 

5 Except as otherwise provided in this subsection, 

6 no court shall have jurisdiction over— 

7 (i) any claim or action for payment 

8 from, or any action seeking a determina9 tion of rights with respect to, the assets of 

10 any covered financial company for which 

11 the Corporation has been appointed re12 ceiver, including any assets which the Cor13 poration may acquire from itself as such 

14 receiver; or 

15 (ii) any claim relating to any act or 

16 omission of such covered financial company 

17 or the Corporation as receiver. 

18 (E) DISPOSITION OF ASSETS.—In exer19 cising any right, power, privilege, or authority 

20 as receiver or qualified receiver in connection 

21 with any covered financial company for which 

22 the Corporation is acting as receiver or quali23 fied receiver under this section, the Corporation 

24 shall, to the greatest extent practicable, conduct 

25 its operations in a manner which— 


wwoods2 on DSK1DXX6B1PROD with BILLS
285 

•HR 3996 IH

1 (i) maximizes the net present value 

2 return from the sale or disposition of such 

3 assets; 

4 (ii) minimizes the amount of any loss 

5 realized in the resolution of cases; 

6 (iii) minimizes the cost to the general 

7 fund of the Treasury; 

8 (iv) mitigates the potential for serious 

9 adverse effects to the financial system and 

10 the U.S. economy; 

11 (v) ensures timely and adequate com12 petition and fair and consistent treatment 

13 of offerors; and 

14 (vi) prohibits discrimination on the 

15 basis of race, sex, or ethnic groups in the 

16 solicitation and consideration of offers. 

17 (11) STATUTE OF LIMITATIONS FOR ACTIONS

18 BROUGHT BY RECEIVER.— 

19 (A) IN GENERAL.—Notwithstanding any 

20 provision of any contract, the applicable statute 

21 of limitations with regard to any action brought 

22 by the Corporation as receiver or qualified re23 ceiver shall be— 

24 (i) in the case of any contract claim, 

25 the longer of— 


wwoods2 on DSK1DXX6B1PROD with BILLS
286 

•HR 3996 IH

1 (I) the 6-year period beginning 

2 on the date the claim accrues; or 

3 (II) the period applicable under 

4 State law; and 

5 (ii) in the case of any tort claim, the 

6 longer of— 

7 (I) the 3-year period beginning 

8 on the date the claim accrues; or 

9 (II) the period applicable under 

10 State law. 

11 (B) DETERMINATION OF THE DATE ON

12 WHICH A CLAIM ACCRUES.—For purposes of 

13 subparagraph (A), the date on which the stat14 ute of limitations begins to run on any claim 

15 described in such subparagraph shall be the 

16 later of— 

17 (i) the date of the appointment of the 

18 Corporation as receiver or qualified re19 ceiver under this title; or 

20 (ii) the date on which the cause of ac21 tion accrues. 

22 (C) REVIVAL OF EXPIRED STATE CAUSES

23 OF ACTION.— 

24 (i) IN GENERAL.—In the case of any 

25 tort claim described in clause (ii) for which 


wwoods2 on DSK1DXX6B1PROD with BILLS
287 

•HR 3996 IH

1 the statute of limitation applicable under 

2 State law with respect to such claim has 

3 expired not more than 5 years before the 

4 appointment of the Corporation as receiver 

5 or qualified receiver, the Corporation may 

6 bring an action as receiver or qualified re7 ceiver on such claim without regard to the 

8 expiration of the statute of limitation ap9 plicable under State law. 

10 (ii) CLAIMS DESCRIBED.—A tort 

11 claim referred to in clause (i) is a claim 

12 arising from fraud, intentional misconduct 

13 resulting in unjust enrichment, or inten14 tional misconduct resulting in substantial 

15 loss to the covered financial company. 

16 (12) FRAUDULENT TRANSFERS.— 

17 (A) IN GENERAL.—The Corporation, as re18 ceiver or qualified receiver for any covered fi19 nancial company, may avoid a transfer of any 

20 interest of an institution affiliated party, or any 

21 person who the Corporation determines is a 

22 debtor of the covered financial company, in 

23 property, or any obligation incurred by such 

24 party or person, that was made within 5 years 

25 of the date on which the Corporation was apVerDate Nov 24 2008 00:06 Nov 20, 2009 Jkt 089200 PO 00000 Frm 00287 Fmt 6652 Sfmt 6201 E:\BILLS\H3996.IH H3996

wwoods2 on DSK1DXX6B1PROD with BILLS
288 

•HR 3996 IH

1 pointed receiver or qualified receiver if such 

2 party or person voluntarily or involuntarily 

3 made such transfer or incurred such liability 

4 with the intent to hinder, delay, or defraud the 

5 covered financial company or the Corporation. 

6 (B) RIGHT OF RECOVERY.—To the extent 

7 a transfer is avoided under subparagraph (A), 

8 the Corporation may recover, for the benefit of 

9 the covered financial company, the property 

10 transferred or, if a court so orders, the value of 

11 such property (at the time of such transfer) 

12 from— 

13 (i) the initial transferee of such trans14 fer or the institution-affiliated party or 

15 person for whose benefit such transfer was 

16 made; or 

17 (ii) any immediate or mediate trans18 feree of any such initial transferee. 

19 (C) RIGHTS OF TRANSFEREE OR OBLI20 GEE.—The Corporation may not recover under 

21 subparagraph (B)— 

22 (i) any transfer that takes for value, 

23 including satisfaction or securing of a 

24 present or antecedent debt, in good faith, 

25 or 


wwoods2 on DSK1DXX6B1PROD with BILLS
289 

•HR 3996 IH

1 (ii) any immediate or mediate good 

2 faith transferee of such transferee. 

3 (D) RIGHTS UNDER THIS SUBSECTION.— 

4 The rights of the Corporation as receiver or 

5 qualified receiver of a covered financial com6 pany under this subsection shall be superior to 

7 any rights of a trustee or any other party 

8 (other than any party which is a Federal agen9 cy) under title 11, United States Code. 

10 (E) DEFINITION.—For purposes of this 

11 subsection, the term ‘‘institution affiliated 

12 party’’ means— 

13 (i) any director, officer, employee, or 

14 controlling stockholder of, or agent for, a 

15 covered financial company; 

16 (ii) any shareholder, consultant, joint 

17 venture partner, and any other person as 

18 determined by the Corporation (by regula19 tion or otherwise) who participates in the 

20 conduct of the affairs of a covered finan21 cial company; and 

22 (iii) any independent contractor (in23 cluding any attorney, appraiser, or ac24 countant) who knowingly or recklessly par25 ticipates in— 


wwoods2 on DSK1DXX6B1PROD with BILLS
290 

•HR 3996 IH

1 (I) any violation of any law or 

2 regulation; 

3 (II) any breach of fiduciary duty; 

4 or 

5 (III) any unsafe or unsound 

6 practice, 

7 which caused or is likely to cause more 

8 than a minimal financial loss to, or a sig9 nificant adverse effect on, the covered fi10 nancial company. 

11 (13) ATTACHMENT OF ASSETS AND OTHER IN12 JUNCTIVE RELIEF.—Subject to paragraph (14), any 

13 court of competent jurisdiction may, at the request 

14 of the Corporation, issue an order in accordance 

15 with rule 65 of the Federal Rules of Civil Procedure, 

16 including an order placing the assets of any person 

17 designated by the Corporation under the control of 

18 the court and appointing a trustee to hold such as19 sets. 

20 (14) STANDARDS.— 

21 (A) SHOWING.—Rule 65 of the Federal 

22 Rules of Civil Procedure shall apply with re23 spect to any proceeding under paragraph (13) 

24 without regard to the requirement of such rule 


wwoods2 on DSK1DXX6B1PROD with BILLS
291 

•HR 3996 IH

1 that the applicant show that the injury, loss, or 

2 damage is irreparable and immediate. 

3 (B) STATE PROCEEDING.—If, in the case 

4 of any proceeding in a State court, the court 

5 determines that rules of civil procedure avail6 able under the laws of such State provide sub7 stantially similar protections to such party’s 

8 right to due process as rule 65 (as modified 

9 with respect to such proceeding by subpara10 graph (A)), the relief sought by the Corporation 

11 pursuant to paragraph (14) may be requested 

12 under the laws of such State. 

13 (15) TREATMENT OF CLAIMS ARISING FROM

14 BREACH OF CONTRACTS EXECUTED BY THE COR15 PORATION AS RECEIVER OR QUALIFIED RECEIVER.— 

16 Notwithstanding any other provision of this sub17 section, any final and unappealable judgment for 

18 monetary damages entered against the Corporation 

19 as receiver or qualified receiver for a covered finan20 cial company for the breach of an agreement exe21 cuted or approved by the Corporation after the date 

22 of its appointment shall be paid as an administrative 

23 expense of the receiver or the qualified receiver. 

24 Nothing in this paragraph shall be construed to limit 

25 the power of a receiver or qualified receiver to exerVerDate Nov 24 2008 00:06 Nov 20, 2009 Jkt 089200 PO 00000 Frm 00291 Fmt 6652 Sfmt 6201 E:\BILLS\H3996.IH H3996

wwoods2 on DSK1DXX6B1PROD with BILLS
292 

•HR 3996 IH

1 cise any rights under contract or law, including to 

2 terminate, breach, cancel, or otherwise discontinue 

3 such agreement. 

4 (16) ACCOUNTING AND RECORDKEEPING RE5 QUIREMENTS.— 

6 (A) IN GENERAL.—The Corporation as re7 ceiver or qualified receiver shall, consistent with 

8 the accounting and reporting practices and pro9 cedures established by the Corporation, main10 tain a full accounting of each qualified receiver11 ship, receivership, or other disposition of any 

12 covered financial company. 

13 (B) ANNUAL ACCOUNTING OR REPORT.— 

14 With respect to each receivership or qualified 

15 receivership to which the Corporation was ap16 pointed, the Corporation shall make an annual 

17 accounting or report, as appropriate, available 

18 to the Secretary and the Comptroller General of 

19 the United States. 

20 (C) AVAILABILITY OF REPORTS.—Any re21 port prepared pursuant to subparagraph (B) 

22 shall be made available by the Corporation upon 

23 request to any member of the public. 

24 (D) RECORDKEEPING REQUIREMENT.— 


wwoods2 on DSK1DXX6B1PROD with BILLS
293 

•HR 3996 IH

1 (i) IN GENERAL.—Except as provided 

2 in clause (ii), after the end of the 6-year 

3 period beginning on the date the Corpora4 tion is appointed as receiver of a covered 

5 financial company the Corporation may de6 stroy any records of such covered financial 

7 company which the Corporation, in the 

8 Corporation’s discretion, determines to be 

9 unnecessary unless directed not to do so by 

10 a court of competent jurisdiction or gov11 ernmental agency, or prohibited by law. 

12 (ii) OLD RECORDS.—Notwithstanding 

13 clause (i), the Corporation may destroy 

14 records of a covered financial company 

15 which are at least 10 years old as of the 

16 date on which the Corporation is appointed 

17 as the receiver of such company in accord18 ance with clause (i) at any time after such 

19 appointment is final, without regard to the 

20 6-year period of limitation contained in 

21 clause (i). 

22 (b) PRIORITY OF EXPENSES AND UNSECURED

23 CLAIMS.— 

24 (1) IN GENERAL.—Unsecured claims against a 

25 covered financial company, or the receiver for such 


wwoods2 on DSK1DXX6B1PROD with BILLS
294 

•HR 3996 IH

1 covered financial company under this section, that 

2 are proven to the satisfaction of the receiver shall 

3 have priority in the following order: 

4 (A) Administrative expenses of the re5 ceiver. 

6 (B) Any amounts owed to the United 

7 States, unless the United States agrees or con8 sents otherwise. 

9 (C) Any other general or senior liability of 

10 the covered financial company (which is not a 

11 liability described under subparagraph (D) or 

12 (E)). 

13 (D) Any obligation subordinated to general 

14 creditors (which is not an obligation described 

15 under subparagraph (E)). 

16 (E) Any obligation to shareholders, mem17 bers, general partners, limited partners or other 

18 persons with interests in the equity of the cov19 ered financial company arising as a result of 

20 their status as shareholders, members, general 

21 partners, limited partners or other persons with 

22 interests in the equity of the covered financial 

23 company. 

24 (2) POST-RECEIVERSHIP FINANCING PRI25 ORITY.—In the event that the Corporation as reVerDate Nov 24 2008 00:06 Nov 20, 2009 Jkt 089200 PO 00000 Frm 00294 Fmt 6652 Sfmt 6201 E:\BILLS\H3996.IH H3996

wwoods2 on DSK1DXX6B1PROD with BILLS
295 

•HR 3996 IH

1 ceiver is unable to obtain unsecured credit for the 

2 covered financial company from commercial sources, 

3 the Corporation as receiver may obtain credit or 

4 incur debt on the part of the covered financial com5 pany which shall have priority over any or all admin6 istrative expenses of the receiver under paragraph 

7 (1)(A). 

8 (3) CLAIMS OF THE UNITED STATES.—Unse9 cured claims of the United States shall, at a min10 imum, have a higher priority than liabilities of the 

11 covered financial company that count as regulatory 

12 capital. 

13 (4) CREDITORS SIMILARLY SITUATED.—All 

14 claimants of a covered financial company that are 

15 similarly situated under paragraph (1) shall be 

16 treated in a similar manner, except that the receiver 

17 may take any action (including making payments) 

18 that does not comply with this subsection, if— 

19 (A) the Corporation determines that such 

20 action is necessary to maximize the value of the 

21 assets of the covered financial company, to 

22 maximize the present value return from the sale 

23 or other disposition of the assets of the covered 

24 financial company, to minimize the amount of 

25 any loss realized upon the sale or other disposiVerDate Nov 24 2008 00:06 Nov 20, 2009 Jkt 089200 PO 00000 Frm 00295 Fmt 6652 Sfmt 6201 E:\BILLS\H3996.IH H3996

wwoods2 on DSK1DXX6B1PROD with BILLS
296 

•HR 3996 IH

1 tion of the assets of the covered financial com2 pany, or to contain or address serious adverse 

3 effects on financial stability or the U.S. econ4 omy; and 

5 (B) all claimants that are similarly situ6 ated under paragraph (1) receive not less than 

7 the amount provided in subsection (d)(2). 

8 (5) SECURED CLAIMS UNAFFECTED.—This sub9 section shall not affect secured claims, except to the 

10 extent that the security is insufficient to satisfy the 

11 claim and then only with regard to the difference be12 tween the claim and the amount realized from the 

13 security. 

14 (6) DEFINITIONS.—As used in this subsection, 

15 the term ‘‘administrative expenses of the receiver’’ 

16 includes— 

17 (A) the actual, necessary costs and ex18 penses incurred by the receiver in preserving 

19 the assets of a covered financial company or liq20 uidating or otherwise resolving the affairs of a 

21 covered financial company for which the Cor22 poration has been appointed as receiver; and 

23 (B) any obligations that the receiver deter24 mines are necessary and appropriate to faciliVerDate Nov 24 2008 00:06 Nov 20, 2009 Jkt 089200 PO 00000 Frm 00296 Fmt 6652 Sfmt 6201 E:\BILLS\H3996.IH H3996

wwoods2 on DSK1DXX6B1PROD with BILLS
297 

•HR 3996 IH

1 tate the smooth and orderly liquidation or other 

2 resolution of the covered financial company. 

3 (c) PROVISIONS RELATING TO CONTRACTS ENTERED

4 INTO BEFORE APPOINTMENT OF RECEIVER OR QUALI5 FIED RECEIVER.— 

6 (1) AUTHORITY TO REPUDIATE CONTRACTS.— 

7 In addition to any other rights a receiver or quali8 fied receiver may have, the Corporation as receiver 

9 or qualified receiver for any covered financial com10 pany may disaffirm or repudiate any contract or 

11 lease— 

12 (A) to which the covered financial company 

13 is a party; 

14 (B) the performance of which the receiver 

15 or qualified receiver, in the receiver’s or quali16 fied receiver’s discretion, determines to be bur17 densome; and 

18 (C) the disaffirmance or repudiation of 

19 which the receiver or qualified receiver deter20 mines, in the receiver’s or qualified receiver’s 

21 discretion, will promote the orderly administra22 tion of the covered financial company’s affairs. 

23 (2) TIMING OF REPUDIATION.—The receiver or 

24 qualified receiver appointed for any covered financial 

25 company under section 1604 shall determine whethVerDate Nov 24 2008 00:06 Nov 20, 2009 Jkt 089200 PO 00000 Frm 00297 Fmt 6652 Sfmt 6201 E:\BILLS\H3996.IH H3996

wwoods2 on DSK1DXX6B1PROD with BILLS
298 

•HR 3996 IH

1 er or not to exercise the rights of repudiation under 

2 this subsection within a reasonable period following 

3 such appointment. 

4 (3) CLAIMS FOR DAMAGES FOR REPUDI5 ATION.— 

6 (A) IN GENERAL.—Except as otherwise 

7 provided in subparagraph (C) and paragraphs 

8 (4), (5), and (6), the liability of the receiver or 

9 qualified receiver for the disaffirmance or repu10 diation of any contract pursuant to paragraph 

11 (1) shall be— 

12 (i) limited to actual direct compen13 satory damages; and 

14 (ii) determined as of— 

15 (I) the date of the appointment 

16 of the receiver or qualified receiver; or 

17 (II) in the case of any contract 

18 or agreement referred to in paragraph 

19 (8), the date of the disaffirmance or 

20 repudiation of such contract or agree21 ment. 

22 (B) NO LIABILITY FOR OTHER DAM23 AGES.—For purposes of subparagraph (A), the 

24 term ‘‘actual direct compensatory damages’’ 

25 does not include— 


wwoods2 on DSK1DXX6B1PROD with BILLS
299 

•HR 3996 IH

1 (i) punitive or exemplary damages; 

2 (ii) damages for lost profits or oppor3 tunity; or 

4 (iii) damages for pain and suffering. 

5 (C) MEASURE OF DAMAGES FOR REPUDI6 ATION OF QUALIFIED FINANCIAL CONTRACTS.— 

7 In the case of any qualified financial contract 

8 or agreement to which paragraph (8) applies, 

9 compensatory damages shall be— 

10 (i) deemed to include normal and rea11 sonable costs of cover or other reasonable 

12 measures of damages utilized in the indus13 tries for such contract and agreement 

14 claims; and 

15 (ii) paid in accordance with this sub16 section and subsection (d) except as other17 wise specifically provided in this sub18 section. 

19 (4) LEASES UNDER WHICH THE COVERED FI20 NANCIAL COMPANY IS THE LESSEE.— 

21 (A) IN GENERAL.—If the receiver or quali22 fied receiver disaffirms or repudiates a lease 

23 under which the covered financial company was 

24 the lessee, the receiver or qualified receiver 

25 shall not be liable for any damages (other than 


wwoods2 on DSK1DXX6B1PROD with BILLS
300 

•HR 3996 IH

1 damages determined pursuant to subparagraph 

2 (B)) for the disaffirmance or repudiation of 

3 such lease. 

4 (B) PAYMENTS OF RENT.—Notwith5 standing subparagraph (A), the lessor under a 

6 lease to which such subparagraph applies 

7 shall— 

8 (i) be entitled to the contractual rent 

9 accruing before the later of the date— 

10 (I) the notice of disaffirmance or 

11 repudiation is mailed; or 

12 (II) the disaffirmance or repudi13 ation becomes effective, unless the les14 sor is in default or breach of the 

15 terms of the lease; 

16 (ii) have no claim for damages under 

17 any acceleration clause or other penalty 

18 provision in the lease; and 

19 (iii) have a claim for any unpaid rent, 

20 subject to all appropriate offsets and de21 fenses, due as of the date of the appoint22 ment which shall be paid in accordance 

23 with this subsection and subsection (d). 

24 (5) LEASES UNDER WHICH THE COVERED FI25 NANCIAL COMPANY IS THE LESSOR.— 


wwoods2 on DSK1DXX6B1PROD with BILLS
301 

•HR 3996 IH

1 (A) IN GENERAL.—If the receiver or quali2 fied receiver repudiates an unexpired written 

3 lease of real property of the covered financial 

4 company under which the covered financial 

5 company is the lessor and the lessee is not, as 

6 of the date of such repudiation, in default, the 

7 lessee under such lease may either— 

8 (i) treat the lease as terminated by 

9 such repudiation; or 

10 (ii) remain in possession of the lease11 hold interest for the balance of the term of 

12 the lease unless the lessee defaults under 

13 the terms of the lease after the date of 

14 such repudiation. 

15 (B) PROVISIONS APPLICABLE TO LESSEE

16 REMAINING IN POSSESSION.—If any lessee 

17 under a lease described in subparagraph (A) re18 mains in possession of a leasehold interest pur19 suant to clause (ii) of such subparagraph— 

20 (i) the lessee— 

21 (I) shall continue to pay the con22 tractual rent pursuant to the terms of 

23 the lease after the date of the repudi24 ation of such lease; and 


wwoods2 on DSK1DXX6B1PROD with BILLS
302 

•HR 3996 IH

1 (II) may offset against any rent 

2 payment which accrues after the date 

3 of the repudiation of the lease, any 

4 damages which accrue after such date 

5 due to the nonperformance of any ob6 ligation of the covered financial com7 pany under the lease after such date; 

8 and 

9 (ii) the receiver or qualified receiver 

10 shall not be liable to the lessee for any 

11 damages arising after such date as a result 

12 of the repudiation other than the amount 

13 of any offset allowed under clause (i)(II). 

14 (6) CONTRACTS FOR THE SALE OF REAL PROP15 ERTY.— 

16 (A) IN GENERAL.—If the receiver or quali17 fied receiver repudiates any contract (which 

18 meets the requirements of subsection (a)(7)) for 

19 the sale of real property and the purchaser of 

20 such real property under such contract is in 

21 possession and is not, as of the date of such re22 pudiation, in default, such purchaser may ei23 ther— 

24 (i) treat the contract as terminated by 

25 such repudiation; or 


wwoods2 on DSK1DXX6B1PROD with BILLS
303 

•HR 3996 IH

1 (ii) remain in possession of such real 

2 property. 

3 (B) PROVISIONS APPLICABLE TO PUR4 CHASER REMAINING IN POSSESSION.—If any 

5 purchaser of real property under any contract 

6 described in subparagraph (A) remains in pos7 session of such property pursuant to clause (ii) 

8 of such subparagraph— 

9 (i) the purchaser— 

10 (I) shall continue to make all 

11 payments due under the contract after 

12 the date of the repudiation of the con13 tract; and 

14 (II) may offset against any such 

15 payments any damages which accrue 

16 after such date due to the non17 performance (after such date) of any 

18 obligation of the covered financial 

19 company under the contract; and 

20 (ii) the receiver or qualified receiver 

21 shall— 

22 (I) not be liable to the purchaser 

23 for any damages arising after such 

24 date as a result of the repudiation 


wwoods2 on DSK1DXX6B1PROD with BILLS
304 

•HR 3996 IH

1 other than the amount of any offset 

2 allowed under clause (i)(II); 

3 (II) deliver title to the purchaser 

4 in accordance with the provisions of 

5 the contract; and 

6 (III) have no obligation under 

7 the contract other than the perform8 ance required under subclause (II). 

9 (C) ASSIGNMENT AND SALE ALLOWED.— 

10 (i) IN GENERAL.—No provision of this 

11 paragraph shall be construed as limiting 

12 the right of the receiver or qualified re13 ceiver to assign the contract described in 

14 subparagraph (A) and sell the property 

15 subject to the contract and the provisions 

16 of this paragraph. 

17 (ii) NO LIABILITY AFTER ASSIGNMENT

18 AND SALE.—If an assignment and sale de19 scribed in clause (i) is consummated, the 

20 receiver or qualified receiver shall have no 

21 further liability under the contract de22 scribed in subparagraph (A) or with re23 spect to the real property which was the 

24 subject of such contract. 


wwoods2 on DSK1DXX6B1PROD with BILLS
305 

•HR 3996 IH

1 (7) PROVISIONS APPLICABLE TO SERVICE CON2 TRACTS.— 

3 (A) SERVICES PERFORMED BEFORE AP4 POINTMENT.—In the case of any contract for 

5 services between any person and any covered fi6 nancial company for which the Corporation has 

7 been appointed receiver or qualified receiver, 

8 any claim of such person for services performed 

9 before the appointment of the receiver or quali10 fied receiver shall be— 

11 (i) a claim to be paid in accordance 

12 with subsections (a), (b) and (d); and 

13 (ii) deemed to have arisen as of the 

14 date the receiver or qualified receiver was 

15 appointed. 

16 (B) SERVICES PERFORMED AFTER AP17 POINTMENT AND PRIOR TO REPUDIATION.—If, 

18 in the case of any contract for services de19 scribed in subparagraph (A), the receiver or 

20 qualified receiver accepts performance by the 

21 other person before the receiver or qualified re22 ceiver makes any determination to exercise the 

23 right of repudiation of such contract under this 

24 section— 


wwoods2 on DSK1DXX6B1PROD with BILLS
306 

•HR 3996 IH

1 (i) the other party shall be paid under 

2 the terms of the contract for the services 

3 performed; and 

4 (ii) the amount of such payment shall 

5 be treated as an administrative expense of 

6 the receivership or qualified receivership. 

7 (C) ACCEPTANCE OF PERFORMANCE NO

8 BAR TO SUBSEQUENT REPUDIATION.—The ac9 ceptance by any receiver or qualified receiver of 

10 services referred to in subparagraph (B) in con11 nection with a contract described in such sub12 paragraph shall not affect the right of the re13 ceiver or qualified receiver to repudiate such 

14 contract under this section at any time after 

15 such performance. 

16 (8) CERTAIN QUALIFIED FINANCIAL CON17 TRACTS.— 

18 (A) RIGHTS OF PARTIES TO CONTRACTS.— 

19 Subject to paragraphs (9) and (10) of this sub20 section and notwithstanding any other provision 

21 of this section (other than subsection (a)(7)), 

22 any other Federal law, or the law of any State, 

23 no person shall be stayed or prohibited from ex24 ercising— 


wwoods2 on DSK1DXX6B1PROD with BILLS
307 

•HR 3996 IH

1 (i) any right such person has to cause 

2 the termination, liquidation, or acceleration 

3 of any qualified financial contract with a 

4 covered financial company which arises 

5 upon the appointment of the Corporation 

6 as receiver for such covered financial com7 pany at any time after such appointment; 

8 (ii) any right under any security 

9 agreement or arrangement or other credit 

10 enhancement related to one or more quali11 fied financial contracts described in clause 

12 (i); and 

13 (iii) any right to offset or net out any 

14 termination value, payment amount, or 

15 other transfer obligation arising under or 

16 in connection with 1 or more contracts and 

17 agreements described in clause (i), includ18 ing any master agreement for such con19 tracts or agreements. 

20 (B) APPLICABILITY OF OTHER PROVI21 SIONS.—Subsection (a)(9) shall apply in the 

22 case of any judicial action or proceeding 

23 brought against any receiver referred to in sub24 paragraph (A), or the covered financial com25 pany for which such receiver was appointed, by 


wwoods2 on DSK1DXX6B1PROD with BILLS
308 

•HR 3996 IH

1 any party to a contract or agreement described 

2 in subparagraph (A)(i) with such company. 

3 (C) CERTAIN TRANSFERS NOT AVOID4 ABLE.— 

5 (i) IN GENERAL.—Notwithstanding 

6 paragraph (11), section 5242 of the Re7 vised Statutes of the United States or any 

8 other provision of Federal or State law re9 lating to the avoidance of preferential or 

10 fraudulent transfers, the Corporation, 

11 whether acting as such or as receiver or 

12 qualified receiver of a covered financial 

13 company, may not avoid any transfer of 

14 money or other property in connection with 

15 any qualified financial contract with a cov16 ered financial company. 

17 (ii) EXCEPTION FOR CERTAIN TRANS18 FERS.—Clause (i) shall not apply to any 

19 transfer of money or other property in con20 nection with any qualified financial con21 tract with a covered financial company if 

22 the Corporation determines that the trans23 feree had actual intent to hinder, delay, or 

24 defraud such company, the creditors of 


wwoods2 on DSK1DXX6B1PROD with BILLS
309 

•HR 3996 IH

1 such company, or any receiver or qualified 

2 receiver appointed for such company. 

3 (D) CERTAIN CONTACTS AND AGREE4 MENTS DEFINED.—For purposes of this sub5 section, the following definitions shall apply: 

6 (i) QUALIFIED FINANCIAL CON7 TRACT.—The term ‘‘qualified financial 

8 contract’’ means any securities contract, 

9 commodity contract, forward contract, re10 purchase agreement, swap agreement, and 

11 any similar agreement that the Corpora12 tion determines by regulation, resolution, 

13 or order to be a qualified financial contract 

14 for purposes of this paragraph. 

15 (ii) SECURITIES CONTRACT.—The 

16 term ‘‘securities contract’’— 

17 (I) means a contract for the pur18 chase, sale, or loan of a security, a 

19 certificate of deposit, a mortgage loan, 

20 any interest in a mortgage loan, a 

21 group or index of securities, certifi22 cates of deposit, or mortgage loans or 

23 interests therein (including any inter24 est therein or based on the value 

25 thereof) or any option on any of the 


wwoods2 on DSK1DXX6B1PROD with BILLS
310 

•HR 3996 IH

1 foregoing, including any option to 

2 purchase or sell any such security, 

3 certificate of deposit, mortgage loan, 

4 interest, group or index, or option, 

5 and including any repurchase or re6 verse repurchase transaction on any 

7 such security, certificate of deposit, 

8 mortgage loan, interest, group or 

9 index, or option (whether or not such 

10 repurchase or reverse repurchase 

11 transaction is a ‘‘repurchase agree12 ment,’’ as defined in clause (v)); 

13 (II) does not include any pur14 chase, sale, or repurchase obligation 

15 under a participation in a commercial 

16 mortgage loan unless the Corporation 

17 determines by regulation, resolution, 

18 or order to include any such agree19 ment within the meaning of such 

20 term; 

21 (III) means any option entered 

22 into on a national securities exchange 

23 relating to foreign currencies; 

24 (IV) means the guarantee (in25 cluding by novation) by or to any seVerDate Nov 24 2008 00:06 Nov 20, 2009 Jkt 089200 PO 00000 Frm 00310 Fmt 6652 Sfmt 6201 E:\BILLS\H3996.IH H3996

wwoods2 on DSK1DXX6B1PROD with BILLS
311 

•HR 3996 IH

1 curities clearing agency of any settle2 ment of cash, securities, certificates of 

3 deposit, mortgage loans or interests 

4 therein, group or index of securities, 

5 certificates of deposit or mortgage 

6 loans or interests therein (including 

7 any interest therein or based on the 

8 value thereof) or option on any of the 

9 foregoing, including any option to 

10 purchase or sell any such security, 

11 certificate of deposit, mortgage loan, 

12 interest, group or index, or option 

13 (whether or not such settlement is in 

14 connection with any agreement or 

15 transaction referred to in subclauses 

16 (I) through (XII) (other than sub17 clause (II)); 

18 (V) means any margin loan; 

19 (VI) means any extension of 

20 credit for the clearance or settlement 

21 of securities transactions; 

22 (VII) means any loan transaction 

23 coupled with a securities collar trans24 action, any prepaid securities forward 

25 transaction, or any total return swap 


wwoods2 on DSK1DXX6B1PROD with BILLS
312 

•HR 3996 IH

1 transaction coupled with a securities 

2 sale transaction; 

3 (VIII) means any other agree4 ment or transaction that is similar to 

5 any agreement or transaction referred 

6 to in this clause; 

7 (IX) means any combination of 

8 the agreements or transactions re9 ferred to in this clause; 

10 (X) means any option to enter 

11 into any agreement or transaction re12 ferred to in this clause; 

13 (XI) means a master agreement 

14 that provides for an agreement or 

15 transaction referred to in subclause 

16 (I), (III), (IV), (V), (VI), (VII), 

17 (VIII), (IX), or (X), together with all 

18 supplements to any such master 

19 agreement, without regard to whether 

20 the master agreement provides for an 

21 agreement or transaction that is not a 

22 securities contract under this clause, 

23 except that the master agreement 

24 shall be considered to be a securities 

25 contract under this clause only with 


wwoods2 on DSK1DXX6B1PROD with BILLS
313 

•HR 3996 IH

1 respect to each agreement or trans2 action under the master agreement 

3 that is referred to in subclause (I), 

4 (III), (IV), (V), (VI), (VII), (VIII), 

5 (IX), or (X); and 

6 (XII) means any security agree7 ment or arrangement or other credit 

8 enhancement related to any agree9 ment or transaction referred to in this 

10 clause, including any guarantee or re11 imbursement obligation in connection 

12 with any agreement or transaction re13 ferred to in this clause. 

14 (iii) COMMODITY CONTRACT.—The 

15 term ‘‘commodity contract’’ means— 

16 (I) with respect to a futures com17 mission merchant, a contract for the 

18 purchase or sale of a commodity for 

19 future delivery on, or subject to the 

20 rules of, a contract market or board 

21 of trade; 

22 (II) with respect to a foreign fu23 tures commission merchant, a foreign 

24 future; 


wwoods2 on DSK1DXX6B1PROD with BILLS
314 

•HR 3996 IH

1 (III) with respect to a leverage 

2 transaction merchant, a leverage 

3 transaction; 

4 (IV) with respect to a clearing 

5 organization, a contract for the pur6 chase or sale of a commodity for fu7 ture delivery on, or subject to the 

8 rules of, a contract market or board 

9 of trade that is cleared by such clear10 ing organization, or commodity option 

11 traded on, or subject to the rules of, 

12 a contract market or board of trade 

13 that is cleared by such clearing orga14 nization; 

15 (V) with respect to a commodity 

16 options dealer, a commodity option; 

17 (VI) any other agreement or 

18 transaction that is similar to any 

19 agreement or transaction referred to 

20 in this clause; 

21 (VII) any combination of the 

22 agreements or transactions referred to 

23 in this clause; 


wwoods2 on DSK1DXX6B1PROD with BILLS
315 

•HR 3996 IH

1 (VIII) any option to enter into 

2 any agreement or transaction referred 

3 to in this clause; 

4 (IX) a master agreement that 

5 provides for an agreement or trans6 action referred to in subclause (I), 

7 (II), (III), (IV), (V), (VI), (VII), or 

8 (VIII), together with all supplements 

9 to any such master agreement, with10 out regard to whether the master 

11 agreement provides for an agreement 

12 or transaction that is not a com13 modity contract under this clause, ex14 cept that the master agreement shall 

15 be considered to be a commodity con16 tract under this clause only with re17 spect to each agreement or trans18 action under the master agreement 

19 that is referred to in subclause (I), 

20 (II), (III), (IV), (V), (VI), (VII), or 

21 (VIII); or 

22 (X) any security agreement or 

23 arrangement or other credit enhance24 ment related to any agreement or 

25 transaction referred to in this clause, 


wwoods2 on DSK1DXX6B1PROD with BILLS
316 

•HR 3996 IH

1 including any guarantee or reimburse2 ment obligation in connection with 

3 any agreement or transaction referred 

4 to in this clause. 

5 (iv) FORWARD CONTRACT.—The term 

6 ‘‘forward contract’’ means— 

7 (I) a contract (other than a com8 modity contract) for the purchase, 

9 sale, or transfer of a commodity or 

10 any similar good, article, service, 

11 right, or interest which is presently or 

12 in the future becomes the subject of 

13 dealing in the forward contract trade, 

14 or product or byproduct thereof, with 

15 a maturity date more than 2 days 

16 after the date the contract is entered 

17 into, including a repurchase or reverse 

18 repurchase transaction (whether or 

19 not such repurchase or reverse repur20 chase transaction is a ‘‘repurchase 

21 agreement’’, as defined in clause (v)), 

22 consignment, lease, swap, hedge 

23 transaction, deposit, loan, option, allo24 cated transaction, unallocated transVerDate Nov 24 2008 00:06 Nov 20, 2009 Jkt 089200 PO 00000 Frm 00316 Fmt 6652 Sfmt 6201 E:\BILLS\H3996.IH H3996

wwoods2 on DSK1DXX6B1PROD with BILLS
317 

•HR 3996 IH

1 action, or any other similar agree2 ment; 

3 (II) any combination of agree4 ments or transactions referred to in 

5 subclauses (I) and (III); 

6 (III) any option to enter into any 

7 agreement or transaction referred to 

8 in subclause (I) or (II); 

9 (IV) a master agreement that 

10 provides for an agreement or trans11 action referred to in subclauses (I), 

12 (II), or (III), together with all supple13 ments to any such master agreement, 

14 without regard to whether the master 

15 agreement provides for an agreement 

16 or transaction that is not a forward 

17 contract under this clause, except that 

18 the master agreement shall be consid19 ered to be a forward contract under 

20 this clause only with respect to each 

21 agreement or transaction under the 

22 master agreement that is referred to 

23 in subclause (I), (II), or (III); or 

24 (V) any security agreement or ar25 rangement or other credit enhanceVerDate Nov 24 2008 00:06 Nov 20, 2009 Jkt 089200 PO 00000 Frm 00317 Fmt 6652 Sfmt 6201 E:\BILLS\H3996.IH H3996

wwoods2 on DSK1DXX6B1PROD with BILLS
318 

•HR 3996 IH

1 ment related to any agreement or 

2 transaction referred to in subclause 

3 (I), (II), (III), or (IV), including any 

4 guarantee or reimbursement obliga5 tion in connection with any agreement 

6 or transaction referred to in any such 

7 subclause. 

8 (v) REPURCHASE AGREEMENT.—The 

9 term ‘‘repurchase agreement’’ (which defi10 nition also applies to a reverse repurchase 

11 agreement)— 

12 (I) means an agreement, includ13 ing related terms, which provides for 

14 the transfer of one or more certifi15 cates of deposit, mortgage-related se16 curities (as such term is defined in 

17 the Securities Exchange Act of 1934), 

18 mortgage loans, interests in mortgage19 related securities or mortgage loans, 

20 eligible bankers’ acceptances, qualified 

21 foreign government securities (which 

22 for purposes of this clause shall mean 

23 a security that is a direct obligation 

24 of, or that is fully guaranteed by, the 

25 central government of a member of 


wwoods2 on DSK1DXX6B1PROD with BILLS
319 

•HR 3996 IH

1 the Organization for Economic Co2 operation and Development as deter3 mined by regulation or order adopted 

4 by the Federal Reserve Board) or se5 curities that are direct obligations of, 

6 or that are fully guaranteed by, the 

7 United States or any agency of the 

8 United States against the transfer of 

9 funds by the transferee of such certifi10 cates of deposit, eligible bankers’ ac11 ceptances, securities, mortgage loans, 

12 or interests with a simultaneous 

13 agreement by such transferee to 

14 transfer to the transferor thereof cer15 tificates of deposit, eligible bankers’ 

16 acceptances, securities, mortgage 

17 loans, or interests as described above, 

18 at a date certain not later than 1 year 

19 after such transfers or on demand, 

20 against the transfer of funds, or any 

21 other similar agreement; 

22 (II) does not include any repur23 chase obligation under a participation 

24 in a commercial mortgage loan unless 

25 the Corporation determines by regulaVerDate Nov 24 2008 00:06 Nov 20, 2009 Jkt 089200 PO 00000 Frm 00319 Fmt 6652 Sfmt 6201 E:\BILLS\H3996.IH H3996

wwoods2 on DSK1DXX6B1PROD with BILLS
320 

•HR 3996 IH

1 tion, resolution, or order to include 

2 any such participation within the 

3 meaning of such term; 

4 (III) means any combination of 

5 agreements or transactions referred to 

6 in subclauses (I) and (IV); 

7 (IV) means any option to enter 

8 into any agreement or transaction re9 ferred to in subclause (I) or (III); 

10 (V) means a master agreement 

11 that provides for an agreement or 

12 transaction referred to in subclause 

13 (I), (III), or (IV), together with all 

14 supplements to any such master 

15 agreement, without regard to whether 

16 the master agreement provides for an 

17 agreement or transaction that is not a 

18 repurchase agreement under this 

19 clause, except that the master agree20 ment shall be considered to be a re21 purchase agreement under this sub22 clause only with respect to each agree23 ment or transaction under the master 

24 agreement that is referred to in sub25 clause (I), (III), or (IV); and 


wwoods2 on DSK1DXX6B1PROD with BILLS
321 

•HR 3996 IH

1 (VI) means any security agree2 ment or arrangement or other credit 

3 enhancement related to any agree4 ment or transaction referred to in 

5 subclause (I), (III), (IV), or (V), in6 cluding any guarantee or reimburse7 ment obligation in connection with 

8 any agreement or transaction referred 

9 to in any such subclause. 

10 (vi) SWAP AGREEMENT.—The term 

11 ‘‘swap agreement’’ means— 

12 (I) any agreement, including the 

13 terms and conditions incorporated by 

14 reference in any such agreement, 

15 which is an interest rate swap, option, 

16 future, or forward agreement, includ17 ing a rate floor, rate cap, rate collar, 

18 cross-currency rate swap, and basis 

19 swap; a spot, same day-tomorrow, to20 morrow-next, forward, or other for21 eign exchange, precious metals, or 

22 other commodity agreement; a cur23 rency swap, option, future, or forward 

24 agreement; an equity index or equity 

25 swap, option, future, or forward 


wwoods2 on DSK1DXX6B1PROD with BILLS
322 

•HR 3996 IH

1 agreement; a debt index or debt swap, 

2 option, future, or forward agreement; 

3 a total return, credit spread or credit 

4 swap, option, future, or forward 

5 agreement; a commodity index or 

6 commodity swap, option, future, or 

7 forward agreement; weather swap, op8 tion, future, or forward agreement; an 

9 emissions swap, option, future, or for10 ward agreement; or an inflation swap, 

11 option, future, or forward agreement; 

12 (II) any agreement or transaction 

13 that is similar to any other agreement 

14 or transaction referred to in this 

15 clause and that is of a type that has 

16 been, is presently, or in the future be17 comes, the subject of recurrent deal18 ings in the swap or other derivatives 

19 markets (including terms and condi20 tions incorporated by reference in 

21 such agreement) and that is a for22 ward, swap, future, option or spot 

23 transaction on one or more rates, cur24 rencies, commodities, equity securities 

25 or other equity instruments, debt seVerDate Nov 24 2008 00:06 Nov 20, 2009 Jkt 089200 PO 00000 Frm 00322 Fmt 6652 Sfmt 6201 E:\BILLS\H3996.IH H3996

wwoods2 on DSK1DXX6B1PROD with BILLS
323 

•HR 3996 IH

1 curities or other debt instruments, 

2 quantitative measures associated with 

3 an occurrence, extent of an occur4 rence, or contingency associated with 

5 a financial, commercial, or economic 

6 consequence, or economic or financial 

7 indices or measures of economic or fi8 nancial risk or value; 

9 (III) any combination of agree10 ments or transactions referred to in 

11 this clause; 

12 (IV) any option to enter into any 

13 agreement or transaction referred to 

14 in this clause; 

15 (V) a master agreement that pro16 vides for an agreement or transaction 

17 referred to in subclause (I), (II), (III), 

18 or (IV), together with all supplements 

19 to any such master agreement, with20 out regard to whether the master 

21 agreement contains an agreement or 

22 transaction that is not a swap agree23 ment under this clause, except that 

24 the master agreement shall be consid25 ered to be a swap agreement under 


wwoods2 on DSK1DXX6B1PROD with BILLS
324 

•HR 3996 IH

1 this clause only with respect to each 

2 agreement or transaction under the 

3 master agreement that is referred to 

4 in subclause (I), (II), (III), or (IV); 

5 and 

6 (VI) any security agreement or 

7 arrangement or other credit enhance8 ment related to any agreements or 

9 transactions referred to in subclause 

10 (I), (II), (III), (IV), or (V), including 

11 any guarantee or reimbursement obli12 gation in connection with any agree13 ment or transaction referred to in any 

14 such subclause. 

15 (vii) DEFINITIONS RELATING TO DE16 FAULT.—When used in this paragraph and 

17 paragraph (10)— 

18 (I) The term ‘‘default’’ shall 

19 mean, with respect to a covered finan20 cial company, any adjudication or 

21 other official determination by any 

22 court of competent jurisdiction, or 

23 other public authority pursuant to 

24 which a conservator, receiver, or other 

25 legal custodian is appointed; and 


wwoods2 on DSK1DXX6B1PROD with BILLS
325 

•HR 3996 IH

1 (II) The term ‘‘in danger of de2 fault’’ shall mean a covered financial 

3 company with respect to which the 

4 Corporation or appropriate State au5 thority has determined that— 

6 (aa) in the opinion of the 

7 Corporation or such authority— 

8 (AA) the covered finan9 cial company is not likely to 

10 be able to pay its obligations 

11 in the normal course of busi12 ness; and 

13 (BB) there is no rea14 sonable prospect that the 

15 covered financial company 

16 will be able to pay such obli17 gations without Federal as18 sistance; or 

19 (CC) in the opinion of 

20 the Corporation or such au21 thority— 

22 (bb) the covered financial 

23 company has incurred or is likely 

24 to incur losses that will deplete 


wwoods2 on DSK1DXX6B1PROD with BILLS
326 

•HR 3996 IH

1 all or substantially all of its cap2 ital; and 

3 (cc) there is no reasonable 

4 prospect that the capital will be 

5 replenished without Federal as6 sistance. 

7 (viii) TREATMENT OF MASTER AGREE8 MENT AS ONE AGREEMENT.—Any master 

9 agreement for any contract or agreement 

10 described in any preceding clause of this 

11 subparagraph (or any master agreement 

12 for such master agreement or agreements), 

13 together with all supplements to such mas14 ter agreement, shall be treated as a single 

15 agreement and a single qualified financial 

16 contact. If a master agreement contains 

17 provisions relating to agreements or trans18 actions that are not themselves qualified fi19 nancial contracts, the master agreement 

20 shall be deemed to be a qualified financial 

21 contract only with respect to those trans22 actions that are themselves qualified finan23 cial contracts. 

24 (ix) TRANSFER.—The term ‘‘transfer’’ 

25 means every mode, direct or indirect, absoVerDate Nov 24 2008 00:06 Nov 20, 2009 Jkt 089200 PO 00000 Frm 00326 Fmt 6652 Sfmt 6201 E:\BILLS\H3996.IH H3996

wwoods2 on DSK1DXX6B1PROD with BILLS
327 

•HR 3996 IH

1 lute or conditional, voluntary or involun2 tary, of disposing of or parting with prop3 erty or with an interest in property, includ4 ing retention of title as a security interest 

5 and foreclosure of the covered financial 

6 company’s equity of redemption. 

7 (x) PERSON.—The term ‘‘person’’ in8 cludes any governmental entity in addition 

9 to any entity included in the definition of 

10 such term in section 1, title 1, United 

11 States Code. 

12 (E) CERTAIN PROTECTIONS IN EVENT OF

13 APPOINTMENT OF QUALIFIED RECEIVER.—Not14 withstanding any other provision of this section 

15 (other than paragraph (10) of this subsection 

16 and subsection (a)(7) of this section), any other 

17 Federal law, or the law of any State, no person 

18 shall be stayed or prohibited from exercising— 

19 (i) any right such person has to cause 

20 the termination, liquidation, or acceleration 

21 of any qualified financial contract with a 

22 covered financial company in a qualified 

23 receivership based upon a default under 

24 such financial contract which is enforceable 

25 under applicable noninsolvency law; 


wwoods2 on DSK1DXX6B1PROD with BILLS
328 

•HR 3996 IH

1 (ii) any right under any security 

2 agreement or arrangement or other credit 

3 enhancement related to one or more quali4 fied financial contracts described in clause 

5 (i); or 

6 (iii) any right to offset or net out any 

7 termination values, payment amounts, or 

8 other transfer obligations arising under or 

9 in connection with such qualified financial 

10 contracts. 

11 (F) CLARIFICATION.—No provision of law 

12 shall be construed as limiting the right or 

13 power of the Corporation, or authorizing any 

14 court or agency to limit or delay, in any man15 ner, the right or power of the Corporation to 

16 transfer any qualified financial contract in ac17 cordance with paragraphs (9) and (10) of this 

18 subsection or to disaffirm or repudiate any such 

19 contract in accordance with subsection (c)(1) of 

20 this section. 

21 (G) WALKAWAY CLAUSES NOT EFFEC22 TIVE.— 

23 (i) IN GENERAL.—Notwithstanding 

24 the provisions of subparagraphs (A) and 

25 (E) and sections 403 and 404 of the FedVerDate Nov 24 2008 00:06 Nov 20, 2009 Jkt 089200 PO 00000 Frm 00328 Fmt 6652 Sfmt 6201 E:\BILLS\H3996.IH H3996

wwoods2 on DSK1DXX6B1PROD with BILLS
329 

•HR 3996 IH

1 eral Deposit Insurance Corporation Im2 provement Act of 1991, no walkaway 

3 clause shall be enforceable in a qualified fi4 nancial contract of a covered financial 

5 company in default. 

6 (ii) LIMITED SUSPENSION OF CERTAIN

7 OBLIGATIONS.—In the case of a qualified 

8 financial contract referred to in clause (i), 

9 any payment or delivery obligations other10 wise due from a party pursuant to the 

11 qualified financial contract shall be sus12 pended from the time the receiver is ap13 pointed until the earlier of— 

14 (I) the time such party receives 

15 notice that such contract has been 

16 transferred pursuant to paragraph 

17 (10)(A); or 

18 (II) 5:00 p.m. (eastern time) on 

19 the business day following the date of 

20 the appointment of the receiver. 

21 (iii) WALKAWAY CLAUSE DEFINED.— 

22 For purposes of this subparagraph, the 

23 term ‘‘walkaway clause’’ means any provi24 sion in a qualified financial contract that 

25 suspends, conditions, or extinguishes a 


wwoods2 on DSK1DXX6B1PROD with BILLS
330 

•HR 3996 IH

1 payment obligation of a party, in whole or 

2 in part, or does not create a payment obli3 gation of a party that would otherwise 

4 exist, solely because of such party’s status 

5 as a nondefaulting party in connection 

6 with the insolvency of a covered financial 

7 company that is a party to the contract or 

8 the appointment of or the exercise of rights 

9 or powers by a receiver or qualified re10 ceiver of such covered financial company, 

11 and not as a result of a party’s exercise of 

12 any right to offset, setoff, or net obliga13 tions that exist under the contract, any 

14 other contract between those parties, or 

15 applicable law. 

16 (H) RECORDKEEPING.—The Corporation, 

17 in consultation with the Federal Reserve Board, 

18 may prescribe regulations requiring that the 

19 covered financial company maintain such 

20 records with respect to qualified financial con21 tracts (including market valuations) as the Cor22 poration determines to be necessary or appro23 priate in order to assist the receiver or qualified 

24 receiver of the covered financial company in 

25 being able to exercise its rights and fulfill its 


wwoods2 on DSK1DXX6B1PROD with BILLS
331 

•HR 3996 IH

1 obligations under this paragraph or paragraph 

2 (9) or (10). 

3 (9) TRANSFER OF QUALIFIED FINANCIAL CON4 TRACTS.— 

5 (A) IN GENERAL.—In making any transfer 

6 of assets or liabilities of a covered financial 

7 company in default which includes any qualified 

8 financial contract, the receiver or qualified re9 ceiver for such covered financial company shall 

10 either— 

11 (i) transfer to one financial institu12 tion, other than a financial institution for 

13 which a conservator, receiver, trustee in 

14 bankruptcy, or other legal custodian has 

15 been appointed or which is otherwise the 

16 subject of a bankruptcy or insolvency pro17 ceeding— 

18 (I) all qualified financial con19 tracts between any person or any af20 filiate of such person and the covered 

21 financial company in default; 

22 (II) all claims of such person or 

23 any affiliate of such person against 

24 such covered financial company under 

25 any such contract (other than any 


wwoods2 on DSK1DXX6B1PROD with BILLS
332 

•HR 3996 IH

1 claim which, under the terms of any 

2 such contract, is subordinated to the 

3 claims of general unsecured creditors 

4 of such company); 

5 (III) all claims of such covered fi6 nancial company against such person 

7 or any affiliate of such person under 

8 any such contract; and 

9 (IV) all property securing or any 

10 other credit enhancement for any con11 tract described in subclause (I) or any 

12 claim described in subclause (II) or 

13 (III) under any such contract; or 

14 (ii) transfer none of the qualified fi15 nancial contracts, claims, property or other 

16 credit enhancement referred to in clause (i) 

17 (with respect to such person and any affil18 iate of such person). 

19 (B) TRANSFER TO FOREIGN BANK, FINAN20 CIAL INSTITUTION, OR BRANCH OR AGENCY

21 THEREOF.—In transferring any qualified finan22 cial contracts and related claims and property 

23 under subparagraph (A)(i), the receiver or 

24 qualified receiver for the covered financial com25 pany shall not make such transfer to a foreign 


wwoods2 on DSK1DXX6B1PROD with BILLS
333 

•HR 3996 IH

1 bank, financial institution organized under the 

2 laws of a foreign country, or a branch or agency 

3 of a foreign bank or financial institution unless, 

4 under the law applicable to such bank, financial 

5 institution, branch or agency, to the qualified 

6 financial contracts, and to any netting contract, 

7 any security agreement or arrangement or other 

8 credit enhancement related to one or more 

9 qualified financial contracts, the contractual 

10 rights of the parties to such qualified financial 

11 contracts, netting contracts, security agree12 ments or arrangements, or other credit en13 hancements are enforceable substantially to the 

14 same extent as permitted under this section. 

15 (C) TRANSFER OF CONTRACTS SUBJECT

16 TO THE RULES OF A CLEARING ORGANIZA17 TION.—In the event that a receiver or qualified 

18 receiver transfers any qualified financial con19 tract and related claims, property, and credit 

20 enhancements pursuant to subparagraph (A)(i) 

21 and such contract is cleared by or subject to the 

22 rules of a clearing organization, the clearing or23 ganization shall not be required to accept the 

24 transferee as a member by virtue of the trans25 fer. 


wwoods2 on DSK1DXX6B1PROD with BILLS
334 

•HR 3996 IH

1 (D) DEFINITIONS.—For purposes of this 

2 paragraph, the term ‘‘financial institution’’ 

3 means a broker or dealer, a depository institu4 tion, a futures commission merchant, a bridge 

5 financial company, or any other institution de6 termined by the Corporation by regulation to be 

7 a financial institution, and the term ‘‘clearing 

8 organization’’ has the same meaning as in sec9 tion 402 of the Federal Deposit Insurance Cor10 poration Improvement Act of 1991. 

11 (10) NOTIFICATION OF TRANSFER.— 

12 (A) IN GENERAL.—If— 

13 (i) the receiver or qualified receiver 

14 for a covered financial company in default 

15 or in danger of default transfers any assets 

16 and liabilities of the covered financial com17 pany; and 

18 (ii) the transfer includes any qualified 

19 financial contract, 

20 the receiver or qualified receiver shall notify any 

21 person who is a party to any such contract of 

22 such transfer by 5:00 p.m. (eastern time) on 

23 the business day following the date of the ap24 pointment of the receiver in the case of a reVerDate Nov 24 2008 00:06 Nov 20, 2009 Jkt 089200 PO 00000 Frm 00334 Fmt 6652 Sfmt 6201 E:\BILLS\H3996.IH H3996

wwoods2 on DSK1DXX6B1PROD with BILLS
335 

•HR 3996 IH

1 ceivership, or the business day following such 

2 transfer in the case of a qualified receivership. 

3 (B) CERTAIN RIGHTS NOT ENFORCE4 ABLE.— 

5 (i) RECEIVERSHIP.—A person who is 

6 a party to a qualified financial contract 

7 with a covered financial company may not 

8 exercise any right that such person has to 

9 terminate, liquidate, or net such contract 

10 under paragraph (8)(A) of this subsection 

11 solely by reason of or incidental to the ap12 pointment under this section of a receiver 

13 for the covered financial company (or the 

14 insolvency or financial condition of the cov15 ered financial company for which the re16 ceiver has been appointed)— 

17 (I) until 5:00 p.m. (eastern time) 

18 on the business day following the date 

19 of the appointment of the receiver; or 

20 (II) after the person has received 

21 notice that the contract has been 

22 transferred pursuant to paragraph 

23 (9)(A). 

24 (ii) QUALIFIED RECEIVERSHIP.—A 

25 person who is a party to a qualified finanVerDate Nov 24 2008 00:06 Nov 20, 2009 Jkt 089200 PO 00000 Frm 00335 Fmt 6652 Sfmt 6201 E:\BILLS\H3996.IH H3996

wwoods2 on DSK1DXX6B1PROD with BILLS
336 

•HR 3996 IH

1 cial contract with a covered financial com2 pany may not exercise any right such per3 son has to terminate, liquidate, or net such 

4 contract under paragraph (8)(E) of this 

5 subsection or section 403 of Federal De6 posit Insurance Corporation Improvement 

7 Act of 1991 solely by reason of or inci8 dental to the appointment under this sec9 tion of a qualified receiver for the covered 

10 financial company (or the insolvency or fi11 nancial condition of the covered financial 

12 company for which the qualified receiver 

13 has been appointed). 

14 (iii) NOTICE.—For purposes of this 

15 paragraph, the receiver or qualified re16 ceiver for a covered financial company 

17 shall be deemed to have notified a person 

18 who is a party to a qualified financial con19 tract with such covered financial company 

20 if the receiver or qualified receiver has 

21 taken steps reasonably calculated to pro22 vide notice to such person by the time 

23 specified in subparagraph (A). 

24 (C) TREATMENT OF BRIDGE FINANCIAL

25 COMPANY.—For purposes of paragraph (9), a 


wwoods2 on DSK1DXX6B1PROD with BILLS
337 

•HR 3996 IH

1 bridge financial company shall not be consid2 ered to be a financial institution for which a 

3 conservator, receiver, trustee in bankruptcy, or 

4 other legal custodian has been appointed or 

5 which is otherwise the subject of a bankruptcy 

6 or insolvency proceeding. 

7 (D) BUSINESS DAY DEFINED.—For pur8 poses of this paragraph, the term ‘‘business 

9 day’’ means any day other than any Saturday, 

10 Sunday, or any day on which either the New 

11 York Stock Exchange or the Federal Reserve 

12 Bank of New York is closed. 

13 (11) DISAFFIRMANCE OR REPUDIATION OF

14 QUALIFIED FINANCIAL CONTRACTS.—In exercising 

15 the rights of disaffirmance or repudiation of a re16 ceiver or qualified receiver with respect to any quali17 fied financial contract to which a covered financial 

18 company is a party, the receiver or qualified receiver 

19 for such covered financial shall either— 

20 (A) disaffirm or repudiate all qualified fi21 nancial contracts between— 

22 (i) any person or any affiliate of such 

23 person; and 

24 (ii) the covered financial company in 

25 default; or 


wwoods2 on DSK1DXX6B1PROD with BILLS
338 

•HR 3996 IH

1 (B) disaffirm or repudiate none of the 

2 qualified financial contracts referred to in sub3 paragraph (A) (with respect to such person or 

4 any affiliate of such person). 

5 (12) CERTAIN SECURITY AND CUSTOMER IN6 TERESTS NOT AVOIDABLE.—No provision of this 

7 subsection shall be construed as permitting the 

8 avoidance of any— 

9 (A) legally enforceable or perfected secu10 rity interest in any of the assets of any covered 

11 financial company except where such an inter12 est is taken in contemplation of the company’s 

13 insolvency or with the intent to hinder, delay, or 

14 defraud the company or the creditors of such 

15 company; or 

16 (B) legally enforceable interest in customer 

17 property. 

18 (13) AUTHORITY TO ENFORCE CONTRACTS.— 

19 (A) IN GENERAL.—The receiver or quali20 fied receiver may enforce any contract, other 

21 than a director’s or officer’s liability insurance 

22 contract or a financial institution bond, entered 

23 into by the covered financial company notwith24 standing any provision of the contract providing 

25 for termination, default, acceleration, or exerVerDate Nov 24 2008 00:06 Nov 20, 2009 Jkt 089200 PO 00000 Frm 00338 Fmt 6652 Sfmt 6201 E:\BILLS\H3996.IH H3996

wwoods2 on DSK1DXX6B1PROD with BILLS
339 

•HR 3996 IH

1 cise of rights upon, or solely by reason of, insol2 vency or the appointment of or the exercise of 

3 rights or powers by a receiver or qualified re4 ceiver. 

5 (B) CERTAIN RIGHTS NOT AFFECTED.— 

6 No provision of this paragraph may be con7 strued as impairing or affecting any right of the 

8 receiver or qualified receiver to enforce or re9 cover under a director’s or officer’s liability in10 surance contract or financial institution bond 

11 under other applicable law. 

12 (C) CONSENT REQUIREMENT.— 

13 (i) IN GENERAL.—Except as otherwise 

14 provided by this section, no person may ex15 ercise any right or power to terminate, ac16 celerate, or declare a default under any 

17 contract to which the covered financial 

18 company is a party, or to obtain possession 

19 of or exercise control over any property of 

20 the covered financial company or affect 

21 any contractual rights of the covered finan22 cial company, without the consent of the 

23 receiver or qualified receiver, as appro24 priate, of the covered financial company 

25 during the 45-day period beginning on the 


wwoods2 on DSK1DXX6B1PROD with BILLS
340 

•HR 3996 IH

1 date of the appointment of the qualified re2 ceiver, or during the 90-day period begin3 ning on the date of the appointment of the 

4 receiver, as applicable. 

5 (ii) CERTAIN EXCEPTIONS.—No provi6 sion of this subparagraph shall apply to a 

7 director or officer liability insurance con8 tract or a financial institution bond, to the 

9 rights of parties to certain qualified finan10 cial contracts pursuant to paragraph (8), 

11 or to the rights of parties to netting con12 tracts pursuant to subtitle A of title IV of 

13 the Federal Deposit Insurance Corporation 

14 Improvement Act of 1991 (12 U.S.C. 4401 

15 et seq.), or shall be construed as permit16 ting the receiver or qualified receiver to fail 

17 to comply with otherwise enforceable provi18 sions of such contract. 

19 (14) EXCEPTION FOR FEDERAL RESERVE

20 BANKS AND CORPORATION SECURITY INTEREST.— 

21 No provision of this subsection shall apply with re22 spect to— 

23 (A) any extension of credit from any Fed24 eral Reserve bank or the Corporation to any 

25 covered financial company; or 


wwoods2 on DSK1DXX6B1PROD with BILLS
341 

•HR 3996 IH

1 (B) any security interest in the assets of 

2 the covered financial company securing any 

3 such extension of credit. 

4 (15) SAVINGS CLAUSE.—The meanings of terms 

5 used in this subsection are applicable for purposes of 

6 this subsection only, and shall not be construed or 

7 applied so as to challenge or affect the characteriza8 tion, definition, or treatment of any similar terms 

9 under any other statute, regulation, or rule, includ10 ing, but not limited, to the Gramm Leach Bliley Act, 

11 the Legal Certainty for Bank Products Act of 2000, 

12 the securities laws (as that term is defined in section 

13 3(a)(47) of the Securities Exchange Act of 1934), 

14 and the Commodity Exchange Act. 

15 (d) VALUATION OF CLAIMS IN DEFAULT.— 

16 (1) IN GENERAL.—Notwithstanding any other 

17 provision of Federal law or the law of any State, and 

18 regardless of the method which the Corporation de19 termines to utilize with respect to a covered financial 

20 company, including transactions authorized under 

21 subsection (h), this subsection shall govern the 

22 rights of the creditors of such covered financial com23 pany. 

24 (2) MAXIMUM LIABILITY.—The maximum li25 ability of the Corporation, acting as receiver or in 


wwoods2 on DSK1DXX6B1PROD with BILLS
342 

•HR 3996 IH

1 any other capacity, to any person having a claim 

2 against the receiver or the covered financial com3 pany for which such receiver is appointed shall equal 

4 the amount such claimant would have received if— 

5 (A) a determination had not been made 

6 under section 1603(b) with respect to the cov7 ered financial company; and 

8 (B) the covered financial company had 

9 been liquidated under title 11, United States 

10 Code, or any case related to title 11, United 

11 States Code (including but not limited to a case 

12 initiated by the Securities Investor Protection 

13 Corporation with respect to a financial company 

14 subject to the Securities Investor Protection Act 

15 of 1970), or any State insolvency law. 

16 (3) ADDITIONAL PAYMENTS AUTHORIZED.— 

17 (A) IN GENERAL.—The Corporation may, 

18 as receiver and with the approval of the Sec19 retary, make additional payments or credit ad20 ditional amounts to or with respect to or for the 

21 account of any claimant or category of claim22 ants of a covered financial company if the Cor23 poration determines that such payments or 

24 credits are necessary or appropriate to— 


wwoods2 on DSK1DXX6B1PROD with BILLS
343 

•HR 3996 IH

1 (i) minimize losses to the receiver 

2 from the resolution of the covered financial 

3 company under this section; or 

4 (ii) prevent or mitigate serious ad5 verse effects to financial stability or the 

6 United States economy. 

7 (B) MANNER OF PAYMENT.—The Corpora8 tion may make payments or credit amounts 

9 under subparagraph (A) directly to the claim10 ants or may make such payments or credit such 

11 amounts to a company other than a covered fi12 nancial company or a bridge financial company 

13 established with respect thereto in order to in14 duce such other company to accept liability for 

15 such claims. 

16 (e) LIMITATION ON COURT ACTION.—Except as pro17 vided in this section or at the request of the receiver or 

18 qualified receiver appointed for a covered financial com19 pany, no court may take any action to restrain or affect 

20 the exercise of powers or functions of the receiver or quali21 fied receiver hereunder. 

22 (f) LIABILITY OF DIRECTORS AND OFFICERS.— 

23 (1) IN GENERAL.—A director or officer of a 

24 covered financial company may be held personally 

25 liable for monetary damages in any civil action deVerDate Nov 24 2008 00:06 Nov 20, 2009 Jkt 089200 PO 00000 Frm 00343 Fmt 6652 Sfmt 6201 E:\BILLS\H3996.IH H3996

wwoods2 on DSK1DXX6B1PROD with BILLS
344 

•HR 3996 IH

1 scribed in paragraph (2) by, on behalf of, or at the 

2 request or direction of the Corporation, which action 

3 is prosecuted wholly or partially for the benefit of 

4 the Corporation— 

5 (A) acting as receiver or qualified receiver 

6 of such covered financial company; 

7 (B) acting based upon a suit, claim, or 

8 cause of action purchased from, assigned by, or 

9 otherwise conveyed by such receiver or qualified 

10 receiver; or 

11 (C) acting based upon a suit, claim, or 

12 cause of action purchased from, assigned by, or 

13 otherwise conveyed in whole or in part by a cov14 ered financial company or its affiliate in con15 nection with assistance provided under section 

16 1604. 

17 (2) ACTIONS COVERED.—Paragraph (1) shall 

18 apply with respect to actions for gross negligence, 

19 including any similar conduct or conduct that dem20 onstrates a greater disregard of a duty of care (than 

21 gross negligence) including intentional tortious con22 duct, as such terms are defined and determined 

23 under applicable State law. 


wwoods2 on DSK1DXX6B1PROD with BILLS
345 

•HR 3996 IH

1 (3) SAVINGS CLAUSE.—Nothing in this sub2 section shall impair or affect any right of the Cor3 poration under other applicable law. 

4 (g) DAMAGES.—In any proceeding related to any 

5 claim against a covered financial company’s director, offi6 cer, employee, agent, attorney, accountant, appraiser, or 

7 any other party employed by or providing services to a 

8 covered financial company, recoverable damages deter9 mined to result from the improvident or otherwise im10 proper use or investment of any covered financial com11 pany’s assets shall include principal losses and appropriate 

12 interest. 

13 (h) BRIDGE FINANCIAL COMPANIES.— 

14 (1) ORGANIZATION.— 

15 (A) PURPOSE.—The Corporation, as re16 ceiver of one or more covered financial compa17 nies may organize one or more bridge financial 

18 companies in accordance with this subsection. 

19 (B) AUTHORITIES.—Upon the creation of 

20 a bridge financial company under subparagraph 

21 (A) with respect to a covered financial com22 pany, such bridge financial company may— 

23 (i) assume such liabilities (including 

24 liabilities associated with any trust or cus25 tody business but excluding any liabilities 


wwoods2 on DSK1DXX6B1PROD with BILLS
346 

•HR 3996 IH

1 that count as regulatory capital) of such 

2 covered financial company as the Corpora3 tion may, in its discretion, determine to be 

4 appropriate; 

5 (ii) purchase such assets (including 

6 assets associated with any trust or custody 

7 business) of such covered financial com8 pany as the Corporation may, in its discre9 tion, determine to be appropriate; and 

10 (iii) perform any other temporary 

11 function which the Corporation may, in its 

12 discretion, prescribe in accordance with 

13 this section. 

14 (2) CHARTER AND ESTABLISHMENT.— 

15 (A) ESTABLISHMENT.—If the Corporation 

16 is appointed as receiver for a covered financial 

17 company, the Corporation may grant a Federal 

18 charter to and approve articles of association 

19 for one or more bridge financial company or 

20 companies with respect to such covered finan21 cial company which shall, by operation of law 

22 and immediately upon issuance of its charter 

23 and approval of its articles of association, be es24 tablished and operate in accordance with, and 


wwoods2 on DSK1DXX6B1PROD with BILLS
347 

•HR 3996 IH

1 subject to, such charter, articles, and this sec2 tion. 

3 (B) MANAGEMENT.—Upon its establish4 ment, a bridge financial company shall be under 

5 the management of a board of directors ap6 pointed by the Corporation. 

7 (C) ARTICLES OF ASSOCIATION.—The arti8 cles of association and organization certificate 

9 of a bridge financial shall have such terms as 

10 the Corporation may provide, and shall be exe11 cuted by such representatives as the Corpora12 tion may designate. 

13 (D) TERMS OF CHARTER; RIGHTS AND

14 PRIVILEGES.—Subject to and in accordance 

15 with the provisions of this subsection, the Cor16 poration shall— 

17 (i) establish the terms of the charter 

18 of a bridge financial company and the 

19 rights, powers, authorities and privileges of 

20 a bridge financial company granted by the 

21 charter or as an incident thereto; and 

22 (ii) provide for, and establish the 

23 terms and conditions governing, the man24 agement (including, but not limited to, the 

25 bylaws and the number of directors of the 


wwoods2 on DSK1DXX6B1PROD with BILLS
348 

•HR 3996 IH

1 board of directors) and operations of the 

2 bridge financial company. 

3 (E) TRANSFER OF RIGHTS AND PRIVI4 LEGES OF COVERED FINANCIAL COMPANY.— 

5 (i) IN GENERAL.—Notwithstanding 

6 any other provision of Federal law or the 

7 law of any State, the Corporation may pro8 vide for a bridge financial company to suc9 ceed to and assume any rights, powers, au10 thorities or privileges of the covered finan11 cial company with respect to which the 

12 bridge financial company was established 

13 and, upon such determination by the Cor14 poration, the bridge financial company 

15 shall immediately and by operation of law 

16 succeed to and assume such rights, powers, 

17 authorities and privileges. 

18 (ii) EFFECTIVE WITHOUT AP19 PROVAL.—Any succession to or assumption 

20 by a bridge financial company of rights, 

21 powers, authorities or privileges of a cov22 ered financial company under clause (i) or 

23 otherwise shall be effective without any 

24 further approval under Federal or State 


wwoods2 on DSK1DXX6B1PROD with BILLS
349 

•HR 3996 IH

1 law, assignment, or consent with respect 

2 thereto. 

3 (F) CORPORATE GOVERNANCE AND ELEC4 TION AND DESIGNATION OF BODY OF LAW.—To 

5 the extent permitted by the Corporation and 

6 consistent with this section and any rules, regu7 lations or directives issued by the Corporation 

8 under this section, a bridge financial company 

9 may elect to follow the corporate governance 

10 practices and procedures as are applicable to a 

11 corporation incorporated under the general cor12 poration law of the State of Delaware, or the 

13 State of incorporation or organization of the 

14 covered financial company with respect to which 

15 the bridge financial company was established, 

16 as such law may be amended from time to time. 

17 (G) CAPITAL.— 

18 (i) CAPITAL NOT REQUIRED.—Not19 withstanding any other provision of Fed20 eral or State law, a bridge financial com21 pany may, if permitted by the Corporation, 

22 operate without any capital or surplus, or 

23 with such capital or surplus as the Cor24 poration may in its discretion determine to 

25 be appropriate. 


wwoods2 on DSK1DXX6B1PROD with BILLS
350 

•HR 3996 IH

1 (ii) NO CONTRIBUTION BY THE COR2 PORATION REQUIRED.—The Corporation is 

3 not required to pay capital into a bridge fi4 nancial company or to issue any capital 

5 stock on behalf of a bridge financial com6 pany established under this subsection. 

7 (iii) AUTHORITY.—If the Corporation 

8 determines that such action is advisable, 

9 the Corporation may cause capital stock or 

10 other securities of a bridge financial com11 pany established with respect to a covered 

12 financial company to be issued and offered 

13 for sale in such amounts and on such 

14 terms and conditions as the Corporation 

15 may, in its discretion, determine. 

16 (3) INTERESTS IN AND ASSETS AND OBLIGA17 TIONS OF COVERED FINANCIAL COMPANY.—Notwith18 standing paragraphs (1) or (2) or any other provi19 sion of law— 

20 (A) a bridge financial company shall as21 sume, acquire, or succeed to the assets or liabil22 ities of a covered financial company (including 

23 the assets or liabilities associated with any trust 

24 or custody business) only to the extent that 

25 such assets or liabilities are transferred by the 


wwoods2 on DSK1DXX6B1PROD with BILLS
351 

•HR 3996 IH

1 Corporation to the bridge financial company in 

2 accordance with, and subject to the restrictions 

3 set forth in, paragraph (1)(B); and 

4 (B) a bridge financial company shall not 

5 assume, acquire, or succeed to any obligation 

6 that a covered financial company for which a 

7 receiver has been appointed may have to any 

8 shareholder, member, general partner, limited 

9 partner, or other person with an interest in the 

10 equity of the covered financial company that 

11 arises as a result of the status of that person 

12 having an equity claim in the covered financial 

13 company. 

14 (4) BRIDGE FINANCIAL COMPANY TREATED AS

15 BEING IN DEFAULT FOR CERTAIN PURPOSES.—A 

16 bridge financial company shall be treated as a cov17 ered financial company in default at such times and 

18 for such purposes as the Corporation may, in its dis19 cretion, determine. 

20 (5) TRANSFER OF ASSETS AND LIABILITIES.— 

21 (A) TRANSFER OF ASSETS AND LIABIL22 ITIES.—The Corporation, as receiver, may 

23 transfer any assets and liabilities of a covered 

24 financial company (including any assets or li25 abilities associated with any trust or custody 


wwoods2 on DSK1DXX6B1PROD with BILLS
352 

•HR 3996 IH

1 business) to one or more bridge financial com2 panies in accordance with and subject to the re3 strictions of paragraph (1)(B). 

4 (B) SUBSEQUENT TRANSFERS.—At any 

5 time after the establishment of a bridge finan6 cial company with respect to a covered financial 

7 company, the Corporation, as receiver, may 

8 transfer any assets and liabilities of such cov9 ered financial company as the Corporation may, 

10 in its discretion, determine to be appropriate in 

11 accordance with and subject to the restrictions 

12 of paragraph (1)(B). 

13 (C) TREATMENT OF TRUST OR CUSTODY

14 BUSINESS.—For purposes of this paragraph, 

15 the trust or custody business, including fidu16 ciary appointments, held by any covered finan17 cial company is included among its assets and 

18 liabilities. 

19 (D) EFFECTIVE WITHOUT APPROVAL.— 

20 The transfer of any assets or liabilities, includ21 ing those associated with any trust or custody 

22 business of a covered financial company to a 

23 bridge financial company shall be effective with24 out any further approval under Federal or 


wwoods2 on DSK1DXX6B1PROD with BILLS
353 

•HR 3996 IH

1 State law, assignment, or consent with respect 

2 thereto. 

3 (E) EQUITABLE TREATMENT OF SIMI4 LARLY SITUATED CREDITORS.—The Corpora5 tion shall treat all creditors of a covered finan6 cial company that are similarly situated under 

7 subsection (b)(1) in a similar manner in exer8 cising the authority of the Corporation under 

9 this subsection to transfer any assets or liabil10 ities of the covered financial company to one or 

11 more bridge financial companies established 

12 with respect to such covered financial company, 

13 except that the Corporation may take actions 

14 (including making payments) that do not com15 ply with this subparagraph, if— 

16 (i) the Corporation determines that 

17 such actions are necessary to maximize the 

18 value of the assets of the covered financial 

19 company, to maximize the present value 

20 return from the sale or other disposition of 

21 the assets of the covered financial com22 pany, to minimize the amount of any loss 

23 realized upon the sale or other disposition 

24 of the assets of the covered financial com25 pany, or to contain or address serious adVerDate Nov 24 2008 00:06 Nov 20, 2009 Jkt 089200 PO 00000 Frm 00353 Fmt 6652 Sfmt 6201 E:\BILLS\H3996.IH H3996

wwoods2 on DSK1DXX6B1PROD with BILLS
354 

•HR 3996 IH

1 verse effects to financial stability or the 

2 U.S. economy; and 

3 (ii) all creditors that are similarly sit4 uated under subsection (b)(1) receive not 

5 less than the amount provided in sub6 section (d)(2). 

7 (F) LIMITATION ON TRANSFER OF LIABIL8 ITIES.—Notwithstanding any other provision of 

9 law, the aggregate amount of liabilities of a cov10 ered financial company that are transferred to, 

11 or assumed by, a bridge financial company from 

12 a covered financial company may not exceed the 

13 aggregate amount of the assets of the covered 

14 financial company that are transferred to, or 

15 purchased by, the bridge financial company 

16 from the covered financial company. 

17 (6) STAY OF JUDICIAL ACTION.—Any judicial 

18 action to which a bridge financial company becomes 

19 a party by virtue of its acquisition of any assets or 

20 assumption of any liabilities of a covered financial 

21 company shall be stayed from further proceedings 

22 for a period of up to 45 days (or such longer period 

23 as may be agreed to upon the consent of all parties) 

24 at the request of the bridge financial company. 


wwoods2 on DSK1DXX6B1PROD with BILLS
355 

•HR 3996 IH

1 (7) AGREEMENTS AGAINST INTEREST OF THE

2 BRIDGE FINANCIAL COMPANY.—No agreement that 

3 tends to diminish or defeat the interest of the bridge 

4 financial company in any asset of a covered financial 

5 company acquired by the bridge financial company 

6 shall be valid against the bridge financial company 

7 unless such agreement is in writing and executed by 

8 an authorized officer or representative of the covered 

9 financial company. 

10 (8) NO FEDERAL STATUS.— 

11 (A) AGENCY STATUS.—A bridge financial 

12 company is not an agency, establishment, or in13 strumentality of the United States. 

14 (B) EMPLOYEE STATUS.—Representatives 

15 for purposes of paragraph (1)(B), directors, of16 ficers, employees, or agents of a bridge financial 

17 company are not, solely by virtue of service in 

18 any such capacity, officers or employees of the 

19 United States. Any employee of the Corporation 

20 or of any Federal instrumentality who serves at 

21 the request of the Corporation as a representa22 tive for purposes of paragraph (1)(B), director, 

23 officer, employee, or agent of a bridge financial 

24 company shall not— 


wwoods2 on DSK1DXX6B1PROD with BILLS
356 

•HR 3996 IH

1 (i) solely by virtue of service in any 

2 such capacity lose any existing status as 

3 an officer or employee of the United States 

4 for purposes of title 5, United States Code, 

5 or any other provision of law; or 

6 (ii) receive any salary or benefits for 

7 service in any such capacity with respect to 

8 a bridge financial company in addition to 

9 such salary or benefits as are obtained 

10 through employment with the Corporation 

11 or such Federal instrumentality. 

12 (9) EXEMPT TAX STATUS.—Notwithstanding 

13 any other provision of Federal or State law, a bridge 

14 financial company, its franchise, property, and in15 come shall be exempt from all taxation now or here16 after imposed by the United States, by any territory, 

17 dependency, or possession thereof, or by any State, 

18 county, municipality, or local taxing authority. 

19 (10) FEDERAL AGENCY APPROVAL; ANTITRUST

20 REVIEW.— 

21 (A) IN GENERAL.—If a transaction involv22 ing the merger or sale of a bridge financial 

23 company requires approval by a Federal agency, 

24 the transaction may not be consummated before 

25 the 5th calendar day after the date of approval 


wwoods2 on DSK1DXX6B1PROD with BILLS
357 

•HR 3996 IH

1 by the Federal agency responsible for such ap2 proval with respect thereto. If, in connection 

3 with any such approval a report on competitive 

4 factors from the Attorney General is required, 

5 the Federal agency responsible for such ap6 proval shall promptly notify the Attorney Gen7 eral of the proposed transaction and the Attor8 ney General shall provide the required report 

9 within 10 days of the request. If a filing is re10 quired under the Hart-Scott-Rodino Antitrust 

11 Improvements Act of 1976 with the Depart12 ment of Justice or the Federal Trade Commis13 sion, the waiting period shall expire not later 

14 than the 30th day following such filing notwith15 standing any other provision of Federal law or 

16 any attempt by any Federal agency to extend 

17 such waiting period, and no further request for 

18 information by any Federal agency shall be per19 mitted. 

20 (B) EMERGENCY.—If the Secretary, in 

21 consultation with the Chairman of the Federal 

22 Reserve Board, has found that the Corporation 

23 must act immediately to prevent the probable 

24 failure of the covered financial company in25 volved, the approvals and filings referred to in 


wwoods2 on DSK1DXX6B1PROD with BILLS
358 

•HR 3996 IH

1 subparagraph (A) shall not be required and the 

2 transaction may be consummated immediately 

3 by the Corporation. 

4 (11) DURATION OF BRIDGE FINANCIAL COM5 PANY.—Subject to paragraphs (12), (13), and (14), 

6 the status of a bridge financial company as such 

7 shall terminate at the end of the 2-year period fol8 lowing the date it was granted a charter. The Cor9 poration may, in its discretion, extend the status of 

10 the bridge financial company as such for 3 addi11 tional 1-year periods. 

12 (12) TERMINATION OF BRIDGE FINANCIAL COM13 PANY STATUS.—The status of any bridge financial 

14 company as such shall terminate upon the earliest 

15 of— 

16 (A) the merger or consolidation of the 

17 bridge financial company with a company that 

18 is not a bridge financial company; 

19 (B) at the election of the Corporation, the 

20 sale of a majority of the capital stock of the 

21 bridge financial company to a company other 

22 than the Corporation and other than another 

23 bridge financial company; 

24 (C) the sale of 80 percent, or more, of the 

25 capital stock of the bridge financial company to 


wwoods2 on DSK1DXX6B1PROD with BILLS
359 

•HR 3996 IH

1 a person other than the Corporation and other 

2 than another bridge financial company; 

3 (D) at the election of the Corporation, ei4 ther the assumption of all or substantially all of 

5 the liabilities of the bridge financial company by 

6 a company that is not a bridge financial com7 pany, or the acquisition of all or substantially 

8 all of the assets of the bridge financial company 

9 by a company that is not a bridge financial 

10 company, or other entity as permitted under 

11 applicable law; and 

12 (E) the expiration of the period provided in 

13 paragraph (11), or the earlier dissolution of the 

14 bridge financial company as provided in para15 graph (14). 

16 (13) EFFECT OF TERMINATION EVENTS.— 

17 (A) MERGER OR CONSOLIDATION.—A 

18 merger or consolidation as provided in para19 graph (12)(A) shall be conducted in accordance 

20 with, and shall have the effect provided in, the 

21 provisions of applicable law. For the purpose of 

22 effecting such a merger or consolidation, the 

23 bridge financial company shall be treated as a 

24 corporation organized under the laws of the 

25 State of Delaware (unless the law of another 


wwoods2 on DSK1DXX6B1PROD with BILLS
360 

•HR 3996 IH

1 State has been selected by the bridge financial 

2 company in accordance with paragraph (2)(F)), 

3 and the Corporation shall be treated as the sole 

4 shareholder thereof, notwithstanding any other 

5 provision of State or Federal law. 

6 (B) CHARTER CONVERSION.—Following 

7 the sale of a majority of the capital stock of the 

8 bridge financial company as provided in para9 graph (12)(B), the Corporation may amend the 

10 charter of the bridge financial company to re11 flect the termination of the status of the bridge 

12 financial company as such, whereupon the com13 pany shall have all of the rights, powers, and 

14 privileges under its constituent documents and 

15 applicable State or Federal law. In connection 

16 therewith, the Corporation may take such steps 

17 as may be necessary or convenient to reincor18 porate the bridge financial company under the 

19 laws of a State and, notwithstanding any provi20 sions of State or Federal law, such State-char21 tered corporation shall be deemed to succeed by 

22 operation of law to such rights, titles, powers 

23 and interests of the bridge financial company as 

24 the Corporation may provide, with the same ef25 fect as if the bridge financial company had 


wwoods2 on DSK1DXX6B1PROD with BILLS
361 

•HR 3996 IH

1 merged with the State-chartered corporation 

2 under provisions of the corporate laws of such 

3 State. 

4 (C) SALE OF STOCK.—Following the sale 

5 of 80 percent or more of the capital stock of a 

6 bridge financial company as provided in para7 graph (12)(C), the company shall have all of 

8 the rights, powers, and privileges under its con9 stituent documents and applicable State or Fed10 eral law. In connection therewith, the Corpora11 tion may take such steps as may be necessary 

12 or convenient to reincorporate the bridge finan13 cial company under the laws of a State and, 

14 notwithstanding any provisions of State or Fed15 eral law, the State-chartered corporation shall 

16 be deemed to succeed by operation of law to 

17 such rights, titles, powers and interests of the 

18 bridge financial company as the Corporation 

19 may provide, with the same effect as if the 

20 bridge financial company had merged with the 

21 State-chartered corporation under provisions of 

22 the corporate laws of such State. 

23 (D) ASSUMPTION OF LIABILITIES AND

24 SALE OF ASSETS.—Following the assumption of 

25 all or substantially all of the liabilities of the 


wwoods2 on DSK1DXX6B1PROD with BILLS
362 

•HR 3996 IH

1 bridge financial company, or the sale of all or 

2 substantially all of the assets of the bridge fi3 nancial company, as provided in paragraph 

4 (12)(D), at the election of the Corporation the 

5 bridge financial company may retain its status 

6 as such for the period provided in paragraph 

7 (11) or may be dissolved at the election of the 

8 Corporation. 

9 (E) AMENDMENTS TO CHARTER.—Fol10 lowing the consummation of a transaction de11 scribed in subparagraph (A), (B), (C), or (D) 

12 of paragraph (12), the charter of the resulting 

13 company shall be amended to reflect the termi14 nation of bridge financial company status, if ap15 propriate. 

16 (14) DISSOLUTION OF BRIDGE FINANCIAL COM17 PANY.— 

18 (A) IN GENERAL.—Notwithstanding any 

19 other provision of State or Federal law, if a 

20 bridge financial company’s status as such has 

21 not previously been terminated by the occur22 rence of an event specified in subparagraph (A), 

23 (B), (C), or (D) of paragraph (12)— 

24 (i) the Corporation may, in its discre25 tion, dissolve the bridge financial company 


wwoods2 on DSK1DXX6B1PROD with BILLS
363 

•HR 3996 IH

1 in accordance with this paragraph at any 

2 time; and 

3 (ii) the Corporation shall promptly 

4 commence dissolution proceedings in ac5 cordance with this paragraph upon the ex6 piration of the 2-year period following the 

7 date the bridge financial company was 

8 chartered, or any extension thereof, as pro9 vided in paragraph (11). 

10 (B) PROCEDURES.—The Corporation shall 

11 remain the receiver of a bridge financial com12 pany for the purpose of dissolving the bridge fi13 nancial company. The Corporation as such re14 ceiver shall wind up the affairs of the bridge fi15 nancial company in conformity with the provi16 sions of law relating to the liquidation of cov17 ered financial companies. With respect to any 

18 such bridge financial company, the Corporation 

19 as receiver shall have all the rights, powers, and 

20 privileges and shall perform the duties related 

21 to the exercise of such rights, powers, or privi22 leges granted by law to a receiver of a covered 

23 financial company and, notwithstanding any 

24 other provision of law, in the exercise of such 

25 rights, powers, and privileges the Corporation 


wwoods2 on DSK1DXX6B1PROD with BILLS
364 

•HR 3996 IH

1 shall not be subject to the direction or super2 vision of any State agency or other Federal 

3 agency. 

4 (15) AUTHORITY TO OBTAIN CREDIT.— 

5 (A) IN GENERAL.—A bridge financial com6 pany may obtain unsecured credit and issue un7 secured debt. 

8 (B) INABILITY TO OBTAIN CREDIT.—If a 

9 bridge financial company is unable to obtain 

10 unsecured credit or issue unsecured debt, the 

11 Corporation may authorize the obtaining of 

12 credit or the issuance of debt by the bridge fi13 nancial company— 

14 (i) with priority over any or all of the 

15 obligations of the bridge financial com16 pany; 

17 (ii) secured by a lien on property of 

18 the bridge financial company that is not 

19 otherwise subject to a lien; or 

20 (iii) secured by a junior lien on prop21 erty of the bridge financial company that 

22 is subject to a lien. 

23 (C) LIMITATIONS.— 

24 (i) IN GENERAL.—The Corporation, 

25 after notice and a hearing, may authorize 


wwoods2 on DSK1DXX6B1PROD with BILLS
365 

•HR 3996 IH

1 the obtaining of credit or the issuance of 

2 debt by a bridge financial company that is 

3 secured by a senior or equal lien on prop4 erty of the bridge financial company that 

5 is subject to a lien only if— 

6 (I) the bridge financial company 

7 is unable to otherwise obtain such 

8 credit or issue such debt; and 

9 (II) there is adequate protection 

10 of the interest of the holder of the lien 

11 on the property with respect to which 

12 such senior or equal lien is proposed 

13 to be granted. 

14 (D) BURDEN OF PROOF.—In any hearing 

15 under this subsection, the Corporation has the 

16 burden of proof on the issue of adequate protec17 tion. 

18 (16) EFFECT ON DEBTS AND LIENS.—The re19 versal or modification on appeal of an authorization 

20 under this subsection to obtain credit or issue debt, 

21 or of a grant under this section of a priority or a 

22 lien, does not affect the validity of any debt so 

23 issued, or any priority or lien so granted, to an enti24 ty that extended such credit in good faith, whether 

25 or not such entity knew of the pendency of the apVerDate Nov 24 2008 00:06 Nov 20, 2009 Jkt 089200 PO 00000 Frm 00365 Fmt 6652 Sfmt 6201 E:\BILLS\H3996.IH H3996

wwoods2 on DSK1DXX6B1PROD with BILLS
366 

•HR 3996 IH

1 peal, unless such authorization and the issuance of 

2 such debt, or the granting of such priority or lien, 

3 were stayed pending appeal. 

4 (i) SHARING RECORDS.—Whenever the Corporation 

5 has been appointed as receiver or qualified receiver for a 

6 covered financial company, the Federal Reserve Board and 

7 the company’s primary Federal regulatory agency, if any, 

8 shall each make all records relating to the company avail9 able to the receiver or qualified receiver which may be used 

10 by the receiver or qualified receiver in any manner the re11 ceiver or qualified receiver determines to be appropriate. 

12 (j) EXPEDITED PROCEDURES FOR CERTAIN

13 CLAIMS.— 

14 (1) TIME FOR FILING NOTICE OF APPEAL.— 

15 The notice of appeal of any order, whether interlocu16 tory or final, entered in any case brought by the 

17 Corporation against a covered financial company’s 

18 director, officer, employee, agent, attorney, account19 ant, or appraiser or any other person employed by 

20 or providing services to a covered financial company 

21 shall be filed not later than 30 days after the date 

22 of entry of the order. The hearing of the appeal shall 

23 be held not later than 120 days after the date of the 

24 notice of appeal. The appeal shall be decided not 


wwoods2 on DSK1DXX6B1PROD with BILLS
367 

•HR 3996 IH

1 later than 180 days after the date of the notice of 

2 appeal. 

3 (2) SCHEDULING.—A court of the United 

4 States shall expedite the consideration of any case 

5 brought by the Corporation against a covered finan6 cial company’s director, officer, employee, agent, at7 torney, accountant, or appraiser or any other person 

8 employed by or providing services to a covered finan9 cial company. As far as practicable, the court shall 

10 give such case priority on its docket. 

11 (3) JUDICIAL DISCRETION.—The court may 

12 modify the schedule and limitations stated in para13 graphs (1) and (2) in a particular case, based on a 

14 specific finding that the ends of justice that would 

15 be served by making such a modification would out16 weigh the best interest of the public in having the 

17 case resolved expeditiously. 

18 (k) FOREIGN INVESTIGATIONS.—The Corporation, as 

19 receiver or qualified receiver of any covered financial com20 pany and for purposes of carrying out any power, author21 ity, or duty with respect to a covered financial company— 

22 (1) may request the assistance of any foreign fi23 nancial authority and provide assistance to any for24 eign financial authority in accordance with section 

25 8(v) of the Federal Deposit Insurance Act as if the 


wwoods2 on DSK1DXX6B1PROD with BILLS
368 

•HR 3996 IH

1 covered financial company were an insured deposi2 tory institution, the Corporation were the appro3 priate Federal banking agency for the company and 

4 any foreign financial authority were the foreign 

5 banking authority; and 

6 (2) may maintain an office to coordinate for7 eign investigations or investigations on behalf of for8 eign financial authorities. 

9 (l) PROHIBITION ON ENTERING SECRECY AGREE10 MENTS AND PROTECTIVE ORDERS.—The Corporation 

11 may not enter into any agreement or approve any protec12 tive order which prohibits the Corporation from disclosing 

13 the terms of any settlement of an administrative or other 

14 action for damages or restitution brought by the Corpora15 tion in its capacity as receiver or qualified receiver for a 

16 covered financial company. 

17 (m) LIQUIDATION OF CERTAIN COVERED FINANCIAL

18 COMPANIES OR BRIDGE FINANCIAL COMPANIES.—Not19 withstanding any other provision of law (other than a con20 flicting provision of this section), the Corporation, in con21 nection with the liquidation of any covered financial com22 pany or bridge financial company with respect to which 

23 the Corporation has been appointed as receiver, shall— 

24 (1) in the case of any covered financial com25 pany or bridge financial company that is or has a 


wwoods2 on DSK1DXX6B1PROD with BILLS
369 

•HR 3996 IH

1 subsidiary that is a stockbroker (as that term is de2 fined in section 101 of title 11 of the United States 

3 Code) but is not a member of the Securities Investor 

4 Protection Corporation, apply the provisions of sub5 chapter III of chapter 7 of title 11 of the United 

6 States Code in respect of the distribution to any 

7 ‘‘customer’’ of all ‘‘customer name securities’’ and 

8 ‘‘customer property’’ (as such terms are defined in 

9 section 741 of such title 11) as if such covered fi10 nancial company or bridge financial company were a 

11 debtor for purposes of such subchapter; or 

12 (2) in the case of any covered financial com13 pany or bridge financial company that is a com14 modity broker (as that term is defined in section 

15 101 of title 11 of the United States Code), apply the 

16 provisions of subchapter IV of chapter 7 of title 11 

17 of the United States Code in respect of the distribu18 tion to any ‘‘customer’’ of all ‘‘customer property’’ 

19 (as such terms are defined in section 761 of such 

20 title 11) as if such covered financial company or 

21 bridge financial company were a debtor for purposes 

22 of such subchapter. 

23 (n) SYSTEMIC RESOLUTION FUND.— 

24 (1) ESTABLISHMENT.—There is established in 

25 the Treasury a separate fund called the Systemic 


wwoods2 on DSK1DXX6B1PROD with BILLS
370 

•HR 3996 IH

1 Resolution Fund, which shall be available without 

2 further appropriation for the cost of actions author3 ized by this title upon a determination made under 

4 section 1603(b) to the Corporation to carry out the 

5 authorities contained in this title, including the pay6 ment of administrative expenses, the Corporation’s 

7 payment of principal and interest on obligations 

8 issued under paragraph (3), and the exercise of au9 thorities under section 1604. 

10 (2) PROCEEDS.—Amounts received by the Cor11 poration (including amounts borrowed under para12 graph (3) and assessments received under subsection 

13 (o), but excluding amounts received by any covered 

14 financial company when the Corporation is acting in 

15 its capacity as receiver or qualified receiver for such 

16 company, and excluding amounts credited to the ap17 propriate financing account as a means of financing 

18 credit activity, as applicable) shall be deposited into 

19 the Fund, subject to apportionment. 

20 (3) CAPITALIZATION OF FUND.— 

21 (A) CORPORATION AUTHORIZED TO ISSUE

22 OBLIGATIONS.—In order to capitalize the Fund 

23 upon the Secretary making the determination 

24 provided for in section 1603(b), the Corporation 


wwoods2 on DSK1DXX6B1PROD with BILLS
371 

•HR 3996 IH

1 is authorized to issue obligations to the Sec2 retary. 

3 (B) SECRETARY AUTHORIZED TO PUR4 CHASE OBLIGATIONS.—The Secretary may, in 

5 the Secretary’s discretion and under such terms 

6 and conditions that the Secretary may require, 

7 purchase or agree to purchase any obligations 

8 issued under subparagraph (A), and for such 

9 purpose the Secretary is authorized to use as a 

10 public debt transaction the proceeds of the sale 

11 of any securities hereafter issued under chapter 

12 31 of title 31, United States Code, and the pur13 poses for which securities may be issued under 

14 chapter 31 of title 31, United States Code, are 

15 extended to include such purchases. 

16 (C) INTEREST RATE.—Each purchase of 

17 obligations by the Secretary under this para18 graph shall be upon such terms and conditions 

19 as to yield a return at a rate not less than a 

20 rate determined by the Secretary, taking into 

21 consideration the current average yield on out22 standing marketable obligations of the United 

23 States of comparable maturity. 

24 (D) SECRETARY AUTHORIZED TO SELL OB25 LIGATIONS.—The Secretary may sell, upon such 


wwoods2 on DSK1DXX6B1PROD with BILLS
372 

•HR 3996 IH

1 terms and conditions and at such price or 

2 prices as the Secretary shall determine, any of 

3 the obligations acquired under this paragraph. 

4 (E) PUBLIC DEBT TRANSACTIONS.—All 

5 purchases and sales by the Secretary of such 

6 obligations under this paragraph shall be treat7 ed as public debt transactions of the United 

8 States, and the proceeds from the sale of any 

9 obligations acquired by the Secretary under this 

10 paragraph shall be covered into the Treasury as 

11 miscellaneous receipts. 

12 (o) RECOVERY OF EXPENDED FUNDS FROM FINAN13 CIAL COMPANIES.— 

14 (1) RISK-BASED ASSESSMENTS.—The Corpora15 tion shall recover the amount of funds expended out 

16 of the Fund under subsection (n) and which have 

17 not otherwise been recouped. Steps to recover such 

18 amounts shall include one or more risk-based assess19 ments on financial companies in such amount and 

20 manner, and subject to such terms and conditions 

21 that the Corporation determines, with the concur22 rence of the Secretary and the Federal Reserve 

23 Board, are necessary to pay in full the obligations 

24 issued by Corporation to the Secretary, within 60 

25 months from the date of the Secretary’s determinaVerDate Nov 24 2008 00:06 Nov 20, 2009 Jkt 089200 PO 00000 Frm 00372 Fmt 6652 Sfmt 6201 E:\BILLS\H3996.IH H3996

wwoods2 on DSK1DXX6B1PROD with BILLS
373 

•HR 3996 IH

1 tion under section 1603(b). The Corporation may, 

2 with the approval of the Secretary and the Federal 

3 Reserve Board, extend this time period if the Cor4 poration determines that an extension is necessary 

5 to avoid having a serious adverse effect on the finan6 cial system or economic conditions in the United 

7 States. 

8 (2) ASSESSMENT THRESHOLD AND GRADUATED

9 ASSESSMENT RATE.—The Corporation shall not as10 sess any financial company whose total assets on a 

11 consolidated basis are less than $10 billion. The 

12 Corporation shall assess any financial company with 

13 $10 billion or more in total consolidated assets on a 

14 graduated basis that assesses financial companies 

15 with greater assets at a higher rate. 

16 (3) RISK-BASED ASSESSMENT CONSIDER17 ATIONS.—In imposing assessments under para18 graphs (1) and (2), the Corporation shall— 

19 (A) take into account economic conditions 

20 generally affecting financial companies so as to 

21 allow assessments to be lower during less favor22 able economic conditions; 

23 (B) take into account any assessments im24 posed on a subsidiary of a financial company 

25 that is— 


wwoods2 on DSK1DXX6B1PROD with BILLS
374 

•HR 3996 IH

1 (i) an insured depository institution 

2 pursuant to section 7 or section 

3 13(c)(4)(G) of the Federal Deposit Insur4 ance Act (12 U.S.C. §1817 and 

5 1823(c)(4)(G)); 

6 (ii) a member of the Securities Inves7 tor Protection Corporation pursuant to 

8 section 4 of the Securities Investor Protec9 tion Act of 1970 (15 U.S.C. 78ddd); or 

10 (iii) an insurance company pursuant 

11 to applicable State law to cover (or reim12 burse payments made to cover) the costs of 

13 rehabilitation, liquidation, or other State 

14 insolvency proceeding with respect to one 

15 or more insurance companies; 

16 (C) take into account the risks presented 

17 by the financial company to financial stability 

18 or the U.S. economy and the extent to which 

19 the financial company has, benefitted, or likely 

20 would benefit, from the resolution of a financial 

21 company under this Act; 

22 (D) take into account such other factors as 

23 the Corporation deems appropriate; 

24 (E) distinguish among different classes of 

25 assets or different types of financial companies 


wwoods2 on DSK1DXX6B1PROD with BILLS
375 

•HR 3996 IH

1 in order to establish comparable assessment 

2 bases among financial companies subject to this 

3 subsection; and 

4 (F) establish the parameters for the grad5 uated assessment regime described in para6 graph (2). 

7 (4) COLLECTION OF INFORMATION.—The Cor8 poration may impose on financial companies such 

9 collection of information requirements that the Cor10 poration deems necessary to carry out this sub11 section after a determination under section 1603(b). 

12 (5) RULEMAKING.—The Corporation shall, in 

13 consultation with the Secretary and the Federal Re14 serve Board, prescribe regulations to carry out this 

15 subsection. 

16 (p) NO FEDERAL STATUS.— 

17 (1) AGENCY STATUS.—A covered financial com18 pany (or any covered subsidiary thereof) that is 

19 placed into receivership or qualified receivership is 

20 not a department, agency, or instrumentality of the 

21 United States for purposes of statutes that confer 

22 powers on or impose obligations on government enti23 ties. 

24 (2) EMPLOYEE STATUS.—Interim directors, di25 rectors, officers, employees, or agents of a covered 


wwoods2 on DSK1DXX6B1PROD with BILLS
376 

•HR 3996 IH

1 financial company that is placed into receivership or 

2 qualified receivership are not, solely by virtue of 

3 service in any such capacity, officers or employees of 

4 the United States. Any employee of the Corporation, 

5 acting as receiver or qualified receiver, or of any 

6 Federal agency who serves at the request of the re7 ceiver or qualified receiver as an interim director, di8 rector, officer, employee, or agent of a covered finan9 cial company that is placed into receivership or 

10 qualified receivership shall not— 

11 (A) solely by virtue of service in any such 

12 capacity lose any existing status as an officer or 

13 employee of the United States for purposes of 

14 title 5, United States Code, or any other provi15 sion of law, or 

16 (B) receive any salary or benefits for serv17 ice in any such capacity with respect to a cov18 ered financial company that is placed into re19 ceivership or qualified receivership in addition 

20 to such salary or benefits as are obtained 

21 through employment with the Corporation or 

22 other Federal agency. 


wwoods2 on DSK1DXX6B1PROD with BILLS
377 

•HR 3996 IH

1 SEC. 1610. CLARIFICATION OF PROHIBITION REGARDING 

2 CONCEALMENT OF ASSETS FROM QUALIFIED 

3 RECEIVER, RECEIVER, OR LIQUIDATING 

4 AGENT. 

5 (a) IN GENERAL.—Section 1032 of title 18, United 

6 States Code, is amended in paragraph (1) by deleting ‘‘or’’ 

7 before ‘‘the National Credit Union Administration 

8 Board,’’ and by inserting immediately thereafter ‘‘or the 

9 Corporation, as defined in section 1602 of the Resolution 

10 Authority for Large, Interconnected Financial Companies 

11 Act of 2009,’’. 

12 (b) CONFORMING CHANGE.—The heading of section 

13 1032 of title 18, United States Code, is amended by strik14 ing ‘‘of financial institution’’. 

15 SEC. 1611. MISCELLANEOUS PROVISIONS. 

16 (a) BANKRUPTCY CODE AMENDMENTS.—Section 

17 109(b)(2) of title 11 of the United States Code is amended 

18 by inserting ‘‘covered financial company (as that term is 

19 defined in section 1602(5) of the Resolution Authority for 

20 Large, Interconnected Financial Companies Act of 

21 2009),’’ after ‘‘a domestic insurance company,’’. 

22 (b) FEDERAL DEPOSIT INSURANCE ACT AND FED23 ERAL DEPOSIT INSURANCE CORPORATION IMPROVEMENT

24 ACT OF 1991.— 

25 (1) Section 18(c)(4)(G)(i) of the Federal De26 posit Insurance Act (12 U.S.C. 1823(c)(4)(G)(i)) is 


wwoods2 on DSK1DXX6B1PROD with BILLS
378 

•HR 3996 IH

1 amended by inserting at the end the following new 

2 sentence: ‘‘The determination with regard to the 

3 Corporation’s exercise of authority under this sub4 paragraph shall apply to only an insured depository 

5 institution except when severe financial conditions 

6 exist which threaten the stability of a significant 

7 number of insured depository institutions.’’. 

8 (2) Section 403(a) of the Federal Deposit In9 surance Corporation Improvement Act of 1991 (12 

10 U.S.C. 4403(a)) is amended by inserting ‘‘section 

11 1609(c) of the Resolution Authority for Large, 

12 Interconnected Financial Companies Act of 2009, 

13 section 1367 of the Federal Housing Enterprises Fi14 nancial Safety and Soundness Act of 1992 (12 

15 U.S.C. 4617(d)),’’ after ‘‘section 11(e) of the Fed16 eral Deposit Insurance Act,’’. 

17 Subtitle H—Additional Improve18 ments for Financial Crisis Man19 agement 

20 SEC. 1701. ADDITIONAL IMPROVEMENTS FOR FINANCIAL 

21 CRISIS MANAGEMENT. 

22 Section 13 of the Federal Reserve Act is amended 

23 in the 3rd undesignated paragraph (12 U.S.C. 343) to 

24 read as follows: 


wwoods2 on DSK1DXX6B1PROD with BILLS
379 

•HR 3996 IH

1 ‘‘In unusual and exigent circumstances, the Board of 

2 Governors of the Federal Reserve System, by the affirma3 tive vote of not less than five members and with the writ4 ten concurrence of the Secretary of the Treasury, may au5 thorize any Federal reserve bank, during such periods as 

6 the said board may determine, at rates established in ac7 cordance with the provisions of section 14, subdivision (d) 

8 of this Act (12 U.S.C. 357), to discount for an individual, 

9 partnership, or corporation, notes, drafts, and bills of ex10 change when such notes, drafts, and bills of exchange are 

11 indorsed or otherwise secured to the satisfaction of the 

12 Federal reserve bank: Provided, That the Board of Gov13 ernors of the Federal Reserve System may authorize a 

14 Federal reserve bank to discount notes, drafts, or bills of 

15 exchange under this section only as part of a broadly avail16 able credit or other facility and may not authorize a Fed17 eral Reserve bank to discount notes, drafts, or bills of ex18 change for only a single and specific individual, partner19 ship, or corporation: And provided further that before dis20 counting any such note, draft, or bill of exchange for an 

21 individual, a partnership or corporation the Federal re22 serve bank shall obtain evidence that such individual, part23 nership, or corporation is unable to secure adequate credit 

24 accommodations from other banking institutions. All dis25 counts under this paragraph for individuals, partnerships, 


wwoods2 on DSK1DXX6B1PROD with BILLS
380 

•HR 3996 IH

1 or corporations shall be subject to such limitations, restric2 tions, and regulations as the Board of Governors of the 

3 Federal Reserve System may prescribe.’’. 

Æ 


wwoods2 on DSK1DXX6B1PROD with BILLS