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[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4173 Engrossed Amendment Senate (EAS)]

                  In the Senate of the United States,

                                                          May 20, 2010.
    Resolved, That the bill from the House of Representatives (H.R. 
4173) entitled ``An Act to provide for financial regulatory reform, to 
protect consumers and investors, to enhance Federal understanding of 
insurance issues, to regulate the over-the-counter derivatives markets, 
and for other purposes.'', do pass with the following

                              AMENDMENTS:

            Strike all after the enacting clause and insert the 
      following:

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Restoring American 
Financial Stability Act of 2010''.
    (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Definitions.
Sec. 3. Severability.
Sec. 4. Effective date.

                      TITLE I--FINANCIAL STABILITY

Sec. 101. Short title.
Sec. 102. Definitions.

           Subtitle A--Financial Stability Oversight Council

Sec. 111. Financial Stability Oversight Council established.
Sec. 112. Council authority.
Sec. 113. Authority to require supervision and regulation of certain 
                            nonbank financial companies.
Sec. 114. Registration of nonbank financial companies supervised by the 
                            Board of Governors.
Sec. 115. Enhanced supervision and prudential standards for nonbank 
                            financial companies supervised by the Board 
                            of Governors and certain bank holding 
                            companies.
Sec. 116. Reports.
Sec. 117. Treatment of certain companies that cease to be bank holding 
                            companies.
Sec. 118. Council funding.
Sec. 119. Resolution of supervisory jurisdictional disputes among 
                            member agencies.
Sec. 120. Additional standards applicable to activities or practices 
                            for financial stability purposes.
Sec. 121. Mitigation of risks to financial stability.

                Subtitle B--Office of Financial Research

Sec. 151. Definitions.
Sec. 152. Office of Financial Research established.
Sec. 153. Purpose and duties of the Office.
Sec. 154. Organizational structure; responsibilities of primary 
                            programmatic units.
Sec. 155. Funding.
Sec. 156. Transition oversight.

Subtitle C--Additional Board of Governors Authority for Certain Nonbank 
             Financial Companies and Bank Holding Companies

Sec. 161. Reports by and examinations of nonbank financial companies 
                            supervised by the Board of Governors.
Sec. 162. Enforcement.
Sec. 163. Acquisitions.
Sec. 164. Prohibition against management interlocks between certain 
                            financial companies.
Sec. 165. Enhanced supervision and prudential standards for nonbank 
                            financial companies supervised by the Board 
                            of Governors and certain bank holding 
                            companies.
Sec. 166. Early remediation requirements.
Sec. 167. Affiliations.
Sec. 168. Regulations.
Sec. 169. Avoiding duplication.
Sec. 170. Safe harbor.
Sec. 171. Leverage and risk-based capital requirements.

                TITLE II--ORDERLY LIQUIDATION AUTHORITY

Sec. 201. Definitions.
Sec. 202. Judicial review.
Sec. 203. Systemic risk determination.
Sec. 204. Orderly liquidation.
Sec. 205. Orderly liquidation of covered brokers and dealers.
Sec. 206. Mandatory terms and conditions for all orderly liquidation 
                            actions.
Sec. 207. Directors not liable for acquiescing in appointment of 
                            receiver.
Sec. 208. Dismissal and exclusion of other actions.
Sec. 209. Rulemaking; non-conflicting law.
Sec. 210. Powers and duties of the corporation.
Sec. 211. Miscellaneous provisions.
Sec. 212. Prohibition of circumvention and prevention of conflicts of 
                            interest.
Sec. 213. Ban on senior executives and directors.
Sec. 214. Prohibition on taxpayer funding.

 TITLE III--TRANSFER OF POWERS TO THE COMPTROLLER OF THE CURRENCY, THE 
                CORPORATION, AND THE BOARD OF GOVERNORS

Sec. 300. Short title.
Sec. 301. Purposes.
Sec. 302. Definition.

               Subtitle A--Transfer of Powers and Duties

Sec. 311. Transfer date.
Sec. 312. Powers and duties transferred.
Sec. 313. Abolishment.
Sec. 314. Amendments to the revised statutes.
Sec. 315. Federal information policy.
Sec. 316. Savings provisions.
Sec. 317. References in Federal law to Federal banking agencies.
Sec. 318. Funding.
Sec. 319. Contracting and leasing authority.

                  Subtitle B--Transitional Provisions

Sec. 321. Interim use of funds, personnel, and property of the Office 
                            of Thrift Supervision.
Sec. 322. Transfer of employees.
Sec. 323. Property transferred.
Sec. 324. Funds transferred.
Sec. 325. Disposition of affairs.
Sec. 326. Continuation of services.

           Subtitle C--Federal Deposit Insurance Corporation

Sec. 331. Deposit insurance reforms.
Sec. 332. Management of the Federal Deposit Insurance Corporation.

           Subtitle D--Termination of Federal Thrift Charter

Sec. 341. Termination of Federal savings associations.
Sec. 342. Branching.

       TITLE IV--REGULATION OF ADVISERS TO HEDGE FUNDS AND OTHERS

Sec. 401. Short title.
Sec. 402. Definitions.
Sec. 403. Elimination of private adviser exemption; limited exemption 
                            for foreign private advisers; limited 
                            intrastate exemption.
Sec. 404. Collection of systemic risk data; reports; examinations; 
                            disclosures.
Sec. 405. Disclosure provision eliminated.
Sec. 406. Clarification of rulemaking authority.
Sec. 407. Exemption of venture capital fund advisers.
Sec. 408. Exemption of and record keeping by private equity fund 
                            advisers.
Sec. 409. Family offices.
Sec. 410. State and Federal responsibilities; asset threshold for 
                            Federal registration of investment 
                            advisers.
Sec. 411. Custody of client assets.
Sec. 412. Adjusting the accredited investor standard.
Sec. 413. GAO study and report on accredited investors.
Sec. 414. GAO study on self-regulatory organization for private funds.
Sec. 415. Commission study and report on short selling.
Sec. 416. Transition period.

                           TITLE V--INSURANCE

                Subtitle A--Office of National Insurance

Sec. 501. Short title.
Sec. 502. Establishment of Office of National Insurance.

                Subtitle B--State-based Insurance Reform

Sec. 511. Short title.
Sec. 512. Effective date.

                     PART I--Nonadmitted Insurance

Sec. 521. Reporting, payment, and allocation of premium taxes.
Sec. 522. Regulation of nonadmitted insurance by insured's home State.
Sec. 523. Participation in national producer database.
Sec. 524. Uniform standards for surplus lines eligibility.
Sec. 525. Streamlined application for commercial purchasers.
Sec. 526. GAO study of nonadmitted insurance market.
Sec. 527. Definitions.

                          PART II--Reinsurance

Sec. 531. Regulation of credit for reinsurance and reinsurance 
                            agreements.
Sec. 532. Regulation of reinsurer solvency.
Sec. 533. Definitions.

                     PART III--Rule of Construction

Sec. 541. Rule of construction.
Sec. 542. Severability.

 TITLE VI--IMPROVEMENTS TO REGULATION OF BANK AND SAVINGS ASSOCIATION 
             HOLDING COMPANIES AND DEPOSITORY INSTITUTIONS

Sec. 601. Short title.
Sec. 602. Definition.
Sec. 603. Moratorium and study on treatment of credit card banks, 
                            industrial loan companies, and certain 
                            other companies under the Bank Holding 
                            Company Act of 1956.
Sec. 604. Reports and examinations of holding companies; regulation of 
                            functionally regulated subsidiaries.
Sec. 605. Assuring consistent oversight of permissible activities of 
                            depository institution subsidiaries of 
                            holding companies.
Sec. 606. Requirements for financial holding companies to remain well 
                            capitalized and well managed.
Sec. 607. Standards for interstate acquisitions.
Sec. 608. Enhancing existing restrictions on bank transactions with 
                            affiliates.
Sec. 609. Eliminating exceptions for transactions with financial 
                            subsidiaries.
Sec. 610. Lending limits applicable to credit exposure on derivative 
                            transactions, repurchase agreements, 
                            reverse repurchase agreements, and 
                            securities lending and borrowing 
                            transactions.
Sec. 611. Application of national bank lending limits to insured State 
                            banks.
Sec. 612. Restriction on conversions of troubled banks.
Sec. 613. De novo branching into States.
Sec. 614. Lending limits to insiders.
Sec. 615. Limitations on purchases of assets from insiders.
Sec. 616. Regulations regarding capital levels of holding companies.
Sec. 617. Elimination of elective investment bank holding company 
                            framework.
Sec. 618. Securities holding companies.
Sec. 619. Restrictions on capital market activity by banks and bank 
                            holding companies.
Sec. 620. Concentration limits on large financial firms.

         TITLE VII--WALL STREET TRANSPARENCY AND ACCOUNTABILITY

Sec. 701. Short title.

        Subtitle A--Regulation of Over-the-Counter Swaps Markets

                      PART I--Regulatory Authority

Sec. 711. Definitions.
Sec. 712. Review of regulatory authority.
Sec. 713. Recommendations for changes to portfolio margining laws.
Sec. 714. Abusive swaps.
Sec. 715. Authority to prohibit participation in swap activities.
Sec. 716. Prohibition against Federal Government bailouts of swaps 
                            entities.
Sec. 717. New product approval--CFTC-SEC process.
Sec. 718. Determining status of novel derivative products.

                  PART II--Regulation of Swap Markets

Sec. 721. Definitions.
Sec. 722. Jurisdiction.
Sec. 723. Clearing.
Sec. 724. Swaps; segregation and bankruptcy treatment.
Sec. 725. Derivatives clearing organizations.
Sec. 726. Rulemaking on conflict of interest.
Sec. 727. Public reporting of swap transaction data.
Sec. 728. Swap data repositories.
Sec. 729. Reporting and recordkeeping.
Sec. 730. Large swap trader reporting.
Sec. 731. Registration and regulation of swap dealers and major swap 
                            participants.
Sec. 732. Conflicts of interest.
Sec. 733. Swap execution facilities.
Sec. 734. Derivatives transaction execution facilities and exempt 
                            boards of trade.
Sec. 735. Designated contract markets.
Sec. 736. Margin.
Sec. 737. Position limits.
Sec. 738. Foreign boards of trade.
Sec. 739. Legal certainty for swaps.
Sec. 740. Multilateral clearing organizations.
Sec. 741. Enforcement.
Sec. 742. Retail commodity transactions.
Sec. 743. Other authority.
Sec. 744. Restitution remedies.
Sec. 745. Enhanced compliance by registered entities.
Sec. 746. Insider trading.
Sec. 747. Antidisruptive practices authority.
Sec. 748. Commodity whistleblower incentives and protection.
Sec. 749. Conforming amendments.
Sec. 750. Study on oversight of carbon markets.
Sec. 751. Energy and Environmental Markets Advisory Committee.
Sec. 752. International harmonization.
Sec. 753. Antimarket manipulation authority.
Sec. 754. Effective date.

         Subtitle B--Regulation of Security-Based Swap Markets

Sec. 761. Definitions under the Securities Exchange Act of 1934.
Sec. 762. Repeal of prohibition on regulation of security-based swap 
                            agreements.
Sec. 763. Amendments to the Securities Exchange Act of 1934.
Sec. 764. Registration and regulation of security-based swap dealers 
                            and major security-based swap participants.
Sec. 765. Rulemaking on conflict of interest.
Sec. 766. Reporting and recordkeeping.
Sec. 767. State gaming and bucket shop laws.
Sec. 768. Amendments to the Securities Act of 1933; treatment of 
                            security-based swaps.
Sec. 769. Definitions under the Investment Company Act of 1940.
Sec. 770. Definitions under the Investment Advisors Act of 1940.
Sec. 771. Other authority.
Sec. 772. Jurisdiction.
Sec. 773. Effective date.

       TITLE VIII--PAYMENT, CLEARING, AND SETTLEMENT SUPERVISION

Sec. 801. Short title.
Sec. 802. Findings and purposes.
Sec. 803. Definitions.
Sec. 804. Designation of systemic importance.
Sec. 805. Standards for systemically important financial market 
                            utilities and payment, clearing, or 
                            settlement activities.
Sec. 806. Operations of designated financial market utilities.
Sec. 807. Examination of and enforcement actions against designated 
                            financial market utilities.
Sec. 808. Examination of and enforcement actions against financial 
                            institutions subject to standards for 
                            designated activities.
Sec. 809. Requests for information, reports, or records.
Sec. 810. Rulemaking.
Sec. 811. Other authority.
Sec. 812. Effective date.

 TITLE IX--INVESTOR PROTECTIONS AND IMPROVEMENTS TO THE REGULATION OF 
                               SECURITIES

               Subtitle A--Increasing Investor Protection

Sec. 911. Investor Advisory Committee established.
Sec. 912. Clarification of authority of the Commission to engage in 
                            investor testing.
Sec. 913. Study and rulemaking regarding obligations of brokers, 
                            dealers, and investment advisers.
Sec. 914. Office of the Investor Advocate.
Sec. 915. Streamlining of filing procedures for self-regulatory 
                            organizations.
Sec. 916. Study regarding financial literacy among investors.
Sec. 917. Study regarding mutual fund advertising.
Sec. 918. Clarification of Commission authority to require investor 
                            disclosures before purchase of investment 
                            products and services.
Sec. 919. Study on conflicts of interest.
Sec. 919A. Study on improved investor access to information on 
                            investment advisers and broker-dealers.
Sec. 919B. Study on financial planners and the use of financial 
                            designations.

       Subtitle B--Increasing Regulatory Enforcement and Remedies

Sec. 921. Authority to issue rules related to mandatory predispute 
                            arbitration.
Sec. 922. Whistleblower protection.
Sec. 923. Conforming amendments for whistleblower protection.
Sec. 924. Implementation and transition provisions for whistleblower 
                            protection.
Sec. 925. Collateral bars.
Sec. 926. Disqualifying felons and other ``bad actors'' from Regulation 
                            D Offerings.
Sec. 927. Equal treatment of self-regulatory organization rules.
Sec. 928. Clarification that Section 205 of the Investment Advisers Act 
                            of 1940 does not apply to State-registered 
                            advisers.
Sec. 929. Unlawful margin lending.
Sec. 929A. Protection for employees of subsidiaries and affiliates of 
                            publicly traded companies.
Sec. 929B. FAIR Fund amendments.
Sec. 929C. Increasing the borrowing limit on Treasury loans.

  Subtitle C--Improvements to the Regulation of Credit Rating Agencies

Sec. 931. Findings.
Sec. 932. Enhanced regulation, accountability, and transparency of 
                            nationally recognized statistical rating 
                            organizations.
Sec. 933. State of mind in private actions.
Sec. 934. Referring tips to law enforcement or regulatory authorities.
Sec. 935. Consideration of information from sources other than the 
                            issuer in rating decisions.
Sec. 936. Qualification standards for credit rating analysts.
Sec. 937. Timing of regulations.
Sec. 938. Universal ratings symbols.
Sec. 939. Removal of statutory references to credit ratings.
Sec. 939A. Securities and Exchange Commission study on strengthening 
                            credit rating agency independence.
Sec. 939B. Government Accountability Office study on alternative 
                            business models.
Sec. 939C. Government Accountability Office study on the creation of an 
                            independent professional analyst 
                            organization.
Sec. 939D. Initial credit rating assignments.

  Subtitle D--Improvements to the Asset-Backed Securitization Process

Sec. 941. Regulation of credit risk retention.
Sec. 942. Disclosures and reporting for asset-backed securities.
Sec. 943. Representations and warranties in asset-backed offerings.
Sec. 944. Exempted transactions under the Securities Act of 1933.
Sec. 945. Due diligence analysis and disclosure in asset-backed 
                            securities issues.

         Subtitle E--Accountability and Executive Compensation

Sec. 951. Shareholder vote on executive compensation disclosures.
Sec. 952. Compensation committee independence.
Sec. 953. Executive compensation disclosures.
Sec. 954. Recovery of erroneously awarded compensation.
Sec. 955. Disclosure regarding employee and director hedging.
Sec. 956. Excessive compensation by holding companies of depository 
                            institutions.
Sec. 957. Voting by brokers.

   Subtitle F--Improvements to the Management of the Securities and 
                          Exchange Commission

Sec. 961. Report and certification of internal supervisory controls.
Sec. 962. Triennial report on personnel management.
Sec. 963. Annual financial controls audit.
Sec. 964. Report on oversight of national securities associations.
Sec. 965. Compliance examiners.
Sec. 966. Suggestion program for employees of the Commission.

             Subtitle G--Strengthening Corporate Governance

Sec. 971. Election of directors by majority vote in uncontested 
                            elections.
Sec. 972. Proxy access.
Sec. 973. Disclosures regarding chairman and CEO structures.

                    Subtitle H--Municipal Securities

Sec. 975. Regulation of municipal securities and changes to the board 
                            of the MSRB.
Sec. 976. Government Accountability Office study of increased 
                            disclosure to investors.
Sec. 977. Government Accountability Office study on the municipal 
                            securities markets.
Sec. 978. Study of funding for Government Accounting Standards Board.
Sec. 979. Commission Office of Municipal Securities.

   Subtitle I--Public Company Accounting Oversight Board, Portfolio 
                      Margining, and Other Matters

Sec. 981. Authority to share certain information with foreign 
                            authorities.
Sec. 982. Oversight of brokers and dealers.
Sec. 983. Portfolio margining.
Sec. 984. Loan or borrowing of securities.
Sec. 985. Technical corrections to Federal securities laws.
Sec. 986. Conforming amendments relating to repeal of the Public 
                            Utility Holding Company Act of 1935.
Sec. 987. Amendment to definition of material loss and nonmaterial 
                            losses to the Deposit Insurance Fund for 
                            purposes of Inspector General reviews.
Sec. 988. Amendment to definition of material loss and nonmaterial 
                            losses to the National Credit Union Share 
                            Insurance Fund for purposes of Inspector 
                            General reviews.
Sec. 989. Government Accountability Office study on proprietary 
                            trading.
Sec. 989A. Senior investor protections.
Sec. 989B. Designated Federal Entity Inspectors General Independence.
Sec. 989C. Strengthening Inspector General accountability.
Sec. 989D. Removal of inspectors general of designated Federal 
                            entities.
Sec. 989E. Additional oversight of financial regulatory system.

   Subtitle J--Self-funding of the Securities and Exchange Commission

Sec. 991. Securities and Exchange Commission self-funding.

            TITLE X--BUREAU OF CONSUMER FINANCIAL PROTECTION

Sec. 1001. Short title.
Sec. 1002. Definitions.

          Subtitle A--Bureau of Consumer Financial Protection

Sec. 1011. Establishment of the Bureau.
Sec. 1012. Executive and administrative powers.
Sec. 1013. Administration.
Sec. 1014. Consumer Advisory Board.
Sec. 1015. Coordination.
Sec. 1016. Appearances before and reports to Congress.
Sec. 1017. Funding; penalties and fines.
Sec. 1018. Effective date.

                Subtitle B--General Powers of the Bureau

Sec. 1021. Purpose, objectives, and functions.
Sec. 1022. Rulemaking authority.
Sec. 1023. Review of Bureau regulations.
Sec. 1024. Supervision of nondepository covered persons.
Sec. 1025. Supervision of very large banks, savings associations, and 
                            credit unions.
Sec. 1026. Other banks, savings associations, and credit unions.
Sec. 1027. Limitations on authorities of the Bureau; preservation of 
                            authorities.
Sec. 1028. Authority to restrict mandatory pre-dispute arbitration.
Sec. 1029. Effective date.

                Subtitle C--Specific Bureau Authorities

Sec. 1031. Prohibiting unfair, deceptive, or abusive acts or practices.
Sec. 1032. Disclosures.
Sec. 1033. Consumer rights to access information.
Sec. 1034. Response to consumer complaints and inquiries.
Sec. 1035. Private education loan ombudsman.
Sec. 1036. Prohibited acts.
Sec. 1037. Effective date.

                 Subtitle D--Preservation of State Law

Sec. 1041. Relation to State law.
Sec. 1042. Preservation of enforcement powers of States.
Sec. 1043. Preservation of existing contracts.
Sec. 1044. State law preemption standards for national banks and 
                            subsidiaries clarified.
Sec. 1045. Clarification of law applicable to nondepository institution 
                            subsidiaries.
Sec. 1046. State law preemption standards for Federal savings 
                            associations and subsidiaries clarified.
Sec. 1047. Visitorial standards for national banks and savings 
                            associations.
Sec. 1048. Effective date.

                     Subtitle E--Enforcement Powers

Sec. 1051. Definitions.
Sec. 1052. Investigations and administrative discovery.
Sec. 1053. Hearings and adjudication proceedings.
Sec. 1054. Litigation authority.
Sec. 1055. Relief available.
Sec. 1056. Referrals for criminal proceedings.
Sec. 1057. Employee protection.
Sec. 1058. Effective date.

     Subtitle F--Transfer of Functions and Personnel; Transitional 
                               Provisions

Sec. 1061. Transfer of consumer financial protection functions.
Sec. 1062. Designated transfer date.
Sec. 1063. Savings provisions.
Sec. 1064. Transfer of certain personnel.
Sec. 1065. Incidental transfers.
Sec. 1066. Interim authority of the Secretary.
Sec. 1067. Transition oversight.

                  Subtitle G--Regulatory Improvements

Sec. 1071. Small business data collection.
Sec. 1072. GAO study on the effectiveness and impact of various 
                            appraisal methods.
Sec. 1073. Prohibited payments to mortgage originators.
Sec. 1074. Minimum standards for residential mortgage loans.
Sec. 1075. Prohibition on certain prepayment penalties.
Sec. 1076. Assistance for economically vulnerable individuals and 
                            families.
Sec. 1077. Remittance transfers.
Sec. 1078. Department of the Treasury study on ending the 
                            conservatorship of Fannie Mae, Freddie Mac, 
                            and reforming the housing finance system.
Sec. 1079. Reasonable fees and rules for payment card transactions.
Sec. 1079A. Use of Consumer Reports.

                   Subtitle H--Conforming Amendments

Sec. 1081. Amendments to the Inspector General Act.
Sec. 1082. Amendments to the Privacy Act of 1974.
Sec. 1083. Amendments to the Alternative Mortgage Transaction Parity 
                            Act of 1982.
Sec. 1084. Amendments to the Electronic Fund Transfer Act.
Sec. 1085. Amendments to the Equal Credit Opportunity Act.
Sec. 1086. Amendments to the Expedited Funds Availability Act.
Sec. 1087. Amendments to the Fair Credit Billing Act.
Sec. 1088. Amendments to the Fair Credit Reporting Act and the Fair and 
                            Accurate Credit Transactions Act.
Sec. 1089. Amendments to the Fair Debt Collection Practices Act.
Sec. 1090. Amendments to the Federal Deposit Insurance Act.
Sec. 1091. Amendments to the Gramm-Leach-Bliley Act.
Sec. 1092. Amendments to the Home Mortgage Disclosure Act.
Sec. 1093. Amendments to the Homeowners Protection Act of 1998.
Sec. 1094. Amendments to the Home Ownership and Equity Protection Act 
                            of 1994.
Sec. 1095. Amendments to the Omnibus Appropriations Act, 2009.
Sec. 1096. Amendments to the Real Estate Settlement Procedures Act.
Sec. 1097. Amendments to the Right to Financial Privacy Act of 1978.
Sec. 1098. Amendments to the Secure and Fair Enforcement for Mortgage 
                            Licensing Act of 2008.
Sec. 1099. Amendments to the Truth in Lending Act.
Sec. 1100. Amendments to the Truth in Savings Act.
Sec. 1101. Amendments to the Telemarketing and Consumer Fraud and Abuse 
                            Prevention Act.
Sec. 1102. Amendments to the Paperwork Reduction Act.
Sec. 1103. Adjustments for inflation in the Truth in Lending Act.
Sec. 1104. Small business fairness and regulatory transparency.
Sec. 1105. Effective date.

              TITLE XI--FEDERAL RESERVE SYSTEM PROVISIONS

Sec. 1151. Federal Reserve Act amendments on emergency lending 
                            authority.
Sec. 1152. Reviews of special Federal Reserve credit facilities.
Sec. 1153. Public access to information.
Sec. 1154. Liquidity event determination.
Sec. 1155. Emergency financial stabilization.
Sec. 1156. Additional related amendments.
Sec. 1157. Federal Reserve Act amendments on Federal reserve bank 
                            governance.
Sec. 1158. Amendments to the Federal Reserve Act relating to 
                            supervision and regulation policy.
Sec. 1159. GAO audit of the Federal Reserve facilities; Publication of 
                            Board actions.

    TITLE XII--IMPROVING ACCESS TO MAINSTREAM FINANCIAL INSTITUTIONS

Sec. 1201. Short title.
Sec. 1202. Purpose.
Sec. 1203. Definitions.
Sec. 1204. Expanded access to mainstream financial institutions.
Sec. 1205. Low-cost alternatives to payday loans.
Sec. 1206. Grants to establish loan-loss reserve funds.
Sec. 1207. Procedural provisions.
Sec. 1208. Authorization of appropriations.
Sec. 1209. Regulations.
Sec. 1210. Evaluation and reports to Congress.

                      TITLE XIII--PAY IT BACK ACT

Sec. 1301. Short title.
Sec. 1302. Amendment to reduce TARP authorization.
Sec. 1303. Report.
Sec. 1304. Amendments to Housing and Economic Recovery Act of 2008.
Sec. 1305. Federal Housing Finance Agency report.
Sec. 1306. Repayment of unobligated ARRA funds.

                        TITLE XIV--MISCELLANEOUS

Sec. 1401. Restrictions on use of Federal funds to finance bailouts of 
                            foreign governments.

                   TITLE XV--CONGO CONFLICT MINERALS

Sec. 1501. Sense of Congress on exploitation and trade of columbite-
                            tantalite, cassiterite, gold, and 
                            wolframite originating in Democratic 
                            Republic of Congo.
Sec. 1502. Disclosure to Securities and Exchange Commission relating to 
                            columbite-tantalite, cassiterite, gold, and 
                            wolframite originating in Democratic 
                            Republic of Congo.
Sec. 1503. Report.

SEC. 2. DEFINITIONS.

    As used in this Act, the following definitions shall apply, except 
as the context otherwise requires or as otherwise specifically provided 
in this Act:
            (1) Affiliate.--The term ``affiliate'' means any company 
        that controls, is controlled by, or is under common control 
        with another company.
            (2) Appropriate federal banking agency.--On and after the 
        transfer date, the term ``appropriate Federal banking agency'' 
        has the same meaning as in section 3(q) of the Federal Deposit 
        Insurance Act (12 U.S.C. 1813(q)), as amended by title III.
            (3) Board of governors.--The term ``Board of Governors'' 
        means the Board of Governors of the Federal Reserve System.
            (4) Bureau.--The term ``Bureau'' means the Bureau of 
        Consumer Financial Protection established under title X.
            (5) Commission.--The term ``Commission'' means the 
        Securities and Exchange Commission, except in the context of 
        the Commodity Futures Trading Commission.
            (6) Corporation.--The term ``Corporation'' means the 
        Federal Deposit Insurance Corporation.
            (7) Council.--The term ``Council'' means the Financial 
        Stability Oversight Council established under title I.
            (8) Credit union.--The term ``credit union'' means a 
        Federal credit union, State credit union, or State-chartered 
        credit union, as those terms are defined in section 101 of the 
        Federal Credit Union Act (12 U.S.C. 1752).
            (9) Federal banking agency.--The term--
                    (A) ``Federal banking agency'' means, individually, 
                the Board of Governors, the Office of the Comptroller 
                of the Currency, and the Corporation; and
                    (B) ``Federal banking agencies'' means all of the 
                agencies referred to in subparagraph (A), collectively.
            (10) Functionally regulated subsidiary.--The term 
        ``functionally regulated subsidiary'' has the same meaning as 
        in section 5(c)(5) of the Bank Holding Company Act of 1956 (12 
        U.S.C. 1844(c)(5)).
            (11) Primary financial regulatory agency.--The term 
        ``primary financial regulatory agency'' means--
                    (A) the appropriate Federal banking agency, with 
                respect to institutions described in section 3(q) of 
                the Federal Deposit Insurance Act, except to the extent 
                that an institution is or the activities of an 
                institution are otherwise subject to the jurisdiction 
                of an agency listed in subparagraph (B), (C), (D), or 
                (E);
                    (B) the Securities and Exchange Commission, with 
                respect to--
                            (i) any broker or dealer that is registered 
                        with the Commission under the Securities 
                        Exchange Act of 1934;
                            (ii) any investment company that is 
                        registered with the Commission under the 
                        Investment Company Act of 1940;
                            (iii) any investment adviser that is 
                        registered with the Commission under the 
                        Investment Advisers Act of 1940, with respect 
                        to the investment advisory activities of such 
                        company and activities that are incidental to 
                        such advisory activities; and
                            (iv) any clearing agency registered with 
                        the Commission under the Securities Exchange 
                        Act of 1934;
                    (C) the Commodity Futures Trading Commission, with 
                respect to any futures commission merchant, any 
                commodity trading adviser, and any commodity pool 
                operator registered with the Commodity Futures Trading 
                Commission under the Commodity Exchange Act, with 
                respect to the commodities activities of such entity 
                and activities that are incidental to such commodities 
                activities;
                    (D) the State insurance authority of the State in 
                which an insurance company is domiciled, with respect 
                to the insurance activities and activities that are 
                incidental to such insurance activities of an insurance 
                company that is subject to supervision by the State 
                insurance authority under State insurance law; and
                    (E) the Federal Housing Finance Agency, with 
                respect to Federal Home Loan Banks or the Federal Home 
                Loan Bank System, and with respect to the Federal 
                National Mortgage Association or the Federal Home Loan 
                Mortgage Corporation.
            (12) Prudential standards.--The term ``prudential 
        standards'' means enhanced supervision and regulatory standards 
        developed by the Board of Governors under section 115 or 165.
            (13) Secretary.--The term ``Secretary'' means the Secretary 
        of the Treasury.
            (14) Securities terms.--The--
                    (A) terms ``broker'', ``dealer'', ``issuer'', 
                ``nationally recognized statistical ratings 
                organization'', ``security'', and ``securities laws'' 
                have the same meanings as in section 3 of the 
                Securities Exchange Act of 1934 (15 U.S.C. 78c);
                    (B) term ``investment adviser'' has the same 
                meaning as in section 202 of the Investment Advisers 
                Act of 1940 (15 U.S.C. 80b-2); and
                    (C) term ``investment company'' has the same 
                meaning as in section 3 of the Investment Company Act 
                of 1940 (15 U.S.C. 80a-3).
            (15) State.--The term ``State'' means any State, 
        commonwealth, territory, or possession of the United States, 
        the District of Columbia, the Commonwealth of Puerto Rico, the 
        Commonwealth of the Northern Mariana Islands, American Samoa, 
        Guam, or the United States Virgin Islands.
            (16) Transfer date.--The term ``transfer date'' means the 
        date established under section 311.
            (17) Other incorporated definitions.--
                    (A) Federal deposit insurance act.--The terms 
                ``affiliate'', ``bank'', ``bank holding company'', 
                ``control'' (when used with respect to a depository 
                institution), ``deposit'', ``depository institution'', 
                ``Federal depository institution'', ``Federal savings 
                association'', ``foreign bank'', ``including'', 
                ``insured branch'', ``insured depository institution'', 
                ``national member bank'', ``national nonmember bank'', 
                ``savings association'', ``State bank'', ``State 
                depository institution'', ``State member bank'', 
                ``State nonmember bank'', ``State savings 
                association'', and ``subsidiary'' have the same 
                meanings as in section 3 of the Federal Deposit 
                Insurance Act (12 U.S.C. 1813).
                    (B) Holding companies.--The term--
                            (i) ``bank holding company'' has the same 
                        meaning as in section 2 of the Bank Holding 
                        Company Act of 1956 (12 U.S.C. 1841);
                            (ii) ``financial holding company'' has the 
                        same meaning as in section 2(p) of the Bank 
                        Holding Company Act of 1956 (12 U.S.C. 
                        1841(p)); and
                            (iii) ``savings and loan holding company'' 
                        has the same meaning as in section 10 of the 
                        Home Owners' Loan Act (12 U.S.C. 1467a(a)).

SEC. 3. SEVERABILITY.

    If any provision of this Act, an amendment made by this Act, or the 
application of such provision or amendment to any person or 
circumstance is held to be unconstitutional, the remainder of this Act, 
the amendments made by this Act, and the application of the provisions 
of such to any person or circumstance shall not be affected thereby.

SEC. 4. EFFECTIVE DATE.

    Except as otherwise specifically provided in this Act or the 
amendments made by this Act, this Act and such amendments shall take 
effect 1 day after the date of enactment of this Act.

                      TITLE I--FINANCIAL STABILITY

SEC. 101. SHORT TITLE.

    This title may be cited as the ``Financial Stability Act of 2010''.

SEC. 102. DEFINITIONS.

    (a) In General.--For purposes of this title, unless the context 
otherwise requires, the following definitions shall apply:
            (1) Bank holding company.--The term ``bank holding 
        company'' has the same meaning as in section 2 of the Bank 
        Holding Company Act of 1956 (12 U.S.C. 1841). A foreign bank or 
        company that is treated as a bank holding company for purposes 
        of the Bank Holding Company Act of 1956, pursuant to section 
        8(a) of the International Banking Act of 1978 (12 U.S.C. 
        3106(a)), shall be treated as a bank holding company for 
        purposes of this title.
            (2) Chairperson.--The term ``Chairperson'' means the 
        Chairperson of the Council.
            (3) Member agency.--The term ``member agency'' means an 
        agency represented by a voting member of the Council.
            (4) Nonbank financial company definitions.--
                    (A) Foreign nonbank financial company.--The term 
                ``foreign nonbank financial company'' means a company 
                (other than a company that is, or is treated in the 
                United States as, a bank holding company or a 
                subsidiary thereof) that is--
                            (i) incorporated or organized in a country 
                        other than the United States; and
                            (ii) predominantly engaged in, including 
                        through a branch in the United States, 
                        financial activities, as defined in paragraph 
                        (6).
                    (B) U.S. nonbank financial company.--The term 
                ``U.S. nonbank financial company'' means a company 
                (other than a bank holding company or a subsidiary 
                thereof, or a Farm Credit System institution chartered 
                and subject to the provisions of the Farm Credit Act of 
                1971 (12 U.S.C. 2001 et seq.)) that is--
                            (i) incorporated or organized under the 
                        laws of the United States or any State; and
                            (ii) predominantly engaged in financial 
                        activities as defined in paragraph (6).
                    (C) Nonbank financial company.--The term ``nonbank 
                financial company'' means a U.S. nonbank financial 
                company and a foreign nonbank financial company.
                    (D) Nonbank financial company supervised by the 
                board of governors.--The term ``nonbank financial 
                company supervised by the Board of Governors'' means a 
                nonbank financial company that the Council has 
                determined under section 113 shall be supervised by the 
                Board of Governors.
            (5) Office of financial research.--The term ``Office of 
        Financial Research'' means the office established under section 
        152.
            (6) Predominantly engaged.--A company is ``predominantly 
        engaged in financial activities'' if--
                    (A) the annual gross revenues derived by the 
                company and all of its subsidiaries from activities 
                that are financial in nature (as defined in section 
                4(k) of the Bank Holding Company Act of 1956) and, if 
                applicable, from the ownership or control of one or 
                more insured depository institutions, represents 85 
                percent or more of the consolidated annual gross 
                revenues of the company; or
                    (B) the consolidated assets of the company and all 
                of its subsidiaries related to activities that are 
                financial in nature (as defined in section 4(k) of the 
                Bank Holding Company Act of 1956) and, if applicable, 
                related to the ownership or control of one or more 
                insured depository institutions, represents 85 percent 
                or more of the consolidated assets of the company.
            (7) Significant institutions.--The terms ``significant 
        nonbank financial company'' and ``significant bank holding 
        company'' have the meanings given those terms by rule of the 
        Board of Governors.
    (b) Definitional Criteria.--The Board of Governors shall establish, 
by regulation, the requirements for determining if a company is 
predominantly engaged in financial activities, as defined in subsection 
(a)(6).
    (c) Foreign Nonbank Financial Companies.--For purposes of the 
authority of the Board of Governors under this title with respect to 
foreign nonbank financial companies, references in this title to 
``company'' or ``subsidiary'' include only the United States activities 
and subsidiaries of such foreign company.

           Subtitle A--Financial Stability Oversight Council

SEC. 111. FINANCIAL STABILITY OVERSIGHT COUNCIL ESTABLISHED.

    (a) Establishment.--Effective on the date of enactment of this Act, 
there is established the Financial Stability Oversight Council.
    (b) Membership.--The Council shall consist of the following 
members:
            (1) Voting members.--The voting members, who shall each 
        have 1 vote on the Council shall be--
                    (A) the Secretary of the Treasury, who shall serve 
                as Chairperson of the Council;
                    (B) the Chairman of the Board of Governors;
                    (C) the Comptroller of the Currency;
                    (D) the Director of the Bureau;
                    (E) the Chairman of the Commission;
                    (F) the Chairperson of the Corporation;
                    (G) the Chairperson of the Commodity Futures 
                Trading Commission;
                    (H) the Director of the Federal Housing Finance 
                Agency; and
                    (I) an independent member appointed by the 
                President, by and with the advice and consent of the 
                Senate, having insurance expertise.
            (2) Nonvoting members.--The Director of the Office of 
        Financial Research--
                    (A) shall serve in an advisory capacity as a 
                nonvoting member of the Council; and
                    (B) may not be excluded from any of the 
                proceedings, meetings, discussions, or deliberations of 
                the Council.
    (c) Terms; Vacancy.--
            (1) Terms.--The independent member of the Council shall 
        serve for a term of 6 years.
            (2) Vacancy.--Any vacancy on the Council shall be filled in 
        the manner in which the original appointment was made.
            (3) Acting officials may serve.--In the event of a vacancy 
        in the office of the head of a member agency or department, and 
        pending the appointment of a successor, or during the absence 
        or disability of the head of a member agency or department, the 
        acting head of the member agency or department shall serve as a 
        member of the Council in the place of that agency or department 
        head.
    (d) Technical and Professional Advisory Committees.--The Council 
may appoint such special advisory, technical, or professional 
committees as may be useful in carrying out the functions of the 
Council, including an advisory committee consisting of State 
regulators, and the members of such committees may be members of the 
Council, or other persons, or both.
    (e) Meetings.--
            (1) Timing.--The Council shall meet at the call of the 
        Chairperson or a majority of the members then serving, but not 
        less frequently than quarterly.
            (2) Rules for conducting business.--The Council shall adopt 
        such rules as may be necessary for the conduct of the business 
        of the Council. Such rules shall be rules of agency 
        organization, procedure, or practice for purposes of section 
        553 of title 5, United States Code.
    (f) Voting.--Unless otherwise specified, the Council shall make all 
decisions that it is authorized or required to make by a majority vote 
of the members then serving.
    (g) Nonapplicability of FACA.--The Federal Advisory Committee Act 
(5 U.S.C. App.) shall not apply to the Council, or to any special 
advisory, technical, or professional committee appointed by the 
Council, except that, if an advisory, technical, or professional 
committee has one or more members who are not employees of or 
affiliated with the United States Government, the Council shall publish 
a list of the names of the members of such committee.
    (h) Assistance From Federal Agencies.--Any department or agency of 
the United States may provide to the Council and any special advisory, 
technical, or professional committee appointed by the Council, such 
services, funds, facilities, staff, and other support services as the 
Council may determine advisable.
    (i) Compensation of Members.--
            (1) Federal employee members.--All members of the Council 
        who are officers or employees of the United States shall serve 
        without compensation in addition to that received for their 
        services as officers or employees of the United States.
            (2) Compensation for non-federal member.--Section 5314 of 
        title 5, United States Code, is amended by adding at the end 
        the following:
            ``Independent Member of the Financial Stability Oversight 
        Council (1).''.
    (j) Detail of Government Employees.--Any employee of the Federal 
Government may be detailed to the Council without reimbursement, and 
such detail shall be without interruption or loss of civil service 
status or privilege. An employee of the Federal Government detailed to 
the Council shall report to and be subject to oversight by the Council 
during the assignment to the Council, and shall be compensated by the 
department or agency from which the employee was detailed.

SEC. 112. COUNCIL AUTHORITY.

    (a) Purposes and Duties of the Council.--
            (1) In general.--The purposes of the Council are--
                    (A) to identify risks to the financial stability of 
                the United States that could arise from the material 
                financial distress or failure of large, interconnected 
                bank holding companies or nonbank financial companies;
                    (B) to promote market discipline, by eliminating 
                expectations on the part of shareholders, creditors, 
                and counterparties of such companies that the 
                Government will shield them from losses in the event of 
                failure; and
                    (C) to respond to emerging threats to the stability 
                of the United States financial markets.
            (2) Duties.--The Council shall, in accordance with this 
        title--
                    (A) collect information from member agencies and 
                other Federal and State financial regulatory agencies 
                and, if necessary to assess risks to the United States 
                financial system, direct the Office of Financial 
                Research to collect information from bank holding 
                companies and nonbank financial companies;
                    (B) provide direction to, and request data and 
                analyses from, the Office of Financial Research to 
                support the work of the Council;
                    (C) monitor the financial services marketplace in 
                order to identify potential threats to the financial 
                stability of the United States;
                    (D) facilitate information sharing and coordination 
                among the member agencies and other Federal and State 
                agencies regarding domestic financial services policy 
                development, rulemaking, examinations, reporting 
                requirements, and enforcement actions;
                    (E) recommend to the member agencies general 
                supervisory priorities and principles reflecting the 
                outcome of discussions among the member agencies;
                    (F) identify gaps in regulation that could pose 
                risks to the financial stability of the United States;
                    (G) require supervision by the Board of Governors 
                for nonbank financial companies that may pose risks to 
                the financial stability of the United States in the 
                event of their material financial distress or failure, 
                pursuant to section 113;
                    (H) make recommendations to the Board of Governors 
                concerning the establishment of heightened prudential 
                standards for risk-based capital, leverage, liquidity, 
                contingent capital, resolution plans and credit 
                exposure reports, concentration limits, enhanced public 
                disclosures, and overall risk management for nonbank 
                financial companies and large, interconnected bank 
                holding companies supervised by the Board of Governors;
                    (I) identify systemically important financial 
                market utilities and payment, clearing, and settlement 
                activities (as that term is defined in title VIII), and 
                require such utilities and activities to be subject to 
                standards established by the Board of Governors;
                    (J) make recommendations to primary financial 
                regulatory agencies to apply new or heightened 
                standards and safeguards for financial activities or 
                practices that could create or increase risks of 
                significant liquidity, credit, or other problems 
                spreading among bank holding companies, nonbank 
                financial companies, and United States financial 
                markets;
                    (K) make determinations regarding exemptions in 
                title VII, where necessary;
                    (L) provide a forum for--
                            (i) discussion and analysis of emerging 
                        market developments and financial regulatory 
                        issues; and
                            (ii) resolution of jurisdictional disputes 
                        among the members of the Council; and
                    (M) annually report to and testify before Congress 
                on--
                            (i) the activities of the Council;
                            (ii) significant financial market 
                        developments and potential emerging threats to 
                        the financial stability of the United States;
                            (iii) all determinations made under section 
                        113 or title VIII, and the basis for such 
                        determinations; and
                            (iv) recommendations--
                                    (I) to enhance the integrity, 
                                efficiency, competitiveness, and 
                                stability of United States financial 
                                markets;
                                    (II) to promote market discipline; 
                                and
                                    (III) to maintain investor 
                                confidence.
    (b) Authority To Obtain Information.--
            (1) In general.--The Council may receive, and may request 
        the submission of, any data or information from the Office of 
        Financial Research and member agencies, as necessary--
                    (A) to monitor the financial services marketplace 
                to identify potential risks to the financial stability 
                of the United States; or
                    (B) to otherwise carry out any of the provisions of 
                this title.
            (2) Submissions by the office and member agencies.--
        Notwithstanding any other provision of law, the Office of 
        Financial Research and any member agency are authorized to 
        submit information to the Council.
            (3) Financial data collection.--
                    (A) In general.--The Council, acting through the 
                Office of Financial Research, may require the 
                submission of periodic and other reports from any 
                nonbank financial company or bank holding company for 
                the purpose of assessing the extent to which a 
                financial activity or financial market in which the 
                nonbank financial company or bank holding company 
                participates, or the nonbank financial company or bank 
                holding company itself, poses a threat to the financial 
                stability of the United States.
                    (B) Mitigation of report burden.--Before requiring 
                the submission of reports from any nonbank financial 
                company or bank holding company that is regulated by a 
                member agency or any primary financial regulatory 
                agency, the Council, acting through the Office of 
                Financial Research, shall coordinate with such agencies 
                and shall, whenever possible, rely on information 
                available from the Office of Financial Research or such 
                agencies.
            (4) Back-up examination by the board of governors.--If the 
        Council is unable to determine whether the financial activities 
        of a nonbank financial company pose a threat to the financial 
        stability of the United States, based on information or reports 
        obtained under paragraph (3), discussions with management, and 
        publicly available information, the Council may request the 
        Board of Governors, and the Board of Governors is authorized, 
        to conduct an examination of the nonbank financial company for 
        the sole purpose of determining whether the nonbank financial 
        company should be supervised by the Board of Governors for 
        purposes of this title.
            (5) Confidentiality.--
                    (A) In general.--The Council, the Office of 
                Financial Research, and the other member agencies shall 
                maintain the confidentiality of any data, information, 
                and reports submitted under this subsection and 
                subtitle B.
                    (B) Retention of privilege.--The submission of any 
                nonpublicly available data or information under this 
                subsection and subtitle B shall not constitute a waiver 
                of, or otherwise affect, any privilege arising under 
                Federal or State law (including the rules of any 
                Federal or State court) to which the data or 
                information is otherwise subject.
                    (C) Freedom of information act.--Section 552 of 
                title 5, United States Code, including the exceptions 
                thereunder, shall apply to any data or information 
                submitted under this subsection and subtitle B.

SEC. 113. AUTHORITY TO REQUIRE SUPERVISION AND REGULATION OF CERTAIN 
              NONBANK FINANCIAL COMPANIES.

    (a) U.S. Nonbank Financial Companies Supervised by the Board of 
Governors.--
            (1) Determination.--The Council, on a nondelegable basis 
        and by a vote of not fewer than \2/3\ of the members then 
        serving, including an affirmative vote by the Chairperson, may 
        determine that a U.S. nonbank financial company shall be 
        supervised by the Board of Governors and shall be subject to 
        prudential standards, in accordance with this title, if the 
        Council determines that material financial distress at the U.S. 
        nonbank financial company would pose a threat to the financial 
        stability of the United States.
            (2) Considerations.--Each determination under paragraph (1) 
        shall be based on a consideration by the Council of--
                    (A) the degree of leverage of the company;
                    (B) the amount and nature of the financial assets 
                of the company;
                    (C) the amount and types of the liabilities of the 
                company, including the degree of reliance on short-term 
                funding;
                    (D) the extent and types of the off-balance-sheet 
                exposures of the company;
                    (E) the extent and types of the transactions and 
                relationships of the company with other significant 
                nonbank financial companies and significant bank 
                holding companies;
                    (F) the importance of the company as a source of 
                credit for households, businesses, and State and local 
                governments and as a source of liquidity for the United 
                States financial system;
                    (G) the recommendation, if any, of a member of the 
                Council;
                    (H) the operation of, or ownership interest in, any 
                clearing, settlement, or payment business of the 
                company;
                    (I) the extent to which--
                            (i) assets are managed rather than owned by 
                        the company; and
                            (ii) ownership of assets under management 
                        is diffuse; and
                    (J) any other factors that the Council deems 
                appropriate.
    (b) Foreign Nonbank Financial Companies Supervised by the Board of 
Governors.--
            (1) Determination.--The Council, on a nondelegable basis 
        and by a vote of not fewer than \2/3\ of the members then 
        serving, including an affirmative vote by the Chairperson, may 
        determine that a foreign nonbank financial company that has 
        substantial assets or operations in the United States shall be 
        supervised by the Board of Governors and shall be subject to 
        prudential standards in accordance with this title, if the 
        Council determines that material financial distress at the 
        foreign nonbank financial company would pose a threat to the 
        financial stability of the United States.
            (2) Considerations.--Each determination under paragraph (1) 
        shall be based on a consideration by the Council of--
                    (A) the degree of leverage of the company;
                    (B) the amount and nature of the United States 
                financial assets of the company;
                    (C) the amount and types of the liabilities of the 
                company used to fund activities and operations in the 
                United States, including the degree of reliance on 
                short-term funding;
                    (D) the extent of the United States-related off-
                balance-sheet exposure of the company;
                    (E) the extent and type of the transactions and 
                relationships of the company with other significant 
                nonbank financial companies and bank holding companies;
                    (F) the importance of the company as a source of 
                credit for United States households, businesses, and 
                State and local governments, and as a source of 
                liquidity for the United States financial system;
                    (G) the recommendation, if any, of a member of the 
                Council;
                    (H) the extent to which--
                            (i) assets are managed rather than owned by 
                        the company; and
                            (ii) ownership of assets under management 
                        is diffuse; and
                    (I) any other factors that the Council deems 
                appropriate.
    (c) Anti-evasion.--
            (1) Determinations.--In order to avoid evasion of this Act, 
        the Council, on its own initiative or at the request of the 
        Board of Governors, may determine, on a nondelegable basis and 
        by a vote of not fewer than \2/3\ of the members then serving, 
        including an affirmative vote by the Chairperson, that--
                    (A) material financial distress related to 
                financial activities conducted directly or indirectly 
                by a company incorporated or organized under the laws 
                of the United States or any State or the financial 
                activities in the United States of a company 
                incorporated or organized in a country other than the 
                United States would pose a threat to the financial 
                stability of the United States based on consideration 
                of the factors in subsection (b)(2);
                    (B) the company is organized or operates in such a 
                manner as to evade the application of this title;
                    (C) such financial activities of the company shall 
                be supervised by the Board of Governors and subject to 
                prudential standards in accordance with this title 
                consistent with paragraph (2); and
                    (D) upon making a determination under subsection 
                (c)(1), the Council shall submit a report to the 
                appropriate committees of Congress detailing the 
                reasons for making such determination under this 
                subsection.
            (2) Consolidated supervision of only financial activities; 
        Establishment of an intermediate holding company.
                    (A) Establishment of an intermediate holding 
                company.--Upon a determination under paragraph (1), the 
                company may establish an intermediate holding company 
                in which the financial activities of such company and 
                its subsidiaries will be conducted (other than the 
                activities described in section 167(b)(2) in compliance 
                with any regulations or guidance provided by the Board 
                of Governors). Such intermediate holding company shall 
                be subject to the supervision of the Board of Governors 
                and to prudential standards under this title as if the 
                intermediate holding company is a nonbank financial 
                company supervised by the Board of Governors.
                    (B) Action of the board of governors.--To 
                facilitate the supervision of the financial activities 
                subject to the determination in paragraph (1), the 
                Board of Governors may require a company to establish 
                an intermediate holding company, as provided for in 
                section 167, which would be subject to the supervision 
                of the Board of Governors and to prudential standards 
                under this title as if the intermediate holding company 
                is a nonbank financial company supervised by the Board 
                of Governors.
            (3) Notice and opportunity for hearing and final 
        determination; judicial review.--Subsections (d), (f), and (g) 
        shall apply to determinations made by the Council pursuant to 
        paragraph (1) in the same manner as such subsections apply to 
        nonbank financial companies.
            (4) Covered financial activities.--For purposes of this 
        subsection, the term ``financial activities'' means activities 
        that are financial in nature (as defined in section 4(k) of the 
        Bank Holding Company Act of 1956) and include the ownership or 
        control of one or more insured depository institutions and 
        shall not include internal financial activities conducted for 
        the company or any affiliates thereof including internal 
        treasury, investment, and employee benefit functions.
            (5) Only financial activities subject to prudential 
        supervision.--Nonfinancial activities of the company shall not 
        be subject to supervision by the Board of Governors and 
        prudential standards of the Board. For purposes of this Act, 
        the financial activities that are the subject of the 
        determination in paragraph (1) shall be subject to the same 
        requirements as a nonbank financial company. Nothing in this 
        paragraph shall prohibit or limit the authority of the Board of 
        Governors to apply prudential standards under this title to the 
        financial activities that are subject to the determination in 
        paragraph (1).
    (d) Reevaluation and Rescission.--The Council shall--
            (1) not less frequently than annually, reevaluate each 
        determination made under subsections (a) and (b) with respect 
        to each nonbank financial company supervised by the Board of 
        Governors; and
            (2) rescind any such determination, if the Council, by a 
        vote of not fewer than \2/3\ of the members then serving, 
        including an affirmative vote by the Chairperson, determines 
        that the nonbank financial company no longer meets the 
        standards under subsection (a) or (b), as applicable.
    (e) Notice and Opportunity for Hearing and Final Determination.--
            (1) In general.--The Council shall provide to a nonbank 
        financial company written notice of a proposed determination of 
        the Council, including an explanation of the basis of the 
        proposed determination of the Council, that such nonbank 
        financial company shall be supervised by the Board of Governors 
        and shall be subject to prudential standards in accordance with 
        this title.
            (2) Hearing.--Not later than 30 days after the date of 
        receipt of any notice of a proposed determination under 
        paragraph (1), the nonbank financial company may request, in 
        writing, an opportunity for a written or oral hearing before 
        the Council to contest the proposed determination. Upon receipt 
        of a timely request, the Council shall fix a time (not later 
        than 30 days after the date of receipt of the request) and 
        place at which such company may appear, personally or through 
        counsel, to submit written materials (or, at the sole 
        discretion of the Council, oral testimony and oral argument).
            (3) Final determination.--Not later than 60 days after the 
        date of a hearing under paragraph (2), the Council shall notify 
        the nonbank financial company of the final determination of the 
        Council, which shall contain a statement of the basis for the 
        decision of the Council.
            (4) No hearing requested.--If a nonbank financial company 
        does not make a timely request for a hearing, the Council shall 
        notify the nonbank financial company, in writing, of the final 
        determination of the Council under subsection (a) or (b), as 
        applicable, not later than 10 days after the date by which the 
        company may request a hearing under paragraph (2).
    (f) Emergency Exception.--
            (1) In general.--The Council may waive or modify the 
        requirements of subsection (d) with respect to a nonbank 
        financial company, if the Council determines, by a vote of not 
        fewer than \2/3\ of the members then serving, including an 
        affirmative vote by the Chairperson, that such waiver or 
        modification is necessary or appropriate to prevent or mitigate 
        threats posed by the nonbank financial company to the financial 
        stability of the United States.
            (2) Notice.--The Council shall provide notice of a waiver 
        or modification under this paragraph to the nonbank financial 
        company concerned as soon as practicable, but not later than 24 
        hours after the waiver or modification is granted.
            (3) Opportunity for hearing.--The Council shall allow a 
        nonbank financial company to request, in writing, an 
        opportunity for a written or oral hearing before the Council to 
        contest a waiver or modification under this paragraph, not 
        later than 10 days after the date of receipt of notice of the 
        waiver or modification by the company. Upon receipt of a timely 
        request, the Council shall fix a time (not later than 15 days 
        after the date of receipt of the request) and place at which 
        the nonbank financial company may appear, personally or through 
        counsel, to submit written materials (or, at the sole 
        discretion of the Council, oral testimony and oral argument).
            (4) Notice of final determination.--Not later than 30 days 
        after the date of any hearing under paragraph (3), the Council 
        shall notify the subject nonbank financial company of the final 
        determination of the Council under this paragraph, which shall 
        contain a statement of the basis for the decision of the 
        Council.
    (g) Consultation.--The Council shall consult with the primary 
financial regulatory agency, if any, for each nonbank financial company 
or subsidiary of a nonbank financial company that is being considered 
for supervision by the Board of Governors under this section before the 
Council makes any final determination with respect to such nonbank 
financial company under subsection (a), (b), or (c).
    (h) Judicial Review.--If the Council makes a final determination 
under this section with respect to a nonbank financial company, such 
nonbank financial company may, not later than 30 days after the date of 
receipt of the notice of final determination under subsection (d)(3) or 
(e)(4), bring an action in the United States district court for the 
judicial district in which the home office of such nonbank financial 
company is located, or in the United States District Court for the 
District of Columbia, for an order requiring that the final 
determination be rescinded, and the court shall, upon review, dismiss 
such action or direct the final determination to be rescinded. Review 
of such an action shall be limited to whether the final determination 
made under this section was arbitrary and capricious.

SEC. 114. REGISTRATION OF NONBANK FINANCIAL COMPANIES SUPERVISED BY THE 
              BOARD OF GOVERNORS.

    Not later than 180 days after the date of a final Council 
determination under section 113 that a nonbank financial company is to 
be supervised by the Board of Governors, such company shall register 
with the Board of Governors, on forms prescribed by the Board of 
Governors, which shall include such information as the Board of 
Governors, in consultation with the Council, may deem necessary or 
appropriate to carry out this title.

SEC. 115. ENHANCED SUPERVISION AND PRUDENTIAL STANDARDS FOR NONBANK 
              FINANCIAL COMPANIES SUPERVISED BY THE BOARD OF GOVERNORS 
              AND CERTAIN BANK HOLDING COMPANIES.

    (a) In General.--
            (1) Purpose.--In order to prevent or mitigate risks to the 
        financial stability of the United States that could arise from 
        the material financial distress or failure of large, 
        interconnected financial institutions, the Council may make 
        recommendations to the Board of Governors concerning the 
        establishment and refinement of prudential standards and 
        reporting and disclosure requirements applicable to nonbank 
        financial companies supervised by the Board of Governors and 
        large, interconnected bank holding companies, that--
                    (A) are more stringent than those applicable to 
                other nonbank financial companies and bank holding 
                companies that do not present similar risks to the 
                financial stability of the United States; and
                    (B) increase in stringency, based on the 
                considerations identified in subsection (b)(3).
            (2) Limitation on bank holding companies.--Any standards 
        recommended under subsections (b) through (f) shall not apply 
        to any bank holding company with total consolidated assets of 
        less than $50,000,000,000. The Council may recommend an asset 
        threshold greater than $50,000,000,000 for the applicability of 
        any particular standard under those subsections.
    (b) Development of Prudential Standards.--
            (1) In general.--The recommendations of the Council under 
        subsection (a) may include--
                    (A) risk-based capital requirements;
                    (B) leverage limits;
                    (C) liquidity requirements;
                    (D) resolution plan and credit exposure report 
                requirements;
                    (E) concentration limits;
                    (F) a contingent capital requirement;
                    (G) enhanced public disclosures; and
                    (H) overall risk management requirements.
            (2) Prudential standards for foreign financial companies.--
        In making recommendations concerning the standards set forth in 
        paragraph (1) that would apply to foreign nonbank financial 
        companies supervised by the Board of Governors or foreign-based 
        bank holding companies, the Council shall give due regard to 
        the principle of national treatment and competitive equity.
            (3) Considerations.--In making recommendations concerning 
        prudential standards under paragraph (1), the Council shall--
                    (A) take into account differences among nonbank 
                financial companies supervised by the Board of 
                Governors and bank holding companies described in 
                subsection (a), based on--
                            (i) the factors described in subsections 
                        (a) and (b) of section 113;
                            (ii) whether the company owns an insured 
                        depository institution;
                            (iii) nonfinancial activities and 
                        affiliations of the company; and
                            (iv) any other factors that the Council 
                        determines appropriate; and
                    (B) to the extent possible, ensure that small 
                changes in the factors listed in subsections (a) and 
                (b) of section 113 would not result in sharp, 
                discontinuous changes in the prudential standards 
                established under paragraph (1).
    (c) Contingent Capital.--
            (1) Study required.--The Council shall conduct a study of 
        the feasibility, benefits, costs, and structure of a contingent 
        capital requirement for nonbank financial companies supervised 
        by the Board of Governors and bank holding companies described 
        in subsection (a), which study shall include--
                    (A) an evaluation of the degree to which such 
                requirement would enhance the safety and soundness of 
                companies subject to the requirement, promote the 
                financial stability of the United States, and reduce 
                risks to United States taxpayers;
                    (B) an evaluation of the characteristics and 
                amounts of convertible debt that should be required;
                    (C) an analysis of potential prudential standards 
                that should be used to determine whether the contingent 
                capital of a company would be converted to equity in 
                times of financial stress;
                    (D) an evaluation of the costs to companies, the 
                effects on the structure and operation of credit and 
                other financial markets, and other economic effects of 
                requiring contingent capital;
                    (E) an evaluation of the effects of such 
                requirement on the international competitiveness of 
                companies subject to the requirement and the prospects 
                for international coordination in establishing such 
                requirement; and
                    (F) recommendations for implementing regulations.
            (2) Report.--The Council shall submit a report to Congress 
        regarding the study required by paragraph (1) not later than 2 
        years after the date of enactment of this Act.
            (3) Recommendations.--
                    (A) In general.--Subsequent to submitting a report 
                to Congress under paragraph (2), the Council may make 
                recommendations to the Board of Governors to require 
                any nonbank financial company supervised by the Board 
                of Governors and any bank holding company described in 
                subsection (a) to maintain a minimum amount of long-
                term hybrid debt that is convertible to equity in times 
                of financial stress.
                    (B) Factors to consider.--In making recommendations 
                under this subsection, the Council shall consider--
                            (i) an appropriate transition period for 
                        implementation of a conversion under this 
                        subsection;
                            (ii) the factors described in subsection 
                        (b)(3);
                            (iii) capital requirements applicable to a 
                        nonbank financial company supervised by the 
                        Board of Governors or a bank holding company 
                        described in subsection (a), and subsidiaries 
                        thereof;
                            (iv) results of the study required by 
                        paragraph (1); and
                            (v) any other factor that the Council deems 
                        appropriate.
    (d) Resolution Plan and Credit Exposure Reports.--
            (1) Resolution plan.--The Council may make recommendations 
        to the Board of Governors concerning the requirement that each 
        nonbank financial company supervised by the Board of Governors 
        and each bank holding company described in subsection (a) 
        report periodically to the Council, the Board of Governors, and 
        the Corporation, the plan of such company for rapid and orderly 
        resolution in the event of material financial distress or 
        failure.
            (2) Credit exposure report.--The Council may make 
        recommendations to the Board of Governors concerning the 
        advisability of requiring each nonbank financial company 
        supervised by the Board of Governors and bank holding company 
        described in subsection (a) to report periodically to the 
        Council, the Board of Governors, and the Corporation on--
                    (A) the nature and extent to which the company has 
                credit exposure to other significant nonbank financial 
                companies and significant bank holding companies; and
                    (B) the nature and extent to which other such 
                significant nonbank financial companies and significant 
                bank holding companies have credit exposure to that 
                company.
    (e) Concentration Limits.--In order to limit the risks that the 
failure of any individual company could pose to nonbank financial 
companies supervised by the Board of Governors or bank holding 
companies described in subsection (a), the Council may make 
recommendations to the Board of Governors to prescribe standards to 
limit such risks, as set forth in section 165.
    (f) Enhanced Public Disclosures.--The Council may make 
recommendations to the Board of Governors to require periodic public 
disclosures by bank holding companies described in subsection (a) and 
by nonbank financial companies supervised by the Board of Governors, in 
order to support market evaluation of the risk profile, capital 
adequacy, and risk management capabilities thereof.

SEC. 116. REPORTS.

    (a) In General.--Subject to subsection (b), the Council, acting 
through the Office of Financial Research, may require a bank holding 
company with total consolidated assets of $50,000,000,000 or greater or 
a nonbank financial company supervised by the Board of Governors, and 
any subsidiary thereof, to submit certified reports to keep the Council 
informed as to--
            (1) the financial condition of the company;
            (2) systems for monitoring and controlling financial, 
        operating, and other risks;
            (3) transactions with any subsidiary that is a depository 
        institution; and
            (4) the extent to which the activities and operations of 
        the company and any subsidiary thereof, could, under adverse 
        circumstances, have the potential to disrupt financial markets 
        or affect the overall financial stability of the United States.
    (b) Use of Existing Reports.--
            (1) In general.--For purposes of compliance with subsection 
        (a), the Council, acting through the Office of Financial 
        Research, shall, to the fullest extent possible, use--
                    (A) reports that a bank holding company, nonbank 
                financial company supervised by the Board of Governors, 
                or any functionally regulated subsidiary of such 
                company has been required to provide to other Federal 
                or State regulatory agencies;
                    (B) information that is otherwise required to be 
                reported publicly; and
                    (C) externally audited financial statements.
            (2) Availability.--Each bank holding company described in 
        subsection (a) and nonbank financial company supervised by the 
        Board of Governors, and any subsidiary thereof, shall provide 
        to the Council, at the request of the Council, copies of all 
        reports referred to in paragraph (1).
            (3) Confidentiality.--The Council shall maintain the 
        confidentiality of the reports obtained under subsection (a) 
        and paragraph (1)(A) of this subsection.

SEC. 117. TREATMENT OF CERTAIN COMPANIES THAT CEASE TO BE BANK HOLDING 
              COMPANIES.

    (a) Applicability.--This section shall apply to any entity or a 
successor entity that--
            (1) was a bank holding company having total consolidated 
        assets equal to or greater than $50,000,000,000 as of January 
        1, 2010; and
            (2) received financial assistance under or participated in 
        the Capital Purchase Program established under the Troubled 
        Asset Relief Program authorized by the Emergency Economic 
        Stabilization Act of 2008.
    (b) Treatment.--If an entity described in subsection (a) ceases to 
be a bank holding company at any time after January 1, 2010, then such 
entity shall be treated as a nonbank financial company supervised by 
the Board of Governors, as if the Council had made a determination 
under section 113 with respect to that entity.
    (c) Appeal.--
            (1) Request for hearing.--An entity may request, in 
        writing, an opportunity for a written or oral hearing before 
        the Council to appeal its treatment as a nonbank financial 
        company supervised by the Board of Governors in accordance with 
        this section. Upon receipt of the request, the Council shall 
        fix a time (not later than 30 days after the date of receipt of 
        the request) and place at which such entity may appear, 
        personally or through counsel, to submit written materials (or, 
        at the sole discretion of the Council, oral testimony and oral 
        argument).
            (2) Decision.--
                    (A) Proposed decision.--Not later than 60 days 
                after the date of a hearing under paragraph (1), the 
                Council shall submit a report to, and may testify 
                before, the Committee on Banking, Housing, and Urban 
                Affairs of the Senate and the Committee on Financial 
                Services of the House of Representatives on the 
                proposed decision of the Council regarding an appeal 
                under paragraph (1), which report shall include a 
                statement of the basis for the proposed decision of the 
                Council.
                    (B) Notice of final decision.--The Council shall 
                notify the subject entity of the final decision of the 
                Council regarding an appeal under paragraph (1), which 
                notice shall contain a statement of the basis for the 
                final decision of the Council, not later than 60 days 
                after the later of--
                            (i) the date of the submission of the 
                        report under subparagraph (A); or
                            (ii) if the Committee on Banking, Housing, 
                        and Urban Affairs of the Senate or the 
                        Committee on Financial Services of the House of 
                        Representatives holds one or more hearings 
                        regarding such report, the date of the last 
                        such hearing.
                    (C) Considerations.--In making a decision regarding 
                an appeal under paragraph (1), the Council shall 
                consider whether the company meets the standards under 
                section 113(a) or 113(b), as applicable, and the 
                definition of the term ``nonbank financial company'' 
                under section 102. The decision of the Council shall be 
                final, subject to the review under paragraph (3).
            (3) Review.--If the Council denies an appeal under this 
        subsection, the Council shall, not less frequently than 
        annually, review and reevaluate the decision.

SEC. 118. COUNCIL FUNDING.

    Any expenses of the Council shall be treated as expenses of, and 
paid by, the Office of Financial Research.

SEC. 119. RESOLUTION OF SUPERVISORY JURISDICTIONAL DISPUTES AMONG 
              MEMBER AGENCIES.

    (a) Request for Dispute Resolution.--The Council shall resolve a 
dispute among 2 or more member agencies, if--
            (1) a member agency has a dispute with another member 
        agency about the respective jurisdiction over a particular bank 
        holding company, nonbank financial company, or financial 
        activity or product (excluding matters for which another 
        dispute mechanism specifically has been provided under Federal 
        law);
            (2) the Council determines that the disputing agencies 
        cannot, after a demonstrated good faith effort, resolve the 
        dispute without the intervention of the Council; and
            (3) any of the member agencies involved in the dispute--
                    (A) provides all other disputants prior notice of 
                the intent to request dispute resolution by the 
                Council; and
                    (B) requests in writing, not earlier than 14 days 
                after providing the notice described in subparagraph 
                (A), that the Council resolve the dispute.
    (b) Council Decision.--The Council shall resolve each dispute 
described in subsection (a)--
            (1) within a reasonable time after receiving the dispute 
        resolution request;
            (2) after consideration of relevant information provided by 
        each agency party to the dispute; and
            (3) by agreeing with 1 of the disputants regarding the 
        entirety of the matter, or by determining a compromise 
        position.
    (c) Form and Binding Effect.--A Council decision under this section 
shall--
            (1) be in writing;
            (2) include an explanation of the reasons therefor; and
            (3) be binding on all Federal agencies that are parties to 
        the dispute.

SEC. 120. ADDITIONAL STANDARDS APPLICABLE TO ACTIVITIES OR PRACTICES 
              FOR FINANCIAL STABILITY PURPOSES.

    (a) In General.--The Council may issue recommendations to the 
primary financial regulatory agencies to apply new or heightened 
standards and safeguards, including standards enumerated in section 
115, for a financial activity or practice conducted by bank holding 
companies or nonbank financial companies under their respective 
jurisdictions, if the Council determines that the conduct of such 
activity or practice could create or increase the risk of significant 
liquidity, credit, or other problems spreading among bank holding 
companies and nonbank financial companies or the financial markets of 
the United States.
    (b) Procedure for Recommendations to Regulators.--
            (1) Notice and opportunity for comment.--The Council shall 
        consult with the primary financial regulatory agencies and 
        provide notice to the public and opportunity for comment for 
        any proposed recommendation that the primary financial 
        regulatory agencies apply new or heightened standards and 
        safeguards for a financial activity or practice.
            (2) Criteria.--The new or heightened standards and 
        safeguards for a financial activity or practice recommended 
        under paragraph (1)--
                    (A) shall take costs to long-term economic growth 
                into account; and
                    (B) may include prescribing the conduct of the 
                activity or practice in specific ways (such as by 
                limiting its scope, or applying particular capital or 
                risk management requirements to the conduct of the 
                activity) or prohibiting the activity or practice.
    (c) Implementation of Recommended Standards.--
            (1) Role of primary financial regulatory agency.--
                    (A) In general.--Each primary financial regulatory 
                agency may impose, require reports regarding, examine 
                for compliance with, and enforce standards in 
                accordance with this section with respect to those 
                entities for which it is the primary financial 
                regulatory agency.
                    (B) Rule of construction.--The authority under this 
                paragraph is in addition to, and does not limit, any 
                other authority of a primary financial regulatory 
                agency. Compliance by an entity with actions taken by a 
                primary financial regulatory agency under this section 
                shall be enforceable in accordance with the statutes 
                governing the respective jurisdiction of the primary 
                financial regulatory agency over the entity, as if the 
                agency action were taken under those statutes.
            (2) Imposition of standards.--The primary financial 
        regulatory agency shall impose the standards recommended by the 
        Council in accordance with subsection (a), or similar standards 
        that the Council deems acceptable, or shall explain in writing 
        to the Council, not later than 90 days after the date on which 
        the Council issues the recommendation, why the agency has 
        determined not to follow the recommendation of the Council.
    (d) Report to Congress.--The Council shall report to Congress on--
            (1) any recommendations issued by the Council under this 
        section;
            (2) the implementation of, or failure to implement such 
        recommendation on the part of a primary financial regulatory 
        agency; and
            (3) in any case in which no primary financial regulatory 
        agency exists for the nonbank financial company conducting 
        financial activities or practices referred to in subsection 
        (a), recommendations for legislation that would prevent such 
        activities or practices from threatening the stability of the 
        financial system of the United States.
    (e) Effect of Rescission of Identification.--
            (1) Notice.--The Council may recommend to the relevant 
        primary financial regulatory agency that a financial activity 
        or practice no longer requires any standards or safeguards 
        implemented under this section.
            (2) Determination of primary financial regulatory agency to 
        continue.--
                    (A) In general.--Upon receipt of a recommendation 
                under paragraph (1), a primary financial regulatory 
                agency that has imposed standards under this section 
                shall determine whether standards that it has imposed 
                under this section should remain in effect.
                    (B) Appeal process.--Each primary financial 
                regulatory agency that has imposed standards under this 
                section shall promulgate regulations to establish a 
                procedure under which entities under its jurisdiction 
                may appeal a determination by such agency under this 
                paragraph that standards imposed under this section 
                should remain in effect.

SEC. 121. MITIGATION OF RISKS TO FINANCIAL STABILITY.

    (a) Mitigatory Actions.--If the Board of Governors determines that 
a bank holding company with total consolidated assets of 
$50,000,000,000 or more, or a nonbank financial company supervised by 
the Board of Governors, poses a grave threat to the financial stability 
of the United States, the Board of Governors, upon an affirmative vote 
of not fewer than \2/3\ of the Council members then serving, shall 
require the subject company--
            (1) to terminate one or more activities;
            (2) to impose conditions on the manner in which the company 
        conducts one or more activities; or
            (3) if the Board of Governors determines that such action 
        is inadequate to mitigate a threat to the financial stability 
        of the United States in its recommendation, to sell or 
        otherwise transfer assets or off-balance-sheet items to 
        unaffiliated entities.
    (b) Notice and Hearing.--
            (1) In general.--The Board of Governors, in consultation 
        with the Council, shall provide to a company described in 
        subsection (a) written notice that such company is being 
        considered for mitigatory action pursuant to this section, 
        including an explanation of the basis for, and description of, 
        the proposed mitigatory action.
            (2) Hearing.--Not later than 30 days after the date of 
        receipt of notice under paragraph (1), the company may request, 
        in writing, an opportunity for a written or oral hearing before 
        the Board of Governors to contest the proposed mitigatory 
        action. Upon receipt of a timely request, the Board of 
        Governors shall fix a time (not later than 30 days after the 
        date of receipt of the request) and place at which such company 
        may appear, personally or through counsel, to submit written 
        materials (or, at the discretion of the Board of Governors, in 
        consultation with the Council, oral testimony and oral 
        argument).
            (3) Decision.--Not later than 60 days after the date of a 
        hearing under paragraph (2), or not later than 60 days after 
        the provision of a notice under paragraph (1) if no hearing was 
        held, the Board of Governors shall notify the company of the 
        final decision of the Board of Governors, including the results 
        of the vote of the Council, as described in subsection (a).
    (c) Factors for Consideration.--The Board of Governors and the 
Council shall take into consideration the factors set forth in 
subsection (a) or (b) of section 113, as applicable, in a determination 
described in subsection (a) and in a decision described in subsection 
(b).
    (d) Application to Foreign Financial Companies.--The Board of 
Governors may prescribe regulations regarding the application of this 
section to foreign nonbank financial companies supervised by the Board 
of Governors and foreign-based bank holding companies, giving due 
regard to the principle of national treatment and competitive equity.

                Subtitle B--Office of Financial Research

SEC. 151. DEFINITIONS.

    For purposes of this subtitle--
            (1) the terms ``Office'' and ``Director'' mean the Office 
        of Financial Research established under this subtitle and the 
        Director thereof, respectively;
            (2) the term ``financial company'' has the same meaning as 
        in title II, and includes an insured depository institution and 
        an insurance company;
            (3) the term ``Data Center'' means the data center 
        established under section 154;
            (4) the term ``Research and Analysis Center'' means the 
        research and analysis center established under section 154;
            (5) the term ``financial transaction data'' means the 
        structure and legal description of a financial contract, with 
        sufficient detail to describe the rights and obligations 
        between counterparties and make possible an independent 
        valuation;
            (6) the term ``position data''--
                    (A) means data on financial assets or liabilities 
                held on the balance sheet of a financial company, where 
                positions are created or changed by the execution of a 
                financial transaction; and
                    (B) includes information that identifies 
                counterparties, the valuation by the financial company 
                of the position, and information that makes possible an 
                independent valuation of the position;
            (7) the term ``financial contract'' means a legally binding 
        agreement between 2 or more counterparties, describing rights 
        and obligations relating to the future delivery of items of 
        intrinsic or extrinsic value among the counterparties; and
            (8) the term ``financial instrument'' means a financial 
        contract in which the terms and conditions are publicly 
        available, and the roles of one or more of the counterparties 
        are assignable without the consent of any of the other 
        counterparties (including common stock of a publicly traded 
        company, government bonds, or exchange traded futures and 
        options contracts).

SEC. 152. OFFICE OF FINANCIAL RESEARCH ESTABLISHED.

    (a) Establishment.--There is established within the Department of 
the Treasury the Office of Financial Research.
    (b) Director.--
            (1) In general.--The Office shall be headed by a Director, 
        who shall be appointed by the President, by and with the advice 
        and consent of the Senate.
            (2) Term of service.--The Director shall serve for a term 
        of 6 years, except that, in the event that a successor is not 
        nominated and confirmed by the end of the term of service of a 
        Director, the Director may continue to serve until such time as 
        the next Director is appointed and confirmed.
            (3) Executive level.--The Director shall be compensated at 
        level III of the Executive Schedule.
            (4) Prohibition on dual service.--The individual serving in 
        the position of Director may not, during such service, also 
        serve as the head of any financial regulatory agency.
            (5) Responsibilities, duties, and authority.--The Director 
        shall have sole discretion in the manner in which the Director 
        fulfills the responsibilities and duties and exercises the 
        authorities described in this subtitle.
    (c) Budget.--The Director, in consultation with the Chairperson, 
shall establish the annual budget of the Office.
    (d) Office Personnel.--
            (1) In general.--The Director, in consultation with the 
        Chairperson, may fix the number of, and appoint and direct, all 
        employees of the Office.
            (2) Compensation.--The Director, in consultation with the 
        Chairperson, shall fix, adjust, and administer the pay for all 
        employees of the Office, without regard to chapter 51 or 
        subchapter III of chapter 53 of title 5, United States Code, 
        relating to classification of positions and General Schedule 
        pay rates.
            (3) Comparability.--Section 1206(a) of the Financial 
        Institutions Reform, Recovery, and Enforcement Act of 1989 (12 
        U.S.C. 1833b(a)) is amended--
                    (A) by striking ``Finance Board,'' and inserting 
                ``Finance Board, the Office of Financial Research, and 
                the Bureau of Consumer Financial Protection''; and
                    (B) by striking ``and the Office of Thrift 
                Supervision,''.
    (e) Assistance From Federal Agencies.--Any department or agency of 
the United States may provide to the Office and any special advisory, 
technical, or professional committees appointed by the Office, such 
services, funds, facilities, staff, and other support services as the 
Office may determine advisable. Any Federal Government employee may be 
detailed to the Office without reimbursement, and such detail shall be 
without interruption or loss of civil service status or privilege.
    (f) Procurement of Temporary and Intermittent Services.--The 
Director may procure temporary and intermittent services under section 
3109(b) of title 5, United States Code, at rates for individuals which 
do not exceed the daily equivalent of the annual rate of basic pay 
prescribed for level V of the Executive Schedule under section 5316 of 
such title.
    (g) Contracting and Leasing Authority.--Notwithstanding the Federal 
Property and Administrative Services Act of 1949 (41 U.S.C. 251 et 
seq.) or any other provision of law, the Director may--
            (1) enter into and perform contracts, execute instruments, 
        and acquire, in any lawful manner, such goods and services, or 
        personal or real property (or property interest), as the 
        Director deems necessary to carry out the duties and 
        responsibilities of the Office; and
            (2) hold, maintain, sell, lease, or otherwise dispose of 
        the property (or property interest) acquired under paragraph 
        (1).
    (h) Non-compete.--The Director and any staff of the Office who has 
had access to the transaction or position data maintained by the Data 
Center or other business confidential information about financial 
entities required to report to the Office, may not, for a period of 1 
year after last having access to such transaction or position data or 
business confidential information, be employed by or provide advice or 
consulting services to a financial company, regardless of whether that 
entity is required to report to the Office. For staff whose access to 
business confidential information was limited, the Director may 
provide, on a case-by-case basis, for a shorter period of post-
employment prohibition, provided that the shorter period does not 
compromise business confidential information.
    (i) Technical and Professional Advisory Committees.--The Office, in 
consultation with the Chairperson, may appoint such special advisory, 
technical, or professional committees as may be useful in carrying out 
the functions of the Office, and the members of such committees may be 
staff of the Office, or other persons, or both.
    (j) Fellowship Program.--The Office, in consultation with the 
Chairperson, may establish and maintain an academic and professional 
fellowship program, under which qualified academics and professionals 
shall be invited to spend not longer than 2 years at the Office, to 
perform research and to provide advanced training for Office personnel.
    (k) Executive Schedule Compensation.--Section 5314 of title 5, 
United States Code, is amended by adding at the end the following new 
item:
            ``Director of the Office of Financial Research.''.

SEC. 153. PURPOSE AND DUTIES OF THE OFFICE.

    (a) Purpose and Duties.--The purpose of the Office is to support 
the Council in fulfilling the purposes and duties of the Council, as 
set forth in subtitle A, and to support member agencies, by--
            (1) collecting data on behalf of the Council, and providing 
        such data to the Council and member agencies;
            (2) standardizing the types and formats of data reported 
        and collected;
            (3) performing applied research and essential long-term 
        research;
            (4) developing tools for risk measurement and monitoring;
            (5) performing other related services;
            (6) making the results of the activities of the Office 
        available to financial regulatory agencies; and
            (7) assisting such member agencies in determining the types 
        and formats of data authorized by this Act to be collected by 
        such member agencies.
    (b) Administrative Authority.--The Office may--
            (1) share data and information, including software 
        developed by the Office, with the Council and member agencies, 
        which shared data, information, and software--
                    (A) shall be maintained with at least the same 
                level of security as is used by the Office; and
                    (B) may not be shared with any individual or entity 
                without the permission of the Council;
            (2) sponsor and conduct research projects; and
            (3) assist, on a reimbursable basis, with financial 
        analyses undertaken at the request of other Federal agencies 
        that are not member agencies.
    (c) Rulemaking Authority.--
            (1) Scope.--The Office, in consultation with the 
        Chairperson, shall issue rules, regulations, and orders only to 
        the extent necessary to carry out the purposes and duties 
        described in paragraphs (1), (2), and (7) of subsection (a).
            (2) Standardization.--Member agencies, in consultation with 
        the Office, shall implement regulations promulgated by the 
        Office under paragraph (1) to standardize the types and formats 
        of data reported and collected on behalf of the Council, as 
        described in subsection (a)(2). If a member agency fails to 
        implement such regulations prior to the expiration of the 3-
        year period following the date of publication of final 
        regulations, the Office, in consultation with the Chairperson, 
        may implement such regulations with respect to the financial 
        entities under the jurisdiction of the member agency.
    (d) Testimony.--
            (1) In general.--The Director of the Office shall report to 
        and testify before the Committee on Banking, Housing, and Urban 
        Affairs of the Senate and the Committee on Financial Services 
        of the House of Representatives annually on the activities of 
        the Office, including the work of the Data Center and the 
        Research and Analysis Center, and the assessment of the Office 
        of significant financial market developments and potential 
        emerging threats to the financial stability of the United 
        States.
            (2) No prior review.--No officer or agency of the United 
        States shall have any authority to require the Director to 
        submit the testimony required under paragraph (1) or other 
        Congressional testimony to any officer or agency of the United 
        States for approval, comment, or review prior to the submission 
        of such testimony. Any such testimony to Congress shall include 
        a statement that the views expressed therein are those of the 
        Director and do not necessarily represent the views of the 
        President.
    (e) Additional Reports.--The Director may provide additional 
reports to Congress concerning the financial stability of the United 
States. The Director shall notify the Council of any such additional 
reports provided to Congress.
    (f) Subpoena.--
            (1) In general.--The Director may require, by subpoena, the 
        production of the data requested under subsection (a)(1) and 
        section 154(b)(1), but only upon a written finding by the 
        Director that--
                    (A) such data is required to carry out the 
                functions described under this subtitle; and
                    (B) the Office has coordinated with such agency, as 
                required under section 154(b)(1)(B)(ii).
            (2) Format.--Subpoenas under paragraph (1) shall bear the 
        signature of the Director, and shall be served by any person or 
        class of persons designated by the Director for that purpose.
            (3) Enforcement.--In the case of contumacy or failure to 
        obey a subpoena, the subpoena shall be enforceable by order of 
        any appropriate district court of the United States. Any 
        failure to obey the order of the court may be punished by the 
        court as a contempt of court.

SEC. 154. ORGANIZATIONAL STRUCTURE; RESPONSIBILITIES OF PRIMARY 
              PROGRAMMATIC UNITS.

    (a) In General.--There are established within the Office, to carry 
out the programmatic responsibilities of the Office--
            (1) the Data Center; and
            (2) the Research and Analysis Center.
    (b) Data Center.--
            (1) General duties.--
                    (A) Data collection.--The Data Center, on behalf of 
                the Council, shall collect, validate, and maintain all 
                data necessary to carry out the duties of the Data 
                Center, as described in this subtitle. The data 
                assembled shall be obtained from member agencies, 
                commercial data providers, publicly available data 
                sources, and financial entities under subparagraph (B).
                    (B) Authority.--
                            (i) In general.--The Office may, as 
                        determined by the Council or by the Director in 
                        consultation with the Council, require the 
                        submission of periodic and other reports from 
                        any financial company for the purpose of 
                        assessing the extent to which a financial 
                        activity or financial market in which the 
                        financial company participates, or the 
                        financial company itself, poses a threat to the 
                        financial stability of the United States.
                            (ii) Mitigation of report burden.--Before 
                        requiring the submission of a report from any 
                        financial company that is regulated by a member 
                        agency or any primary financial regulatory 
                        agency, the Office shall coordinate with such 
                        agencies and shall, whenever possible, rely on 
                        information available from such agencies.
                    (C) Rulemaking.--The Office shall promulgate 
                regulations pursuant to subsections (a)(1), (a)(2), 
                (a)(7), and (c)(1) of section 153 regarding the type 
                and scope of the data to be collected by the Data 
                Center under this paragraph.
            (2) Responsibilities.--
                    (A) Publication.--The Data Center shall prepare and 
                publish, in a manner that is easily accessible to the 
                public--
                            (i) a financial company reference database;
                            (ii) a financial instrument reference 
                        database; and
                            (iii) formats and standards for Office 
                        data, including standards for reporting 
                        financial transaction and position data to the 
                        Office.
                    (B) Confidentiality.--The Data Center shall not 
                publish any confidential data under subparagraph (A).
            (3) Information security.--The Director shall ensure that 
        data collected and maintained by the Data Center are kept 
        secure and protected against unauthorized disclosure.
            (4) Catalog of financial entities and instruments.--The 
        Data Center shall maintain a catalog of the financial entities 
        and instruments reported to the Office.
            (5) Availability to the council and member agencies.--The 
        Data Center shall make data collected and maintained by the 
        Data Center available to the Council and member agencies, as 
        necessary to support their regulatory responsibilities.
            (6) Other authority.--The Office shall, after consultation 
        with the member agencies, provide certain data to financial 
        industry participants and to the general public to increase 
        market transparency and facilitate research on the financial 
        system, to the extent that intellectual property rights are not 
        violated, business confidential information is properly 
        protected, and the sharing of such information poses no 
        significant threats to the financial system of the United 
        States.
    (c) Research and Analysis Center.--
            (1) General duties.--The Research and Analysis Center, on 
        behalf of the Council, shall develop and maintain independent 
        analytical capabilities and computing resources--
                    (A) to develop and maintain metrics and reporting 
                systems for risks to the financial stability of the 
                United States;
                    (B) to monitor, investigate, and report on changes 
                in system-wide risk levels and patterns to the Council 
                and Congress;
                    (C) to conduct, coordinate, and sponsor research to 
                support and improve regulation of financial entities 
                and markets;
                    (D) to evaluate and report on stress tests or other 
                stability-related evaluations of financial entities 
                overseen by the member agencies;
                    (E) to maintain expertise in such areas as may be 
                necessary to support specific requests for advice and 
                assistance from financial regulators;
                    (F) to investigate disruptions and failures in the 
                financial markets, report findings, and make 
                recommendations to the Council based on those findings;
                    (G) to conduct studies and provide advice on the 
                impact of policies related to systemic risk; and
                    (H) to promote best practices for financial risk 
                management.
    (d) Reporting Responsibilities.--
            (1) Required reports.--Not later than 2 years after the 
        date of enactment of this Act, and not later than 120 days 
        after the end of each fiscal year thereafter, the Office shall 
        prepare and submit a report to Congress.
            (2) Content.--Each report required by this subsection shall 
        assess the state of the United States financial system, 
        including--
                    (A) an analysis of any threats to the financial 
                stability of the United States;
                    (B) the status of the efforts of the Office in 
                meeting the mission of the Office; and
                    (C) key findings from the research and analysis of 
                the financial system by the Office.

SEC. 155. FUNDING.

    (a) Financial Research Fund.--
            (1) Fund established.--There is established in the Treasury 
        of the United States a separate fund to be known as the 
        ``Financial Research Fund''.
            (2) Fund receipts.--All amounts provided to the Office 
        under subsection (c), and all assessments that the Office 
        receives under subsection (d) shall be deposited into the 
        Financial Research Fund.
            (3) Investments authorized.--
                    (A) Amounts in fund may be invested.--The Director 
                may request the Secretary to invest the portion of the 
                Financial Research Fund that is not, in the judgment of 
                the Director, required to meet the needs of the Office.
                    (B) Eligible investments.--Investments shall be 
                made by the Secretary in obligations of the United 
                States or obligations that are guaranteed as to 
                principal and interest by the United States, with 
                maturities suitable to the needs of the Financial 
                Research Fund, as determined by the Director.
            (4) Interest and proceeds credited.--The interest on, and 
        the proceeds from the sale or redemption of, any obligations 
        held in the Financial Research Fund shall be credited to and 
        form a part of the Financial Research Fund.
    (b) Use of Funds.--
            (1) In general.--Funds obtained by, transferred to, or 
        credited to the Financial Research Fund shall be immediately 
        available to the Office, and shall remain available until 
        expended, to pay the expenses of the Office in carrying out the 
        duties and responsibilities of the Office.
            (2) Fees, assessments, and other funds not government 
        funds.--Funds obtained by, transferred to, or credited to the 
        Financial Research Fund shall not be construed to be Government 
        funds or appropriated monies.
            (3) Amounts not subject to apportionment.--Notwithstanding 
        any other provision of law, amounts in the Financial Research 
        Fund shall not be subject to apportionment for purposes of 
        chapter 15 of title 31, United States Code, or under any other 
        authority, or for any other purpose.
    (c) Interim Funding.--During the 2-year period following the date 
of enactment of this Act, the Board of Governors shall provide to the 
Office an amount sufficient to cover the expenses of the Office.
    (d) Permanent Self-funding.--
            (1) In general.--Beginning 2 years after the date of 
        enactment of this Act, the Secretary shall establish, by 
        regulation, and with the approval of the Council, an assessment 
        schedule, including the assessment base and rates, applicable 
        to bank holding companies with total consolidated assets of 
        $50,000,000,000 or greater and nonbank financial companies 
        supervised by the Board of Governors, that takes into account 
        differences among such companies, based on the considerations 
        for establishing the prudential standards under section 115, to 
        collect assessments equal to the estimated total expenses of 
        the Office.
            (2) Shortfall.--To the extent that the assessments under 
        paragraph (1) do not fully cover the total expenses of the 
        Office, the Board of Governors shall provide to the Office an 
        amount sufficient to cover the difference.

SEC. 156. TRANSITION OVERSIGHT.

    (a) Purpose.--The purpose of this section is to ensure that the 
Office--
            (1) has an orderly and organized startup;
            (2) attracts and retains a qualified workforce; and
            (3) establishes comprehensive employee training and 
        benefits programs.
    (b) Reporting Requirement.--
            (1) In general.--The Office shall submit an annual report 
        to the Committee on Banking, Housing, and Urban Affairs of the 
        Senate and the Committee on Financial Services of the House of 
        Representatives that includes the plans described in paragraph 
        (2).
            (2) Plans.--The plans described in this paragraph are as 
        follows:
                    (A) Training and workforce development plan.--The 
                Office shall submit a training and workforce 
                development plan that includes, to the extent 
                practicable--
                            (i) identification of skill and technical 
                        expertise needs and actions taken to meet those 
                        requirements;
                            (ii) steps taken to foster innovation and 
                        creativity;
                            (iii) leadership development and succession 
                        planning; and
                            (iv) effective use of technology by 
                        employees.
                    (B) Workplace flexibility plan.--The Office shall 
                submit a workforce flexibility plan that includes, to 
                the extent practicable--
                            (i) telework;
                            (ii) flexible work schedules;
                            (iii) phased retirement;
                            (iv) reemployed annuitants;
                            (v) part-time work;
                            (vi) job sharing;
                            (vii) parental leave benefits and childcare 
                        assistance;
                            (viii) domestic partner benefits;
                            (ix) other workplace flexibilities; or
                            (x) any combination of the items described 
                        in clauses (i) through (ix).
                    (C) Recruitment and retention plan.--The Office 
                shall submit a recruitment and retention plan that 
                includes, to the extent practicable, provisions 
                relating to--
                            (i) the steps necessary to target highly 
                        qualified applicant pools with diverse 
                        backgrounds;
                            (ii) streamlined employment application 
                        processes;
                            (iii) the provision of timely notification 
                        of the status of employment applications to 
                        applicants; and
                            (iv) the collection of information to 
                        measure indicators of hiring effectiveness.
    (c) Expiration.--The reporting requirement under subsection (b) 
shall terminate 5 years after the date of enactment of this Act.
    (d) Rule of Construction.--Nothing in this section may be construed 
to affect--
            (1) a collective bargaining agreement, as that term is 
        defined in section 7103(a)(8) of title 5, United States Code, 
        that is in effect on the date of enactment of this Act; or
            (2) the rights of employees under chapter 71 of title 5, 
        United States Code.

Subtitle C--Additional Board of Governors Authority for Certain Nonbank 
             Financial Companies and Bank Holding Companies

SEC. 161. REPORTS BY AND EXAMINATIONS OF NONBANK FINANCIAL COMPANIES BY 
              THE BOARD OF GOVERNORS.

    (a) Reports.--
            (1) In general.--The Board of Governors may require each 
        nonbank financial company supervised by the Board of Governors, 
        and any subsidiary thereof, to submit reports under oath, to 
        keep the Board of Governors informed as to--
                    (A) the financial condition of the company or 
                subsidiary, systems of the company or subsidiary for 
                monitoring and controlling financial, operating, and 
                other risks, and the extent to which the activities and 
                operations of the company or subsidiary pose a threat 
                to the financial stability of the United States; and
                    (B) compliance by the company or subsidiary with 
                the requirements of this subtitle.
            (2) Use of existing reports and information.--In carrying 
        out subsection (a), the Board of Governors shall, to the 
        fullest extent possible, use--
                    (A) reports and supervisory information that a 
                nonbank financial company or subsidiary thereof has 
                been required to provide to other Federal or State 
                regulatory agencies;
                    (B) information otherwise obtainable from Federal 
                or State regulatory agencies;
                    (C) information that is otherwise required to be 
                reported publicly; and
                    (D) externally audited financial statements of such 
                company or subsidiary.
            (3) Availability.--Upon the request of the Board of 
        Governors, a nonbank financial company supervised by the Board 
        of Governors, or a subsidiary thereof, shall promptly provide 
        to the Board of Governors any information described in 
        paragraph (2).
    (b) Examinations.--
            (1) In general.--Subject to paragraph (2), the Board of 
        Governors may examine any nonbank financial company supervised 
        by the Board of Governors and any subsidiary of such company, 
        to determine--
                    (A) the nature of the operations and financial 
                condition of the company and such subsidiary;
                    (B) the financial, operational, and other risks 
                within the company that may pose a threat to the safety 
                and soundness of such company or to the financial 
                stability of the United States;
                    (C) the systems for monitoring and controlling such 
                risks; and
                    (D) compliance by the company with the requirements 
                of this subtitle.
            (2) Use of examination reports and information.--For 
        purposes of this subsection, the Board of Governors shall, to 
        the fullest extent possible, rely on reports of examination of 
        any depository institution subsidiary or functionally regulated 
        subsidiary made by the primary financial regulatory agency for 
        that subsidiary, and on information described in subsection 
        (a)(2).
    (c) Coordination With Primary Financial Regulatory Agency.--The 
Board of Governors shall--
            (1) provide to the primary financial regulatory agency for 
        any company or subsidiary, reasonable notice before requiring a 
        report, requesting information, or commencing an examination of 
        such subsidiary under this section; and
            (2) avoid duplication of examination activities, reporting 
        requirements, and requests for information, to the extent 
        possible.

SEC. 162. ENFORCEMENT.

    (a) In General.--Except as provided in subsection (b), a nonbank 
financial company supervised by the Board of Governors and any 
subsidiaries of such company (other than any depository institution 
subsidiary) shall be subject to the provisions of subsections (b) 
through (n) of section 8 of the Federal Deposit Insurance Act (12 
U.S.C. 1818), in the same manner and to the same extent as if the 
company were a bank holding company, as provided in section 8(b)(3) of 
the Federal Deposit Insurance Act (12 U.S.C. 1818(b)(3)).
    (b) Enforcement Authority for Functionally Regulated 
Subsidiaries.--
            (1) Referral.--If the Board of Governors determines that a 
        condition, practice, or activity of a depository institution 
        subsidiary or functionally regulated subsidiary of a nonbank 
        financial company supervised by the Board of Governors does not 
        comply with the regulations or orders prescribed by the Board 
        of Governors under this Act, or otherwise poses a threat to the 
        financial stability of the United States, the Board of 
        Governors may recommend, in writing, to the primary financial 
        regulatory agency for the subsidiary that such agency initiate 
        a supervisory action or enforcement proceeding. The 
        recommendation shall be accompanied by a written explanation of 
        the concerns giving rise to the recommendation.
            (2) Back-up authority of the board of governors.--If, 
        during the 60-day period beginning on the date on which the 
        primary financial regulatory agency receives a recommendation 
        under paragraph (1), the primary financial regulatory agency 
        does not take supervisory or enforcement action against a 
        subsidiary that is acceptable to the Board of Governors, the 
        Board of Governors (upon a vote of its members) may take the 
        recommended supervisory or enforcement action, as if the 
        subsidiary were a bank holding company subject to supervision 
        by the Board of Governors.

SEC. 163. ACQUISITIONS.

    (a) Acquisitions of Banks; Treatment as a Bank Holding Company.--
For purposes of section 3 of the Bank Holding Company Act of 1956 (12 
U.S.C. 1842), a nonbank financial company supervised by the Board of 
Governors shall be deemed to be, and shall be treated as, a bank 
holding company.
    (b) Acquisition of Nonbank Companies.--
            (1) Prior notice for large acquisitions.--Notwithstanding 
        section 4(k)(6)(B) of the Bank Holding Company Act of 1956 (12 
        U.S.C. 1843(k)(6)(B)), a bank holding company with total 
        consolidated assets equal to or greater than $50,000,000,000 or 
        a nonbank financial company supervised by the Board of 
        Governors shall not acquire direct or indirect ownership or 
        control of any voting shares of any company (other than an 
        insured depository institution) that is engaged in activities 
        described in section 4(k) of the Bank Holding Company Act of 
        1956 having total consolidated assets of $10,000,000,000 or 
        more, without providing written notice to the Board of 
        Governors in advance of the transaction.
            (2) Exemptions.--The prior notice requirement in paragraph 
        (1) shall not apply with regard to the acquisition of shares 
        that would qualify for the exemptions in section 4(c) or 
        section 4(k)(4)(E) of the Bank Holding Company Act of 1956 (12 
        U.S.C. 1843(c) and (k)(4)(E)).
            (3) Notice procedures.--The notice procedures set forth in 
        section 4(j)(1) of the Bank Holding Company Act of 1956 (12 
        U.S.C. 1843(j)(1)), without regard to section 4(j)(3) of that 
        Act, shall apply to an acquisition of any company (other than 
        an insured depository institution) by a bank holding company 
        with total consolidated assets equal to or greater than 
        $50,000,000,000 or a nonbank financial company supervised by 
        the Board of Governors, as described in paragraph (1), 
        including any such company engaged in activities described in 
        section 4(k) of that Act.
            (4) Standards for review.--In addition to the standards 
        provided in section 4(j)(2) of the Bank Holding Company Act of 
        1956 (12 U.S.C. 1843(j)(2)), the Board of Governors shall 
        consider the extent to which the proposed acquisition would 
        result in greater or more concentrated risks to global or 
        United States financial stability or the United States economy.

SEC. 164. PROHIBITION AGAINST MANAGEMENT INTERLOCKS BETWEEN CERTAIN 
              FINANCIAL COMPANIES.

    A nonbank financial company supervised by the Board of Governors 
shall be treated as a bank holding company for purposes of the 
Depository Institutions Management Interlocks Act (12 U.S.C. 3201 et 
seq.), except that the Board of Governors shall not exercise the 
authority provided in section 7 of that Act (12 U.S.C. 3207) to permit 
service by a management official of a nonbank financial company 
supervised by the Board of Governors as a management official of any 
bank holding company with total consolidated assets equal to or greater 
than $50,000,000,000, or other nonaffiliated nonbank financial company 
supervised by the Board of Governors (other than to provide a temporary 
exemption for interlocks resulting from a merger, acquisition, or 
consolidation).

SEC. 165. ENHANCED SUPERVISION AND PRUDENTIAL STANDARDS FOR NONBANK 
              FINANCIAL COMPANIES SUPERVISED BY THE BOARD OF GOVERNORS 
              AND CERTAIN BANK HOLDING COMPANIES.

    (a) In General.--
            (1) Purpose.--In order to prevent or mitigate risks to the 
        financial stability of the United States that could arise from 
        the material financial distress or failure of large, 
        interconnected financial institutions, the Board of Governors 
        shall, on its own or pursuant to recommendations by the Council 
        under section 115, establish prudential standards and reporting 
        and disclosure requirements applicable to nonbank financial 
        companies supervised by the Board of Governors and large, 
        interconnected bank holding companies that--
                    (A) are more stringent than the standards and 
                requirements applicable to nonbank financial companies 
                and bank holding companies that do not present similar 
                risks to the financial stability of the United States; 
                and
                    (B) increase in stringency, based on the 
                considerations identified in subsection (b)(3).
            (2) Limitation on bank holding companies.--Any standards 
        established under subsections (b) through (f) shall not apply 
        to any bank holding company with total consolidated assets of 
        less than $50,000,000,000, but the Board of Governors may 
        establish an asset threshold greater than $50,000,000,000 for 
        the applicability of any particular standard under subsections 
        (b) through (f).
    (b) Development of Prudential Standards.--
            (1) In general.--
                    (A) Required standards.--The Board of Governors 
                shall, by regulation or order, establish prudential 
                standards for nonbank financial companies supervised by 
                the Board of Governors and bank holding companies 
                described in subsection (a), that shall include--
                            (i) risk-based capital requirements;
                            (ii) leverage limits;
                            (iii) liquidity requirements;
                            (iv) resolution plan and credit exposure 
                        report requirements; and
                            (v) concentration limits.
                    (B) Additional standards authorized.--The Board of 
                Governors may, by regulation or order, establish 
                prudential standards for nonbank financial companies 
                supervised by the Board of Governors and bank holding 
                companies described in subsection (a), that include--
                            (i) a contingent capital requirement;
                            (ii) enhanced public disclosures; and
                            (iii) overall risk management requirements.
            (2) Prudential standards for foreign financial companies.--
        In applying the standards set forth in paragraph (1) to foreign 
        nonbank financial companies supervised by the Board of 
        Governors and to foreign-based bank holding companies, the 
        Board of Governors shall give due regard to the principle of 
        national treatment and competitive equity.
            (3) Considerations.--In prescribing prudential standards 
        under paragraph (1), the Board of Governors shall--
                    (A) take into account differences among nonbank 
                financial companies supervised by the Board of 
                Governors and bank holding companies described in 
                subsection (a), based on--
                            (i) the factors described in subsections 
                        (a) and (b) of section 113;
                            (ii) whether the company owns an insured 
                        depository institution;
                            (iii) nonfinancial activities and 
                        affiliations of the company; and
                            (iv) any other factors that the Board of 
                        Governors determines appropriate;
                    (B) to the extent possible, ensure that small 
                changes in the factors listed in subsections (a) and 
                (b) of section 113 would not result in sharp, 
                discontinuous changes in the prudential standards 
                established under paragraph (1) of this subsection; and
                    (C) take into account any recommendations of the 
                Council under section 115.
            (4) Report.--The Board of Governors shall submit an annual 
        report to Congress regarding the implementation of the 
        prudential standards required pursuant to paragraph (1), 
        including the use of such standards to mitigate risks to the 
        financial stability of the United States.
    (c) Contingent Capital.--
            (1) In general.--Subsequent to submission by the Council of 
        a report to Congress under section 115(c), the Board of 
        Governors may promulgate regulations that require each nonbank 
        financial company supervised by the Board of Governors and bank 
        holding companies described in subsection (a) to maintain a 
        minimum amount of long-term hybrid debt that is convertible to 
        equity in times of financial stress.
            (2) Factors to consider.--In establishing regulations under 
        this subsection, the Board of Governors shall consider--
                    (A) the results of the study undertaken by the 
                Council, and any recommendations of the Council, under 
                section 115(c);
                    (B) an appropriate transition period for 
                implementation of a conversion under this subsection;
                    (C) the factors described in subsection (b)(3)(A);
                    (D) capital requirements applicable to the nonbank 
                financial company supervised by the Board of Governors 
                or a bank holding company described in subsection (a), 
                and subsidiaries thereof; and
                    (E) any other factor that the Board of Governors 
                deems appropriate.
    (d) Resolution Plan and Credit Exposure Reports.--
            (1) Resolution plan.--The Board of Governors shall require 
        each nonbank financial company supervised by the Board of 
        Governors and bank holding companies described in subsection 
        (a) to report periodically to the Board of Governors, the 
        Council, and the Corporation the plan of such company for rapid 
        and orderly resolution in the event of material financial 
        distress or failure.
            (2) Credit exposure report.--The Board of Governors shall 
        require each nonbank financial company supervised by the Board 
        of Governors and bank holding companies described in subsection 
        (a) to report periodically to the Board of Governors, the 
        Council, and the Corporation on--
                    (A) the nature and extent to which the company has 
                credit exposure to other significant nonbank financial 
                companies and significant bank holding companies; and
                    (B) the nature and extent to which other 
                significant nonbank financial companies and significant 
                bank holding companies have credit exposure to that 
                company.
            (3) Review.--The Board of Governors and the Corporation 
        shall review the information provided in accordance with this 
        section by each nonbank financial company supervised by the 
        Board of Governors and bank holding company described in 
        subsection (a).
            (4) Notice of deficiencies.--If the Board of Governors and 
        the Corporation jointly determine, based on their review under 
        paragraph (3), that the resolution plan of a nonbank financial 
        company supervised by the Board of Governors or a bank holding 
        company described in subsection (a) is not credible or would 
        not facilitate an orderly resolution of the company under title 
        11, United States Code--
                    (A) the Board of Governors and the Corporation 
                shall notify the company, as applicable, of the 
                deficiencies in the resolution plan; and
                    (B) the company shall resubmit the resolution plan 
                within a time frame determined by the Board of 
                Governors and the Corporation, with revisions 
                demonstrating that the plan is credible and would 
                result in an orderly resolution under title 11, United 
                States Code, including any proposed changes in business 
                operations and corporate structure to facilitate 
                implementation of the plan.
            (5) Failure to resubmit credible plan.--
                    (A) In general.--If a nonbank financial company 
                supervised by the Board of Governors or a bank holding 
                company described in subsection (a) fails to timely 
                resubmit the resolution plan as required under 
                paragraph (4), with such revisions as are required 
                under subparagraph (B), the Board of Governors and the 
                Corporation may jointly impose more stringent capital, 
                leverage, or liquidity requirements, or restrictions on 
                the growth, activities, or operations of the company, 
                or any subsidiary thereof, until such time as the 
                company resubmits a plan that remedies the 
                deficiencies.
                    (B) Divestiture.--The Board of Governors and the 
                Corporation, in consultation with the Council, may 
                direct a nonbank financial company supervised by the 
                Board of Governors or a bank holding company described 
                in subsection (a), by order, to divest certain assets 
                or operations identified by the Board of Governors and 
                the Corporation, to facilitate an orderly resolution of 
                such company under title 11, United States Code, in the 
                event of the failure of such company, in any case in 
                which--
                            (i) the Board of Governors and the 
                        Corporation have jointly imposed more stringent 
                        requirements on the company pursuant to 
                        subparagraph (A); and
                            (ii) the company has failed, within the 2-
                        year period beginning on the date of the 
                        imposition of such requirements under 
                        subparagraph (A), to resubmit the resolution 
                        plan with such revisions as were required under 
                        paragraph (4)(B).
            (6) Rules.--Not later than 18 months after the date of 
        enactment of this Act, the Board of Governors and the 
        Corporation shall jointly issue final rules implementing this 
        subsection.
    (e) Concentration Limits.--
            (1) Standards.--In order to limit the risks that the 
        failure of any individual company could pose to a nonbank 
        financial company supervised by the Board of Governors or a 
        bank holding company described in subsection (a), the Board of 
        Governors, by regulation, shall prescribe standards that limit 
        such risks.
            (2) Limitation on credit exposure.--The regulations 
        prescribed by the Board of Governors under paragraph (1) shall 
        prohibit each nonbank financial company supervised by the Board 
        of Governors and bank holding company described in subsection 
        (a) from having credit exposure to any unaffiliated company 
        that exceeds 25 percent of the capital stock and surplus (or 
        such lower amount as the Board of Governors may determine by 
        regulation to be necessary to mitigate risks to the financial 
        stability of the United States) of the company.
            (3) Credit exposure.--For purposes of paragraph (2), 
        ``credit exposure'' to a company means--
                    (A) all extensions of credit to the company, 
                including loans, deposits, and lines of credit;
                    (B) all repurchase agreements and reverse 
                repurchase agreements with the company;
                    (C) all securities borrowing and lending 
                transactions with the company, to the extent that such 
                transactions create credit exposure for the nonbank 
                financial company supervised by the Board of Governors 
                or a bank holding company described in subsection (a);
                    (D) all guarantees, acceptances, or letters of 
                credit (including endorsement or standby letters of 
                credit) issued on behalf of the company;
                    (E) all purchases of or investment in securities 
                issued by the company;
                    (F) counterparty credit exposure to the company in 
                connection with a derivative transaction between the 
                nonbank financial company supervised by the Board of 
                Governors or a bank holding company described in 
                subsection (a) and the company; and
                    (G) any other similar transactions that the Board 
                of Governors, by regulation, determines to be a credit 
                exposure for purposes of this section.
            (4) Attribution rule.--For purposes of this subsection, any 
        transaction by a nonbank financial company supervised by the 
        Board of Governors or a bank holding company described in 
        subsection (a) with any person is a transaction with a company, 
        to the extent that the proceeds of the transaction are used for 
        the benefit of, or transferred to, that company.
            (5) Rulemaking.--The Board of Governors may issue such 
        regulations and orders, including definitions consistent with 
        this section, as may be necessary to administer and carry out 
        this subsection.
            (6) Exemptions.--The Board of Governors may, by regulation 
        or order, exempt transactions, in whole or in part, from the 
        definition of ``credit exposure'' for purposes of this 
        subsection, if the Board of Governors finds that the exemption 
        is in the public interest and is consistent with the purpose of 
        this subsection.
            (7) Transition period.--
                    (A) In general.--This subsection and any 
                regulations and orders of the Board of Governors under 
                this subsection shall not be effective until 3 years 
                after the date of enactment of this Act.
                    (B) Extension authorized.--The Board of Governors 
                may extend the period specified in subparagraph (A) for 
                not longer than an additional 2 years.
    (f) Enhanced Public Disclosures.--The Board of Governors may 
prescribe, by regulation, periodic public disclosures by nonbank 
financial companies supervised by the Board of Governors and bank 
holding companies described in subsection (a) in order to support 
market evaluation of the risk profile, capital adequacy, and risk 
management capabilities thereof.
    (g) Risk Committee.--
            (1) Nonbank financial companies supervised by the board of 
        governors.--The Board of Governors shall require each nonbank 
        financial company supervised by the Board of Governors that is 
        a publicly traded company to establish a risk committee, as set 
        forth in paragraph (3), not later than 1 year after the date of 
        receipt of a notice of final determination under section 
        113(d)(3) with respect to such nonbank financial company 
        supervised by the Board of Governors.
            (2) Certain bank holding companies.--
                    (A) Mandatory regulations.--The Board of Governors 
                shall issue regulations requiring each bank holding 
                company that is a publicly traded company and that has 
                total consolidated assets of not less than 
                $10,000,000,000 to establish a risk committee, as set 
                forth in paragraph (3).
                    (B) Permissive regulations.--The Board of Governors 
                may require each bank holding company that is a 
                publicly traded company and that has total consolidated 
                assets of less than $10,000,000,000 to establish a risk 
                committee, as set forth in paragraph (3), as determined 
                necessary or appropriate by the Board of Governors to 
                promote sound risk management practices.
            (3) Risk committee.--A risk committee required by this 
        subsection shall--
                    (A) be responsible for the oversight of the 
                enterprise-wide risk management practices of the 
                nonbank financial company supervised by the Board of 
                Governors or bank holding company described in 
                subsection (a), as applicable;
                    (B) include such number of independent directors as 
                the Board of Governors may determine appropriate, based 
                on the nature of operations, size of assets, and other 
                appropriate criteria related to the nonbank financial 
                company supervised by the Board of Governors or a bank 
                holding company described in subsection (a), as 
                applicable; and
                    (C) include at least 1 risk management expert 
                having experience in identifying, assessing, and 
                managing risk exposures of large, complex firms.
            (4) Rulemaking.--The Board of Governors shall issue final 
        rules to carry out this subsection, not later than 1 year after 
        the transfer date, to take effect not later than 15 months 
        after the transfer date.
    (h) Stress Tests.--The Board of Governors shall conduct analyses in 
which nonbank financial companies supervised by the Board of Governors 
and bank holding companies described in subsection (a) are subject to 
evaluation of whether the companies have the capital, on a total 
consolidated basis, necessary to absorb losses as a result of adverse 
economic conditions. The Board of Governors may develop and apply such 
other analytic techniques as are necessary to identify, measure, and 
monitor risks to the financial stability of the United States.

SEC. 166. EARLY REMEDIATION REQUIREMENTS.

    (a) In General.--The Board of Governors, in consultation with the 
Council and the Corporation, shall prescribe regulations establishing 
requirements to provide for the early remediation of financial distress 
of a nonbank financial company supervised by the Board of Governors or 
a bank holding company described in section 165(a), except that nothing 
in this subsection authorizes the provision of financial assistance 
from the Federal Government.
    (b) Purpose of the Early Remediation Requirements.--The purpose of 
the early remediation requirements under subsection (a) shall be to 
establish a series of specific remedial actions to be taken by a 
nonbank financial company supervised by the Board of Governors or a 
bank holding company described in section 165(a) that is experiencing 
increasing financial distress, in order to minimize the probability 
that the company will become insolvent and the potential harm of such 
insolvency to the financial stability of the United States.
    (c) Remediation Requirements.--The regulations prescribed by the 
Board of Governors under subsection (a) shall--
            (1) define measures of the financial condition of the 
        company, including regulatory capital, liquidity measures, and 
        other forward-looking indicators; and
            (2) establish requirements that increase in stringency as 
        the financial condition of the company declines, including--
                    (A) requirements in the initial stages of financial 
                decline, including limits on capital distributions, 
                acquisitions, and asset growth; and
                    (B) requirements at later stages of financial 
                decline, including a capital restoration plan and 
                capital-raising requirements, limits on transactions 
                with affiliates, management changes, and asset sales.

SEC. 167. AFFILIATIONS.

    (a) Affiliations.--Nothing in this subtitle shall be construed to 
require a nonbank financial company supervised by the Board of 
Governors, or a company that controls a nonbank financial company 
supervised by the Board of Governors, to conform the activities thereof 
to the requirements of section 4 of the Bank Holding Company Act of 
1956 (12 U.S.C. 1843).
    (b) Requirement.--
            (1) In general.--If a nonbank financial company supervised 
        by the Board of Governors conducts activities other than those 
        that are determined to be financial in nature or incidental 
        thereto under section 4(k) of the Bank Holding Company Act of 
        1956, the Board of Governors may require such company to 
        establish and conduct such activities that are determined to be 
        financial in nature or incidental thereto in an intermediate 
        holding company established pursuant to regulation of the Board 
        of Governors, not later than 90 days after the date on which 
        the nonbank financial company supervised by the Board of 
        Governors was notified of the determination under section 
        113(a).
            (2) Internal financial activities.--For purposes of this 
        subsection, activities that are determined to be financial in 
        nature or incidental thereto under section 4(k) of the Bank 
        Holding Company Act of 1956, as described in paragraph (1), 
        shall not include internal financial activities conducted for a 
        nonbank financial company supervised by the Board of Governors 
        or any affiliate, including internal treasury, investment, and 
        employee benefit functions. With respect to any internal 
        financial activity of such company during the year prior to the 
        date of enactment of this Act, such company may continue to 
        engage in such activity as long as at least \2/3\ of the assets 
        or \2/3\ of the revenues generated from the activity are from 
        or attributable to such company, subject to review by the Board 
        of Governors, to determine whether engaging in such activity 
        presents undue risk to such company or to the financial 
        stability of the United States.
    (c) Regulations.--The Board of Governors--
            (1) shall promulgate regulations to establish the criteria 
        for determining whether to require a nonbank financial company 
        supervised by the Board of Governors to establish an 
        intermediate holding company under subsection (a); and
            (2) may promulgate regulations to establish any 
        restrictions or limitations on transactions between an 
        intermediate holding company or a nonbank financial company 
        supervised by the Board of Governors and its affiliates, as 
        necessary to prevent unsafe and unsound practices in connection 
        with transactions between such company, or any subsidiary 
        thereof, and its parent company or affiliates that are not 
        subsidiaries of such company, except that such regulations 
        shall not restrict or limit any transaction in connection with 
        the bona fide acquisition or lease by an unaffiliated person of 
        assets, goods, or services.

SEC. 168. REGULATIONS.

    Except as otherwise specified in this subtitle, not later than 18 
months after the transfer date, the Board of Governors shall issue 
final regulations to implement this subtitle and the amendments made by 
this subtitle.

SEC. 169. AVOIDING DUPLICATION.

    The Board of Governors shall take any action that the Board of 
Governors deems appropriate to avoid imposing requirements under this 
subtitle that are duplicative of requirements applicable to bank 
holding companies and nonbank financial companies under other 
provisions of law.

SEC. 170. SAFE HARBOR.

    (a) Regulations.--The Board of Governors shall promulgate 
regulations on behalf of, and in consultation with, the Council setting 
forth the criteria for exempting certain types or classes of U.S. 
nonbank financial companies or foreign nonbank financial companies from 
supervision by the Board of Governors.
    (b) Considerations.--In developing the criteria under subsection 
(a), the Board of Governors shall take into account the factors for 
consideration described in subsections (a) and (b) of section 113 in 
determining whether a U.S. nonbank financial company or foreign nonbank 
financial company shall be supervised by the Board of Governors.
    (c) Rule of Construction.--Nothing in this section shall be 
construed to require supervision by the Board of Governors of a U.S. 
nonbank financial company or foreign nonbank financial company, if such 
company does not meet the criteria for exemption established under 
subsection (a).
    (d) Update.--The Board of Governors shall, in consultation with the 
Council, review the regulations promulgated under subsection (a), not 
less frequently than every 5 years, and based upon the review, the 
Board of Governors may revise such regulations on behalf of, and in 
consultation with, the Council to update as necessary the criteria set 
forth in such regulations.
    (e) Transition Period.--No revisions under subsection (d) shall 
take effect before the end of the 2-year period after the date of 
publication of such revisions in final form.
    (f) Report.--The Chairperson of the Board of Governors and the 
Chairperson of the Council shall submit a joint report to the Committee 
on Banking, Housing, and Urban Affairs of the Senate and the Committee 
on Financial Services of the House of Representatives not later than 30 
days after the date of the issuance in final form of the regulations 
under subsection (a), or any subsequent revision to such regulations 
under subsection (d), as applicable. Such report shall include, at a 
minimum, the rationale for exemption and empirical evidence to support 
the criteria for exemption.

SEC. 171. LEVERAGE AND RISK-BASED CAPITAL REQUIREMENTS.

    (a) Definitions.--
            (1) Generally applicable leverage capital requirements.--
        The term ``generally applicable leverage capital requirements'' 
        means--
                    (A) the minimum ratios of tier 1 capital to average 
                total assets, as established by the appropriate Federal 
                banking agencies to apply to insured depository 
                institutions under the prompt corrective action 
                regulations implementing section 38 of the Federal 
                Deposit Insurance Act, regardless of total consolidated 
                asset size or foreign financial exposure; and
                    (B) includes the regulatory capital components in 
                the numerator of that capital requirement, average 
                total assets in the denominator of that capital 
                requirement, and the required ratio of the numerator to 
                the denominator.
            (2) Generally applicable risk-based capital requirements.--
        The term ``generally applicable risk-based capital 
        requirements'' means--
                    (A) the risk-based capital requirements as 
                established by the appropriate Federal banking agencies 
                to apply to insured depository institutions under the 
                agency's Prompt Corrective Action regulations that 
                implement section 38 of the Federal Deposit Insurance 
                Act, regardless of total consolidated asset size or 
                foreign financial exposure; and
                    (B) includes the regulatory capital components in 
                the numerator of those capital requirements, the risk-
                weighted assets in the denominator of those capital 
                requirements, and the required ratio of the numerator 
                to the denominator.
    (b) Minimum Capital Requirements.--
            (1) Minimum leverage capital requirements.--The appropriate 
        Federal banking agencies shall establish minimum leverage 
        capital requirements on a consolidated basis for insured 
        depository institutions, depository institution holding 
        companies, and nonbank financial companies identified under 
        section 113. The minimum leverage capital requirements 
        established under this paragraph shall not be less than the 
        generally applicable leverage capital requirements, which shall 
        serve as a floor for any capital requirements the agency may 
        require, nor quantitatively lower than the generally applicable 
        leverage capital requirements that were in effect for insured 
        depository institutions as of the date of enactment of this 
        Act.
            (2) Minimum risk-based capital requirements.--The 
        appropriate Federal banking agencies shall establish minimum 
        risk-based capital requirements on a consolidated basis for 
        insured depository institutions, depository institution holding 
        companies, and nonbank financial companies identified under 
        section 113. The minimum risk-based capital requirements 
        established under this paragraph shall not be less than the 
        generally applicable risk-based capital requirements, which 
        shall serve as a floor for any capital requirements the agency 
        may require, nor quantitatively lower than the generally 
        applicable risk-based capital requirements that were in effect 
        for insured depository institutions as of the date of enactment 
        of this Act.
            (3) Capital requirements to address activities that pose 
        risks to the financial system.--
                    (A) In general.--Subject to the recommendations of 
                the Council, in accordance with section 120, the 
                Federal banking agencies shall develop capital 
                requirements applicable to all institutions covered by 
                this section that address the risks that the activities 
                of such institutions pose, not only to the institution 
                engaging in the activity, but to other public and 
                private stakeholders in the event of adverse 
                performance, disruption, or failure of the institution 
                or the activity.
                    (B) Content.--Such rules shall address, at a 
                minimum, the risks arising from--
                            (i) significant volumes of activity in 
                        derivatives, securitized products purchased and 
                        sold, financial guarantees purchased and sold, 
                        securities borrowing and lending, and 
                        repurchase agreements and reverse repurchase 
                        agreements;
                            (ii) concentrations in assets for which the 
                        values presented in financial reports are based 
                        on models rather than historical cost or prices 
                        deriving from deep and liquid 2-way markets; 
                        and
                            (iii) concentrations in market share for 
                        any activity that would substantially disrupt 
                        financial markets if the institution is forced 
                        to unexpectedly cease the activity.

                TITLE II--ORDERLY LIQUIDATION AUTHORITY

SEC. 201. DEFINITIONS.

    (a) In General.--In this title, the following definitions shall 
apply:
            (1) Administrative expenses of the receiver.--The term 
        ``administrative expenses of the receiver'' includes--
                    (A) the actual, necessary costs and expenses 
                incurred by the Corporation as receiver for a covered 
                financial company in liquidating a covered financial 
                company; and
                    (B) any obligations that the Corporation as 
                receiver for a covered financial company determines are 
                necessary and appropriate to facilitate the smooth and 
                orderly liquidation of the covered financial company.
            (2) Bankruptcy code.--The term ``Bankruptcy Code'' means 
        title 11, United States Code.
            (3) Bridge financial company.--The term ``bridge financial 
        company'' means a new financial company organized by the 
        Corporation in accordance with section 210(h) for the purpose 
        of resolving a covered financial company.
            (4) Claim.--The term ``claim'' means any right of payment, 
        whether or not such right is reduced to judgment, liquidated, 
        unliquidated, fixed, contingent, matured, unmatured, disputed, 
        undisputed, legal, equitable, secured, or unsecured.
            (5) Company.--The term ``company'' has the same meaning as 
        in section 2(b) of the Bank Holding Company Act of 1956 (12 
        U.S.C. 1841(b)), except that such term includes any company 
        described in paragraph (11), the majority of the securities of 
        which are owned by the United States or any State.
            (6) Covered broker or dealer.--The term ``covered broker or 
        dealer'' means a covered financial company that is a broker or 
        dealer that--
                    (A) is registered with the Commission under section 
                15(b) of the Securities Exchange Act of 1934 (15 U.S.C. 
                78o(b)); and
                    (B) is a member of SIPC.
            (7) Covered financial company.--The term ``covered 
        financial company''--
                    (A) means a financial company for which a 
                determination has been made under section 203(b); and
                    (B) does not include an insured depository 
                institution.
            (8) Covered subsidiary.--The term ``covered subsidiary'' 
        means a subsidiary of a covered financial company, other than--
                    (A) an insured depository institution;
                    (B) an insurance company; or
                    (C) a covered broker or dealer.
            (9) Definitions relating to covered brokers and dealers.--
        The terms ``customer'', ``customer name securities'', 
        ``customer property'', and ``net equity'' in the context of a 
        covered broker or dealer, have the same meanings as in section 
        16 of the Securities Investor Protection Act of 1970 (15 U.S.C. 
        78lll).
            (10) Financial company.--The term ``financial company'' 
        means any company that--
                    (A) is incorporated or organized under any 
                provision of Federal law or the laws of any State;
                    (B) is--
                            (i) a bank holding company, as defined in 
                        section 2(a) of the Bank Holding Company Act of 
                        1956 (12 U.S.C. 1841(a)), and including any 
                        company described in paragraph (5);
                            (ii) a nonbank financial company supervised 
                        by the Board of Governors;
                            (iii) any company that is predominantly 
                        engaged in activities that the Board of 
                        Governors has determined are financial in 
                        nature or incidental thereto for purposes of 
                        section 4(k) of the Bank Holding Company Act of 
                        1956 (12 U.S.C. 1843(k)) other than a company 
                        described in clause (i) or (ii); or
                            (iv) any subsidiary of any company 
                        described in any of clauses (i) through (iii) 
                        that is predominantly engaged in activities 
                        that the Board of Governors has determined are 
                        financial in nature or incidental thereto for 
                        purposes of section 4(k) of the Bank Holding 
                        Company Act of 1956 (12 U.S.C. 1843(k)) (other 
                        than a subsidiary that is an insured depository 
                        institution or an insurance company); and
                    (C) is not a Farm Credit System institution 
                chartered under and subject to the provisions of the 
                Farm Credit Act of 1971, as amended (12 U.S.C. 2001 et 
                seq.), a governmental entity, or a regulated entity, as 
                defined under section 1303 of the Federal Housing 
                Enterprises Financial Safety and Soundness Act of 1992 
                (12 U.S.C. 4502(20)).
            (11) Fund.--The term ``Fund'' means the Orderly Liquidation 
        Fund established under section 210(n).
            (12) Insurance company.--The term ``insurance company'' 
        means any entity that is--
                    (A) engaged in the business of insurance;
                    (B) subject to regulation by a State insurance 
                regulator; and
                    (C) covered by a State law that is designed to 
                specifically deal with the rehabilitation, liquidation, 
                or insolvency of an insurance company.
            (13) Nonbank financial company.--The term ``nonbank 
        financial company'' has the same meaning as in section 
        102(a)(4)(C).
            (14) Nonbank financial company supervised by the board of 
        governors.--The term ``nonbank financial company supervised by 
        the Board of Governors'' has the same meaning as in section 
        102(a)(3)(D).
            (15) Court.--The term ``Court'' means the United States 
        District Court for the District of Columbia.
            (16) SIPC.--The term ``SIPC'' means the Securities Investor 
        Protection Corporation.
    (b) Definitional Criteria.--For purpose of the definition of the 
term ``financial company'' under subsection (a)(10), no company shall 
be deemed to be predominantly engaged in activities that the Board of 
Governors has determined are financial in nature or incidental thereto 
for purposes of section 4(k) of the Bank Holding Company Act of 1956 
(12 U.S.C. 1843(k)), if the consolidated revenues of such company from 
such activities constitute less than 85 percent of the total 
consolidated revenues of such company, as the Corporation, in 
consultation with the Secretary, shall establish by regulation. In 
determining whether a company is a financial company under this title, 
the consolidated revenues derived from the ownership or control of a 
depository institution shall be included.

SEC. 202. JUDICIAL REVIEW.

    (a) Commencement of Orderly Liquidation.--
            (1) Petition to district court.--
                    (A) District court review.--
                            (i) Petition to district court.--Subsequent 
                        to a determination by the Secretary under 
                        section 203 that a financial company satisfies 
                        the criteria in section 203(b), the Secretary 
                        shall notify the Corporation and the covered 
                        financial company. If the board of directors 
                        (or body performing similar functions) of the 
                        covered financial company acquiesces or 
                        consents to the appointment of the Corporation 
                        as a receiver, the Secretary shall appoint the 
                        Corporation as a receiver. If the board of 
                        directors (or body performing similar 
                        functions) of the covered financial company 
                        does not acquiesce or consent to the 
                        appointment of the Corporation as receiver, the 
                        Secretary shall petition the United States 
                        District Court for the District of Columbia for 
                        an order authorizing the Secretary to appoint 
                        the Corporation as a receiver.
                            (ii) Form and content of order.--The 
                        Secretary shall present all relevant findings 
                        and the recommendation made pursuant to section 
                        203(a) to the Court. The petition shall be 
                        filed under seal.
                            (iii) Determination.--On a strictly 
                        confidential basis, and without any prior 
                        public disclosure, the Court, after notice to 
                        the covered financial company and a hearing in 
                        which the covered financial company may oppose 
                        the petition, shall determine whether the 
                        determination of the Secretary that the covered 
                        financial company is in default or in danger of 
                        default and satisfies the definition of a 
                        financial company under section 201(10) is 
                        arbitrary and capricious.
                            (iv) Issuance of order.--If the Court 
                        determines that the determination of the 
                        Secretary that the covered financial company is 
                        in default or in danger of default and 
                        satisfies the definition of a financial company 
                        under section 201(10)--
                                    (I) is not arbitrary and 
                                capricious, the Court shall issue an 
                                order immediately authorizing the 
                                Secretary to appoint the Corporation as 
                                receiver of the covered financial 
                                company; or
                                    (II) is arbitrary and capricious, 
                                the Court shall immediately provide to 
                                the Secretary a written statement of 
                                each reason supporting its 
                                determination, and afford the Secretary 
                                an immediate opportunity to amend and 
                                refile the petition under clause (i).
                            (v) Petition granted by operation of law.--
                        If the Court does not make a determination 
                        within 24 hours of receipt of the petition--
                                    (I) the petition shall be granted 
                                by operation of law;
                                    (II) the Secretary shall appoint 
                                the Corporation as receiver; and
                                    (III) liquidation under this title 
                                shall automatically and without further 
                                notice or action be commenced and the 
                                Corporation may immediately take all 
                                actions authorized under this title.
                    (B) Effect of determination.--The determination of 
                the Court under subparagraph (A) shall be final, and 
                shall be subject to appeal only in accordance with 
                paragraph (2). The decision shall not be subject to any 
                stay or injunction pending appeal. Upon conclusion of 
                its proceedings under subparagraph (A), the Court shall 
                provide immediately for the record a written statement 
                of each reason supporting the decision of the Court, 
                and shall provide copies thereof to the Secretary and 
                the covered financial company.
                    (C) Criminal penalties.--A person who recklessly 
                discloses a determination of the Secretary under 
                section 203(b) or a petition of the Secretary under 
                subparagraph (A), or the pendency of court proceedings 
                as provided for under subparagraph (A), shall be fined 
                not more than $250,000, or imprisoned for not more than 
                5 years, or both.
            (2) Appeal of decisions of the district court.--
                    (A) Appeal to court of appeals.--
                            (i) In general.--Subject to clause (ii), 
                        the United States Court of Appeals for the 
                        District of Columbia Circuit shall have 
                        jurisdiction of an appeal of a final decision 
                        of the Court filed by the Secretary or a 
                        covered financial company, through its board of 
                        directors, notwithstanding section 
                        210(a)(1)(A)(i), not later than 30 days after 
                        the date on which the decision of the Court is 
                        rendered or deemed rendered under this 
                        subsection.
                            (ii) Condition of jurisdiction.--The Court 
                        of Appeals shall have jurisdiction of an appeal 
                        by a covered financial company only if the 
                        covered financial company did not acquiesce or 
                        consent to the appointment of a receiver by the 
                        Secretary under paragraph (1)(A).
                            (iii) Expedition.--The Court of Appeals 
                        shall consider any appeal under this 
                        subparagraph on an expedited basis.
                            (iv) Scope of review.--For an appeal taken 
                        under this subparagraph, review shall be 
                        limited to whether the determination of the 
                        Secretary that a covered financial company is 
                        in default or in danger of default and 
                        satisfies the definition of a financial company 
                        under section 201(10) is arbitrary and 
                        capricious.
                    (B) Appeal to the supreme court.--
                            (i) In general.--A petition for a writ of 
                        certiorari to review a decision of the Court of 
                        Appeals under subparagraph (A) may be filed by 
                        the Secretary or the covered financial company, 
                        through its board of directors, notwithstanding 
                        section 210(a)(1)(A)(i), with the Supreme Court 
                        of the United States, not later than 30 days 
                        after the date of the final decision of the 
                        Court of Appeals, and the Supreme Court shall 
                        have discretionary jurisdiction to review such 
                        decision.
                            (ii) Written statement.--In the event of a 
                        petition under clause (i), the Court of Appeals 
                        shall immediately provide for the record a 
                        written statement of each reason for its 
                        decision.
                            (iii) Expedition.--The Supreme Court shall 
                        consider any petition under this subparagraph 
                        on an expedited basis.
                            (iv) Scope of review.--Review by the 
                        Supreme Court under this subparagraph shall be 
                        limited to whether the determination of the 
                        Secretary that the covered financial company is 
                        in default or in danger of default and 
                        satisfies the definition of a financial company 
                        under section 201(10) is arbitrary and 
                        capricious.
    (b) Establishment and Transmittal of Rules and Procedures.--
            (1) In general.--Not later than 6 months after the date of 
        enactment of this Act, the Court shall establish such rules and 
        procedures as may be necessary to ensure the orderly conduct of 
        proceedings, including rules and procedures to ensure that the 
        24-hour deadline is met and that the Secretary shall have an 
        ongoing opportunity to amend and refile petitions under 
        subsection (a)(1).
            (2) Publication of rules.--The rules and procedures 
        established under paragraph (1), and any modifications of such 
        rules and procedures, shall be recorded and shall be 
        transmitted to--
                    (A) the Committee on the Judiciary of the Senate;
                    (B) the Committee on Banking, Housing, and Urban 
                Affairs of the Senate;
                    (C) the Committee on the Judiciary of the House of 
                Representatives; and
                    (D) the Committee on Financial Services of the 
                House of Representatives.
    (c) Provisions Applicable to Financial Companies.--
            (1) Bankruptcy code.--Except as provided in this 
        subsection, the provisions of the Bankruptcy Code and rules 
        issued thereunder, and not the provisions of this title, shall 
        apply to financial companies that are not covered financial 
        companies for which the Corporation has been appointed as 
        receiver.
            (2) This title.--The provisions of this title shall 
        exclusively apply to and govern all matters relating to covered 
        financial companies for which the Corporation is appointed as 
        receiver, and no provisions of the Bankruptcy Code or the rules 
        issued thereunder shall apply in such cases.
    (d) Time Limit on Receivership Authority.--
            (1) Baseline period.--Any appointment of the Corporation as 
        receiver under this section shall terminate at the end of the 
        3-year period beginning on the date on which such appointment 
        is made.
            (2) Extension of time limit.--The time limit established in 
        paragraph (1) may be extended by the Corporation for up to 1 
        additional year, if the Chairperson of the Corporation 
        determines and certifies in writing to the Committee on 
        Banking, Housing, and Urban Affairs of the Senate and the 
        Committee on Financial Services of the House of Representatives 
        that continuation of the receivership is necessary--
                    (A) to--
                            (i) maximize the net present value return 
                        from the sale or other disposition of the 
                        assets of the covered financial company; or
                            (ii) minimize the amount of loss realized 
                        upon the sale or other disposition of the 
                        assets of the covered financial company; and
                    (B) to protect the stability of the financial 
                system of the United States.
            (3) Second extension of time limit.--
                    (A) In general.--The time limit under this 
                subsection, as extended under paragraph (2), may be 
                extended for up to 1 additional year, if the 
                Chairperson of the Corporation, with the concurrence of 
                the Secretary, submits the certifications described in 
                paragraph (2).
                    (B) Additional report required.--Not later than 30 
                days after the date of commencement of the extension 
                under subparagraph (A), the Corporation shall submit a 
                report to the Committee on Banking, Housing, and Urban 
                Affairs of the Senate and the Committee on Financial 
                Services of the House of Representatives describing the 
                need for the extension and the specific plan of the 
                Corporation to conclude the receivership before the end 
                of the second extension.
            (4) Ongoing litigation.--The time limit under this 
        subsection, as extended under paragraph (3), may be further 
        extended solely for the purpose of completing ongoing 
        litigation in which the Corporation as receiver is a party, 
        provided that the appointment of the Corporation as receiver 
        shall terminate not later than 90 days after the date of 
        completion of such litigation, if--
                    (A) the Council determines that the Corporation 
                used its best efforts to conclude the receivership in 
                accordance with its plan before the end of the time 
                limit described in paragraph (3);
                    (B) the Council determines that the completion of 
                longer-term responsibilities in the form of ongoing 
                litigation justifies the need for an extension; and
                    (C) the Corporation submits a report approved by 
                the Council not later than 30 days after the date of 
                the determinations by the Council under subparagraphs 
                (A) and (B) to the Committee on Banking, Housing, and 
                Urban Affairs of the Senate and the Committee on 
                Financial Services of the House of Representatives, 
                describing--
                            (i) the ongoing litigation justifying the 
                        need for an extension; and
                            (ii) the specific plan of the Corporation 
                        to complete the litigation and conclude the 
                        receivership.
            (5) Regulations.--The Corporation may issue regulations 
        governing the termination of receiverships under this title.
            (6) No liability.--The Corporation and the Deposit 
        Insurance Fund shall not be liable for unresolved claims 
        arising from the receivership after the termination of the 
        receivership.
    (e) Study of Bankruptcy and Orderly Liquidation Process for 
Financial Companies.--
            (1) Study.--
                    (A) In general.--The Administrative Office of the 
                United States Courts and the Comptroller General of the 
                United States shall each monitor the activities of the 
                Court, and each such Office shall conduct separate 
                studies regarding the bankruptcy and orderly 
                liquidation process for financial companies under the 
                Bankruptcy Code.
                    (B) Issues to be studied.--In conducting the study 
                under subparagraph (A), the Administrative Office of 
                the United States Courts and the Comptroller General of 
                the United States each shall evaluate--
                            (i) the effectiveness of chapter 7 or 
                        chapter 11 of the Bankruptcy Code in 
                        facilitating the orderly liquidation or 
                        reorganization of financial companies;
                            (ii) ways to maximize the efficiency and 
                        effectiveness of the Court; and
                            (iii) ways to make the orderly liquidation 
                        process under the Bankruptcy Code for financial 
                        companies more effective.
            (2) Reports.--Not later than 1 year after the date of 
        enactment of this Act, in each successive year until the third 
        year, and every fifth year after that date of enactment, the 
        Administrative Office of the United States Courts and the 
        Comptroller General of the United States shall submit to the 
        Committee on Banking, Housing, and Urban Affairs and the 
        Committee on the Judiciary of the Senate and the Committee on 
        Financial Services and the Committee on the Judiciary of the 
        House of Representatives separate reports summarizing the 
        results of the studies conducted under paragraph (1).
    (f) Study of International Coordination Relating to Bankruptcy 
Process for Financial Companies.--
            (1) Study.--
                    (A) In general.--The Comptroller General of the 
                United States shall conduct a study regarding 
                international coordination relating to the orderly 
                liquidation of financial companies under the Bankruptcy 
                Code.
                    (B) Issues to be studied.--In conducting the study 
                under subparagraph (A), the Comptroller General of the 
                United States shall evaluate, with respect to the 
                bankruptcy process for financial companies--
                            (i) the extent to which international 
                        coordination currently exists;
                            (ii) current mechanisms and structures for 
                        facilitating international cooperation;
                            (iii) barriers to effective international 
                        coordination; and
                            (iv) ways to increase and make more 
                        effective international coordination.
            (2) Report.--Not later than 1 year after the date of 
        enactment of this Act, the Comptroller General of the United 
        States shall submit to the Committee on Banking, Housing, and 
        Urban Affairs and the Committee on the Judiciary of the Senate 
        and the Committee on Financial Services and the Committee on 
        the Judiciary of the House of Representatives and the Secretary 
        a report summarizing the results of the study conducted under 
        paragraph (1).
    (g) Study of Prompt Corrective Action Implementation by the 
Appropriate Federal Agencies.--
            (1) Study.--The Comptroller General of the United States 
        shall conduct a study regarding the implementation of prompt 
        corrective action by the appropriate Federal banking agencies.
            (2) Issues to be studied.--In conducting the study under 
        paragraph (1), the Comptroller General shall evaluate--
                    (A) the effectiveness of implementation of prompt 
                corrective action by the appropriate Federal banking 
                agencies and the resolution of insured depository 
                institutions by the Corporation; and
                    (B) ways to make prompt corrective action a more 
                effective tool to resolve the insured depository 
                institutions at the least possible long-term cost to 
                the Deposit Insurance Fund.
            (3) Report to council.--Not later than 1 years after the 
        date of enactment of this Act, the Comptroller General shall 
        submit a report to the Council on the results of the study 
        conducted under this subsection.
            (4) Council report of action.--Not later than 6 months 
        after the date of receipt of the report from the Comptroller 
        General under paragraph (3), the Council shall submit a report 
        to the Committee on Banking, Housing, and Urban Affairs of the 
        Senate and the Committee on Financial Services of the House of 
        Representatives on actions taken in response to the report, 
        including any recommendations made to the Federal primary 
        financial regulatory agencies under section 120.

SEC. 203. SYSTEMIC RISK DETERMINATION.

    (a) Written Recommendation and Determination.--
            (1) Vote required.--
                    (A) In general.--On their own initiative, or at the 
                request of the Secretary, the Corporation and the Board 
                of Governors shall consider whether to make a written 
                recommendation described in paragraph (2) with respect 
                to whether the Secretary should appoint the Corporation 
                as receiver for a financial company. Such 
                recommendation shall be made upon a vote of not fewer 
                than \2/3\ of the members of the Board of Governors 
                then serving and \2/3\ of the members of the board of 
                directors of the Corporation then serving.
                    (B) Cases involving covered brokers or dealers.--In 
                the case of a covered broker or dealer, or in which the 
                largest United States subsidiary (as measured by total 
                assets as of the end of the previous calendar quarter) 
                of a financial company is a covered broker or dealer, 
                the Commission and the Board of Governors, at the 
                request of the Secretary, or on their own initiative, 
                shall consider whether to make the written 
                recommendation described in paragraph (2) with respect 
                to the financial company. Subject to the requirements 
                in paragraph (2), such recommendation shall be made 
                upon a vote of not fewer than \2/3\ of the members of 
                the Board of Governors then serving and the members of 
                the Commission then serving, and in consultation with 
                the Corporation.
            (2) Recommendation required.--Any written recommendation 
        pursuant to paragraph (1) shall contain--
                    (A) an evaluation of whether the financial company 
                is in default or in danger of default;
                    (B) a description of the effect that the default of 
                the financial company would have on financial stability 
                in the United States;
                    (C) a recommendation regarding the nature and the 
                extent of actions to be taken under this title 
                regarding the financial company;
                    (D) an evaluation of the likelihood of a private 
                sector alternative to prevent the default of the 
                financial company;
                    (E) an evaluation of why a case under the 
                Bankruptcy Code is not appropriate for the financial 
                company;
                    (F) an evaluation of the effects on creditors, 
                counterparties, and shareholders of the financial 
                company and other market participants; and
                    (G) an evaluation of whether the company satisfies 
                the definition of a financial company under section 
                201.
    (b) Determination by the Secretary.--Notwithstanding any other 
provision of Federal or State law, the Secretary shall take action in 
accordance with section 202(a)(1)(A), if, upon the written 
recommendation under subsection (a), the Secretary (in consultation 
with the President) determines that--
            (1) the financial company is in default or in danger of 
        default;
            (2) the failure of the financial company and its resolution 
        under otherwise applicable Federal or State law would have 
        serious adverse effects on financial stability in the United 
        States;
            (3) no viable private sector alternative is available to 
        prevent the default of the financial company;
            (4) any effect on the claims or interests of creditors, 
        counterparties, and shareholders of the financial company and 
        other market participants as a result of actions to be taken 
        under this title is appropriate, given the impact that any 
        action taken under this title would have on financial stability 
        in the United States;
            (5) any action under section 204 would avoid or mitigate 
        such adverse effects, taking into consideration the 
        effectiveness of the action in mitigating potential adverse 
        effects on the financial system, the cost to the general fund 
        of the Treasury, and the potential to increase excessive risk 
        taking on the part of creditors, counterparties, and 
        shareholders in the financial company;
            (6) a Federal regulatory agency has ordered the financial 
        company to convert all of its convertible debt instruments that 
        are subject to the regulatory order; and
            (7) the company satisfies the definition of a financial 
        company under section 201.
    (c) Documentation and Review.--
            (1) In general.--The Secretary shall--
                    (A) document any determination under subsection 
                (b);
                    (B) retain the documentation for review under 
                paragraph (2); and
                    (C) notify the covered financial company and the 
                Corporation of such determination.
            (2) Report to congress.--Not later than 24 hours after the 
        date of appointment of the Corporation as receiver for a 
        covered financial company, the Secretary shall provide written 
        notice of the recommendations and determinations reached in 
        accordance with subsections (a) and (b) to the Majority Leader 
        and the Minority Leader of the Senate and the Speaker and the 
        Minority Leader of the House of Representatives, the Committee 
        on Banking, Housing, and Urban Affairs of the Senate, and the 
        Committee on Financial Services of the House of 
        Representatives, which shall consist of a summary of the basis 
        for the determination, including, to the extent available at 
        the time of the determination--
                    (A) the size and financial condition of the covered 
                financial company;
                    (B) the sources of capital and credit support that 
                were available to the covered financial company;
                    (C) the operations of the covered financial company 
                that could have had a significant impact on financial 
                stability, markets, or both;
                    (D) identification of the banks and financial 
                companies which may be able to provide the services 
                offered by the covered financial company;
                    (E) any potential international ramifications of 
                resolution of the covered financial company under other 
                applicable insolvency law;
                    (F) an estimate of the potential effect of the 
                resolution of the covered financial company under other 
                applicable insolvency law on the financial stability of 
                the United States;
                    (G) the potential effect of the appointment of a 
                receiver by the Secretary on consumers;
                    (H) the potential effect of the appointment of a 
                receiver by the Secretary on the financial system, 
                financial markets, and banks and other financial 
                companies; and
                    (I) whether resolution of the covered financial 
                company under other applicable insolvency law would 
                cause banks or other financial companies to experience 
                severe liquidity distress.
            (3) Reports to congress and the public.--
                    (A) In general.--Not later than 60 days after the 
                date of appointment of the Corporation as receiver for 
                a covered financial company, the Corporation shall file 
                a report with the Committee on Banking, Housing, and 
                Urban Affairs of the Senate and the Committee on 
                Financial Services of the House of Representatives--
                            (i) setting forth information on the 
                        financial condition of the covered financial 
                        company as of the date of the appointment, 
                        including a description of its assets and 
                        liabilities;
                            (ii) describing the plan of, and actions 
                        taken by, the Corporation to wind down the 
                        covered financial company;
                            (iii) explaining each instance in which the 
                        Corporation waived any applicable requirements 
                        of part 366 of title 12, Code of Federal 
                        Regulations (or any successor thereto) with 
                        respect to conflicts of interest by any person 
                        in the private sector who was retained to 
                        provide services to the Corporation in 
                        connection with such receivership;
                            (iv) describing the reasons for the 
                        provision of any funding to the receivership 
                        out of the Fund;
                            (v) setting forth the expected costs of the 
                        orderly liquidation of the covered financial 
                        company;
                            (vi) setting forth the identity of any 
                        claimant that is treated in a manner different 
                        from other similarly situated claimants under 
                        subsection (b)(4), (d)(4), or (h)(5)(E), the 
                        amount of any additional payment to such 
                        claimant under subsection (d)(4), and the 
                        reason for any such action; and
                            (vii) which report the Corporation shall 
                        publish on an online website maintained by the 
                        Corporation, subject to maintaining appropriate 
                        confidentiality.
                    (B) Amendments.--The Corporation shall, on a timely 
                basis, not less frequently than quarterly, amend or 
                revise and resubmit the reports prepared under this 
                paragraph, as necessary.
                    (C) Congressional testimony.--The Corporation and 
                the primary financial regulatory agency, if any, of the 
                financial company for which the Corporation was 
                appointed receiver under this title shall appear before 
                Congress, if requested, not later than 30 days after 
                the date on which the Corporation first files the 
                reports required under subparagraph (A).
            (4) Default or in danger of default.--For purposes of this 
        title, a financial company shall be considered to be in default 
        or in danger of default if, as determined in accordance with 
        subsection (b)--
                    (A) a case has been, or likely will promptly be, 
                commenced with respect to the financial company under 
                the Bankruptcy Code;
                    (B) the financial company has incurred, or is 
                likely to incur, losses that will deplete all or 
                substantially all of its capital, and there is no 
                reasonable prospect for the company to avoid such 
                depletion;
                    (C) the assets of the financial company are, or are 
                likely to be, less than its obligations to creditors 
                and others; or
                    (D) the financial company is, or is likely to be, 
                unable to pay its obligations (other than those subject 
                to a bona fide dispute) in the normal course of 
                business.
            (5) GAO review.--The Comptroller General of the United 
        States shall review and report to Congress on any determination 
        under subsection (b), that results in the appointment of the 
        Corporation as receiver, including--
                    (A) the basis for the determination;
                    (B) the purpose for which any action was taken 
                pursuant thereto;
                    (C) the likely effect of the determination and such 
                action on the incentives and conduct of financial 
                companies and their creditors, counterparties, and 
                shareholders; and
                    (D) the likely disruptive effect of the 
                determination and such action on the reasonable 
                expectations of creditors, counterparties, and 
                shareholders, taking into account the impact any action 
                under this title would have on financial stability in 
                the United States, including whether the rights of such 
                parties will be disrupted.
    (d) Corporation Policies and Procedures.--As soon as is practicable 
after the date of enactment of this Act, the Corporation shall 
establish policies and procedures that are acceptable to the Secretary 
governing the use of funds available to the Corporation to carry out 
this title, including the terms and conditions for the provision and 
use of funds under sections 204(d), 210(h)(2)(G)(iv), and 210(h)(9).
    (e) Treatment of Insurance Companies and Insurance Company 
Subsidiaries.--
            (1) In general.--Notwithstanding subsection (b), if an 
        insurance company is a covered financial company or a 
        subsidiary or affiliate of a covered financial company, the 
        liquidation or rehabilitation of such insurance company, and 
        any subsidiary or affiliate of such company that is not 
        excepted under paragraph (2), shall be conducted as provided 
        under such State law.
            (2) Exception for subsidiaries and affiliates.--The 
        requirement of paragraph (1) shall not apply with respect to 
        any subsidiary or affiliate of an insurance company that is not 
        itself an insurance company.
            (3) Backup authority.--Notwithstanding paragraph (1), with 
        respect to a covered financial company described in paragraph 
        (1), if, after the end of the 60-day period beginning on the 
        date on which a determination is made under section 202(a) with 
        respect to such company, the appropriate regulatory agency has 
        not filed the appropriate judicial action in the appropriate 
        State court to place such company into orderly liquidation 
        under the laws and requirements of the State, the Corporation 
        shall have the authority to stand in the place of the 
        appropriate regulatory agency and file the appropriate judicial 
        action in the appropriate State court to place such company 
        into orderly liquidation under the laws and requirements of the 
        State.

SEC. 204. ORDERLY LIQUIDATION.

    (a) Purpose of Orderly Liquidation Authority.--It is the purpose of 
this title to provide the necessary authority to liquidate failing 
financial companies that pose a significant risk to the financial 
stability of the United States in a manner that mitigates such risk and 
minimizes moral hazard. The authority provided in this title shall be 
exercised in the manner that best fulfills such purpose, so that--
            (1) creditors and shareholders will bear the losses of the 
        financial company;
            (2) management responsible for the condition of the 
        financial company will not be retained; and
            (3) the Corporation and other appropriate agencies will 
        take all steps necessary and appropriate to assure that all 
        parties, including management and third parties, having 
        responsibility for the condition of the financial company bear 
        losses consistent with their responsibility, including actions 
        for damages, restitution, and recoupment of compensation and 
        other gains not compatible with such responsibility.
    (b) Corporation as Receiver.--Upon the appointment of the 
Corporation under section 202, the Corporation shall act as the 
receiver for the covered financial company, with all of the rights and 
obligations set forth in this title.
    (c) Consultation.--The Corporation, as receiver--
            (1) shall consult with the primary financial regulatory 
        agency or agencies of the covered financial company and its 
        covered subsidiaries for purposes of ensuring an orderly 
        liquidation of the covered financial company;
            (2) may consult with, or under subsection (a)(1)(B)(v) or 
        (a)(1)(L) of section 210, acquire the services of, any outside 
        experts, as appropriate to inform and aid the Corporation in 
        the orderly liquidation process;
            (3) shall consult with the primary financial regulatory 
        agency or agencies of any subsidiaries of the covered financial 
        company that are not covered subsidiaries, and coordinate with 
        such regulators regarding the treatment of such solvent 
        subsidiaries and the separate resolution of any such insolvent 
        subsidiaries under other governmental authority, as 
        appropriate; and
            (4) shall consult with the Commission and the Securities 
        Investor Protection Corporation in the case of any covered 
        financial company for which the Corporation has been appointed 
        as receiver that is a broker or dealer registered with the 
        Commission under section 15(b) of the Securities Exchange Act 
        of 1934 (15 U.S.C. 78o(b)) and is a member of the Securities 
        Investor Protection Corporation, for the purpose of determining 
        whether to transfer to a bridge financial company organized by 
        the Corporation as receiver, without consent of any customer, 
        customer accounts of the covered financial company.
    (d) Funding for Orderly Liquidation.--Upon its appointment as 
receiver for a covered financial company, and thereafter as the 
Corporation may, in its discretion, determine to be necessary or 
appropriate, the Corporation may make available to the receivership, 
subject to the conditions set forth in section 206 and subject to the 
plan described in section 210(n)(11), funds for the orderly liquidation 
of the covered financial company. All funds provided by the Corporation 
under this subsection shall have a priority of claims under 
subparagraph (A) or (B) of section 210(b)(1), as applicable, including 
funds used for--
            (1) making loans to, or purchasing any debt obligation of, 
        the covered financial company or any covered subsidiary;
            (2) purchasing or guaranteeing against loss the assets of 
        the covered financial company or any covered subsidiary, 
        directly or through an entity established by the Corporation 
        for such purpose;
            (3) assuming or guaranteeing the obligations of the covered 
        financial company or any covered subsidiary to 1 or more third 
        parties;
            (4) taking a lien on any or all assets of the covered 
        financial company or any covered subsidiary, including a first 
        priority lien on all unencumbered assets of the covered 
        financial company or any covered subsidiary to secure repayment 
        of any transactions conducted under this subsection;
            (5) selling or transferring all, or any part, of such 
        acquired assets, liabilities, or obligations of the covered 
        financial company or any covered subsidiary; and
            (6) making payments pursuant to subsections (b)(4), (d)(4), 
        and (h)(5)(E) of section 210.

SEC. 205. ORDERLY LIQUIDATION OF COVERED BROKERS AND DEALERS.

    (a) Appointment of SIPC as Trustee for Protection of Customer 
Securities and Property.--Upon the appointment of the Corporation as 
receiver for any covered broker or dealer, the Corporation shall 
appoint, without any need for court approval, the Securities Investor 
Protection Corporation to act as trustee for liquidation under the 
Securities Investor Protection Act of 1970 (15 U.S.C. 78aaa et seq.) of 
the covered broker or dealer.
    (b) Powers and Duties of SIPC.--
            (1) In general.--Except as provided in this section, upon 
        its appointment as trustee for the liquidation of a covered 
        broker or dealer, SIPC shall have all of the powers and duties 
        provided by the Securities Investor Protection Act of 1970 (15 
        U.S.C. 78aaa et seq.), including, without limitation, all 
        rights of action against third parties, but shall have no 
        powers or duties with respect to assets and liabilities 
        transferred by the Corporation from the covered broker or 
        dealer to any bridge financial company established in 
        accordance with this title.
            (2) Limitation of powers.--The exercise by SIPC of powers 
        and functions as trustee under subsection (a) shall not impair 
        or impede the exercise of the powers and duties of the 
        Corporation with regard to--
                    (A) any action, except as otherwise provided in 
                this title--
                            (i) to make funds available under section 
                        204(d);
                            (ii) to organize, establish, operate, or 
                        terminate any bridge financial company;
                            (iii) to transfer assets and liabilities;
                            (iv) to enforce or repudiate contracts; or
                            (v) to take any other action relating to 
                        such bridge financial company under section 
                        210; or
                    (B) determining claims under subsection (d).
            (3) Qualified financial contracts.--Notwithstanding any 
        provision of the Securities Investor Protection Act of 1970 to 
        the contrary (including section 5(b)(2)(C) of that Act (15 
        U.S.C. 78eee(b)(2)(C))), the rights and obligations of any 
        party to a qualified financial contract (as that term is 
        defined in section 210(c)(8)) to which a covered broker or 
        dealer described in subsection (a) is a party shall be governed 
        exclusively by section 210, including the limitations and 
        restrictions contained in section 210(c)(10)(B).
    (c) Limitation on Court Action.--Except as otherwise provided in 
this title, no court may take any action, including any action pursuant 
to the Securities Investor Protection Act of 1970 or the Bankruptcy 
Code, to restrain or affect the exercise of powers or functions of the 
Corporation as receiver for a covered broker or dealer and any claims 
against the Corporation as such receiver shall be determined in 
accordance with subsection (e) and such claims shall be limited to 
money damages.
    (d) Actions by Corporation as Receiver.--
            (1) In general.--Notwithstanding any other provision of 
        this title, no action taken by the Corporation, as receiver 
        with respect to a covered broker or dealer, shall--
                    (A) adversely affect the rights of a customer to 
                customer property or customer name securities;
                    (B) diminish the amount or timely payment of net 
                equity claims of customers; or
                    (C) otherwise impair the recoveries provided to a 
                customer under the Securities Investor Protection Act 
                of 1970 (15 U.S.C. 78aaa et seq.).
            (2) Net proceeds.--The net proceeds from any transfer, 
        sale, or disposition of assets by the Corporation as receiver 
        for the covered broker or dealer shall be for the benefit of 
        the estate of the covered broker or dealer, as provided in this 
        title.
    (e) Claims Against the Corporation as Receiver.--Any claim against 
the Corporation as receiver for a covered broker or dealer for assets 
transferred to a bridge financial company established with respect to 
such covered broker or dealer--
            (1) shall be determined in accordance with section 
        210(a)(2); and
            (2) may be reviewed by the appropriate district or 
        territorial court of the United States in accordance with 
        section 210(a)(5).
    (f) Satisfaction of Customer Claims.--
            (1) Obligations to customers.--Notwithstanding any other 
        provision of this title, all obligations of a covered broker or 
        dealer or of any bridge financial company established with 
        respect to such covered broker or dealer to a customer relating 
        to, or net equity claims based upon, customer property shall be 
        promptly discharged by the delivery of securities or the making 
        of payments to or for the account of such customer, in a manner 
        and in an amount at least as beneficial to the customer as 
        would have been the case had the covered broker or dealer been 
        subject to a proceeding under the Securities Investor 
        Protection Act of 1970 (15 U.S.C. 78aaa et seq.) without the 
        appointment of the Corporation as receiver, and with a filing 
        date as of the date on which the Corporation is appointed as 
        receiver.
            (2) Satisfaction of claims by sipc.--SIPC, as trustee for a 
        covered broker or dealer, shall satisfy customer claims in the 
        manner and amount provided under the Securities Investor 
        Protection Act of 1970 (15 U.S.C. 78aaa et seq.), as if the 
        appointment of the Corporation as receiver had not occurred, 
        and with a filing date as of the date on which the Corporation 
        is appointed as receiver. The Corporation shall satisfy 
        customer claims, to the extent that a customer would have 
        received more securities or cash with respect to the allocation 
        of customer property had the covered financial company been 
        subject to a proceeding under the Securities Investor 
        Protection Act (15 U.S.C. 78aaa et seq.) without the 
        appointment of the Corporation as receiver, and with a filing 
        date as of the date on which the Corporation is appointed as 
        receiver.
    (g) Priorities.--
            (1) Customer property.--As trustee for a covered broker or 
        dealer, SIPC shall allocate customer property and deliver 
        customer name securities in accordance with section 8(c) of the 
        Securities Investor Protection Act of 1970 (15 U.S.C. 78fff-
        2(c)).
            (2) Other claims.--All claims other than those described in 
        paragraph (1) (including any unpaid claim by a customer for the 
        allowed net equity claim of such customer from customer 
        property) shall be paid in accordance with the priorities in 
        section 210(b).
    (h) Rulemaking.--The Commission and the Corporation, after 
consultation with SIPC, shall jointly issue rules to implement this 
section.

SEC. 206. MANDATORY TERMS AND CONDITIONS FOR ALL ORDERLY LIQUIDATION 
              ACTIONS.

    In taking action under this title, the Corporation shall--
            (1) determine that such action is necessary for purposes of 
        the financial stability of the United States, and not for the 
        purpose of preserving the covered financial company;
            (2) ensure that the shareholders of a covered financial 
        company do not receive payment until after all other claims and 
        the Fund are fully paid;
            (3) ensure that unsecured creditors bear losses in 
        accordance with the priority of claim provisions in section 
        210;
            (4) ensure that management responsible for the failed 
        condition of the covered financial company is removed (if such 
        management has not already been removed at the time at which 
        the Corporation is appointed receiver); and
            (5) not take an equity interest in or become a shareholder 
        of any covered financial company or any covered subsidiary.

SEC. 207. DIRECTORS NOT LIABLE FOR ACQUIESCING IN APPOINTMENT OF 
              RECEIVER.

    The members of the board of directors (or body performing similar 
functions) of a covered financial company shall not be liable to the 
shareholders or creditors thereof for acquiescing in or consenting in 
good faith to the appointment of the Corporation as receiver for the 
covered financial company under section 203.

SEC. 208. DISMISSAL AND EXCLUSION OF OTHER ACTIONS.

    (a) In General.--Effective as of the date of the appointment of the 
Corporation as receiver for the covered financial company under section 
202 or the appointment of SIPC as trustee for a covered broker or 
dealer under section 205, as applicable, any case or proceeding 
commenced with respect to the covered financial company under the 
Bankruptcy Code or the Securities Investor Protection Act of 1970 shall 
be dismissed, upon notice to the Bankruptcy Court (with respect to a 
case commenced under the Bankruptcy Code), and upon notice to SIPC 
(with respect to a covered broker or dealer) and no such case or 
proceeding may be commenced with respect to a covered financial company 
at any time while the orderly liquidation is pending.
    (b) Revesting of Assets.--Effective as of the date of appointment 
of the Corporation as receiver, the assets of a covered financial 
company shall, to the extent they have vested in any entity other than 
the covered financial company as a result of any case or proceeding 
commenced with respect to the covered financial company under the 
Bankruptcy Code, the Securities Investor Protection Act of 1970, or any 
similar provision of State liquidation or insolvency law applicable to 
the covered financial company, revest in the covered financial company.
    (c) Limitation.--Notwithstanding subsections (a) and (b), any order 
entered or other relief granted by a bankruptcy court prior to the date 
of appointment of the Corporation as receiver shall continue with the 
same validity as if an orderly liquidation had not been commenced.

SEC. 209. RULEMAKING; NON-CONFLICTING LAW.

    The Corporation shall, in consultation with the Council, prescribe 
such rules or regulations as the Corporation considers necessary or 
appropriate to implement this title, including rules and regulations 
with respect to the rights, interests, and priorities of creditors, 
counterparties, security entitlement holders, or other persons with 
respect to any covered financial company or any assets or other 
property of or held by such covered financial company, and address the 
potential for conflicts of interest between or among individual 
receiverships established under this title or under the Federal Deposit 
Insurance Act. To the extent possible, the Corporation shall seek to 
harmonize applicable rules and regulations promulgated under this 
section with the insolvency laws that would otherwise apply to a 
covered financial company.

SEC. 210. POWERS AND DUTIES OF THE CORPORATION.

    (a) Powers and Authorities.--
            (1) General powers.--
                    (A) Successor to covered financial company.--The 
                Corporation shall, upon appointment as receiver for a 
                covered financial company under this title, succeed 
                to--
                            (i) all rights, titles, powers, and 
                        privileges of the covered financial company and 
                        its assets, and of any stockholder, member, 
                        officer, or director of such company; and
                            (ii) title to the books, records, and 
                        assets of any previous receiver or other legal 
                        custodian of such covered financial company.
                    (B) Operation of the covered financial company 
                during the period of orderly liquidation.--The 
                Corporation, as receiver for a covered financial 
                company, may--
                            (i) take over the assets of and operate the 
                        covered financial company with all of the 
                        powers of the members or shareholders, the 
                        directors, and the officers of the covered 
                        financial company, and conduct all business of 
                        the covered financial company;
                            (ii) collect all obligations and money owed 
                        to the covered financial company;
                            (iii) perform all functions of the covered 
                        financial company, in the name of the covered 
                        financial company;
                            (iv) manage the assets and property of the 
                        covered financial company, consistent with 
                        maximization of the value of the assets in the 
                        context of the orderly liquidation; and
                            (v) provide by contract for assistance in 
                        fulfilling any function, activity, action, or 
                        duty of the Corporation as receiver.
                    (C) Functions of covered financial company 
                officers, directors, and shareholders.--
                            (i) In general.--The Corporation may 
                        provide for the exercise of any function by any 
                        member or stockholder, director, or officer of 
                        any covered financial company for which the 
                        Corporation has been appointed as receiver 
                        under this title.
                            (ii) Presumption.--There shall be a strong 
                        presumption that the Corporation, as receiver 
                        for a covered financial company, will remove 
                        management responsible for the failed condition 
                        of the covered financial company.
                    (D) Additional powers as receiver.--The Corporation 
                shall, as receiver for a covered financial company, and 
                subject to all legally enforceable and perfected 
                security interests and all legally enforceable security 
                entitlements in respect of assets held by the covered 
                financial company, liquidate, and wind-up the affairs 
                of a covered financial company, including taking steps 
                to realize upon the assets of the covered financial 
                company, in such manner as the Corporation deems 
                appropriate, including through the sale of assets, the 
                transfer of assets to a bridge financial company 
                established under subsection (h), or the exercise of 
                any other rights or privileges granted to the receiver 
                under this section.
                    (E) Additional powers with respect to failing 
                subsidiaries of a covered financial company.--
                            (i) In general.--In any case in which a 
                        receiver is appointed for a covered financial 
                        company under section 202, the Corporation may 
                        appoint itself as receiver of any subsidiary 
                        (other than an insured depository institution, 
                        any covered broker or dealer, or an insurance 
                        company) of the covered financial company that 
                        is organized under Federal law or the laws of 
                        any State, if the Corporation and the Secretary 
                        jointly determine that--
                                    (I) the subsidiary is in default or 
                                in danger of default;
                                    (II) such action would avoid or 
                                mitigate serious adverse effects on the 
                                financial stability or economic 
                                conditions of the United States; and
                                    (III) such action would facilitate 
                                the orderly liquidation of the covered 
                                financial company.
                            (ii) Treatment as covered financial 
                        company.--If the Corporation is appointed as 
                        receiver of a subsidiary of a covered financial 
                        company under clause (i), the subsidiary shall 
                        thereafter be considered a covered financial 
                        company under this title, and the Corporation 
                        shall thereafter have all the powers and rights 
                        with respect to that subsidiary as it has with 
                        respect to a covered financial company under 
                        this title.
                    (F) Organization of bridge companies.--The 
                Corporation, as receiver for a covered financial 
                company, may organize a bridge financial company under 
                subsection (h).
                    (G) Merger; transfer of assets and liabilities.--
                            (i) In general.--Subject to clauses (ii) 
                        and (iii), the Corporation, as receiver for a 
                        covered financial company, may--
                                    (I) merge the covered financial 
                                company with another company; or
                                    (II) transfer any asset or 
                                liability of the covered financial 
                                company (including any assets and 
                                liabilities held by the covered 
                                financial company for security 
                                entitlement holders, any customer 
                                property, or any assets and liabilities 
                                associated with any trust or custody 
                                business) without obtaining any 
                                approval, assignment, or consent with 
                                respect to such transfer.
                            (ii) Federal agency approval; antitrust 
                        review.--With respect to a transaction 
                        described in clause (i)(I) that requires 
                        approval by a Federal agency--
                                    (I) the transaction may not be 
                                consummated before the 5th calendar day 
                                after the date of approval by the 
                                Federal agency responsible for such 
                                approval;
                                    (II) if, in connection with any 
                                such approval, a report on competitive 
                                factors is required, the Federal agency 
                                responsible for such approval shall 
                                promptly notify the Attorney General of 
                                the United States of the proposed 
                                transaction, and the Attorney General 
                                shall provide the required report not 
                                later than 10 days after the date of 
                                the request; and
                                    (III) if notification under section 
                                7A of the Clayton Act is required with 
                                respect to such transaction, then the 
                                required waiting period shall end on 
                                the 15th day after the date on which 
                                the Attorney General and the Federal 
                                Trade Commission receive such 
                                notification, unless the waiting period 
                                is terminated earlier under subsection 
                                (b)(2) of such section 7A, or is 
                                extended pursuant to subsection (e)(2) 
                                of such section 7A.
                            (iii) Setoff.--Subject to the other 
                        provisions of this title, any transferee of 
                        assets from a receiver, including a bridge 
                        financial company, shall be subject to such 
                        claims or rights as would prevail over the 
                        rights of such transferee in such assets under 
                        applicable noninsolvency law.
                    (H) Payment of valid obligations.--The Corporation, 
                as receiver for a covered financial company, shall, to 
                the extent that funds are available, pay all valid 
                obligations of the covered financial company that are 
                due and payable at the time of the appointment of the 
                Corporation as receiver, in accordance with the 
                prescriptions and limitations of this title.
                    (I) Applicable noninsolvency law.--Except as may 
                otherwise be provided in this title, the applicable 
                noninsolvency law shall be determined by the 
                noninsolvency choice of law rules otherwise applicable 
                to the claims, rights, titles, persons, or entities at 
                issue.
                    (J) Subpoena authority.--
                            (i) In general.--The Corporation, as 
                        receiver for a covered financial company, may, 
                        for purposes of carrying out any power, 
                        authority, or duty with respect to the covered 
                        financial company (including determining any 
                        claim against the covered financial company and 
                        determining and realizing upon any asset of any 
                        person in the course of collecting money due 
                        the covered financial company), exercise any 
                        power established under section 8(n) of the 
                        Federal Deposit Insurance Act, as if the 
                        Corporation were the appropriate Federal 
                        banking agency for the covered financial 
                        company, and the covered financial company were 
                        an insured depository institution.
                            (ii) Rule of construction.--This 
                        subparagraph may not be construed as limiting 
                        any rights that the Corporation, in any 
                        capacity, might otherwise have to exercise any 
                        powers described in clause (i) or under any 
                        other provision of law.
                    (K) Incidental powers.--The Corporation, as 
                receiver for a covered financial company, may exercise 
                all powers and authorities specifically granted to 
                receivers under this title, and such incidental powers 
                as shall be necessary to carry out such powers under 
                this title.
                    (L) Utilization of private sector.--In carrying out 
                its responsibilities in the management and disposition 
                of assets from the covered financial company, the 
                Corporation, as receiver for a covered financial 
                company, may utilize the services of private persons, 
                including real estate and loan portfolio asset 
                management, property management, auction marketing, 
                legal, and brokerage services, if such services are 
                available in the private sector, and the Corporation 
                determines that utilization of such services is 
                practicable, efficient, and cost effective.
                    (M) Shareholders and creditors of covered financial 
                company.--Notwithstanding any other provision of law, 
                the Corporation, as receiver for a covered financial 
                company, shall succeed by operation of law to the 
                rights, titles, powers, and privileges described in 
                subparagraph (A), and shall terminate all rights and 
                claims that the stockholders and creditors of the 
                covered financial company may have against the assets 
                of the covered financial company or the Corporation 
                arising out of their status as stockholders or 
                creditors, except for their right to payment, 
                resolution, or other satisfaction of their claims, as 
                permitted under this section. The Corporation shall 
                ensure that shareholders and unsecured creditors bear 
                losses, consistent with the priority of claims 
                provisions under this section.
                    (N) Coordination with foreign financial 
                authorities.--The Corporation, as receiver for a 
                covered financial company, shall coordinate, to the 
                maximum extent possible, with the appropriate foreign 
                financial authorities regarding the orderly liquidation 
                of any covered financial company that has assets or 
                operations in a country other than the United States.
                    (O) Restriction on transfers to bridge financial 
                company.--
                            (i) Section of accounts for transfer.--If 
                        the Corporation establishes one or more bridge 
                        financial companies with respect to a covered 
                        broker or dealer, the Corporation shall 
                        transfer to a bridge financial company, all 
                        customer accounts of the covered financial 
                        company, unless the Corporation, after 
                        consulting with the Commission and SIPC, 
                        determines that--
                                    (I) the customer accounts are 
                                likely to be promptly transferred to 
                                another covered broker or dealer; or
                                    (II) the transfer of the accounts 
                                to a bridge financial company would 
                                materially interfere with the ability 
                                of the Corporation to avoid or mitigate 
                                serious adverse effects on financial 
                                stability or economic conditions in the 
                                United States.
                            (ii) Transfer of property.--SIPC, as 
                        trustee for the liquidation of the covered 
                        broker or dealer, and the Commission, shall 
                        provide any and all reasonable assistance 
                        necessary to complete such transfers by the 
                        Corporation.
                            (iii) Customer consent and court approval 
                        not required.--Neither customer consent nor 
                        court approval shall be required to transfer 
                        any customer accounts and associated customer 
                        property to a bridge financial company in 
                        accordance with this section.
                            (iv) Notification of sipc and sharing of 
                        information.--The Corporation shall identify to 
                        SIPC the customer accounts and associated 
                        customer property transferred to the bridge 
                        financial company. The Corporation and SIPC 
                        shall cooperate in the sharing of any 
                        information necessary for each entity to 
                        discharge its obligations under this title and 
                        under the Securities Investor Protection Act of 
                        1970 (15 U.S.C. 78aaa et seq.) including by 
                        providing access to the books and records of 
                        the covered financial company and any bridge 
                        financial company established in accordance 
                        with this title.
            (2) Determination of claims.--
                    (A) In general.--The Corporation, as receiver for a 
                covered financial company, shall report on claims, as 
                set forth in section 203(c)(3). Subject to paragraph 
                (4) of this subsection, the Corporation, as receiver 
                for a covered financial company, shall determine claims 
                in accordance with the requirements of this subsection 
                and regulations prescribed under section 209.
                    (B) Notice requirements.--The Corporation, as 
                receiver for a covered financial company, in any case 
                involving the liquidation or winding up of the affairs 
                of a covered financial company, shall--
                            (i) promptly publish a notice to the 
                        creditors of the covered financial company to 
                        present their claims, together with proof, to 
                        the receiver by a date specified in the notice, 
                        which shall be not earlier than 90 days after 
                        the date of publication of such notice; and
                            (ii) republish such notice 1 month and 2 
                        months, respectively, after the date of 
                        publication under clause (i).
                    (C) Mailing required.--The Corporation as receiver 
                shall mail a notice similar to the notice published 
                under clause (i) or (ii) of subparagraph (B), at the 
                time of such publication, to any creditor shown on the 
                books and records of the covered financial company--
                            (i) at the last address of the creditor 
                        appearing in such books;
                            (ii) in any claim filed by the claimant; or
                            (iii) upon discovery of the name and 
                        address of a claimant not appearing on the 
                        books and records of the covered financial 
                        company, not later than 30 days after the date 
                        of the discovery of such name and address.
            (3) Procedures for resolution of claims.--
                    (A) Decision period.--
                            (i) In general.--Prior to the 180th day 
                        after the date on which a claim against a 
                        covered financial company is filed with the 
                        Corporation as receiver, or such later date as 
                        may be agreed as provided in clause (ii), the 
                        Corporation shall notify the claimant whether 
                        it accepts or objects to the claim, in 
                        accordance with subparagraphs (B), (C), and 
                        (D).
                            (ii) Extension of time.--By written 
                        agreement executed not later than 180 days 
                        after the date on which a claim against a 
                        covered financial company is filed with the 
                        Corporation, the period described in clause (i) 
                        may be extended by written agreement between 
                        the claimant and the Corporation. Failure to 
                        notify the claimant of any disallowance within 
                        the time period set forth in clause (i), as it 
                        may be extended by agreement under this clause, 
                        shall be deemed to be a disallowance of such 
                        claim, and the claimant may file or continue an 
                        action in court, as provided in paragraph (4).
                            (iii) Mailing of notice sufficient.--The 
                        requirements of clause (i) shall be deemed to 
                        be satisfied if the notice of any decision with 
                        respect to any claim is mailed to the last 
                        address of the claimant which appears--
                                    (I) on the books, records, or both 
                                of the covered financial company;
                                    (II) in the claim filed by the 
                                claimant; or
                                    (III) in documents submitted in 
                                proof of the claim.
                            (iv) Contents of notice of disallowance.--
                        If the Corporation as receiver objects to any 
                        claim filed under clause (i), the notice to the 
                        claimant shall contain--
                                    (I) a statement of each reason for 
                                the disallowance; and
                                    (II) the procedures required to 
                                file or continue an action in court, as 
                                provided in paragraph (4).
                    (B) Allowance of proven claim.--The receiver shall 
                allow any claim received by the receiver on or before 
                the date specified in the notice under paragraph 
                (2)(B)(i), which is proved to the satisfaction of the 
                receiver.
                    (C) Disallowance of claims filed after end of 
                filing period.--
                            (i) In general.--Except as provided in 
                        clause (ii), claims filed after the date 
                        specified in the notice published under 
                        paragraph (2)(B)(i) shall be disallowed, and 
                        such disallowance shall be final.
                            (ii) Certain exceptions.--Clause (i) shall 
                        not apply with respect to any claim filed by a 
                        claimant after the date specified in the notice 
                        published under paragraph (2)(B)(i), and such 
                        claim may be considered by the receiver under 
                        subparagraph (B), if--
                                    (I) the claimant did not receive 
                                notice of the appointment of the 
                                receiver in time to file such claim 
                                before such date; and
                                    (II) such claim is filed in time to 
                                permit payment of such claim.
                    (D) Authority to disallow claims.--
                            (i) In general.--The Corporation may object 
                        to any portion of any claim by a creditor or 
                        claim of a security, preference, setoff, or 
                        priority which is not proved to the 
                        satisfaction of the Corporation.
                            (ii) Payments to undersecured creditors.--
                        In the case of a claim against a covered 
                        financial company that is secured by any 
                        property or other asset of such covered 
                        financial company, the receiver--
                                    (I) may treat the portion of such 
                                claim which exceeds an amount equal to 
                                the fair market value of such property 
                                or other asset as an unsecured claim; 
                                and
                                    (II) may not make any payment with 
                                respect to such unsecured portion of 
                                the claim, other than in connection 
                                with the disposition of all claims of 
                                unsecured creditors of the covered 
                                financial company.
                            (iii) Exceptions.--No provision of this 
                        paragraph shall apply with respect to--
                                    (I) any extension of credit from 
                                any Federal reserve bank, or the 
                                Corporation, to any covered financial 
                                company; or
                                    (II) subject to clause (ii), any 
                                legally enforceable and perfected 
                                security interest in the assets of the 
                                covered financial company securing any 
                                such extension of credit.
                    (E) Legal effect of filing.--
                            (i) Statute of limitations tolled.--For 
                        purposes of any applicable statute of 
                        limitations, the filing of a claim with the 
                        receiver shall constitute a commencement of an 
                        action.
                            (ii) No prejudice to other actions.--
                        Subject to paragraph (8), the filing of a claim 
                        with the receiver shall not prejudice any right 
                        of the claimant to continue any action which 
                        was filed before the date of appointment of the 
                        receiver for the covered financial company.
            (4) Judicial determination of claims.--
                    (A) In general.--Subject to subparagraph (B), a 
                claimant may file suit on a claim (or continue an 
                action commenced before the date of appointment of the 
                Corporation as receiver) in the district or territorial 
                court of the United States for the district within 
                which the principal place of business of the covered 
                financial company is located (and such court shall have 
                jurisdiction to hear such claim).
                    (B) Timing.--A claim under subparagraph (A) may be 
                filed before the end of the 60-day period beginning on 
                the earlier of--
                            (i) the end of the period described in 
                        paragraph (3)(A)(i) (or, if extended by 
                        agreement of the Corporation and the claimant, 
                        the period described in paragraph (3)(A)(ii)) 
                        with respect to any claim against a covered 
                        financial company for which the Corporation is 
                        receiver; or
                            (ii) the date of any notice of disallowance 
                        of such claim pursuant to paragraph (3)(A)(i).
                    (C) Statute of limitations.--If any claimant fails 
                to file suit on such claim (or to continue an action on 
                such claim commenced before the date of appointment of 
                the Corporation as receiver) prior to the end of the 
                60-day period described in subparagraph (B), the claim 
                shall be deemed to be disallowed (other than any 
                portion of such claim which was allowed by the 
                receiver) as of the end of such period, such 
                disallowance shall be final, and the claimant shall 
                have no further rights or remedies with respect to such 
                claim.
            (5) Expedited determination of claims.--
                    (A) Procedure required.--The Corporation shall 
                establish a procedure for expedited relief outside of 
                the claims process established under paragraph (3), for 
                any claimant that alleges--
                            (i) the existence of a legally valid and 
                        enforceable or perfected security interest in 
                        property of a covered financial company, or is 
                        an entitlement holder that has obtained control 
                        of any legally valid and enforceable security 
                        entitlement in respect of any asset held by the 
                        covered financial company for which the 
                        Corporation has been appointed receiver; and
                            (ii) that irreparable injury will occur if 
                        the claims procedure established under 
                        paragraph (3) is followed.
                    (B) Determination period.--Prior to the end of the 
                90-day period beginning on the date on which a claim is 
                filed in accordance with the procedures established 
                pursuant to subparagraph (A), the Corporation shall--
                            (i) determine--
                                    (I) whether to allow or disallow 
                                such claim, or any portion thereof; or
                                    (II) whether such claim should be 
                                determined pursuant to the procedures 
                                established pursuant to paragraph (3);
                            (ii) notify the claimant of the 
                        determination; and
                            (iii) if the claim is disallowed, provide a 
                        statement of each reason for the disallowance 
                        and the procedure for obtaining a judicial 
                        determination.
                    (C) Period for filing or renewing suit.--Any 
                claimant who files a request for expedited relief shall 
                be permitted to file suit (or continue a suit filed 
                before the date of appointment of the Corporation as 
                receiver seeking a determination of the rights of the 
                claimant with respect to such security interest (or 
                such security entitlement) after the earlier of--
                            (i) the end of the 90-day period beginning 
                        on the date of the filing of a request for 
                        expedited relief; or
                            (ii) the date on which the Corporation 
                        denies the claim or a portion thereof.
                    (D) Statute of limitations.--If an action described 
                in subparagraph (C) is not filed, or the motion to 
                renew a previously filed suit is not made, before the 
                end of the 30-day period beginning on the date on which 
                such action or motion may be filed in accordance with 
                subparagraph (C), the claim shall be deemed to be 
                disallowed as of the end of such period (other than any 
                portion of such claim which was allowed by the 
                receiver), such disallowance shall be final, and the 
                claimant shall have no further rights or remedies with 
                respect to such claim.
                    (E) Legal effect of filing.--
                            (i) Statute of limitations tolled.--For 
                        purposes of any applicable statute of 
                        limitations, the filing of a claim with the 
                        receiver shall constitute a commencement of an 
                        action.
                            (ii) No prejudice to other actions.--
                        Subject to paragraph (8), the filing of a claim 
                        with the receiver shall not prejudice any right 
                        of the claimant to continue any action which 
                        was filed before the appointment of the 
                        Corporation as receiver for the covered 
                        financial company.
            (6) Agreements against interest of the receiver.--No 
        agreement that tends to diminish or defeat the interest of the 
        Corporation as receiver in any asset acquired by the receiver 
        under this section shall be valid against the receiver, unless 
        such agreement--
                    (A) is in writing;
                    (B) was executed by an authorized officer or 
                representative of the covered financial company, or 
                confirmed in the ordinary course of business by the 
                covered financial company; and
                    (C) has been, since the time of its execution, an 
                official record of the company or the party claiming 
                under the agreement provides documentation, acceptable 
                to the receiver, of such agreement and its authorized 
                execution or confirmation by the covered financial 
                company.
            (7) Payment of claims.--
                    (A) In general.--Subject to subparagraph (B), the 
                Corporation as receiver may, in its discretion and to 
                the extent that funds are available, pay creditor 
                claims, in such manner and amounts as are authorized 
                under this section, which are--
                            (i) allowed by the receiver;
                            (ii) approved by the receiver pursuant to a 
                        final determination pursuant to paragraph (3) 
                        or (5), as applicable; or
                            (iii) determined by the final judgment of a 
                        court of competent jurisdiction.
                    (B) Limitation.--A creditor shall, in no event, 
                receive less than the amount that the creditor is 
                entitled to receive under paragraphs (2) and (3) of 
                subsection (d), as applicable.
                    (C) Payment of dividends on claims.--The 
                Corporation as receiver may, in its sole discretion, 
                and to the extent otherwise permitted by this section, 
                pay dividends on proven claims at any time, and no 
                liability shall attach to the Corporation as receiver, 
                by reason of any such payment or for failure to pay 
                dividends to a claimant whose claim is not proved at 
                the time of any such payment.
                    (D) Rulemaking by the corporation.--The Corporation 
                may prescribe such rules, including definitions of 
                terms, as the Corporation deems appropriate to 
                establish an interest rate for or to make payments of 
                post-insolvency interest to creditors holding proven 
                claims against the receivership estate of a covered 
                financial company, except that no such interest shall 
                be paid until the Corporation as receiver has satisfied 
                the principal amount of all creditor claims.
            (8) Suspension of legal actions.--
                    (A) In general.--After the appointment of the 
                Corporation as receiver for a covered financial 
                company, the Corporation may request a stay in any 
                judicial action or proceeding in which such covered 
                financial company is or becomes a party, for a period 
                of not to exceed 90 days.
                    (B) Grant of stay by all courts required.--Upon 
                receipt of a request by the Corporation pursuant to 
                subparagraph (A), the court shall grant such stay as to 
                all parties.
            (9) Additional rights and duties.--
                    (A) Prior final adjudication.--The Corporation 
                shall abide by any final, non-appealable judgment of 
                any court of competent jurisdiction that was rendered 
                before the appointment of the Corporation as receiver.
                    (B) Rights and remedies of receiver.--In the event 
                of any appealable judgment, the Corporation as receiver 
                shall--
                            (i) have all the rights and remedies 
                        available to the covered financial company 
                        (before the date of appointment of the 
                        Corporation as receiver under section 202) and 
                        the Corporation, including removal to Federal 
                        court and all appellate rights; and
                            (ii) not be required to post any bond in 
                        order to pursue such remedies.
                    (C) No attachment or execution.--No attachment or 
                execution may be issued by any court upon assets in the 
                possession of the Corporation as receiver for a covered 
                financial company.
                    (D) Limitation on judicial review.--Except as 
                otherwise provided in this title, no court shall have 
                jurisdiction over--
                            (i) any claim or action for payment from, 
                        or any action seeking a determination of rights 
                        with respect to, the assets of any covered 
                        financial company for which the Corporation has 
                        been appointed receiver, including any assets 
                        which the Corporation may acquire from itself 
                        as such receiver; or
                            (ii) any claim relating to any act or 
                        omission of such covered financial company or 
                        the Corporation as receiver.
                    (E) Disposition of assets.--In exercising any 
                right, power, privilege, or authority as receiver in 
                connection with any covered financial company for which 
                the Corporation is acting as receiver under this 
                section, the Corporation shall, to the greatest extent 
                practicable, conduct its operations in a manner that--
                            (i) maximizes the net present value return 
                        from the sale or disposition of such assets;
                            (ii) minimizes the amount of any loss 
                        realized in the resolution of cases;
                            (iii) mitigates the potential for serious 
                        adverse effects to the financial system;
                            (iv) ensures timely and adequate 
                        competition and fair and consistent treatment 
                        of offerors; and
                            (v) prohibits discrimination on the basis 
                        of race, sex, or ethnic group in the 
                        solicitation and consideration of offers.
            (10) Statute of limitations for actions brought by 
        receiver.--
                    (A) In general.--Notwithstanding any provision of 
                any contract, the applicable statute of limitations 
                with regard to any action brought by the Corporation as 
                receiver for a covered financial company shall be--
                            (i) in the case of any contract claim, the 
                        longer of--
                                    (I) the 6-year period beginning on 
                                the date on which the claim accrues; or
                                    (II) the period applicable under 
                                State law; and
                            (ii) in the case of any tort claim, the 
                        longer of--
                                    (I) the 3-year period beginning on 
                                the date on which the claim accrues; or
                                    (II) the period applicable under 
                                State law.
                    (B) Date on which a claim accrues.--For purposes of 
                subparagraph (A), the date on which the statute of 
                limitations begins to run on any claim described in 
                subparagraph (A) shall be the later of--
                            (i) the date of the appointment of the 
                        Corporation as receiver under this title; or
                            (ii) the date on which the cause of action 
                        accrues.
                    (C) Revival of expired state causes of action.--
                            (i) In general.--In the case of any tort 
                        claim described in clause (ii) for which the 
                        applicable statute of limitations under State 
                        law has expired not more than 5 years before 
                        the date of appointment of the Corporation as 
                        receiver for a covered financial company, the 
                        Corporation may bring an action as receiver on 
                        such claim without regard to the expiration of 
                        the statute of limitations.
                            (ii) Claims described.--A tort claim 
                        referred to in clause (i) is a claim arising 
                        from fraud, intentional misconduct resulting in 
                        unjust enrichment, or intentional misconduct 
                        resulting in substantial loss to the covered 
                        financial company.
            (11) Avoidable transfers.--
                    (A) Fraudulent transfers.--The Corporation, as 
                receiver for any covered financial company, may avoid a 
                transfer of any interest of the covered financial 
                company in property, or any obligation incurred by the 
                covered financial company, that was made or incurred at 
                or within 2 years before the time of commencement, if--
                            (i) the covered financial company 
                        voluntarily or involuntarily--
                                    (I) made such transfer or incurred 
                                such obligation with actual intent to 
                                hinder, delay, or defraud any entity to 
                                which the covered financial company was 
                                or became, on or after the date on 
                                which such transfer was made or such 
                                obligation was incurred, indebted; or
                                    (II) received less than a 
                                reasonably equivalent value in exchange 
                                for such transferor obligation; and
                            (ii) the covered financial company 
                        voluntarily or involuntarily--
                                    (I) was insolvent on the date that 
                                such transfer was made or such 
                                obligation was incurred, or became 
                                insolvent as a result of such transfer 
                                or obligation;
                                    (II) was engaged in business or a 
                                transaction, or was about to engage in 
                                business or a transaction, for which 
                                any property remaining with the covered 
                                financial company was an unreasonably 
                                small capital;
                                    (III) intended to incur, or 
                                believed that the covered financial 
                                company would incur, debts that would 
                                be beyond the ability of the covered 
                                financial company to pay as such debts 
                                matured; or
                                    (IV) made such transfer to or for 
                                the benefit of an insider, or incurred 
                                such obligation to or for the benefit 
                                of an insider, under an employment 
                                contract and not in the ordinary course 
                                of business.
                    (B) Preferential transfers.--The Corporation as 
                receiver for any covered financial company may avoid a 
                transfer of an interest of the covered financial 
                company in property--
                            (i) to or for the benefit of a creditor;
                            (ii) for or on account of an antecedent 
                        debt that was owed by the covered financial 
                        company before the transfer was made;
                            (iii) that was made while the covered 
                        financial company was insolvent;
                            (iv) that was made--
                                    (I) 90 days or less before the date 
                                on which the Corporation was appointed 
                                receiver; or
                                    (II) more than 90 days, but less 
                                than 1 year before the date on which 
                                the Corporation was appointed receiver, 
                                if such creditor at the time of the 
                                transfer was an insider; and
                            (v) that enables the creditor to receive 
                        more than the creditor would receive if--
                                    (I) the covered financial company 
                                had been liquidated under chapter 7 of 
                                the Bankruptcy Code;
                                    (II) the transfer had not been 
                                made; and
                                    (III) the creditor received payment 
                                of such debt to the extent provided by 
                                the provisions of chapter 7 of the 
                                Bankruptcy Code.
                    (C) Post-receivership transactions.--The 
                Corporation as receiver for any covered financial 
                company may avoid a transfer of property of the 
                receivership that occurred after the Corporation was 
                appointed receiver that was not authorized under this 
                title by the Corporation as receiver.
                    (D) Right of recovery.--To the extent that a 
                transfer is avoided under subparagraph (A), (B), or 
                (C), the Corporation may recover, for the benefit of 
                the covered financial company, the property transferred 
                or, if a court so orders, the value of such property 
                (at the time of such transfer) from--
                            (i) the initial transferee of such transfer 
                        or the person for whose benefit such transfer 
                        was made; or
                            (ii) any immediate or mediate transferee of 
                        any such initial transferee.
                    (E) Rights of transferee or obligee.--The 
                Corporation may not recover under subparagraph (D)(ii) 
                from--
                            (i) any transferee that takes for value, 
                        including in satisfaction of or to secure a 
                        present or antecedent debt, in good faith, and 
                        without knowledge of the voidability of the 
                        transfer avoided; or
                            (ii) any immediate or mediate good faith 
                        transferee of such transferee.
                    (F) Defenses.--Subject to the other provisions of 
                this title--
                            (i) a transferee or obligee from which the 
                        Corporation seeks to recover a transfer or to 
                        avoid an obligation under subparagraph (A), 
                        (B), (C), or (D) shall have the same defenses 
                        available to a transferee or obligee from which 
                        a trustee seeks to recover a transfer or avoid 
                        an obligation under; and
                            (ii) the authority of the Corporation to 
                        recover a transfer or avoid an obligation shall 
                        be subject to subsections (b) and (c) of 
                        section 546, section 547(c), and section 548(c) 
                        of the Bankruptcy Code.
                    (G) Rights under this section.--The rights of the 
                Corporation as receiver under this section shall be 
                superior to any rights of a trustee or any other party 
                (other than a Federal agency) under the Bankruptcy 
                Code.
                    (H) Rules of construction; definitions.--For 
                purposes of--
                            (i) subparagraphs (A) and (B)--
                                    (I) the term ``insider'' has the 
                                same meaning as in section 101(31) of 
                                the Bankruptcy Code;
                                    (II) a transfer is made when such 
                                transfer is so perfected that a bona 
                                fide purchaser from the covered 
                                financial company against whom 
                                applicable law permits such transfer to 
                                be perfected cannot acquire an interest 
                                in the property transferred that is 
                                superior to the interest in such 
                                property of the transferee, but if such 
                                transfer is not so perfected before the 
                                date on which the Corporation is 
                                appointed as receiver for the covered 
                                financial company, such transfer is 
                                made immediately before the date of 
                                such appointment; and
                                    (III) the term ``value'' means 
                                property, or satisfaction or securing 
                                of a present or antecedent debt of the 
                                covered financial company, but does not 
                                include an unperformed promise to 
                                furnish support to the covered 
                                financial company; and
                            (ii) subparagraph (B)--
                                    (I) the covered financial company 
                                is presumed to have been insolvent on 
                                and during the 90-day period 
                                immediately preceding the date of 
                                appointment of the Corporation as 
                                receiver; and
                                    (II) the term ``insolvent'' has the 
                                same meaning as in section 101(32) of 
                                the Bankruptcy Code.
            (12) Setoff.--
                    (A) Generally.--Except as otherwise provided in 
                this title, any right of a creditor to offset a mutual 
                debt owed by the creditor to any covered financial 
                company that arose before the Corporation was appointed 
                as receiver for the covered financial company against a 
                claim of such creditor may be asserted if enforceable 
                under applicable noninsolvency law, except to the 
                extent that--
                            (i) the claim of the creditor against the 
                        covered financial company is disallowed;
                            (ii) the claim was transferred, by an 
                        entity other than the covered financial 
                        company, to the creditor--
                                    (I) after the Corporation was 
                                appointed as receiver of the covered 
                                financial company; or
                                    (II)(aa) after the 90-day period 
                                preceding the date on which the 
                                Corporation was appointed as receiver 
                                for the covered financial company; and
                                    (bb) while the covered financial 
                                company was insolvent (except for a 
                                setoff in connection with a qualified 
                                financial contract); or
                            (iii) the debt owed to the covered 
                        financial company was incurred by the covered 
                        financial company--
                                    (I) after the 90-day period 
                                preceding the date on which the 
                                Corporation was appointed as receiver 
                                for the covered financial company;
                                    (II) while the covered financial 
                                company was insolvent; and
                                    (III) for the purpose of obtaining 
                                a right of setoff against the covered 
                                financial company (except for a setoff 
                                in connection with a qualified 
                                financial contract).
                    (B) Insufficiency.--
                            (i) In general.--Except with respect to a 
                        setoff in connection with a qualified financial 
                        contract, if a creditor offsets a mutual debt 
                        owed to the covered financial company against a 
                        claim of the covered financial company on or 
                        within the 90-day period preceding the date on 
                        which the Corporation is appointed as receiver 
                        for the covered financial company, the 
                        Corporation may recover from the creditor the 
                        amount so offset, to the extent that any 
                        insufficiency on the date of such setoff is 
                        less than the insufficiency on the later of--
                                    (I) the date that is 90 days before 
                                the date on which the Corporation is 
                                appointed as receiver for the covered 
                                financial company; or
                                    (II) the first day on which there 
                                is an insufficiency during the 90-day 
                                period preceding the date on which the 
                                Corporation is appointed as receiver 
                                for the covered financial company.
                            (ii) Definition of insufficiency.--In this 
                        subparagraph, the term ``insufficiency'' means 
                        the amount, if any, by which a claim against 
                        the covered financial company exceeds a mutual 
                        debt owed to the covered financial company by 
                        the holder of such claim.
                    (C) Insolvency.--The term ``insolvent'' has the 
                same meaning as in section 101(32) of the Bankruptcy 
                Code.
                    (D) Presumption of insolvency.--For purposes of 
                this paragraph, the covered financial company is 
                presumed to have been insolvent on and during the 90-
                day period preceding the date of appointment of the 
                Corporation as receiver.
                    (E) Limitation.--Nothing in this paragraph (12) 
                shall be the basis for any right of setoff where no 
                such right exists under applicable noninsolvency law.
                    (F) Priority claim.--Except as otherwise provided 
                in this title, the Corporation as receiver for the 
                covered financial company may sell or transfer any 
                assets free and clear of the setoff rights of any 
                party, except that such party shall be entitled to a 
                claim, subordinate to the claims payable under 
                subparagraphs (A), (B), (C), and (D) of subsection 
                (b)(1), but senior to all other unsecured liabilities 
                defined in subsection (b)(1)(E), in an amount equal to 
                the value of such setoff rights.
            (13) Attachment of assets and other injunctive relief.--
        Subject to paragraph (14), any court of competent jurisdiction 
        may, at the request of the Corporation as receiver for a 
        covered financial company, issue an order in accordance with 
        Rule 65 of the Federal Rules of Civil Procedure, including an 
        order placing the assets of any person designated by the 
        Corporation under the control of the court and appointing a 
        trustee to hold such assets.
            (14) Standards.--
                    (A) Showing.--Rule 65 of the Federal Rules of Civil 
                Procedure shall apply with respect to any proceeding 
                under paragraph (13), without regard to the requirement 
                that the applicant show that the injury, loss, or 
                damage is irreparable and immediate.
                    (B) State proceeding.--If, in the case of any 
                proceeding in a State court, the court determines that 
                rules of civil procedure available under the laws of 
                the State provide substantially similar protections of 
                the right of the parties to due process as provided 
                under Rule 65 (as modified with respect to such 
                proceeding by subparagraph (A)), the relief sought by 
                the Corporation pursuant to paragraph (14) may be 
                requested under the laws of such State.
            (15) Treatment of claims arising from breach of contracts 
        executed by the corporation as receiver.--Notwithstanding any 
        other provision of this title, any final and non-appealable 
        judgment for monetary damages entered against the Corporation 
        as receiver for a covered financial company for the breach of 
        an agreement executed or approved by the Corporation after the 
        date of its appointment shall be paid as an administrative 
        expense of the receiver. Nothing in this paragraph shall be 
        construed to limit the power of a receiver to exercise any 
        rights under contract or law, including to terminate, breach, 
        cancel, or otherwise discontinue such agreement.
            (16) Accounting and recordkeeping requirements.--
                    (A) In general.--The Corporation as receiver for a 
                covered financial company shall, consistent with the 
                accounting and reporting practices and procedures 
                established by the Corporation, maintain a full 
                accounting of each receivership or other disposition of 
                any covered financial company.
                    (B) Annual accounting or report.--With respect to 
                each receivership to which the Corporation is 
                appointed, the Corporation shall make an annual 
                accounting or report, as appropriate, available to the 
                Secretary and the Comptroller General of the United 
                States.
                    (C) Availability of reports.--Any report prepared 
                pursuant to subparagraph (B) and section 203(c)(3) 
                shall be made available to the public by the 
                Corporation.
                    (D) Recordkeeping requirement.--
                            (i) In general.--The Corporation shall 
                        prescribe such regulations and establish such 
                        retention schedules as are necessary to 
                        maintain the documents and records of the 
                        Corporation generated in exercising the 
                        authorities of this title and the records of a 
                        covered financial company for which the 
                        Corporation is appointed receiver, with due 
                        regard for--
                                    (I) the avoidance of duplicative 
                                record retention; and
                                    (II) the expected evidentiary needs 
                                of the Corporation as receiver for a 
                                covered financial company and the 
                                public regarding the records of covered 
                                financial companies.
                            (ii) Retention of records.--Unless 
                        otherwise required by applicable Federal law or 
                        court order, the Corporation may not, at any 
                        time, destroy any records that are subject to 
                        clause (i).
                            (iii) Records defined.--As used in this 
                        subparagraph, the terms ``records'' and 
                        ``records of a covered financial company'' mean 
                        any document, book, paper, map, photograph, 
                        microfiche, microfilm, computer or 
                        electronically-created record generated or 
                        maintained by the covered financial company in 
                        the course of and necessary to its transaction 
                        of business.
    (b) Priority of Expenses and Unsecured Claims.--
            (1) In general.--Unsecured claims against a covered 
        financial company, or the Corporation as receiver for such 
        covered financial company under this section, that are proven 
        to the satisfaction of the receiver shall have priority in the 
        following order:
                    (A) Administrative expenses of the receiver.
                    (B) Any amounts owed to the United States, unless 
                the United States agrees or consents otherwise.
                    (C) Wages, salaries, or commissions, including 
                vacation, severance, and sick leave pay earned by an 
                individual (other than an individual described in 
                subparagraph (G)), but only to the extent of $11,725 
                for each individual (as indexed for inflation, by 
                regulation of the Corporation) earned not later than 
                180 days before the date of appointment of the 
                Corporation as receiver.
                    (D) Contributions owed to employee benefit plans 
                arising from services rendered not later than 180 days 
                before the date of appointment of the Corporation as 
                receiver, to the extent of the number of employees 
                covered by each such plan, multiplied by $11,725 (as 
                indexed for inflation, by regulation of the 
                Corporation), less the aggregate amount paid to such 
                employees under subparagraph (C), plus the aggregate 
                amount paid by the receivership on behalf of such 
                employees to any other employee benefit plan.
                    (E) Any other general or senior liability of the 
                covered financial company (which is not a liability 
                described under subparagraph (F), (G), or (H)).
                    (F) Any obligation subordinated to general 
                creditors (which is not an obligation described under 
                subparagraph (G) or (H)).
                    (G) Any wages, salaries, or commissions including 
                vacation, severance, and sick leave pay earned, owed to 
                senior executives and directors of the covered 
                financial company.
                    (H) Any obligation to shareholders, members, 
                general partners, limited partners, or other persons, 
                with interests in the equity of the covered financial 
                company arising as a result of their status as 
                shareholders, members, general partners, limited 
                partners, or other persons with interests in the equity 
                of the covered financial company.
            (2) Post-receivership financing priority.--In the event 
        that the Corporation, as receiver for a covered financial 
        company, is unable to obtain unsecured credit for the covered 
        financial company from commercial sources, the Corporation as 
        receiver may obtain credit or incur debt on the part of the 
        covered financial company, which shall have priority over any 
        or all administrative expenses of the receiver under paragraph 
        (1)(A).
            (3) Claims of the united states.--Unsecured claims of the 
        United States shall, at a minimum, have a higher priority than 
        liabilities of the covered financial company that count as 
        regulatory capital.
            (4) Creditors similarly situated.--All claimants of a 
        covered financial company that are similarly situated under 
        paragraph (1) shall be treated in a similar manner, except that 
        the Corporation as receiver may take any action (including 
        making payments, subject to subsection (o)(1)(E)(ii)) that does 
        not comply with this subsection, if--
                    (A) the Corporation determines that such action is 
                necessary--
                            (i) to maximize the value of the assets of 
                        the covered financial company;
                            (ii) to initiate and continue operations 
                        essential to implementation of the receivership 
                        or any bridge financial company;
                            (iii) to maximize the present value return 
                        from the sale or other disposition of the 
                        assets of the covered financial company; or
                            (iv) to minimize the amount of any loss 
                        realized upon the sale or other disposition of 
                        the assets of the covered financial company; 
                        and
                    (B) all claimants that are similarly situated under 
                paragraph (1) receive not less than the amount provided 
                in paragraphs (2) and (3) of subsection (d).
            (5) Secured claims unaffected.--This section shall not 
        affect secured claims or security entitlements in respect of 
        assets or property held by the covered financial company, 
        except to the extent that the security is insufficient to 
        satisfy the claim, and then only with regard to the difference 
        between the claim and the amount realized from the security.
            (6) Priority of expenses and unsecured claims in the 
        orderly liquidation of sipc member.--Where the Corporation is 
        appointed as receiver for a covered broker or dealer, unsecured 
        claims against such covered broker or dealer, or the 
        Corporation as receiver for such covered broker or dealer under 
        this section, that are proven to the satisfaction of the 
        receiver under section 205(e), shall have the priority 
        prescribed in paragraph (1), except that--
                    (A) SIPC shall be entitled to recover 
                administrative expenses incurred in performing its 
                responsibilities under section 205 on an equal basis 
                with the Corporation, in accordance with paragraph 
                (1)(A);
                    (B) the Corporation shall be entitled to recover 
                any amounts paid to customers or to SIPC pursuant to 
                section 205(f), in accordance with paragraph (1)(B);
                    (C) SIPC shall be entitled to recover any amounts 
                paid out of the SIPC Fund to meet its obligations under 
                section 205 and under the Securities Investor 
                Protection Act of 1970 (15 U.S.C. 78aaa et seq.), which 
                claim shall be subordinate to the claims payable under 
                subparagraphs (A) and (B) of paragraph (1), but senior 
                to all other claims; and
                    (D) the Corporation may, after paying any proven 
                claims to customers under section 205 and the 
                Securities Investor Protection Act of 1970 (15 U.S.C. 
                78aaa et seq.), and as provided above, pay dividends on 
                other proven claims, in its discretion, and to the 
                extent that funds are available, in accordance with the 
                priorities set forth in paragraph (1).
    (c) Provisions Relating to Contracts Entered Into Before 
Appointment of Receiver.--
            (1) Authority to repudiate contracts.--In addition to any 
        other rights that a receiver may have, the Corporation as 
        receiver for any covered financial company may disaffirm or 
        repudiate any contract or lease--
                    (A) to which the covered financial company is a 
                party;
                    (B) the performance of which the Corporation as 
                receiver, in the discretion of the Corporation, 
                determines to be burdensome; and
                    (C) the disaffirmance or repudiation of which the 
                Corporation as receiver determines, in the discretion 
                of the Corporation, will promote the orderly 
                administration of the affairs of the covered financial 
                company.
            (2) Timing of repudiation.--The Corporation, as receiver 
        for any covered financial company, shall determine whether or 
        not to exercise the rights of repudiation under this section 
        within a reasonable period of time.
            (3) Claims for damages for repudiation.--
                    (A) In general.--Except as provided in paragraphs 
                (4), (5), and (6) and in subparagraphs (C), (D), and 
                (E) of this paragraph, the liability of the Corporation 
                as receiver for a covered financial company for the 
                disaffirmance or repudiation of any contract pursuant 
                to paragraph (1) shall be--
                            (i) limited to actual direct compensatory 
                        damages; and
                            (ii) determined as of--
                                    (I) the date of the appointment of 
                                the Corporation as receiver; or
                                    (II) in the case of any contract or 
                                agreement referred to in paragraph (8), 
                                the date of the disaffirmance or 
                                repudiation of such contract or 
                                agreement.
                    (B) No liability for other damages.--For purposes 
                of subparagraph (A), the term ``actual direct 
                compensatory damages'' does not include--
                            (i) punitive or exemplary damages;
                            (ii) damages for lost profits or 
                        opportunity; or
                            (iii) damages for pain and suffering.
                    (C) Measure of damages for repudiation of qualified 
                financial contracts.--In the case of any qualified 
                financial contract or agreement to which paragraph (8) 
                applies, compensatory damages shall be--
                            (i) deemed to include normal and reasonable 
                        costs of cover or other reasonable measures of 
                        damages utilized in the industries for such 
                        contract and agreement claims; and
                            (ii) paid in accordance with this paragraph 
                        and subsection (d), except as otherwise 
                        specifically provided in this subsection.
                    (D) Measure of damages for repudiation or 
                disaffirmance of debt obligation.--In the case of any 
                debt for borrowed money or evidenced by a security, 
                actual direct compensatory damages shall be no less 
                than the amount lent plus accrued interest plus any 
                accreted original issue discount as of the date the 
                Corporation was appointed receiver of the covered 
                financial company and, to the extent that an allowed 
                secured claim is secured by property the value of which 
                is greater than the amount of such claim and any 
                accrued interest through the date of repudiation or 
                disaffirmance, such accrued interest pursuant to 
                paragraph (1).
                    (E) Measure of damages for repudiation or 
                disaffirmance of contingent obligation.--In the case of 
                any contingent obligation of a covered financial 
                company consisting of any obligation under a guarantee, 
                letter of credit, loan commitment, or similar credit 
                obligation, the Corporation may, by rule or regulation, 
                prescribe that actual direct compensatory damages shall 
                be no less than the estimated value of the claim as of 
                the date the Corporation was appointed receiver of the 
                covered financial company, as such value is measured 
                based on the likelihood that such contingent claim 
                would become fixed and the probable magnitude thereof.
            (4) Leases under which the covered financial company is the 
        lessee.--
                    (A) In general.--If the Corporation as receiver 
                disaffirms or repudiates a lease under which the 
                covered financial company is the lessee, the receiver 
                shall not be liable for any damages (other than damages 
                determined pursuant to subparagraph (B)) for the 
                disaffirmance or repudiation of such lease.
                    (B) Payments of rent.--Notwithstanding subparagraph 
                (A), the lessor under a lease to which subparagraph (A) 
                would otherwise apply shall--
                            (i) be entitled to the contractual rent 
                        accruing before the later of the date on 
                        which--
                                    (I) the notice of disaffirmance or 
                                repudiation is mailed; or
                                    (II) the disaffirmance or 
                                repudiation becomes effective, unless 
                                the lessor is in default or breach of 
                                the terms of the lease;
                            (ii) have no claim for damages under any 
                        acceleration clause or other penalty provision 
                        in the lease; and
                            (iii) have a claim for any unpaid rent, 
                        subject to all appropriate offsets and 
                        defenses, due as of the date of the appointment 
                        which shall be paid in accordance with this 
                        paragraph and subsection (d).
            (5) Leases under which the covered financial company is the 
        lessor.--
                    (A) In general.--If the Corporation as receiver for 
                a covered financial company repudiates an unexpired 
                written lease of real property of the covered financial 
                company under which the covered financial company is 
                the lessor and the lessee is not, as of the date of 
                such repudiation, in default, the lessee under such 
                lease may either--
                            (i) treat the lease as terminated by such 
                        repudiation; or
                            (ii) remain in possession of the leasehold 
                        interest for the balance of the term of the 
                        lease, unless the lessee defaults under the 
                        terms of the lease after the date of such 
                        repudiation.
                    (B) Provisions applicable to lessee remaining in 
                possession.--If any lessee under a lease described in 
                subparagraph (A) remains in possession of a leasehold 
                interest pursuant to clause (ii) of subparagraph (A)--
                            (i) the lessee--
                                    (I) shall continue to pay the 
                                contractual rent pursuant to the terms 
                                of the lease after the date of the 
                                repudiation of such lease; and
                                    (II) may offset against any rent 
                                payment which accrues after the date of 
                                the repudiation of the lease, any 
                                damages which accrue after such date 
                                due to the nonperformance of any 
                                obligation of the covered financial 
                                company under the lease after such 
                                date; and
                            (ii) the Corporation as receiver shall not 
                        be liable to the lessee for any damages arising 
                        after such date as a result of the repudiation, 
                        other than the amount of any offset allowed 
                        under clause (i)(II).
            (6) Contracts for the sale of real property.--
                    (A) In general.--If the receiver repudiates any 
                contract (which meets the requirements of subsection 
                (a)(6)) for the sale of real property, and the 
                purchaser of such real property under such contract is 
                in possession and is not, as of the date of such 
                repudiation, in default, such purchaser may either--
                            (i) treat the contract as terminated by 
                        such repudiation; or
                            (ii) remain in possession of such real 
                        property.
                    (B) Provisions applicable to purchaser remaining in 
                possession.--If any purchaser of real property under 
                any contract described in subparagraph (A) remains in 
                possession of such property pursuant to clause (ii) of 
                subparagraph (A)--
                            (i) the purchaser--
                                    (I) shall continue to make all 
                                payments due under the contract after 
                                the date of the repudiation of the 
                                contract; and
                                    (II) may offset against any such 
                                payments any damages which accrue after 
                                such date due to the nonperformance 
                                (after such date) of any obligation of 
                                the covered financial company under the 
                                contract; and
                            (ii) the Corporation as receiver shall--
                                    (I) not be liable to the purchaser 
                                for any damages arising after such date 
                                as a result of the repudiation, other 
                                than the amount of any offset allowed 
                                under clause (i)(II);
                                    (II) deliver title to the purchaser 
                                in accordance with the provisions of 
                                the contract; and
                                    (III) have no obligation under the 
                                contract other than the performance 
                                required under subclause (II).
                    (C) Assignment and sale allowed.--
                            (i) In general.--No provision of this 
                        paragraph shall be construed as limiting the 
                        right of the Corporation as receiver to assign 
                        the contract described in subparagraph (A) and 
                        sell the property, subject to the contract and 
                        the provisions of this paragraph.
                            (ii) No liability after assignment and 
                        sale.--If an assignment and sale described in 
                        clause (i) is consummated, the Corporation as 
                        receiver shall have no further liability under 
                        the contract described in subparagraph (A) or 
                        with respect to the real property which was the 
                        subject of such contract.
            (7) Provisions applicable to service contracts.--
                    (A) Services performed before appointment.--In the 
                case of any contract for services between any person 
                and any covered financial company for which the 
                Corporation has been appointed receiver, any claim of 
                such person for services performed before the date of 
                appointment shall be--
                            (i) a claim to be paid in accordance with 
                        subsections (a), (b), and (d); and
                            (ii) deemed to have arisen as of the date 
                        on which the receiver was appointed.
                    (B) Services performed after appointment and prior 
                to repudiation.--If, in the case of any contract for 
                services described in subparagraph (A), the Corporation 
                as receiver accepts performance by the other person 
                before making any determination to exercise the right 
                of repudiation of such contract under this section--
                            (i) the other party shall be paid under the 
                        terms of the contract for the services 
                        performed; and
                            (ii) the amount of such payment shall be 
                        treated as an administrative expense of the 
                        receivership.
                    (C) Acceptance of performance no bar to subsequent 
                repudiation.--The acceptance by the Corporation as 
                receiver for services referred to in subparagraph (B) 
                in connection with a contract described in subparagraph 
                (B) shall not affect the right of the Corporation as 
                receiver to repudiate such contract under this section 
                at any time after such performance.
            (8) Certain qualified financial contracts.--
                    (A) Rights of parties to contracts.--Subject to 
                subsection (a)(8) and paragraphs (9) and (10) of this 
                subsection, and notwithstanding any other provision of 
                this section, any other provision of Federal law, or 
                the law of any State, no person shall be stayed or 
                prohibited from exercising--
                            (i) any right that such person has to cause 
                        the termination, liquidation, or acceleration 
                        of any qualified financial contract with a 
                        covered financial company which arises upon the 
                        date of appointment of the Corporation as 
                        receiver for such covered financial company at 
                        any time after such appointment;
                            (ii) any right under any security agreement 
                        or arrangement or other credit enhancement 
                        related to one or more qualified financial 
                        contracts described in clause (i); or
                            (iii) any right to offset or net out any 
                        termination value, payment amount, or other 
                        transfer obligation arising under or in 
                        connection with 1 or more contracts or 
                        agreements described in clause (i), including 
                        any master agreement for such contracts or 
                        agreements.
                    (B) Applicability of other provisions.--Subsection 
                (a)(8) shall apply in the case of any judicial action 
                or proceeding brought against the Corporation as 
                receiver referred to in subparagraph (A), or the 
                subject covered financial company, by any party to a 
                contract or agreement described in subparagraph (A)(i) 
                with such covered financial company.
                    (C) Certain transfers not avoidable.--
                            (i) In general.--Notwithstanding subsection 
                        (a)(11), (a)(12), or (c)(12), section 5242 of 
                        the Revised Statutes of the United States, or 
                        any other provision of Federal or State law 
                        relating to the avoidance of preferential or 
                        fraudulent transfers, the Corporation, whether 
                        acting as the Corporation or as receiver for a 
                        covered financial company, may not avoid any 
                        transfer of money or other property in 
                        connection with any qualified financial 
                        contract with a covered financial company.
                            (ii) Exception for certain transfers.--
                        Clause (i) shall not apply to any transfer of 
                        money or other property in connection with any 
                        qualified financial contract with a covered 
                        financial company if the transferee had actual 
                        intent to hinder, delay, or defraud such 
                        company, the creditors of such company, or the 
                        Corporation as receiver appointed for such 
                        company.
                    (D) Certain contracts and agreements defined.--For 
                purposes of this subsection, the following definitions 
                shall apply:
                            (i) Qualified financial contract.--The term 
                        ``qualified financial contract'' means any 
                        securities contract, commodity contract, 
                        forward contract, repurchase agreement, swap 
                        agreement, and any similar agreement that the 
                        Corporation determines by regulation, 
                        resolution, or order to be a qualified 
                        financial contract for purposes of this 
                        paragraph.
                            (ii) Securities contract.--The term 
                        ``securities contract''--
                                    (I) means a contract for the 
                                purchase, sale, or loan of a security, 
                                a certificate of deposit, a mortgage 
                                loan, any interest in a mortgage loan, 
                                a group or index of securities, 
                                certificates of deposit, or mortgage 
                                loans or interests therein (including 
                                any interest therein or based on the 
                                value thereof), or any option on any of 
                                the foregoing, including any option to 
                                purchase or sell any such security, 
                                certificate of deposit, mortgage loan, 
                                interest, group or index, or option, 
                                and including any repurchase or reverse 
                                repurchase transaction on any such 
                                security, certificate of deposit, 
                                mortgage loan, interest, group or 
                                index, or option (whether or not such 
                                repurchase or reverse repurchase 
                                transaction is a ``repurchase 
                                agreement'', as defined in clause (v));
                                    (II) does not include any purchase, 
                                sale, or repurchase obligation under a 
                                participation in a commercial mortgage 
                                loan unless the Corporation determines 
                                by regulation, resolution, or order to 
                                include any such agreement within the 
                                meaning of such term;
                                    (III) means any option entered into 
                                on a national securities exchange 
                                relating to foreign currencies;
                                    (IV) means the guarantee (including 
                                by novation) by or to any securities 
                                clearing agency of any settlement of 
                                cash, securities, certificates of 
                                deposit, mortgage loans or interests 
                                therein, group or index of securities, 
                                certificates of deposit or mortgage 
                                loans or interests therein (including 
                                any interest therein or based on the 
                                value thereof) or an option on any of 
                                the foregoing, including any option to 
                                purchase or sell any such security, 
                                certificate of deposit, mortgage loan, 
                                interest, group or index, or option 
                                (whether or not such settlement is in 
                                connection with any agreement or 
                                transaction referred to in subclauses 
                                (I) through (XII) (other than subclause 
                                (II)));
                                    (V) means any margin loan;
                                    (VI) means any extension of credit 
                                for the clearance or settlement of 
                                securities transactions;
                                    (VII) means any loan transaction 
                                coupled with a securities collar 
                                transaction, any prepaid securities 
                                forward transaction, or any total 
                                return swap transaction coupled with a 
                                securities sale transaction;
                                    (VIII) means any other agreement or 
                                transaction that is similar to any 
                                agreement or transaction referred to in 
                                this clause;
                                    (IX) means any combination of the 
                                agreements or transactions referred to 
                                in this clause;
                                    (X) means any option to enter into 
                                any agreement or transaction referred 
                                to in this clause;
                                    (XI) means a master agreement that 
                                provides for an agreement or 
                                transaction referred to in any of 
                                subclauses (I) through (X), other than 
                                subclause (II), together with all 
                                supplements to any such master 
                                agreement, without regard to whether 
                                the master agreement provides for an 
                                agreement or transaction that is not a 
                                securities contract under this clause, 
                                except that the master agreement shall 
                                be considered to be a securities 
                                contract under this clause only with 
                                respect to each agreement or 
                                transaction under the master agreement 
                                that is referred to in any of 
                                subclauses (I) through (X), other than 
                                subclause (II); and
                                    (XII) means any security agreement 
                                or arrangement or other credit 
                                enhancement related to any agreement or 
                                transaction referred to in this clause, 
                                including any guarantee or 
                                reimbursement obligation in connection 
                                with any agreement or transaction 
                                referred to in this clause.
                            (iii) Commodity contract.--The term 
                        ``commodity contract'' means--
                                    (I) with respect to a futures 
                                commission merchant, a contract for the 
                                purchase or sale of a commodity for 
                                future delivery on, or subject to the 
                                rules of, a contract market or board of 
                                trade;
                                    (II) with respect to a foreign 
                                futures commission merchant, a foreign 
                                future;
                                    (III) with respect to a leverage 
                                transaction merchant, a leverage 
                                transaction;
                                    (IV) with respect to a clearing 
                                organization, a contract for the 
                                purchase or sale of a commodity for 
                                future delivery on, or subject to the 
                                rules of, a contract market or board of 
                                trade that is cleared by such clearing 
                                organization, or commodity option 
                                traded on, or subject to the rules of, 
                                a contract market or board of trade 
                                that is cleared by such clearing 
                                organization;
                                    (V) with respect to a commodity 
                                options dealer, a commodity option;
                                    (VI) any other agreement or 
                                transaction that is similar to any 
                                agreement or transaction referred to in 
                                this clause;
                                    (VII) any combination of the 
                                agreements or transactions referred to 
                                in this clause;
                                    (VIII) any option to enter into any 
                                agreement or transaction referred to in 
                                this clause;
                                    (IX) a master agreement that 
                                provides for an agreement or 
                                transaction referred to in any of 
                                subclauses (I) through (VIII), together 
                                with all supplements to any such master 
                                agreement, without regard to whether 
                                the master agreement provides for an 
                                agreement or transaction that is not a 
                                commodity contract under this clause, 
                                except that the master agreement shall 
                                be considered to be a commodity 
                                contract under this clause only with 
                                respect to each agreement or 
                                transaction under the master agreement 
                                that is referred to in any of 
                                subclauses (I) through (VIII); or
                                    (X) any security agreement or 
                                arrangement or other credit enhancement 
                                related to any agreement or transaction 
                                referred to in this clause, including 
                                any guarantee or reimbursement 
                                obligation in connection with any 
                                agreement or transaction referred to in 
                                this clause.
                            (iv) Forward contract.--The term ``forward 
                        contract'' means--
                                    (I) a contract (other than a 
                                commodity contract) for the purchase, 
                                sale, or transfer of a commodity or any 
                                similar good, article, service, right, 
                                or interest which is presently or in 
                                the future becomes the subject of 
                                dealing in the forward contract trade, 
                                or product or byproduct thereof, with a 
                                maturity date that is more than 10 days 
                                after the date on which the contract is 
                                entered into, including a repurchase or 
                                reverse repurchase transaction (whether 
                                or not such repurchase or reverse 
                                repurchase transaction is a 
                                ``repurchase agreement'', as defined in 
                                clause (v)), consignment, lease, swap, 
                                hedge transaction, deposit, loan, 
                                option, allocated transaction, 
                                unallocated transaction, or any other 
                                similar agreement;
                                    (II) any combination of agreements 
                                or transactions referred to in 
                                subclauses (I) and (III);
                                    (III) any option to enter into any 
                                agreement or transaction referred to in 
                                subclause (I) or (II);
                                    (IV) a master agreement that 
                                provides for an agreement or 
                                transaction referred to in subclause 
                                (I), (II), or (III), together with all 
                                supplements to any such master 
                                agreement, without regard to whether 
                                the master agreement provides for an 
                                agreement or transaction that is not a 
                                forward contract under this clause, 
                                except that the master agreement shall 
                                be considered to be a forward contract 
                                under this clause only with respect to 
                                each agreement or transaction under the 
                                master agreement that is referred to in 
                                subclause (I), (II), or (III); or
                                    (V) any security agreement or 
                                arrangement or other credit enhancement 
                                related to any agreement or transaction 
                                referred to in subclause (I), (II), 
                                (III), or (IV), including any guarantee 
                                or reimbursement obligation in 
                                connection with any agreement or 
                                transaction referred to in any such 
                                subclause.
                            (v) Repurchase agreement.--The term 
                        ``repurchase agreement'' (which definition also 
                        applies to a reverse repurchase agreement)--
                                    (I) means an agreement, including 
                                related terms, which provides for the 
                                transfer of one or more certificates of 
                                deposit, mortgage related securities 
                                (as such term is defined in section 3 
                                of the Securities Exchange Act of 
                                1934), mortgage loans, interests in 
                                mortgage-related securities or mortgage 
                                loans, eligible bankers' acceptances, 
                                qualified foreign government securities 
                                (which, for purposes of this clause, 
                                means a security that is a direct 
                                obligation of, or that is fully 
                                guaranteed by, the central government 
                                of a member of the Organization for 
                                Economic Cooperation and Development, 
                                as determined by regulation or order 
                                adopted by the Board of Governors), or 
                                securities that are direct obligations 
                                of, or that are fully guaranteed by, 
                                the United States or any agency of the 
                                United States against the transfer of 
                                funds by the transferee of such 
                                certificates of deposit, eligible 
                                bankers' acceptances, securities, 
                                mortgage loans, or interests with a 
                                simultaneous agreement by such 
                                transferee to transfer to the 
                                transferor thereof certificates of 
                                deposit, eligible bankers' acceptances, 
                                securities, mortgage loans, or 
                                interests as described above, at a date 
                                certain not later than 1 year after 
                                such transfers or on demand, against 
                                the transfer of funds, or any other 
                                similar agreement;
                                    (II) does not include any 
                                repurchase obligation under a 
                                participation in a commercial mortgage 
                                loan, unless the Corporation 
                                determines, by regulation, resolution, 
                                or order to include any such 
                                participation within the meaning of 
                                such term;
                                    (III) means any combination of 
                                agreements or transactions referred to 
                                in subclauses (I) and (IV);
                                    (IV) means any option to enter into 
                                any agreement or transaction referred 
                                to in subclause (I) or (III);
                                    (V) means a master agreement that 
                                provides for an agreement or 
                                transaction referred to in subclause 
                                (I), (III), or (IV), together with all 
                                supplements to any such master 
                                agreement, without regard to whether 
                                the master agreement provides for an 
                                agreement or transaction that is not a 
                                repurchase agreement under this clause, 
                                except that the master agreement shall 
                                be considered to be a repurchase 
                                agreement under this subclause only 
                                with respect to each agreement or 
                                transaction under the master agreement 
                                that is referred to in subclause (I), 
                                (III), or (IV); and
                                    (VI) means any security agreement 
                                or arrangement or other credit 
                                enhancement related to any agreement or 
                                transaction referred to in subclause 
                                (I), (III), (IV), or (V), including any 
                                guarantee or reimbursement obligation 
                                in connection with any agreement or 
                                transaction referred to in any such 
                                subclause.
                            (vi) Swap agreement.--The term ``swap 
                        agreement'' means--
                                    (I) any agreement, including the 
                                terms and conditions incorporated by 
                                reference in any such agreement, which 
                                is an interest rate swap, option, 
                                future, or forward agreement, including 
                                a rate floor, rate cap, rate collar, 
                                cross-currency rate swap, and basis 
                                swap; a spot, same day-tomorrow, 
                                tomorrow-next, forward, or other 
                                foreign exchange, precious metals, or 
                                other commodity agreement; a currency 
                                swap, option, future, or forward 
                                agreement; an equity index or equity 
                                swap, option, future, or forward 
                                agreement; a debt index or debt swap, 
                                option, future, or forward agreement; a 
                                total return, credit spread or credit 
                                swap, option, future, or forward 
                                agreement; a commodity index or 
                                commodity swap, option, future, or 
                                forward agreement; weather swap, 
                                option, future, or forward agreement; 
                                an emissions swap, option, future, or 
                                forward agreement; or an inflation 
                                swap, option, future, or forward 
                                agreement;
                                    (II) any agreement or transaction 
                                that is similar to any other agreement 
                                or transaction referred to in this 
                                clause and that is of a type that has 
                                been, is presently, or in the future 
                                becomes, the subject of recurrent 
                                dealings in the swap or other 
                                derivatives markets (including terms 
                                and conditions incorporated by 
                                reference in such agreement) and that 
                                is a forward, swap, future, option, or 
                                spot transaction on one or more rates, 
                                currencies, commodities, equity 
                                securities or other equity instruments, 
                                debt securities or other debt 
                                instruments, quantitative measures 
                                associated with an occurrence, extent 
                                of an occurrence, or contingency 
                                associated with a financial, 
                                commercial, or economic consequence, or 
                                economic or financial indices or 
                                measures of economic or financial risk 
                                or value;
                                    (III) any combination of agreements 
                                or transactions referred to in this 
                                clause;
                                    (IV) any option to enter into any 
                                agreement or transaction referred to in 
                                this clause;
                                    (V) a master agreement that 
                                provides for an agreement or 
                                transaction referred to in subclause 
                                (I), (II), (III), or (IV), together 
                                with all supplements to any such master 
                                agreement, without regard to whether 
                                the master agreement contains an 
                                agreement or transaction that is not a 
                                swap agreement under this clause, 
                                except that the master agreement shall 
                                be considered to be a swap agreement 
                                under this clause only with respect to 
                                each agreement or transaction under the 
                                master agreement that is referred to in 
                                subclause (I), (II), (III), or (IV); 
                                and
                                    (VI) any security agreement or 
                                arrangement or other credit enhancement 
                                related to any agreement or transaction 
                                referred to in any of clauses (I) 
                                through (V), including any guarantee or 
                                reimbursement obligation in connection 
                                with any agreement or transaction 
                                referred to in any such clause.
                            (vii) Definitions relating to default.--
                        When used in this paragraph and paragraph 
                        (10)--
                                    (I) the term ``default'' means, 
                                with respect to a covered financial 
                                company, any adjudication or other 
                                official decision by any court of 
                                competent jurisdiction, or other public 
                                authority pursuant to which the 
                                Corporation has been appointed 
                                receiver; and
                                    (II) the term ``in danger of 
                                default'' means a covered financial 
                                company with respect to which the 
                                Corporation or appropriate State 
                                authority has determined that--
                                            (aa) in the opinion of the 
                                        Corporation or such authority--

                                                    (AA) the covered 
                                                financial company is 
                                                not likely to be able 
                                                to pay its obligations 
                                                in the normal course of 
                                                business; and

                                                    (BB) there is no 
                                                reasonable prospect 
                                                that the covered 
                                                financial company will 
                                                be able to pay such 
                                                obligations without 
                                                Federal assistance; or

                                            (bb) in the opinion of the 
                                        Corporation or such authority--

                                                    (AA) the covered 
                                                financial company has 
                                                incurred or is likely 
                                                to incur losses that 
                                                will deplete all or 
                                                substantially all of 
                                                its capital; and

                                                    (BB) there is no 
                                                reasonable prospect 
                                                that the capital will 
                                                be replenished without 
                                                Federal assistance.

                            (viii) Treatment of master agreement as one 
                        agreement.--Any master agreement for any 
                        contract or agreement described in any of 
                        clauses (i) through (vi) (or any master 
                        agreement for such master agreement or 
                        agreements), together with all supplements to 
                        such master agreement, shall be treated as a 
                        single agreement and a single qualified 
                        financial contact. If a master agreement 
                        contains provisions relating to agreements or 
                        transactions that are not themselves qualified 
                        financial contracts, the master agreement shall 
                        be deemed to be a qualified financial contract 
                        only with respect to those transactions that 
                        are themselves qualified financial contracts.
                            (ix) Transfer.--The term ``transfer'' means 
                        every mode, direct or indirect, absolute or 
                        conditional, voluntary or involuntary, of 
                        disposing of or parting with property or with 
                        an interest in property, including retention of 
                        title as a security interest and foreclosure of 
                        the equity of redemption of the covered 
                        financial company.
                            (x) Person.--The term ``person'' includes 
                        any governmental entity in addition to any 
                        entity included in the definition of such term 
                        in section 1, title 1, United States Code.
                    (E) Clarification.--No provision of law shall be 
                construed as limiting the right or power of the 
                Corporation, or authorizing any court or agency to 
                limit or delay, in any manner, the right or power of 
                the Corporation to transfer any qualified financial 
                contract in accordance with paragraphs (9) and (10) of 
                this subsection or to disaffirm or repudiate any such 
                contract in accordance with subsection (c)(1).
                    (F) Walkaway clauses not effective.--
                            (i) In general.--Notwithstanding the 
                        provisions of subparagraph (A) of this 
                        paragraph and sections 403 and 404 of the 
                        Federal Deposit Insurance Corporation 
                        Improvement Act of 1991, no walkaway clause 
                        shall be enforceable in a qualified financial 
                        contract of a covered financial company in 
                        default.
                            (ii) Limited suspension of certain 
                        obligations.--In the case of a qualified 
                        financial contract referred to in clause (i), 
                        any payment or delivery obligations otherwise 
                        due from a party pursuant to the qualified 
                        financial contract shall be suspended from the 
                        time at which the Corporation is appointed as 
                        receiver until the earlier of--
                                    (I) the time at which such party 
                                receives notice that such contract has 
                                been transferred pursuant to paragraph 
                                (10)(A); or
                                    (II) 5:00 p.m. (eastern time) on 
                                the 3rd business day following the date 
                                of the appointment of the Corporation 
                                as receiver.
                            (iii) Walkaway clause defined.--For 
                        purposes of this subparagraph, the term 
                        ``walkaway clause'' means any provision in a 
                        qualified financial contract that suspends, 
                        conditions, or extinguishes a payment 
                        obligation of a party, in whole or in part, or 
                        does not create a payment obligation of a party 
                        that would otherwise exist, solely because of 
                        the status of such party as a nondefaulting 
                        party in connection with the insolvency of a 
                        covered financial company that is a party to 
                        the contract or the appointment of or the 
                        exercise of rights or powers by the Corporation 
                        as receiver for such covered financial company, 
                        and not as a result of the exercise by a party 
                        of any right to offset, setoff, or net 
                        obligations that exist under the contract, any 
                        other contract between those parties, or 
                        applicable law.
                            (iv) Certain obligations to clearing 
                        organizations.--In the event that the 
                        Corporation has been appointed as receiver for 
                        a covered financial company which is a party to 
                        any qualified financial contract cleared by or 
                        subject to the rules of a clearing organization 
                        (as defined in subsection (c)(9)(D)), the 
                        receiver shall use its best efforts to meet all 
                        margin, collateral, and settlement obligations 
                        of the covered financial company that arise 
                        under qualified financial contracts (other than 
                        any margin, collateral, or settlement 
                        obligation that is not enforceable against the 
                        receiver under paragraph (8)(F)(i) or paragraph 
                        (10)(B)), as required by the rules of the 
                        clearing organization when due, and such 
                        obligations shall not be suspended pursuant to 
                        paragraph (8)(F)(ii). Notwithstanding paragraph 
                        (8)(F)(ii) or (10)(B), if the receiver fails to 
                        satisfy any such margin, collateral, or 
                        settlement obligations under the rules of the 
                        clearing organization, the clearing 
                        organization shall have the immediate right to 
                        exercise, and shall not be stayed from 
                        exercising, all of its rights and remedies 
                        under its rules and applicable law with respect 
                        to any qualified financial contract of the 
                        covered financial company, including, without 
                        limitation, the right to liquidate all 
                        positions and collateral of such covered 
                        financial company under the company's qualified 
                        financial contracts, and suspend or cease to 
                        act for such covered financial company, all in 
                        accordance with the rules of the clearing 
                        organization.
                    (G) Recordkeeping.--
                            (i) Joint rulemaking.--The Federal primary 
                        financial regulatory agencies shall jointly 
                        prescribe regulations requiring that financial 
                        companies maintain such records with respect to 
                        qualified financial contracts (including market 
                        valuations) that the Federal primary financial 
                        regulatory agencies determine to be necessary 
                        or appropriate in order to assist the 
                        Corporation as receiver for a covered financial 
                        company in being able to exercise its rights 
                        and fulfill its obligations under this 
                        paragraph or paragraph (9) or (10).
                            (ii) Timeframe.--The Federal primary 
                        financial regulatory agencies shall prescribe 
                        joint final or interim final regulations not 
                        later than 24 months after the date of 
                        enactment of this Act.
                            (iii) Back-up rulemaking authority.--If the 
                        Federal primary financial regulatory agencies 
                        do not prescribe joint final or interim final 
                        regulations within the time frame in clause 
                        (ii), the Chairperson of the Council shall 
                        prescribe, in consultation with the 
                        Corporation, the regulations required by clause 
                        (i).
                            (iv) Categorization and tiering.--The joint 
                        regulations prescribed under clause (i) shall, 
                        as appropriate, differentiate among financial 
                        companies by taking into consideration their 
                        size, risk, complexity, leverage, frequency and 
                        dollar amount of qualified financial contracts, 
                        interconnectedness to the financial system, and 
                        any other factors deemed appropriate.
            (9) Transfer of qualified financial contracts.--
                    (A) In general.--In making any transfer of assets 
                or liabilities of a covered financial company in 
                default, which includes any qualified financial 
                contract, the Corporation as receiver for such covered 
                financial company shall either--
                            (i) transfer to one financial institution, 
                        other than a financial institution for which a 
                        conservator, receiver, trustee in bankruptcy, 
                        or other legal custodian has been appointed or 
                        which is otherwise the subject of a bankruptcy 
                        or insolvency proceeding--
                                    (I) all qualified financial 
                                contracts between any person or any 
                                affiliate of such person and the 
                                covered financial company in default;
                                    (II) all claims of such person or 
                                any affiliate of such person against 
                                such covered financial company under 
                                any such contract (other than any claim 
                                which, under the terms of any such 
                                contract, is subordinated to the claims 
                                of general unsecured creditors of such 
                                company);
                                    (III) all claims of such covered 
                                financial company against such person 
                                or any affiliate of such person under 
                                any such contract; and
                                    (IV) all property securing or any 
                                other credit enhancement for any 
                                contract described in subclause (I) or 
                                any claim described in subclause (II) 
                                or (III) under any such contract; or
                            (ii) transfer none of the qualified 
                        financial contracts, claims, property or other 
                        credit enhancement referred to in clause (i) 
                        (with respect to such person and any affiliate 
                        of such person).
                    (B) Transfer to foreign bank, financial 
                institution, or branch or agency thereof.--In 
                transferring any qualified financial contracts and 
                related claims and property under subparagraph (A)(i), 
                the Corporation as receiver for the covered financial 
                company shall not make such transfer to a foreign bank, 
                financial institution organized under the laws of a 
                foreign country, or a branch or agency of a foreign 
                bank or financial institution unless, under the law 
                applicable to such bank, financial institution, branch 
                or agency, to the qualified financial contracts, and to 
                any netting contract, any security agreement or 
                arrangement or other credit enhancement related to one 
                or more qualified financial contracts, the contractual 
                rights of the parties to such qualified financial 
                contracts, netting contracts, security agreements or 
                arrangements, or other credit enhancements are 
                enforceable substantially to the same extent as 
                permitted under this section.
                    (C) Transfer of contracts subject to the rules of a 
                clearing organization.--In the event that the 
                Corporation as receiver for a financial institution 
                transfers any qualified financial contract and related 
                claims, property, or credit enhancement pursuant to 
                subparagraph (A)(i) and such contract is cleared by or 
                subject to the rules of a clearing organization, the 
                clearing organization shall not be required to accept 
                the transferee as a member by virtue of the transfer.
                    (D) Definitions.--For purposes of this paragraph--
                            (i) the term ``financial institution'' 
                        means a broker or dealer, a depository 
                        institution, a futures commission merchant, a 
                        bridge financial company, or any other 
                        institution determined by the Corporation, by 
                        regulation, to be a financial institution; and
                            (ii) the term ``clearing organization'' has 
                        the same meaning as in section 402 of the 
                        Federal Deposit Insurance Corporation 
                        Improvement Act of 1991.
            (10) Notification of transfer.--
                    (A) In general.--
                            (i) Notice.--The Corporation shall provide 
                        notice in accordance with clause (ii), if--
                                    (I) the Corporation as receiver for 
                                a covered financial company in default 
                                or in danger of default transfers any 
                                assets or liabilities of the covered 
                                financial company; and
                                    (II) the transfer includes any 
                                qualified financial contract.
                            (ii) Timing.--The Corporation as receiver 
                        for a covered financial company shall notify 
                        any person who is a party to any contract 
                        described in clause (i) of such transfer not 
                        later than 5:00 p.m. (eastern time) on the 3rd 
                        business day following the date of the 
                        appointment of the Corporation as receiver.
                    (B) Certain rights not enforceable.--
                            (i) Receivership.--A person who is a party 
                        to a qualified financial contract with a 
                        covered financial company may not exercise any 
                        right that such person has to terminate, 
                        liquidate, or net such contract under paragraph 
                        (8)(A) solely by reason of or incidental to the 
                        appointment under this section of the 
                        Corporation as receiver for the covered 
                        financial company (or the insolvency or 
                        financial condition of the covered financial 
                        company for which the Corporation has been 
                        appointed as receiver)--
                                    (I) until 5:00 p.m. (eastern time) 
                                on the 3rd business day following the 
                                date of the appointment; or
                                    (II) after the person has received 
                                notice that the contract has been 
                                transferred pursuant to paragraph 
                                (9)(A).
                            (ii) Notice.--For purposes of this 
                        paragraph, the Corporation as receiver for a 
                        covered financial company shall be deemed to 
                        have notified a person who is a party to a 
                        qualified financial contract with such covered 
                        financial company, if the Corporation has taken 
                        steps reasonably calculated to provide notice 
                        to such person by the time specified in 
                        subparagraph (A).
                    (C) Treatment of bridge financial company.--For 
                purposes of paragraph (9), a bridge financial company 
                shall not be considered to be a covered financial 
                company for which a conservator, receiver, trustee in 
                bankruptcy, or other legal custodian has been 
                appointed, or which is otherwise the subject of a 
                bankruptcy or insolvency proceeding.
                    (D) Business day defined.--For purposes of this 
                paragraph, the term ``business day'' means any day 
                other than any Saturday, Sunday, or any day on which 
                either the New York Stock Exchange or the Federal 
                Reserve Bank of New York is closed.
            (11) Disaffirmance or repudiation of qualified financial 
        contracts.--In exercising the rights of disaffirmance or 
        repudiation of the Corporation as receiver with respect to any 
        qualified financial contract to which a covered financial 
        company is a party, the Corporation shall either--
                    (A) disaffirm or repudiate all qualified financial 
                contracts between--
                            (i) any person or any affiliate of such 
                        person; and
                            (ii) the covered financial company in 
                        default; or
                    (B) disaffirm or repudiate none of the qualified 
                financial contracts referred to in subparagraph (A) 
                (with respect to such person or any affiliate of such 
                person).
            (12) Certain security and customer interests not 
        avoidable.--No provision of this subsection shall be construed 
        as permitting the avoidance of any--
                    (A) legally enforceable or perfected security 
                interest in any of the assets of any covered financial 
                company, except in accordance with subsection (a)(11); 
                or
                    (B) legally enforceable interest in customer 
                property, security entitlements in respect of assets or 
                property held by the covered financial company for any 
                security entitlement holder.
            (13) Authority to enforce contracts.--
                    (A) In general.--The Corporation, as receiver for a 
                covered financial company, may enforce any contract, 
                other than a liability insurance contract of a director 
                or officer, a financial institution bond entered into 
                by the covered financial company, notwithstanding any 
                provision of the contract providing for termination, 
                default, acceleration, or exercise of rights upon, or 
                solely by reason of, insolvency, the appointment of or 
                the exercise of rights or powers by the Corporation as 
                receiver, the filing of the petition pursuant to 
                section 202(a)(1), or the issuance of the 
                recommendations or determination, or any actions or 
                events occurring in connection therewith or as a result 
                thereof, pursuant to section 203.
                    (B) Certain rights not affected.--No provision of 
                this paragraph may be construed as impairing or 
                affecting any right of the Corporation as receiver to 
                enforce or recover under a liability insurance contract 
                of a director or officer or financial institution bond 
                under other applicable law.
                    (C) Consent requirement and ipso facto clauses.--
                            (i) In general.--Except as otherwise 
                        provided by this section, no person may 
                        exercise any right or power to terminate, 
                        accelerate, or declare a default under any 
                        contract to which the covered financial company 
                        is a party (and no provision in any such 
                        contract providing for such default, 
                        termination, or acceleration shall be 
                        enforceable), or to obtain possession of or 
                        exercise control over any property of the 
                        covered financial company or affect any 
                        contractual rights of the covered financial 
                        company, without the consent of the Corporation 
                        as receiver for the covered financial company 
                        during the 90 day period beginning from the 
                        appointment of the Corporation as receiver.
                            (ii) Exceptions.--No provision of this 
                        subparagraph shall apply to a director or 
                        officer liability insurance contract or a 
                        financial institution bond, to the rights of 
                        parties to certain qualified financial 
                        contracts pursuant to paragraph (8), or to the 
                        rights of parties to netting contracts pursuant 
                        to subtitle A of title IV of the Federal 
                        Deposit Insurance Corporation Improvement Act 
                        of 1991 (12 U.S.C. 4401 et seq.), or shall be 
                        construed as permitting the Corporation as 
                        receiver to fail to comply with otherwise 
                        enforceable provisions of such contract.
                    (D) Contracts to extend credit.--Notwithstanding 
                any other provision in this title, if the Corporation 
                as receiver enforces any contract to extend credit to 
                the covered financial company or bridge financial 
                company, any valid and enforceable obligation to repay 
                such debt shall be paid by the Corporation as receiver, 
                as an administrative expense of the receivership.
            (14) Exception for federal reserve banks and corporation 
        security interest.--No provision of this subsection shall apply 
        with respect to--
                    (A) any extension of credit from any Federal 
                reserve bank or the Corporation to any covered 
                financial company; or
                    (B) any security interest in the assets of the 
                covered financial company securing any such extension 
                of credit.
            (15) Savings clause.--The meanings of terms used in this 
        subsection are applicable for purposes of this subsection only, 
        and shall not be construed or applied so as to challenge or 
        affect the characterization, definition, or treatment of any 
        similar terms under any other statute, regulation, or rule, 
        including the Gramm-Leach-Bliley Act, the Legal Certainty for 
        Bank Products Act of 2000, the securities laws (as that term is 
        defined in section 3(a)(47) of the Securities Exchange Act of 
        1934), and the Commodity Exchange Act.
            (16) Enforcement of contracts guaranteed by the covered 
        financial company.--
                    (A) In general.--The Corporation, as receiver for a 
                covered financial company or as receiver for a 
                subsidiary of a covered financial company (including an 
                insured depository institution) shall have the power to 
                enforce contracts of subsidiaries or affiliates of the 
                covered financial company, the obligations under which 
                are guaranteed or otherwise supported by or linked to 
                the covered financial company, notwithstanding any 
                contractual right to cause the termination, 
                liquidation, or acceleration of such contracts based 
                solely on the insolvency, financial condition, or 
                receivership of the covered financial company, if--
                            (i) such guaranty or other support and all 
                        related assets and liabilities are transferred 
                        to and assumed by a bridge financial company or 
                        a third party (other than a third party for 
                        which a conservator, receiver, trustee in 
                        bankruptcy, or other legal custodian has been 
                        appointed, or which is otherwise the subject of 
                        a bankruptcy or insolvency proceeding) within 
                        the same period of time as the Corporation is 
                        entitled to transfer the qualified financial 
                        contracts of such covered financial company; or
                            (ii) the Corporation, as receiver, 
                        otherwise provides adequate protection with 
                        respect to such obligations.
                    (B) Rule of construction.--For purposes of this 
                paragraph, a bridge financial company shall not be 
                considered to be a third party for which a conservator, 
                receiver, trustee in bankruptcy, or other legal 
                custodian has been appointed, or which is otherwise the 
                subject of a bankruptcy or insolvency proceeding.
    (d) Valuation of Claims in Default.--
            (1) In general.--Notwithstanding any other provision of 
        Federal law or the law of any State, and regardless of the 
        method utilized by the Corporation for a covered financial 
        company, including transactions authorized under subsection 
        (h), this subsection shall govern the rights of the creditors 
        of any such covered financial company.
            (2) Maximum liability.--The maximum liability of the 
        Corporation, acting as receiver for a covered financial company 
        or in any other capacity, to any person having a claim against 
        the Corporation as receiver or the covered financial company 
        for which the Corporation is appointed shall equal the amount 
        that such claimant would have received if--
                    (A) the Corporation had not been appointed receiver 
                with respect to the covered financial company; and
                    (B) the covered financial company had been 
                liquidated under chapter 7 of the Bankruptcy Code, or 
                any similar provision of State insolvency law 
                applicable to the covered financial company.
            (3) Special provision for orderly liquidation by sipc.--The 
        maximum liability of the Corporation, acting as receiver or in 
        its corporate capacity for any covered broker or dealer to any 
        customer of such covered broker or dealer, with respect to 
        customer property of such customer, shall be--
                    (A) equal to the amount that such customer would 
                have received with respect to such customer property in 
                a case initiated by SIPC under the Securities Investor 
                Protection Act of 1970 (15 U.S.C. 78aaa et seq.); and
                    (B) determined as of the close of business on the 
                date on which the Corporation is appointed as receiver.
            (4) Additional payments authorized.--
                    (A) In general.--Subject to subsection 
                (o)(1)(E)(ii), the Corporation, with the approval of 
                the Secretary, may make additional payments or credit 
                additional amounts to or with respect to or for the 
                account of any claimant or category of claimants of the 
                covered financial company, if the Corporation 
                determines that such payments or credits are necessary 
                or appropriate to minimize losses to the Corporation as 
                receiver from the orderly liquidation of the covered 
                financial company under this section.
                    (B) Limitations.--
                            (i) Prohibition.--The Corporation shall not 
                        make any payments or credit amounts to any 
                        claimant or category of claimants that would 
                        result in any claimant receiving more than the 
                        face value amount of any claim that is proven 
                        to the satisfaction of the Corporation.
                            (ii) No obligation.--Notwithstanding any 
                        other provision of Federal or State law, or the 
                        Constitution of any State, the Corporation 
                        shall not be obligated, as a result of having 
                        made any payment under subparagraph (A) or 
                        credited any amount described in subparagraph 
                        (A) to or with respect to, or for the account, 
                        of any claimant or category of claimants, to 
                        make payments to any other claimant or category 
                        of claimants.
                    (C) Manner of payment.--The Corporation may make 
                payments or credit amounts under subparagraph (A) 
                directly to the claimants or may make such payments or 
                credit such amounts to a company other than a covered 
                financial company or a bridge financial company 
                established with respect thereto in order to induce 
                such other company to accept liability for such claims.
    (e) Limitation on Court Action.--Except as provided in this title, 
no court may take any action to restrain or affect the exercise of 
powers or functions of the receiver hereunder, and any remedy against 
the Corporation or receiver shall be limited to money damages 
determined in accordance with this title.
    (f) Liability of Directors and Officers.--
            (1) In general.--A director or officer of a covered 
        financial company may be held personally liable for monetary 
        damages in any civil action described in paragraph (2) by, on 
        behalf of, or at the request or direction of the Corporation, 
        which action is prosecuted wholly or partially for the benefit 
        of the Corporation--
                    (A) acting as receiver for such covered financial 
                company;
                    (B) acting based upon a suit, claim, or cause of 
                action purchased from, assigned by, or otherwise 
                conveyed by the Corporation as receiver; or
                    (C) acting based upon a suit, claim, or cause of 
                action purchased from, assigned by, or otherwise 
                conveyed in whole or in part by a covered financial 
                company or its affiliate in connection with assistance 
                provided under this title.
            (2) Actions covered.--Paragraph (1) shall apply with 
        respect to actions for gross negligence, including any similar 
        conduct or conduct that demonstrates a greater disregard of a 
        duty of care (than gross negligence) including intentional 
        tortious conduct, as such terms are defined and determined 
        under applicable State law.
            (3) Savings clause.--Nothing in this subsection shall 
        impair or affect any right of the Corporation under other 
        applicable law.
    (g) Damages.--In any proceeding related to any claim against a 
director, officer, employee, agent, attorney, accountant, or appraiser 
of a covered financial company, or any other party employed by or 
providing services to a covered financial company, recoverable damages 
determined to result from the improvident or otherwise improper use or 
investment of any assets of the covered financial company shall include 
principal losses and appropriate interest.
    (h) Bridge Financial Companies.--
            (1) Organization.--
                    (A) Purpose.--The Corporation, as receiver for one 
                or more covered financial companies or in anticipation 
                of being appointed receiver for one or more covered 
                financial companies, may organize one or more bridge 
                financial companies in accordance with this subsection.
                    (B) Authorities.--Upon the creation of a bridge 
                financial company under subparagraph (A) with respect 
                to a covered financial company, such bridge financial 
                company may--
                            (i) assume such liabilities (including 
                        liabilities associated with any trust or 
                        custody business, but excluding any liabilities 
                        that count as regulatory capital) of such 
                        covered financial company as the Corporation 
                        may, in its discretion, determine to be 
                        appropriate;
                            (ii) purchase such assets (including assets 
                        associated with any trust or custody business) 
                        of such covered financial company as the 
                        Corporation may, in its discretion, determine 
                        to be appropriate; and
                            (iii) perform any other temporary function 
                        which the Corporation may, in its discretion, 
                        prescribe in accordance with this section.
            (2) Charter and establishment.--
                    (A) Establishment.--Except as provided in 
                subparagraph (H), where the covered financial company 
                is a covered broker or dealer, the Corporation, as 
                receiver for a covered financial company, may grant a 
                Federal charter to and approve articles of association 
                for one or more bridge financial company or companies, 
                with respect to such covered financial company which 
                shall, by operation of law and immediately upon 
                issuance of its charter and approval of its articles of 
                association, be established and operate in accordance 
                with, and subject to, such charter, articles, and this 
                section.
                    (B) Management.--Upon its establishment, a bridge 
                financial company shall be under the management of a 
                board of directors appointed by the Corporation.
                    (C) Articles of association.--The articles of 
                association and organization certificate of a bridge 
                financial company shall have such terms as the 
                Corporation may provide, and shall be executed by such 
                representatives as the Corporation may designate.
                    (D) Terms of charter; rights and privileges.--
                Subject to and in accordance with the provisions of 
                this subsection, the Corporation shall--
                            (i) establish the terms of the charter of a 
                        bridge financial company and the rights, 
                        powers, authorities, and privileges of a bridge 
                        financial company granted by the charter or as 
                        an incident thereto; and
                            (ii) provide for, and establish the terms 
                        and conditions governing, the management 
                        (including the bylaws and the number of 
                        directors of the board of directors) and 
                        operations of the bridge financial company.
                    (E) Transfer of rights and privileges of covered 
                financial company.--
                            (i) In general.--Notwithstanding any other 
                        provision of Federal or State law, the 
                        Corporation may provide for a bridge financial 
                        company to succeed to and assume any rights, 
                        powers, authorities, or privileges of the 
                        covered financial company with respect to which 
                        the bridge financial company was established 
                        and, upon such determination by the 
                        Corporation, the bridge financial company shall 
                        immediately and by operation of law succeed to 
                        and assume such rights, powers, authorities, 
                        and privileges.
                            (ii) Effective without approval.--Any 
                        succession to or assumption by a bridge 
                        financial company of rights, powers, 
                        authorities, or privileges of a covered 
                        financial company under clause (i) or otherwise 
                        shall be effective without any further approval 
                        under Federal or State law, assignment, or 
                        consent with respect thereto.
                    (F) Corporate governance and election and 
                designation of body of law.--To the extent permitted by 
                the Corporation and consistent with this section and 
                any rules, regulations, or directives issued by the 
                Corporation under this section, a bridge financial 
                company may elect to follow the corporate governance 
                practices and procedures that are applicable to a 
                corporation incorporated under the general corporation 
                law of the State of Delaware, or the State of 
                incorporation or organization of the covered financial 
                company with respect to which the bridge financial 
                company was established, as such law may be amended 
                from time to time.
                    (G) Capital.--
                            (i) Capital not required.--Notwithstanding 
                        any other provision of Federal or State law, a 
                        bridge financial company may, if permitted by 
                        the Corporation, operate without any capital or 
                        surplus, or with such capital or surplus as the 
                        Corporation may in its discretion determine to 
                        be appropriate.
                            (ii) No contribution by the corporation 
                        required.--The Corporation is not required to 
                        pay capital into a bridge financial company or 
                        to issue any capital stock on behalf of a 
                        bridge financial company established under this 
                        subsection.
                            (iii) Authority.--If the Corporation 
                        determines that such action is advisable, the 
                        Corporation may cause capital stock or other 
                        securities of a bridge financial company 
                        established with respect to a covered financial 
                        company to be issued and offered for sale in 
                        such amounts and on such terms and conditions 
                        as the Corporation may, in its discretion, 
                        determine.
                            (iv) Operating funds in lieu of capital and 
                        implementation plan.--Upon the organization of 
                        a bridge financial company, and thereafter as 
                        the Corporation may, in its discretion, 
                        determine to be necessary or advisable, the 
                        Corporation may make available to the bridge 
                        financial company, subject to the plan 
                        described in subsection (n)(11), funds for the 
                        operation of the bridge financial company in 
                        lieu of capital.
                    (H) Bridge brokers or dealers.--
                            (i) In general.--The Corporation, as 
                        receiver for a covered broker or dealer, may 
                        approve articles of association for one or more 
                        bridge financial companies with respect to such 
                        covered broker or dealer, which bridge 
                        financial company or companies shall, by 
                        operation of law and immediately upon approval 
                        of its articles of association--
                                    (I) be established and deemed 
                                registered with the Commission under 
                                the Securities Exchange Act of 1934 and 
                                a member of SIPC;
                                    (II) operate in accordance with 
                                such articles and this section; and
                                    (III) succeed to any and all 
                                registrations and memberships of the 
                                covered financial company with or in 
                                any self-regulatory organizations.
                            (ii) Other requirements.--Except as 
                        provided in clause (i), and notwithstanding any 
                        other provision of this section, the bridge 
                        financial company shall be subject to the 
                        Federal securities laws and all requirements 
                        with respect to being a member of a self-
                        regulatory organization, unless exempted from 
                        any such requirements by the Commission, as is 
                        necessary or appropriate in the public interest 
                        or for the protection of investors.
                            (iii) Treatment of customers.--Except as 
                        otherwise provided by this title, any customer 
                        of the covered broker or dealer whose account 
                        is transferred to a bridge financial company 
                        shall have all the rights, privileges, and 
                        protections under section 205(f) and under the 
                        Securities Investor Protection Act of 1970 (15 
                        U.S.C. 78aaa et seq.), that such customer would 
                        have had if the account were not transferred 
                        from the covered financial company under this 
                        subparagraph.
                            (iv) Operation of bridge brokers or 
                        dealers.--Notwithstanding any other provision 
                        of this title, the Corporation shall not 
                        operate any bridge financial company created by 
                        the Corporation under this title with respect 
                        to a covered broker or dealer in such a manner 
                        as to adversely affect the ability of customers 
                        to promptly access their customer property in 
                        accordance with applicable law.
            (3) Interests in and assets and obligations of covered 
        financial company.--Notwithstanding paragraph (1) or (2) or any 
        other provision of law--
                    (A) a bridge financial company shall assume, 
                acquire, or succeed to the assets or liabilities of a 
                covered financial company (including the assets or 
                liabilities associated with any trust or custody 
                business) only to the extent that such assets or 
                liabilities are transferred by the Corporation to the 
                bridge financial company in accordance with, and 
                subject to the restrictions set forth in, paragraph 
                (1)(B); and
                    (B) a bridge financial company shall not assume, 
                acquire, or succeed to any obligation that a covered 
                financial company for which the Corporation has been 
                appointed receiver may have to any shareholder, member, 
                general partner, limited partner, or other person with 
                an interest in the equity of the covered financial 
                company that arises as a result of the status of that 
                person having an equity claim in the covered financial 
                company.
            (4) Bridge financial company treated as being in default 
        for certain purposes.--A bridge financial company shall be 
        treated as a covered financial company in default at such times 
        and for such purposes as the Corporation may, in its 
        discretion, determine.
            (5) Transfer of assets and liabilities.--
                    (A) Authority of corporation.--The Corporation, as 
                receiver for a covered financial company, may transfer 
                any assets and liabilities of a covered financial 
                company (including any assets or liabilities associated 
                with any trust or custody business) to one or more 
                bridge financial companies, in accordance with and 
                subject to the restrictions of paragraph (1).
                    (B) Subsequent transfers.--At any time after the 
                establishment of a bridge financial company with 
                respect to a covered financial company, the 
                Corporation, as receiver, may transfer any assets and 
                liabilities of such covered financial company as the 
                Corporation may, in its discretion, determine to be 
                appropriate in accordance with and subject to the 
                restrictions of paragraph (1).
                    (C) Treatment of trust or custody business.--For 
                purposes of this paragraph, the trust or custody 
                business, including fiduciary appointments, held by any 
                covered financial company is included among its assets 
                and liabilities.
                    (D) Effective without approval.--The transfer of 
                any assets or liabilities, including those associated 
                with any trust or custody business of a covered 
                financial company, to a bridge financial company shall 
                be effective without any further approval under Federal 
                or State law, assignment, or consent with respect 
                thereto.
                    (E) Equitable treatment of similarly situated 
                creditors.--The Corporation shall treat all creditors 
                of a covered financial company that are similarly 
                situated under subsection (b)(1), in a similar manner 
                in exercising the authority of the Corporation under 
                this subsection to transfer any assets or liabilities 
                of the covered financial company to one or more bridge 
                financial companies established with respect to such 
                covered financial company, except that the Corporation 
                may take any action (including making payments, subject 
                to subsection (o)(1)(D)(ii)) that does not comply with 
                this subparagraph, if--
                            (i) the Corporation determines that such 
                        action is necessary--
                                    (I) to maximize the value of the 
                                assets of the covered financial 
                                company;
                                    (II) to maximize the present value 
                                return from the sale or other 
                                disposition of the assets of the 
                                covered financial company; or
                                    (III) to minimize the amount of any 
                                loss realized upon the sale or other 
                                disposition of the assets of the 
                                covered financial company; and
                            (ii) all creditors that are similarly 
                        situated under subsection (b)(1) receive not 
                        less than the amount provided under paragraphs 
                        (2) and (3) of subsection (d).
                    (F) Limitation on transfer of liabilities.--
                Notwithstanding any other provision of law, the 
                aggregate amount of liabilities of a covered financial 
                company that are transferred to, or assumed by, a 
                bridge financial company from a covered financial 
                company may not exceed the aggregate amount of the 
                assets of the covered financial company that are 
                transferred to, or purchased by, the bridge financial 
                company from the covered financial company.
            (6) Stay of judicial action.--Any judicial action to which 
        a bridge financial company becomes a party by virtue of its 
        acquisition of any assets or assumption of any liabilities of a 
        covered financial company shall be stayed from further 
        proceedings for a period of not longer than 45 days (or such 
        longer period as may be agreed to upon the consent of all 
        parties) at the request of the bridge financial company.
            (7) Agreements against interest of the bridge financial 
        company.--No agreement that tends to diminish or defeat the 
        interest of the bridge financial company in any asset of a 
        covered financial company acquired by the bridge financial 
        company shall be valid against the bridge financial company, 
        unless such agreement--
                    (A) is in writing;
                    (B) was executed by an authorized officer or 
                representative of the covered financial company or 
                confirmed in the ordinary course of business by the 
                covered financial company; and
                    (C) has been on the official record of the company, 
                since the time of its execution, or with which, the 
                party claiming under the agreement provides 
                documentation of such agreement and its authorized 
                execution or confirmation by the covered financial 
                company that is acceptable to the receiver.
            (8) No federal status.--
                    (A) Agency status.--A bridge financial company is 
                not an agency, establishment, or instrumentality of the 
                United States.
                    (B) Employee status.--Representatives for purposes 
                of paragraph (1)(B), directors, officers, employees, or 
                agents of a bridge financial company are not, solely by 
                virtue of service in any such capacity, officers or 
                employees of the United States. Any employee of the 
                Corporation or of any Federal instrumentality who 
                serves at the request of the Corporation as a 
                representative for purposes of paragraph (1)(B), 
                director, officer, employee, or agent of a bridge 
                financial company shall not--
                            (i) solely by virtue of service in any such 
                        capacity lose any existing status as an officer 
                        or employee of the United States for purposes 
                        of title 5, United States Code, or any other 
                        provision of law; or
                            (ii) receive any salary or benefits for 
                        service in any such capacity with respect to a 
                        bridge financial company in addition to such 
                        salary or benefits as are obtained through 
                        employment with the Corporation or such Federal 
                        instrumentality.
            (9) Funding authorized.--The Corporation may, subject to 
        the plan described in subsection (n)(11), provide funding to 
        facilitate any transaction described in subparagraph (A), (B), 
        (C), or (D) of paragraph (13) with respect to any bridge 
        financial company, or facilitate the acquisition by a bridge 
        financial company of any assets, or the assumption of any 
        liabilities, of a covered financial company for which the 
        Corporation has been appointed receiver.
            (10) Exempt tax status.--Notwithstanding any other 
        provision of Federal or State law, a bridge financial company, 
        its franchise, property, and income shall be exempt from all 
        taxation now or hereafter imposed by the United States, by any 
        territory, dependency, or possession thereof, or by any State, 
        county, municipality, or local taxing authority.
            (11) Federal agency approval; antitrust review.--If a 
        transaction involving the merger or sale of a bridge financial 
        company requires approval by a Federal agency, the transaction 
        may not be consummated before the 5th calendar day after the 
        date of approval by the Federal agency responsible for such 
        approval with respect thereto. If, in connection with any such 
        approval a report on competitive factors from the Attorney 
        General is required, the Federal agency responsible for such 
        approval shall promptly notify the Attorney General of the 
        proposed transaction and the Attorney General shall provide the 
        required report within 10 days of the request. If a 
        notification is required under section 7A of the Clayton Act 
        with respect to such transaction, the required waiting period 
        shall end on the 15th day after the date on which the Attorney 
        General and the Federal Trade Commission receive such 
        notification, unless the waiting period is terminated earlier 
        under section 7A(b)(2) of the Clayton Act, or extended under 
        section 7A(e)(2) of that Act.
            (12) Duration of bridge financial company.--Subject to 
        paragraphs (13) and (14), the status of a bridge financial 
        company as such shall terminate at the end of the 2-year period 
        following the date on which it was granted a charter. The 
        Corporation may, in its discretion, extend the status of the 
        bridge financial company as such for no more than 3 additional 
        1-year periods.
            (13) Termination of bridge financial company status.--The 
        status of any bridge financial company as such shall terminate 
        upon the earliest of--
                    (A) the date of the merger or consolidation of the 
                bridge financial company with a company that is not a 
                bridge financial company;
                    (B) at the election of the Corporation, the sale of 
                a majority of the capital stock of the bridge financial 
                company to a company other than the Corporation and 
                other than another bridge financial company;
                    (C) the sale of 80 percent, or more, of the capital 
                stock of the bridge financial company to a person other 
                than the Corporation and other than another bridge 
                financial company;
                    (D) at the election of the Corporation, either the 
                assumption of all or substantially all of the 
                liabilities of the bridge financial company by a 
                company that is not a bridge financial company, or the 
                acquisition of all or substantially all of the assets 
                of the bridge financial company by a company that is 
                not a bridge financial company, or other entity as 
                permitted under applicable law; and
                    (E) the expiration of the period provided in 
                paragraph (12), or the earlier dissolution of the 
                bridge financial company, as provided in paragraph 
                (15).
            (14) Effect of termination events.--
                    (A) Merger or consolidation.--A merger or 
                consolidation, described in paragraph (12)(A) shall be 
                conducted in accordance with, and shall have the effect 
                provided in, the provisions of applicable law. For the 
                purpose of effecting such a merger or consolidation, 
                the bridge financial company shall be treated as a 
                corporation organized under the laws of the State of 
                Delaware (unless the law of another State has been 
                selected by the bridge financial company in accordance 
                with paragraph (2)(F)), and the Corporation shall be 
                treated as the sole shareholder thereof, 
                notwithstanding any other provision of State or Federal 
                law.
                    (B) Charter conversion.--Following the sale of a 
                majority of the capital stock of the bridge financial 
                company, as provided in paragraph (13)(B), the 
                Corporation may amend the charter of the bridge 
                financial company to reflect the termination of the 
                status of the bridge financial company as such, 
                whereupon the company shall have all of the rights, 
                powers, and privileges under its constituent documents 
                and applicable Federal or State law. In connection 
                therewith, the Corporation may take such steps as may 
                be necessary or convenient to reincorporate the bridge 
                financial company under the laws of a State and, 
                notwithstanding any provisions of Federal or State law, 
                such State-chartered corporation shall be deemed to 
                succeed by operation of law to such rights, titles, 
                powers, and interests of the bridge financial company 
                as the Corporation may provide, with the same effect as 
                if the bridge financial company had merged with the 
                State-chartered corporation under provisions of the 
                corporate laws of such State.
                    (C) Sale of stock.--Following the sale of 80 
                percent or more of the capital stock of a bridge 
                financial company, as provided in paragraph (13)(C), 
                the company shall have all of the rights, powers, and 
                privileges under its constituent documents and 
                applicable Federal or State law. In connection 
                therewith, the Corporation may take such steps as may 
                be necessary or convenient to reincorporate the bridge 
                financial company under the laws of a State and, 
                notwithstanding any provisions of Federal or State law, 
                the State-chartered corporation shall be deemed to 
                succeed by operation of law to such rights, titles, 
                powers and interests of the bridge financial company as 
                the Corporation may provide, with the same effect as if 
                the bridge financial company had merged with the State-
                chartered corporation under provisions of the corporate 
                laws of such State.
                    (D) Assumption of liabilities and sale of assets.--
                Following the assumption of all or substantially all of 
                the liabilities of the bridge financial company, or the 
                sale of all or substantially all of the assets of the 
                bridge financial company, as provided in paragraph 
                (13)(D), at the election of the Corporation, the bridge 
                financial company may retain its status as such for the 
                period provided in paragraph (12) or may be dissolved 
                at the election of the Corporation.
                    (E) Amendments to charter.--Following the 
                consummation of a transaction described in subparagraph 
                (A), (B), (C), or (D) of paragraph (13), the charter of 
                the resulting company shall be amended to reflect the 
                termination of bridge financial company status, if 
                appropriate.
            (15) Dissolution of bridge financial company.--
                    (A) In general.--Notwithstanding any other 
                provision of Federal or State law, if the status of a 
                bridge financial company as such has not previously 
                been terminated by the occurrence of an event specified 
                in subparagraph (A), (B), (C), or (D) of paragraph 
                (13)--
                            (i) the Corporation may, in its discretion, 
                        dissolve the bridge financial company in 
                        accordance with this paragraph at any time; and
                            (ii) the Corporation shall promptly 
                        commence dissolution proceedings in accordance 
                        with this paragraph upon the expiration of the 
                        2-year period following the date on which the 
                        bridge financial company was chartered, or any 
                        extension thereof, as provided in paragraph 
                        (12).
                    (B) Procedures.--The Corporation shall remain the 
                receiver for a bridge financial company for the purpose 
                of dissolving the bridge financial company. The 
                Corporation as receiver for a bridge financial company 
                shall wind up the affairs of the bridge financial 
                company in conformity with the provisions of law 
                relating to the liquidation of covered financial 
                companies under this title. With respect to any such 
                bridge financial company, the Corporation as receiver 
                shall have all the rights, powers, and privileges and 
                shall perform the duties related to the exercise of 
                such rights, powers, or privileges granted by law to 
                the Corporation as receiver for a covered financial 
                company under this title and, notwithstanding any other 
                provision of law, in the exercise of such rights, 
                powers, and privileges, the Corporation shall not be 
                subject to the direction or supervision of any State 
                agency or other Federal agency.
            (16) Authority to obtain credit.--
                    (A) In general.--A bridge financial company may 
                obtain unsecured credit and issue unsecured debt.
                    (B) Inability to obtain credit.--If a bridge 
                financial company is unable to obtain unsecured credit 
                or issue unsecured debt, the Corporation may authorize 
                the obtaining of credit or the issuance of debt by the 
                bridge financial company--
                            (i) with priority over any or all of the 
                        obligations of the bridge financial company;
                            (ii) secured by a lien on property of the 
                        bridge financial company that is not otherwise 
                        subject to a lien; or
                            (iii) secured by a junior lien on property 
                        of the bridge financial company that is subject 
                        to a lien.
                    (C) Limitations.--
                            (i) In general.--The Corporation, after 
                        notice and a hearing, may authorize the 
                        obtaining of credit or the issuance of debt by 
                        a bridge financial company that is secured by a 
                        senior or equal lien on property of the bridge 
                        financial company that is subject to a lien, 
                        only if--
                                    (I) the bridge financial company is 
                                unable to otherwise obtain such credit 
                                or issue such debt; and
                                    (II) there is adequate protection 
                                of the interest of the holder of the 
                                lien on the property with respect to 
                                which such senior or equal lien is 
                                proposed to be granted.
                            (ii) Hearing.--The hearing required 
                        pursuant to this subparagraph shall be before a 
                        court of the United States, which shall have 
                        jurisdiction to conduct such hearing.
                    (D) Burden of proof.--In any hearing under this 
                paragraph, the Corporation has the burden of proof on 
                the issue of adequate protection.
                    (E) Qualified financial contracts.--No credit or 
                debt obtained or issued by a bridge financial company 
                may contain terms that impair the rights of a 
                counterparty to a qualified financial contract upon a 
                default by the bridge financial company, other than the 
                priority of such counterparty's unsecured claim (after 
                the exercise of rights) relative to the priority of the 
                bridge financial company's obligations in respect of 
                such credit or debt, unless such counterparty consents 
                in writing to any such impairment.
            (17) Effect on debts and liens.--The reversal or 
        modification on appeal of an authorization under this 
        subsection to obtain credit or issue debt, or of a grant under 
        this section of a priority or a lien, does not affect the 
        validity of any debt so issued, or any priority or lien so 
        granted, to an entity that extended such credit in good faith, 
        whether or not such entity knew of the pendency of the appeal, 
        unless such authorization and the issuance of such debt, or the 
        granting of such priority or lien, were stayed pending appeal.
    (i) Sharing Records.--If the Corporation has been appointed as 
receiver for a covered financial company, other Federal regulators 
shall make all records relating to the covered financial company 
available to the Corporation, which may be used by the Corporation in 
any manner that the Corporation determines to be appropriate.
    (j) Expedited Procedures for Certain Claims.--
            (1) Time for filing notice of appeal.--The notice of appeal 
        of any order, whether interlocutory or final, entered in any 
        case brought by the Corporation against a director, officer, 
        employee, agent, attorney, accountant, or appraiser of the 
        covered financial company, or any other person employed by or 
        providing services to a covered financial company, shall be 
        filed not later than 30 days after the date of entry of the 
        order. The hearing of the appeal shall be held not later than 
        120 days after the date of the notice of appeal. The appeal 
        shall be decided not later than 180 days after the date of the 
        notice of appeal.
            (2) Scheduling.--The court shall expedite the consideration 
        of any case brought by the Corporation against a director, 
        officer, employee, agent, attorney, accountant, or appraiser of 
        a covered financial company or any other person employed by or 
        providing services to a covered financial company. As far as 
        practicable, the court shall give such case priority on its 
        docket.
            (3) Judicial discretion.--The court may modify the schedule 
        and limitations stated in paragraphs (1) and (2) in a 
        particular case, based on a specific finding that the ends of 
        justice that would be served by making such a modification 
        would outweigh the best interest of the public in having the 
        case resolved expeditiously.
    (k) Foreign Investigations.--The Corporation, as receiver for any 
covered financial company, and for purposes of carrying out any power, 
authority, or duty with respect to a covered financial company--
            (1) may request the assistance of any foreign financial 
        authority and provide assistance to any foreign financial 
        authority in accordance with section 8(v) of the Federal 
        Deposit Insurance Act, as if the covered financial company were 
        an insured depository institution, the Corporation were the 
        appropriate Federal banking agency for the company, and any 
        foreign financial authority were the foreign banking authority; 
        and
            (2) may maintain an office to coordinate foreign 
        investigations or investigations on behalf of foreign financial 
        authorities.
    (l) Prohibition on Entering Secrecy Agreements and Protective 
Orders.--The Corporation may not enter into any agreement or approve 
any protective order which prohibits the Corporation from disclosing 
the terms of any settlement of an administrative or other action for 
damages or restitution brought by the Corporation in its capacity as 
receiver for a covered financial company.
    (m) Liquidation of Certain Covered Financial Companies or Bridge 
Financial Companies.--
            (1) In general.--Except as specifically provided in this 
        section, and notwithstanding any other provision of law, the 
        Corporation, in connection with the liquidation of any covered 
        financial company or bridge financial company with respect to 
        which the Corporation has been appointed as receiver, shall--
                    (A) in the case of any covered financial company or 
                bridge financial company that is or has a subsidiary 
                that is a stockbroker, but is not a member of the 
                Securities Investor Protection Corporation, apply the 
                provisions of subchapter III of chapter 7 of the 
                Bankruptcy Code, in respect of the distribution to any 
                customer of all customer name securities and customer 
                property, as if such covered financial company or 
                bridge financial company were a debtor for purposes of 
                such subchapter; or
                    (B) in the case of any covered financial company or 
                bridge financial company that is a commodity broker, 
                apply the provisions of subchapter IV of chapter 7 the 
                Bankruptcy Code, in respect of the distribution to any 
                customer of all customer property, as if such covered 
                financial company or bridge financial company were a 
                debtor for purposes of such subchapter.
            (2) Definitions.--For purposes of this subsection--
                    (A) the terms ``customer'', ``customer name 
                securities'', and ``customer property'' have the same 
                meanings as in section 741 of title 11, United States 
                Code; and
                    (B) the terms ``commodity broker'' and 
                ``stockbroker'' have the same meanings as in section 
                101 of the Bankruptcy Code.
    (n) Orderly Liquidation Fund.--
            (1) Establishment.--There is established in the Treasury of 
        the United States a separate fund to be known as the ``Orderly 
        Liquidation Fund'', which shall be available to the Corporation 
        to carry out the authorities contained in this title, for the 
        cost of actions authorized by this title, including the orderly 
        liquidation of covered financial companies, payment of 
        administrative expenses, the payment of principal and interest 
        by the Corporation on obligations issued under paragraph (6), 
        and the exercise of the authorities of the Corporation under 
        this title.
            (2) Proceeds.--Amounts received by the Corporation, 
        including assessments received under subsection (o), proceeds 
        of obligations issued under paragraph (6), interest and other 
        earnings from investments, and repayments to the Corporation by 
        covered financial companies, shall be deposited into the Fund.
            (3) Management.--The Corporation shall manage the Fund in 
        accordance with this subsection and the policies and procedures 
        established under section 203(d).
            (4) Investments.--At the request of the Corporation, the 
        Secretary may invest such portion of amounts held in the Fund 
        that are not, in the judgment of the Corporation, required to 
        meet the current needs of the Corporation, in obligations of 
        the United States having suitable maturities, as determined by 
        the Corporation. The interest on and the proceeds from the sale 
        or redemption of such obligations shall be credited to the 
        Fund.
            (5) Authority to issue obligations.--
                    (A) Corporation authorized to issue obligations.--
                Upon appointment by the Secretary of the Corporation as 
                receiver for a covered financial company, the 
                Corporation is authorized to issue obligations to the 
                Secretary.
                    (B) Secretary authorized to purchase obligations.--
                The Secretary may, under such terms and conditions as 
                the Secretary may require, purchase or agree to 
                purchase any obligations issued under subparagraph (A), 
                and for such purpose, the Secretary is authorized to 
                use as a public debt transaction the proceeds of the 
                sale of any securities issued under chapter 31 of title 
                31, United States Code, and the purposes for which 
                securities may be issued under chapter 31 of title 31, 
                United States Code, are extended to include such 
                purchases.
                    (C) Interest rate.--Each purchase of obligations by 
                the Secretary under this paragraph shall be upon such 
                terms and conditions as to yield a return at a rate 
                determined by the Secretary, taking into consideration 
                the current average yield on outstanding marketable 
                obligations of the United States of comparable 
                maturity, plus an interest rate surcharge to be 
                determined by the Secretary, which shall be greater 
                than the difference between--
                            (i) the current average rate on an index of 
                        corporate obligations of comparable maturity; 
                        and
                            (ii) the current average rate on 
                        outstanding marketable obligations of the 
                        United States of comparable maturity.
                    (D) Secretary authorized to sell obligations.--The 
                Secretary may sell, upon such terms and conditions as 
                the Secretary shall determine, any of the obligations 
                acquired under this paragraph.
                    (E) Public debt transactions.--All purchases and 
                sales by the Secretary of such obligations under this 
                paragraph shall be treated as public debt transactions 
                of the United States, and the proceeds from the sale of 
                any obligations acquired by the Secretary under this 
                paragraph shall be deposited into the Treasury of the 
                United States as miscellaneous receipts.
            (6) Maximum obligation limitation.--The Corporation may 
        not, in connection with the orderly liquidation of a covered 
        financial company, issue or incur any obligation, if, after 
        issuing or incurring the obligation, the aggregate amount of 
        such obligations outstanding under this subsection for each 
        covered financial company would exceed--
                    (A) an amount that is equal to 10 percent of the 
                total consolidated assets of the covered financial 
                company, based on the most recent financial statement 
                available, during the 30-day period immediately 
                following the date of appointment of the Corporation as 
                receiver (or a shorter time period if the Corporation 
                has calculated the amount described under subparagraph 
                (B)); and
                    (B) the amount that is equal to 90 percent of the 
                fair value of the total consolidated assets of each 
                covered financial company that are available for 
                repayment, after the time period described in 
                subparagraph (A).
            (7) Rulemaking.--The Corporation and the Secretary shall 
        jointly, in consultation with the Council, prescribe 
        regulations governing the calculation of the maximum obligation 
        limitation defined in this paragraph.
            (8) Rule of construction.--
                    (A) In general.--Nothing in this section shall be 
                construed to affect the authority of the Corporation 
                under subsection (a) or (b) of section 14 or section 
                15(c)(5) of the Federal Deposit Insurance Act (12 
                U.S.C. 1824, 1825(c)(5)), the management of the Deposit 
                Insurance Fund by the Corporation, or the resolution of 
                insured depository institutions, provided that--
                            (i) the authorities of the Corporation 
                        contained in this title shall not be used to 
                        assist the Deposit Insurance Fund or to assist 
                        any financial company under applicable law 
                        other than this Act;
                            (ii) the authorities of the Corporation 
                        relating to the Deposit Insurance Fund, or any 
                        other responsibilities of the Corporation under 
                        applicable law other than this title, shall not 
                        be used to assist a covered financial company 
                        pursuant to this title; and
                            (iii) the Deposit Insurance Fund may not be 
                        used in any manner to otherwise circumvent the 
                        purposes of this title.
                    (B) Valuation.--For purposes of determining the 
                amount of obligations under this subsection--
                            (i) the Corporation shall include as an 
                        obligation any contingent liability of the 
                        Corporation pursuant to this title; and
                            (ii) the Corporation shall value any 
                        contingent liability at its expected cost to 
                        the Corporation.
            (9) Orderly liquidation plan.--Amounts in the Fund shall be 
        available to the Corporation with regard to a covered financial 
        company for which the Corporation is appointed receiver after 
        the Corporation has developed an orderly liquidation plan that 
        is acceptable to the Secretary with regard to such covered 
        financial company, including the provision and use of funds, 
        including taking any actions specified under section 204(d) and 
        subsection (h)(2)(G)(iv) and (h)(9) of this section, and 
        payments to third parties. The Corporation may, at any time, 
        amend any orderly liquidation plan approved by the Secretary 
        with the concurrence of the Secretary.
            (10) Implementation expenses.--
                    (A) In general.--Reasonable implementation expenses 
                of the Corporation incurred after the date of enactment 
                of this Act shall be treated as expenses of the 
                Council.
                    (B) Requests for reimbursement.--The Corporation 
                shall periodically submit a request for reimbursement 
                for implementation expenses to the Chairperson of the 
                Council, who shall arrange for prompt reimbursement to 
                the Corporation of reasonable implementation expenses.
                    (C) Definition.--As used in this paragraph, the 
                term ``implementation expenses''--
                            (i) means costs incurred by the Corporation 
                        beginning on the date of enactment of this Act, 
                        as part of its efforts to implement this title 
                        that do not relate to a particular covered 
                        financial company; and
                            (ii) includes the costs incurred in 
                        connection with the development of policies, 
                        procedures, rules, and regulations and other 
                        planning activities of the Corporation 
                        consistent with carrying out this title.
    (o) Assessments.--
            (1) Risk-based assessments.--
                    (A) Eligible financial companies defined.--For 
                purposes of this subsection, the term ``eligible 
                financial company'' means any bank holding company with 
                total consolidated assets equal to or greater than 
                $50,000,000,000 and any nonbank financial company 
                supervised by the Board of Governors.
                    (B) Assessments.--The Corporation shall charge one 
                or more risk-based assessments in accordance with the 
                provisions of subparagraph (D), if such assessments are 
                necessary to pay in full the obligations issued by the 
                Corporation to the Secretary within 60 months of the 
                date of issuance of such obligations.
                    (C) Extensions authorized.--The Corporation may, 
                with the approval of the Secretary, extend the time 
                period under subparagraph (C)(iii), if the Corporation 
                determines that an extension is necessary to avoid a 
                serious adverse effect on the financial system of the 
                United States.
                    (D) Application of assessments.--To meet the 
                requirements of subparagraph (C), the Corporation 
                shall--
                            (i) impose assessments, as soon as 
                        practicable, on any claimant that received 
                        additional payments or amounts from the 
                        Corporation pursuant to subsection (b)(4), 
                        (d)(4), or (h)(5)(E), except for payments or 
                        amounts necessary to initiate and continue 
                        operations essential to implementation of the 
                        receivership or any bridge financial company, 
                        to recover on a cumulative basis, the entire 
                        difference between--
                                    (I) the aggregate value the 
                                claimant received from the Corporation 
                                on a claim pursuant to this title 
                                (including pursuant to subsection 
                                (b)(4), (d)(4), and (h)(5)(E)), as of 
                                the date on which such value was 
                                received; and
                                    (II) the value the claimant was 
                                entitled to receive from the 
                                Corporation on such claim solely from 
                                the proceeds of the liquidation of the 
                                covered financial company under this 
                                title; and
                            (ii) if the amounts to be recovered on a 
                        cumulative basis under clause (i) are 
                        insufficient to meet the requirements of 
                        subparagraph (C), after taking into account the 
                        considerations set forth in paragraph (4), 
                        impose assessments on--
                                    (I) eligible financial companies; 
                                and
                                    (II) financial companies with total 
                                consolidated assets equal to or greater 
                                than $50,000,000,000 that are not 
                                eligible financial companies.
                    (E) Provision of financing.--Payments or amounts 
                necessary to initiate and continue operations essential 
                to implementation of the receivership or any bridge 
                financial company described in subparagraph (E)(i) 
                shall not include the provision of financing, as 
                defined by rule of the Corporation, to third parties.
            (2) Graduated assessment rate.--The Corporation shall 
        impose assessments on a graduated basis, with financial 
        companies having greater assets being assessed at a higher 
        rate.
            (3) Notification and payment.--The Corporation shall notify 
        each financial company of that company's assessment under this 
        subsection. Any financial company subject to assessment under 
        this subsection shall pay such assessment in accordance with 
        the regulations prescribed pursuant to paragraph (6).
            (4) Risk-based assessment considerations.--In imposing 
        assessments under this subsection, the Corporation shall--
                    (A) take into account economic conditions generally 
                affecting financial companies, so as to allow 
                assessments to be lower during less favorable economic 
                conditions;
                    (B) take into account any assessments imposed on--
                            (i) an insured depository institution 
                        subsidiary of a financial company pursuant to 
                        section 7 or section 13(c)(4)(G) of the Federal 
                        Deposit Insurance Act (12 U.S.C. 1817, 
                        1823(c)(4)(G));
                            (ii) a financial company or subsidiary of 
                        such company that is a member of SIPC pursuant 
                        to section 4 of the Securities Investor 
                        Protection Act of 1970 (15 U.S.C. 78ddd); and
                            (iii) a financial company or subsidiary of 
                        such company that is an insurance company 
                        pursuant to applicable State law to cover (or 
                        reimburse payments made to cover) the costs of 
                        rehabilitation, liquidation, or other State 
                        insolvency proceeding with respect to one or 
                        more insurance companies;
                    (C) take into account the financial condition of 
                the financial company, including the extent and type of 
                off-balance-sheet exposures of the financial company;
                    (D) take into account the risks presented by the 
                financial company to the financial stability of the 
                United States economy;
                    (E) take into account the extent to which the 
                financial company or group of financial companies has 
                benefitted, or likely would benefit, from the orderly 
                liquidation of a covered financial company and the use 
                of the Fund under this title;
                    (F) distinguish among different classes of assets 
                or different types of financial companies (including 
                distinguishing among different types of financial 
                companies, based on their levels of capital and 
                leverage) in order to establish comparable assessment 
                bases among financial companies subject to this 
                subsection;
                    (G) establish the parameters for the graduated 
                assessment requirement in paragraph (2); and
                    (H) take into account such other factors as the 
                Corporation, in consultation with the Secretary, deems 
                appropriate.
            (5) Collection of information.--The Corporation may impose 
        on covered financial companies such collection of information 
        requirements as the Corporation deems necessary to carry out 
        this subsection after the appointment of the Corporation as 
        receiver under this title.
            (6) Rulemaking.--
                    (A) In general.--The Corporation shall prescribe 
                regulations to carry out this subsection. The 
                Corporation shall consult with the Secretary in the 
                development and finalization of such regulations.
                    (B) Equitable treatment.--The regulations 
                prescribed under subparagraph (A) shall take into 
                account the differences in risks posed to the financial 
                stability of the United States by financial companies, 
                the differences in the liability structures of 
                financial companies, and the different bases for other 
                assessments that such financial companies may be 
                required to pay, to ensure that assessed financial 
                companies are treated equitably and that assessments 
                under this subsection reflect such differences.
    (p) Unenforceability of Certain Agreements.--
            (1) In general.--No provision described in paragraph (2) 
        shall be enforceable against or impose any liability on any 
        person, as such enforcement or liability shall be contrary to 
        public policy.
            (2) Prohibited provisions.--A provision described in this 
        paragraph is any term contained in any existing or future 
        standstill, confidentiality, or other agreement that, directly 
        or indirectly--
                    (A) affects, restricts, or limits the ability of 
                any person to offer to acquire or acquire;
                    (B) prohibits any person from offering to acquire 
                or acquiring; or
                    (C) prohibits any person from using any previously 
                disclosed information in connection with any such offer 
                to acquire or acquisition of,
        all or part of any covered financial company, including any 
        liabilities, assets, or interest therein, in connection with 
        any transaction in which the Corporation exercises its 
        authority under this title.
    (q) Other Exemptions.--
            (1) In general.--When acting as a receiver under this 
        title--
                    (A) the Corporation, including its franchise, its 
                capital, reserves and surplus, and its income, shall be 
                exempt from all taxation imposed by any State, county, 
                municipality, or local taxing authority, except that 
                any real property of the Corporation shall be subject 
                to State, territorial, county, municipal, or local 
                taxation to the same extent according to its value as 
                other real property is taxed, except that, 
                notwithstanding the failure of any person to challenge 
                an assessment under State law of the value of such 
                property, such value, and the tax thereon, shall be 
                determined as of the period for which such tax is 
                imposed;
                    (B) no property of the Corporation shall be subject 
                to levy, attachment, garnishment, foreclosure, or sale 
                without the consent of the Corporation, nor shall any 
                involuntary lien attach to the property of the 
                Corporation; and
                    (C) the Corporation shall not be liable for any 
                amounts in the nature of penalties or fines, including 
                those arising from the failure of any person to pay any 
                real property, personal property, probate, or recording 
                tax or any recording or filing fees when due; and
                    (D) the Corporation shall be exempt from all 
                prosecution by the United States or any State, county, 
                municipality, or local authority for any criminal 
                offense arising under Federal, State, county, 
                municipal, or local law, which was allegedly committed 
                by the covered financial company, or persons acting on 
                behalf of the covered financial company, prior to the 
                appointment of the Corporation as receiver.
            (2) Limitation.--Paragraph (1) shall not apply with respect 
        to any tax imposed (or other amount arising) under the Internal 
        Revenue Code of 1986.
    (r) Certain Sales of Assets Prohibited.--
            (1) Persons who engaged in improper conduct with, or caused 
        losses to, covered financial companies.--The Corporation shall 
        prescribe regulations which, at a minimum, shall prohibit the 
        sale of assets of a covered financial company by the 
        Corporation to--
                    (A) any person who--
                            (i) has defaulted, or was a member of a 
                        partnership or an officer or director of a 
                        corporation that has defaulted, on 1 or more 
                        obligations, the aggregate amount of which 
                        exceeds $1,000,000, to such covered financial 
                        company;
                            (ii) has been found to have engaged in 
                        fraudulent activity in connection with any 
                        obligation referred to in clause (i); and
                            (iii) proposes to purchase any such asset 
                        in whole or in part through the use of the 
                        proceeds of a loan or advance of credit from 
                        the Corporation or from any covered financial 
                        company;
                    (B) any person who participated, as an officer or 
                director of such covered financial company or of any 
                affiliate of such company, in a material way in any 
                transaction that resulted in a substantial loss to such 
                covered financial company; or
                    (C) any person who has demonstrated a pattern or 
                practice of defalcation regarding obligations to such 
                covered financial company.
            (2) Convicted debtors.--Except as provided in paragraph 
        (3), a person may not purchase any asset of such institution 
        from the receiver, if that person--
                    (A) has been convicted of an offense under section 
                215, 656, 657, 1005, 1006, 1007, 1008, 1014, 1032, 
                1341, 1343, or 1344 of title 18, United States Code, or 
                of conspiring to commit such an offense, affecting any 
                covered financial company; and
                    (B) is in default on any loan or other extension of 
                credit from such covered financial company which, if 
                not paid, will cause substantial loss to the Fund or 
                the Corporation.
            (3) Settlement of claims.--Paragraphs (1) and (2) shall not 
        apply to the sale or transfer by the Corporation of any asset 
        of any covered financial company to any person, if the sale or 
        transfer of the asset resolves or settles, or is part of the 
        resolution or settlement, of 1 or more claims that have been, 
        or could have been, asserted by the Corporation against the 
        person.
            (4) Definition of default.--For purposes of this 
        subsection, the term ``default'' means a failure to comply with 
        the terms of a loan or other obligation to such an extent that 
        the property securing the obligation is foreclosed upon.
    (s) Recoupment of Compensation From Senior Executives and 
Directors.--
            (1) In general.--The Corporation, as receiver of a covered 
        financial company, may recover from any current or former 
        senior executive or director substantially responsible for the 
        failed condition of the covered financial company any 
        compensation received during the 2-year period preceding the 
        date on which the Corporation was appointed as the receiver of 
        the covered financial company, except that, in the case of 
        fraud, no time limit shall apply.
            (2) Cost considerations.--In seeking to recover any such 
        compensation, the Corporation shall weigh the financial and 
        deterrent benefits of such recovery against the cost of 
        executing the recovery.
            (3) Rulemaking.--The Corporation shall promulgate 
        regulations to implement the requirements of this subsection, 
        including defining the term ``compensation'' to mean any 
        financial remuneration, including salary, bonuses, incentives, 
        benefits, severance, deferred compensation, or golden parachute 
        benefits, and any profits realized from the sale of the 
        securities of the covered financial company.

SEC. 211. MISCELLANEOUS PROVISIONS.

    (a) Clarification of Prohibition Regarding Concealment of Assets 
From Receiver or Liquidating Agent.--Section 1032(1) of title 18, 
United States Code, is amended by inserting ``the Federal Deposit 
Insurance Corporation acting as receiver for a covered financial 
company, in accordance with title II of the Restoring American 
Financial Stability Act of 2010,'' before ``or the National Credit''.
    (b) Conforming Amendment.--Section 1032 of title 18, United States 
Code, is amended in the section heading, by striking ``of financial 
institution''.
    (c) Federal Deposit Insurance Corporation Improvement Act of 
1991.--Section 403(a) of the Federal Deposit Insurance Corporation 
Improvement Act of 1991 (12 U.S.C. 4403(a)) is amended by inserting 
``section 210(c) of the Restoring American Financial Stability Act of 
2010, section 1367 of the Federal Housing Enterprises Financial Safety 
and Soundness Act of 1992 (12 U.S.C. 4617(d)),'' after ``section 11(e) 
of the Federal Deposit Insurance Act,''.
    (d) FDIC Inspector General Reviews.--
            (1) Scope.--The Inspector General of the Corporation shall 
        conduct, supervise, and coordinate audits and investigations of 
        the liquidation of any covered financial company by the 
        Corporation as receiver under this title, including collecting 
        and summarizing--
                    (A) a description of actions taken by the 
                Corporation as receiver;
                    (B) a description of any material sales, transfers, 
                mergers, obligations, purchases, and other material 
                transactions entered into by the Corporation;
                    (C) an evaluation of the adequacy of the policies 
                and procedures of the Corporation under section 203(d) 
                and orderly liquidation plan under section 210(n)(14);
                    (D) an evaluation of the utilization by the 
                Corporation of the private sector in carrying out its 
                functions, including the adequacy of any conflict-of-
                interest reviews; and
                    (E) an evaluation of the overall performance of the 
                Corporation in liquidating the covered financial 
                company, including administrative costs, timeliness of 
                liquidation process, and impact on the financial 
                system.
            (2) Frequency.--Not later than 6 months after the date of 
        appointment of the Corporation as receiver under this title and 
        every 6 months thereafter, the Inspector General of the 
        Corporation shall conduct the audit and investigation described 
        in paragraph (1).
            (3) Reports and testimony.--The Inspector General of the 
        Corporation shall include in the semiannual reports required by 
        section 5(a) of the Inspector General Act of 1978 (5 U.S.C. 
        App.), a summary of the findings and evaluations under 
        paragraph (1), and shall appear before the appropriate 
        committees of Congress, if requested, to present each such 
        report.
            (4) Funding.--
                    (A) Initial funding.--The expenses of the Inspector 
                General of the Corporation in carrying out this 
                subsection shall be considered administrative expenses 
                of the receivership.
                    (B) Additional funding.--If the maximum amount 
                available to the Corporation as receiver under this 
                title is insufficient to enable the Inspector General 
                of the Corporation to carry out the duties under this 
                subsection, the Corporation shall pay such additional 
                amounts from assessments imposed under section 210.
            (5) Termination of responsibilities.--The duties and 
        responsibilities of the Inspector General of the Corporation 
        under this subsection shall terminate 1 year after the date of 
        termination of the receivership under this title.
    (e) Treasury Inspector General Reviews.--
            (1) Scope.--The Inspector General of the Department of the 
        Treasury shall conduct, supervise, and coordinate audits and 
        investigations of actions taken by the Secretary related to the 
        liquidation of any covered financial company under this title, 
        including collecting and summarizing--
                    (A) a description of actions taken by the Secretary 
                under this title;
                    (B) an analysis of the approval by the Secretary of 
                the policies and procedures of the Corporation under 
                section 203 and acceptance of the orderly liquidation 
                plan of the Corporation under section 210; and
                    (C) an assessment of the terms and conditions 
                underlying the purchase by the Secretary of obligations 
                of the Corporation under section 210.
            (2) Frequency.--Not later than 6 months after the date of 
        appointment of the Corporation as receiver under this title and 
        every 6 months thereafter, the Inspector General of the 
        Department of the Treasury shall conduct the audit and 
        investigation described in paragraph (1).
            (3) Reports and testimony.--The Inspector General of the 
        Department of the Treasury shall include in the semiannual 
        reports required by section 5(a) of the Inspector General Act 
        of 1978 (5 U.S.C. App.), a summary of the findings and 
        assessments under paragraph (1), and shall appear before the 
        appropriate committees of Congress, if requested, to present 
        each such report.
            (4) Termination of responsibilities.--The duties and 
        responsibilities of the Inspector General of the Department of 
        the Treasury under this subsection shall terminate 1 year after 
        the date on which the obligations purchased by the Secretary 
        from the Corporation under section 210 are fully redeemed.
    (f) Primary Financial Regulatory Agency Inspector General 
Reviews.--
            (1) Scope.--Upon the appointment of the Corporation as 
        receiver for a covered financial company supervised by a 
        Federal primary financial regulatory agency or the Board of 
        Governors under section 165, the Inspector General of the 
        agency or the Board of Governors shall make a written report 
        reviewing the supervision by the agency or the Board of 
        Governors of the covered financial company, which shall--
                    (A) evaluate the effectiveness of the agency or the 
                Board of Governors in carrying out its supervisory 
                responsibilities with respect to the covered financial 
                company;
                    (B) identify any acts or omissions on the part of 
                agency or Board of Governors officials that contributed 
                to the covered financial company being in default or in 
                danger of default;
                    (C) identify any actions that could have been taken 
                by the agency or the Board of Governors that would have 
                prevented the company from being in default or in 
                danger of default; and
                    (D) recommend appropriate administrative or 
                legislative action.
            (2) Reports and testimony.--Not later than 1 year after the 
        date of appointment of the Corporation as receiver under this 
        title, the Inspector General of the Federal primary financial 
        regulatory agency or the Board of Governors shall provide the 
        report required by paragraph (1) to such agency or the Board of 
        Governors, and along with such agency or the Board of 
        Governors, as applicable, shall appear before the appropriate 
        committees of Congress, if requested, to present the report 
        required by paragraph (1). Not later than 90 days after the 
        date of receipt of the report required by paragraph (1), such 
        agency or the Board of Governors, as applicable, shall provide 
        a written report to Congress describing any actions taken in 
        response to the recommendations in the report, and if no such 
        actions were taken, describing the reasons why no actions were 
        taken.

SEC. 212. PROHIBITION OF CIRCUMVENTION AND PREVENTION OF CONFLICTS OF 
              INTEREST.

    (a) No Other Funding.--Funds for the orderly liquidation of any 
covered financial company under this title shall only be provided as 
specified under this title.
    (b) Limit on Governmental Actions.--No governmental entity may take 
any action to circumvent the purposes of this title.
    (c) Conflict of Interest.--In the event that the Corporation is 
appointed receiver for more than 1 covered financial company or is 
appointed receiver for a covered financial company and receiver for any 
insured depository institution that is an affiliate of such covered 
financial company, the Corporation shall take appropriate action, as 
necessary to avoid any conflicts of interest that may arise in 
connection with multiple receiverships.

SEC. 213. BAN ON SENIOR EXECUTIVES AND DIRECTORS.

    (a) Prohibition Authority.--The Board of Governors or, if the 
covered financial company was not supervised by the Board of Governors, 
the Corporation, may exercise the authority provided by this section.
    (b) Authority To Issue Order.--The appropriate agency described in 
subsection (a) may take any action authorized by subsection (c), if the 
agency determines that--
            (1) a senior executive or a director of the covered 
        financial company, prior to the appointment of the Corporation 
        as receiver, has, directly or indirectly--
                    (A) violated--
                            (i) any law or regulation;
                            (ii) any cease-and-desist order which has 
                        become final;
                            (iii) any condition imposed in writing by a 
                        Federal agency in connection with any action on 
                        any application, notice, or request by such 
                        company or senior executive; or
                            (iv) any written agreement between such 
                        company and such agency;
                    (B) engaged or participated in any unsafe or 
                unsound practice in connection with any financial 
                company; or
                    (C) committed or engaged in any act, omission, or 
                practice which constitutes a breach of the fiduciary 
                duty of such senior executive or director;
            (2) by reason of the violation, practice, or breach 
        described in any clause of paragraph (1), such senior executive 
        or director has received financial gain or other benefit by 
        reason of such violation, practice, or breach and such 
        violation, practice, or breach contributed to the failure of 
        the company; and
            (3) such violation, practice, or breach--
                    (A) involves personal dishonesty on the part of 
                such senior executive or director; or
                    (B) demonstrates willful or continuing disregard by 
                such senior executive or director for the safety or 
                soundness of such company.
    (c) Authorized Actions.--
            (1) In general.--The appropriate agency for a financial 
        company, as described in subsection (a), may serve upon a 
        senior executive or director described in subsection (b) a 
        written notice of the intention of the agency to prohibit any 
        further participation by such person, in any manner, in the 
        conduct of the affairs of any financial company for a period of 
        time determined by the appropriate agency to be commensurate 
        with such violation, practice, or breach, provided such period 
        shall be not less than 2 years.
            (2) Procedures.--The due process requirements and other 
        procedures under section 8(e) of the Federal Deposit Insurance 
        Act shall apply to actions under this section as if the covered 
        financial company were an insured depository institution and 
        the senior executive or director were an institution-affiliated 
        party, as those terms are defined in that Act.
    (d) Regulations.--The Corporation and the Board of Governors, in 
consultation with the Council, shall jointly prescribe rules or 
regulations to administer and carry out this section, including rules, 
regulations, or guidelines to further define the term senior executive 
for the purposes of this section.

SEC. 214. PROHIBITION ON TAXPAYER FUNDING.

    (a) Liquidation Required.--All financial companies put into 
receivership under this title shall be liquidated. No taxpayer funds 
shall be used to prevent the liquidation of any financial company under 
this title.
    (b) Recovery of Funds.--All funds expended in the liquidation of a 
financial company under this title shall be recovered from the 
disposition of assets of such financial company, or shall be the 
responsibility of the financial sector, through assessments.
    (c) No Losses to Taxpayers.--Taxpayers shall bear no losses from 
the exercise of any authority under this title.

 TITLE III--TRANSFER OF POWERS TO THE COMPTROLLER OF THE CURRENCY, THE 
                CORPORATION, AND THE BOARD OF GOVERNORS

SEC. 300. SHORT TITLE.

    This title may be cited as the ``Enhancing Financial Institution 
Safety and Soundness Act of 2010''.

SEC. 301. PURPOSES.

    The purposes of this title are--
            (1) to provide for the safe and sound operation of the 
        banking system of the United States;
            (2) to preserve and protect the dual system of Federal and 
        State-chartered depository institutions;
            (3) to ensure the fair and appropriate supervision of each 
        depository institution, regardless of the size or type of 
        charter of the depository institution; and
            (4) to streamline and rationalize the supervision of 
        depository institutions and the holding companies of depository 
        institutions.

SEC. 302. DEFINITION.

    In this title, the term ``transferred employee'' means, as the 
context requires, an employee transferred to the Office of the 
Comptroller of the Currency or the Corporation under section 322.

               Subtitle A--Transfer of Powers and Duties

SEC. 311. TRANSFER DATE.

    (a) Transfer Date.--Except as provided in subsection (b), the term 
``transfer date'' means the date that is 1 year after the date of 
enactment of this Act.
    (b) Extension Permitted.--
            (1) Notice required.--The Secretary, in consultation with 
        the Comptroller of the Currency, the Director of the Office of 
        Thrift Supervision, the Chairman of the Board of Governors, and 
        the Chairperson of the Corporation, may extend the period under 
        subsection (a) and designate a transfer date that is not later 
        than 18 months after the date of enactment of this Act, if the 
        Secretary transmits to the Committee on Banking, Housing, and 
        Urban Affairs of the Senate and the Committee on Financial 
        Services of the House of Representatives--
                    (A) a written determination that commencement of 
                the orderly process to implement this title is not 
                feasible by the date that is 1 year after the date of 
                enactment of this Act;
                    (B) an explanation of why an extension is necessary 
                to commence the process of orderly implementation of 
                this title;
                    (C) the transfer date designated under this 
                subsection; and
                    (D) a description of the steps that will be taken 
                to initiate the process of an orderly and timely 
                implementation of this title within the extended time 
                period.
            (2) Publication of notice.--Not later than 270 days after 
        the date of enactment of this Act, the Secretary shall publish 
        in the Federal Register notice of any transfer date designated 
        under paragraph (1).

SEC. 312. POWERS AND DUTIES TRANSFERRED.

    (a) Effective Date.--This section, and the amendments made by this 
section, shall take effect on the transfer date.
    (b) Functions of the Office of Thrift Supervision.--
            (1) Savings and loan holding company functions 
        transferred.--There are transferred to the Board of Governors 
        all functions of the Office of Thrift Supervision and the 
        Director of the Office of Thrift Supervision (including the 
        authority to issue orders) relating to--
                    (A) the supervision of--
                            (i) any savings and loan holding company; 
                        and
                            (ii) any subsidiary (other than a 
                        depository institution) of a savings and loan 
                        holding company; and
                    (B) all rulemaking authority of the Office of 
                Thrift Supervision and the Director of the Office of 
                Thrift Supervision relating to savings and loan holding 
                companies.
            (2) All other functions transferred.--
                    (A) Board of governors.--All rulemaking authority 
                of the Office of Thrift Supervision and the Director of 
                the Office of Thrift Supervision under section 11 of 
                the Home Owners' Loan Act (12 U.S.C. 1468) relating to 
                transactions with affiliates and extensions of credit 
                to executive officers, directors, and principal 
                shareholders and under section 5(q) of such Act 
                relating to tying arrangements is transferred to the 
                Board of Governors.
                    (B) Comptroller of the currency.--Except as 
                provided in paragraph (1) and subparagraph (A), there 
                are transferred to the Comptroller of the Currency all 
                functions of the Office of Thrift Supervision and the 
                Director of the Office of Thrift Supervision relating 
                to Federal savings associations.
                    (C) Corporation.--Except as provided in paragraph 
                (1) and subparagraph (A), all functions of the Office 
                of Thrift Supervision and the Director of the Office of 
                Thrift Supervision relating to State savings 
                associations are transferred to the Corporation.
                    (D) Comptroller of the currency and the 
                corporation.--Except as provided in paragraph (1) and 
                subparagraph (A), all rulemaking authority of the 
                Office of Thrift Supervision and the Director of the 
                Office of Thrift Supervision relating to savings 
                associations is transferred to the Office of the 
                Comptroller of the Currency.
    (c) Conforming Amendments.--
            (1) Federal deposit insurance act.--Section 3(q) of the 
        Federal Deposit Insurance Act (12 U.S.C. 1813(q)) is amended by 
        striking paragraphs (1) through (4) and inserting the 
        following:
            ``(1) the Office of the Comptroller of the Currency, in the 
        case of--
                    ``(A) any national banking association;
                    ``(B) any Federal branch or agency of a foreign 
                bank; and
                    ``(C) any Federal savings association;
            ``(2) the Federal Deposit Insurance Corporation, in the 
        case of--
                    ``(A) any insured State nonmember bank;
                    ``(B) any foreign bank having an insured branch; 
                and
                    ``(C) any State savings association;
            ``(3) the Board of Governors of the Federal Reserve System, 
        in the case of--
                    ``(A) any State member bank;
                    ``(B) any branch or agency of a foreign bank with 
                respect to any provision of the Federal Reserve Act 
                which is made applicable under the International 
                Banking Act of 1978;
                    ``(C) any foreign bank which does not operate an 
                insured branch;
                    ``(D) any agency or commercial lending company 
                other than a Federal agency;
                    ``(E) supervisory or regulatory proceedings arising 
                from the authority given to the Board of Governors 
                under section 7(c)(1) of the International Banking Act 
                of 1978, including such proceedings under the Financial 
                Institutions Supervisory Act of 1966;
                    ``(F) any bank holding company and any subsidiary 
                (other than a depository institution) of a bank holding 
                company; and
                    ``(G) any savings and loan holding company and any 
                subsidiary (other than a depository institution) of a 
                savings and loan holding company.''.
            (2) Federal deposit insurance act.--
                    (A) Application.--Section 8(b)(3) of the Federal 
                Deposit Insurance Act (12 U.S.C. 1818(b)(3)) is amended 
                to read as follows:
    ``(3) Application to Bank Holding Companies, Savings and Loan 
Holding Companies, and Edge and Agreement Corporations.--
            ``(A) Application.--This subsection, subsections (c) 
        through (s) and subsection (u) of this section, and section 50 
        shall apply to--
                    ``(i) any bank holding company, and any subsidiary 
                (other than a bank) of a bank holding company, as those 
                terms are defined in section 2 of the Bank Holding 
                Company Act of 1956 (12 U.S.C. 1841), as if such 
                company or subsidiary was an insured depository 
                institution for which the appropriate Federal banking 
                agency for the bank holding company was the appropriate 
                Federal banking agency;
                    ``(ii) any savings and loan holding company, and 
                any subsidiary (other than a depository institution) of 
                a savings and loan holding company, as those terms are 
                defined in section 10 of the Home Owners' Loan Act (12 
                U.S.C. 1467a), as if such company or subsidiary was an 
                insured depository institution for which the 
                appropriate Federal banking agency for the savings and 
                loan holding company was the appropriate Federal 
                banking agency; and
                    ``(iii) any organization organized and operated 
                under section 25A of the Federal Reserve Act (12 U.S.C. 
                611 et seq.) or operating under section 25 of the 
                Federal Reserve Act (12 U.S.C. 601 et seq.) and any 
                noninsured State member bank, as if such organization 
                or bank was a bank holding company.
            ``(B) Rules of construction.--
                    ``(i) Effect on other authority.--Nothing in this 
                paragraph may be construed to alter or affect the 
                authority of an appropriate Federal banking agency to 
                initiate enforcement proceedings, issue directives, or 
                take other remedial action under any other provision of 
                law.
                    ``(ii) Holding companies.--Nothing in this 
                paragraph or subsection (c) may be construed as 
                authorizing any Federal banking agency other than the 
                appropriate Federal banking agency for a bank holding 
                company or a savings and loan holding company to 
                initiate enforcement proceedings, issue directives, or 
                take other remedial action against a bank holding 
                company, a savings and loan holding company, or any 
                subsidiary thereof (other than a depository 
                institution).''.
                    (B) Conforming amendment.--Section 8(b)(9) of the 
                Federal Deposit Insurance Act (12 U.S.C. 1818(b)(9)) is 
                amended to read as follows:
            ``(9) [Reserved].''.
    (d) Consumer Protection.--Nothing in this section may be construed 
to limit or otherwise affect the transfer of powers under title X.

SEC. 313. ABOLISHMENT.

    Effective 90 days after the transfer date, the Office of Thrift 
Supervision and the position of Director of the Office of Thrift 
Supervision are abolished.

SEC. 314. AMENDMENTS TO THE REVISED STATUTES.

    (a) Amendment to Section 324.--Section 324 of the Revised Statutes 
of the United States (12 U.S.C. 1) is amended to read as follows:

``SEC. 324. COMPTROLLER OF THE CURRENCY.

    ``(a) Office of the Comptroller of the Currency Established.--There 
is established in the Department of the Treasury a bureau to be known 
as the `Office of the Comptroller of the Currency' which is charged 
with assuring the safety and soundness of, and compliance with laws and 
regulations, fair access to financial services, and fair treatment of 
customers by, the institutions and other persons subject to its 
jurisdiction.
    ``(b) Comptroller of the Currency.--
            ``(1) In general.--The chief officer of the Office of the 
        Comptroller of the Currency shall be known as the Comptroller 
        of the Currency. The Comptroller of the Currency shall perform 
        the duties of the Comptroller of the Currency under the general 
        direction of the Secretary of the Treasury. The Secretary of 
        the Treasury may not delay or prevent the issuance of any rule 
        or the promulgation of any regulation by the Comptroller of the 
        Currency, and may not intervene in any matter or proceeding 
        before the Comptroller of the Currency (including agency 
        enforcement actions), unless otherwise specifically provided by 
        law.
            ``(2) Additional authority.--The Comptroller of the 
        Currency shall have the same authority with respect to 
        functions transferred to the Comptroller of the Currency under 
        the Enhancing Financial Institution Safety and Soundness Act of 
        2010 (including matters that were within the jurisdiction of 
        the Director of the Office of Thrift Supervision or the Office 
        of Thrift Supervision on the day before the transfer date under 
        that Act) as was vested in the Director of the Office of Thrift 
        Supervision on the transfer date under that Act.''.
    (b) Amendment to Section 329.--Section 329 of the Revised Statutes 
of the United States (12 U.S.C. 11) is amended by inserting before the 
period at the end the following: ``or any Federal savings 
association''.
    (c) Effective Date.--This section, and the amendments made by this 
section, shall take effect on the transfer date.

SEC. 315. FEDERAL INFORMATION POLICY.

    Section 3502(5) of title 44, United States Code, is amended by 
inserting ``Office of the Comptroller of the Currency,'' after ``the 
Securities and Exchange Commission,''.

SEC. 316. SAVINGS PROVISIONS.

    (a) Office of Thrift Supervision.--
            (1) Existing rights, duties, and obligations not 
        affected.--Sections 312(b) and 313 shall not affect the 
        validity of any right, duty, or obligation of the United 
        States, the Director of the Office of Thrift Supervision, the 
        Office of Thrift Supervision, or any other person, that existed 
        on the day before the transfer date.
            (2) Continuation of suits.--This title shall not abate any 
        action or proceeding commenced by or against the Director of 
        the Office of Thrift Supervision or the Office of Thrift 
        Supervision before the transfer date, except that, for any 
        action or proceeding arising out of a function of the Director 
        of the Office of Thrift Supervision or the Office of Thrift 
        Supervision that is transferred to the Comptroller of the 
        Currency, the Office of the Comptroller of the Currency, the 
        Chairperson of the Corporation, the Corporation, the Chairman 
        of the Board of Governors, or the Board of Governors by this 
        subtitle, the Comptroller of the Currency, the Office of the 
        Comptroller of the Currency, the Chairperson of the 
        Corporation, the Corporation, the Chairman of the Board of 
        Governors, or the Board of Governors shall be substituted for 
        the Director of the Office of Thrift Supervision or the Office 
        of Thrift Supervision, as appropriate, as a party to the action 
        or proceeding as of the transfer date.
    (b) Continuation of Existing Orders, Resolutions, Determinations, 
Agreements, Regulations, and Other Materials.--All orders, resolutions, 
determinations, agreements, regulations, interpretative rules, other 
interpretations, guidelines, procedures, and other advisory materials 
that have been issued, made, prescribed, or allowed to become effective 
by the Office of Thrift Supervision, or by a court of competent 
jurisdiction, in the performance of functions of the Office of Thrift 
Supervision that are transferred by this subtitle and that are in 
effect on the day before the transfer date, shall continue in effect 
according to the terms of those materials, and shall be enforceable by 
or against the Office of the Comptroller of the Currency, the 
Corporation, or the Board of Governors, as appropriate, until modified, 
terminated, set aside, or superseded in accordance with applicable law 
by the Office of the Comptroller of the Currency, the Corporation, or 
the Board of Governors, as appropriate, by any court of competent 
jurisdiction, or by operation of law.
    (c) Identification of Regulations Continued.--
            (1) By the office of the comptroller of the currency.--Not 
        later than the transfer date, the Office of the Comptroller of 
        the Currency shall--
                    (A) in consultation with the Corporation, identify 
                the regulations continued under subsection (b) that 
                will be enforced by the Office of the Comptroller of 
                the Currency; and
                    (B) publish a list of such regulations in the 
                Federal Register.
            (2) By the corporation.--Not later than the transfer date, 
        the Corporation shall--
                    (A) in consultation with the Office of the 
                Comptroller of the Currency, identify the regulations 
                continued under subsection (b) that will be enforced by 
                the Corporation; and
                    (B) publish a list of such regulations in the 
                Federal Register.
            (3) By the board of governors.--Not later than the transfer 
        date, the Board of Governors shall--
                    (A) in consultation with the Office of the 
                Comptroller of the Currency and the Corporation, 
                identify the regulations continued under subsection (b) 
                that will be enforced by the Board of Governors; and
                    (B) publish a list of such regulations in the 
                Federal Register.
    (d) Status of Regulations Proposed or Not Yet Effective.--
            (1) Proposed regulations.--Any proposed regulation of the 
        Office of Thrift Supervision that the Office of Thrift 
        Supervision, in performing functions transferred by this 
        subtitle, has proposed before the transfer date, but has not 
        published as a final regulation before that date, shall be 
        deemed to be a proposed regulation of the Office of the 
        Comptroller of the Currency or the Board of Governors, as 
        appropriate, according to its terms.
            (2) Regulations not yet effective.--Any interim or final 
        regulation of the Office of Thrift Supervision that the Office 
        of Thrift Supervision, in performing functions transferred by 
        this subtitle, has published before the transfer date, but 
        which has not become effective before that date, shall become 
        effective as a regulation of the Office of the Comptroller of 
        the Currency or the Board of Governors, as appropriate, 
        according to its terms.

SEC. 317. REFERENCES IN FEDERAL LAW TO FEDERAL BANKING AGENCIES.

    Except as provided in section 312(d)(2), on and after the transfer 
date, any reference in Federal law to the Director of the Office of 
Thrift Supervision or the Office of Thrift Supervision, in connection 
with any function of the Director of the Office of Thrift Supervision 
or the Office of Thrift Supervision transferred under section 312(b) or 
any other provision of this subtitle, shall be deemed to be a reference 
to the Comptroller of the Currency, the Office of the Comptroller of 
the Currency, the Chairperson of the Corporation, the Corporation, the 
Chairman of the Board of Governors, or the Board of Governors, as 
appropriate.

SEC. 318. FUNDING.

    (a) Funding of Office of the Comptroller of the Currency.--Chapter 
4 of title LXII of the Revised Statutes is amended by inserting after 
section 5240 (12 U.S.C. 481, 482) the following:
    ``Sec. 5240A.  The Comptroller of the Currency may collect an 
assessment, fee, or other charge from any entity described in section 
3(q)(1) of the Federal Deposit Insurance Act (12 U.S.C. 1813(q)(1)), as 
the Comptroller determines is necessary or appropriate to carry out the 
responsibilities of the Office of the Comptroller of the Currency. In 
establishing the amount of an assessment, fee, or charge collected from 
an entity under this section, the Comptroller of the Currency may take 
into account the funds transferred to the Office of the Comptroller of 
the Currency under this section, the nature and scope of the activities 
of the entity, the amount and type of assets that the entity holds, the 
financial and managerial condition of the entity, and any other factor, 
as the Comptroller of the Currency determines is appropriate. Funds 
derived from any assessment, fee, or charge collected or payment made 
pursuant to this section may be deposited by the Comptroller of the 
Currency in accordance with the provisions of section 5234. Such funds 
shall not be construed to be Government funds or appropriated monies, 
and shall not be subject to apportionment for purposes of chapter 15 of 
title 31, United States Code, or any other provision of law. The 
authority of the Comptroller of the Currency under this section shall 
be in addition to the authority under section 5240.
    ``The Comptroller of the Currency shall have sole authority to 
determine the manner in which the obligations of the Office of the 
Comptroller of the Currency shall be incurred and its disbursements and 
expenses allowed and paid, in accordance with this section.''.
    (b) Funding of Board of Governors.--Section 11 of the Federal 
Reserve Act (12 U.S.C. 248) is amended by adding at the end the 
following:
    ``(s) Assessments, Fees, and Other Charges for Certain Companies.--
            ``(1) In general.--The Board shall collect a total amount 
        of assessments, fees, or other charges from the companies 
        described in paragraph (2) that is equal to the total expenses 
        the Board estimates are necessary or appropriate to carry out 
        the responsibilities of the Board with respect to such 
        companies.
            ``(2) Companies.--The companies described in this paragraph 
        are--
                    ``(A) all bank holding companies having total 
                consolidated assets of $50,000,000,000 or more;
                    ``(B) all savings and loan holding companies having 
                total consolidated assets of $50,000,000,000 or more; 
                and
                    ``(C) all nonbank financial companies supervised by 
                the Board under section 113 of the Restoring American 
                Financial Stability Act of 2010.''.
    (c) Corporation Examination Fees.--Section 10(e) of the Federal 
Deposit Insurance Act (12 U.S.C. 1820(e)) is amended by striking 
paragraph (1) and inserting the following:
            ``(1) Regular and special examinations of depository 
        institutions.--The cost of conducting any regular examination 
        or special examination of any depository institution under 
        subsection (b)(2), (b)(3), or (d) or of any entity described in 
        section 3(q)(2) may be assessed by the Corporation against the 
        institution or entity to meet the expenses of the Corporation 
        in carrying out such examinations, or as the Corporation 
        determines is necessary or appropriate to carry out the 
        responsibilities of the Corporation.''.
    (d) Effective Date.--This section, and the amendments made by this 
section, shall take effect on the transfer date.

SEC. 319. CONTRACTING AND LEASING AUTHORITY.

    Notwithstanding the Federal Property and Administrative Services 
Act of 1949 (41 U.S.C. 251 et seq.) or any other provision of law, the 
Office of the Comptroller of the Currency may--
            (1) enter into and perform contracts, execute instruments, 
        and acquire, in any lawful manner, such goods and services, or 
        personal or real property (or property interest) as the 
        Comptroller deems necessary to carry out the duties and 
        responsibilities of the Office of the Comptroller of the 
        Currency; and
            (2) hold, maintain, sell, lease, or otherwise dispose of 
        the property (or property interest) acquired under paragraph 
        (1).

                  Subtitle B--Transitional Provisions

SEC. 321. INTERIM USE OF FUNDS, PERSONNEL, AND PROPERTY OF THE OFFICE 
              OF THRIFT SUPERVISION.

    (a) In General.--Before the transfer date, the Office of the 
Comptroller of the Currency, the Corporation, and the Board of 
Governors shall--
            (1) consult and cooperate with the Office of Thrift 
        Supervision to facilitate the orderly transfer of functions to 
        the Office of the Comptroller of the Currency, the Corporation, 
        and the Board of Governors in accordance with this title;
            (2) determine jointly, from time to time--
                    (A) the amount of funds necessary to pay any 
                expenses associated with the transfer of functions 
                (including expenses for personnel, property, and 
                administrative services) during the period beginning on 
                the date of enactment of this Act and ending on the 
                transfer date;
                    (B) which personnel are appropriate to facilitate 
                the orderly transfer of functions by this title; and
                    (C) what property and administrative services are 
                necessary to support the Office of the Comptroller of 
                the Currency, the Corporation, and the Board of 
                Governors during the period beginning on the date of 
                enactment of this Act and ending on the transfer date; 
                and
            (3) take such actions as may be necessary to provide for 
        the orderly implementation of this title.
    (b) Agency Consultation.--When requested jointly by the Office of 
the Comptroller of the Currency, the Corporation, and the Board of 
Governors to do so before the transfer date, the Office of Thrift 
Supervision shall--
            (1) pay to the Office of the Comptroller of the Currency, 
        the Corporation, or the Board of Governors, as applicable, from 
        funds obtained by the Office of Thrift Supervision through 
        assessments, fees, or other charges that the Office of Thrift 
        Supervision is authorized by law to impose, such amounts as the 
        Office of the Comptroller of the Currency, the Corporation, and 
        the Board of Governors jointly determine to be necessary under 
        subsection (a);
            (2) detail to the Office of the Comptroller of the 
        Currency, the Corporation, or the Board of Governors, as 
        applicable, such personnel as the Office of the Comptroller of 
        the Currency, the Corporation, and the Board of Governors 
        jointly determine to be appropriate under subsection (a); and
            (3) make available to the Office of the Comptroller of the 
        Currency, the Corporation, or the Board of Governors, as 
        applicable, such property and provide to the Office of the 
        Comptroller of the Currency, the Corporation, or the Board of 
        Governors, as applicable, such administrative services as the 
        Office of the Comptroller of the Currency, the Corporation, and 
        the Board of Governors jointly determine to be necessary under 
        subsection (a).
    (c) Notice Required.--The Office of the Comptroller of the 
Currency, the Corporation, and the Board of Governors shall jointly 
give the Office of Thrift Supervision reasonable prior notice of any 
request that the Office of the Comptroller of the Currency, the 
Corporation, and the Board of Governors jointly intend to make under 
subsection (b).

SEC. 322. TRANSFER OF EMPLOYEES.

    (a) In General.--
            (1) Office of thrift supervision employees.--
                    (A) In general.--All employees of the Office of 
                Thrift Supervision shall be transferred to the Office 
                of the Comptroller of the Currency or the Corporation 
                for employment in accordance with this section.
                    (B) Allocating employees for transfer to receiving 
                agencies.--The Director of the Office of Thrift 
                Supervision, the Comptroller of the Currency, and the 
                Chairperson of the Corporation shall--
                            (i) jointly determine the number of 
                        employees of the Office of Thrift Supervision 
                        necessary to perform or support the functions 
                        that are transferred to the Office of the 
                        Comptroller of the Currency or the Corporation 
                        by this title; and
                            (ii) consistent with the determination 
                        under clause (i), jointly identify employees of 
                        the Office of Thrift Supervision for transfer 
                        to the Office of the Comptroller of the 
                        Currency or the Corporation.
            (2) Employees transferred; service periods credited.--For 
        purposes of this section, periods of service with a Federal 
        home loan bank, a joint office of Federal home loan banks, or a 
        Federal reserve bank shall be credited as periods of service 
        with a Federal agency.
            (3) Appointment authority for excepted service 
        transferred.--
                    (A) In general.--Except as provided in subparagraph 
                (B), any appointment authority of the Office of Thrift 
                Supervision under Federal law that relates to the 
                functions transferred under section 312, including the 
                regulations of the Office of Personnel Management, for 
                filling the positions of employees in the excepted 
                service shall be transferred to the Comptroller of the 
                Currency or the Chairperson of the Corporation, as 
                appropriate.
                    (B) Declining transfers allowed.--The Office of the 
                Comptroller of the Currency or the Chairperson of the 
                Corporation may decline to accept a transfer of 
                authority under subparagraph (A) (and the employees 
                appointed under that authority) to the extent that such 
                authority relates to positions excepted from the 
                competitive service because of their confidential, 
                policy-making, policy-determining, or policy-advocating 
                character.
            (4) Additional appointment authority.--Notwithstanding any 
        other provision of law, the Office of the Comptroller of the 
        Currency and the Corporation may appoint transferred employees 
        to positions in the Office of the Comptroller of the Currency 
        or the Corporation, respectively.
    (b) Timing of Transfers and Position Assignments.--Each employee to 
be transferred under subsection (a)(1) shall--
            (1) be transferred not later than 90 days after the 
        transfer date; and
            (2) receive notice of the position assignment of the 
        employee not later than 120 days after the effective date of 
        the transfer of the employee.
    (c) Transfer of Functions.--
            (1) In general.--Notwithstanding any other provision of 
        law, the transfer of employees under this subtitle shall be 
        deemed a transfer of functions for the purpose of section 3503 
        of title 5, United States Code.
            (2) Priority.--If any provision of this subtitle conflicts 
        with any protection provided to a transferred employee under 
        section 3503 of title 5, United States Code, the provisions of 
        this subtitle shall control.
    (d) Employee Status and Eligibility.--The transfer of functions and 
employees under this subtitle, and the abolishment of the Office of 
Thrift Supervision under section 313, shall not affect the status of 
the transferred employees as employees of an agency of the United 
States under any provision of law.
    (e) Equal Status and Tenure Positions.--
            (1) Status and tenure.--Each transferred employee from the 
        Office of Thrift Supervision shall be placed in a position at 
        the Office of the Comptroller of the Currency or the 
        Corporation with the same status and tenure as the transferred 
        employee held on the day before the date on which the employee 
        was transferred.
            (2) Functions.--To the extent practicable, each transferred 
        employee shall be placed in a position at the Office of the 
        Comptroller of the Currency or the Corporation, as applicable, 
        responsible for the same functions and duties as the 
        transferred employee had on the day before the date on which 
        the employee was transferred, in accordance with the expertise 
        and preferences of the transferred employee.
    (f) No Additional Certification Requirements.--An examiner who is a 
transferred employee shall not be subject to any additional 
certification requirements before being placed in a comparable position 
at the Office of the Comptroller of the Currency or the Corporation, if 
the examiner carries out examinations of the same type of institutions 
as an employee of the Office of the Comptroller of the Currency or the 
Corporation as the employee was responsible for carrying out before the 
date on which the employee was transferred.
    (g) Personnel Actions Limited.--
            (1) 2-year protection.--Except as provided in paragraph 
        (2), during the 2-year period beginning on the transfer date, 
        an employee holding a permanent position on the day before the 
        date on which the employee was transferred shall not be 
        involuntarily separated or involuntarily reassigned outside the 
        locality pay area (as defined by the Office of Personnel 
        Management) of the employee.
            (2) Exceptions.--The Comptroller of the Currency and the 
        Chairperson of the Corporation, as applicable, may--
                    (A) separate a transferred employee for cause, 
                including for unacceptable performance; or
                    (B) terminate an appointment to a position excepted 
                from the competitive service because of its 
                confidential policy-making, policy-determining, or 
                policy-advocating character.
    (h) Pay.--
            (1) 2-year protection.--Except as provided in paragraph 
        (2), during the 2-year period beginning on the date on which 
        the employee was transferred under this subtitle, a transferred 
        employee shall be paid at a rate that is not less than the 
        basic rate of pay, including any geographic differential, that 
        the transferred employee received during the pay period 
        immediately preceding the date on which the employee was 
        transferred.
            (2) Exceptions.--The Comptroller of the Currency or the 
        Chairman of the Board of Governors may reduce the rate of basic 
        pay of a transferred employee--
                    (A) for cause, including for unacceptable 
                performance; or
                    (B) with the consent of the transferred employee.
            (3) Protection only while employed.--This subsection shall 
        apply to a transferred employee only during the period that the 
        transferred employee remains employed by Office of the 
        Comptroller of the Currency or the Corporation.
            (4) Pay increases permitted.--Nothing in this subsection 
        shall limit the authority of the Comptroller of the Currency or 
        the Chairperson of the Corporation to increase the pay of a 
        transferred employee.
    (i) Benefits.--
            (1) Retirement benefits for transferred employees.--
                    (A) In general.--
                            (i) Continuation of existing retirement 
                        plan.--Each transferred employee shall remain 
                        enrolled in the retirement plan of the 
                        transferred employee, for as long as the 
                        transferred employee is employed by the Office 
                        of the Comptroller of the Currency or the 
                        Corporation.
                            (ii) Employer's contribution.--The 
                        Comptroller of the Currency or the Chairperson 
                        of the Corporation, as appropriate, shall pay 
                        any employer contributions to the existing 
                        retirement plan of each transferred employee, 
                        as required under each such existing retirement 
                        plan.
                    (B) Definition.--In this paragraph, the term 
                ``existing retirement plan'' means, with respect to a 
                transferred employee, the retirement plan (including 
                the Financial Institutions Retirement Fund), and any 
                associated thrift savings plan, of the agency from 
                which the employee was transferred in which the 
                employee was enrolled on the day before the date on 
                which the employee was transferred.
            (2) Benefits other than retirement benefits.--
                    (A) During first year.--
                            (i) Existing plans continue.--During the 1-
                        year period following the transfer date, each 
                        transferred employee may retain membership in 
                        any employee benefit program (other than a 
                        retirement benefit program) of the agency from 
                        which the employee was transferred under this 
                        title, including any dental, vision, long term 
                        care, or life insurance program to which the 
                        employee belonged on the day before the 
                        transfer date.
                            (ii) Employer's contribution.--The Office 
                        of the Comptroller of the Currency or the 
                        Corporation, as appropriate, shall pay any 
                        employer cost required to extend coverage in 
                        the benefit program to the transferred employee 
                        as required under that program or negotiated 
                        agreements.
                    (B) Dental, vision, or life insurance after first 
                year.--If, after the 1-year period beginning on the 
                transfer date, the Office of the Comptroller of the 
                Currency or the Corporation determines that the Office 
                of the Comptroller of the Currency or the Corporation, 
                as the case may be, will not continue to participate in 
                any dental, vision, or life insurance program of an 
                agency from which an employee was transferred, a 
                transferred employee who is a member of the program 
                may, before the decision takes effect and without 
                regard to any regularly scheduled open season, elect to 
                enroll in--
                            (i) the enhanced dental benefits program 
                        established under chapter 89A of title 5, 
                        United States Code;
                            (ii) the enhanced vision benefits 
                        established under chapter 89B of title 5, 
                        United States Code; and
                            (iii) the Federal Employees' Group Life 
                        Insurance Program established under chapter 87 
                        of title 5, United States Code, without regard 
                        to any requirement of insurability.
                    (C) Long term care insurance after 1st year.--If, 
                after the 1-year period beginning on the transfer date, 
                the Office of the Comptroller of the Currency or the 
                Corporation determines that the Office of the 
                Comptroller of the Currency or the Corporation, as 
                appropriate, will not continue to participate in any 
                long term care insurance program of an agency from 
                which an employee transferred, a transferred employee 
                who is a member of such a program may, before the 
                decision takes effect, elect to apply for coverage 
                under the Federal Long Term Care Insurance Program 
                established under chapter 90 of title 5, United States 
                Code, under the underwriting requirements applicable to 
                a new active workforce member, as described in part 875 
                of title 5, Code of Federal Regulations (or any 
                successor thereto).
                    (D) Contribution of transferred employee.--
                            (i) In general.--Subject to clause (ii), a 
                        transferred employee who is enrolled in a plan 
                        under the Federal Employees Health Benefits 
                        Program shall pay any employee contribution 
                        required under the plan.
                            (ii) Cost differential.--The Office of the 
                        Comptroller of the Currency or the Corporation, 
                        as applicable, shall pay any difference in cost 
                        between the employee contribution required 
                        under the plan provided to transferred 
                        employees by the agency from which the employee 
                        transferred on the date of enactment of this 
                        Act and the plan provided by the Office of the 
                        Comptroller of the Currency or the Corporation, 
                        as the case may be, under this section.
                            (iii) Funds transfer.--The Office of the 
                        Comptroller of the Currency or the Corporation, 
                        as the case may be, shall transfer to the 
                        Employees Health Benefits Fund established 
                        under section 8909 of title 5, United States 
                        Code, an amount determined by the Director of 
                        the Office of Personnel Management, after 
                        consultation with the Comptroller of the 
                        Currency or the Chairperson of the Corporation, 
                        as the case may be, and the Office of 
                        Management and Budget, to be necessary to 
                        reimburse the Fund for the cost to the Fund of 
                        providing any benefits under this subparagraph 
                        that are not otherwise paid for by a 
                        transferred employee under clause (i).
                    (E) Special provisions to ensure continuation of 
                life insurance benefits.--
                            (i) In general.--An annuitant, as defined 
                        in section 8901 of title 5, United States Code, 
                        who is enrolled in a life insurance plan 
                        administered by an agency from which employees 
                        are transferred under this title on the day 
                        before the transfer date shall be eligible for 
                        coverage by a life insurance plan under 
                        sections 8706(b), 8714a, 8714b, or 8714c of 
                        title 5, United States Code, or by a life 
                        insurance plan established by the Office of the 
                        Comptroller of the Currency or the Corporation, 
                        as applicable, without regard to any regularly 
                        scheduled open season or any requirement of 
                        insurability.
                            (ii) Contribution of transferred 
                        employee.--
                                    (I) In general.--Subject to 
                                subclause (II), a transferred employee 
                                enrolled in a life insurance plan under 
                                this subparagraph shall pay any 
                                employee contribution required by the 
                                plan.
                                    (II) Cost differential.--The Office 
                                of the Comptroller of the Currency or 
                                the Corporation, as the case may be, 
                                shall pay any difference in cost 
                                between the benefits provided by the 
                                agency from which the employee 
                                transferred on the date of enactment of 
                                this Act and the benefits provided 
                                under this section.
                                    (III) Funds transfer.--The Office 
                                of the Comptroller of the Currency or 
                                the Corporation, as the case may be, 
                                shall transfer to the Federal 
                                Employees' Group Life Insurance Fund 
                                established under section 8714 of title 
                                5, United States Code, an amount 
                                determined by the Director of the 
                                Office of Personnel Management, after 
                                consultation with the Comptroller of 
                                the Currency or the Chairperson of the 
                                Corporation, as the case may be, and 
                                the Office of Management and Budget, to 
                                be necessary to reimburse the Federal 
                                Employees' Group Life Insurance Fund 
                                for the cost to the Federal Employees' 
                                Group Life Insurance Fund of providing 
                                benefits under this subparagraph not 
                                otherwise paid for by a transferred 
                                employee under subclause (I).
                                    (IV) Credit for time enrolled in 
                                other plans.--For any transferred 
                                employee, enrollment in a life 
                                insurance plan administered by the 
                                agency from which the employee 
                                transferred, immediately before 
                                enrollment in a life insurance plan 
                                under chapter 87 of title 5, United 
                                States Code, shall be considered as 
                                enrollment in a life insurance plan 
                                under that chapter for purposes of 
                                section 8706(b)(1)(A) of title 5, 
                                United States Code.
    (j) Incorporation Into Agency Pay System.--Not later than 2 years 
after the transfer date, the Comptroller of the Currency and the 
Chairperson of the Corporation shall place each transferred employee 
into the established pay system and structure of the appropriate 
employing agency.
    (k) Equitable Treatment.--In administering the provisions of this 
section, the Comptroller of the Currency and the Chairperson of the 
Corporation--
            (1) may not take any action that would unfairly 
        disadvantage a transferred employee relative to any other 
        employee of the Office of the Comptroller of the Currency or 
        the Corporation on the basis of prior employment by the Office 
        of Thrift Supervision; and
            (2) may take such action as is appropriate in an individual 
        case to ensure that a transferred employee receives equitable 
        treatment, with respect to the status, tenure, pay, benefits 
        (other than benefits under programs administered by the Office 
        of Personnel Management), and accrued leave or vacation time 
        for prior periods of service with any Federal agency of the 
        transferred employee.
    (l) Reorganization.--
            (1) In general.--If the Comptroller of the Currency or the 
        Chairperson of the Corporation determines, during the 2-year 
        period beginning 1 year after the transfer date, that a 
        reorganization of the staff of the Office of the Comptroller of 
        the Currency or the Corporation, respectively, is required, the 
        reorganization shall be deemed a ``major reorganization'' for 
        purposes of affording affected employees retirement under 
        section 8336(d)(2) or 8414(b)(1)(B) of title 5, United States 
        Code.
            (2) Service credit.--For purposes of this subsection, 
        periods of service with a Federal home loan bank or a joint 
        office of Federal home loan banks shall be credited as periods 
        of service with a Federal agency.

SEC. 323. PROPERTY TRANSFERRED.

    (a) Property Defined.--For purposes of this section, the term 
``property'' includes all real property (including leaseholds) and all 
personal property, including computers, furniture, fixtures, equipment, 
books, accounts, records, reports, files, memoranda, paper, reports of 
examination, work papers, and correspondence related to such reports, 
and any other information or materials.
    (b) Property of the Office of Thrift Supervision.--Not later than 
90 days after the transfer date, all property of the Office of Thrift 
Supervision that the Comptroller of the Currency and the Chairperson of 
the Corporation jointly determine is used, on the day before the 
transfer date, to perform or support the functions of the Office of 
Thrift Supervision transferred to the Office of the Comptroller of the 
Currency or the Corporation under this title, shall be transferred to 
the Office of the Comptroller of the Currency or the Corporation in a 
manner consistent with the transfer of employees under this subtitle.
    (c) Contracts Related to Property Transferred.--Each contract, 
agreement, lease, license, permit, and similar arrangement relating to 
property transferred to the Office of the Comptroller of the Currency 
or the Corporation by this section shall be transferred to the Office 
of the Comptroller of the Currency or the Corporation, as appropriate, 
together with the property to which it relates.
    (d) Preservation of Property.--Property identified for transfer 
under this section shall not be altered, destroyed, or deleted before 
transfer under this section.

SEC. 324. FUNDS TRANSFERRED.

    The funds that, on the day before the transfer date, the Director 
of the Office of Thrift Supervision (in consultation with the 
Comptroller of the Currency, the Chairperson of the Corporation, and 
the Chairman of the Board of Governors) determines are not necessary to 
dispose of the affairs of the Office of Thrift Supervision under 
section 325 and are available to the Office of Thrift Supervision to 
pay the expenses of the Office of Thrift Supervision--
            (1) relating to the functions of the Office of Thrift 
        Supervision transferred under section 312(b)(1)(B), shall be 
        transferred to the Office of the Comptroller of the Currency on 
        the transfer date;
            (2) relating to the functions of the Office of Thrift 
        Supervision transferred under section 312(b)(1)(C), shall be 
        transferred to the Corporation on the transfer date; and
            (3) relating to the functions of the Office of Thrift 
        Supervision transferred under section 312(b)(1)(A), shall be 
        transferred to the Board of Governors on the transfer date.

SEC. 325. DISPOSITION OF AFFAIRS.

    (a) Authority of Director.--During the 90-day period beginning on 
the transfer date, the Director of the Office of Thrift Supervision--
            (1) shall, solely for the purpose of winding up the affairs 
        of the Office of Thrift Supervision relating to any function 
        transferred to the Office of the Comptroller of the Currency, 
        the Corporation, or the Board of Governors under this title--
                    (A) manage the employees of the Office of Thrift 
                Supervision who have not yet been transferred and 
                provide for the payment of the compensation and 
                benefits of the employees that accrue before the date 
                on which the employees are transferred under this 
                title; and
                    (B) manage any property of the Office of Thrift 
                Supervision, until the date on which the property is 
                transferred under section 323; and
            (2) may take any other action necessary to wind up the 
        affairs of the Office of Thrift Supervision.
    (b) Status of Director.--
            (1) In general.--Notwithstanding the transfer of functions 
        under this subtitle, during the 90-day period beginning on the 
        transfer date, the Director of the Office of Thrift Supervision 
        shall retain and may exercise any authority vested in the 
        Director of the Office of Thrift Supervision on the day before 
        the transfer date, only to the extent necessary--
                    (A) to wind up the Office of Thrift Supervision; 
                and
                    (B) to carry out the transfer under this subtitle 
                during such 90-day period.
            (2) Other provisions.--For purposes of paragraph (1), the 
        Director of the Office of Thrift Supervision shall, during the 
        90-day period beginning on the transfer date, continue to be--
                    (A) treated as an officer of the United States; and
                    (B) entitled to receive compensation at the same 
                annual rate of basic pay that the Director of the 
                Office of Thrift Supervision received on the day before 
                the transfer date.

SEC. 326. CONTINUATION OF SERVICES.

    Any agency, department, or other instrumentality of the United 
States, and any successor to any such agency, department, or 
instrumentality, that was, before the transfer date, providing support 
services to the Office of Thrift Supervision in connection with 
functions transferred to the Office of the Comptroller of the Currency, 
the Corporation or the Board of Governors under this title, shall--
            (1) continue to provide such services, subject to 
        reimbursement by the Office of the Comptroller of the Currency, 
        the Corporation, or the Board of Governors, until the transfer 
        of functions under this title is complete; and
            (2) consult with the Comptroller of the Currency, the 
        Chairperson of the Corporation, or the Chairman of the Board of 
        Governors, as appropriate, to coordinate and facilitate a 
        prompt and orderly transition.

           Subtitle C--Federal Deposit Insurance Corporation

SEC. 331. DEPOSIT INSURANCE REFORMS.

    (a) Size Distinctions.--Section 7(b)(2) of the Federal Deposit 
Insurance Act (12 U.S.C. 1817(b)(2)) is amended--
            (1) by striking subparagraph (D); and
            (2) by redesignating subparagraph (C) as subparagraph (D).
    (b) Assessment Base.--The Corporation shall amend the regulations 
issued by the Corporation under section 7(b)(2) of the Federal Deposit 
Insurance Act (12 U.S.C. 1817(b)(2)) to define the term ``assessment 
base'' with respect to an insured depository institution for purposes 
of that section 7(b)(2), as an amount equal to--
            (1) the average consolidated total assets of the insured 
        depository institution during the assessment period; minus
            (2) the sum of--
                    (A) the average tangible equity of the insured 
                depository institution during the assessment period; 
                and
                    (B) in the case of an insured depository 
                institution that is a custodial bank (as defined by the 
                Corporation, based on factors including the percentage 
                of total revenues generated by custodial businesses and 
                the level of assets under custody) or a banker's bank 
                (as that term is used in section 5136 of the Revised 
                Statutes (12 U.S.C. 24)), an amount that the 
                Corporation determines is necessary to establish 
                assessments consistent with the definition under 
                section 7(b)(1) of the Federal Deposit Insurance Act 
                (12 U.S.C. 1817(b)(1)) for a custodial bank or a 
                banker's bank.

SEC. 332. MANAGEMENT OF THE FEDERAL DEPOSIT INSURANCE CORPORATION.

    (a) In General.--Section 2 of the Federal Deposit Insurance Act (12 
U.S.C. 1812) is amended--
            (1) in subsection (a)(1)(B), by striking ``Director of the 
        Office of Thrift Supervision'' and inserting ``Director of the 
        Consumer Financial Protection Bureau'';
            (2) by amending subsection (d)(2) to read as follows:
            ``(2) Acting officials may serve.--In the event of a 
        vacancy in the Office of the Comptroller of the Currency and 
        pending the appointment of a successor, or during the absence 
        or disability of the Comptroller of the Currency, the acting 
        Comptroller of the Currency shall be a member of the Board of 
        Directors in the place of the Comptroller of the Currency.''; 
        and
            (3) in subsection (f)(2), by striking ``or of the Office of 
        Thrift Supervision''.
    (b) Effective Date.--This section, and the amendments made by this 
section, shall take effect on the transfer date.

           Subtitle D--Termination of Federal Thrift Charter

SEC. 341. TERMINATION OF FEDERAL SAVINGS ASSOCIATIONS.

    (a) In General.--Beginning on the date of enactment of this Act, 
the Director of the Office of Thrift Supervision, or the Comptroller of 
the Currency, may not issue a charter for a Federal savings association 
under section 5 of the Home Owners' Loan Act (12 U.S.C. 1464).
    (b) Conforming Amendment.--Section 5(a) of the Home Owner's Loan 
Act (12 U.S.C. 1464(a)) is amended to read as follows:
    ``(a) In General.--In order to provide thrift institutions for the 
deposit of funds and for the extension of credit for homes and other 
goods and services, the Comptroller of the Currency is authorized, 
under such regulations as the Comptroller of the Currency may 
prescribe, to provide for the examination, operation, and regulation of 
associations to be known as `Federal savings associations' (including 
Federal savings banks), giving primary consideration to the best 
practices of thrift institutions in the United States. The lending and 
investment powers conferred by this section are intended to encourage 
such institutions to provide credit for housing safely and soundly.''.
    (c) Prospective Repeal.--Effective on the date on which the 
Comptroller of the Currency determines that no Federal savings 
associations exist, section 5 of the Home Owner's Loan Act (12 U.S.C. 
1464) is repealed.

SEC. 342. BRANCHING.

    Notwithstanding the Federal Deposit Insurance Act (12 U.S.C. 1811 
et seq.), the Bank Holding Company Act of 1956 (12 U.S.C. 1841 et 
seq.), or any other provision of Federal or State law, a savings 
association that becomes a bank may continue to operate any branch or 
agency that the savings association operated immediately before the 
savings association became a bank.

       TITLE IV--REGULATION OF ADVISERS TO HEDGE FUNDS AND OTHERS

SEC. 401. SHORT TITLE.

    This title may be cited as the ``Private Fund Investment Advisers 
Registration Act of 2010''.

SEC. 402. DEFINITIONS.

    (a) Investment Advisers Act of 1940 Definitions.--Section 202(a) of 
the Investment Advisers Act of 1940 (15 U.S.C. 80b-2(a)) is amended by 
adding at the end the following:
            ``(29) The term `private fund' means an issuer that would 
        be an investment company, as defined in section 3 of the 
        Investment Company Act of 1940 (15 U.S.C. 80a-3), but for 
        section 3(c)(1) or 3(c)(7) of that Act.
            ``(30) The term `foreign private adviser' means any 
        investment adviser who--
                    ``(A) has no place of business in the United 
                States;
                    ``(B) has, in total, fewer than 15 clients who are 
                domiciled in or residents of the United States;
                    ``(C) has aggregate assets under management 
                attributable to clients in the United States and 
                investors in the United States in private funds advised 
                by the investment adviser of less than $25,000,000, or 
                such higher amount as the Commission may, by rule, deem 
                appropriate in accordance with the purposes of this 
                title; and
                    ``(D) neither--
                            ``(i) holds itself out generally to the 
                        public in the United States as an investment 
                        adviser; nor
                            ``(ii) acts as--
                                    ``(I) an investment adviser to any 
                                investment company registered under the 
                                Investment Company Act of 1940; or
                                    ``(II) a company that has elected 
                                to be a business development company 
                                pursuant to section 54 of the 
                                Investment Company Act of 1940 (15 
                                U.S.C. 80a-53), and has not withdrawn 
                                its election.''.
    (b) Other Definitions.--As used in this title, the terms 
``investment adviser'' and ``private fund'' have the same meanings as 
in section 202 of the Investment Advisers Act of 1940, as amended by 
this title.

SEC. 403. ELIMINATION OF PRIVATE ADVISER EXEMPTION; LIMITED EXEMPTION 
              FOR FOREIGN PRIVATE ADVISERS; LIMITED INTRASTATE 
              EXEMPTION.

    Section 203(b) of the Investment Advisers Act of 1940 (15 U.S.C. 
80b-3(b)) is amended--
            (1) in paragraph (1), by inserting ``, other than an 
        investment adviser who acts as an investment adviser to any 
        private fund,'' before ``all of whose'';
            (2) by striking paragraph (3) and inserting the following:
            ``(3) any investment adviser that is a foreign private 
        adviser;''; and
            (3) in paragraph (5), by striking ``or'' at the end;
            (4) in paragraph (6), by striking the period at the end and 
        inserting ``; or''; and
            (5) by adding at the end the following:
            ``(7) any investment adviser, other than any entity that 
        has elected to be regulated or is regulated as a business 
        development company pursuant to section 54 of the Investment 
        Company Act of 1940 (15 U.S.C. 80a-54), who solely advises--
                    ``(A) small business investment companies that are 
                licensees under the Small Business Investment Act of 
                1958;
                    ``(B) entities that have received from the Small 
                Business Administration notice to proceed to qualify 
                for a license as a small business investment company 
                under the Small Business Investment Act of 1958, which 
                notice or license has not been revoked; or
                    ``(C) applicants that are affiliated with 1 or more 
                licensed small business investment companies described 
                in subparagraph (A) and that have applied for another 
                license under the Small Business Investment Act of 
                1958, which application remains pending.''.

SEC. 404. COLLECTION OF SYSTEMIC RISK DATA; REPORTS; EXAMINATIONS; 
              DISCLOSURES.

    Section 204 of the Investment Advisers Act of 1940 (15 U.S.C. 80b-
4) is amended--
            (1) by redesignating subsections (b) and (c) as subsections 
        (c) and (d), respectively; and
            (2) by inserting after subsection (a) the following:
    ``(b) Records and Reports of Private Funds.--
            ``(1) In general.--The Commission may require any 
        investment adviser registered under this title--
                    ``(A) to maintain such records of, and file with 
                the Commission such reports regarding, private funds 
                advised by the investment adviser, as necessary and 
                appropriate in the public interest and for the 
                protection of investors, or for the assessment of 
                systemic risk by the Financial Stability Oversight 
                Council (in this subsection referred to as the 
                `Council'); and
                    ``(B) to provide or make available to the Council 
                those reports or records or the information contained 
                therein.
            ``(2) Treatment of records.--The records and reports of any 
        private fund to which an investment adviser registered under 
        this title provides investment advice shall be deemed to be the 
        records and reports of the investment adviser.
            ``(3) Required information.--The records and reports 
        required to be maintained by a private fund and subject to 
        inspection by the Commission under this subsection shall 
        include, for each private fund advised by the investment 
        adviser, a description of--
                    ``(A) the amount of assets under management and use 
                of leverage;
                    ``(B) counterparty credit risk exposure;
                    ``(C) trading and investment positions;
                    ``(D) valuation policies and practices of the fund;
                    ``(E) types of assets held;
                    ``(F) side arrangements or side letters, whereby 
                certain investors in a fund obtain more favorable 
                rights or entitlements than other investors;
                    ``(G) trading practices; and
                    ``(H) such other information as the Commission, in 
                consultation with the Council, determines is necessary 
                and appropriate in the public interest and for the 
                protection of investors or for the assessment of 
                systemic risk, which may include the establishment of 
                different reporting requirements for different classes 
                of fund advisers, based on the type or size of private 
                fund being advised.
            ``(4) Maintenance of records.--An investment adviser 
        registered under this title shall maintain such records of 
        private funds advised by the investment adviser for such period 
        or periods as the Commission, by rule, may prescribe as 
        necessary and appropriate in the public interest and for the 
        protection of investors, or for the assessment of systemic 
        risk.
            ``(5) Filing of records.--The Commission shall issue rules 
        requiring each investment adviser to a private fund to file 
        reports containing such information as the Commission deems 
        necessary and appropriate in the public interest and for the 
        protection of investors or for the assessment of systemic risk.
            ``(6) Examination of records.--
                    ``(A) Periodic and special examinations.--The 
                Commission--
                            ``(i) shall conduct periodic inspections of 
                        all records of private funds maintained by an 
                        investment adviser registered under this title 
                        in accordance with a schedule established by 
                        the Commission; and
                            ``(ii) may conduct at any time and from 
                        time to time such additional, special, and 
                        other examinations as the Commission may 
                        prescribe as necessary and appropriate in the 
                        public interest and for the protection of 
                        investors, or for the assessment of systemic 
                        risk.
                    ``(B) Availability of records.--An investment 
                adviser registered under this title shall make 
                available to the Commission any copies or extracts from 
                such records as may be prepared without undue effort, 
                expense, or delay, as the Commission or its 
                representatives may reasonably request.
            ``(7) Information sharing.--
                    ``(A) In general.--The Commission shall make 
                available to the Council copies of all reports, 
                documents, records, and information filed with or 
                provided to the Commission by an investment adviser 
                under this subsection as the Council may consider 
                necessary for the purpose of assessing the systemic 
                risk posed by a private fund.
                    ``(B) Confidentiality.--The Council shall maintain 
                the confidentiality of information received under this 
                paragraph in all such reports, documents, records, and 
                information, in a manner consistent with the level of 
                confidentiality established by the Commission pursuant 
                to paragraph (8). The Council shall be exempt from 
                section 552 of title 5, United States Code, with 
                respect to any information in any report, document, 
                record, or information made available, to the Council 
                under this subsection.''.
            ``(8) Commission confidentiality of reports.--
        Notwithstanding any other provision of law, the Commission may 
        not be compelled to disclose any report or information 
        contained therein required to be filed with the Commission 
        under this subsection, except that nothing in this subsection 
        authorizes the Commission--
                    ``(A) to withhold information from Congress, upon 
                an agreement of confidentiality; or
                    ``(B) prevent the Commission from complying with--
                            ``(i) a request for information from any 
                        other Federal department or agency or any self-
                        regulatory organization requesting the report 
                        or information for purposes within the scope of 
                        its jurisdiction; or
                            ``(ii) an order of a court of the United 
                        States in an action brought by the United 
                        States or the Commission.
            ``(9) Other recipients confidentiality.--Any department, 
        agency, or self-regulatory organization that receives reports 
        or information from the Commission under this subsection shall 
        maintain the confidentiality of such reports, documents, 
        records, and information in a manner consistent with the level 
        of confidentiality established for the Commission under 
        paragraph (8).
            ``(10) Public information exception.--
                    ``(A) In general.--The Commission, the Council, and 
                any other department, agency, or self-regulatory 
                organization that receives information, reports, 
                documents, records, or information from the Commission 
                under this subsection, shall be exempt from the 
                provisions of section 552 of title 5, United States 
                Code, with respect to any such report, document, 
                record, or information. Any proprietary information of 
                an investment adviser ascertained by the Commission 
                from any report required to be filed with the 
                Commission pursuant to this subsection shall be subject 
                to the same limitations on public disclosure as any 
                facts ascertained during an examination, as provided by 
                section 210(b) of this title.
                    ``(B) Proprietary information.--For purposes of 
                this paragraph, proprietary information includes--
                            ``(i) sensitive, non-public information 
                        regarding the investment or trading strategies 
                        of the investment adviser;
                            ``(ii) analytical or research 
                        methodologies;
                            ``(iii) trading data;
                            ``(iv) computer hardware or software 
                        containing intellectual property; and
                            ``(v) any additional information that the 
                        Commission determines to be proprietary.
            ``(11) Annual report to congress.--The Commission shall 
        report annually to Congress on how the Commission has used the 
        data collected pursuant to this subsection to monitor the 
        markets for the protection of investors and the integrity of 
        the markets.''.

SEC. 405. DISCLOSURE PROVISION ELIMINATED.

    Section 210(c) of the Investment Advisers Act of 1940 (15 U.S.C. 
80b-10(c)) is amended by inserting before the period at the end the 
following: ``or for purposes of assessment of potential systemic 
risk''.

SEC. 406. CLARIFICATION OF RULEMAKING AUTHORITY.

    Section 211 of the Investment Advisers Act of 1940 (15 U.S.C. 80b-
11) is amended--
            (1) in subsection (a), by inserting before the period at 
        the end of the first sentence the following: ``, including 
        rules and regulations defining technical, trade, and other 
        terms used in this title, except that the Commission may not 
        define the term `client' for purposes of paragraphs (1) and (2) 
        of section 206 to include an investor in a private fund managed 
        by an investment adviser, if such private fund has entered into 
        an advisory contract with such adviser''; and
            (2) by adding at the end the following:
    ``(e) Disclosure Rules on Private Funds.--The Commission and the 
Commodity Futures Trading Commission shall, after consultation with the 
Council but not later than 12 months after the date of enactment of the 
Private Fund Investment Advisers Registration Act of 2010, jointly 
promulgate rules to establish the form and content of the reports 
required to be filed with the Commission under subsection 204(b) and 
with the Commodity Futures Trading Commission by investment advisers 
that are registered both under this title and the Commodity Exchange 
Act (7 U.S.C. 1a et seq.).''.

SEC. 407. EXEMPTION OF VENTURE CAPITAL FUND ADVISERS.

    Section 203 of the Investment Advisers Act of 1940 (15 U.S.C. 80b-
3) is amended by adding at the end the following:
    ``(l) Exemption of Venture Capital Fund Advisers.--No investment 
adviser shall be subject to the registration requirements of this title 
with respect to the provision of investment advice relating to a 
venture capital fund. Not later than 6 months after the date of 
enactment of this subsection, the Commission shall issue final rules to 
define the term `venture capital fund' for purposes of this 
subsection.''.

SEC. 408. EXEMPTION OF AND RECORD KEEPING BY PRIVATE EQUITY FUND 
              ADVISERS.

    Section 203 of the Investment Advisers Act of 1940 (15 U.S.C. 80b-
3) is amended by adding at the end the following:
    ``(m) Exemption of and Reporting by Private Equity Fund Advisers.--
            ``(1) In general.--Except as provided in this subsection, 
        no investment adviser shall be subject to the registration or 
        reporting requirements of this title with respect to the 
        provision of investment advice relating to a private equity 
        fund or funds.
            ``(2) Maintenance of records and access by commission.--Not 
        later than 6 months after the date of enactment of this 
        subsection, the Commission shall issue final rules--
                    ``(A) to require investment advisers described in 
                paragraph (1) to maintain such records and provide to 
                the Commission such annual or other reports as the 
                Commission taking into account fund size, governance, 
                investment strategy, risk, and other factors, as the 
                Commission determines necessary and appropriate in the 
                public interest and for the protection of investors; 
                and
                    ``(B) to define the term `private equity fund' for 
                purposes of this subsection.''.

SEC. 409. FAMILY OFFICES.

    (a) In General.--Section 202(a)(11) of the Investment Advisers Act 
of 1940 (15 U.S.C. 80b-2(a)(11)) is amended by striking ``or (G)'' and 
inserting the following: ``; (G) any family office, as defined by rule, 
regulation, or order of the Commission, in accordance with the purposes 
of this title; or (H)''.
    (b) Rulemaking.--The rules, regulations, or orders issued by the 
Commission pursuant to section 202(a)(11)(G) of the Investment Advisers 
Act of 1940, as added by this section, regarding the definition of the 
term ``family office'' shall provide for an exemption that--
            (1) is consistent with the previous exemptive policy of the 
        Commission, as reflected in exemptive orders for family offices 
        in effect on the date of enactment of this Act; and
            (2) recognizes the range of organizational, management, and 
        employment structures and arrangements employed by family 
        offices.

SEC. 410. STATE AND FEDERAL RESPONSIBILITIES; ASSET THRESHOLD FOR 
              FEDERAL REGISTRATION OF INVESTMENT ADVISERS.

    Section 203A(a)(1) of the Investment Advisers Act of 1940 (15 
U.S.C. 80b-3a(a)(1)) is amended--
            (1) in subparagraph (A)--
                    (A) by striking ``$25,000,000'' and inserting 
                ``$100,000,000''; and
                    (B) by striking ``or'' at the end;
            (2) in subparagraph (B), by striking the period at the end 
        and inserting ``; or''; and
            (3) by adding at the end the following:
                    ``(C) is an adviser to a company that has elected 
                to be a business development company pursuant to 
                section 54 of the Investment Company Act of 1940, and 
                has not withdrawn its election.''.

SEC. 411. CUSTODY OF CLIENT ASSETS.

    The Investment Advisers Act of 1940 (15 U.S.C. 80b-1 et seq.) is 
amended by adding at the end the following new section:

``SEC. 223. CUSTODY OF CLIENT ACCOUNTS.

    ``An investment adviser registered under this title shall take such 
steps to safeguard client assets over which such adviser has custody, 
including, without limitation, verification of such assets by an 
independent public accountant, as the Commission may, by rule, 
prescribe.''.

SEC. 412. ADJUSTING THE ACCREDITED INVESTOR STANDARD.

    (a) In General.--The Commission shall adjust any net worth standard 
for an accredited investor, as set forth in the rules of the Commission 
under the Securities Act of 1933, so that the individual net worth of 
any natural person, or joint net worth with the spouse of that person, 
at the time of purchase, is more than $1,000,000 (as such amount is 
adjusted periodically by rule of the Commission), excluding the value 
of the primary residence of such natural person, except that during the 
4-year period that begins on the date of enactment of this Act, any net 
worth standard shall be $1,000,000, excluding the value of the primary 
residence of such natural person.
    (b) Review and Adjustment.--
            (1) Initial review and adjustment.--
                    (A) Initial review.--The Commission may undertake a 
                review of the definition of the term ``accredited 
                investor'', as such term applies to natural persons, to 
                determine whether the requirements of the definition, 
                excluding the requirement relating to the net worth 
                standard described in subsection (a), should be 
                adjusted or modified for the protection of investors, 
                in the public interest, and in light of the economy.
                    (B) Adjustment or modification.--Upon completion of 
                a review under subparagraph (A), the Commission may, by 
                notice and comment rulemaking, make such adjustments to 
                the definition of the term ``accredited investor'', 
                excluding adjusting or modifying the requirement 
                relating to the net worth standard described in 
                subsection (a), as such term applies to natural 
                persons, as the Commission may deem appropriate for the 
                protection of investors, in the public interest, and in 
                light of the economy.
            (2) Subsequent reviews and adjustment.--
                    (A) Subsequent reviews.--Not earlier than 4 years 
                after the date of enactment of this Act, and not less 
                frequently than once every 4 years thereafter, the 
                Commission shall undertake a review of the definition, 
                in its entirety, of the term ``accredited investor'', 
                as defined in section 230.215 of title 17, Code of 
                Federal Regulations, or any successor thereto, as such 
                term applies to natural persons, to determine whether 
                the requirements of the definition should be adjusted 
                or modified for the protection of investors, in the 
                public interest, and in light of the economy.
                    (B) Adjustment or modification.--Upon completion of 
                a review under subparagraph (A), the Commission may, by 
                notice and comment rulemaking, make such adjustments to 
                the definition of the term ``accredited investor'', as 
                defined in section 230.215 of title 17, Code of Federal 
                Regulations, or any successor thereto, as such term 
                applies to natural persons, as the Commission may deem 
                appropriate for the protection of investors, in the 
                public interest, and in light of the economy.

SEC. 413. GAO STUDY AND REPORT ON ACCREDITED INVESTORS.

    The Comptroller General of the United States shall conduct a study 
on the appropriate criteria for determining the financial thresholds or 
other criteria needed to qualify for accredited investor status and 
eligibility to invest in private funds, and shall submit a report to 
the Committee on Banking, Housing, and Urban Affairs of the Senate and 
the Committee on Financial Services of the House of Representatives on 
the results of such study not later than 3 years after the date of 
enactment of this Act.

SEC. 414. GAO STUDY ON SELF-REGULATORY ORGANIZATION FOR PRIVATE FUNDS.

    The Comptroller General of the United States shall--
            (1) conduct a study of the feasibility of forming a self-
        regulatory organization to oversee private funds; and
            (2) submit a report to the Committee on Banking, Housing, 
        and Urban Affairs of the Senate and the Committee on Financial 
        Services of the House of Representatives on the results of such 
        study, not later than 1 year after the date of enactment of 
        this Act.

SEC. 415. COMMISSION STUDY AND REPORT ON SHORT SELLING.

    (a) Study.--The Division of Risk, Strategy, and Financial 
Innovation of the Commission shall conduct a study, taking into account 
current scholarship, on the state of short selling on national 
securities exchanges and in the over-the-counter markets, with 
particular attention to the impact of recent rule changes and the 
incidence of--
            (1) the failure to deliver shares sold short; or
            (2) delivery of shares on the fourth day following the 
        short sale transaction.
    (b) Report.--The Division of Risk, Strategy, and Financial 
Innovation shall submit a report, together with any recommendations for 
market improvements, including consideration of real time reporting of 
short sale positions, to the Committee on Banking, Housing, and Urban 
Affairs of the Senate and the Committee on Financial Services of the 
House of Representatives on the results of the study conducted under 
subsection (a), not later than 2 years after the date of enactment of 
this Act.

SEC. 416. TRANSITION PERIOD.

    Except as otherwise provided in this title, this title and the 
amendments made by this title shall become effective 1 year after the 
date of enactment of this Act, except that any investment adviser may, 
at the discretion of the investment adviser, register with the 
Commission under the Investment Advisers Act of 1940 during that 1-year 
period, subject to the rules of the Commission.

                           TITLE V--INSURANCE

                Subtitle A--Office of National Insurance

SEC. 501. SHORT TITLE.

    This subtitle may be cited as the ``Office of National Insurance 
Act of 2010''.

SEC. 502. ESTABLISHMENT OF OFFICE OF NATIONAL INSURANCE.

    (a) Establishment of Office.--Subchapter I of chapter 3 of subtitle 
I of title 31, United States Code, is amended--
            (1) by redesignating section 312 as section 315;
            (2) by redesignating section 313 as section 312; and
            (3) by inserting after section 312 (as so redesignated) the 
        following new sections:

``SEC. 313. OFFICE OF NATIONAL INSURANCE.

    ``(a) Establishment.--There is established within the Department of 
the Treasury the Office of National Insurance.
    ``(b) Leadership.--The Office shall be headed by a Director, who 
shall be appointed by the Secretary of the Treasury. The position of 
Director shall be a career reserved position in the Senior Executive 
Service, as that position is defined under section 3132 of title 5, 
United States Code.
    ``(c) Functions.--
            ``(1) Authority pursuant to direction of secretary.--The 
        Office, pursuant to the direction of the Secretary, shall have 
        the authority--
                    ``(A) to monitor all aspects of the insurance 
                industry, including identifying issues or gaps in the 
                regulation of insurers that could contribute to a 
                systemic crisis in the insurance industry or the United 
                States financial system;
                    ``(B) to recommend to the Financial Stability 
                Oversight Council that it designate an insurer, 
                including the affiliates of such insurer, as an entity 
                subject to regulation as a nonbank financial company 
                supervised by the Board of Governors pursuant to title 
                I of the Restoring American Financial Stability Act of 
                2010;
                    ``(C) to assist the Secretary in administering the 
                Terrorism Insurance Program established in the 
                Department of the Treasury under the Terrorism Risk 
                Insurance Act of 2002 (15 U.S.C. 6701 note);
                    ``(D) to coordinate Federal efforts and develop 
                Federal policy on prudential aspects of international 
                insurance matters, including representing the United 
                States, as appropriate, in the International 
                Association of Insurance Supervisors (or a successor 
                entity) and assisting the Secretary in negotiating 
                International Insurance Agreements on Prudential 
                Measures;
                    ``(E) to determine, in accordance with subsection 
                (f), whether State insurance measures are preempted by 
                International Insurance Agreements on Prudential 
                Measures;
                    ``(F) to consult with the States (including State 
                insurance regulators) regarding insurance matters of 
                national importance and prudential insurance matters of 
                international importance; and
                    ``(G) to perform such other related duties and 
                authorities as may be assigned to the Office by the 
                Secretary.
            ``(2) Advisory functions.--The Office shall advise the 
        Secretary on major domestic and prudential international 
        insurance policy issues.
    ``(d) Scope.--The authority of the Office shall extend to all lines 
of insurance except health insurance, as such insurance is determined 
by the Secretary based on section 2791 of the Public Health Service Act 
(42 U.S.C. 300gg-91), and crop insurance, as established by the Federal 
Crop Insurance Act (7 U.S.C. 1501 et seq.).
    ``(e) Gathering of Information.--
            ``(1) In general.--In carrying out the functions required 
        under subsection (c), the Office may--
                    ``(A) receive and collect data and information on 
                and from the insurance industry and insurers;
                    ``(B) enter into information-sharing agreements;
                    ``(C) analyze and disseminate data and information; 
                and
                    ``(D) issue reports regarding all lines of 
                insurance except health insurance.
            ``(2) Collection of information from insurers and 
        affiliates.--
                    ``(A) In general.--Except as provided in paragraph 
                (3), the Office may require an insurer, or any 
                affiliate of an insurer, to submit such data or 
                information as the Office may reasonably require in 
                carrying out the functions described under subsection 
                (c).
                    ``(B) Rule of construction.--Notwithstanding any 
                other provision of this section, for purposes of 
                subparagraph (A), the term `insurer' means any person 
                that is authorized to write insurance or reinsure risks 
                and issue contracts or policies in 1 or more States.
            ``(3) Exception for small insurers.--Paragraph (2) shall 
        not apply with respect to any insurer or affiliate thereof that 
        meets a minimum size threshold that the Office may establish, 
        whether by order or rule.
            ``(4) Advance coordination.--Before collecting any data or 
        information under paragraph (2) from an insurer, or any 
        affiliate of an insurer, the Office shall coordinate with each 
        relevant State insurance regulator (or other relevant Federal 
        or State regulatory agency, if any, in the case of an affiliate 
        of an insurer) to determine if the information to be collected 
        is available from, or may be obtained in a timely manner by, 
        such State insurance regulator, individually or collectively, 
        another regulatory agency, or publicly available sources. 
        Notwithstanding any other provision of law, each such relevant 
        State insurance regulator or other Federal or State regulatory 
        agency is authorized to provide to the Office such data or 
        information.
            ``(5) Confidentiality.--
                    ``(A) Retention of privilege.--The submission of 
                any nonpublicly available data and information to the 
                Office under this subsection shall not constitute a 
                waiver of, or otherwise affect, any privilege arising 
                under Federal or State law (including the rules of any 
                Federal or State court) to which the data or 
                information is otherwise subject.
                    ``(B) Continued application of prior 
                confidentiality agreements.--Any requirement under 
                Federal or State law to the extent otherwise 
                applicable, or any requirement pursuant to a written 
                agreement in effect between the original source of any 
                nonpublicly available data or information and the 
                source of such data or information to the Office, 
                regarding the privacy or confidentiality of any data or 
                information in the possession of the source to the 
                Office, shall continue to apply to such data or 
                information after the data or information has been 
                provided pursuant to this subsection to the Office.
                    ``(C) Information sharing agreement.--Any data or 
                information obtained by the Office may be made 
                available to State insurance regulators, individually 
                or collectively, through an information sharing 
                agreement that--
                            ``(i) shall comply with applicable Federal 
                        law; and
                            ``(ii) shall not constitute a waiver of, or 
                        otherwise affect, any privilege under Federal 
                        or State law (including the rules of any 
                        Federal or State Court) to which the data or 
                        information is otherwise subject.
                    ``(D) Agency disclosure requirements.--Section 552 
                of title 5, United States Code, shall apply to any data 
                or information submitted to the Office by an insurer or 
                an affiliate of an insurer.
            ``(6) Subpoenas and enforcement.--The Director shall have 
        the power to require by subpoena the production of the data or 
        information requested under paragraph (2), but only upon a 
        written finding by the Director that such data or information 
        is required to carry out the functions described under 
        subsection (c) and that the Office has coordinated with such 
        regulator or agency as required under paragraph (4). Subpoenas 
        shall bear the signature of the Director and shall be served by 
        any person or class of persons designated by the Director for 
        that purpose. In the case of contumacy or failure to obey a 
        subpoena, the subpoena shall be enforceable by order of any 
        appropriate district court of the United States. Any failure to 
        obey the order of the court may be punished by the court as a 
        contempt of court.
    ``(f) Preemption of State Insurance Measures.--
            ``(1) Standard.--A State insurance measure shall be 
        preempted if, and only to the extent that the Director 
        determines, in accordance with this subsection, that the 
        measure--
                    ``(A) results in less favorable treatment of a non-
                United States insurer domiciled in a foreign 
                jurisdiction that is subject to an international 
                insurance agreement on prudential measures than a 
                United States insurer domiciled, licensed, or otherwise 
                admitted in that State; and
                    ``(B) is inconsistent with an International 
                Insurance Agreement on Prudential Measures.
            ``(2) Determination.--
                    ``(A) Notice of potential inconsistency.--Before 
                making any determination under paragraph (1), the 
                Director shall--
                            ``(i) notify and consult with the 
                        appropriate State regarding any potential 
                        inconsistency or preemption;
                            ``(ii) cause to be published in the Federal 
                        Register notice of the issue regarding the 
                        potential inconsistency or preemption, 
                        including a description of each State insurance 
                        measure at issue and any applicable 
                        International Insurance Agreement on Prudential 
                        Measures;
                            ``(iii) provide interested parties a 
                        reasonable opportunity to submit written 
                        comments to the Office; and
                            ``(iv) consider any comments received.
                    ``(B) Scope of review.--For purposes of this 
                subsection, the determination of the Director regarding 
                State insurance measures shall be limited to the 
                subject matter contained within the international 
                insurance agreement on prudential measure involved.
                    ``(C) Notice of determination of inconsistency.--
                Upon making any determination under paragraph (1), the 
                Director shall--
                            ``(i) notify the appropriate State of the 
                        determination and the extent of the 
                        inconsistency;
                            ``(ii) establish a reasonable period of 
                        time, which shall not be less than 30 days, 
                        before the determination shall become 
                        effective; and
                            ``(iii) notify the Committee on Banking, 
                        Housing, and Urban Affairs of the Senate and 
                        the Committee on Financial Services of the 
                        House of Representatives of the inconsistency.
            ``(3) Notice of effectiveness.--Upon the conclusion of the 
        period referred to in paragraph (2)(C)(ii), if the basis for 
        such determination still exists, the determination shall become 
        effective and the Director shall--
                    ``(A) cause to be published a notice in the Federal 
                Register that the preemption has become effective, as 
                well as the effective date; and
                    ``(B) notify the appropriate State.
            ``(4) Limitation.--No State may enforce a State insurance 
        measure to the extent that such measure has been preempted 
        under this subsection.
    ``(g) Applicability of Administrative Procedures Act.--
Determinations of inconsistency made pursuant to subsection (f)(2) 
shall be subject to the applicable provisions of subchapter II of 
chapter 5 of title 5, United States Code (relating to administrative 
procedure), and chapter 7 of such title (relating to judicial review).
    ``(h) Regulations, Policies, and Procedures.--The Secretary may 
issue orders, regulations, policies, and procedures to implement this 
section.
    ``(i) Consultation.--The Director shall consult with State 
insurance regulators, individually or collectively, to the extent the 
Director determines appropriate, in carrying out the functions of the 
Office.
    ``(j) Savings Provisions.--Nothing in this section shall--
            ``(1) preempt--
                    ``(A) any State insurance measure that governs any 
                insurer's rates, premiums, underwriting, or sales 
                practices;
                    ``(B) any State coverage requirements for 
                insurance;
                    ``(C) the application of the antitrust laws of any 
                State to the business of insurance; or
                    ``(D) any State insurance measure governing the 
                capital or solvency of an insurer, except to the extent 
                that such State insurance measure results in less 
                favorable treatment of a non-United State insurer than 
                a United States insurer;
            ``(2) be construed to alter, amend, or limit any provision 
        of the Consumer Financial Protection Agency Act of 2010; or
            ``(3) affect the preemption of any State insurance measure 
        otherwise inconsistent with and preempted by Federal law.
    ``(k) Retention of Existing State Regulatory Authority.--Nothing in 
this section or section 314 shall be construed to establish or provide 
the Office or the Department of the Treasury with general supervisory 
or regulatory authority over the business of insurance.
    ``(l) Annual Report to Congress.--Beginning September 30, 2011, the 
Director shall submit a report on or before September 30 of each 
calendar year to the President and to the Committee on Banking, 
Housing, and Urban Affairs of the Senate and the Committee on Financial 
Services of the House of Representatives on the insurance industry, any 
actions taken by the Office pursuant to subsection (f) (regarding 
preemption of inconsistent State insurance measures), and any other 
information as deemed relevant by the Director or as requested by such 
Committees.
    ``(m) Study and Report on Regulation of Insurance.--
            ``(1) In general.--Not later than 18 months after the date 
        of enactment of this section, the Director shall conduct a 
        study and submit a report to Congress on how to modernize and 
        improve the system of insurance regulation in the United 
        States.
            ``(2) Considerations.--The study and report required under 
        paragraph (1) shall be based on and guided by the following 
        considerations:
                    ``(A) Systemic risk regulation with respect to 
                insurance.
                    ``(B) Capital standards and the relationship 
                between capital allocation and liabilities, including 
                standards relating to liquidity and duration risk.
                    ``(C) Consumer protection for insurance products 
                and practices, including gaps in state regulation.
                    ``(D) The degree of national uniformity of state 
                insurance regulation.
                    ``(E) The regulation of insurance companies and 
                affiliates on a consolidated basis.
                    ``(F) International coordination of insurance 
                regulation.
            ``(3) Additional factors.--The study and report required 
        under paragraph (1) shall also examine the following factors:
                    ``(A) The costs and benefits of potential Federal 
                regulation of insurance across various lines of 
                insurance (except health insurance).
                    ``(B) The feasibility of regulating only certain 
                lines of insurance at the Federal level, while leaving 
                other lines of insurance to be regulated at the State 
                level.
                    ``(C) The ability of any potential Federal 
                regulation or Federal regulators to eliminate or 
                minimize regulatory arbitrage.
                    ``(D) The impact that developments in the 
                regulation of insurance in foreign jurisdictions might 
                have on the potential Federal regulation of insurance.
                    ``(E) The ability of any potential Federal 
                regulation or Federal regulator to provide robust 
                consumer protection for policyholders.
                    ``(F) The potential consequences of subjecting 
                insurance companies to a Federal resolution authority, 
                including the effects of any Federal resolution 
                authority--
                            ``(i) on the operation of State insurance 
                        guaranty fund systems, including the loss of 
                        guaranty fund coverage if an insurance company 
                        is subject to a Federal resolution authority;
                            ``(ii) on policyholder protection, 
                        including the loss of the priority status of 
                        policyholder claims over other unsecured 
                        general creditor claims;
                            ``(iii) in the case of life insurance 
                        companies, the loss of the special status of 
                        separate account assets and separate account 
                        liabilities; and
                            ``(iv) on the international competitiveness 
                        of insurance companies.
                    ``(G) Such other factors as the Director determines 
                necessary or appropriate, consistent with the 
                principles set forth in paragraph (2).
            ``(4) Required recommendations.--The study and report 
        required under paragraph (1) shall also contain any 
        legislative, administrative, or regulatory recommendations, as 
        the Director determines appropriate, to carry out or effectuate 
        the findings set forth in such report.
            ``(5) Consultation.--With respect to the study and report 
        required under paragraph (1), the Director shall consult with 
        the National Association of Insurance Commissioners, consumer 
        organizations, representatives of the insurance industry and 
        policyholders, and other organizations and experts, as 
        appropriate.
    ``(n) Use of Existing Resources.--To carry out this section, the 
Office may employ personnel, facilities, and any other resource of the 
Department of the Treasury available to the Secretary.
    ``(o) Definitions.--In this section and section 314, the following 
definitions shall apply:
            ``(1) Affiliate.--The term `affiliate' means, with respect 
        to an insurer, any person who controls, is controlled by, or is 
        under common control with the insurer.
            ``(2) Insurer.--The term `insurer' means any person engaged 
        in the business of insurance, including reinsurance.
            ``(3) International insurance agreement on prudential 
        measures.--The term `International Insurance Agreement on 
        Prudential Measures' means a written bilateral or multilateral 
        agreement entered into between the United States and a foreign 
        government, authority, or regulatory entity regarding 
        prudential measures applicable to the business of insurance or 
        reinsurance.
            ``(4) Non-united states insurer.--The term `non-United 
        States insurer' means an insurer that is organized under the 
        laws of a jurisdiction other than a State, but does not include 
        any United States branch of such an insurer.
            ``(5) Office.--The term `Office' means the Office of 
        National Insurance established by this section.
            ``(6) State insurance measure.--The term `State insurance 
        measure' means any State law, regulation, administrative 
        ruling, bulletin, guideline, or practice relating to or 
        affecting prudential measures applicable to insurance or 
        reinsurance.
            ``(7) State insurance regulator.--The term `State insurance 
        regulator' means any State regulatory authority responsible for 
        the supervision of insurers.
            ``(8) United states insurer.--The term `United States 
        insurer' means--
                    ``(A) an insurer that is organized under the laws 
                of a State; or
                    ``(B) a United States branch of a non-United States 
                insurer.
    ``(p) Authorization of Appropriations.--There are authorized to be 
appropriated for the Office for each fiscal year such sums as may be 
necessary.

``SEC. 314. INTERNATIONAL INSURANCE AGREEMENTS ON PRUDENTIAL MEASURES.

    ``(a) In General.--The Secretary of the Treasury is authorized to 
negotiate and enter into International Insurance Agreements on 
Prudential Measures on behalf of the United States.
    ``(b) Savings Provision.--Nothing in this section or section 313 
shall be construed to affect the development and coordination of United 
States international trade policy or the administration of the United 
States trade agreements program. It is to be understood that the 
negotiation of International Insurance Agreements on Prudential 
Measures under such sections is consistent with the requirement of this 
subsection.
    ``(c) Consultation.--The Secretary shall consult with the United 
States Trade Representative on the negotiation of International 
Insurance Agreements on Prudential Measures, including prior to 
initiating and concluding any such agreements.''.
    (b) Duties of Secretary.--Section 321(a) of title 31, United States 
Code, is amended--
            (1) in paragraph (7), by striking ``; and'' and inserting a 
        semicolon;
            (2) in paragraph (8)(C), by striking the period at the end 
        and inserting ``; and''; and
            (3) by adding at the end the following new paragraph:
            ``(9) advise the President on major domestic and 
        international prudential policy issues in connection with all 
        lines of insurance except health insurance.''.
    (c) Clerical Amendment.--The table of sections for subchapter I of 
chapter 3 of title 31, United States Code, is amended by striking the 
item relating to section 312 and inserting the following new items:

``Sec. 312. Terrorism and financial intelligence.
``Sec. 313. Office of National Insurance.
``Sec. 314. International insurance agreements on prudential measures.
``Sec. 315. Continuing in office.''.

                Subtitle B--State-based Insurance Reform

SEC. 511. SHORT TITLE.

    This subtitle may be cited as the ``Nonadmitted and Reinsurance 
Reform Act of 2010''.

SEC. 512. EFFECTIVE DATE.

    Except as otherwise specifically provided in this subtitle, this 
subtitle shall take effect upon the expiration of the 12-month period 
beginning on the date of the enactment of this subtitle.

                     PART I--NONADMITTED INSURANCE

SEC. 521. REPORTING, PAYMENT, AND ALLOCATION OF PREMIUM TAXES.

    (a) Home State's Exclusive Authority.--No State other than the home 
State of an insured may require any premium tax payment for nonadmitted 
insurance.
    (b) Allocation of Nonadmitted Premium Taxes.--
            (1) In general.--The States may enter into a compact or 
        otherwise establish procedures to allocate among the States the 
        premium taxes paid to an insured's home State described in 
        subsection (a).
            (2) Effective date.--Except as expressly otherwise provided 
        in such compact or other procedures, any such compact or other 
        procedures--
                    (A) if adopted on or before the expiration of the 
                330-day period that begins on the date of the enactment 
                of this subtitle, shall apply to any premium taxes 
                that, on or after such date of enactment, are required 
                to be paid to any State that is subject to such compact 
                or procedures; and
                    (B) if adopted after the expiration of such 330-day 
                period, shall apply to any premium taxes that, on or 
                after January 1 of the first calendar year that begins 
                after the expiration of such 330-day period, are 
                required to be paid to any State that is subject to 
                such compact or procedures.
            (3) Report.--Upon the expiration of the 330-day period 
        referred to in paragraph (2), the NAIC may submit a report to 
        the Committee on Financial Services and Committee on the 
        Judiciary of the House of Representatives and the Committee on 
        Banking, Housing, and Urban Affairs of the Senate identifying 
        and describing any compact or other procedures for allocation 
        among the States of premium taxes that have been adopted during 
        such period by any States.
            (4) Nationwide system.--The Congress intends that each 
        State adopt nationwide uniform requirements, forms, and 
        procedures, such as an interstate compact, that provides for 
        the reporting, payment, collection, and allocation of premium 
        taxes for nonadmitted insurance consistent with this section.
    (c) Allocation Based on Tax Allocation Report.--To facilitate the 
payment of premium taxes among the States, an insured's home State may 
require surplus lines brokers and insureds who have independently 
procured insurance to annually file tax allocation reports with the 
insured's home State detailing the portion of the nonadmitted insurance 
policy premium or premiums attributable to properties, risks, or 
exposures located in each State. The filing of a nonadmitted insurance 
tax allocation report and the payment of tax may be made by a person 
authorized by the insured to act as its agent.

SEC. 522. REGULATION OF NONADMITTED INSURANCE BY INSURED'S HOME STATE.

    (a) Home State Authority.--Except as otherwise provided in this 
section, the placement of nonadmitted insurance shall be subject to the 
statutory and regulatory requirements solely of the insured's home 
State.
    (b) Broker Licensing.--No State other than an insured's home State 
may require a surplus lines broker to be licensed in order to sell, 
solicit, or negotiate nonadmitted insurance with respect to such 
insured.
    (c) Enforcement Provision.--With respect to section 521 and 
subsections (a) and (b) of this section, any law, regulation, 
provision, or action of any State that applies or purports to apply to 
nonadmitted insurance sold to, solicited by, or negotiated with an 
insured whose home State is another State shall be preempted with 
respect to such application.
    (d) Workers' Compensation Exception.--This section may not be 
construed to preempt any State law, rule, or regulation that restricts 
the placement of workers' compensation insurance or excess insurance 
for self-funded workers' compensation plans with a nonadmitted insurer.

SEC. 523. PARTICIPATION IN NATIONAL PRODUCER DATABASE.

    After the expiration of the 2-year period beginning on the date of 
the enactment of this subtitle, a State may not collect any fees 
relating to licensing of an individual or entity as a surplus lines 
broker in the State unless the State has in effect at such time laws or 
regulations that provide for participation by the State in the national 
insurance producer database of the NAIC, or any other equivalent 
uniform national database, for the licensure of surplus lines brokers 
and the renewal of such licenses.

SEC. 524. UNIFORM STANDARDS FOR SURPLUS LINES ELIGIBILITY.

    A State may not--
            (1) impose eligibility requirements on, or otherwise 
        establish eligibility criteria for, nonadmitted insurers 
        domiciled in a United States jurisdiction, except in 
        conformance with such requirements and criteria in sections 
        5A(2) and 5C(2)(a) of the Non-Admitted Insurance Model Act, 
        unless the State has adopted nationwide uniform requirements, 
        forms, and procedures developed in accordance with section 
        521(b) of this subtitle that include alternative nationwide 
        uniform eligibility requirements; or
            (2) prohibit a surplus lines broker from placing 
        nonadmitted insurance with, or procuring nonadmitted insurance 
        from, a nonadmitted insurer domiciled outside the United States 
        that is listed on the Quarterly Listing of Alien Insurers 
        maintained by the International Insurers Department of the 
        NAIC.

SEC. 525. STREAMLINED APPLICATION FOR COMMERCIAL PURCHASERS.

    A surplus lines broker seeking to procure or place nonadmitted 
insurance in a State for an exempt commercial purchaser shall not be 
required to satisfy any State requirement to make a due diligence 
search to determine whether the full amount or type of insurance sought 
by such exempt commercial purchaser can be obtained from admitted 
insurers if--
            (1) the broker procuring or placing the surplus lines 
        insurance has disclosed to the exempt commercial purchaser that 
        such insurance may or may not be available from the admitted 
        market that may provide greater protection with more regulatory 
        oversight; and
            (2) the exempt commercial purchaser has subsequently 
        requested in writing the broker to procure or place such 
        insurance from a nonadmitted insurer.

SEC. 526. GAO STUDY OF NONADMITTED INSURANCE MARKET.

    (a) In General.--The Comptroller General of the United States shall 
conduct a study of the nonadmitted insurance market to determine the 
effect of the enactment of this part on the size and market share of 
the nonadmitted insurance market for providing coverage typically 
provided by the admitted insurance market.
    (b) Contents.--The study shall determine and analyze--
            (1) the change in the size and market share of the 
        nonadmitted insurance market and in the number of insurance 
        companies and insurance holding companies providing such 
        business in the 18-month period that begins upon the effective 
        date of this subtitle;
            (2) the extent to which insurance coverage typically 
        provided by the admitted insurance market has shifted to the 
        nonadmitted insurance market;
            (3) the consequences of any change in the size and market 
        share of the nonadmitted insurance market, including 
        differences in the price and availability of coverage available 
        in both the admitted and nonadmitted insurance markets;
            (4) the extent to which insurance companies and insurance 
        holding companies that provide both admitted and nonadmitted 
        insurance have experienced shifts in the volume of business 
        between admitted and nonadmitted insurance; and
            (5) the extent to which there has been a change in the 
        number of individuals who have nonadmitted insurance policies, 
        the type of coverage provided under such policies, and whether 
        such coverage is available in the admitted insurance market.
    (c) Consultation With NAIC.--In conducting the study under this 
section, the Comptroller General shall consult with the NAIC.
    (d) Report.--The Comptroller General shall complete the study under 
this section and submit a report to the Committee on Banking, Housing, 
and Urban Affairs of the Senate and the Committee on Financial Services 
of the House of Representatives regarding the findings of the study not 
later than 30 months after the effective date of this subtitle.

SEC. 527. DEFINITIONS.

    For purposes of this part, the following definitions shall apply:
            (1) Admitted insurer.--The term ``admitted insurer'' means, 
        with respect to a State, an insurer licensed to engage in the 
        business of insurance in such State.
            (2) Affiliate.--The term ``affiliate'' means, with respect 
        to an insured, any entity that controls, is controlled by, or 
        is under common control with the insured.
            (3) Affiliated group.--The term ``affiliated group'' means 
        any group of entities that are all affiliated.
            (4) Control.--An entity has ``control'' over another entity 
        if--
                    (A) the entity directly or indirectly or acting 
                through 1 or more other persons owns, controls, or has 
                the power to vote 25 percent or more of any class of 
                voting securities of the other entity; or
                    (B) the entity controls in any manner the election 
                of a majority of the directors or trustees of the other 
                entity.
            (5) Exempt commercial purchaser.--The term ``exempt 
        commercial purchaser'' means any person purchasing commercial 
        insurance that, at the time of placement, meets the following 
        requirements:
                    (A) The person employs or retains a qualified risk 
                manager to negotiate insurance coverage.
                    (B) The person has paid aggregate nationwide 
                commercial property and casualty insurance premiums in 
                excess of $100,000 in the immediately preceding 12 
                months.
                    (C)(i) The person meets at least 1 of the following 
                criteria:
                            (I) The person possesses a net worth in 
                        excess of $20,000,000, as such amount is 
                        adjusted pursuant to clause (ii).
                            (II) The person generates annual revenues 
                        in excess of $50,000,000, as such amount is 
                        adjusted pursuant to clause (ii).
                            (III) The person employs more than 500 
                        full-time or full-time equivalent employees per 
                        individual insured or is a member of an 
                        affiliated group employing more than 1,000 
                        employees in the aggregate.
                            (IV) The person is a not-for-profit 
                        organization or public entity generating annual 
                        budgeted expenditures of at least $30,000,000, 
                        as such amount is adjusted pursuant to clause 
                        (ii).
                            (V) The person is a municipality with a 
                        population in excess of 50,000 persons.
                    (ii) Effective on the fifth January 1 occurring 
                after the date of the enactment of this subtitle and 
                each fifth January 1 occurring thereafter, the amounts 
                in subclauses (I), (II), and (IV) of clause (i) shall 
                be adjusted to reflect the percentage change for such 
                5-year period in the Consumer Price Index for All Urban 
                Consumers published by the Bureau of Labor Statistics 
                of the Department of Labor.
            (6) Home state.--
                    (A) In general.--Except as provided in subparagraph 
                (B), the term ``home State'' means, with respect to an 
                insured--
                            (i) the State in which an insured maintains 
                        its principal place of business or, in the case 
                        of an individual, the individual's principal 
                        residence; or
                            (ii) if 100 percent of the insured risk is 
                        located out of the State referred to in 
                        subparagraph (A), the State to which the 
                        greatest percentage of the insured's taxable 
                        premium for that insurance contract is 
                        allocated.
                    (B) Affiliated groups.--If more than 1 insured from 
                an affiliated group are named insureds on a single 
                nonadmitted insurance contract, the term ``home State'' 
                means the home State, as determined pursuant to 
                subparagraph (A), of the member of the affiliated group 
                that has the largest percentage of premium attributed 
                to it under such insurance contract.
            (7) Independently procured insurance.--The term 
        ``independently procured insurance'' means insurance procured 
        directly by an insured from a nonadmitted insurer.
            (8) NAIC.--The term ``NAIC'' means the National Association 
        of Insurance Commissioners or any successor entity.
            (9) Nonadmitted insurance.--The term ``nonadmitted 
        insurance'' means any property and casualty insurance permitted 
        to be placed directly or through a surplus lines broker with a 
        nonadmitted insurer eligible to accept such insurance.
            (10) Non-admitted insurance model act.--The term ``Non-
        Admitted Insurance Model Act'' means the provisions of the Non-
        Admitted Insurance Model Act, as adopted by the NAIC on August 
        3, 1994, and amended on September 30, 1996, December 6, 1997, 
        October 2, 1999, and June 8, 2002.
            (11) Nonadmitted insurer.--The term ``nonadmitted 
        insurer''--
                    (A) means, with respect to a State, an insurer not 
                licensed to engage in the business of insurance in such 
                State; but
                    (B) does not include a risk retention group, as 
                that term is defined in section 2(a)(4) of the 
                Liability Risk Retention Act of 1986 (15 U.S.C. 
                3901(a)(4)).
            (12) Qualified risk manager.--The term ``qualified risk 
        manager'' means, with respect to a policyholder of commercial 
        insurance, a person who meets all of the following 
        requirements:
                    (A) The person is an employee of, or third party 
                consultant retained by, the commercial policyholder.
                    (B) The person provides skilled services in loss 
                prevention, loss reduction, or risk and insurance 
                coverage analysis, and purchase of insurance.
                    (C) The person--
                            (i)(I) has a bachelor's degree or higher 
                        from an accredited college or university in 
                        risk management, business administration, 
                        finance, economics, or any other field 
                        determined by a State insurance commissioner or 
                        other State regulatory official or entity to 
                        demonstrate minimum competence in risk 
                        management; and
                            (II)(aa) has 3 years of experience in risk 
                        financing, claims administration, loss 
                        prevention, risk and insurance analysis, or 
                        purchasing commercial lines of insurance; or
                            (bb) has 1 of the following designations:
                                    (AA) a designation as a Chartered 
                                Property and Casualty Underwriter (in 
                                this subparagraph referred to as 
                                ``CPCU'') issued by the American 
                                Institute for CPCU/Insurance Institute 
                                of America;
                                    (BB) a designation as an Associate 
                                in Risk Management (ARM) issued by the 
                                American Institute for CPCU/Insurance 
                                Institute of America;
                                    (CC) a designation as Certified 
                                Risk Manager (CRM) issued by the 
                                National Alliance for Insurance 
                                Education & Research;
                                    (DD) a designation as a RIMS Fellow 
                                (RF) issued by the Global Risk 
                                Management Institute; or
                                    (EE) any other designation, 
                                certification, or license determined by 
                                a State insurance commissioner or other 
                                State insurance regulatory official or 
                                entity to demonstrate minimum 
                                competency in risk management;
                            (ii)(I) has at least 7 years of experience 
                        in risk financing, claims administration, loss 
                        prevention, risk and insurance coverage 
                        analysis, or purchasing commercial lines of 
                        insurance; and
                            (II) has any 1 of the designations 
                        specified in subitems (AA) through (EE) of 
                        clause (i)(II)(bb);
                            (iii) has at least 10 years of experience 
                        in risk financing, claims administration, loss 
                        prevention, risk and insurance coverage 
                        analysis, or purchasing commercial lines of 
                        insurance; or
                            (iv) has a graduate degree from an 
                        accredited college or university in risk 
                        management, business administration, finance, 
                        economics, or any other field determined by a 
                        State insurance commissioner or other State 
                        regulatory official or entity to demonstrate 
                        minimum competence in risk management.
            (13) Premium tax.--The term ``premium tax'' means, with 
        respect to surplus lines or independently procured insurance 
        coverage, any tax, fee, assessment, or other charge imposed by 
        a government entity directly or indirectly based on any payment 
        made as consideration for an insurance contract for such 
        insurance, including premium deposits, assessments, 
        registration fees, and any other compensation given in 
        consideration for a contract of insurance.
            (14) Surplus lines broker.--The term ``surplus lines 
        broker'' means an individual, firm, or corporation which is 
        licensed in a State to sell, solicit, or negotiate insurance on 
        properties, risks, or exposures located or to be performed in a 
        State with nonadmitted insurers.

                          PART II--REINSURANCE

SEC. 531. REGULATION OF CREDIT FOR REINSURANCE AND REINSURANCE 
              AGREEMENTS.

    (a) Credit for Reinsurance.--If the State of domicile of a ceding 
insurer is an NAIC-accredited State, or has financial solvency 
requirements substantially similar to the requirements necessary for 
NAIC accreditation, and recognizes credit for reinsurance for the 
insurer's ceded risk, then no other State may deny such credit for 
reinsurance.
    (b) Additional Preemption of Extraterritorial Application of State 
Law.--In addition to the application of subsection (a), all laws, 
regulations, provisions, or other actions of a State that is not the 
domiciliary State of the ceding insurer, except those with respect to 
taxes and assessments on insurance companies or insurance income, are 
preempted to the extent that they--
            (1) restrict or eliminate the rights of the ceding insurer 
        or the assuming insurer to resolve disputes pursuant to 
        contractual arbitration to the extent such contractual 
        provision is not inconsistent with the provisions of title 9, 
        United States Code;
            (2) require that a certain State's law shall govern the 
        reinsurance contract, disputes arising from the reinsurance 
        contract, or requirements of the reinsurance contract;
            (3) attempt to enforce a reinsurance contract on terms 
        different than those set forth in the reinsurance contract, to 
        the extent that the terms are not inconsistent with this part; 
        or
            (4) otherwise apply the laws of the State to reinsurance 
        agreements of ceding insurers not domiciled in that State.

SEC. 532. REGULATION OF REINSURER SOLVENCY.

    (a) Domiciliary State Regulation.--If the State of domicile of a 
reinsurer is an NAIC-accredited State or has financial solvency 
requirements substantially similar to the requirements necessary for 
NAIC accreditation, such State shall be solely responsible for 
regulating the financial solvency of the reinsurer.
    (b) Nondomiciliary States.--
            (1) Limitation on financial information requirements.--If 
        the State of domicile of a reinsurer is an NAIC-accredited 
        State or has financial solvency requirements substantially 
        similar to the requirements necessary for NAIC accreditation, 
        no other State may require the reinsurer to provide any 
        additional financial information other than the information the 
        reinsurer is required to file with its domiciliary State.
            (2) Receipt of information.--No provision of this section 
        shall be construed as preventing or prohibiting a State that is 
        not the State of domicile of a reinsurer from receiving a copy 
        of any financial statement filed with its domiciliary State.

SEC. 533. DEFINITIONS.

    For purposes of this part, the following definitions shall apply:
            (1) Ceding insurer.--The term ``ceding insurer'' means an 
        insurer that purchases reinsurance.
            (2) Domiciliary state.--The terms ``State of domicile'' and 
        ``domiciliary State'' mean, with respect to an insurer or 
        reinsurer, the State in which the insurer or reinsurer is 
        incorporated or entered through, and licensed.
            (3) Reinsurance.--The term ``reinsurance'' means the 
        assumption by an insurer of all or part of a risk undertaken 
        originally by another insurer.
            (4) Reinsurer.--
                    (A) In general.--The term ``reinsurer'' means an 
                insurer to the extent that the insurer--
                            (i) is principally engaged in the business 
                        of reinsurance;
                            (ii) does not conduct significant amounts 
                        of direct insurance as a percentage of its net 
                        premiums; and
                            (iii) is not engaged in an ongoing basis in 
                        the business of soliciting direct insurance.
                    (B) Determination.--A determination of whether an 
                insurer is a reinsurer shall be made under the laws of 
                the State of domicile in accordance with this 
                paragraph.

                     PART III--RULE OF CONSTRUCTION

SEC. 541. RULE OF CONSTRUCTION.

    Nothing in this subtitle or the amendments made by this subtitle 
shall be construed to modify, impair, or supersede the application of 
the antitrust laws. Any implied or actual conflict between this 
subtitle and any amendments to this subtitle and the antitrust laws 
shall be resolved in favor of the operation of the antitrust laws.

SEC. 542. SEVERABILITY.

    If any section or subsection of this subtitle, or any application 
of such provision to any person or circumstance, is held to be 
unconstitutional, the remainder of this subtitle, and the application 
of the provision to any other person or circumstance, shall not be 
affected.

 TITLE VI--IMPROVEMENTS TO REGULATION OF BANK AND SAVINGS ASSOCIATION 
             HOLDING COMPANIES AND DEPOSITORY INSTITUTIONS

SEC. 601. SHORT TITLE.

    This title may be cited as the ``Bank and Savings Association 
Holding Company and Depository Institution Regulatory Improvements Act 
of 2010''.

SEC. 602. DEFINITION.

    In this title, the term ``commercial firm'' means any entity that 
derives not less than 15 percent of the consolidated annual gross 
revenues of the entity, including all affiliates of the entity, from 
engaging in activities that are not financial in nature or incidental 
to activities that are financial in nature, as provided in section 4(k) 
of the Bank Holding Company Act of 1956 (12 U.S.C. 1843(k)).

SEC. 603. MORATORIUM AND STUDY ON TREATMENT OF CREDIT CARD BANKS, 
              INDUSTRIAL LOAN COMPANIES, AND CERTAIN OTHER COMPANIES 
              UNDER THE BANK HOLDING COMPANY ACT OF 1956.

    (a) Moratorium.--
            (1) Definitions.--In this subsection--
                    (A) the term ``credit card bank'' means an 
                institution described in section 2(c)(2)(F) of the Bank 
                Holding Company Act of 1956 (12 U.S.C. 1841(c)(2)(F));
                    (B) the term ``industrial bank'' means an 
                institution described in section 2(c)(2)(H) of the Bank 
                Holding Company Act of 1956 (12 U.S.C. 1841(c)(2)(H)); 
                and
                    (C) the term ``trust bank'' means an institution 
                described in section 2(c)(2)(D) of the Bank Holding 
                Company Act of 1956 (12 U.S.C. 1841(c)(2)(D)).
            (2) Moratorium on provision of deposit insurance.--The 
        Corporation may not approve an application for deposit 
        insurance under section 5 of the Federal Deposit Insurance Act 
        (12 U.S.C. 1815) that is received after November 10, 2009, for 
        an industrial bank, a credit card bank, or a trust bank that is 
        directly or indirectly owned or controlled by a commercial 
        firm.
            (3) Change in control.--
                    (A) In general.--Except as provided in subparagraph 
                (B), the appropriate Federal banking agency shall 
                disapprove a change in control, as provided in section 
                7(j) of the Federal Deposit Insurance Act (12 U.S.C. 
                1817(j)), of an industrial bank, a credit card bank, or 
                a trust bank if the change in control would result in 
                direct or indirect control of the industrial bank, 
                credit card bank, or trust bank by a commercial firm.
                    (B) Exceptions.--Subparagraph (A) shall not apply 
                to a change in control of an industrial bank, credit 
                card bank, or trust bank that--
                            (i) is in danger of default, as determined 
                        by the appropriate Federal banking agency; or
                            (ii) results from the merger or whole 
                        acquisition of a commercial firm that directly 
                        or indirectly controls the industrial bank, 
                        credit card bank, or trust bank in a bona fide 
                        merger with or acquisition by another 
                        commercial firm, as determined by the 
                        appropriate Federal banking agency.
            (4) Sunset.--This subsection shall cease to have effect 3 
        years after the date of enactment of this Act.
    (b) Government Accountability Office Study of Exceptions Under the 
Bank Holding Company Act of 1956.--
            (1) Study required.--The Comptroller General of the United 
        States shall carry out a study to determine whether it is 
        necessary, in order to strengthen the safety and soundness of 
        institutions or the stability of the financial system, to 
        eliminate the exceptions under section 2 of the Bank Holding 
        Company Act of 1956 (12 U.S.C. 1841) for institutions described 
        in--
                    (A) section 2(a)(5)(E) of the Bank Holding Company 
                Act of 1956 (12 U.S.C. 1841(a)(5)(E));
                    (B) section 2(a)(5)(F) of the Bank Holding Company 
                Act of 1956 (12 U.S.C. 1841(a)(5)(F));
                    (C) section 2(c)(2)(D) of the Bank Holding Company 
                Act of 1956 (12 U.S.C. 1841(c)(2)(D));
                    (D) section 2(c)(2)(F) of the Bank Holding Company 
                Act of 1956 (12 U.S.C. 1841(c)(2)(F));
                    (E) section 2(c)(2)(H) of the Bank Holding Company 
                Act of 1956 (12 U.S.C. 1841(c)(2)(H)); and
                    (F) section 2(c)(2)(B) of the Bank Holding Company 
                Act of 1956 (12 U.S.C. 1841(c)(2)(B)).
            (2) Content of study.--
                    (A) In general.--The study required under paragraph 
                (1), with respect to the institutions referenced in 
                each of subparagraphs (A) through (E) of paragraph (1), 
                shall, to the extent feasible be based on information 
                provided to the Comptroller General by the appropriate 
                Federal or State regulator, and shall--
                            (i) identify the types and number of 
                        institutions excepted from section 2 of the 
                        Bank Holding Company Act of 1956 (12 U.S.C. 
                        1841) under each of the subparagraphs described 
                        in subparagraphs (A) through (E) of paragraph 
                        (1);
                            (ii) generally describe the size and 
                        geographic locations of the institutions 
                        described in clause (i);
                            (iii) determine the extent to which the 
                        institutions described in clause (i) are held 
                        by holding companies that are commercial firms;
                            (iv) determine whether the institutions 
                        described in clause (i) have any affiliates 
                        that are commercial firms;
                            (v) identify the Federal banking agency 
                        responsible for the supervision of the 
                        institutions described in clause (i) on and 
                        after the transfer date;
                            (vi) determine the adequacy of the Federal 
                        bank regulatory framework applicable to each 
                        category of institution described in clause 
                        (i), including any restrictions (including 
                        limitations on affiliate transactions or cross-
                        marketing) that apply to transactions between 
                        an institution, the holding company of the 
                        institution, and any other affiliate of the 
                        institution; and
                            (vii) evaluate the potential consequences 
                        of subjecting the institutions described in 
                        clause (i) to the requirements of the Bank 
                        Holding Company Act of 1956, including with 
                        respect to the availability and allocation of 
                        credit, the stability of the financial system 
                        and the economy, the safe and sound operation 
                        of each category of institution, and the impact 
                        on the types of activities in which such 
                        institutions, and the holding companies of such 
                        institutions, may engage.
                    (B) Savings associations.--With respect to 
                institutions described in paragraph (1)(F), the study 
                required under paragraph (1) shall--
                            (i) determine the adequacy of the Federal 
                        bank regulatory framework applicable to such 
                        institutions, including any restrictions 
                        (including limitations on affiliate 
                        transactions or cross-marketing) that apply to 
                        transactions between an institution, the 
                        holding company of the institution, and any 
                        other affiliate of the institution; and
                            (ii) evaluate the potential consequences of 
                        subjecting the institutions described in 
                        paragraph (1)(F) to the requirements of the 
                        Bank Holding Company Act of 1956, including 
                        with respect to the availability and allocation 
                        of credit, the stability of the financial 
                        system and the economy, the safe and sound 
                        operation of such institutions, and the impact 
                        on the types of activities in which such 
                        institutions, and the holding companies of such 
                        institutions, may engage.
            (3) Report.--Not later than 18 months after the date of 
        enactment of this Act, the Comptroller General shall submit to 
        the Committee on Banking, Housing, and Urban Affairs of the 
        Senate and the Committee on Financial Services of the House of 
        Representatives a report on the study required under paragraph 
        (1).

SEC. 604. REPORTS AND EXAMINATIONS OF HOLDING COMPANIES; REGULATION OF 
              FUNCTIONALLY REGULATED SUBSIDIARIES.

    (a) Reports by Bank Holding Companies.--Sections 5(c)(1) of the 
Bank Holding Company Act of 1956 (12 U.S.C. 1844(c)(1)) is amended--
            (1) by striking subparagraph (B) and inserting the 
        following:
                    ``(B) Use of existing reports and other supervisory 
                information.--The appropriate Federal banking agency 
                for a bank holding company shall, to the fullest extent 
                possible, use--
                            ``(i) reports and other supervisory 
                        information that the bank holding company or 
                        any subsidiary thereof has been required to 
                        provide to other Federal or State regulatory 
                        agencies;
                            ``(ii) externally audited financial 
                        statements of the bank holding company or 
                        subsidiary;
                            ``(iii) information otherwise available 
                        from Federal or State regulatory agencies; and
                            ``(iv) information that is otherwise 
                        required to be reported publicly.''; and
            (2) by adding at the end the following:
                    ``(C) Availability.--Upon the request of the 
                appropriate Federal banking agency for a bank holding 
                company, the bank holding company or a subsidiary of 
                the bank holding company shall promptly provide to the 
                appropriate Federal banking agency any information 
                described in clauses (i) through (iii) of subparagraph 
                (B).''.
    (b) Examinations of Bank Holding Companies.--Section 5(c)(2) of the 
Bank Holding Company Act of 1956 (12 U.S.C. 1844(c)(2)) is amended to 
read as follows:
            ``(2) Examinations.--
                    ``(A) In general.--The appropriate Federal banking 
                agency for a bank holding company may make examinations 
                of the bank holding company and each subsidiary of the 
                bank holding company in order to--
                            ``(i) inform such appropriate Federal 
                        banking agency of--
                                    ``(I) the nature of the operations 
                                and financial condition of the bank 
                                holding company and the subsidiary;
                                    ``(II) the financial, operational, 
                                and other risks within the bank holding 
                                company system that may pose a threat 
                                to--
                                            ``(aa) the safety and 
                                        soundness of the bank holding 
                                        company or of any depository 
                                        institution subsidiary of the 
                                        bank holding company; or
                                            ``(bb) the stability of the 
                                        financial system of the United 
                                        States; and
                                    ``(III) the systems of the bank 
                                holding company for monitoring and 
                                controlling the risks described in 
                                subclause (II); and
                            ``(ii) enforce the compliance of the bank 
                        holding company and the subsidiary with this 
                        Act and any other Federal law that such 
                        appropriate Federal banking agency has specific 
                        jurisdiction to enforce against the bank 
                        holding company or subsidiary.
                    ``(B) Use of reports to reduce examinations.--For 
                purposes of this paragraph, the appropriate Federal 
                banking agency for a bank holding company shall, to the 
                fullest extent possible, rely on--
                            ``(i) examination reports made by other 
                        Federal or State regulatory agencies relating 
                        to the bank holding company and any subsidiary 
                        of the bank holding company; and
                            ``(ii) the reports and other information 
                        required under paragraph (1).
                    ``(C) Coordination with other regulators.--The 
                appropriate Federal banking agency for a bank holding 
                company shall--
                            ``(i) provide reasonable notice to, and 
                        consult with, the appropriate Federal banking 
                        agency or State regulatory agency of a 
                        subsidiary that is a depository institution or 
                        a functionally regulated subsidiary before 
                        commencing an examination of the subsidiary 
                        under this section; and
                            ``(ii) to the fullest extent possible, 
                        avoid duplication of examination activities, 
                        reporting requirements, and requests for 
                        information.''.
    (c) Authority To Regulate Functionally Regulated Subsidiaries of 
Bank Holding Companies.--The Bank Holding Company Act of 1956 (12 
U.S.C. 1841 et seq.) is amended--
            (1) in section 5(c) (12 U.S.C. 1844(c)), by striking 
        paragraphs (3) and (4) and inserting the following:
            ``(3) [Reserved]
            ``(4) [Reserved]''; and
            (2) by striking section 10A (12 U.S.C. 1848a).
    (d) Acquisitions of Banks.--Section 3(c) of the Bank Holding 
Company Act of 1956 (12 U.S.C. 1842(c)) is amended by adding at the end 
the following:
            ``(7) Financial stability.--In every case, the appropriate 
        Federal banking agency of a bank holding company shall take 
        into consideration the extent to which a proposed acquisition, 
        merger, or consolidation would result in greater or more 
        concentrated risks to the stability of the United States 
        banking or financial system.''.
    (e) Acquisitions of Nonbanks.--
            (1) Notice procedures.--Section 4(j)(2)(A) of the Bank 
        Holding Company Act of 1956 (12 U.S.C. 1843(j)(2)(A)) is 
        amended by striking ``or unsound banking practices'' and 
        inserting ``unsound banking practices, or risk to the stability 
        of the United States banking or financial system''.
            (2) Activities that are financial in nature.--Section 
        4(k)(6)(B) of the Bank Holding Company Act of 1956 (12 U.S.C. 
        1843(k)(6)(B)) is amended to read as follows:
                    ``(B) Approval not required for certain financial 
                activities.--
                            ``(i) In general.--Except as provided in 
                        clause (ii), a financial holding company may 
                        commence any activity or acquire any company, 
                        pursuant to paragraph (4) or any regulation 
                        prescribed or order issued under paragraph (5), 
                        without prior approval of the appropriate 
                        Federal banking agency for the financial 
                        holding company.
                            ``(ii) Exception.--A financial holding 
                        company may not acquire a company, without the 
                        prior approval of the appropriate Federal 
                        banking agency for the financial holding 
                        company, in a transaction in which the total 
                        consolidated assets to be acquired by the 
                        financial holding company exceed 
                        $25,000,000,000.''.
    (f) Bank Merger Act Transactions.--Section 18(c)(5) of the Federal 
Deposit Insurance Act (12 U.S.C. 1828(c)(5)) is amended, in the matter 
immediately following subparagraph (B), by striking ``and the 
convenience and needs of the community to be served'' and inserting 
``the convenience and needs of the community to be served, and the risk 
to the stability of the United States banking or financial system''.
    (g) Reports by Savings and Loan Holding Companies.--Section 
10(b)(2) of the Home Owners' Loan Act (12 U.S.C. 1467a(b)(2) is 
amended--
            (1) by striking ``Each savings'' and inserting the 
        following:
                    ``(A) In general.--Each savings''; and
            (2) by adding at the end the following:
                    ``(B) Use of existing reports and other supervisory 
                information.--The appropriate Federal banking agency 
                for a savings and loan holding company shall, to the 
                fullest extent possible, use--
                            ``(i) reports and other supervisory 
                        information that the savings and loan holding 
                        company or any subsidiary thereof has been 
                        required to provide to other Federal or State 
                        regulatory agencies;
                            ``(ii) externally audited financial 
                        statements of the savings and loan holding 
                        company or subsidiary;
                            ``(iii) information that is otherwise 
                        available from Federal or State regulatory 
                        agencies; and
                            ``(iv) information that is otherwise 
                        required to be reported publicly.
                    ``(C) Availability.--Upon the request of the 
                appropriate Federal banking agency for a savings and 
                loan holding company, the savings and loan holding 
                company or a subsidiary of the savings and loan holding 
                company shall promptly provide to the appropriate 
                Federal banking agency any information described in 
                clauses (i) through (iii) of subparagraph (B).''.
    (h) Examination of Savings and Loan Holding Companies.--
            (1) Definitions.--Section 2 of the Home Owners' Loan Act 
        (12 U.S.C. 1462) is amended by adding at the end the following:
            ``(10) Appropriate federal banking agency.--The term 
        `appropriate Federal banking agency' has the same meaning as in 
        section 3(q) of the Federal Deposit Insurance Act (12 U.S.C. 
        1813(q)).
            ``(11) Functionally regulated subsidiary.--The term 
        `functionally regulated subsidiary' has the same meaning as in 
        section 5(c)(5) of the Bank Holding Company Act of 1956 (12 
        U.S.C. 1844(c)(5)).''.
            (2) Examination.--Section 10(b) of the Home Owners' Loan 
        Act (12 U.S.C. 1467a(b)) is amended by striking paragraph (4) 
        and inserting the following:
            ``(4) Examinations.--
                    ``(A) In general.--The appropriate Federal banking 
                agency for a savings and loan holding company may make 
                examinations of the savings and loan holding company 
                and each subsidiary of the savings and loan holding 
                company system, in order to--
                            ``(i) inform such appropriate Federal 
                        banking agency of--
                                    ``(I) the nature of the operations 
                                and financial condition of the savings 
                                and loan holding company and the 
                                subsidiary;
                                    ``(II) the financial, operational, 
                                and other risks within the savings and 
                                loan holding company that may pose a 
                                threat to--
                                            ``(aa) the safety and 
                                        soundness of the savings and 
                                        loan holding company or of any 
                                        depository institution 
                                        subsidiary of the savings and 
                                        loan holding company; or
                                            ``(bb) the stability of the 
                                        financial system of the United 
                                        States; and
                                    ``(III) the systems of the savings 
                                and loan holding company for monitoring 
                                and controlling the risks described in 
                                subclause (II); and
                            ``(ii) enforce the compliance of the 
                        savings and loan holding company and the 
                        subsidiary with this Act and any other Federal 
                        law that such appropriate Federal banking 
                        agency has specific jurisdiction to enforce 
                        against the savings and loan holding company or 
                        subsidiary.
                    ``(B) Use of reports to reduce examinations.--For 
                purposes of this subsection, the appropriate Federal 
                banking agency for a savings and loan holding company 
                shall, to the fullest extent possible, rely on--
                            ``(i) the examination reports made by other 
                        Federal or State regulatory agencies relating 
                        to the savings and loan holding company and any 
                        subsidiary; and
                            ``(ii) the reports and other information 
                        required under paragraph (2).
                    ``(C) Coordination with other regulators.--The 
                appropriate Federal banking agency for a savings and 
                loan holding company shall--
                            ``(i) provide reasonable notice to, and 
                        consult with, the appropriate Federal banking 
                        agency or State regulatory agency of a 
                        subsidiary that is a depository institution or 
                        a functionally regulated subsidiary before 
                        commencing an examination of the subsidiary 
                        under this section; and
                            ``(ii) to the fullest extent possible, 
                        avoid duplication of examination activities, 
                        reporting requirements, and requests for 
                        information.''.
    (i) Effective Date.--The amendments made by this section shall take 
effect on the transfer date.

SEC. 605. ASSURING CONSISTENT OVERSIGHT OF PERMISSIBLE ACTIVITIES OF 
              DEPOSITORY INSTITUTION SUBSIDIARIES OF HOLDING COMPANIES.

    Section 6 of the Bank Holding Company Act of 1956 (12 U.S.C. 1845) 
is amended to read as follows:

``SEC. 6. ASSURING CONSISTENT OVERSIGHT OF PERMISSIBLE ACTIVITIES OF 
              DEPOSITORY INSTITUTION SUBSIDIARIES OF HOLDING COMPANIES.

    ``(a) Definitions.--
            ``(1) Definitions.--In this section--
                    ``(A) the term `depository institution holding 
                company' has the same meaning as in section 3(w) of the 
                Federal Deposit Insurance Act (12 U.S.C. 1813(w));
                    ``(B) the term `functionally regulated subsidiary' 
                has the same meaning as in section 5(c)(5); and
                    ``(C) the term `lead Federal banking agency' 
                means--
                            ``(i) the Office of the Comptroller of the 
                        Currency, in the case of any depository 
                        institution holding company having--
                                    ``(I) a subsidiary that is an 
                                insured depository institution, if all 
                                such insured depository institutions 
                                are Federal depository institutions; or
                                    ``(II) a subsidiary that is a 
                                Federal depository institution and a 
                                subsidiary that is a State depository 
                                institution, if the total consolidated 
                                assets of all subsidiaries that are 
                                Federal depository institutions exceed 
                                the total consolidated assets of all 
                                subsidiaries that are State depository 
                                institutions; and
                            ``(ii) the Federal Deposit Insurance 
                        Corporation, in the case of any depository 
                        institution holding company having--
                                    ``(I) a subsidiary that is an 
                                insured depository institution, if all 
                                such insured depository institutions 
                                are State depository institutions; or
                                    ``(II) a subsidiary that is a 
                                Federal depository institution and a 
                                subsidiary that is a State depository 
                                institution, if the total consolidated 
                                assets of all subsidiaries that are 
                                State depository institutions exceed 
                                the total consolidated assets of all 
                                subsidiaries that are Federal 
                                depository institutions.
            ``(2) Determination of total consolidated assets.--For 
        purposes of paragraph (1)(A), the total consolidated assets of 
        a depository institution shall be determined in the same manner 
        that total consolidated assets of depository institutions are 
        determined for purposes of section 3(q) of the Federal Deposit 
        Insurance Act (12 U.S.C. 1813(q)).
    ``(b) Lead Agency Supervision.--
            ``(1) In general.--The lead Federal banking agency for each 
        depository institution holding company shall make examinations 
        of the activities of each nondepository institution subsidiary 
        (other than a functionally regulated subsidiary) of the 
        depository institution holding company that are permissible for 
        depository institution subsidiaries of the depository 
        institution holding company, to determine whether the 
        activities--
                    ``(A) present safety and soundness risks to any 
                depository institution subsidiary of the depository 
                institution holding company;
                    ``(B) are conducted in accordance with applicable 
                law; and
                    ``(C) are subject to appropriate systems for 
                monitoring and controlling the financial, operating, 
                and other risks of the activity and protecting the 
                depository institution subsidiaries of the holding 
                company.
            ``(2) Process for examination.--An examination under 
        paragraph (1) shall be carried out under the authority of the 
        lead Federal banking agency, as if the nondepository 
        institution subsidiary were an insured depository institution 
        for which the lead Federal banking agency is the appropriate 
        Federal banking agency.
    ``(c) Coordination.--For each depository institution holding 
company for which the Board of Governors is the appropriate Federal 
banking agency, the lead Federal banking agency of the depository 
institution holding company shall coordinate the supervision of the 
activities of subsidiaries described in subsection (b) with the Board 
of Governors, in a manner that--
            ``(1) avoids duplication;
            ``(2) shares information relevant to the supervision of the 
        depository institution holding company by each agency;
            ``(3) achieves the objectives of subsection (b); and
            ``(4) ensures that the depository institution holding 
        company and the subsidiaries of the depository institution 
        holding company are not subject to conflicting supervisory 
        demands by the 2 agencies.
    ``(d) Referrals for Enforcement.--
            ``(1) Recommendation of action by board of governors.--The 
        lead Federal banking agency for a depository institution 
        holding company, based on information obtained pursuant to the 
        responsibilities of the agency under subsection (b), may submit 
        to the Board of Governors, in writing, a recommendation that 
        the Board of Governors take enforcement action against a 
        nondepository institution subsidiary (other than a functionally 
        regulated subsidiary) of the depository institution holding 
        company, together with an explanation of the concerns giving 
        rise to the recommendation.
            ``(2) Back-up authority of the lead federal banking 
        agency.--If, within the 60-day period beginning on the date on 
        which the Board of Governors receives a recommendation under 
        paragraph (1), the Board of Governors does not take enforcement 
        action against a nondepository institution subsidiary or 
        provide a plan for enforcement action that is acceptable to the 
        lead Federal banking agency, the lead Federal banking agency 
        (upon the authorization of the Comptroller, or the Federal 
        Deposit Insurance Corporation, upon a vote of its members, as 
        applicable) may take the recommended enforcement action, in the 
        same manner as if the subsidiary were an insured depository 
        institution for which the lead Federal banking agency is the 
        appropriate Federal banking agency.''.

SEC. 606. REQUIREMENTS FOR FINANCIAL HOLDING COMPANIES TO REMAIN WELL 
              CAPITALIZED AND WELL MANAGED.

    (a) Amendment.--Section 4(l)(1) of the Bank Holding Company Act of 
1956 (12 U.S.C. 1843(l)(1)) is amended--
            (1) in subparagraph (B), by striking ``and'' at the end;
            (2) by redesignating subparagraph (C) as subparagraph (D);
            (3) by inserting after subparagraph (B) the following:
                    ``(C) the bank holding company is well capitalized 
                and well managed; and''; and
            (4) in subparagraph (D)(ii), as so redesignated, by 
        striking ``subparagraphs (A) and (B)'' and inserting 
        ``subparagraphs (A), (B), and (C)''.
    (b) Effective Date.--The amendments made by this section shall take 
effect on the transfer date.

SEC. 607. STANDARDS FOR INTERSTATE ACQUISITIONS.

    (a) Acquisition of Banks.--Section 3(d)(1)(A) of the Bank Holding 
Company Act of 1956 (12 U.S.C. 1842(d)(1)(A)) is amended by striking 
``adequately capitalized and adequately managed'' and inserting ``well 
capitalized and well managed''.
    (b) Interstate Bank Mergers.--Section 44(b)(4)(B) of the Federal 
Deposit Insurance Act (12 U.S.C. 1831u(b)(4)(B)) is amended by striking 
``will continue to be adequately capitalized and adequately managed'' 
and inserting ``will be well capitalized and well managed''.
    (c) Effective Date.--The amendments made by this section shall take 
effect on the transfer date.

SEC. 608. ENHANCING EXISTING RESTRICTIONS ON BANK TRANSACTIONS WITH 
              AFFILIATES.

    (a) Affiliate Transactions.--Section 23A of the Federal Reserve Act 
(12 U.S.C. 371c) is amended--
            (1) in subsection (b)--
                    (A) in paragraph (1), by striking subparagraph (D) 
                and inserting the following:
                    ``(D) any investment fund with respect to which a 
                member bank or affiliate thereof is an investment 
                adviser; and''; and
                    (B) in paragraph (7)--
                            (i) in subparagraph (A), by inserting 
                        before the semicolon at the end the following: 
                        ``, including a purchase of assets subject to 
                        an agreement to repurchase'';
                            (ii) in subparagraph (C), by striking ``, 
                        including assets subject to an agreement to 
                        repurchase,'';
                            (iii) in subparagraph (D)--
                                    (I) by inserting ``or other debt 
                                obligations'' after ``acceptance of 
                                securities''; and
                                    (II) by striking ``or'' at the end; 
                                and
                            (iv) by adding at the end the following:
                    ``(F) a transaction with an affiliate that involves 
                the borrowing or lending of securities, to the extent 
                that the transaction causes a member bank or a 
                subsidiary to have credit exposure to the affiliate; or
                    ``(G) a derivative transaction, as defined in 
                paragraph (3) of section 5200(b) of the Revised 
                Statutes of the United States (12 U.S.C. 84(b)), with 
                an affiliate, to the extent that the transaction causes 
                a member bank or a subsidiary to have credit exposure 
                to the affiliate;'';
            (2) in subsection (c)--
                    (A) in paragraph (1)--
                            (i) in the matter preceding subparagraph 
                        (A), by striking ``subsidiary'' and all that 
                        follows through ``time of the transaction'' and 
                        inserting ``subsidiary, and any credit exposure 
                        of a member bank or a subsidiary to an 
                        affiliate resulting from a securities borrowing 
                        or lending transaction, or a derivative 
                        transaction, shall be secured at all times''; 
                        and
                            (ii) in each of subparagraphs (A) through 
                        (D), by striking ``or letter of credit'' and 
                        inserting ``letter of credit, or credit 
                        exposure'';
                    (B) by striking paragraph (2);
                    (C) by redesignating paragraphs (3) through (5) as 
                paragraphs (2) through (4), respectively;
                    (D) in paragraph (2), as so redesignated, by 
                inserting before the period at the end ``, or credit 
                exposure to an affiliate resulting from a securities 
                borrowing or lending transaction, or derivative 
                transaction''; and
                    (E) in paragraph (3), as so redesignated--
                            (i) by inserting ``or other debt 
                        obligations'' after ``securities''; and
                            (ii) by striking ``or guarantee'' and all 
                        that follows through ``behalf of,'' and 
                        inserting ``guarantee, acceptance, or letter of 
                        credit issued on behalf of, or credit exposure 
                        from a securities borrowing or lending 
                        transaction, or derivative transaction to,'';
            (3) in subsection (d)(4), in the matter preceding 
        subparagraph (A), by striking ``or issuing'' and all that 
        follows through ``behalf of,'' and inserting ``issuing a 
        guarantee, acceptance, or letter of credit on behalf of, or 
        having credit exposure resulting from a securities borrowing or 
        lending transaction, or derivative transaction to,''; and
            (4) in subsection (f)--
                    (A) in paragraph (2)--
                            (i) by striking ``or order'';
                            (ii) by striking ``if it finds'' and all 
                        that follows through the end of the paragraph 
                        and inserting the following: ``if--
                            ``(i) the Board finds the exemption to be 
                        in the public interest and consistent with the 
                        purposes of this section, and notifies the 
                        Federal Deposit Insurance Corporation of such 
                        finding; and
                            ``(ii) before the end of the 60-day period 
                        beginning on the date on which the Federal 
                        Deposit Insurance Corporation receives notice 
                        of the finding under clause (i), the Federal 
                        Deposit Insurance Corporation does not object, 
                        in writing, to the finding, based on a 
                        determination that the exemption presents an 
                        unacceptable risk to the Deposit Insurance 
                        Fund.'';
                            (iii) by striking the Board and inserting 
                        the following:
                    ``(A) In general.--The Board''; and
                            (iv) by adding at the end the following:
                    ``(B) Additional exemptions.--
                            ``(i) National banks.--The Comptroller of 
                        the Currency may, by order, exempt a 
                        transaction of a national bank from the 
                        requirements of this section if--
                                    ``(I) the Board and the Office of 
                                the Comptroller of the Currency jointly 
                                find the exemption to be in the public 
                                interest and consistent with the 
                                purposes of this section and notify the 
                                Federal Deposit Insurance Corporation 
                                of such finding; and
                                    ``(II) before the end of the 60-day 
                                period beginning on the date on which 
                                the Federal Deposit Insurance 
                                Corporation receives notice of the 
                                finding under subclause (I), the 
                                Federal Deposit Insurance Corporation 
                                does not object, in writing, to the 
                                finding, based on a determination that 
                                the exemption presents an unacceptable 
                                risk to the Deposit Insurance Fund.
                            ``(ii) State banks.--The Federal Deposit 
                        Insurance Corporation may, by order, exempt a 
                        transaction of a State nonmember bank, and the 
                        Board may, by order, exempt a transaction of a 
                        State member bank, from the requirements of 
                        this section if--
                                    ``(I) the Board and the Federal 
                                Deposit Insurance Corporation jointly 
                                find that the exemption is in the 
                                public interest and consistent with the 
                                purposes of this section; and
                                    ``(II) the Federal Deposit 
                                Insurance Corporation finds that the 
                                exemption does not present an 
                                unacceptable risk to the Deposit 
                                Insurance Fund.''; and
                    (B) by adding at the end the following:
            ``(4) Amounts of covered transactions.--The Board may issue 
        such regulations or interpretations as the Board determines are 
        necessary or appropriate with respect to the manner in which a 
        netting agreement may be taken into account in determining the 
        amount of a covered transaction between a member bank or a 
        subsidiary and an affiliate, including the extent to which 
        netting agreements between a member bank or a subsidiary and an 
        affiliate may be taken into account in determining whether a 
        covered transaction is fully secured for purposes of subsection 
        (d)(4). An interpretation under this paragraph with respect to 
        a specific member bank, subsidiary, or affiliate shall be 
        issued jointly with the appropriate Federal banking agency for 
        such member bank, subsidiary, or affiliate.''.
    (b) Transactions With Affiliates.--Section 23B(e) of the Federal 
Reserve Act (12 U.S.C. 371c-1(e)) is amended--
            (1) by striking the undesignated matter following 
        subparagraph (B);
            (2) by redesignating subparagraphs (A) and (B) as clauses 
        (i) and (ii), respectively, and adjusting the clause margins 
        accordingly;
            (3) by redesignating paragraphs (1) and (2) as 
        subparagraphs (A) and (B), respectively, and adjusting the 
        subparagraph margins accordingly;
            (4) by striking ``The Board'' and inserting the following:
            ``(1) In general.--The Board'';
            (5) in paragraph (1)(B), as so redesignated--
                    (A) in the matter preceding clause (i), by 
                inserting before ``regulations'' the following: 
                ``subject to paragraph (2), if the Board finds that an 
                exemption or exclusion is in the public interest and is 
                consistent with the purposes of this section, and 
                notifies the Federal Deposit Insurance Corporation of 
                such finding,''; and
                    (B) in clause (ii), by striking the comma at the 
                end and inserting a period; and
            (6) by adding at the end the following:
            ``(2) Exception.--The Board may grant an exemption or 
        exclusion under this subsection only if, during the 60-day 
        period beginning on the date of receipt of notice of the 
        finding from the Board under paragraph (1)(B), the Federal 
        Deposit Insurance Corporation does not object, in writing, to 
        such exemption or exclusion, based on a determination that the 
        exemption presents an unacceptable risk to the Deposit 
        Insurance Fund.''.
    (c) Home Owners' Loan Act.--Section 11 of the Home Owners' Loan Act 
(12 U.S.C. 1468) is amended by adding at the end the following:
    ``(d) Exemptions.--
            ``(1) Federal savings associations.--The Comptroller of the 
        Currency may, by order, exempt a transaction of a Federal 
        savings association from the requirements of this section if--
                    ``(A) the Board and the Office of the Comptroller 
                of the Currency jointly find the exemption to be in the 
                public interest and consistent with the purposes of 
                this section and notify the Federal Deposit Insurance 
                Corporation of such finding; and
                    ``(B) before the end of the 60-day period beginning 
                on the date on which the Federal Deposit Insurance 
                Corporation receives notice of the finding under 
                subparagraph (A), the Federal Deposit Insurance 
                Corporation does not object, in writing, to the 
                finding, based on a determination that the exemption 
                presents an unacceptable risk to the Deposit Insurance 
                Fund.
            ``(2) State savings association.--The Federal Deposit 
        Insurance Corporation may, by order, exempt a transaction of a 
        State savings association from the requirements of this section 
        if the Board and the Federal Deposit Insurance Corporation 
        jointly find that--
                    ``(A) the exemption is in the public interest and 
                consistent with the purposes of this section; and
                    ``(B) the exemption does not present an 
                unacceptable risk to the Deposit Insurance Fund.''.
    (d) Effective Date.--The amendments made by this section shall take 
effect 1 year after the transfer date.

SEC. 609. ELIMINATING EXCEPTIONS FOR TRANSACTIONS WITH FINANCIAL 
              SUBSIDIARIES.

    (a) Amendment.--Section 23A(e) of the Federal Reserve Act (12 
U.S.C. 371c(e)) is amended--
            (1) by striking paragraph (3); and
            (2) by redesignating paragraph (4) as paragraph (3).
    (b) Prospective Application of Amendment.--The amendments made by 
this section shall apply with respect to any covered transaction 
between a bank and a subsidiary of the bank, as those terms are defined 
in section 23A of the Federal Reserve Act (12 U.S.C. 371c), that is 
entered into on or after the date of enactment of this Act.
    (c) Effective Date.--The amendments made by this section shall take 
effect 1 year after the transfer date.

SEC. 610. LENDING LIMITS APPLICABLE TO CREDIT EXPOSURE ON DERIVATIVE 
              TRANSACTIONS, REPURCHASE AGREEMENTS, REVERSE REPURCHASE 
              AGREEMENTS, AND SECURITIES LENDING AND BORROWING 
              TRANSACTIONS.

    (a) National Banks.--Section 5200(b) of the Revised Statutes of the 
United States (12 U.S.C. 84(b)) is amended--
            (1) in paragraph (1), by striking ``shall include'' and all 
        that follows through the end of the paragraph and inserting the 
        following: ``shall include--
                    ``(A) all direct or indirect advances of funds to a 
                person made on the basis of any obligation of that 
                person to repay the funds or repayable from specific 
                property pledged by or on behalf of the person;
                    ``(B) to the extent specified by the Comptroller of 
                the Currency, any liability of a national banking 
                association to advance funds to or on behalf of a 
                person pursuant to a contractual commitment; and
                    ``(C) any credit exposure to a person arising from 
                a derivative transaction, repurchase agreement, reverse 
                repurchase agreement, securities lending transaction, 
                or securities borrowing transaction between the 
                national banking association and the person;'';
            (2) in paragraph (2), by striking the period at the end and 
        inserting ``; and''; and
            (3) by adding at the end the following:
            ``(3) the term `derivative transaction' includes any 
        transaction that is a contract, agreement, swap, warrant, note, 
        or option that is based, in whole or in part, on the value of, 
        any interest in, or any quantitative measure or the occurrence 
        of any event relating to, one or more commodities, securities, 
        currencies, interest or other rates, indices, or other 
        assets.''.
    (b) Savings Associations.--Section 5(u)(3) of the Home Owners' Loan 
Act (12 U.S.C. 1464(u)(3)) is amended by striking ``Director'' each 
place that term appears and inserting ``Comptroller of the Currency''.
    (c) Effective Date.--The amendments made by this section shall take 
effect 1 year after the transfer date.

SEC. 611. APPLICATION OF NATIONAL BANK LENDING LIMITS TO INSURED STATE 
              BANKS.

    (a) Amendment.--Section 18 of the Federal Deposit Insurance Act (12 
U.S.C. 1828) is amended by adding at the end the following:
    ``(y) Application of Lending Limits to Insured State Banks.--
Section 5200 of the Revised Statutes of the United States (12 U.S.C. 
84) shall apply to each insured State bank, in the same manner and to 
the same extent as if the insured State bank were a national banking 
association.''.
    (b) Effective Date.--The amendment made by this section shall take 
effect 1 year after the transfer date.

SEC. 612. RESTRICTION ON CONVERSIONS OF TROUBLED BANKS.

    (a) Conversion of a National Banking Association to a State Bank.--
The Act entitled ``An Act to provide for the conversion of national 
banking associations into and their merger or consolidation with State 
banks, and for other purposes.'' (12 U.S.C. 214 et seq.) is amended by 
adding at the end the following:

``SEC. 10. PROHIBITION ON CONVERSION.

    ``A national banking association may not convert to a State bank or 
State savings association during any period in which the national 
banking association is subject to a cease and desist order (or other 
formal enforcement order) issued by, or a memorandum of understanding 
entered into with, the Comptroller of the Currency with respect to a 
significant supervisory matter.''.
    (b) Conversion of a State Bank to a National Bank.--Section 5154 of 
the Revised Statutes of the United States (12 U.S.C. 35) is amended by 
adding at the end the following: ``The Comptroller of the Currency may 
not approve the conversion of a State bank or State savings association 
to a national banking association during any period in which the State 
bank or State savings association is subject to a cease and desist 
order (or other formal enforcement order) issued by, or a memorandum of 
understanding entered into with, a State bank supervisor or the 
appropriate Federal banking agency with respect to a significant 
supervisory matter.''.
    (c) Conversion of a Federal Savings Association to a National or 
State Bank or State Savings Association.--Section 5(i) of the Home 
Owners' Loan Act (12 U.S.C. 1464(i)) is amended by adding at the end 
the following:
            ``(6) Limitation on certain conversions by federal savings 
        associations.--A Federal savings association may not convert to 
        a national bank or State bank or State savings association 
        during any period in which the Federal savings association is 
        subject to a cease and desist order (or other formal 
        enforcement order) issued by, or a memorandum of understanding 
        entered into with, the Office of Thrift Supervision or the 
        Comptroller of the Currency with respect to a significant 
        supervisory matter.''.

SEC. 613. DE NOVO BRANCHING INTO STATES.

    (a) National Banks.--Section 5155(g)(1)(A) of the Revised Statutes 
of the United States (12 U.S.C. 36(g)(1)(A)) is amended to read as 
follows:
                    ``(A) the law of the State in which the branch is 
                located, or is to be located, would permit 
                establishment of the branch, if the national bank were 
                a State bank chartered by such State; and''.
    (b) State Insured Banks.--Section 18(d)(4)(A)(i) of the Federal 
Deposit Insurance Act (12 U.S.C. 1828(d)(4)(A)(i)) is amended to read 
as follows:
                            ``(i) the law of the State in which the 
                        branch is located, or is to be located, would 
                        permit establishment of the branch, if the bank 
                        were a State bank chartered by such State; 
                        and''.

SEC. 614. LENDING LIMITS TO INSIDERS.

    (a) Extensions of Credit.--Section 22(h)(9)(D)(i) of the Federal 
Reserve Act (12 U.S.C. 375b(9)(D)(i)) is amended--
            (1) by striking the period at the end and inserting ``; 
        or'';
            (2) by striking ``a person'' and inserting ``the person'';
            (3) by striking ``extends credit by making'' and inserting 
        the following: ``extends credit to a person by--
                                    ``(I) making''; and
            (4) by adding at the end the following:
                                    ``(II) having credit exposure to 
                                the person arising from a derivative 
                                transaction (as defined in section 
                                5200(b) of the Revised Statutes of the 
                                United States (12 U.S.C. 84(b))), 
                                repurchase agreement, reverse 
                                repurchase agreement, securities 
                                lending transaction, or securities 
                                borrowing transaction between the 
                                member bank and the person.''.
    (b) Effective Date.--The amendments made by this section shall take 
effect 1 year after the transfer date.

SEC. 615. LIMITATIONS ON PURCHASES OF ASSETS FROM INSIDERS.

    (a) Amendment to the Federal Deposit Insurance Act.--Section 18 of 
the Federal Deposit Insurance Act (12 U.S.C. 1828) is amended by adding 
at the end the following:
    ``(z) General Prohibition on Sale of Assets.--
            ``(1) In general.--An insured depository institution may 
        not purchase an asset from, or sell an asset to, an executive 
        officer, director, or principal shareholder of the insured 
        depository institution, or any related interest of such person 
        (as such terms are defined in section 22(h) of Federal Reserve 
        Act), unless--
                    ``(A) the transaction is on market terms; and
                    ``(B) if the transaction represents more than 10 
                percent of the capital stock and surplus of the insured 
                depository institution, the transaction has been 
                approved in advance by a majority of the members of the 
                board of directors of the insured depository 
                institution who do not have an interest in the 
                transaction.
            ``(2) Rulemaking.--The Board of Governors of the Federal 
        Reserve System may issue such rules as may be necessary to 
        define terms and to carry out the purposes this subsection. 
        Before proposing or adopting a rule under this paragraph, the 
        Board of Governors of the Federal Reserve System shall consult 
        with the Comptroller of the Currency and the Corporation as to 
        the terms of the rule.''.
    (b) Amendments to the Federal Reserve Act.--Section 22(d) of the 
Federal Reserve Act (12 U.S.C. 375) is amended to read as follows:
    ``(d) [Reserved]''.
    (c) Effective Date.--The amendments made by this section shall take 
effect on the transfer date.

SEC. 616. REGULATIONS REGARDING CAPITAL LEVELS OF HOLDING COMPANIES.

    (a) Capital Levels of Bank Holding Companies.--Section 5(b) of the 
Bank Holding Company Act of 1956 (12 U.S.C. 1844(b)) is amended by 
inserting after ``regulations'' the following: ``(including regulations 
relating to the capital requirements of bank holding companies)''.
    (b) Capital Levels of Savings and Loan Holding Companies.--Section 
10(g)(1) of the Home Owners' Loan Act (12 U.S.C. 1467a(g)(1)) is 
amended by inserting after ``orders'' the following: ``(including 
regulations relating to capital requirements for savings and loan 
holding companies)''.
    (c) Source of Strength.--The Federal Deposit Insurance Act (12 
U.S.C. 1811 et seq.) is amended by inserting after section 38 (12 
U.S.C. 1831o) the following:

``SEC. 38A. SOURCE OF STRENGTH.

    ``(a) Holding Companies.--The appropriate Federal banking agency 
for a bank holding company or savings and loan holding company shall 
require the bank holding company or savings and loan holding company to 
serve as a source of financial strength for any subsidiary of the bank 
holding company or savings and loan holding company that is a 
depository institution.
    ``(b) Other Companies.--If an insured depository institution is not 
the subsidiary of a bank holding company or savings and loan holding 
company, the appropriate Federal banking agency for the insured 
depository institution shall require any company that directly or 
indirectly controls the insured depository institution to serve as a 
source of financial strength for such institution.
    ``(c) Reports.--The appropriate Federal banking agency for an 
insured depository institution described in subsection (b) may, from 
time to time, require the company, or a company that directly or 
indirectly controls the insured depository institution to submit a 
report, under oath, for the purposes of--
            ``(1) assessing the ability of such company to comply with 
        the requirement under subsection (b); and
            ``(2) enforcing the compliance of such company with the 
        requirement under subsection (b).
    ``(d) Rules.--Not later than 1 year after the transfer date, as 
defined in section 311 of the Enhancing Financial Institution Safety 
and Soundness Act of 2010, the appropriate Federal banking agencies 
shall jointly issue final rules to carry out this section.
    ``(e) Definition.--In this section, the term `source of financial 
strength' means the ability of a company that directly or indirectly 
owns or controls an insured depository institution to provide financial 
assistance to such insured depository institution in the event of the 
financial distress of the insured depository institution.''.
    (d) Effective Date.--The amendments made by this section shall take 
effect on the transfer date.

SEC. 617. ELIMINATION OF ELECTIVE INVESTMENT BANK HOLDING COMPANY 
              FRAMEWORK.

    (a) Amendment.--Section 17 of the Securities Exchange Act of 1934 
(15 U.S.C. 78q) is amended--
            (1) by striking subsection (i); and
            (2) by redesignating subsections (j) and (k) as subsections 
        (i) and (j), respectively.
    (b) Effective Date.--The amendments made by this section shall take 
effect on the transfer date.

SEC. 618. SECURITIES HOLDING COMPANIES.

    (a) Definitions.--In this section--
            (1) the term ``associated person of a securities holding 
        company'' means a person directly or indirectly controlling, 
        controlled by, or under common control with, a securities 
        holding company;
            (2) the term ``foreign bank'' has the same meaning as in 
        section 1(b)(7) of the International Banking Act of 1978 (12 
        U.S.C. 3101(b)(7));
            (3) the term ``insured bank'' has the same meaning as in 
        section 3 of the Federal Deposit Insurance Act (12 U.S.C. 
        1813);
            (4) the term ``securities holding company''--
                    (A) means--
                            (i) a person (other than a natural person) 
                        that owns or controls 1 or more brokers or 
                        dealers registered with the Commission; and
                            (ii) the associated persons of a person 
                        described in clause (i); and
                    (B) does not include a person that is--
                            (i) a nonbank financial company supervised 
                        by the Board under title I;
                            (ii) an affiliate of an insured bank (other 
                        than an institution described in subparagraphs 
                        (D), (F), or (H) of section 2(c)(2) of the Bank 
                        Holding Company Act of 1956 (12 U.S.C. 
                        1841(c)(2)) or an affiliate of a savings 
                        association;
                            (iii) a foreign bank, foreign company, or 
                        company that is described in section 8(a) of 
                        the International Banking Act of 1978 (12 
                        U.S.C. 3106(a));
                            (iv) a foreign bank that controls, directly 
                        or indirectly, a corporation chartered under 
                        section 25A of the Federal Reserve Act (12 
                        U.S.C. 611 et seq.); or
                            (v) subject to comprehensive consolidated 
                        supervision by a foreign regulator;
            (5) the term ``supervised securities holding company'' 
        means a securities holding company that is supervised by the 
        Board of Governors under this section; and
            (6) the terms ``affiliate'', ``bank'', ``bank holding 
        company'', ``company'', ``control'', ``savings association'', 
        and ``subsidiary'' have the same meanings as in section 2 of 
        the Bank Holding Company Act of 1956.
    (b) Supervision of a Securities Holding Company Not Having a Bank 
or Savings Association Affiliate.--
            (1) In general.--A securities holding company that is 
        required by a foreign regulator or provision of foreign law to 
        be subject to comprehensive consolidated supervision may 
        register with the Board of Governors under paragraph (2) to 
        become a supervised securities holding company. Any securities 
        holding company filing such a registration shall be supervised 
        in accordance with this section, and shall comply with the 
        rules and orders prescribed by the Board of Governors 
        applicable to supervised securities holding companies.
            (2) Registration as a supervised securities holding 
        company.--
                    (A) Registration.--A securities holding company 
                that elects to be subject to comprehensive consolidated 
                supervision shall register by filing with the Board of 
                Governors such information and documents as the Board 
                of Governors, by regulation, may prescribe as necessary 
                or appropriate in furtherance of the purposes of this 
                section.
                    (B) Effective date.--A securities holding company 
                that registers under subparagraph (A) shall be deemed 
                to be a supervised securities holding company, 
                effective on the date that is 45 days after the date of 
                receipt of the registration information and documents 
                under subparagraph (A) by the Board of Governors, or 
                within such shorter period as the Board of Governors, 
                by rule or order, may determine.
    (c) Supervision of Securities Holding Companies.--
            (1) Recordkeeping and reporting.--
                    (A) Recordkeeping and reporting required.--Each 
                supervised securities holding company and each 
                affiliate of a supervised securities holding company 
                shall make and keep for periods determined by the Board 
                of Governors such records, furnish copies of such 
                records, and make such reports, as the Board of 
                Governors determines to be necessary or appropriate to 
                carry out this section, to prevent evasions thereof, 
                and to monitor compliance by the supervised securities 
                holding company or affiliate with applicable provisions 
                of law.
                    (B) Form and contents.--
                            (i) In general.--Any record or report 
                        required to be made, furnished, or kept under 
                        this paragraph shall--
                                    (I) be prepared in such form and 
                                according to such specifications 
                                (including certification by a 
                                registered public accounting firm), as 
                                the Board of Governors may require; and
                                    (II) be provided promptly to the 
                                Board of Governors at any time, upon 
                                request by the Board of Governors.
                            (ii) Contents.--Records and reports 
                        required to be made, furnished, or kept under 
                        this paragraph may include--
                                    (I) a balance sheet or income 
                                statement of the supervised securities 
                                holding company or an affiliate of a 
                                supervised securities holding company;
                                    (II) an assessment of the 
                                consolidated capital and liquidity of 
                                the supervised securities holding 
                                company;
                                    (III) a report by an independent 
                                auditor attesting to the compliance of 
                                the supervised securities holding 
                                company with the internal risk 
                                management and internal control 
                                objectives of the supervised securities 
                                holding company; and
                                    (IV) a report concerning the extent 
                                to which the supervised securities 
                                holding company or affiliate has 
                                complied with the provisions of this 
                                section and any regulations prescribed 
                                and orders issued under this section.
            (2) Use of existing reports.--
                    (A) In general.--The Board of Governors shall, to 
                the fullest extent possible, accept reports in 
                fulfillment of the requirements of this paragraph that 
                a supervised securities holding company or an affiliate 
                of a supervised securities holding company has been 
                required to provide to another regulatory agency or a 
                self-regulatory organization.
                    (B) Availability.--A supervised securities holding 
                company or an affiliate of a supervised securities 
                holding company shall promptly provide to the Board of 
                Governors, at the request of the Board of Governors, 
                any report described in subparagraph (A), as permitted 
                by law.
            (3) Examination authority.--
                    (A) Focus of examination authority.--The Board of 
                Governors may make examinations of any supervised 
                securities holding company and any affiliate of a 
                supervised securities holding company to carry out this 
                subsection, to prevent evasions thereof, and to monitor 
                compliance by the supervised securities holding company 
                or affiliate with applicable provisions of law.
                    (B) Deference to other examinations.--For purposes 
                of this subparagraph, the Board of Governors shall, to 
                the fullest extent possible, use the reports of 
                examination made by other appropriate Federal or State 
                regulatory authorities with respect to any functionally 
                regulated subsidiary or any institution described in 
                subparagraph (D), (F), or (H) of section 2(c)(2) of the 
                Bank Holding Company Act of 1956 (12 U.S.C. 
                1841(c)(2)).
    (d) Capital and Risk Management.--
            (1) In general.--The Board of Governors shall, by 
        regulation or order, prescribe capital adequacy and other risk 
        management standards for supervised securities holding 
        companies that are appropriate to protect the safety and 
        soundness of the supervised securities holding companies and 
        address the risks posed to financial stability by supervised 
        securities holding companies.
            (2) Differentiation.--In imposing standards under this 
        subsection, the Board of Governors may differentiate among 
        supervised securities holding companies on an individual basis, 
        or by category, taking into consideration the requirements 
        under paragraph (3).
            (3) Content.--Any standards imposed on a supervised 
        securities holding company under this subsection shall take 
        into account--
                    (A) the differences among types of business 
                activities carried out by the supervised securities 
                holding company;
                    (B) the amount and nature of the financial assets 
                of the supervised securities holding company;
                    (C) the amount and nature of the liabilities of the 
                supervised securities holding company, including the 
                degree of reliance on short-term funding;
                    (D) the extent and nature of the off-balance sheet 
                exposures of the supervised securities holding company;
                    (E) the extent and nature of the transactions and 
                relationships of the supervised securities holding 
                company with other financial companies;
                    (F) the importance of the supervised securities 
                holding company as a source of credit for households, 
                businesses, and State and local governments, and as a 
                source of liquidity for the financial system; and
                    (G) the nature, scope, and mix of the activities of 
                the supervised securities holding company.
            (4) Notice.--A capital requirement imposed under this 
        subsection may not take effect earlier than 180 days after the 
        date on which a supervised securities holding company is 
        provided notice of the capital requirement.
    (e) Exception for Banks.--No bank shall be subject to any of the 
requirements set forth in subsections (c) and (d).
    (f) Other Provisions of Law Applicable to Supervised Securities 
Holding Companies.--
            (1) Federal deposit insurance act.--Subsections (b), (c) 
        through (s), and (u) of section 8 of the Federal Deposit 
        Insurance Act (12 U.S.C. 1818) shall apply to any supervised 
        securities holding company, and to any subsidiary (other than a 
        bank or an institution described in subparagraph (D), (F), or 
        (H) of section 2(c)(2) of the Bank Holding Company Act of 1956 
        (12 U.S.C. 1841(c)(2))) of a supervised securities holding 
        company, in the same manner as such subsections apply to a bank 
        holding company for which the Board of Governors is the 
        appropriate Federal banking agency. For purposes of applying 
        such subsections to a supervised securities holding company or 
        a subsidiary (other than a bank or an institution described in 
        subparagraph (D), (F), or (H) of section 2(c)(2) of the Bank 
        Holding Company Act of 1956 (12 U.S.C. 1841(c)(2))) of a 
        supervised securities holding company, the Board of Governors 
        shall be deemed the appropriate Federal banking agency for the 
        supervised securities holding company or subsidiary.
            (2) Bank holding company act of 1956.--Except as the Board 
        of Governors may otherwise provide by regulation or order, a 
        supervised securities holding company shall be subject to the 
        provisions of the Bank Holding Company Act of 1956 (12 U.S.C. 
        1841 et seq.) in the same manner and to the same extent a bank 
        holding company is subject to such provisions, except that a 
        supervised securities holding company may not, by reason of 
        this paragraph, be deemed to be a bank holding company for 
        purposes of section 4 of the Bank Holding Company Act of 1956 
        (12 U.S.C. 1843).

SEC. 619. RESTRICTIONS ON CAPITAL MARKET ACTIVITY BY BANKS AND BANK 
              HOLDING COMPANIES.

    (a) Definitions.--In this section--
            (1) the terms ``hedge fund'' and ``private equity fund'' 
        mean a company or other entity that is exempt from registration 
        as an investment company pursuant to section 3(c)(1) or 3(c)(7) 
        of the Investment Company Act of 1940 (15 U.S.C. 80a-3(c)(1) or 
        80a-3(c)(7)), or a similar fund, as jointly determined by the 
        appropriate Federal banking agencies;
            (2) the term ``proprietary trading''--
                    (A) means purchasing or selling, or otherwise 
                acquiring or disposing of, stocks, bonds, options, 
                commodities, derivatives, or other financial 
                instruments by an insured depository institution, a 
                company that controls, directly or indirectly, an 
                insured depository institution or is treated as a bank 
                holding company for purposes of the Bank Holding 
                Company Act of 1956 (12 U.S.C. 1841 et seq.), and any 
                subsidiary of such institution or company, for the 
                trading book (or such other portfolio as the Federal 
                banking agencies may determine) of such institution, 
                company, or subsidiary; and
                    (B) subject to such restrictions as the Federal 
                banking agencies may determine, does not include 
                purchasing or selling, or otherwise acquiring or 
                disposing of, stocks, bonds, options, commodities, 
                derivatives, or other financial instruments on behalf 
                of a customer, as part of market making activities, or 
                otherwise in connection with or in facilitation of 
                customer relationships, including risk-mitigating 
                hedging activities related to such a purchase, sale, 
                acquisition, or disposal; and
            (3) the term ``sponsoring'', when used with respect to a 
        hedge fund or private equity fund, means--
                    (A) serving as a general partner, managing member, 
                or trustee of the fund;
                    (B) in any manner selecting or controlling (or 
                having employees, officers, directors, or agents who 
                constitute) a majority of the directors, trustees, or 
                management of the fund; or
                    (C) sharing with the fund, for corporate, 
                marketing, promotional, or other purposes, the same 
                name or a variation of the same name.
    (b) Prohibition on Proprietary Trading.--
            (1) In general.--Subject to the recommendations and 
        modifications of the Council under subsection (g), and except 
        as provided in paragraph (2) or (3), the appropriate Federal 
        banking agencies shall, through a rulemaking under subsection 
        (g), jointly prohibit proprietary trading by an insured 
        depository institution, a company that controls, directly or 
        indirectly, an insured depository institution or is treated as 
        a bank holding company for purposes of the Bank Holding Company 
        Act of 1956 (12 U.S.C. 1841 et seq.), and any subsidiary of 
        such institution or company.
            (2) Excepted obligations.--
                    (A) In general.--The prohibition under this 
                subsection shall not apply with respect to an 
                investment that is otherwise authorized by Federal law 
                in--
                            (i) obligations of the United States or any 
                        agency of the United States, including 
                        obligations fully guaranteed as to principal 
                        and interest by the United States or an agency 
                        of the United States;
                            (ii) obligations, participations, or other 
                        instruments of, or issued by, the Government 
                        National Mortgage Association, the Federal 
                        National Mortgage Association, or the Federal 
                        Home Loan Mortgage Corporation, including 
                        obligations fully guaranteed as to principal 
                        and interest by such entities; and
                            (iii) obligations of any State or any 
                        political subdivision of a State.
                    (B) Conditions.--The appropriate Federal banking 
                agencies may impose conditions on the conduct of 
                investments described in subparagraph (A).
                    (C) Rule of construction.--Nothing in subparagraph 
                (A) may be construed to grant any authority to any 
                person that is not otherwise provided in Federal law.
            (3) Foreign activities.--An investment or activity 
        conducted by a company pursuant to paragraph (9) or (13) of 
        section 4(c) of the Bank Holding Company Act of 1956 (12 U.S.C. 
        1843(c)) solely outside of the United States shall not be 
        subject to the prohibition under paragraph (1), provided that 
        the company is not directly or indirectly controlled by a 
        company that is organized under the laws of the United States 
        or of a State.
    (c) Prohibition on Sponsoring and Investing in Hedge Funds and 
Private Equity Funds.--
            (1) In general.--Except as provided in paragraph (2), and 
        subject to the recommendations and modifications of the Council 
        under subsection (g), the appropriate Federal banking agencies 
        shall, through a rulemaking under subsection (g), jointly 
        prohibit an insured depository institution, a company that 
        controls, directly or indirectly, an insured depository 
        institution or is treated as a bank holding company for 
        purposes of the Bank Holding Company Act of 1956 (12 U.S.C. 
        1841 et seq.), or any subsidiary of such institution or 
        company, from sponsoring or investing in a hedge fund or a 
        private equity fund.
            (2) Application to foreign activities of foreign firms.--An 
        investment or activity conducted by a company pursuant to 
        paragraph (9) or (13) of section 4(c) of the Bank Holding 
        Company Act of 1956 (12 U.S.C. 1843(c)) solely outside of the 
        United States shall not be subject to the prohibitions and 
        restrictions under paragraph (1), provided that the company is 
        not directly or indirectly controlled by a company that is 
        organized under the laws of the United States or of a State.
    (d) Investments in Small Business Investment Companies and 
Investments Designed To Promote the Public Welfare.--
            (1) In general.--A prohibition imposed by the appropriate 
        Federal banking agencies under subsection (c) shall not apply 
        with respect an investment otherwise authorized under Federal 
        law that is--
                    (A) an investment in a small business investment 
                company, as that term is defined in section 103 of the 
                Small Business Investment Act of 1958 (15 U.S.C. 662); 
                or
                    (B) designed primarily to promote the public 
                welfare, as provided in the 11th paragraph of section 
                5136 of the Revised Statutes (12 U.S.C. 24).
            (2) Rule of construction.--Nothing in paragraph (1) may be 
        construed to grant any authority to any person that is not 
        otherwise provided in Federal law.
    (e) Limitations on Relationships With Hedge Funds and Private 
Equity Funds.--
            (1) Covered transactions.--An insured depository 
        institution, a company that controls, directly or indirectly, 
        an insured depository institution or is treated as a bank 
        holding company for purposes of the Bank Holding Company Act of 
        1956 (12 U.S.C. 1841 et seq.), and any subsidiary of such 
        institution or company that serves, directly or indirectly, as 
        the investment manager or investment adviser to a hedge fund or 
        private equity fund may not enter into a covered transaction, 
        as defined in section 23A of the Federal Reserve Act (12 U.S.C. 
        371c) with such hedge fund or private equity fund.
            (2) Affiliation.--An insured depository institution, a 
        company that controls, directly or indirectly, an insured 
        depository institution or is treated as a bank holding company 
        for purposes of the Bank Holding Company Act of 1956 (12 U.S.C. 
        1841 et seq.), and any subsidiary of such institution or 
        company that serves, directly or indirectly, as the investment 
        manager or investment adviser to a hedge fund or private equity 
        fund shall be subject to section 23B of the Federal Reserve Act 
        (12 U.S.C. 371c-1) as if such institution, company, or 
        subsidiary were a member bank and such hedge fund or private 
        equity fund were an affiliate.
    (f) Capital and Quantitative Limitations for Certain Nonbank 
Financial Companies.--
            (1) In general.--Except as provided in paragraph (2), and 
        subject to the recommendations and modifications of the Council 
        under subsection (g), the Board of Governors shall adopt rules 
        imposing additional capital requirements and specifying 
        additional quantitative limits for nonbank financial companies 
        supervised by the Board of Governors under section 113 that 
        engage in proprietary trading or sponsoring and investing in 
        hedge funds and private equity funds.
            (2) Exceptions.--The rules under this subsection shall not 
        apply with respect to the trading of an investment that is 
        otherwise authorized by Federal law--
                    (A) in obligations of the United States or any 
                agency of the United States, including obligations 
                fully guaranteed as to principal and interest by the 
                United States or an agency of the United States;
                    (B) in obligations, participations, or other 
                instruments of, or issued by, the Government National 
                Mortgage Association, the Federal National Mortgage 
                Association, or the Federal Home Loan Mortgage 
                Corporation, including obligations fully guaranteed as 
                to principal and interest by such entities;
                    (C) in obligations of any State or any political 
                subdivision of a State;
                    (D) in a small business investment company, as that 
                term is defined in section 103 of the Small Business 
                Investment Act of 1958 (15 U.S.C. 662); or
                    (E) that is designed primarily to promote the 
                public welfare, as provided in the 11th paragraph of 
                section 5136 of the Revised Statutes (12 U.S.C. 24).
    (g) Council Study and Rulemaking.--
            (1) Study and recommendations.--Not later than 6 months 
        after the date of enactment of this Act, the Council--
                    (A) shall complete a study of the definitions under 
                subsection (a) and the other provisions under 
                subsections (b) through (f), to assess the extent to 
                which the definitions under subsection (a) and the 
                implementation of subsections (a) through (f) would--
                            (i) promote and enhance the safety and 
                        soundness of depository institutions and the 
                        affiliates of depository institutions;
                            (ii) protect taxpayers and enhance 
                        financial stability by minimizing the risk that 
                        depository institutions and the affiliates of 
                        depository institutions will engage in unsafe 
                        and unsound activities;
                            (iii) limit the inappropriate transfer of 
                        Federal subsidies from institutions that 
                        benefit from deposit insurance and liquidity 
                        facilities of the Federal Government to 
                        unregulated entities;
                            (iv) reduce inappropriate conflicts of 
                        interest between the self-interest of 
                        depository institutions, affiliates of 
                        depository institutions, and financial 
                        companies supervised by the Board, and the 
                        interests of the customers of such institutions 
                        and companies;
                            (v) raise the cost of credit or other 
                        financial services, reduce the availability of 
                        credit or other financial services, or impose 
                        other costs on households and businesses in the 
                        United States;
                            (vi) limit activities that have caused 
                        undue risk or loss in depository institutions, 
                        affiliates of depository institutions, and 
                        financial companies supervised by the Board of 
                        Governors, or that might reasonably be expected 
                        to create undue risk or loss in such 
                        institutions, affiliates, and companies; and
                            (vii) appropriately accommodates the 
                        business of insurance within an insurance 
                        company subject to regulation in accordance 
                        with State insurance company investment laws;
                    (B) shall make recommendations regarding the 
                definitions under subsection (a) and the implementation 
                of other provisions under subsections (b) through (f), 
                including any modifications to the definitions, 
                prohibitions, requirements, and limitations contained 
                therein that the Council determines would more 
                effectively implement the purposes of this section; and
                    (C) may make recommendations for prohibiting the 
                conduct of the activities described in subsections (b) 
                and (c) above a specific threshold amount and imposing 
                additional capital requirements on activities conducted 
                below such threshold amount.
            (2) Rulemaking.--Not earlier than the date of completion of 
        the study required under paragraph (1), and not later than 9 
        months after the date of completion of such study--
                    (A) the appropriate Federal banking agencies shall 
                jointly issue final regulations implementing 
                subsections (b) through (e), which shall reflect any 
                recommendations or modifications made by the Council 
                pursuant to paragraph (1)(B); and
                    (B) the Board of Governors shall issue final 
                regulations implementing subsection (f), which shall 
                reflect any recommendations or modifications made by 
                the Council pursuant to paragraph (1)(B).
    (h) Transition.--
            (1) In general.--The final regulations issued by the 
        appropriate Federal banking agencies and the Board of Governors 
        under subsection (g)(2) shall provide that, effective 2 years 
        after the date on which such final regulations are issued, no 
        insured depository institution, company that controls, directly 
        or indirectly, an insured depository institution, company that 
        is treated as a bank holding company for purposes of the Bank 
        Holding Company Act of 1956 (12 U.S.C. 1841 et seq.), or 
        subsidiary of such institution or company, may retain any 
        investment or relationship prohibited under such regulations.
            (2) Extension.--
                    (A) In general.--The appropriate Federal banking 
                agency for an insured depository institution or a 
                company described in paragraph (1) may, upon the 
                application of any such company, extend the 2-year 
                period under paragraph (1) with respect to such 
                company, if the appropriate Federal banking agency 
                determines that an extension would not be detrimental 
                to the public interest.
                    (B) Time period for extension.--An extension 
                granted under subparagraph (A) may not exceed--
                            (i) 1 year for each determination made by 
                        the appropriate Federal banking agency under 
                        subparagraph (A); and
                            (ii) a total of 3 years with respect to any 
                        1 company.

SEC. 620. CONCENTRATION LIMITS ON LARGE FINANCIAL FIRMS.

    The Bank Holding Company Act of 1956 (12 U.S.C. 1841 et seq.) is 
amended by adding at the end the following:

``SEC. 13. CONCENTRATION LIMITS ON LARGE FINANCIAL FIRMS.

    ``(a) Definitions.--In this section--
            ``(1) the term `Council' means the Financial Stability 
        Oversight Council;
            ``(2) the term `financial company' means--
                    ``(A) an insured depository institution;
                    ``(B) a bank holding company;
                    ``(C) a savings and loan holding company;
                    ``(D) a company that controls an insured depository 
                institution;
                    ``(E) a nonbank financial company supervised by the 
                Board under title I of the Restoring American Financial 
                Stability Act of 2010; and
                    ``(F) a foreign bank or company that is treated as 
                a bank holding company for purposes of this Act; and
            ``(3) the term `liabilities' means--
                    ``(A) with respect to a United States financial 
                company--
                            ``(i) the total risk-weighted assets of the 
                        financial company, as determined under the 
                        risk-based capital rules applicable to bank 
                        holding companies, as adjusted to reflect 
                        exposures that are deducted from regulatory 
                        capital; less
                            ``(ii) the total regulatory capital of the 
                        financial company under the risk-based capital 
                        rules applicable to bank holding companies;
                    ``(B) with respect to a foreign-based financial 
                company--
                            ``(i) the total risk-weighted assets of the 
                        United States operations of the financial 
                        company, as determined under the applicable 
                        risk-based capital rules, as adjusted to 
                        reflect exposures that are deducted from 
                        regulatory capital; less
                            ``(ii) the total regulatory capital of the 
                        United States operations of the financial 
                        company, as determined under the applicable 
                        risk-based capital rules; and
                    ``(C) with respect to an insurance company or other 
                nonbank financial company supervised by the Board, such 
                assets of the company as the Board shall specify by 
                rule, in order to provide for consistent and equitable 
                treatment of such companies.
    ``(b) Concentration Limit.--Subject to the recommendations by the 
Council under subsection (e), a financial company may not merge or 
consolidate with, acquire all or substantially all of the assets of, or 
otherwise acquire control of, another company, if the total 
consolidated liabilities of the acquiring financial company upon 
consummation of the transaction would exceed 10 percent of the 
aggregate consolidated liabilities of all financial companies at the 
end of the calendar year preceding the transaction.
    ``(c) Exception to Concentration Limit.--With the prior written 
consent of the Board, the concentration limit under subsection (b) 
shall not apply to an acquisition--
            ``(1) of a bank in default or in danger of default;
            ``(2) with respect to which assistance is provided by the 
        Federal Deposit Insurance Corporation under section 13(c) of 
        the Federal Deposit Insurance Act (12 U.S.C. 1823(c)); or
            ``(3) that would result only in a de minimis increase in 
        the liabilities of the financial company.
    ``(d) Rulemaking and Guidance.--The Board shall issue regulations 
implementing this section in accordance with the recommendations of the 
Council under subsection (e), including the definition of terms, as 
necessary. The Board may issue interpretations or guidance regarding 
the application of this section to an individual financial company or 
to financial companies in general.
    ``(e) Council Study and Rulemaking.--
            ``(1) Study and recommendations.--Not later than 6 months 
        after the date of enactment of this section, the Council 
        shall--
                    ``(A) complete a study of the extent to which the 
                concentration limit under this section would affect 
                financial stability, moral hazard in the financial 
                system, the efficiency and competitiveness of United 
                States financial firms and financial markets, and the 
                cost and availability of credit and other financial 
                services to households and businesses in the United 
                States; and
                    ``(B) make recommendations regarding any 
                modifications to the concentration limit that the 
                Council determines would more effectively implement 
                this section.
            ``(2) Rulemaking.--Not later than 9 months after the date 
        of completion of the study under paragraph (1), and 
        notwithstanding subsections (b) and (d), the Board shall issue 
        final regulations implementing this section, which shall 
        reflect any recommendations by the Council under paragraph 
        (1)(B).''.

         TITLE VII--WALL STREET TRANSPARENCY AND ACCOUNTABILITY

SEC. 701. SHORT TITLE.

    This title may be cited as the ``Wall Street Transparency and 
Accountability Act of 2010''.

        Subtitle A--Regulation of Over-the-Counter Swaps Markets

                      PART I--REGULATORY AUTHORITY

SEC. 711. DEFINITIONS.

    In this subtitle, the terms ``prudential regulator'', ``swap'', 
``swap dealer'', ``major swap participant'', ``swap data repository'', 
``associated person of a swap dealer or major swap participant'', 
``eligible contract participant'', ``swap execution facility'', 
``security-based swap'', ``security-based swap dealer'', ``major 
security-based swap participant'', ``swap data repository'', and 
``associated person of a security-based swap dealer or major security-
based swap participant'' have the meanings given the terms in section 
1a of the Commodity Exchange Act (7 U.S.C. 1a).

SEC. 712. REVIEW OF REGULATORY AUTHORITY.

    (a) Regulatory Authority.--
            (1) In general.--Except as provided in paragraphs (4) and 
        (8), the Commodity Futures Trading Commission and the 
        Securities and Exchange Commission shall each prescribe such 
        regulations as may be necessary to carry out the purposes of 
        this title.
            (2) Coordination, consistency, and comparability.--Both 
        Commissions required under paragraph (1) to prescribe 
        regulations shall consult and coordinate with each other for 
        the purposes of assuring, to the extent possible, that the 
        regulations prescribed by each such Commission are consistent 
        and comparable with the regulations prescribed by the other.
            (3) Procedures and deadline.--Such regulations shall be 
        prescribed in accordance with applicable requirements of title 
        5, United States Code, and, shall be issued in final form not 
        later than 180 days after the date of enactment of this Act.
            (4) Applicability.--The requirements of paragraph (1) shall 
        not apply to an order issued--
                    (A) in connection with or arising from a violation 
                or potential violation of any provision of the 
                Commodity Exchange Act (7 U.S.C. 1 et seq.);
                    (B) in connection with or arising from a violation 
                or potential violation of any provision of the 
                securities laws; or
                    (C) in any proceeding that is conducted on the 
                record in accordance with sections 556 and 557 of title 
                5, United States Code.
            (5) Effect.--Nothing in this subsection authorizes any 
        consultation or procedure for consultation that is not 
        consistent with the requirements of subchapter II of chapter 5, 
        and chapter 7, of title 5, United States Code (commonly known 
        as the ``Administrative Procedure Act'').
            (6) Rules; orders.--In developing and promulgating rules or 
        orders pursuant to this subsection, each Commission shall 
        consider the views of the prudential regulators.
            (7) Treatment of similar products and entities.--
                    (A) In general.--In adopting rules and orders under 
                this subsection, the Commodity Futures Trading 
                Commission and the Securities and Exchange Commission 
                shall treat functionally or economically similar 
                products or entities described in paragraphs (1) and 
                (2) in a similar manner.
                    (B) Effect.--Nothing in this subtitle requires the 
                Commodity Futures Trading Commission or the Securities 
                and Exchange Commission to adopt joint rules or orders 
                that treat functionally or economically similar 
                products or entities described in paragraphs (1) and 
                (2) in an identical manner.
            (8) Mixed swaps.--The Commodity Futures Trading Commission 
        and the Securities and Exchange Commission shall jointly 
        prescribe such regulations regarding mixed swaps, as described 
        in section 1a(47)(D) of the Commodity Exchange Act (7 U.S.C. 
        1a(47)(D)) and in section (68)(D) of the Securities Exchange 
        Act of 1934 (15 U.S.C. (68)(D)), as may be necessary to carry 
        out the purposes of this title.
    (b) Limitation.--
            (1) Commodity futures trading commission.--Nothing in this 
        title, unless specifically provided, confers jurisdiction on 
        the Commodity Futures Trading Commission to issue a rule, 
        regulation, or order providing for oversight or regulation of--
                    (A) security-based swaps; or
                    (B) with regard to its activities or functions 
                concerning security-based swaps--
                            (i) security-based swap dealers;
                            (ii) major security-based swap 
                        participants;
                            (iii) security-based swap data 
                        repositories;
                            (iv) persons associated with a security-
                        based swap dealer or major security-based swap 
                        participant;
                            (v) eligible contract participants with 
                        respect to security-based swaps; or
                            (vi) swap execution facilities with respect 
                        to security-based swaps.
            (2) Securities and exchange commission.--Nothing in this 
        title, unless specifically provided, confers jurisdiction on 
        the Securities and Exchange Commission or State securities 
        regulators to issue a rule, regulation, or order providing for 
        oversight or regulation of--
                    (A) swaps; or
                    (B) with regard to its activities or functions 
                concerning swaps--
                            (i) swap dealers;
                            (ii) major swap participants;
                            (iii) swap data repositories;
                            (iv) persons associated with a swap dealer 
                        or major swap participant;
                            (v) eligible contract participants with 
                        respect to swaps; or
                            (vi) swap execution facilities with respect 
                        to swaps.
            (3) Prohibition on certain futures associations and 
        national securities associations.--
                    (A) Futures associations.--Notwithstanding any 
                other provision of law (including regulations), unless 
                otherwise authorized by this title, no futures 
                association registered under section 17 of the 
                Commodity Exchange Act (7 U.S.C. 21) may issue a rule, 
                regulation, or order for the oversight or regulation 
                of, or otherwise assert jurisdiction over, for any 
                purpose, any security-based swap, except that this 
                shall not limit the authority of a national futures 
                association to examine for compliance with and enforce 
                its rules on advertising and capital adequacy.
                    (B) National securities associations.--
                Notwithstanding any other provision of law (including 
                regulations), unless otherwise authorized by this 
                title, no national securities association registered 
                under section 15A of the Securities Exchange Act of 
                1934 (15 U.S.C. 78o-3) may issue a rule, regulation, or 
                order for the oversight or regulation of, or otherwise 
                assert jurisdiction over, for any purpose, any swap, 
                except that this shall not limit the authority of a 
                national securities association to examine for 
                compliance with and enforce its rules on advertising 
                and capital adequacy.
    (c) Objection to Commission Regulation.--
            (1) Filing of petition for review.--
                    (A) In general.--If either Commission referred to 
                in this section determines that a final rule, 
                regulation, or order of the other Commission conflicts 
                with subsection (a)(4) or (b), then the complaining 
                Commission may obtain review of the final rule, 
                regulation, or order in the United States Court of 
                Appeals for the District of Columbia Circuit by filing 
                in the court, not later than 60 days after the date of 
                publication of the final rule, regulation, or order, a 
                written petition requesting that the rule, regulation, 
                or order be set aside.
                    (B) Expedited proceeding.--A proceeding described 
                in subparagraph (A) shall be expedited by the United 
                States Court of Appeals for the District of Columbia 
                Circuit.
            (2) Transmittal of petition and record.--
                    (A) In general.--A copy of a petition described in 
                paragraph (1) shall be transmitted not later than 1 
                business day after the date of filing by the 
                complaining Commission to the Secretary of the 
                responding Commission.
                    (B) Duty of responding commission.--On receipt of 
                the copy of a petition described in paragraph (1), the 
                responding Commission shall file with the United States 
                Court of Appeals for the District of Columbia Circuit--
                            (i) a copy of the rule, regulation, or 
                        order under review (including any documents 
                        referred to therein); and
                            (ii) any other materials prescribed by the 
                        United States Court of Appeals for the District 
                        of Columbia Circuit.
            (3) Standard of review.--The United States Court of Appeals 
        for the District of Columbia Circuit shall--
                    (A) give deference to the views of neither 
                Commission; and
                    (B) determine to affirm or set aside a rule, 
                regulation, or order of the responding Commission under 
                this subsection, based on the determination of the 
                court as to whether the rule, regulation, or order is 
                in conflict with subsection (a)(4) or (b), as 
                applicable.
            (4) Judicial stay.--The filing of a petition by the 
        complaining Commission pursuant to paragraph (1) shall operate 
        as a stay of the rule, regulation, or order until the date on 
        which the determination of the United States Court of Appeals 
        for the District of Columbia Circuit is final (including any 
        appeal of the determination).
    (d) Adoption of Rules on Uncleared Swaps.--Notwithstanding 
subsections (b) and (c), the Commodity Futures Trading Commission and 
the Securities and Exchange Commission shall, after consulting with 
each other Commission, adopt rules--
            (1) to require the maintenance of records of all activities 
        relating to transactions in swaps and security-based swaps 
        under the respective jurisdictions of the Commodity Futures 
        Trading Commission and the Securities and Exchange Commission 
        that are uncleared;
            (2) to make available, consistent with section 8 of the 
        Commodity Exchange Act (7 U.S.C. 12), to the Securities and 
        Exchange Commission information relating to swaps transactions 
        that are uncleared; and
            (3) to make available to the Commodity Futures Trading 
        Commission information relating to security-based swaps 
        transactions that are uncleared.
    (e) Definitions.--Notwithstanding subsections (b) and (c), the 
Commodity Futures Trading Commission and the Securities and Exchange 
Commission shall jointly adopt rules to define the term ``security-
based swap agreement'' in section 1a(47)(A)(v) of the Commodity 
Exchange Act (7 U.S.C. 1a(47)(A)(v)) and in section 3(a)(78) of the 
Securities Exchange Act of 1934 (15 U.S.C. 78c(a)(78)).
    (f) Global Rulemaking Timeframe.--Unless otherwise provided in a 
particular provision of this title, or an amendment made by this title, 
the Commodity Futures Trading Commission or the Securities and Exchange 
Commission, or both, shall individually, and not jointly, promulgate 
rules and regulations required of each Commission under this title or 
an amendment made by this title not later than 180 days after the date 
of enactment of this Act.
    (g) Expedited Rulemaking Process.--The Commodity Futures Trading 
Commission or the Securities and Exchange Commission, or both, may use 
emergency and expedited procedures (including any administrative or 
other procedure as appropriate) to carry out this title and the 
amendments made by this title if, in either of the Commissions' 
discretion, it considers it necessary to do so.

SEC. 713. RECOMMENDATIONS FOR CHANGES TO PORTFOLIO MARGINING LAWS.

    Not later than 180 days after the date of enactment of this Act, 
the Securities and Exchange Commission, the Commodity Futures Trading 
Commission, and the prudential regulators shall submit to the 
appropriate committees of Congress recommendations for legislative 
changes to the Federal laws to facilitate the portfolio margining of 
securities and commodity futures and options, commodity options, swaps, 
and other financial instrument positions.

SEC. 714. ABUSIVE SWAPS.

    The Commodity Futures Trading Commission or the Securities and 
Exchange Commission, or both, individually may, by rule or order--
            (1) collect information as may be necessary concerning the 
        markets for any types of--
                    (A) swap (as defined in section 1a of the Commodity 
                Exchange Act (7 U.S.C. 1a)); or
                    (B) security-based swap (as defined in section 1a 
                of the Commodity Exchange Act (7 U.S.C. 1a)); and
            (2) issue a report with respect to any types of swaps or 
        security-based swaps that the Commodity Futures Trading 
        Commission or the Securities and Exchange Commission determines 
        to be detrimental to--
                    (A) the stability of a financial market; or
                    (B) participants in a financial market.

SEC. 715. AUTHORITY TO PROHIBIT PARTICIPATION IN SWAP ACTIVITIES.

    Except as provided in section 4 of the Commodity Exchange Act (7 
U.S.C. 6) (as amended by section 738), if the Commodity Futures Trading 
Commission or the Securities and Exchange Commission determines that 
the regulation of swaps or security-based swaps markets in a foreign 
country undermines the stability of the United States financial system, 
either Commission, in consultation with the Secretary of the Treasury, 
may prohibit an entity domiciled in the foreign country from 
participating in the United States in any swap or security-based swap 
activities.

SEC. 716. PROHIBITION AGAINST FEDERAL GOVERNMENT BAILOUTS OF SWAPS 
              ENTITIES.

    (a) Prohibition on Federal Assistance.--Notwithstanding any other 
provision of law (including regulations), no Federal assistance may be 
provided to any swaps entity with respect to any swap, security-based 
swap, or other activity of the swaps entity.
    (b) Definitions.--In this section:
            (1) Federal assistance.--The term ``Federal assistance'' 
        means the use of any funds, including advances from any Federal 
        Reserve credit facility, discount window, or pursuant to the 
        third undesignated paragraph of section 13 of the Federal 
        Reserve Act (12 U.S.C. 343) (relating to emergency lending 
        authority), Federal Deposit Insurance Corporation insurance, or 
        guarantees for the purpose of--
                    (A) making any loan to, or purchasing any stock, 
                equity interest, or debt obligation of, any swaps 
                entity;
                    (B) purchasing the assets of any swaps entity;
                    (C) guaranteeing any loan or debt issuance of any 
                swaps entity; or
                    (D) entering into any assistance arrangement 
                (including tax breaks), loss sharing, or profit sharing 
                with any swaps entity.
            (2) Swaps entity.--The term ``swaps entity'' means any swap 
        dealer, security-based swap dealer, major swap participant, 
        major security-based swap participant, swap execution facility, 
        designated contract market, national securities exchange, 
        central counterparty, clearing house, clearing agency, or 
        derivatives clearing organization that is registered under--
                    (A) the Commodity Exchange Act (7 U.S.C. 1 et 
                seq.);
                    (B) the Securities Exchange Act of 1934 (15 U.S.C. 
                78a et seq.); or
                    (C) any other Federal or State law (including 
                regulations).

SEC. 717. NEW PRODUCT APPROVAL--CFTC--SEC PROCESS.

    (a) Amendments to the Commodity Exchange Act.--Section 2(a)(1)(C) 
of the Commodity Exchange Act (7 U.S.C. 2(a)(1)(C)) is amended--
            (1) in clause (i) by striking ``This'' and inserting ``(I) 
        Except as provided in subclause (II), this''; and
            (2) by adding at the end of clause (i) the following:
                                    ``(II) This Act shall apply to and 
                                the Commission shall have jurisdiction 
                                with respect to accounts, agreements, 
                                and transactions involving, and may 
                                permit the listing for trading pursuant 
                                to section 5c(c) of, a put, call, or 
                                other option on 1 or more securities 
                                (as defined in section 2(a)(1) of the 
                                Securities Act of 1933 or section 
                                3(a)(10) of the Securities Exchange Act 
                                of 1934 on the date of enactment of the 
                                Futures Trading Act of 1982), including 
                                any group or index of such securities, 
                                or any interest therein or based on the 
                                value thereof, that is exempted by the 
                                Securities and Exchange Commission 
                                pursuant to section 36(a)(1) of the 
                                Securities Exchange Act of 1934 with 
                                the condition that the Commission 
                                exercise concurrent jurisdiction over 
                                such put, call, or other option; 
                                provided, however, that nothing in this 
                                paragraph shall be construed to affect 
                                the jurisdiction and authority of the 
                                Securities and Exchange Commission over 
                                such put, call, or other option.''.
    (b) Amendment to the Securities Exchange Act of 1934.--The 
Securities Exchange Act of 1934 is amended by adding the following 
section after section 3A (15 U.S.C. 78c-1):

``SEC. 3B. SECURITIES-RELATED DERIVATIVES.

    ``(a) Any agreement, contract, or transaction (or class thereof) 
that is exempted by the Commodity Futures Trading Commission pursuant 
to section 4(c)(1) of the Commodity Exchange Act (7 U.S.C. 6(c)(1)) 
with the condition that the Commission exercise concurrent jurisdiction 
over such agreement, contract, or transaction (or class thereof) shall 
be deemed a security for purposes of the securities laws.
    ``(b) With respect to any agreement, contract, or transaction (or 
class thereof) that is exempted by the Commodity Futures Trading 
Commission pursuant to section 4(c)(1) of the Commodity Exchange Act (7 
U.S.C. 6(c)(1)) with the condition that the Commission exercise 
concurrent jurisdiction over such agreement, contract, or transaction 
(or class thereof), references in the securities laws to the `purchase' 
or `sale' of a security shall be deemed to include the execution, 
termination (prior to its scheduled maturity date), assignment, 
exchange, or similar transfer or conveyance of, or extinguishing of 
rights or obligations under such agreement, contract, or transaction, 
as the context may require.''.
    (c) Amendment to Securities Exchange Act of 1934.--Section 19(b) of 
the Securities Exchange Act of 1934 (15 U.S.C. 78s(b)) is amended by 
adding at the end the following:
            ``(10) Notwithstanding the provisions of paragraph (2), the 
        time period within which the Commission is required by order to 
        approve a proposed rule change or institute proceedings to 
        determine whether the proposed rule change should be 
        disapproved is stayed pending a determination by the Commission 
        upon the request of the Commodity Futures Trading Commission or 
        its Chairman that the Commission issue a determination as to 
        whether a product that is the subject of such proposed rule 
        change is a security pursuant to section 718 of the Wall Street 
        Transparency and Accountability Act of 2010.''.
    (d) Amendment to Commodity Exchange Act.--Section 5c(c)(1) of the 
Commodity Exchange Act (7 U.S.C. 7a-2(c)(1)) is amended--
            (1) by striking ``Subject to paragraph (2)'' and inserting 
        the following:
                    ``(A) Election.--Subject to paragraph (2)''; and
            (2) by adding at the end the following:
                    ``(B) Certification.--The certification of a 
                product pursuant to this paragraph shall be stayed 
                pending a determination by the Commission upon the 
                request of the Securities and Exchange Commission or 
                its Chairman that the Commission issue a determination 
                as to whether the product that is the subject of such 
                certification is a contract of sale of a commodity for 
                future delivery, an option on such a contract, or an 
                option on a commodity pursuant to section 718 of the 
                Wall Street Transparency and Accountability Act of 
                2010.''.

SEC. 718. DETERMINING STATUS OF NOVEL DERIVATIVE PRODUCTS.

    (a) Process for Determining the Status of a Novel Derivative 
Product.--
            (1) Notice.--
                    (A) In general.--Any person filing a proposal to 
                list or trade a novel derivative product that may have 
                elements of both securities and contracts of sale of a 
                commodity for future delivery (or options on such 
                contracts or options on commodities) may concurrently 
                provide notice and furnish a copy of such filing with 
                both the Securities and Exchange Commission and the 
                Commodity Futures Trading Commission. Any such notice 
                shall state that notice has been made with both 
                Commissions.
                    (B) Notification.--If no concurrent notice is made 
                pursuant to subparagraph (A), within 5 business days 
                after determining that a proposal that seeks to list or 
                trade a novel derivative product may have elements of 
                both securities and contracts of sale of a commodity 
                for future delivery (or options on such contracts or 
                options on commodities), the Securities and Exchange 
                Commission or the Commodity Futures Trading Commission, 
                as applicable, shall notify the other Commission and 
                provide a copy of such filing to the other Commission.
            (2) Request for determination.--
                    (A) In general.--No later than 21 days after 
                receipt of a notice under paragraph (1), or upon its 
                own initiative if no such notice is received, the 
                Commodity Futures Trading Commission may request that 
                the Securities and Exchange Commission issue a 
                determination as to whether a product is a security, as 
                defined in section 3(a)(10) of the Securities Exchange 
                Act of 1934 (15 U.S.C. 78c(a)(10)).
                    (B) Request.--No later than 21 days after receipt 
                of a notice under paragraph (1), or upon its own 
                initiative if no such notice is received, the 
                Securities and Exchange Commission may request that the 
                Commodity Futures Trading Commission issue a 
                determination as to whether a product is a contract of 
                sale of a commodity for future delivery, an option on 
                such a contract, or an option on a commodity subject to 
                the Commodity Futures Trading Commission's exclusive 
                jurisdiction under section 2(a)(1)(A) of the Commodity 
                Exchange Act (7 U.S.C. 2(a)(1)(A)).
                    (C) Requirement relating to request.--A request 
                under subparagraph (A) or (B) shall be made by 
                submitting such request, in writing, to the Securities 
                and Exchange Commission or the Commodity Futures 
                Trading Commission, as applicable.
                    (D) Effect.--Nothing in this paragraph shall be 
                construed to prevent--
                            (i) the Commodity Futures Trading 
                        Commission from requesting that the Securities 
                        and Exchange Commission grant an exemption 
                        pursuant to section 36(a)(1) of the Securities 
                        Exchange Act of 1934 (15 U.S.C. 78mm(a)(1)) 
                        with respect to a product that is the subject 
                        of a filing under paragraph (1); or
                            (ii) the Securities and Exchange Commission 
                        from requesting that the Commodity Futures 
                        Trading Commission grant an exemption pursuant 
                        to section 4(c)(1) of the Commodity Exchange 
                        Act (7 U.S.C. 6(c)(1)) with respect to a 
                        product that is the subject of a filing under 
                        paragraph (1).
                Provided, however, that nothing in this subparagraph 
                shall be construed to require the Commodity Futures 
                Trading Commission or the Securities and Exchange 
                Commission to issue an exemption requested pursuant to 
                this subparagraph; provided further, That an order 
                granting or denying an exemption described in this 
                subparagraph and issued under paragraph (3)(B) shall 
                not be subject to judicial review pursuant to 
                subsection (b).
                    (E) Withdrawal of request.--A request under 
                subparagraph (A) or (B) may be withdrawn by the 
                Commission making the request at any time prior to a 
                determination being made pursuant to paragraph (3) for 
                any reason by providing written notice to the head of 
                the other Commission.
            (3) Determination.--Notwithstanding any other provision of 
        law, no later than 120 days after the date of receipt of a 
        request--
                    (A) under subparagraph (A) or (B) of paragraph (2), 
                unless such request has been withdrawn pursuant to 
                paragraph (2)(E), the Securities and Exchange 
                Commission or the Commodity Futures Trading Commission, 
                as applicable, shall, by order, issue the determination 
                requested in subparagraph (A) or (B) of paragraph (2), 
                as applicable, and the reasons therefore; or
                    (B) under paragraph (2)(D), unless such request has 
                been withdrawn, the Securities and Exchange Commission 
                or the Commodity Futures Trading Commission, as 
                applicable, shall grant an exemption or provide reasons 
                for not granting such exemption, provided that any 
                decision by the Securities and Exchange Commission not 
                to grant such exemption shall not be reviewable under 
                section 25 of the Securities Exchange Act of 1934 (15 
                U.S.C. 78y).
    (b) Judicial Resolution.--
            (1) In general.--The Commodity Futures Trading Commission 
        or the Securities and Exchange Commission may petition the 
        United States Court of Appeals for the District of Columbia 
        Circuit for review of a final order of the other Commission, 
        with respect to a novel derivative product that may have 
        elements of both securities and contracts of sale of a 
        commodity for future delivery (or options on such contracts or 
        options on commodities) that it believes affects its statutory 
        jurisdiction, including an order or orders issued under 
        subsection (a)(3)(A), by filing in such court, within 60 days 
        after the date of entry of such order, a written petition 
        requesting a review of the order. Any such proceeding shall be 
        expedited by the Court of Appeals.
            (2) Transmittal of petition and record.--A copy of a 
        petition described in paragraph (1) shall be transmitted not 
        later than 1 business day after filing by the complaining 
        Commission to the responding Commission. On receipt of the 
        petition, the responding Commission shall file with the court a 
        copy of the order under review and any documents referred to 
        therein, and any other materials prescribed by the court.
            (3) Standard of review.--The court, in considering a 
        petition filed pursuant to paragraph (1), shall give no 
        deference to, or presumption in favor of, the views of either 
        Commission.
            (4) Judicial stay.--The filing of a petition by the 
        complaining Commission pursuant to paragraph (1) shall operate 
        as a stay of the order, until the date on which the 
        determination of the court is final (including any appeal of 
        the determination).

                  PART II--REGULATION OF SWAP MARKETS

SEC. 721. DEFINITIONS.

    (a) In General.--Section 1a of the Commodity Exchange Act (7 U.S.C. 
1a) is amended--
            (1) by redesignating paragraphs (2), (3) and (4), (5) 
        through (17), (18) through (23), (24) through (28), (29), (30), 
        (31) through (33), and (34) as paragraphs (6), (8) and (9), 
        (11) through (23), (26) through (31), (34) through (38), (40), 
        (41), (44) through (46), and (51), respectively;
            (2) by inserting after paragraph (1) the following:
            ``(2) Appropriate federal banking agency.--The term 
        `appropriate Federal banking agency' has the meaning given the 
        term in section 3 of the Federal Deposit Insurance Act (12 
        U.S.C. 1813).
            ``(3) Associated person of a security-based swap dealer or 
        major security-based swap participant.--The term `associated 
        person of a security-based swap dealer or major security-based 
        swap participant' has the meaning given the term in section 
        3(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a)).
            ``(4) Associated person of a swap dealer or major swap 
        participant.--
                    ``(A) In general.--The term `associated person of a 
                swap dealer or major swap participant' means--
                            ``(i) any partner, officer, director, or 
                        branch manager of a swap dealer or major swap 
                        participant (including any individual who holds 
                        a similar status or performs a similar function 
                        with respect to any partner, officer, director, 
                        or branch manager of a swap dealer or major 
                        swap participant);
                            ``(ii) any person that directly or 
                        indirectly controls, is controlled by, or is 
                        under common control with, a swap dealer or 
                        major swap participant; and
                            ``(iii) any employee of a swap dealer or 
                        major swap participant.
                    ``(B) Exclusion.--Other than for purposes of 
                section 4s(b)(6), the term `associated person of a swap 
                dealer or major swap participant' does not include any 
                person associated with a swap dealer or major swap 
                participant the functions of which are solely clerical 
                or ministerial.
            ``(5) Board.--The term `Board' means the Board of Governors 
        of the Federal Reserve System.'';
            (3) by inserting after paragraph (6) (as redesignated by 
        paragraph (1)) the following:
            ``(7) Cleared swap.--The term `cleared swap' means any swap 
        that is, directly or indirectly, submitted to and cleared by a 
        derivatives clearing organization registered with the 
        Commission.'';
            (4) in paragraph (9) (as redesignated by paragraph (1)), by 
        striking ``except onions'' and all that follows through the 
        period at the end and inserting the following: ``except onions 
        (as provided in section 13-1) and motion picture box office 
        receipts (or any index, measure, value, or data related to such 
        receipts), and all services, rights, and interests (except 
        motion picture box office receipts, or any index, measure, 
        value or data related to such receipts) in which contracts for 
        future delivery are presently or in the future dealt in.'';
            (5) by inserting after paragraph (9) (as redesignated by 
        paragraph (1)) the following:
            ``(10) Commodity pool.--
                    ``(A) In general.--The term `commodity pool' means 
                any investment trust, syndicate, or similar form of 
                enterprise operated for the purpose of trading in 
                commodity interests, including any--
                            ``(i) commodity for future delivery, 
                        security futures product, or swap;
                            ``(ii) agreement, contract, or transaction 
                        described in section 2(c)(2)(C)(i) or section 
                        2(c)(2)(D)(i);
                            ``(iii) commodity option authorized under 
                        section 4c; or
                            ``(iv) leverage transaction authorized 
                        under section 19.
                    ``(B) Further definition.--The Commission, by rule 
                or regulation, may include within, or exclude from, the 
                term `commodity pool' any investment trust, syndicate, 
                or similar form of enterprise if the Commission 
                determines that the rule or regulation will effectuate 
                the purposes of this Act.'';
            (6) by striking paragraph (11) (as redesignated by 
        paragraph (1)) and inserting the following:
            ``(11) Commodity pool operator.--
                    ``(A) In general.--The term `commodity pool 
                operator' means any person--
                            ``(i) engaged in a business that is of the 
                        nature of a commodity pool, investment trust, 
                        syndicate, or similar form of enterprise, and 
                        who, in connection therewith, solicits, 
                        accepts, or receives from others, funds, 
                        securities, or property, either directly or 
                        through capital contributions, the sale of 
                        stock or other forms of securities, or 
                        otherwise, for the purpose of trading in 
                        commodity interest, including any--
                                    ``(I) commodity for future 
                                delivery, security futures product, or 
                                swap;
                                    ``(II) agreement, contract, or 
                                transaction described in section 
                                2(c)(2)(C)(i) or section 2(c)(2)(D)(i);
                                    ``(III) commodity option authorized 
                                under section 4c; or
                                    ``(IV) leverage transaction 
                                authorized under section 19; or
                            ``(ii) who is registered with the 
                        Commission as a commodity pool operator.
                    ``(B) Further definition.--The Commission, by rule 
                or regulation, may include within, or exclude from, the 
                term `commodity pool operator' any person engaged in a 
                business that is of the nature of a commodity pool, 
                investment trust, syndicate, or similar form of 
                enterprise if the Commission determines that the rule 
                or regulation will effectuate the purposes of this 
                Act.'';
            (7) in paragraph (12) (as redesignated by paragraph (1)), 
        in subparagraph (A)--
                    (A) in clause (i)--
                            (i) in subclause (I), by striking ``made or 
                        to be made on or subject to the rules of a 
                        contract market or derivatives transaction 
                        execution facility'' and inserting ``, security 
                        futures product, or swap'';
                            (ii) by redesignating subclauses (II) and 
                        (III) as subclauses (III) and (IV);
                            (iii) by inserting after subclause (I) the 
                        following:
                                    ``(II) any agreement, contract, or 
                                transaction described in section 
                                2(c)(2)(C)(i) or section 
                                2(c)(2)(D)(i)''; and
                            (iv) in subclause (IV) (as so 
                        redesignated), by striking ``or'';
                    (B) in clause (ii), by striking the period at the 
                end and inserting a semicolon; and
                    (C) by adding at the end the following:
                            ``(iii) is registered with the Commission 
                        as a commodity trading advisor; or
                            ``(iv) the Commission, by rule or 
                        regulation, may include if the Commission 
                        determines that the rule or regulation will 
                        effectuate the purposes of this Act.'';
            (8) in paragraph (17) (as redesignated by paragraph (1)), 
        in subparagraph (A), in the matter preceding clause (i), by 
        striking ``paragraph (12)(A)'' and inserting ``paragraph 
        (18)(A)'';
            (9) in paragraph (18) (as redesignated by paragraph (1))--
                    (A) in subparagraph (A)--
                            (i) in the matter following clause 
                        (vii)(III)--
                                    (I) by striking ``section 1a 
                                (11)(A)'' and inserting ``paragraph 
                                (17)(A)''; and
                                    (II) by striking ``$25,000,000'' 
                                and inserting ``$50,000,000''; and
                            (ii) in clause (xi), in the matter 
                        preceding subclause (I), by striking ``total 
                        assets in an amount'' and inserting ``amounts 
                        invested on a discretionary basis, the 
                        aggregate of which is'';
            (10) by striking paragraph (22) (as redesignated by 
        paragraph (1)) and inserting the following:
            ``(22) Floor broker.--
                    ``(A) In general.--The term `floor broker' means 
                any person--
                            ``(i) who, in or surrounding any pit, ring, 
                        post, or other place provided by a contract 
                        market for the meeting of persons similarly 
                        engaged, shall purchase or sell for any other 
                        person--
                                    ``(I) any commodity for future 
                                delivery, security futures product, or 
                                swap; or
                                    ``(II) any commodity option 
                                authorized under section 4c; or
                            ``(ii) who is registered with the 
                        Commission as a floor broker.
                    ``(B) Further definition.--The Commission, by rule 
                or regulation, may include within, or exclude from, the 
                term `floor broker' any person in or surrounding any 
                pit, ring, post, or other place provided by a contract 
                market for the meeting of persons similarly engaged who 
                trades for any other person if the Commission 
                determines that the rule or regulation will effectuate 
                the purposes of this Act.'';
            (11) by striking paragraph (23) (as redesignated by 
        paragraph (1)) and inserting the following:
            ``(23) Floor trader.--
                    ``(A) In general.--The term `floor trader' means 
                any person--
                            ``(i) who, in or surrounding any pit, ring, 
                        post, or other place provided by a contract 
                        market for the meeting of persons similarly 
                        engaged, purchases, or sells solely for such 
                        person's own account--
                                    ``(I) any commodity for future 
                                delivery, security futures product, or 
                                swap; or
                                    ``(II) any commodity option 
                                authorized under section 4c; or
                            ``(ii) who is registered with the 
                        Commission as a floor trader.
                    ``(B) Further definition.--The Commission, by rule 
                or regulation, may include within, or exclude from, the 
                term `floor trader' any person in or surrounding any 
                pit, ring, post, or other place provided by a contract 
                market for the meeting of persons similarly engaged who 
                trades solely for such person's own account if the 
                Commission determines that the rule or regulation will 
                effectuate the purposes of this Act.'';
            (12) by inserting after paragraph (23) (as redesignated by 
        paragraph (1)) the following:
            ``(24) Foreign exchange forward.--The term `foreign 
        exchange forward' means a transaction that solely involves the 
        exchange of 2 different currencies on a specific future date at 
        a fixed rate agreed upon on the inception of the contract 
        covering the exchange.
            ``(25) Foreign exchange swap.--The term `foreign exchange 
        swap' means a transaction that solely involves--
                    ``(A) an exchange of 2 different currencies on a 
                specific date at a fixed rate that is agreed upon on 
                the inception of the contract covering the exchange; 
                and
                    ``(B) a reverse exchange of the 2 currencies 
                described in subparagraph (A) at a later date and at a 
                fixed rate that is agreed upon on the inception of the 
                contract covering the exchange.'';
            (13) by striking paragraph (28) (as redesignated by 
        paragraph (1)) and inserting the following:
            ``(28) Futures commission merchant.--
                    ``(A) In general.--The term `futures commission 
                merchant' means an individual, association, 
                partnership, corporation, or trust--
                            ``(i) that--
                                    ``(I) is engaged in soliciting or 
                                in accepting orders for--
                                            ``(aa) the purchase or sale 
                                        of a commodity for future 
                                        delivery;
                                            ``(bb) a security futures 
                                        product;
                                            ``(cc) a swap;
                                            ``(dd) any agreement, 
                                        contract, or transaction 
                                        described in section 
                                        2(c)(2)(C)(i) or section 
                                        2(c)(2)(D)(i);
                                            ``(ee) any commodity option 
                                        authorized under section 4c; or
                                            ``(ff) any leverage 
                                        transaction authorized under 
                                        section 19; or
                                    ``(II) is acting as a counterparty 
                                in any agreement, contract, or 
                                transaction described in section 
                                2(c)(2)(C)(i) or section 2(c)(2)(D)(i); 
                                and
                                    ``(III) in or in connection with 
                                the activities described in subclause 
                                (I) or (II), accepts any money, 
                                securities, or property (or extends 
                                credit in lieu thereof) to margin, 
                                guarantee, or secure any trades or 
                                contracts that result or may result 
                                therefrom; or
                            ``(ii) that is registered with the 
                        Commission as a futures commission merchant.
                    ``(B) Further definition.--The Commission, by rule 
                or regulation, may include within, or exclude from, the 
                term `futures commission merchant' any person who 
                engages in soliciting or accepting orders for, or 
                acting as a counterparty in, any agreement, contract, 
                or transaction subject to this Act, and who accepts any 
                money, securities, or property (or extends credit in 
                lieu thereof) to margin, guarantee, or secure any 
                trades or contracts that result or may result 
                therefrom, if the Commission determines that the rule 
                or regulation will effectuate the purposes of this 
                Act.'';
            (14) in paragraph (30) (as redesignated by paragraph (1)), 
        in subparagraph (B), by striking ``state'' and inserting 
        ``State'';
            (15) by striking paragraph (31) (as redesignated by 
        paragraph (1)) and inserting the following:
            ``(31) Introducing broker.--
                    ``(A) In general.--The term `introducing broker' 
                means any person (except an individual who elects to be 
                and is registered as an associated person of a futures 
                commission merchant)--
                            ``(i) who--
                                    ``(I) is engaged in soliciting or 
                                in accepting orders for--
                                            ``(aa) the purchase or sale 
                                        of any commodity for future 
                                        delivery, security futures 
                                        product, or swap;
                                            ``(bb) any agreement, 
                                        contract, or transaction 
                                        described in section 
                                        2(c)(2)(C)(i) or section 
                                        2(c)(2)(D)(i);
                                            ``(cc) any commodity option 
                                        authorized under section 4c; or
                                            ``(dd) any leverage 
                                        transaction authorized under 
                                        section 19; and
                                    ``(II) does not accept any money, 
                                securities, or property (or extend 
                                credit in lieu thereof) to margin, 
                                guarantee, or secure any trades or 
                                contracts that result or may result 
                                therefrom; or
                            ``(ii) who is registered with the 
                        Commission as an introducing broker.
                    ``(B) Further definition.--The Commission, by rule 
                or regulation, may include within, or exclude from, the 
                term `introducing broker' any person who engages in 
                soliciting or accepting orders for any agreement, 
                contract, or transaction subject to this Act, and who 
                does not accept any money, securities, or property (or 
                extend credit in lieu thereof) to margin, guarantee, or 
                secure any trades or contracts that result or may 
                result therefrom, if the Commission determines that the 
                rule or regulation will effectuate the purposes of this 
                Act.'';
            (16) by inserting after paragraph (31) (as redesignated by 
        paragraph (1)) the following:
            ``(32) Major security-based swap participant.--The term 
        `major security-based swap participant' has the meaning given 
        the term in section 3(a) of the Securities Exchange Act of 1934 
        (15 U.S.C. 78c(a)).
            ``(33) Major swap participant.--
                    ``(A) In general.--The term `major swap 
                participant' means any person who is not a swap dealer, 
                and--
                            ``(i) maintains a substantial position in 
                        swaps for any of the major swap categories as 
                        determined by the Commission, excluding--
                                    ``(I) positions held for hedging or 
                                mitigating commercial risk; and
                                    ``(II) positions maintained by any 
                                employee benefit plan (or any contract 
                                held by such a plan) as defined in 
                                paragraphs (3) and (32) of section 3 of 
                                the Employee Retirement Income Security 
                                Act of 1974 (29 U.S.C. 1002) for the 
                                primary purpose of hedging or 
                                mitigating any risk directly associated 
                                with the operation of the plan; or
                            ``(ii) whose outstanding swaps create 
                        substantial counterparty exposure that could 
                        have serious adverse effects on the financial 
                        stability of the United States banking system 
                        or financial markets; or
                            ``(iii)(I) is a financial entity, other 
                        than an entity predominantly engaged in 
                        providing financing for the purchase of an 
                        affiliate's merchandise or manufactured goods, 
                        that is highly leveraged relative to the amount 
                        of capital it holds; and
                            ``(II) maintains a substantial position in 
                        outstanding swaps in any major swap category as 
                        determined by the Commission.
                    ``(B) Definition of substantial position.--For 
                purposes of subparagraph (A), the Commission shall 
                define by rule or regulation the term `substantial 
                position' at the threshold that the Commission 
                determines to be prudent for the effective monitoring, 
                management, and oversight of entities that are 
                systemically important or can significantly impact the 
                financial system of the United States.
                    ``(C) Scope of designation.--For purposes of 
                subparagraph (A), a person may be designated as a major 
                swap participant for 1 or more categories of swaps 
                without being classified as a major swap participant 
                for all classes of swaps.
                    ``(D) Capital.--In setting capital requirements for 
                a person that is designated as a major swap participant 
                for a single type or single class or category of swaps 
                or activities, the prudential regulator and the 
                Commission shall take into account the risks associated 
                with other types of swaps or classes of swaps or 
                categories of swaps engaged in and the other activities 
                conducted by that person that are not otherwise subject 
                to regulation applicable to that person by virtue of 
                the status of the person as a major swap 
                participant.'';
            (17) by inserting after paragraph (38) (as redesignated by 
        paragraph (1)) the following:
            ``(39) Prudential regulator.--The term `prudential 
        regulator' means--
                    ``(A) the Office of the Comptroller of the 
                Currency, in the case of--
                            ``(i) any national banking association;
                            ``(ii) any Federal branch or agency of a 
                        foreign bank; or
                            ``(iii) any Federal savings association;
                    ``(B) the Federal Deposit Insurance Corporation, in 
                the case of--
                            ``(i) any insured State bank;
                            ``(ii) any foreign bank having an insured 
                        branch; or
                            ``(iii) any State savings association;
                    ``(C) the Board of Governors of the Federal Reserve 
                System, in the case of--
                            ``(i) any noninsured State member bank;
                            ``(ii) any branch or agency of a foreign 
                        bank with respect to any provision of the 
                        Federal Reserve Act (12 U.S.C. 221 et seq.) 
                        which is made applicable under the 
                        International Banking Act of 1978 (12 U.S.C. 
                        3101 et seq.);
                            ``(iii) any foreign bank which does not 
                        operate an insured branch;
                            ``(iv) any agency or commercial lending 
                        company other than a Federal agency; or
                            ``(v) supervisory or regulatory proceedings 
                        arising from the authority given to the Board 
                        of Governors under section 7(c)(1) of the 
                        International Banking Act of 1978 (12 U.S.C. 
                        3105(c)(1)), including such proceedings under 
                        the Financial Institutions Supervisory Act of 
                        1966 (12 U.S.C. 1464 et seq.); and
                    ``(D) the Farm Credit Administration, in the case 
                of a swap dealer, major swap participant, security-
                based swap dealer, or major security-based swap 
                participant that is an institution chartered under the 
                Farm Credit Act of 1971 (12 U.S.C. 2001 et seq.).'';
            (18) in paragraph (40) (as redesignated by paragraph (1))--
                    (A) by striking subparagraph (B);
                    (B) by redesignating subparagraphs (C), (D), and 
                (E) as subparagraphs (B), (C), and (F), respectively;
                    (C) in subparagraph (C) (as so redesignated), by 
                striking ``and'';
                    (D) by inserting after subparagraph (C) (as so 
                redesignated) the following:
                    ``(D) a swap execution facility registered under 
                section 5h;
                    ``(E) a swap data repository; and'';
            (19) by inserting after paragraph (41) (as redesignated by 
        paragraph (1)) the following:
            ``(42) Security-based swap.--The term `security-based swap' 
        has the meaning given the term in section 3(a) of the 
        Securities Exchange Act of 1934 (15 U.S.C. 78c(a)).
            ``(43) Security-based swap dealer.--The term `security-
        based swap dealer' has the meaning given the term in section 
        3(a) of the Securities Exchange Act of 1934 (15 U.S.C. 
        78c(a)).'';
            (20) in paragraph (46) (as redesignated by paragraph (1)), 
        by striking ``subject to section 2(h)(7)'' and inserting 
        ``subject to section 2(h)(5)'';
            (21) by inserting after paragraph (46) (as redesignated by 
        paragraph (1)) the following:
            ``(47) Swap.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), the term `swap' means any agreement, 
                contract, or transaction--
                            ``(i) that is a put, call, cap, floor, 
                        collar, or similar option of any kind that is 
                        for the purchase or sale, or based on the 
                        value, of 1 or more interest or other rates, 
                        currencies, commodities, securities, 
                        instruments of indebtedness, indices, 
                        quantitative measures, or other financial or 
                        economic interests or property of any kind;
                            ``(ii) that provides for any purchase, 
                        sale, payment, or delivery (other than a 
                        dividend on an equity security) that is 
                        dependent on the occurrence, nonoccurrence, or 
                        the extent of the occurrence of an event or 
                        contingency associated with a potential 
                        financial, economic, or commercial consequence;
                            ``(iii) that provides on an executory basis 
                        for the exchange, on a fixed or contingent 
                        basis, of 1 or more payments based on the value 
                        or level of 1 or more interest or other rates, 
                        currencies, commodities, securities, 
                        instruments of indebtedness, indices, 
                        quantitative measures, or other financial or 
                        economic interests or property of any kind, or 
                        any interest therein or based on the value 
                        thereof, and that transfers, as between the 
                        parties to the transaction, in whole or in 
                        part, the financial risk associated with a 
                        future change in any such value or level 
                        without also conveying a current or future 
                        direct or indirect ownership interest in an 
                        asset (including any enterprise or investment 
                        pool) or liability that incorporates the 
                        financial risk so transferred, including any 
                        agreement, contract, or transaction commonly 
                        known as--
                                    ``(I) an interest rate swap;
                                    ``(II) a rate floor;
                                    ``(III) a rate cap;
                                    ``(IV) a rate collar;
                                    ``(V) a cross-currency rate swap;
                                    ``(VI) a basis swap;
                                    ``(VII) a currency swap;
                                    ``(VIII) a foreign exchange swap;
                                    ``(IX) a total return swap;
                                    ``(X) an equity index swap;
                                    ``(XI) an equity swap;
                                    ``(XII) a debt index swap;
                                    ``(XIII) a debt swap;
                                    ``(XIV) a credit spread;
                                    ``(XV) a credit default swap;
                                    ``(XVI) a credit swap;
                                    ``(XVII) a weather swap;
                                    ``(XVIII) an energy swap;
                                    ``(XIX) a metal swap;
                                    ``(XX) an agricultural swap;
                                    ``(XXI) an emissions swap; and
                                    ``(XXII) a commodity swap;
                            ``(iv) that is an agreement, contract, or 
                        transaction that is, or in the future becomes 
                        commonly known to the trade as a swap;
                            ``(v) including any security-based swap 
                        agreement which meets the definition of `swap 
                        agreement' as defined in section 206A of the 
                        Gramm-Leach-Bliley Act (15 U.S.C. 78c note) of 
                        which a material term is based on the price, 
                        yield, value, or volatility of any security or 
                        any group or index of securities, or any 
                        interest therein; or
                            ``(vi) that is any combination or 
                        permutation of, or option on, any agreement, 
                        contract, or transaction described in any of 
                        clauses (i) through (v).
                    ``(B) Exclusions.--The term `swap' does not 
                include--
                            ``(i) any contract of sale of a commodity 
                        for future delivery (or option on such a 
                        contract), leverage contract authorized under 
                        section 19, security futures product, or 
                        agreement, contract, or transaction described 
                        in section 2(c)(2)(C)(i) or section 
                        2(c)(2)(D)(i);
                            ``(ii) any sale of a nonfinancial commodity 
                        or security for deferred shipment or delivery, 
                        so long as the transaction is intended to be 
                        physically settled;
                            ``(iii) any put, call, straddle, option, or 
                        privilege on any security, certificate of 
                        deposit, or group or index of securities, 
                        including any interest therein or based on the 
                        value thereof, that is subject to--
                                    ``(I) the Securities Act of 1933 
                                (15 U.S.C. 77a et seq.); and
                                    ``(II) the Securities Exchange Act 
                                of 1934 (15 U.S.C. 78a et seq.);
                            ``(iv) any put, call, straddle, option, or 
                        privilege relating to a foreign currency 
                        entered into on a national securities exchange 
                        registered pursuant to section 6(a) of the 
                        Securities Exchange Act of 1934 (15 U.S.C. 
                        78f(a));
                            ``(v) any agreement, contract, or 
                        transaction providing for the purchase or sale 
                        of 1 or more securities on a fixed basis that 
                        is subject to--
                                    ``(I) the Securities Act of 1933 
                                (15 U.S.C. 77a et seq.); and
                                    ``(II) the Securities Exchange Act 
                                of 1934 (15 U.S.C. 78a et seq.);
                            ``(vi) any agreement, contract, or 
                        transaction providing for the purchase or sale 
                        of 1 or more securities on a contingent basis 
                        that is subject to the Securities Act of 1933 
                        (15 U.S.C. 77a et seq.) and the Securities 
                        Exchange Act of 1934 (15 U.S.C. 78a et seq.), 
                        unless the agreement, contract, or transaction 
                        predicates the purchase or sale on the 
                        occurrence of a bona fide contingency that 
                        might reasonably be expected to affect or be 
                        affected by the creditworthiness of a party 
                        other than a party to the agreement, contract, 
                        or transaction;
                            ``(vii) any note, bond, or evidence of 
                        indebtedness that is a security, as defined in 
                        section 2(a) of the Securities Act of 1933 (15 
                        U.S.C. 77b(a));
                            ``(viii) any agreement, contract, or 
                        transaction that is--
                                    ``(I) based on a security; and
                                    ``(II) entered into directly or 
                                through an underwriter (as defined in 
                                section 2(a) of the Securities Act of 
                                1933 (15 U.S.C. 77b(a))) by the issuer 
                                of such security for the purposes of 
                                raising capital, unless the agreement, 
                                contract, or transaction is entered 
                                into to manage a risk associated with 
                                capital raising;
                            ``(ix) any agreement, contract, or 
                        transaction a counterparty of which is a 
                        Federal Reserve bank, the Federal Government, 
                        or a Federal agency that is expressly backed by 
                        the full faith and credit of the United States; 
                        and
                            ``(x) any security-based swap, other than a 
                        security-based swap as described in 
                        subparagraph (D).
                    ``(C) Rule of construction regarding master 
                agreements.--
                            ``(i) In general.--Except as provided in 
                        clause (ii), the term `swap' includes a master 
                        agreement that provides for an agreement, 
                        contract, or transaction that is a swap under 
                        subparagraph (A), together with each supplement 
                        to any master agreement, without regard to 
                        whether the master agreement contains an 
                        agreement, contract, or transaction that is not 
                        a swap pursuant to subparagraph (A).
                            ``(ii) Exception.--For purposes of clause 
                        (i), the master agreement shall be considered 
                        to be a swap only with respect to each 
                        agreement, contract, or transaction covered by 
                        the master agreement that is a swap pursuant to 
                        subparagraph (A).
                    ``(D) Mixed swap.--The term `security-based swap' 
                includes any agreement, contract, or transaction that 
                is as described in section 3(a)(68)(A) of the 
                Securities Exchange Act of 1934 (15 U.S.C. 
                78c(a)(68)(A)) and also is based on the value of 1 or 
                more interest or other rates, currencies, commodities, 
                instruments of indebtedness, indices, quantitative 
                measures, other financial or economic interest or 
                property of any kind (other than a single security or a 
                narrow-based security index), or the occurrence, non-
                occurrence, or the extent of the occurrence of an event 
                or contingency associated with a potential financial, 
                economic, or commercial consequence (other than an 
                event described in subparagraph (A)(iii)).
                    ``(E) Treatment of foreign exchange swaps and 
                forwards.--
                            ``(i) In general.--Foreign exchange swaps 
                        and foreign exchange forwards shall be 
                        considered swaps under this paragraph unless 
                        the Secretary makes a written determination 
                        that either foreign exchange swaps or foreign 
                        exchange forwards or both--
                                    ``(I) should be not be regulated as 
                                swaps under this Act; and
                                    ``(II) are not structured to evade 
                                the Wall Street Transparency and 
                                Accountability Act of 2010 in violation 
                                of any rule promulgated by the 
                                Commission pursuant to section 111(c) 
                                of that Act.
                            ``(ii) Congressional notice; 
                        effectiveness.--The Secretary shall submit any 
                        written determination under clause (i) to the 
                        appropriate committees of Congress, including 
                        the Committee on Agriculture, Nutrition, and 
                        Forestry of the Senate and the Committee on 
                        Agriculture of the House of Representatives. 
                        Any such written determination by the Secretary 
                        shall not be effective until it is submitted to 
                        the appropriate committees of Congress.
                            ``(iii) Reporting.--Notwithstanding a 
                        written determination by the Secretary under 
                        clause (i), all foreign exchange swaps and 
                        foreign exchange forwards shall be reported to 
                        either a swap data repository, or, if there is 
                        no swap data repository that would accept such 
                        swaps or forwards, to the Commission pursuant 
                        to section 4r within such time period as the 
                        Commission may by rule or regulation prescribe.
                            ``(iv) Business standards.--Notwithstanding 
                        clauses (ix) and (x) of subparagraph (B) and 
                        clause (ii), any party to a foreign exchange 
                        swap or forward that is a swap dealer or major 
                        swap participant shall conform to the business 
                        conduct standards contained in section 4s(h).
                            ``(v) Secretary.--For purposes of this 
                        subparagraph only, the term `Secretary' means 
                        the Secretary of the Treasury.
                    ``(F) Exception for certain foreign exchange swaps 
                and forwards.--
                            ``(i) Registered entities.--Any foreign 
                        exchange swap and any foreign exchange forward 
                        that is listed and traded on or subject to the 
                        rules of a designated contract market or a swap 
                        execution facility, or that is cleared by a 
                        derivatives clearing organization shall not be 
                        exempt from any provision of this Act or 
                        amendments made by the Wall Street Transparency 
                        and Accountability Act of 2010 prohibiting 
                        fraud or manipulation.
                            ``(ii) Retail transactions.--Nothing in 
                        subparagraph (E) shall affect, or be construed 
                        to affect, the applicability of this Act or the 
                        jurisdiction of the Commission with respect to 
                        agreements, contracts, or transactions in 
                        foreign currency pursuant to section 2(c)(2).
            ``(48) Swap data repository.--The term `swap data 
        repository' means any person that collects, calculates, 
        prepares, or maintains information or records with respect to 
        transactions or positions in, or the terms and conditions of, 
        swaps entered into by third parties.
            ``(49) Swap dealer.--
                    ``(A) In general.--The term `swap dealer' means any 
                person who--
                            ``(i) holds itself out as a dealer in 
                        swaps;
                            ``(ii) makes a market in swaps;
                            ``(iii) regularly engages in the purchase 
                        and sale of swaps in the ordinary course of 
                        business; or
                            ``(iv) engages in any activity causing the 
                        person to be commonly known in the trade as a 
                        dealer or market maker in swaps.
                    ``(B) Inclusion.--A person may be designated as a 
                swap dealer for a single type or single class or 
                category of swap or activities and considered not to be 
                a swap dealer for other types, classes, or categories 
                of swaps or activities.
                    ``(C) Capital.--In setting capital requirements for 
                a person that is designated as a swap dealer for a 
                single type or single class or category of swap or 
                activities, the prudential regulator and the Commission 
                shall take into account the risks associated with other 
                types of swaps or classes of swaps or categories of 
                swaps engaged in and the other activities conducted by 
                that person that are not otherwise subject to 
                regulation applicable to that person by virtue of the 
                status of the person as a swap dealer.
                    ``(D) Exception.--The term `swap dealer' does not 
                include a person that buys or sells swaps for such 
                person's own account, either individually or in a 
                fiduciary capacity, but not as a part of a regular 
                business.
            ``(50) Swap execution facility.--The term `swap execution 
        facility' means a facility in which multiple participants have 
        the ability to execute or trade swaps by accepting bids and 
        offers made by other participants that are open to multiple 
        participants in the facility or system, through any means of 
        interstate commerce, including any trading facility, that--
                    ``(A) facilitates the execution of swaps between 
                persons; and
                    ``(B) is not a designated contract market.''; and
            (22) in paragraph (51) (as redesignated by paragraph (1)), 
        in subparagraph (A)(i), by striking ``partipants'' and 
        inserting ``participants''.
    (b) Authority To Define Terms.--The Commodity Futures Trading 
Commission may adopt a rule to define--
            (1) the term ``commercial risk''; and
            (2) any other term included in an amendment to the 
        Commodity Exchange Act (7 U.S.C. 1 et seq.) made by this 
        subtitle.
    (c) Modification of Definitions.--To include transactions and 
entities that have been structured to evade this subtitle (or an 
amendment made by this subtitle), the Commodity Futures Trading 
Commission shall adopt a rule to further define the terms ``swap'', 
``swap dealer'', ``major swap participant'', and ``eligible contract 
participant''.
    (d) Exemptions.--Section 4(c)(1) of the Commodity Exchange Act (7 
U.S.C. 6(c)(1)) is amended by striking ``except that'' and all that 
follows through the period at the end and inserting the following: 
``except that--
                    ``(A) unless the Commission is expressly authorized 
                by any provision described in this subparagraph to 
                grant exemptions, with respect to amendments made by 
                subtitle A of the Wall Street Transparency and 
                Accountability Act of 2010--
                            ``(i) with respect to--
                                    ``(I) paragraphs (2), (3), (4), 
                                (5), and (7), clause (vii)(III) of 
                                paragraph (17), paragraphs (23), (24), 
                                (31), (32), (38), (39), (41), (42), 
                                (46), (47), (48), and (49) of section 
                                1a, and sections 2(a)(13), 2(c)(D), 
                                4a(a), 4a(b), 4d(c), 4d(d), 4r, 4s, 
                                5b(a), 5b(b), 5(d), 5(g), 5(h), 5b(c), 
                                5b(i), 8e, and 21; and
                                    ``(II) section 206(e) of the Gramm-
                                Leach-Bliley Act (Public Law 106-102; 
                                15 U.S.C. 78c note); and
                            ``(ii) in subsection (c) of section 111 and 
                        section 132; and
                    ``(B) the Commission and the Securities and 
                Exchange Commission may by rule, regulation, or order 
                jointly exclude any agreement, contract, or transaction 
                from section 2(a)(1)(D)) if the Commission determines 
                that the exemption would be consistent with the public 
                interest.''.
    (e) Conforming Amendments.--
            (1) Section 2(c)(2)(B)(i)(II) of the Commodity Exchange Act 
        (7 U.S.C. 2(c)(2)(B)(i)(II)) is amended--
                    (A) in item (cc)--
                            (i) in subitem (AA), by striking ``section 
                        1a(20)'' and inserting ``section 1a''; and
                            (ii) in subitem (BB), by striking ``section 
                        1a(20)'' and inserting ``section 1a''; and
                    (B) in item (dd), by striking ``section 
                1a(12)(A)(ii)'' and inserting ``section 
                1a(18)(A)(ii)''.
            (2) Section 4m(3) of the Commodity Exchange Act (7 U.S.C. 
        6m(3)) is amended by striking ``section 1a(6)'' and inserting 
        ``section 1a''.
            (3) Section 4q(a)(1) of the Commodity Exchange Act (7 
        U.S.C. 6o-1(a)(1)) is amended by striking ``section 1a(4)'' and 
        inserting ``section 1a(9)''.
            (4) Section 5(e)(1) of the Commodity Exchange Act (7 U.S.C. 
        7(e)(1)) is amended by striking ``section 1a(4)'' and inserting 
        ``section 1a(9)''.
            (5) Section 5a(b)(2)(F) of the Commodity Exchange Act (7 
        U.S.C. 7a(b)(2)(F)) is amended by striking ``section 1a(4)'' 
        and inserting ``section 1a(9)''.
            (6) Section 5b(a) of the Commodity Exchange Act (7 U.S.C. 
        7a-1(a)) is amended, in the matter preceding paragraph (1), by 
        striking ``section 1a(9)'' and inserting ``section 1a''.
            (7) Section 5c(c)(2)(B) of the Commodity Exchange Act (7 
        U.S.C. 7a-2(c)(2)(B)) is amended by striking ``section 1a(4)'' 
        and inserting ``section 1a(9)''.
            (8) Section 6(g)(5)(B)(i) of the Securities Exchange Act of 
        1934 (15 U.S.C. 78f(g)(5)(B)(i)) is amended--
                    (A) in subclause (I), by striking ``section 
                1a(12)(B)(ii)'' and inserting ``section 
                1a(18)(B)(ii)''; and
                    (B) in subclause (II), by striking ``section 
                1a(12)'' and inserting ``section 1a(18)''.
            (9) The Legal Certainty for Bank Products Act of 2000 (7 
        U.S.C. 27 et seq.) is amended--
                    (A) in section 402--
                            (i) in subsection (a)(7), by striking 
                        ``section 1a(20)'' and inserting ``section 
                        1a'';
                            (ii) in subsection (b)(2), by striking 
                        ``section 1a(12)'' and inserting ``section 
                        1a'';
                            (iii) in subsection (c), by striking 
                        ``section 1a(4)'' and inserting ``section 1a''; 
                        and
                            (iv) in subsection (d)--
                                    (I) in the matter preceding 
                                paragraph (1), by striking ``section 
                                1a(4)'' and inserting ``section 
                                1a(9)'';
                                    (II) in paragraph (1)--
                                            (aa) in subparagraph (A), 
                                        by striking ``section 1a(12)'' 
                                        and inserting ``section 1a''; 
                                        and
                                            (bb) in subparagraph (B), 
                                        by striking ``section 1a(33)'' 
                                        and inserting ``section 1a'';
                                    (III) in paragraph (2)--
                                            (aa) in subparagraph (A), 
                                        by striking ``section 1a(10)'' 
                                        and inserting ``section 1a'';
                                            (bb) in subparagraph (B), 
                                        by striking ``section 
                                        1a(12)(B)(ii)'' and inserting 
                                        ``section 1a(18)(B)(ii)'';
                                            (cc) in subparagraph (C), 
                                        by striking ``section 1a(12)'' 
                                        and inserting ``section 
                                        1a(18)''; and
                                            (dd) in subparagraph (D), 
                                        by striking ``section 1a(13)'' 
                                        and inserting ``section 1a''; 
                                        and
                    (B) in section 404(1), by striking ``section 
                1a(4)'' and inserting ``section 1a''.

SEC. 722. JURISDICTION.

    (a) Exclusive Jurisdiction.--Section 2(a)(1)(A) of the Commodity 
Exchange Act (7 U.S.C. 2(a)(1)(A)) is amended in the first sentence--
            (1) by inserting ``the Wall Street Transparency and 
        Accountability Act of 2010 (including an amendment made by that 
        Act) and'' after ``otherwise provided in'';
            (2) by striking ``(c) through (i) of this section'' and 
        inserting ``(c) and (f)'';
            (3) by striking ``contracts of sale'' and inserting ``swaps 
        or contracts of sale''; and
            (4) by striking ``or derivatives transaction execution 
        facility registered pursuant to section 5 or 5a'' and inserting 
        ``pursuant to section 5''.
    (b) Regulation of Swaps Under Federal and State Law.--Section 12 of 
the Commodity Exchange Act (7 U.S.C. 16) is amended by adding at the 
end the following:
    ``(h) Regulation of Swaps as Insurance Under State Law.--A swap--
            ``(1) shall not be considered to be insurance; and
            ``(2) may not be regulated as an insurance contract under 
        the law of any State.''.
    (c) Agreements, Contracts, and Transactions Traded on an Organized 
Exchange.--Section 2(c)(2)(A) of the Commodity Exchange Act (7 U.S.C. 
2(c)(2)(A)) is amended--
            (1) in clause (i), by striking ``or'' at the end;
            (2) by redesignating clause (ii) as clause (iii); and
            (3) by inserting after clause (i) the following:
                            ``(ii) a swap; or''.
    (d) Applicability.--Section 2 of the Commodity Exchange Act (7 
U.S.C. 2) (as amended by section 723(a)(3)) is amended by adding at the 
end the following:
    ``(i) Applicability.--The provisions of this Act relating to swaps 
that were enacted by the Wall Street Transparency and Accountability 
Act of 2010 (including any rule prescribed or regulation promulgated 
under that Act), shall not apply to activities outside the United 
States unless those activities--
            ``(1) have a direct and significant connection with 
        activities in, or effect on, commerce of the United States; or
            ``(2) contravene such rules or regulations as the 
        Commission may prescribe or promulgate as are necessary or 
        appropriate to prevent the evasion of any provision of this Act 
        that was enacted by the Wall Street Transparency and 
        Accountability Act of 2010.''.
    (e) Just and Reasonable Rates.--Section 2(a)(1)(C) of the Commodity 
Exchange Act (7 U.S.C. 2(a)(1)(C)) (as amended by section 717(a)) is 
amended by adding at the end the following:
                            ``(vi) Notwithstanding the exclusive 
                        jurisdiction of the Commission with respect to 
                        accounts, agreements, and transactions 
                        involving swaps or contracts of sale of a 
                        commodity for future delivery under this Act, 
                        no provision of this Act shall be construed--
                                    ``(I) to supersede or limit the 
                                authority of the Federal Energy 
                                Regulatory Commission under the Federal 
                                Power Act (16 U.S.C. 791a et seq.) or 
                                the Natural Gas Act (15 U.S.C. 717 et 
                                seq.);
                                    ``(II) to restrict the Federal 
                                Energy Regulatory Commission from 
                                carrying out the duties and 
                                responsibilities of the Federal Energy 
                                Regulatory Commission to ensure just 
                                and reasonable rates and protect the 
                                public interest under the Acts 
                                described in subclause (I); or
                                    ``(III) to supersede or limit the 
                                authority of a State regulatory 
                                authority (as defined in section 3(21) 
                                of the Federal Power Act (16 U.S.C. 
                                796(21)) that has jurisdiction to 
                                regulate rates and charges for the sale 
                                of electric energy within the State, or 
                                restrict that State regulatory 
                                authority from carrying out the duties 
                                and responsibilities of the State 
                                regulatory authority pursuant to the 
                                jurisdiction of the State regulatory 
                                authority to regulate rates and charges 
                                for the transmission or sale of 
                                electric energy.
                            ``(vii) Nothing in clause (vi) shall affect 
                        the Commission's authority with respect to the 
                        trading, execution, or clearing of any 
                        agreement, contract, or transaction on or 
                        subject to the rules of a registered entity, 
                        including a designated contract market, 
                        derivatives clearing organization, or swaps 
                        execution facility.''.
    (f) Public Interest Waiver.--Section 4(c) of the Commodity Exchange 
Act (7 U.S.C. 6(c)) (as amended by section 721(d)) is amended by adding 
at the end the following:
            ``(6) If the Commission determines that the exemption would 
        be consistent with the public interest and the purposes of this 
        Act, the Commission shall, in accordance with paragraphs (1) 
        and (2), exempt from the requirements of this Act an agreement, 
        contract, or transaction that is entered into--
                    ``(A) pursuant to a tariff or rate schedule 
                approved or permitted to take effect by the Federal 
                Energy Regulatory Commission;
                    ``(B) pursuant to a tariff or rate schedule 
                establishing rates or charges for, or protocols 
                governing, the sale of electric energy approved or 
                permitted to take effect by the regulatory authority of 
                the State or municipality having jurisdiction to 
                regulate rates and charges for the sale of electric 
                energy within the State or municipality; or
                    ``(C) between entities described in section 201(f) 
                of the Federal Power Act (16 U.S.C. 824(f)).''.

SEC. 723. CLEARING.

    (a) Clearing Requirement.--
            (1) In general.--Section 2 of the Commodity Exchange Act (7 
        U.S.C. 2) is amended--
                    (A) by striking subsections (d), (e), (g), and (h); 
                and
                    (B) by redesignating subsection (i) as subsection 
                (g).
            (2) Swaps; limitation on participation.--Section 2 of the 
        Commodity Exchange Act (7 U.S.C. 2) (as amended by paragraph 
        (1)) is amended by inserting after subsection (c) the 
        following:
    ``(d) Swaps.--Nothing in this Act (other than subparagraphs (A), 
(B), (C), and (D) of subsection (a)(1), subsections (f) and (g), 
sections 1a, 2(c)(2)(A)(ii), 2(e), 2(h), 4(c), 4a, 4b, and 4b-1, 
subsections (a), (b), and (g) of section 4c, sections 4d, 4e, 4f, 4g, 
4h, 4i, 4j, 4k, 4l, 4m, 4n, 4o, 4p, 4r, 4s, 4t, 5, 5b, 5c, 5e, and 5h, 
subsections (c) and (d) of section 6, sections 6c, 6d, 8, 8a, and 9, 
subsections (e)(2) and (f) of section 12, subsections (a) and (b) of 
section 13, sections 17, 20, 21, and 22(a)(4), and any other provision 
of this Act that is applicable to registered entities and Commission 
registrants) governs or applies to a swap.
    ``(e) Limitation on Participation.--It shall be unlawful for any 
person, other than an eligible contract participant, to enter into a 
swap unless the swap is entered into on, or subject to the rules of, a 
board of trade designated as a contract market under section 5.''.
            (3) Mandatory clearing of swaps.--Section 2 of the 
        Commodity Exchange Act (7 U.S.C. 2) is amended by inserting 
        after subsection (g) (as redesignated by paragraph (1)(B)) the 
        following:
    ``(h) Clearing Requirement.--
            ``(1) Submission.--
                    ``(A) In general.--Except as provided in paragraphs 
                (9) and (10), any person who is a party to a swap shall 
                submit such swap for clearing to a derivatives clearing 
                organization that is registered under this Act or a 
                derivatives clearing organization that is exempt from 
                registration under section 5b(j) of this Act.
                    ``(B) Open access.--The rules of a registered 
                derivatives clearing organization shall--
                            ``(i) prescribe that all swaps with the 
                        same terms and conditions are economically 
                        equivalent and may be offset with each other 
                        within the derivatives clearing organization; 
                        and
                            ``(ii) provide for nondiscriminatory 
                        clearing of a swap executed bilaterally or on 
                        or through the rules of an unaffiliated 
                        designated contract market or swap execution 
                        facility, subject to the requirements of 
                        section 5(b).
            ``(2) Commission approval.--
                    ``(A) In general.--A derivatives clearing 
                organization shall submit to the Commission for prior 
                approval any group, category, type, or class of swaps 
                that the derivatives clearing organization seeks to 
                accept for clearing, which submission the Commission 
                shall make available to the public.
                    ``(B) Deadline.--The Commission shall take final 
                action on a request submitted pursuant to subparagraph 
                (A) not later than 90 days after submission of the 
                request, unless the derivatives clearing organization 
                submitting the request agrees to an extension of the 
                time limitation established under this subparagraph.
                    ``(C) Approval.--The Commission shall approve, 
                unconditionally or subject to such terms and conditions 
                as the Commission determines to be appropriate, any 
                request submitted pursuant to subparagraph (A) if the 
                Commission finds that the request is consistent with 
                section 5b(c)(2). The Commission shall not approve any 
                such request if the Commission does not make such 
                finding.
                    ``(D) Rules.--The Commission shall adopt rules for 
                a derivatives clearing organization's submission for 
                approval, pursuant to this paragraph, of any group, 
                category, type, or class of swaps that the derivative 
                clearing organization seeks to accept for clearing.
            ``(3) Stay of clearing requirement.--At any time after 
        issuance of an approval pursuant to paragraph (2):
                    ``(A) Review process.--The Commission, on 
                application of a counterparty to a swap or on its own 
                initiative, may stay the clearing requirement of 
                paragraph (1) until the Commission completes a review 
                of the terms of the swap, or the group, category, type, 
                or class of swaps, and the clearing arrangement.
                    ``(B) Deadline.--The Commission shall complete a 
                review undertaken pursuant to subparagraph (A) not 
                later than 90 days after issuance of the stay, unless 
                the derivatives clearing organization that clears the 
                swap, or the group, category, type, or class of swaps, 
                agrees to an extension of the time limitation 
                established under this subparagraph.
                    ``(C) Determination.--Upon completion of the review 
                undertaken pursuant to subparagraph (A)--
                            ``(i) the Commission may determine, 
                        unconditionally or subject to such terms and 
                        conditions as the Commission determines to be 
                        appropriate, that the swap, or the group, 
                        category, type, or class of swaps, must be 
                        cleared pursuant to this subsection if the 
                        Commission finds that such clearing--
                                    ``(I) is consistent with section 
                                5b(c)(2); and
                                    ``(II) is otherwise in the public 
                                interest, for the protection of 
                                investors, and consistent with the 
                                purposes of this Act;
                            ``(ii) the Commission may determine that 
                        the clearing requirement of paragraph (1) shall 
                        not apply to the swap, or the group, category, 
                        type, or class of swaps; or
                            ``(iii) if a determination is made that the 
                        clearing requirement of paragraph (1) shall no 
                        longer apply, then it shall still be 
                        permissible to clear such swap, or the group, 
                        category, type, or class of swaps.
                    ``(D) Rules.--The Commission shall adopt rules for 
                reviewing, pursuant to this paragraph, a derivatives 
                clearing organization's clearing of a swap, or a group, 
                category, type, or class of swaps that the Commission 
                has accepted for clearing.
            ``(4) Swaps required to be accepted for clearing.--
                    ``(A) Rulemaking.--The Commission shall adopt rules 
                to further identify any group, category, type, or class 
                of swaps not submitted for approval under paragraph (2) 
                that the Commission deems should be accepted for 
                clearing. In adopting such rules, the Commission shall 
                take into account the following factors:
                            ``(i) The extent to which any of the terms 
                        of the group, category, type, or class of 
                        swaps, including price, are disseminated to 
                        third parties or are referenced in other 
                        agreements, contracts, or transactions.
                            ``(ii) The volume of transactions in the 
                        group, category, type, or class of swaps.
                            ``(iii) The extent to which the terms of 
                        the group, category, type, or class of swaps 
                        are similar to the terms of other agreements, 
                        contracts, or transactions that are cleared.
                            ``(iv) Whether any differences in the terms 
                        of the group, category, type, or class of 
                        swaps, compared to other agreements, contracts, 
                        or transactions that are cleared, are of 
                        economic significance.
                            ``(v) Whether a derivatives clearing 
                        organization is prepared to clear the group, 
                        category, type, or class of swaps and such 
                        derivatives clearing organization has in place 
                        effective risk management systems.
                            ``(vi) Any other factors the Commission 
                        determine to be appropriate.
                    ``(B) Other designations.--At any time after the 
                adoption of the rules required under subparagraph (A), 
                the Commission may separately designate a particular 
                swap or class of swaps as subject to the clearing 
                requirement in paragraph (1), taking into account the 
                factors described in clauses (i) through (vi) of 
                subparagraph (A) and the rules adopted under such 
                subparagraph.
                    ``(C) In general.--In accordance with subparagraph 
                (A), the Commission shall, consistent with the public 
                interest, adopt rules under the expedited process 
                described in subparagraph (D) to establish criteria for 
                determining that a swap, or any group, category, type, 
                or class of swap is required to be cleared.
                    ``(D) Expedited rulemaking authority.--
                            ``(i) Procedure.--The promulgation of 
                        regulations under subparagraph (A) may be made 
                        without regard to--
                                    ``(I) the notice and comment 
                                provisions of section 553 of title 5, 
                                United States Code; and
                                    ``(II) chapter 35 of title 44, 
                                United States Code (commonly known as 
                                the `Paperwork Reduction Act').
                            ``(ii) Agency rulemaking.--In carrying out 
                        subparagraph (A), the Commission shall use the 
                        authority provided under section 808 of title 
                        5, United States Code.
            ``(5) Prevention of evasion.--
                    ``(A) In general.--The Commission may prescribe 
                rules under this subsection (and issue interpretations 
                of rules prescribed under this subsection) as 
                determined by the Commission to be necessary to prevent 
                evasions of the mandatory clearing requirements under 
                this Act.
                    ``(B) Duty of commission to investigate and take 
                certain actions.--To the extent the Commission finds 
                that a particular swap, group, category, type, or class 
                of swaps would otherwise be subject to mandatory 
                clearing but no derivatives clearing organization has 
                listed the swap, group, category, type, or class of 
                swaps for clearing, the Commission shall--
                            ``(i) investigate the relevant facts and 
                        circumstances;
                            ``(ii) within 30 days issue a public report 
                        containing the results of the investigation; 
                        and
                            ``(iii) take such actions as the Commission 
                        determines to be necessary and in the public 
                        interest, which may include requiring the 
                        retaining of adequate margin or capital by 
                        parties to the swap, group, category, type, or 
                        class of swaps.
                    ``(C) Effect on authority.--Nothing in this 
                paragraph shall--
                            ``(i) authorize the Commission to require a 
                        derivatives clearing organization to list for 
                        clearing a swap, group, category, type, or 
                        class of swaps if the clearing of the swap, 
                        group, category, type, or class of swaps would 
                        adversely affect the business operations of the 
                        derivatives clearing organization, threaten the 
                        financial integrity of the derivatives clearing 
                        organization, or pose a systemic risk to the 
                        derivatives clearing organization; and
                            ``(ii) affect the authority of the 
                        Commission to enforce the open access 
                        provisions of paragraph (1) with respect to a 
                        swap, group, category, type, or class of swaps 
                        that is listed for clearing by a derivatives 
                        clearing organization.
            ``(6) Required reporting.--
                    ``(A) Both counterparties.--Both counterparties to 
                a swap that is not cleared by any derivatives clearing 
                organization shall report such a swap either to a 
                registered swap repository described in section 21 or, 
                if there is no repository that would accept the swap, 
                to the Commission pursuant to section 4r.
                    ``(B) Timing.--Counterparties to a swap shall 
                submit the reports required under subparagraph (A) not 
                later than such time period as the Commission may by 
                rule or regulation prescribe.
            ``(7) Transition rules.--
                    ``(A) Reporting transition rules.--Rules adopted by 
                the Commission under this section shall provide for the 
                reporting of data, as follows:
                            ``(i) Swaps entered into before date of 
                        enactment of this subsection.--Swaps entered 
                        into before the date of the enactment of this 
                        subsection shall be reported to a registered 
                        swap repository or the Commission not later 
                        than 180 days after the effective date of this 
                        subsection.
                            ``(ii) Swaps entered into on or after date 
                        of enactment of this subsection.--Swaps entered 
                        into on or after such date of enactment shall 
                        be reported to a registered swap repository or 
                        the Commission not later than the later of--
                                    ``(I) 90 days after such effective 
                                date; or
                                    ``(II) such other time after 
                                entering into the swap as the 
                                Commission may prescribe by rule or 
                                regulation.
                    ``(B) Clearing transition rules.--
                            ``(i) Swaps entered into before the date of 
                        the enactment of this subsection.--Swaps 
                        entered into before the date of the enactment 
                        of this subsection are exempt from the clearing 
                        requirements of this subsection if reported 
                        pursuant to subparagraph (A)(i).
                            ``(ii) Swaps entered into before 
                        application of clearing requirement.--Swaps 
                        entered into before application of the clearing 
                        requirement pursuant to this subsection are 
                        exempt from the clearing requirements of this 
                        subsection if reported pursuant to subparagraph 
                        (A)(ii).
            ``(8) Trade execution.--
                    ``(A) In general.--With respect to transactions 
                involving swaps subject to the clearing requirement of 
                paragraph (1), counterparties shall--
                            ``(i) execute the transaction on a board of 
                        trade designated as a contract market under 
                        section 5; or
                            ``(ii) execute the transaction on a swap 
                        execution facility registered under section 5h 
                        or a swap execution facility that is exempt 
                        from registration under section 5h(f) of this 
                        Act.
                    ``(B) Exception.--The requirements of clauses (i) 
                and (ii) of subparagraph (A) shall not apply if no 
                board of trade or swap execution facility makes the 
                swap available to trade or a swap transactions where a 
                commercial end user opts to use the clearing exemption 
                under paragraph (9).
            ``(9) Required exemption.--Subject to paragraph (4), the 
        Commission shall exempt a swap from the requirements of 
        paragraphs (1) and (8) and any rules issued under this 
        subsection, if no derivatives clearing organization registered 
        under this Act or no derivatives clearing organization that is 
        exempt from registration under section 5b(j) of this Act will 
        accept the swap from clearing.
            ``(10) End user clearing exemption.--
                    ``(A) Definition of commercial end user.--
                            ``(i) In general.--In this paragraph, the 
                        term `commercial end user' means any person 
                        other than a financial entity described in 
                        clause (ii) who, as its primary business 
                        activity, owns, uses, produces, processes, 
                        manufactures, distributes, merchandises, or 
                        markets goods, services, or commodities (which 
                        shall include but not be limited to coal, 
                        natural gas, electricity, ethanol, crude oil, 
                        gasoline, propane, distillates, and other 
                        hydrocarbons) either individually or in a 
                        fiduciary capacity.
                            ``(ii) Financial entity.--The term 
                        `financial entity' means--
                                    ``(I) a swap dealer, major swap 
                                participant, security-based swap 
                                dealer, or major security-based swap 
                                participant;
                                    ``(II) a person predominantly 
                                engaged in activities that are in the 
                                business of banking or financial in 
                                nature, as defined in Section 4(k) of 
                                the Bank Holding Company Act of 1956;
                                    ``(III) a person predominantly 
                                engaged in activities that are 
                                financial in nature;
                                    ``(IV) a commodity pool or a 
                                private fund as defined in section 
                                202(a) of the Investment Advisers Act 
                                of 1940 (15 U.S.C. 80b-2(a)); or
                                    ``(V) a person that is registered 
                                or required to be registered with the 
                                Commission.
                    ``(B) End user clearing exemption.--
                            ``(i) In general.--Subject to clause (ii), 
                        in the event that a swap is subject to the 
                        mandatory clearing requirement under paragraph 
                        (1), and 1 of the counterparties to the swap is 
                        a commercial end user, that counterparty--
                                    ``(I)(aa) may elect not to clear 
                                the swap, as required under paragraph 
                                (1); or
                                    ``(bb) may elect to require 
                                clearing of the swap; and
                                    ``(II) if the end user makes an 
                                election under subclause (I)(bb), shall 
                                have the sole right to select the 
                                derivatives clearing organization at 
                                which the swap will be cleared.
                            ``(ii) Limitation.--A commercial end user 
                        may only make an election under clause (i) if 
                        the end user is using the swap to hedge its own 
                        commercial risk.
                    ``(C) Treatment of affiliates.--
                            ``(i) In general.--An affiliate of a 
                        commercial end user (including affiliate 
                        entities predominantly engaged in providing 
                        financing for the purchase of the merchandise 
                        or manufactured goods of the commercial end 
                        user) may make an election under subparagraph 
                        (B)(i) only if the affiliate, acting on behalf 
                        of the commercial end user and as an agent, 
                        uses the swap to hedge or mitigate the 
                        commercial risk of the commercial end user 
                        parent or other affiliate of the commercial end 
                        user that is not a financial entity.
                            ``(ii) Prohibition relating to certain 
                        affiliates.--An affiliate of a commercial end 
                        user shall not use the exemption under 
                        subparagraph (B) if the affiliate is--
                                    ``(I) a swap dealer;
                                    ``(II) a security-based swap 
                                dealer;
                                    ``(III) a major swap participant;
                                    ``(IV) a major security-based swap 
                                participant;
                                    ``(V) an issuer that would be an 
                                investment company, as defined in 
                                section 3 of the Investment Company Act 
                                of 1940 (15 U.S.C. 80a-3), but for 
                                paragraph (1) or (7) of subsection (c) 
                                of that Act (15 U.S.C. 80a-3(c));
                                    ``(VI) a commodity pool;
                                    ``(VII) a bank holding company with 
                                over $50,000,000,000 in consolidated 
                                assets; or
                                    ``(VIII) an affiliate of any entity 
                                described in subclauses (I) through 
                                (VII).
                    ``(D) Abuse of exemption.--The Commission may 
                prescribe such rules or issue interpretations of the 
                rules as the Commission determines to be necessary to 
                prevent abuse of the exemption described in 
                subparagraph (B). The Commission may also request 
                information from those entities claiming the clearing 
                exemption as necessary to prevent abuse of the 
                exemption described in subparagraph (B).
                    ``(E) Option to clear.--
                            ``(i) Swaps required to be cleared entered 
                        into with a financial entity.--With respect to 
                        any swap that is required to be cleared by a 
                        derivatives clearing organization and entered 
                        into by a swap dealer or a major swap 
                        participant with a financial entity, the 
                        financial entity shall have the sole right to 
                        select the derivatives clearing organization at 
                        which the swap will be cleared.
                            ``(ii) Swaps not required to be cleared 
                        entered into with a financial entity or 
                        commercial end user.--With respect to any swap 
                        that is not required to be cleared by a 
                        derivatives clearing organization and entered 
                        into by a swap dealer or a major swap 
                        participant with a financial entity or 
                        commercial end user, the financial entity or 
                        commercial end user--
                                    ``(I) may elect to require clearing 
                                of the swap; and
                                    ``(II) shall have the sole right to 
                                select the derivatives clearing 
                                organization at which the swap will be 
                                cleared.''.
    (b) Commodity Exchange Act.--Section 2 of the Commodity Exchange 
Act (7 U.S.C. 2) is amended by adding at the end the following:
    ``(j) Audit Committee Approval.--Exemptions from the requirements 
of subsection (h)(2)(F) to clear a swap and subsection (b) to trade a 
swap through a board of trade or swap execution facility shall be 
available to a counterparty that is an issuer of securities that are 
registered under section 12 of the Securities Exchange Act of 1934 (15 
U.S.C. 78l) or that is required to file reports pursuant to section 
15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78o) only if 
the issuer's audit committee has reviewed and approved its decision to 
enter into swaps that are subject to such exemptions.''.
    (c) Grandfather Provisions.--
            (1) Legal certainty for certain transactions in exempt 
        commodities.--Not later than 60 days after the date of 
        enactment of this Act, a person may submit to the Commodity 
        Futures Trading Commission a petition to remain subject to 
        section 2(h) of the Commodity Exchange Act (7 U.S.C. 2(h)) (as 
        in effect on the day before the date of enactment of this Act).
            (2) Consideration; authority of commodity futures trading 
        commission.--The Commodity Futures Trading Commission--
                    (A) shall consider any petition submitted under 
                subparagraph (A) in a prompt manner; and
                    (B) may allow a person to continue operating 
                subject to section 2(h) of the Commodity Exchange Act 
                (7 U.S.C. 2(h)) (as in effect on the day before the 
                date of enactment of this Act) for not longer than a 1-
                year period.
            (3) Agricultural swaps.--
                    (A) In general.--Except as provided in paragraph 
                (2), no person shall offer to enter into, enter into, 
                or confirm the execution of, any swap in an 
                agricultural commodity (as defined by the Commodity 
                Futures Trading Commission).
                    (B) Exception.--Notwithstanding paragraph (1), a 
                person may offer to enter into, enter into, or confirm 
                the execution of, any swap in an agricultural commodity 
                pursuant to section 4(c) of the Commodity Exchange Act 
                (7 U.S.C. 6(c)) or any rule, regulation, or order 
                issued thereunder (including any rule, regulation, or 
                order in effect as of the date of enactment of this 
                Act) by the Commodity Futures Trading Commission to 
                allow swaps under such terms and conditions as the 
                Commission shall prescribe.
            (4) Required reporting.--If the exception described in 
        paragraph (2) applies, and there is no facility that makes the 
        swap available to trade, the counterparties shall comply with 
        any recordkeeping and transaction reporting requirements that 
        may be prescribed by the Commission with respect to swaps 
        subject to the requirements of paragraph (1).

SEC. 724. SWAPS; SEGREGATION AND BANKRUPTCY TREATMENT.

    (a) Segregation Requirements for Cleared Swaps.--Section 4d of the 
Commodity Exchange Act (7 U.S.C. 6d) (as amended by section 732) is 
amended by adding at the end the following:
    ``(f) Swaps.--
            ``(1) Registration requirement.--It shall be unlawful for 
        any person to accept any money, securities, or property (or to 
        extend any credit in lieu of money, securities, or property) 
        from, for, or on behalf of a swaps customer to margin, 
        guarantee, or secure a swap cleared by or through a derivatives 
        clearing organization (including money, securities, or property 
        accruing to the customer as the result of such a swap), unless 
        the person shall have registered under this Act with the 
        Commission as a futures commission merchant, and the 
        registration shall not have expired nor been suspended nor 
        revoked.
            ``(2) Cleared swaps.--
                    ``(A) Segregation required.--A futures commission 
                merchant shall treat and deal with all money, 
                securities, and property of any swaps customer received 
                to margin, guarantee, or secure a swap cleared by or 
                though a derivatives clearing organization (including 
                money, securities, or property accruing to the swaps 
                customer as the result of such a swap) as belonging to 
                the swaps customer.
                    ``(B) Commingling prohibited.--Money, securities, 
                and property of a swaps customer described in 
                subparagraph (A) shall be separately accounted for and 
                shall not be commingled with the funds of the futures 
                commission merchant or be used to margin, secure, or 
                guarantee any trades or contracts of any swaps customer 
                or person other than the person for whom the same are 
                held.
            ``(3) Exceptions.--
                    ``(A) Use of funds.--
                            ``(i) In general.--Notwithstanding 
                        paragraph (2), money, securities, and property 
                        of a swaps customer of a futures commission 
                        merchant described in paragraph (2) may, for 
                        convenience, be commingled and deposited in the 
                        same 1 or more accounts with any bank or trust 
                        company or with a derivatives clearing 
                        organization.
                            ``(ii) Withdrawal.--Notwithstanding 
                        paragraph (2), such share of the money, 
                        securities, and property described in clause 
                        (i) as in the normal course of business shall 
                        be necessary to margin, guarantee, secure, 
                        transfer, adjust, or settle a cleared swap with 
                        a derivatives clearing organization, or with 
                        any member of the derivatives clearing 
                        organization, may be withdrawn and applied to 
                        such purposes, including the payment of 
                        commissions, brokerage, interest, taxes, 
                        storage, and other charges, lawfully accruing 
                        in connection with the cleared swap.
                    ``(B) Commission action.--Notwithstanding paragraph 
                (2), in accordance with such terms and conditions as 
                the Commission may prescribe by rule, regulation, or 
                order, any money, securities, or property of the swaps 
                customer of a futures commission merchant described in 
                paragraph (2) may be commingled and deposited as 
                provided in this section with any other money, 
                securities, or property received by the futures 
                commission merchant and required by the Commission to 
                be separately accounted for and treated and dealt with 
                as belonging to the swaps customer of the futures 
                commission merchant.
            ``(4) Permitted investments.--Money described in paragraph 
        (2) may be invested in obligations of the United States, in 
        general obligations of any State or of any political 
        subdivision of a State, and in obligations fully guaranteed as 
        to principal and interest by the United States, or in any other 
        investment that the Commission may by rule or regulation 
        prescribe, and such investments shall be made in accordance 
        with such rules and regulations and subject to such conditions 
        as the Commission may prescribe.
            ``(5) Commodity contract.--A swap cleared by or through a 
        derivatives clearing organization shall be considered to be a 
        commodity contract as such term is defined in section 761 of 
        title 11, United States Code, with regard to all money, 
        securities, and property of any swaps customer received by a 
        futures commission merchant or a derivatives clearing 
        organization to margin, guarantee, or secure the swap 
        (including money, securities, or property accruing to the 
        customer as the result of the swap).
            ``(6) Prohibition.--It shall be unlawful for any person, 
        including any derivatives clearing organization and any 
        depository institution, that has received any money, 
        securities, or property for deposit in a separate account or 
        accounts as provided in paragraph (2) to hold, dispose of, or 
        use any such money, securities, or property as belonging to the 
        depositing futures commission merchant or any person other than 
        the swaps customer of the futures commission merchant.''.
    (b) Bankruptcy Treatment of Cleared Swaps.--Section 761 of title 
11, United States Code, is amended--
            (1) in paragraph (4), by striking subparagraph (F) and 
        inserting the following:
                    ``(F)(i) any other contract, option, agreement, or 
                transaction that is similar to a contract, option, 
                agreement, or transaction referred to in this 
                paragraph; and
                    ``(ii) with respect to a futures commission 
                merchant or a clearing organization, any other 
                contract, option, agreement, or transaction, in each 
                case, that is cleared by a clearing organization;''; 
                and
            (2) in paragraph (9)(A)(i), by striking ``the commodity 
        futures account'' and inserting ``a commodity contract 
        account''.
    (c) Segregation Requirements for Uncleared Swaps.--Section 4s of 
the Commodity Exchange Act (as added by section 731) is amended by 
adding at the end the following:
    ``(l) Segregation Requirements.--
            ``(1) Segregation of assets held as collateral in uncleared 
        swap transactions.--
                    ``(A) Notification.--A swap dealer or major swap 
                participant shall be required to notify the 
                counterparty of the swap dealer or major swap 
                participant at the beginning of a swap transaction that 
                the counterparty has the right to require segregation 
                of the funds or other property supplied to margin, 
                guarantee, or secure the obligations of the 
                counterparty.
                    ``(B) Segregation and maintenance of funds.--At the 
                request of a counterparty to a swap that provides funds 
                or other property to a swap dealer or major swap 
                participant to margin, guarantee, or secure the 
                obligations of the counterparty, the swap dealer or 
                major swap participant shall--
                            ``(i) segregate the funds or other property 
                        for the benefit of the counterparty; and
                            ``(ii) in accordance with such rules and 
                        regulations as the Commission may promulgate, 
                        maintain the funds or other property in a 
                        segregated account separate from the assets and 
                        other interests of the swap dealer or major 
                        swap participant.
            ``(2) Applicability.--The requirements described in 
        paragraph (1) shall--
                    ``(A) apply only to a swap between a counterparty 
                and a swap dealer or major swap participant that is not 
                submitted for clearing to a derivatives clearing 
                organization; and
                    ``(B)(i) not apply to variation margin payments; or
                    ``(ii) not preclude any commercial arrangement 
                regarding--
                            ``(I) the investment of segregated funds or 
                        other property that may only be invested in 
                        such investments as the Commission may permit 
                        by rule or regulation; and
                            ``(II) the related allocation of gains and 
                        losses resulting from any investment of the 
                        segregated funds or other property.
            ``(3) Use of independent third-party custodians.--The 
        segregated account described in paragraph (1) shall be--
                    ``(A) carried by an independent third-party 
                custodian; and
                    ``(B) designated as a segregated account for and on 
                behalf of the counterparty.
            ``(4) Reporting requirement.--If the counterparty does not 
        choose to require segregation of the funds or other property 
        supplied to margin, guarantee, or secure the obligations of the 
        counterparty, the swap dealer or major swap participant shall 
        report to the counterparty of the swap dealer or major swap 
        participant on a quarterly basis that the back office 
        procedures of the swap dealer or major swap participant 
        relating to margin and collateral requirements are in 
        compliance with the agreement of the counterparties.''.

SEC. 725. DERIVATIVES CLEARING ORGANIZATIONS.

    (a) Registration Requirement.--Section 5b of the Commodity Exchange 
Act (7 U.S.C. 7a-1) is amended by striking subsections (a) and (b) and 
inserting the following:
    ``(a) Registration Requirement.--
            ``(1) In general.--Except as provided in paragraph (2), it 
        shall be unlawful for a derivatives clearing organization, 
        directly or indirectly, to make use of the mails or any means 
        or instrumentality of interstate commerce to perform the 
        functions of a derivatives clearing organization with respect 
        to--
                    ``(A) a contract of sale of a commodity for future 
                delivery (or an option on the contract of sale) or 
                option on a commodity, in each case, unless the 
                contract or option is--
                            ``(i) excluded from this Act by subsection 
                        (a)(1)(C)(i), (c), or (f) of section 2; or
                            ``(ii) a security futures product cleared 
                        by a clearing agency registered with the 
                        Securities and Exchange Commission under the 
                        Securities Exchange Act of 1934 (15 U.S.C. 78a 
                        et seq.); or
                    ``(B) a swap.
            ``(2) Exception.--Paragraph (1) shall not apply to a 
        derivatives clearing organization that is registered with the 
        Commission.
    ``(b) Voluntary Registration.--A person that clears 1 or more 
agreements, contracts, or transactions that are not required to be 
cleared under this Act may register with the Commission as a 
derivatives clearing organization.''.
    (b) Registration for Depository Institutions and Clearing Agencies; 
Exemptions; Compliance Officer; Annual Reports.--Section 5b of the 
Commodity Exchange Act (7 U.S.C. 7a-1) is amended by adding at the end 
the following:
    ``(g) Required Registration for Depository Institutions and 
Clearing Agencies.--A person that is required to be registered as a 
derivatives clearing organization under this section shall register 
with the Commission regardless of whether the person is also licensed 
as a depository institution (as that term is defined in section 3 of 
the Federal Deposit Insurance Act (12 U.S.C. 1813) or a clearing agency 
registered with the Securities and Exchange Commission under the 
Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.).
    ``(h) Existing Depository Institutions and Clearing Agencies.--
            ``(1) In general.--A depository institution or clearing 
        agency registered with the Securities and Exchange Commission 
        under the Securities Exchange Act of 1934 (15 U.S.C. 78a et 
        seq.) that is required to be registered as a derivatives 
        clearing organization under this section is deemed to be 
        registered under this section to the extent that, before the 
        date of enactment of this subsection--
                    ``(A) the depository institution cleared swaps as a 
                multilateral clearing organization; or
                    ``(B) the clearing agency cleared swaps.
            ``(2) Conversion of depository institutions.--A depository 
        institution to which this paragraph applies may, by the vote of 
        the shareholders owning not less than 51 percent of the voting 
        interests of the depository institution, be converted into a 
        State corporation, partnership, limited liability company, or 
        similar legal form pursuant to a plan of conversion, if the 
        conversion is not in contravention of applicable State law.
    ``(i) Exemptions.--The Commission may exempt, conditionally or 
unconditionally, a derivatives clearing organization from registration 
under this section for the clearing of swaps if the Commission 
determines that the derivatives clearing organization is subject to 
comparable, comprehensive supervision and regulation by the Securities 
and Exchange Commission or the appropriate government authorities in 
the home country of the organization. Such conditions may include, but 
are not limited to, requiring that the derivatives clearing 
organization be available for inspection by the Commission and make 
available all information requested by the Commission.
    ``(j) Designation of Chief Compliance Officer.--
            ``(1) In general.--Each derivatives clearing organization 
        shall designate an individual to serve as a chief compliance 
        officer.
            ``(2) Duties.--The chief compliance officer shall--
                    ``(A) report directly to the board or to the senior 
                officer of the derivatives clearing organization;
                    ``(B) review the compliance of the derivatives 
                clearing organization with respect to the core 
                principles described in subsection (c)(2);
                    ``(C) in consultation with the board of the 
                derivatives clearing organization, a body performing a 
                function similar to the board of the derivatives 
                clearing organization, or the senior officer of the 
                derivatives clearing organization, resolve any 
                conflicts of interest that may arise;
                    ``(D) be responsible for administering each policy 
                and procedure that is required to be established 
                pursuant to this section;
                    ``(E) ensure compliance with this Act (including 
                regulations) relating to agreements, contracts, or 
                transactions, including each rule prescribed by the 
                Commission under this section;
                    ``(F) establish procedures for the remediation of 
                noncompliance issues identified by the compliance 
                officer through any--
                            ``(i) compliance office review;
                            ``(ii) look-back;
                            ``(iii) internal or external audit finding;
                            ``(iv) self-reported error; or
                            ``(v) validated complaint; and
                    ``(G) establish and follow appropriate procedures 
                for the handling, management response, remediation, 
                retesting, and closing of noncompliance issues.
            ``(3) Annual reports.--
                    ``(A) In general.--In accordance with rules 
                prescribed by the Commission, the chief compliance 
                officer shall annually prepare and sign a report that 
                contains a description of--
                            ``(i) the compliance of the derivatives 
                        clearing organization of the compliance officer 
                        with respect to this Act (including 
                        regulations); and
                            ``(ii) each policy and procedure of the 
                        derivatives clearing organization of the 
                        compliance officer (including the code of 
                        ethics and conflict of interest policies of the 
                        derivatives clearing organization).
                    ``(B) Requirements.--A compliance report under 
                subparagraph (A) shall--
                            ``(i) accompany each appropriate financial 
                        report of the derivatives clearing organization 
                        that is required to be furnished to the 
                        Commission pursuant to this section; and
                            ``(ii) include a certification that, under 
                        penalty of law, the compliance report is 
                        accurate and complete.''.
    (c) Core Principles for Derivatives Clearing Organizations.--
Section 5b(c) of the Commodity Exchange Act (7 U.S.C. 7a-1(c)) is 
amended by striking paragraph (2) and inserting the following:
            ``(2) Core principles for derivatives clearing 
        organizations.--
                    ``(A) Compliance.--
                            ``(i) In general.--To be registered and to 
                        maintain registration as a derivatives clearing 
                        organization, a derivatives clearing 
                        organization shall comply with each core 
                        principle described in this paragraph and any 
                        requirement that the Commission may impose by 
                        rule or regulation pursuant to section 8a(5).
                            ``(ii) Discretion of derivatives clearing 
                        organization.--Subject to any rule or 
                        regulation prescribed by the Commission, a 
                        derivatives clearing organization shall have 
                        reasonable discretion in establishing the 
                        manner by which the derivatives clearing 
                        organization complies with each core principle 
                        described in this paragraph.
                    ``(B) Financial resources.--
                            ``(i) In general.--Each derivatives 
                        clearing organization shall have adequate 
                        financial, operational, and managerial 
                        resources, as determined by the Commission, to 
                        discharge each responsibility of the 
                        derivatives clearing organization.
                            ``(ii) Minimum amount of financial 
                        resources.--Each derivatives clearing 
                        organization shall possess financial resources 
                        that, at a minimum, exceed the total amount 
                        that would--
                                    ``(I) enable the organization to 
                                meet its financial obligations to its 
                                members and participants 
                                notwithstanding a default by the member 
                                or participant creating the largest 
                                financial exposure for that 
                                organization in extreme but plausible 
                                market conditions; and
                                    ``(II) enable the derivatives 
                                clearing organization to cover the 
                                operating costs of the derivatives 
                                clearing organization for a period of 1 
                                year (as calculated on a rolling 
                                basis).
                    ``(C) Participant and product eligibility.--
                            ``(i) In general.--Each derivatives 
                        clearing organization shall establish--
                                    ``(I) appropriate admission and 
                                continuing eligibility standards 
                                (including sufficient financial 
                                resources and operational capacity to 
                                meet obligations arising from 
                                participation in the derivatives 
                                clearing organization) for members of, 
                                and participants in, the derivatives 
                                clearing organization; and
                                    ``(II) appropriate standards for 
                                determining the eligibility of 
                                agreements, contracts, and transactions 
                                submitted to the derivatives clearing 
                                organization for clearing.
                            ``(ii) Required procedures.--Each 
                        derivatives clearing organization shall 
                        establish and implement procedures to verify, 
                        on an ongoing basis, the compliance of each 
                        participation and membership requirement of the 
                        derivatives clearing organization.
                            ``(iii) Requirements.--The participation 
                        and membership requirements of each derivatives 
                        clearing organization shall--
                                    ``(I) be objective;
                                    ``(II) be publicly disclosed; and
                                    ``(III) permit fair and open 
                                access.
                    ``(D) Risk management.--
                            ``(i) In general.--Each derivatives 
                        clearing organization shall ensure that the 
                        derivatives clearing organization possesses the 
                        ability to manage the risks associated with 
                        discharging the responsibilities of the 
                        derivatives clearing organization through the 
                        use of appropriate tools and procedures.
                            ``(ii) Measurement of credit exposure.--
                        Each derivatives clearing organization shall--
                                    ``(I) not less than once during 
                                each business day of the derivatives 
                                clearing organization, measure the 
                                credit exposures of the derivatives 
                                clearing organization to each member 
                                and participant of the derivatives 
                                clearing organization; and
                                    ``(II) monitor each exposure 
                                described in subclause (I) periodically 
                                during the business day of the 
                                derivatives clearing organization.
                            ``(iii) Limitation of exposure to potential 
                        losses from defaults.--Each derivatives 
                        clearing organization, through margin 
                        requirements and other risk control mechanisms, 
                        shall limit the exposure of the derivatives 
                        clearing organization to potential losses from 
                        defaults by members and participants of the 
                        derivatives clearing organization to ensure 
                        that--
                                    ``(I) the operations of the 
                                derivatives clearing organization would 
                                not be disrupted; and
                                    ``(II) nondefaulting members or 
                                participants would not be exposed to 
                                losses that nondefaulting members or 
                                participants cannot anticipate or 
                                control.
                            ``(iv) Margin requirements.--The margin 
                        required from each member and participant of a 
                        derivatives clearing organization shall be 
                        sufficient to cover potential exposures in 
                        normal market conditions.
                            ``(v) Requirements regarding models and 
                        parameters.--Each model and parameter used in 
                        setting margin requirements under clause (iv) 
                        shall be--
                                    ``(I) risk-based; and
                                    ``(II) reviewed on a regular basis.
                    ``(E) Settlement procedures.--Each derivatives 
                clearing organization shall--
                            ``(i) complete money settlements on a 
                        timely basis (but not less frequently than once 
                        each business day);
                            ``(ii) employ money settlement arrangements 
                        to eliminate or strictly limit the exposure of 
                        the derivatives clearing organization to 
                        settlement bank risks (including credit and 
                        liquidity risks from the use of banks to effect 
                        money settlements);
                            ``(iii) ensure that money settlements are 
                        final when effected;
                            ``(iv) maintain an accurate record of the 
                        flow of funds associated with each money 
                        settlement;
                            ``(v) possess the ability to comply with 
                        each term and condition of any permitted 
                        netting or offset arrangement with any other 
                        clearing organization;
                            ``(vi) regarding physical settlements, 
                        establish rules that clearly state each 
                        obligation of the derivatives clearing 
                        organization with respect to physical 
                        deliveries; and
                            ``(vii) ensure that each risk arising from 
                        an obligation described in clause (vi) is 
                        identified and managed.
                    ``(F) Treatment of funds.--
                            ``(i) Required standards and procedures.--
                        Each derivatives clearing organization shall 
                        establish standards and procedures that are 
                        designed to protect and ensure the safety of 
                        member and participant funds and assets.
                            ``(ii) Holding of funds and assets.--Each 
                        derivatives clearing organization shall hold 
                        member and participant funds and assets in a 
                        manner by which to minimize the risk of loss or 
                        of delay in the access by the derivatives 
                        clearing organization to the assets and funds.
                            ``(iii) Permissible investments.--Funds and 
                        assets invested by a derivatives clearing 
                        organization shall be held in instruments with 
                        minimal credit, market, and liquidity risks.
                    ``(G) Default rules and procedures.--
                            ``(i) In general.--Each derivatives 
                        clearing organization shall have rules and 
                        procedures designed to allow for the efficient, 
                        fair, and safe management of events during 
                        which members or participants--
                                    ``(I) become insolvent; or
                                    ``(II) otherwise default on the 
                                obligations of the members or 
                                participants to the derivatives 
                                clearing organization.
                            ``(ii) Default procedures.--Each 
                        derivatives clearing organization shall--
                                    ``(I) clearly state the default 
                                procedures of the derivatives clearing 
                                organization;
                                    ``(II) make publicly available the 
                                default rules of the derivatives 
                                clearing organization; and
                                    ``(III) ensure that the derivatives 
                                clearing organization may take timely 
                                action--
                                            ``(aa) to contain losses 
                                        and liquidity pressures; and
                                            ``(bb) to continue meeting 
                                        each obligation of the 
                                        derivatives clearing 
                                        organization.
                    ``(H) Rule enforcement.--Each derivatives clearing 
                organization shall--
                            ``(i) maintain adequate arrangements and 
                        resources for--
                                    ``(I) the effective monitoring and 
                                enforcement of compliance with the 
                                rules of the derivatives clearing 
                                organization; and
                                    ``(II) the resolution of disputes;
                            ``(ii) have the authority and ability to 
                        discipline, limit, suspend, or terminate the 
                        activities of a member or participant due to a 
                        violation by the member or participant of any 
                        rule of the derivatives clearing organization; 
                        and
                            ``(iii) report to the Commission regarding 
                        rule enforcement activities and sanctions 
                        imposed against members and participants as 
                        provided in clause (ii).
                    ``(I) System safeguards.--Each derivatives clearing 
                organization shall--
                            ``(i) establish and maintain a program of 
                        risk analysis and oversight to identify and 
                        minimize sources of operational risk through 
                        the development of appropriate controls and 
                        procedures, and automated systems, that are 
                        reliable, secure, and have adequate scalable 
                        capacity;
                            ``(ii) establish and maintain emergency 
                        procedures, backup facilities, and a plan for 
                        disaster recovery that allows for--
                                    ``(I) the timely recovery and 
                                resumption of operations of the 
                                derivatives clearing organization; and
                                    ``(II) the fulfillment of each 
                                obligation and responsibility of the 
                                derivatives clearing organization; and
                            ``(iii) periodically conduct tests to 
                        verify that the backup resources of the 
                        derivatives clearing organization are 
                        sufficient to ensure daily processing, 
                        clearing, and settlement.
                    ``(J) Reporting.--Each derivatives clearing 
                organization shall provide to the Commission all 
                information that the Commission determines to be 
                necessary to conduct oversight of the derivatives 
                clearing organization.
                    ``(K) Recordkeeping.--Each derivatives clearing 
                organization shall maintain records of all activities 
                related to the business of the derivatives clearing 
                organization as a derivatives clearing organization--
                            ``(i) in a form and manner that is 
                        acceptable to the Commission; and
                            ``(ii) for a period of not less than 5 
                        years.
                    ``(L) Public information.--
                            ``(i) In general.--Each derivatives 
                        clearing organization shall provide to market 
                        participants sufficient information to enable 
                        the market participants to identify and 
                        evaluate accurately the risks and costs 
                        associated with using the services of the 
                        derivatives clearing organization.
                            ``(ii) Availability of information.--Each 
                        derivatives clearing organization shall make 
                        information concerning the rules and operating 
                        procedures governing the clearing and 
                        settlement systems of the derivatives clearing 
                        organization available to market participants.
                            ``(iii) Public disclosure.--Each 
                        derivatives clearing organization shall 
                        disclose publicly and to the Commission 
                        information concerning--
                                    ``(I) the terms and conditions of 
                                each contract, agreement, and other 
                                transaction cleared and settled by the 
                                derivatives clearing organization;
                                    ``(II) each clearing and other fee 
                                that the derivatives clearing 
                                organization charges the members and 
                                participants of the derivatives 
                                clearing organization;
                                    ``(III) the margin-setting 
                                methodology, and the size and 
                                composition, of the financial resource 
                                package of the derivatives clearing 
                                organization;
                                    ``(IV) daily settlement prices, 
                                volume, and open interest for each 
                                contract settled or cleared by the 
                                derivatives clearing organization; and
                                    ``(V) any other matter relevant to 
                                participation in the settlement and 
                                clearing activities of the derivatives 
                                clearing organization.
                    ``(M) Information-sharing.--Each derivatives 
                clearing organization shall--
                            ``(i) enter into, and abide by the terms 
                        of, each appropriate and applicable domestic 
                        and international information-sharing 
                        agreement; and
                            ``(ii) use relevant information obtained 
                        from each agreement described in clause (i) in 
                        carrying out the risk management program of the 
                        derivatives clearing organization.
                    ``(N) Antitrust considerations.--Unless necessary 
                or appropriate to achieve the purposes of this Act, a 
                derivatives clearing organization shall not--
                            ``(i) adopt any rule or take any action 
                        that results in any unreasonable restraint of 
                        trade; or
                            ``(ii) impose any material anticompetitive 
                        burden.
                    ``(O) Governance fitness standards.--
                            ``(i) Governance arrangements.--Each 
                        derivatives clearing organization shall 
                        establish governance arrangements that are 
                        transparent--
                                    ``(I) to fulfill public interest 
                                requirements; and
                                    ``(II) to support the objectives of 
                                owners and participants.
                            ``(ii) Fitness standards.--Each derivatives 
                        clearing organization shall establish and 
                        enforce appropriate fitness standards for--
                                    ``(I) directors;
                                    ``(II) members of any disciplinary 
                                committee;
                                    ``(III) members of the derivatives 
                                clearing organization;
                                    ``(IV) any other individual or 
                                entity with direct access to the 
                                settlement or clearing activities of 
                                the derivatives clearing organization; 
                                and
                                    ``(V) any party affiliated with any 
                                individual or entity described in this 
                                clause.
                    ``(P) Conflicts of interest.--Each derivatives 
                clearing organization shall--
                            ``(i) establish and enforce rules to 
                        minimize conflicts of interest in the decision-
                        making process of the derivatives clearing 
                        organization; and
                            ``(ii) establish a process for resolving 
                        conflicts of interest described in clause (i).
                    ``(Q) Composition of governing boards.--Each 
                derivatives clearing organization shall ensure that the 
                composition of the governing board or committee of the 
                derivatives clearing organization includes market 
                participants.
                    ``(R) Legal risk.--Each derivatives clearing 
                organization shall have a well-founded, transparent, 
                and enforceable legal framework for each aspect of the 
                activities of the derivatives clearing organization.
                    ``(S) Modification of core principles.--The 
                Commission may conform the core principles established 
                in this paragraph to reflect evolving United States and 
                international standards.''.
    (d) Conflicts of Interest.--The Commodity Futures Trading 
Commission shall adopt rules mitigating conflicts of interest in 
connection with the conduct of business by a swap dealer or a major 
swap participant with a derivatives clearing organization, board of 
trade, or a swap execution facility that clears or trades swaps in 
which the swap dealer or major swap participant has a material debt or 
material equity investment.
    (e) Reporting Requirements.--Section 5b of the Commodity Exchange 
Act (7 U.S.C. 7a-1) (as amended by subsection (b)) is amended by adding 
at the end the following:
    ``(k) Reporting Requirements.--
            ``(1) Duty of derivatives clearing organizations.--Each 
        derivatives clearing organization that clears swaps shall 
        provide to the Commission all information that is determined by 
        the Commission to be necessary to perform each responsibility 
        of the Commission under this Act.
            ``(2) Data collection and maintenance requirements.--The 
        Commission shall adopt data collection and maintenance 
        requirements for swaps cleared by derivatives clearing 
        organizations that are comparable to the corresponding 
        requirements for--
                    ``(A) swaps data reported to swap data 
                repositories; and
                    ``(B) swaps traded on swap execution facilities.
            ``(3) Reports on security-based swap agreements to be 
        shared with the securities and exchange commission.--
                    ``(A) In general.--A derivatives clearing 
                organization that clears security-based swap agreements 
                (as defined in section 3(a)(79) of the Securities 
                Exchange Act) shall, upon request, make available to 
                the Securities and Exchange Commission all books and 
                records relating to such security-based swap 
                agreements, consistent with the confidentiality and 
                disclosure requirements of section 8.
                    ``(B) Jurisdiction.--Nothing in this paragraph 
                shall affect the exclusive jurisdiction of the 
                Commission to prescribe recordkeeping and reporting 
                requirements for a derivatives clearing organization 
                that is registered with the Commission.''
            ``(4) Information sharing.--Subject to section 8, and upon 
        request, the Commission shall share information collected under 
        paragraph (2) with--
                    ``(A) the Board;
                    ``(B) the Securities and Exchange Commission;
                    ``(C) each appropriate prudential regulator;
                    ``(D) the Financial Stability Oversight Council;
                    ``(E) the Department of Justice; and
                    ``(F) any other person that the Commission 
                determines to be appropriate, including--
                            ``(i) foreign financial supervisors 
                        (including foreign futures authorities);
                            ``(ii) foreign central banks; and
                            ``(iii) foreign ministries.
            ``(5) Confidentiality and indemnification agreement.--
        Before the Commission may share information with any entity 
        described in paragraph (4)--
                    ``(A) the Commission shall receive a written 
                agreement from each entity stating that the entity 
                shall abide by the confidentiality requirements 
                described in section 8 relating to the information on 
                swap transactions that is provided; and
                    ``(B) each entity shall agree to indemnify the 
                Commission for any expenses arising from litigation 
                relating to the information provided under section 8.
            ``(6) Public information.--Each derivatives clearing 
        organization that clears swaps shall provide to the Commission 
        (including any designee of the Commission) information under 
        paragraph (2) in such form and at such frequency as is required 
        by the Commission to comply with the public reporting 
        requirements contained in section 2(a)(13).''.
    (f) Public Disclosure.--Section 8(e) of the Commodity Exchange Act 
(7 U.S.C. 12(e)) is amended in the last sentence--
            (1) by inserting ``, central bank and ministries,'' after 
        ``department'' each place it appears; and
            (2) by striking ``. is a party.'' and inserting ``, is a 
        party.''.
    (g) Legal Certainty for Identified Banking Products.--
            (1) Repeals.--The Legal Certainty for Bank Products Act of 
        2000 (7 U.S.C. 27 et seq.) is amended--
                    (A) by striking sections 404 and 407 (7 U.S.C. 27b, 
                27e);
                    (B) in section 402 (7 U.S.C. 27), by striking 
                subsection (d); and
                    (C) in section 408 (7 U.S.C. 27f)--
                            (i) in subsection (c)--
                                    (I) by striking ``in the case'' and 
                                all that follows through ``a hybrid'' 
                                and inserting ``in the case of a 
                                hybrid'';
                                    (II) by striking ``; or'' and 
                                inserting a period; and
                                    (III) by striking paragraph (2);
                            (ii) by striking subsection (b); and
                            (iii) by redesignating subsection (c) as 
                        subsection (b).
            (2) Legal certainty for bank products act of 2000.--Section 
        403 of the Legal Certainty for Bank Products Act of 2000 (7 
        U.S.C. 27a) is amended to read as follows:

``SEC. 403. EXCLUSION OF IDENTIFIED BANKING PRODUCT.

    ``(a) Exclusion.--Except as provided in subsection (b) or (c)--
            ``(1) the Commodity Exchange Act (7 U.S.C. 1 et seq.) shall 
        not apply to, and the Commodity Futures Trading Commission 
        shall not exercise regulatory authority under the Commodity 
        Exchange Act (7 U.S.C. 1 et seq.) with respect to, an 
        identified banking product; and
            ``(2) the definitions of `security-based swap' in section 
        3(a)(68) of the Securities Exchange Act of 1934 and `security-
        based swap agreement' in section 3(a)(79) of the Securities 
        Exchange Act of 1934 do not include any identified bank 
        product.
    ``(b) Exception.--An appropriate Federal banking agency may except 
an identified banking product of a bank under its regulatory 
jurisdiction from the exclusion in subsection (a) if the agency 
determines, in consultation with the Commodity Futures Trading 
Commission and the Securities and Exchange Commission, that the 
product--
            ``(1) would meet the definition of a `swap' under section 
        1a(46) of the Commodity Exchange Act (7 U.S.C. 1a) or a 
        `security-based swap' under that section 3(a)(68) of the 
        Securities Exchange Act of 1934; and
            ``(2) has become known to the trade as a swap or security-
        based swap, or otherwise has been structured as an identified 
        banking product for the purpose of evading the provisions of 
        the Commodity Exchange Act (7 U.S.C. 1 et seq.), the Securities 
        Act of 1933 (15 U.S.C. 77a et seq.), or the Securities Exchange 
        Act of 1934 (15 U.S.C. 78a et seq.).
    ``(c) Exception.--The exclusions in subsection (a) shall not apply 
to an identified bank product that--
            ``(1) is a product of a bank that is not under the 
        regulatory jurisdiction of an appropriate Federal banking 
        agency;
            ``(2) meets the definition of swap in section 1a(46) of the 
        Commodity Exchange Act or security-based swap in section 
        3(a)(68) of the Securities Exchange Act of 1934; and
            ``(3) has become known to the trade as a swap or security-
        based swap, or otherwise has been structured as an identified 
        banking product for the purpose of evading the provisions of 
        the Commodity Exchange Act (7 U.S.C. 1 et seq.), the Securities 
        Act of 1933 (15 U.S.C. 77a et seq.), or the Securities Exchange 
        Act of 1934 (15 U.S.C. 78a et seq.).''.

SEC. 726. RULEMAKING ON CONFLICT OF INTEREST.

    (a) In General.--Not later than 180 days after the date of 
enactment of the Wall Street Transparency and Accountability Act of 
2010, the Commodity Futures Trading Commission shall determine whether 
to adopt rules to establish limits on the control of any derivatives 
clearing organization that clears swaps, or swap execution facility or 
board of trade designated as a contract market that posts swaps or 
makes swaps available for trading, by a bank holding company (as 
defined in section 2 of the Bank Holding Company Act of 1956 (12 U.S.C. 
1841)) with total consolidated assets of $50,000,000,000 or more, a 
nonbank financial company (as defined in section 102) supervised by the 
Board of Governors of the Federal Reserve System, an affiliate of such 
a bank holding company or nonbank financial company, a swap dealer, 
major swap participant, or associated person of a swap dealer or major 
swap participant.
    (b) Purposes.--The Commission shall adopt rules if it determines, 
after the review described in subsection (a), that such rules are 
necessary or appropriate to improve the governance of, or to mitigate 
systemic risk, promote competition, or mitigate conflicts of interest 
in connection with a swap dealer or major swap participant's conduct of 
business with, a derivatives clearing organization, contract market, or 
swap execution facility that clears or posts swaps or makes swaps 
available for trading and in which such swap dealer or major swap 
participant has a material debt or equity investment.

SEC. 727. PUBLIC REPORTING OF SWAP TRANSACTION DATA.

    Section 2(a) of the Commodity Exchange Act (7 U.S.C. 2(a)) is 
amended by adding at the end the following:
            ``(13) Public availability of swap transaction data.--
                    ``(A) Definition of real-time public reporting.--In 
                this paragraph, the term `real-time public reporting' 
                means to report data relating to a swap transaction as 
                soon as technologically practicable after the time at 
                which the swap transaction has been executed.
                    ``(B) Purpose.--The purpose of this section is to 
                authorize the Commission to make swap transaction and 
                pricing data available to the public in such form and 
                at such times as the Commission determines appropriate 
                to enhance price discovery.
                    ``(C) General rule.--The Commission is authorized 
                and required to provide by rule for the public 
                availability of swap transaction and pricing data as 
                follows:
                            ``(i) With respect to those swaps that are 
                        subject to the mandatory clearing requirement 
                        described in subsection (h)(2) (including those 
                        swaps that are exempted from the requirement 
                        pursuant to subsection (h)(10)), the Commission 
                        shall require real-time public reporting for 
                        such transactions.
                            ``(ii) With respect to those swaps that are 
                        not subject to the mandatory clearing 
                        requirement described in subsection (h)(2), but 
                        are cleared at a registered derivatives 
                        clearing organization, the Commission shall 
                        require real-time public reporting for such 
                        transactions.
                            ``(iii) With respect to swaps that are not 
                        cleared at a registered derivatives clearing 
                        organization and which are reported to a swap 
                        data repository or the Commission under 
                        subsection (h), the Commission shall make 
                        available to the public, in a manner that does 
                        not disclose the business transactions and 
                        market positions of any person, aggregate data 
                        on such swap trading volumes and positions.
                            ``(iv) With respect to swaps that are 
                        exempt from the requirements of subsection 
                        (h)(1), pursuant to subsection (h)(10), the 
                        Commission shall require real-time public 
                        reporting for such transactions.
                    ``(D) Registered entities and public reporting.--
                The Commission may require registered entities to 
                publicly disseminate the swap transaction and pricing 
                data required to be reported under this paragraph.
                    ``(E) Rulemaking required.--With respect to the 
                rule providing for the public availability of 
                transaction and pricing data for swaps described in 
                clauses (i) and (ii) of subparagraph (C), the rule 
                promulgated by the Commission shall contain 
                provisions--
                            ``(i) to ensure such information does not 
                        identify the participants;
                            ``(ii) to specify the criteria for 
                        determining what constitutes a large notional 
                        swap transaction (block trade) for particular 
                        markets and contracts;
                            ``(iii) to specify the appropriate time 
                        delay for reporting large notional swap 
                        transactions (block trades) to the public; and
                            ``(iv) that take into account whether the 
                        public disclosure will materially reduce market 
                        liquidity.
                    ``(F) Timeliness of reporting.--Parties to a swap 
                (including agents of the parties to a swap) shall be 
                responsible for reporting swap transaction information 
                to the appropriate registered entity in a timely manner 
                as may be prescribed by the Commission.
            ``(14) Semiannual and annual public reporting of aggregate 
        swap data.--
                    ``(A) In general.--In accordance with subparagraph 
                (B), the Commission shall issue a written report on a 
                semiannual and annual basis to make available to the 
                public information relating to--
                            ``(i) the trading and clearing in the major 
                        swap categories; and
                            ``(ii) the market participants and 
                        developments in new products.
                    ``(B) Use; consultation.--In preparing a report 
                under subparagraph (A), the Commission shall--
                            ``(i) use information from swap data 
                        repositories and derivatives clearing 
                        organizations; and
                            ``(ii) consult with the Office of the 
                        Comptroller of the Currency, the Bank for 
                        International Settlements, and such other 
                        regulatory bodies as may be necessary.''.

SEC. 728. SWAP DATA REPOSITORIES.

    The Commodity Exchange Act is amended by inserting after section 20 
(7 U.S.C. 24) the following:

``SEC. 21. SWAP DATA REPOSITORIES.

    ``(a) Registration Requirement.--
            ``(1) In general.--It shall be unlawful for any person, 
        unless registered with the Commission, directly or indirectly 
        to make use of the mails or any means or instrumentality of 
        interstate commerce to perform the functions of a swap data 
        repository.
            ``(2) Inspection and examination.--Each registered swap 
        data repository shall be subject to inspection and examination 
        by any representative of the Commission.
            ``(3) Compliance with core principles.--
                    ``(A) In general.--To be registered, and maintain 
                registration, as a swap data repository, the swap data 
                repository shall comply with--
                            ``(i) the core principles described in this 
                        subsection; and
                            ``(ii) any requirement that the Commission 
                        may impose by rule or regulation pursuant to 
                        section 8a(5).
                    ``(B) Reasonable discretion of swap data 
                repository.--Unless otherwise determined by the 
                Commission by rule or regulation, a swap data 
                repository described in subparagraph (A) shall have 
                reasonable discretion in establishing the manner in 
                which the swap data repository complies with the core 
                principles described in this subsection.
    ``(b) Standard Setting.--
            ``(1) Data identification.--The Commission shall prescribe 
        standards that specify the data elements for each swap that 
        shall be collected and maintained by each registered swap data 
        repository.
            ``(2) Data collection and maintenance.--The Commission 
        shall prescribe data collection and data maintenance standards 
        for swap data repositories.
            ``(3) Comparability.--The standards prescribed by the 
        Commission under this subsection shall be comparable to the 
        data standards imposed by the Commission on derivatives 
        clearing organizations in connection with their clearing of 
        swaps.
            ``(4) Sharing of information with securities and exchange 
        commission.--Registered swap data repositories shall make 
        available to the Securities and Exchange Commission, upon 
        request, all books and records relating to security-based swap 
        agreements that are maintained by such swap data repository, 
        consistent with the confidentiality and disclosure requirements 
        of section 8. Nothing in this paragraph shall affect the 
        exclusive jurisdiction of the Commission to prescribe 
        recordkeeping and reporting requirements for a swap data 
        repository that is registered with the Commission.
    ``(c) Duties.--A swap data repository shall--
            ``(1) accept data prescribed by the Commission for each 
        swap under subsection (b);
            ``(2) confirm with both counterparties to the swap the 
        accuracy of the data that was submitted;
            ``(3) maintain the data described in paragraph (1) in such 
        form, in such manner, and for such period as may be required by 
        the Commission;
            ``(4)(A) provide direct electronic access to the Commission 
        (or any designee of the Commission, including another 
        registered entity); and
            ``(B) provide the information described in paragraph (1) in 
        such form and at such frequency as the Commission may require 
        to comply with the public reporting requirements contained in 
        section 2(a)(13);
            ``(5) at the direction of the Commission, establish 
        automated systems for monitoring, screening, and analyzing swap 
        data, including compliance and frequency of end user clearing 
        exemption claims by individual and affiliated entities;
            ``(6) maintain the privacy of any and all swap transaction 
        information that the swap data repository receives from a swap 
        dealer, counterparty, or any other registered entity; and
            ``(7) on a confidential basis pursuant to section 8, upon 
        request, and after notifying the Commission of the request, 
        make available all data obtained by the swap data repository, 
        including individual counterparty trade and position data, to--
                    ``(A) each appropriate prudential regulator;
                    ``(B) the Financial Stability Oversight Council;
                    ``(C) the Securities and Exchange Commission;
                    ``(D) the Department of Justice; and
                    ``(E) any other person that the Commission 
                determines to be appropriate, including--
                            ``(i) foreign financial supervisors 
                        (including foreign futures authorities);
                            ``(ii) foreign central banks;
                            ``(iii) foreign ministries; and
            ``(8) establish and maintain emergency procedures, backup 
        facilities, and a plan for disaster recovery that allows for 
        the timely recovery and resumption of operations and the 
        fulfillment of the responsibilities and obligations of the 
        organization.
    ``(d) Confidentiality and Indemnification Agreement.--Before the 
swap data repository may share information with any entity described 
above--
            ``(1) the swap data repository shall receive a written 
        agreement from each entity stating that the entity shall abide 
        by the confidentiality requirements described in section 8 
        relating to the information on swap transactions that is 
        provided; and
            ``(2) each entity shall agree to indemnify the swap data 
        repository and the Commission for any expenses arising from 
        litigation relating to the information provided under section 
        8.
    ``(e) Designation of Chief Compliance Officer.--
            ``(1) In general.--Each swap data repository shall 
        designate an individual to serve as a chief compliance officer.
            ``(2) Duties.--The chief compliance officer shall--
                    ``(A) report directly to the board or to the senior 
                officer of the swap data repository;
                    ``(B) review the compliance of the swap data 
                repository with respect to the core principles 
                described in subsection (f);
                    ``(C) in consultation with the board of the swap 
                data repository, a body performing a function similar 
                to the board of the swap data repository, or the senior 
                officer of the swap data repository, resolve any 
                conflicts of interest that may arise;
                    ``(D) be responsible for administering each policy 
                and procedure that is required to be established 
                pursuant to this section;
                    ``(E) ensure compliance with this Act (including 
                regulations) relating to agreements, contracts, or 
                transactions, including each rule prescribed by the 
                Commission under this section;
                    ``(F) establish procedures for the remediation of 
                noncompliance issues identified by the chief compliance 
                officer through any--
                            ``(i) compliance office review;
                            ``(ii) look-back;
                            ``(iii) internal or external audit finding;
                            ``(iv) self-reported error; or
                            ``(v) validated complaint; and
                    ``(G) establish and follow appropriate procedures 
                for the handling, management response, remediation, 
                retesting, and closing of noncompliance issues.
            ``(3) Annual reports.--
                    ``(A) In general.--In accordance with rules 
                prescribed by the Commission, the chief compliance 
                officer shall annually prepare and sign a report that 
                contains a description of--
                            ``(i) the compliance of the swap data 
                        repository of the chief compliance officer with 
                        respect to this Act (including regulations); 
                        and
                            ``(ii) each policy and procedure of the 
                        swap data repository of the chief compliance 
                        officer (including the code of ethics and 
                        conflict of interest policies of the swap data 
                        repository).
                    ``(B) Requirements.--A compliance report under 
                subparagraph (A) shall--
                            ``(i) accompany each appropriate financial 
                        report of the swap data repository that is 
                        required to be furnished to the Commission 
                        pursuant to this section; and
                            ``(ii) include a certification that, under 
                        penalty of law, the compliance report is 
                        accurate and complete.
    ``(f) Core Principles Applicable To Swap Data Repositories.--
            ``(1) Antitrust considerations.--Unless necessary or 
        appropriate to achieve the purposes of this Act, a swap data 
        repository shall not
                    ``(A) adopt any rule or take any action that 
                results in any unreasonable restraint of trade; or
                    ``(B) impose any material anticompetitive burden on 
                the trading, clearing, or reporting of transactions.
            ``(2) Governance arrangements.--Each swap data repository 
        shall establish governance arrangements that are transparent--
                    ``(A) to fulfill public interest requirements; and
                    ``(B) to support the objectives of the Federal 
                Government, owners, and participants.
            ``(3) Conflicts of interest.--Each swap data repository 
        shall--
                    ``(A) establish and enforce rules to minimize 
                conflicts of interest in the decision-making process of 
                the swap data repository; and
                    ``(B) establish a process for resolving conflicts 
                of interest described in subparagraph (A).
    ``(g) Required Registration for Swap Data Repositories.--Any person 
that is required to be registered as a swap data repository under this 
section shall register with the Commission regardless of whether that 
person is also licensed as a bank or registered with the Securities and 
Exchange Commission as a swap data repository.
    ``(h) Rules.--The Commission shall adopt rules governing persons 
that are registered under this section.''.

SEC. 729. REPORTING AND RECORDKEEPING.

    The Commodity Exchange Act is amended by inserting after section 4q 
(7 U.S.C. 6o-1) the following:

``SEC. 4R. REPORTING AND RECORDKEEPING FOR UNCLEARED SWAPS.

    ``(a) Required Reporting of Swaps Not Accepted by Any Derivatives 
Clearing Organization.--
            ``(1) In general.--Each swap that is not accepted for 
        clearing by any derivatives clearing organization shall be 
        reported to--
                    ``(A) a swap data repository described in section 
                21; or
                    ``(B) in the case in which there is no swap data 
                repository that would accept the swap, to the 
                Commission pursuant to this section within such time 
                period as the Commission may by rule or regulation 
                prescribe.
            ``(2) Transition rule for preenactment swaps.--
                    ``(A) Swaps entered into before the date of 
                enactment of the wall street transparency and 
                accountability act of 2010.--Each swap entered into 
                before the date of enactment of the Wall Street 
                Transparency and Accountability Act of 2010, the terms 
                of which have not expired as of the date of enactment 
                of that Act, shall be reported to a registered swap 
                data repository or the Commission by a date that is not 
                later than--
                            ``(i) 30 days after issuance of the interim 
                        final rule; or
                            ``(ii) such other period as the Commission 
                        determines to be appropriate.
                    ``(B) Commission rulemaking.--The Commission shall 
                promulgate an interim final rule within 90 days of the 
                date of enactment of this section providing for the 
                reporting of each swap entered into before the date of 
                enactment as referenced in subparagraph (A).
                    ``(C) Effective date.--The reporting provisions 
                described in this section shall be effective upon the 
                enactment of this section.
            ``(3) Reporting obligations.--
                    ``(A) Swaps in which only 1 counterparty is a swap 
                dealer or major swap participant.--With respect to a 
                swap in which only 1 counterparty is a swap dealer or 
                major swap participant, the swap dealer or major swap 
                participant shall report the swap as required under 
                paragraphs (1) and (2).
                    ``(B) Swaps in which 1 counterparty is a swap 
                dealer and the other a major swap participant.--With 
                respect to a swap in which 1 counterparty is a swap 
                dealer and the other a major swap participant, the swap 
                dealer shall report the swap as required under 
                paragraphs (1) and (2).
                    ``(C) Other swaps.--With respect to any other swap 
                not described in subparagraph (A) or (B), the 
                counterparties to the swap shall select a counterparty 
                to report the swap as required under paragraphs (1) and 
                (2).
    ``(b) Duties of Certain Individuals.--Any individual or entity that 
enters into a swap shall meet each requirement described in subsection 
(c) if the individual or entity did not--
            ``(1) clear the swap in accordance with section 2(h)(1); or
            ``(2) have the data regarding the swap accepted by a swap 
        data repository in accordance with rules (including timeframes) 
        adopted by the Commission under section 21.
    ``(c) Requirements.--An individual or entity described in 
subsection (b) shall--
            ``(1) upon written request from the Commission, provide 
        reports regarding the swaps held by the individual or entity to 
        the Commission in such form and in such manner as the 
        Commission may request; and
            ``(2) maintain books and records pertaining to the swaps 
        held by the individual or entity in such form, in such manner, 
        and for such period as the Commission may require, which shall 
        be open to inspection by--
                    ``(A) any representative of the Commission;
                    ``(B) an appropriate prudential regulator;
                    ``(C) the Securities and Exchange Commission;
                    ``(D) the Financial Stability Oversight Council; 
                and
                    ``(E) the Department of Justice.
    ``(d) Identical Data.--In prescribing rules under this section, the 
Commission shall require individuals and entities described in 
subsection (b) to submit to the Commission a report that contains data 
that is not less comprehensive than the data required to be collected 
by swap data repositories under section 21.''.

SEC. 730. LARGE SWAP TRADER REPORTING.

    The Commodity Exchange Act (7 U.S.C. 1 et seq.) is amended by 
adding after section 4s (as added by section 731) the following:

``SEC. 4T. LARGE SWAP TRADER REPORTING.

    ``(a) Prohibition.--
            ``(1) In general.--Except as provided in paragraph (2), it 
        shall be unlawful for any person to enter into any swap that 
        the Commission determines to perform a significant price 
        discovery function with respect to registered entities if--
                    ``(A) the person directly or indirectly enters into 
                the swap during any 1 day in an amount equal to or in 
                excess of such amount as shall be established 
                periodically by the Commission; and
                    ``(B) the person directly or indirectly has or 
                obtains a position in the swap equal to or in excess of 
                such amount as shall be established periodically by the 
                Commission.
            ``(2) Exception.--Paragraph (1) shall not apply if--
                    ``(A) the person files or causes to be filed with 
                the properly designated officer of the Commission such 
                reports regarding any transactions or positions 
                described in subparagraphs (A) and (B) of paragraph (1) 
                as the Commission may require by rule or regulation; 
                and
                    ``(B) in accordance with the rules and regulations 
                of the Commission, the person keeps books and records 
                of all such swaps and any transactions and positions in 
                any related commodity traded on or subject to the rules 
                of any board of trade, and of cash or spot transactions 
                in, inventories of, and purchase and sale commitments 
                of, such a commodity.
    ``(b) Requirements.--
            ``(1) In general.--Books and records described in 
        subsection (a)(2)(B) shall--
                    ``(A) show such complete details concerning all 
                transactions and positions as the Commission may 
                prescribe by rule or regulation;
                    ``(B) be open at all times to inspection and 
                examination by any representative of the Commission; 
                and
                    ``(C) be open at all times to inspection and 
                examination by the Securities and Exchange Commission, 
                to the extent such books and records relate to 
                transactions in security-based swap agreements (as that 
                term is defined in section 3(a)(79) of the Securities 
                Exchange Act of 1934), and consistent with the 
                confidentiality and disclosure requirements of section 
                8.
            ``(2) Jurisdiction.--Nothing in paragraph (1) shall affect 
        the exclusive jurisdiction of the Commission to prescribe 
        recordkeeping and reporting requirements for large swap traders 
        under this section.
    ``(c) Applicability.--For purposes of this section, the swaps, 
futures, and cash or spot transactions and positions of any person 
shall include the swaps, futures, and cash or spot transactions and 
positions of any persons directly or indirectly controlled by the 
person.
    ``(d) Significant Price Discovery Function.--In making a 
determination as to whether a swap performs or affects a significant 
price discovery function with respect to registered entities, the 
Commission shall consider the factors described in section 4a(a)(3).''.

SEC. 731. REGISTRATION AND REGULATION OF SWAP DEALERS AND MAJOR SWAP 
              PARTICIPANTS.

    The Commodity Exchange Act (7 U.S.C. 1 et seq.) is amended by 
inserting after section 4r (as added by section 729) the following:

``SEC. 4S. REGISTRATION AND REGULATION OF SWAP DEALERS AND MAJOR SWAP 
              PARTICIPANTS.

    ``(a) Registration.--
            ``(1) Swap dealers.--It shall be unlawful for any person to 
        act as a swap dealer unless the person is registered as a swap 
        dealer with the Commission.
            ``(2) Major swap participants.--It shall be unlawful for 
        any person to act as a major swap participant unless the person 
        is registered as a major swap participant with the Commission.
    ``(b) Requirements.--
            ``(1) In general.--A person shall register as a swap dealer 
        or major swap participant by filing a registration application 
        with the Commission.
            ``(2) Contents.--
                    ``(A) In general.--The application shall be made in 
                such form and manner as prescribed by the Commission, 
                and shall contain such information, as the Commission 
                considers necessary concerning the business in which 
                the applicant is or will be engaged.
                    ``(B) Continual reporting.--A person that is 
                registered as a swap dealer or major swap participant 
                shall continue to submit to the Commission reports that 
                contain such information pertaining to the business of 
                the person as the Commission may require.
            ``(3) Expiration.--Each registration under this section 
        shall expire at such time as the Commission may prescribe by 
        rule or regulation.
            ``(4) Rules.--Except as provided in subsections (c), (e), 
        and (f), the Commission may prescribe rules applicable to non-
        bank swap dealers and non-bank major swap participants, 
        including rules that limit the activities of swap dealers and 
        major swap participants.
            ``(5) Transition.--Rules under this section shall provide 
        for the registration of swap dealers and major swap 
        participants not later than 1 year after the date of enactment 
        of the Wall Street Transparency and Accountability Act of 2010.
            ``(6) Statutory disqualification.--Except to the extent 
        otherwise specifically provided by rule, regulation, or order, 
        it shall be unlawful for a swap dealer or a major swap 
        participant to permit any person associated with a swap dealer 
        or a major swap participant who is subject to a statutory 
        disqualification to effect or be involved in effecting swaps on 
        behalf of the swap dealer or major swap participant, if the 
        swap dealer or major swap participant knew, or in the exercise 
        of reasonable care should have known, of the statutory 
        disqualification.
    ``(c) Dual Registration.--
            ``(1) Swap dealer.--Any person that is required to be 
        registered as a swap dealer under this section shall register 
        with the Commission regardless of whether the person also is a 
        depository institution or is registered with the Securities and 
        Exchange Commission as a security-based swap dealer.
            ``(2) Major swap participant.--Any person that is required 
        to be registered as a major swap participant under this section 
        shall register with the Commission regardless of whether the 
        person also is a depository institution or is registered with 
        the Securities and Exchange Commission as a major security-
        based swap participant.
    ``(d) Rulemakings.--
            ``(1) In general.--The Commission shall adopt rules for 
        persons that are registered as swap dealers or major swap 
        participants under this section.
            ``(2) Exception for prudential requirements.--
                    ``(A) In general.--The Commission may not prescribe 
                rules imposing prudential requirements on swap dealers 
                or major swap participants for which there is a 
                prudential regulator.
                    ``(B) Applicability.--Subparagraph (A) does not 
                limit the authority of the Commission to prescribe 
                appropriate business conduct, reporting, and 
                recordkeeping requirements to protect investors.
    ``(e) Capital and Margin Requirements.--
            ``(1) In general.--
                    ``(A) Swap dealers and major swap participants that 
                are depository institutions.--Each registered swap 
                dealer and major swap participant that is a depository 
                institution, as that term is defined in section 3 of 
                the Federal Deposit Insurance Act (12 U.S.C. 1813), 
                shall meet such minimum capital requirements and 
                minimum initial and variation margin requirements as 
                the appropriate Federal banking agency shall by rule or 
                regulation prescribe under paragraph (2)(A) to help 
                ensure the safety and soundness of the swap dealer or 
                major swap participant.
                    ``(B) Swap dealers and major swap participants that 
                are not depository institutions.--Each registered swap 
                dealer and major swap participant that is not a 
                depository institution, as that term is defined in 
                section 3 of the Federal Deposit Insurance Act (12 
                U.S.C. 1813), shall meet such minimum capital 
                requirements and minimum initial and variation margin 
                requirements as the Commission and the Securities and 
                Exchange Commission shall by rule or regulation 
                prescribe under paragraph (2)(B) to help ensure the 
                safety and soundness of the swap dealer or major swap 
                participant.
            ``(2) Rules.--
                    ``(A) Swap dealers and major swap participants that 
                are depository institutions.--The appropriate Federal 
                banking agencies, in consultation with the Commission 
                and the Securities and Exchange Commission, shall adopt 
                rules imposing capital and margin requirements under 
                this subsection for swap dealers and major swap 
                participants that are depository institutions, as that 
                term is defined in section 3 of the Federal Deposit 
                Insurance Act (12 U.S.C. 1813).
                    ``(B) Swap dealers and major swap participants that 
                are not depository institutions.--The Commission shall 
                adopt rules imposing capital and margin requirements 
                under this subsection for swap dealers and major swap 
                participants that are not depository institutions, as 
                that term is defined in section 3 of the Federal 
                Deposit Insurance Act (12 U.S.C. 1813).
            ``(3) Capital.--
                    ``(A) Swap dealers and major swap participants that 
                are depository institutions.--The capital requirements 
                prescribed under paragraph (2)(A) for swap dealers and 
                major swap participants that are depository 
                institutions shall contain--
                            ``(i) a capital requirement that is greater 
                        than zero for swaps that are cleared by a 
                        registered derivatives clearing organization or 
                        a derivatives clearing organization that is 
                        exempt from registration under section 5b(j); 
                        and
                            ``(ii) to offset the greater risk to the 
                        swap dealer or major swap participant and to 
                        the financial system arising from the use of 
                        swaps that are not cleared, substantially 
                        higher capital requirements for swaps that are 
                        not cleared by a registered derivatives 
                        clearing organization or a derivatives clearing 
                        organization that is exempt from registration 
                        under section 5b(j) than for swaps that are 
                        cleared.
                    ``(B) Swap dealers and major swap participants that 
                are not depository institutions.--The capital 
                requirements prescribed under paragraph (2)(B) for swap 
                dealers and major swap participants that are not 
                depository institutions shall be as strict as or 
                stricter than the capital requirements prescribed for 
                swap dealers and major swap participants that are 
                depository institutions under paragraph (2)(A).
                    ``(C) Rule of construction.--
                            ``(i) In general.--Nothing in this section 
                        shall limit, or be construed to limit, the 
                        authority--
                                    ``(I) of the Commission to set 
                                financial responsibility rules for a 
                                futures commission merchant or 
                                introducing broker registered pursuant 
                                to section 4f(a) (except for section 
                                4f(a)(3)) in accordance with section 
                                4f(b); or
                                    ``(II) of the Securities and 
                                Exchange Commission to set financial 
                                responsibility rules for a broker or 
                                dealer registered pursuant to section 
                                15(b) of the Securities Exchange Act of 
                                1934 (15 U.S.C. 78o(b)) (except for 
                                section 15(b)(11) of that Act (15 
                                U.S.C. 78o(b)(11)) in accordance with 
                                section 15(c)(3) of the Securities 
                                Exchange Act of 1934 (15 U.S.C. 
                                78o(c)(3)).
                            ``(ii) Futures commission merchants and 
                        other dealers.--A futures commission merchant, 
                        introducing broker, broker, or dealer shall 
                        maintain sufficient capital to comply with the 
                        stricter of any applicable capital requirements 
                        to which such futures commission merchant, 
                        introducing broker, broker, or dealer is 
                        subject to under this Act or the Securities 
                        Exchange Act of 1934 (15 U.S.C. 78a et seq.).
            ``(4) Margin.--
                    ``(A) Swap dealers and major swap participants that 
                are depository institutions.--The appropriate Federal 
                banking agency for swap dealers and major swap 
                participants that are depository institutions shall 
                impose both initial and variation margin requirements 
                in accordance with paragraph (2)(A) on all swaps that 
                are not cleared by a registered derivatives clearing 
                organization or a derivatives clearing organization 
                that is exempt from registration under section 5b(j).
                    ``(B) Swap dealers and major swap participants that 
                are not depository institutions.--The Commission and 
                the Securities and Exchange Commission shall impose 
                both initial and variation margin requirements in 
                accordance with paragraph (2)(B) for swap dealers and 
                major swap participants that are not depository 
                institutions on all swaps that are not cleared by a 
                registered derivatives clearing organization or a 
                derivatives clearing organization that is exempt from 
                registration under section 5b(j). Any such initial and 
                variation margin requirements shall be as strict as or 
                stricter than the margin requirements prescribed under 
                paragraph (4)(A).
            ``(5) Margin requirements.--In prescribing margin 
        requirements under this subsection, the appropriate Federal 
        banking agency with respect to swap dealers and major swap 
        participants that are depository institutions and the 
        Commission with respect to swap dealers and major swap 
        participants that are not depository institutions may permit 
        the use of noncash collateral, as the agency or the Commission 
        determines to be consistent with--
                    ``(A) preserving the financial integrity of markets 
                trading swaps; and
                    ``(B) preserving the stability of the United States 
                financial system.
            ``(6) Comparability of capital and margin requirements.--
                    ``(A) In general.--The appropriate Federal banking 
                agencies, the Commission, and the Securities and 
                Exchange Commission shall periodically (but not less 
                frequently than annually) consult on minimum capital 
                requirements and minimum initial and variation margin 
                requirements.
                    ``(B) Comparability.--The entities described in 
                subparagraph (A) shall, to the maximum extent 
                practicable, establish and maintain comparable minimum 
                capital requirements and minimum initial and variation 
                margin requirements, including the use of non cash 
                collateral, for--
                            ``(i) swap dealers; and
                            ``(ii) major swap participants.
            ``(7) Requested margin.--If any party to a swap that is 
        exempt from the margin requirements of paragraph (4)(A)(i) 
        pursuant to the provisions of paragraph (4)(A)(ii), or from the 
        margin requirements of paragraph (4)(B)(i) pursuant to the 
        provisions of paragraph (4)(B)(ii), requests that such swap be 
        margined, then--
                    ``(A) the exemption shall not apply; and
                    ``(B) the counterparty to such swap shall provide 
                the requested margin.
            ``(8) Applicability with respect to counterparties.--
        Paragraph (4) shall not apply to initial and variation margin 
        for swaps in which 1 of the counterparties is not--
                    ``(A) a swap dealer;
                    ``(B) a major swap participant; or
                    ``(C) a financial entity as described in section 
                2(h)(9)(A)(ii), and such counterparty is eligible for 
                and utilizing the commercial end user clearing 
                exemption under section 2(h)(9).
    ``(f) Reporting and Recordkeeping.--
            ``(1) In general.--Each registered swap dealer and major 
        swap participant--
                    ``(A) shall make such reports as are required by 
                the Commission by rule or regulation regarding the 
                transactions and positions and financial condition of 
                the registered swap dealer or major swap participant;
                    ``(B)(i) for which there is a prudential regulator, 
                shall keep books and records of all activities related 
                to the business as a swap dealer or major swap 
                participant in such form and manner and for such period 
                as may be prescribed by the Commission by rule or 
                regulation; and
                    ``(ii) for which there is no prudential regulator, 
                shall keep books and records in such form and manner 
                and for such period as may be prescribed by the 
                Commission by rule or regulation; and
                    ``(C) shall keep books and records described in 
                subparagraph (B) open to inspection and examination by 
                any representative of the Commission.
            ``(2) Rules.--The Commission shall adopt rules governing 
        reporting and recordkeeping for swap dealers and major swap 
        participants.
    ``(g) Daily Trading Records.--
            ``(1) In general.--Each registered swap dealer and major 
        swap participant shall maintain daily trading records of the 
        swaps of the registered swap dealer and major swap participant 
        and all related records (including related cash or forward 
        transactions) and recorded communications, including electronic 
        mail, instant messages, and recordings of telephone calls, for 
        such period as may be required by the Commission by rule or 
        regulation.
            ``(2) Information requirements.--The daily trading records 
        shall include such information as the Commission shall require 
        by rule or regulation.
            ``(3) Counterparty records.--Each registered swap dealer 
        and major swap participant shall maintain daily trading records 
        for each counterparty in a manner and form that is identifiable 
        with each swap transaction.
            ``(4) Audit trail.--Each registered swap dealer and major 
        swap participant shall maintain a complete audit trail for 
        conducting comprehensive and accurate trade reconstructions.
            ``(5) Rules.--The Commission shall adopt rules governing 
        daily trading records for swap dealers and major swap 
        participants.
    ``(h) Business Conduct Standards.--
            ``(1) In general.--Each registered swap dealer and major 
        swap participant shall conform with such business conduct 
        standards as may be prescribed by the Commission by rule or 
        regulation that relate to--
                    ``(A) fraud, manipulation, and other abusive 
                practices involving swaps (including swaps that are 
                offered but not entered into);
                    ``(B) diligent supervision of the business of the 
                registered swap dealer and major swap participant;
                    ``(C) adherence to all applicable position limits; 
                and
                    ``(D) such other matters as the Commission 
                determines to be appropriate.
            ``(2) Special rule; fiduciary duties to certain entities.--
                    ``(A) Governmental entities.--A swap dealer that 
                provides advice regarding, or offers to enter into, or 
                enters into a swap with a State, State agency, city, 
                county, municipality, or other political subdivision of 
                a State or a Federal agency shall have a fiduciary duty 
                to the State, State agency, city, county, municipality, 
                or other political subdivision of a State, or the 
                Federal agency, as appropriate.
                    ``(B) Pension plans; endowments; retirement 
                plans.--A swap dealer that provides advice regarding, 
                or offers to enter into, or enters into a swap with a 
                pension plan, endowment, or retirement plan shall have 
                a fiduciary duty to the pension plan, endowment, or 
                retirement plan, as appropriate.
            ``(3) Business conduct requirements.--Business conduct 
        requirements adopted by the Commission shall--
                    ``(A) establish the standard of care for a swap 
                dealer or major swap participant to verify that any 
                counterparty meets the eligibility standards for an 
                eligible contract participant;
                    ``(B) require disclosure by the swap dealer or 
                major swap participant to any counterparty to the 
                transaction (other than a swap dealer, major swap 
                participant, security-based swap dealer, or major 
                security-based swap participant) of--
                            ``(i) information about the material risks 
                        and characteristics of the swap;
                            ``(ii) the source and amount of any fees or 
                        other material remuneration that the swap 
                        dealer or major swap participant would directly 
                        or indirectly expect to receive in connection 
                        with the swap;
                            ``(iii) any other material incentives or 
                        conflicts of interest that the swap dealer or 
                        major swap participant may have in connection 
                        with the swap; and
                            ``(iv)(I) for cleared swaps, upon the 
                        request of the counterparty, the daily mark 
                        from the appropriate derivatives clearing 
                        organization; and
                            ``(II) for uncleared swaps, the daily mark 
                        of the swap dealer or the major swap 
                        participant;
                    ``(C) establish a standard of conduct for a swap 
                dealer or major swap participant to communicate in a 
                fair and balanced manner based on principles of fair 
                dealing and good faith;
                    ``(D) establish a standard of conduct for a swap 
                dealer or major swap participant, with respect to a 
                counterparty that is an eligible contract participant 
                within the meaning of subclause (I) or (II) of clause 
                (vii) of section 1a(18) of this Act, to have a 
                reasonable basis to believe that the counterparty has 
                an independent representative that--
                            ``(i) has sufficient knowledge to evaluate 
                        the transaction and risks;
                            ``(ii) is not subject to a statutory 
                        disqualification;
                            ``(iii) is independent of the swap dealer 
                        or major swap participant;
                            ``(iv) undertakes a duty to act in the best 
                        interests of the counterparty it represents;
                            ``(v) makes appropriate disclosures; and
                            ``(vi) will provide written representations 
                        to the eligible contract participant regarding 
                        fair pricing and the appropriateness of the 
                        transaction; and
                    ``(E) establish such other standards and 
                requirements as the Commission may determine are 
                appropriate in the public interest, for the protection 
                of investors, or otherwise in furtherance of the 
                purposes of this Act.
            ``(4) Rules.--The Commission shall prescribe rules under 
        this subsection governing business conduct standards for swap 
        dealers and major swap participants.
    ``(i) Documentation and Back Office Standards.--
            ``(1) In general.--Each registered swap dealer and major 
        swap participant shall conform with such standards as may be 
        prescribed by the Commission by rule or regulation that relate 
        to timely and accurate confirmation, processing, netting, 
        documentation, and valuation of all swaps.
            ``(2) Rules.--The Commission shall adopt rules governing 
        documentation and back office standards for swap dealers and 
        major swap participants.
    ``(j) Duties.--Each registered swap dealer and major swap 
participant at all times shall comply with the following requirements:
            ``(1) Monitoring of trading.--The swap dealer or major swap 
        participant shall monitor its trading in swaps to prevent 
        violations of applicable position limits.
            ``(2) Risk management procedures.--The swap dealer or major 
        swap participant shall establish robust and professional risk 
        management systems adequate for managing the day-to-day 
        business of the swap dealer or major swap participant.
            ``(3) Disclosure of general information.--The swap dealer 
        or major swap participant shall disclose to the Commission and 
        to the prudential regulator for the swap dealer or major swap 
        participant, as applicable, information concerning--
                    ``(A) terms and conditions of its swaps;
                    ``(B) swap trading operations, mechanisms, and 
                practices;
                    ``(C) financial integrity protections relating to 
                swaps; and
                    ``(D) other information relevant to its trading in 
                swaps.
            ``(4) Ability to obtain information.--The swap dealer or 
        major swap participant shall--
                    ``(A) establish and enforce internal systems and 
                procedures to obtain any necessary information to 
                perform any of the functions described in this section; 
                and
                    ``(B) provide the information to the Commission and 
                to the prudential regulator for the swap dealer or 
                major swap participant, as applicable, on request.
            ``(5) Conflicts of interest.--The swap dealer and major 
        swap participant shall implement conflict-of-interest systems 
        and procedures that--
                    ``(A) establish structural and institutional 
                safeguards to ensure that the activities of any person 
                within the firm relating to research or analysis of the 
                price or market for any commodity or swap or acting in 
                a role of providing clearing activities or making 
                determinations as to accepting clearing customers are 
                separated by appropriate informational partitions 
                within the firm from the review, pressure, or oversight 
                of persons whose involvement in pricing, trading, or 
                clearing activities might potentially bias their 
                judgment or supervision and contravene the core 
                principles of open access and the business conduct 
                standards described in this Act; and
                    ``(B) address such other issues as the Commission 
                determines to be appropriate.
            ``(6) Antitrust considerations.--Unless necessary or 
        appropriate to achieve the purposes of this Act, a swap dealer 
        or major swap participant shall not--
                    ``(A) adopt any process or take any action that 
                results in any unreasonable restraint of trade; or
                    ``(B) impose any material anticompetitive burden on 
                trading or clearing.
    ``(k) Designation of Chief Compliance Officer.--
            ``(1) In general.--Each swap dealer and major swap 
        participant shall designate an individual to serve as a chief 
        compliance officer.
            ``(2) Duties.--The chief compliance officer shall--
                    ``(A) report directly to the board or to the senior 
                officer of the swap dealer or major swap participant;
                    ``(B) review the compliance of the swap dealer or 
                major swap participant with respect to the swap dealer 
                and major swap participant requirements described in 
                this section;
                    ``(C) in consultation with the board of directors, 
                a body performing a function similar to the board, or 
                the senior officer of the organization, resolve any 
                conflicts of interest that may arise;
                    ``(D) be responsible for administering each policy 
                and procedure that is required to be established 
                pursuant to this section;
                    ``(E) ensure compliance with this Act (including 
                regulations) relating to swaps, including each rule 
                prescribed by the Commission under this section;
                    ``(F) establish procedures for the remediation of 
                noncompliance issues identified by the chief compliance 
                officer through any--
                            ``(i) compliance office review;
                            ``(ii) look-back;
                            ``(iii) internal or external audit finding;
                            ``(iv) self-reported error; or
                            ``(v) validated complaint; and
                    ``(G) establish and follow appropriate procedures 
                for the handling, management response, remediation, 
                retesting, and closing of noncompliance issues.
            ``(3) Annual reports.--
                    ``(A) In general.--In accordance with rules 
                prescribed by the Commission, the chief compliance 
                officer shall annually prepare and sign a report that 
                contains a description of--
                            ``(i) the compliance of the swap dealer or 
                        major swap participant with respect to this Act 
                        (including regulations); and
                            ``(ii) each policy and procedure of the 
                        swap dealer or major swap participant of the 
                        chief compliance officer (including the code of 
                        ethics and conflict of interest policies).
                    ``(B) Requirements.--A compliance report under 
                subparagraph (A) shall--
                            ``(i) accompany each appropriate financial 
                        report of the swap dealer or major swap 
                        participant that is required to be furnished to 
                        the Commission pursuant to this section; and
                            ``(ii) include a certification that, under 
                        penalty of law, the compliance report is 
                        accurate and complete.''.

SEC. 732. CONFLICTS OF INTEREST.

    Section 4d of the Commodity Exchange Act (7 U.S.C. 6d) is amended--
            (1) by redesignating subsection (c) as subsection (e); and
            (2) by inserting after subsection (b) the following:
    ``(c) Conflicts of Interest.--The Commission shall require that 
futures commission merchants and introducing brokers implement 
conflict-of-interest systems and procedures that--
            ``(1) establish structural and institutional safeguards to 
        ensure that the activities of any person within the firm 
        relating to research or analysis of the price or market for any 
        commodity are separated by appropriate informational partitions 
        within the firm from the review, pressure, or oversight of 
        persons whose involvement in trading or clearing activities 
        might potentially bias the judgment or supervision of the 
        persons; and
            ``(2) address such other issues as the Commission 
        determines to be appropriate.
    ``(d) Designation of Chief Compliance Officer.--
            ``(1) In general.--Each futures commission merchant shall 
        designate an individual to serve as a chief compliance officer.
            ``(2) Duties.--The chief compliance officer shall--
                    ``(A) report directly to the board or to the senior 
                officer of the futures commission merchant;
                    ``(B) review the compliance of the futures 
                commission merchant with respect to requirements 
                described in this section;
                    ``(C) in consultation with the board of directors, 
                a body performing a function similar to the board, or 
                the senior officer of the organization, resolve any 
                conflicts of interest that may arise;
                    ``(D) be responsible for administering each policy 
                and procedure that is required to be established 
                pursuant to this section;
                    ``(E) ensure compliance with this Act (including 
                regulations and each rule prescribed by the Commission 
                under this section) relating, but not limited, to--
                            ``(i) contracts of sale of a commodity for 
                        future delivery;
                            ``(ii) options on the contracts described 
                        in clause (i);
                            ``(iii) commodity options;
                            ``(iv) retail commodity transactions;
                            ``(v) security futures products;
                            ``(vi) leverage contracts; and
                            ``(vii) swaps;
                    ``(F) establish procedures for the remediation of 
                noncompliance issues identified by the chief compliance 
                officer through any--
                            ``(i) compliance office review;
                            ``(ii) look-back;
                            ``(iii) internal or external audit finding;
                            ``(iv) self-reported error; or
                            ``(v) validated complaint; and
                    ``(G) establish and follow appropriate procedures 
                for the handling, management response, remediation, 
                retesting, and closing of noncompliance issues.
            ``(3) Annual reports.--
                    ``(A) In general.--In accordance with rules 
                prescribed by the Commission, the chief compliance 
                officer shall annually prepare and sign a report that 
                contains a description of--
                            ``(i) the compliance of the futures 
                        commission merchant with respect to this Act 
                        (including regulations); and
                            ``(ii) each policy and procedure of the 
                        futures commission merchant of the chief 
                        compliance officer (including the code of 
                        ethics and conflict of interest policies).
                    ``(B) Requirements.--A compliance report under 
                subparagraph (A) shall--
                            ``(i) accompany each appropriate financial 
                        report of the futures commission merchant that 
                        is required to be furnished to the Commission 
                        pursuant to this section; and
                            ``(ii) include a certification that, under 
                        penalty of law, the compliance report is 
                        accurate and complete.''.

SEC. 733. SWAP EXECUTION FACILITIES.

    The Commodity Exchange Act is amended by inserting after section 5g 
(7 U.S.C. 7b-2) the following:

``SEC. 5H. SWAP EXECUTION FACILITIES.

    ``(a) Registration.--
            ``(1) In general.--No person may operate a facility for the 
        trading or processing of swaps unless the facility is 
        registered as a swap execution facility or as a designated 
        contract market under this section.
            ``(2) Dual registration.--Any person that is registered as 
        a swap execution facility under this section shall register 
        with the Commission regardless of whether the person also is 
        registered with the Securities and Exchange Commission as a 
        swap execution facility.
    ``(b) Trading and Trade Processing.--A swap execution facility that 
is registered under subsection (a) may--
            ``(1) make available for trading any swap; and
            ``(2) facilitate trade processing of any swap.
    ``(c) Identification of Facility Used To Trade Swaps by Contract 
Markets.--A board of trade that operates a contract market shall, to 
the extent that the board of trade also operates a swap execution 
facility and uses the same electronic trade execution system for 
listing and executing trades of swaps on or through the contract market 
and the swap execution facility, identify whether the electronic 
trading of such swaps is taking place on or through the contract market 
or the swap execution facility.
    ``(d) Core Principles for Swap Execution Facilities.--
            ``(1) Compliance with core principles.--
                    ``(A) In general.--To be registered, and maintain 
                registration, as a swap execution facility, the swap 
                execution facility shall comply with--
                            ``(i) the core principles described in this 
                        subsection; and
                            ``(ii) any requirement that the Commission 
                        may impose by rule or regulation pursuant to 
                        section 8a(5).
                    ``(B) Reasonable discretion of swap execution 
                facility.--Unless otherwise determined by the 
                Commission by rule or regulation, a swap execution 
                facility described in subparagraph (A) shall have 
                reasonable discretion in establishing the manner in 
                which the swap execution facility complies with the 
                core principles described in this subsection.
            ``(2) Compliance with rules.--A swap execution facility 
        shall--
                    ``(A) monitor and enforce compliance with any rule 
                of the swap execution facility, including--
                            ``(i) the terms and conditions of the swaps 
                        traded or processed on or through the swap 
                        execution facility; and
                            ``(ii) any limitation on access to the swap 
                        execution facility;
                    ``(B) establish and enforce trading, trade 
                processing, and participation rules that will deter 
                abuses and have the capacity to detect, investigate, 
                and enforce those rules, including means--
                            ``(i) to provide market participants with 
                        impartial access to the market; and
                            ``(ii) to capture information that may be 
                        used in establishing whether rule violations 
                        have occurred;
                    ``(C) establish rules governing the operation of 
                the facility, including rules specifying trading 
                procedures to be used in entering and executing orders 
                traded or posted on the facility, including block 
                trades; and
                    ``(D) provide by its rules that when a swap dealer 
                or major swap participant enters into or facilitates a 
                swap that is subject to the mandatory clearing 
                requirement of section 2(h)(2)(F), the swap dealer or 
                major swap participant shall be responsible for 
                compliance with the mandatory trading requirement of 
                section 113(d) of the Wall Street Transparency and 
                Accountability Act of 2010.
            ``(3) Swaps not readily susceptible to manipulation.--The 
        swap execution facility shall permit trading only in swaps that 
        are not readily susceptible to manipulation.
            ``(4) Monitoring of trading and trade processing.--The swap 
        execution facility shall--
                    ``(A) establish and enforce rules or terms and 
                conditions defining, or specifications detailing--
                            ``(i) trading procedures to be used in 
                        entering and executing orders traded on or 
                        through the facilities of the swap execution 
                        facility; and
                            ``(ii) procedures for trade processing of 
                        swaps on or through the facilities of the swap 
                        execution facility; and
                    ``(B) monitor trading in swaps to prevent 
                manipulation, price distortion, and disruptions of the 
                delivery or cash settlement process through 
                surveillance, compliance, and disciplinary practices 
                and procedures, including methods for conducting real-
                time monitoring of trading and comprehensive and 
                accurate trade reconstructions.
            ``(5) Ability to obtain information.--The swap execution 
        facility shall--
                    ``(A) establish and enforce rules that will allow 
                the facility to obtain any necessary information to 
                perform any of the functions described in this section;
                    ``(B) provide the information to the Commission on 
                request; and
                    ``(C) have the capacity to carry out such 
                international information-sharing agreements as the 
                Commission may require.
            ``(6) Position limits or accountability.--
                    ``(A) In general.--To reduce the potential threat 
                of market manipulation or congestion, especially during 
                trading in the delivery month, a swap execution 
                facility that is a trading facility shall adopt for 
                each of the contracts of the facility, as is necessary 
                and appropriate, position limitations or position 
                accountability for speculators.
                    ``(B) Position limits.--For any contract that is 
                subject to a position limitation established by the 
                Commission pursuant to section 4a(a), the swap 
                execution facility shall set its position limitation at 
                a level no higher than the Commission limitation.
                    ``(C) Position enforcement.--For any contract that 
                is subject to a position limitation established by the 
                Commission pursuant to section 4a(a), a swap execution 
                facility shall reject any proposed swap transaction if, 
                based on information readily available to a swap 
                execution facility, any proposed swap transaction would 
                cause a swap execution facility customer that would be 
                a party to such swap transaction to exceed such 
                position limitation.
            ``(7) Financial integrity of transactions.--The swap 
        execution facility shall establish and enforce rules and 
        procedures for ensuring the financial integrity of swaps 
        entered on or through the facilities of the swap execution 
        facility, including the clearance and settlement of the swaps 
        pursuant to section 2(h)(1).
            ``(8) Emergency authority.--The swap execution facility 
        shall adopt rules to provide for the exercise of emergency 
        authority, in consultation or cooperation with the Commission, 
        as is necessary and appropriate, including the authority to 
        liquidate or transfer open positions in any swap or to suspend 
        or curtail trading in a swap.
            ``(9) Timely publication of trading information.--
                    ``(A) In general.--The swap execution facility 
                shall make public timely information on price, trading 
                volume, and other trading data on swaps to the extent 
                prescribed by the Commission.
                    ``(B) Capacity of swap execution facility.--The 
                swap execution facility shall be required to have the 
                capacity to electronically capture trade information 
                with respect to transactions executed on the facility.
            ``(10) Recordkeeping and reporting.--
                    ``(A) In general.--A swap execution facility 
                shall--
                            ``(i) maintain records of all activities 
                        relating to the business of the facility, 
                        including a complete audit trail, in a form and 
                        manner acceptable to the Commission for a 
                        period of 5 years; and
                            ``(ii) report to the Commission, in a form 
                        and manner acceptable to the Commission, such 
                        information as the Commission determines to be 
                        necessary or appropriate for the Commission to 
                        perform the duties of the Commission under this 
                        Act.
                    ``(B) Requirements.--The Commission shall adopt 
                data collection and reporting requirements for swap 
                execution facilities that are comparable to 
                corresponding requirements for derivatives clearing 
                organizations and swap data repositories.
            ``(11) Antitrust considerations.--Unless necessary or 
        appropriate to achieve the purposes of this Act, the swap 
        execution facility shall not--
                    ``(A) adopt any rules or taking any actions that 
                result in any unreasonable restraint of trade; or
                    ``(B) impose any material anticompetitive burden on 
                trading or clearing.
            ``(12) Conflicts of interest.--The swap execution facility 
        shall--
                    ``(A) establish and enforce rules to minimize 
                conflicts of interest in its decision-making process; 
                and
                    ``(B) establish a process for resolving the 
                conflicts of interest.
            ``(13) Financial resources.--
                    ``(A) In general.--The swap execution facility 
                shall have adequate financial, operational, and 
                managerial resources to discharge each responsibility 
                of the swap execution facility.
                    ``(B) Determination of resource adequacy.--The 
                financial resources of a swap execution facility shall 
                be considered to be adequate if the value of the 
                financial resources exceeds the total amount that would 
                enable the swap execution facility to cover the 
                operating costs of the swap execution facility for a 1-
                year period, as calculated on a rolling basis.
            ``(14) System safeguards.--The swap execution facility 
        shall--
                    ``(A) establish and maintain a program of risk 
                analysis and oversight to identify and minimize sources 
                of operational risk, through the development of 
                appropriate controls and procedures, and automated 
                systems, that--
                            ``(i) are reliable and secure; and
                            ``(ii) have adequate scalable capacity;
                    ``(B) establish and maintain emergency procedures, 
                backup facilities, and a plan for disaster recovery 
                that are designed to allow for--
                            ``(i) the timely recovery and resumption of 
                        operations; and
                            ``(ii) the fulfillment of the 
                        responsibilities and obligation of the swap 
                        execution facility; and
                    ``(C) periodically conduct tests to verify that the 
                backup resources of the swap execution facility are 
                sufficient to ensure continued--
                            ``(i) order processing and trade matching;
                            ``(ii) price reporting;
                            ``(iii) market surveillance and
                            ``(iv) maintenance of a comprehensive and 
                        accurate audit trail.
            ``(15) Designation of chief compliance officer.--
                    ``(A) In general.--Each swap execution facility 
                shall designate an individual to serve as a chief 
                compliance officer.
                    ``(B) Duties.--The chief compliance officer shall--
                            ``(i) report directly to the board or to 
                        the senior officer of the facility;
                            ``(ii) review compliance with the core 
                        principles in this subsection;
                            ``(iii) in consultation with the board of 
                        the facility, a body performing a function 
                        similar to that of a board, or the senior 
                        officer of the facility, resolve any conflicts 
                        of interest that may arise;
                            ``(iv) be responsible for establishing and 
                        administering the policies and procedures 
                        required to be established pursuant to this 
                        section;
                            ``(v) ensure compliance with this Act and 
                        the rules and regulations issued under this 
                        Act, including rules prescribed by the 
                        Commission pursuant to this section; and
                            ``(vi) establish procedures for the 
                        remediation of noncompliance issues found 
                        during compliance office reviews, look backs, 
                        internal or external audit findings, self-
                        reported errors, or through validated 
                        complaints.
                    ``(C) Requirements for procedures.--In establishing 
                procedures under subparagraph (B)(vi), the chief 
                compliance officer shall design the procedures to 
                establish the handling, management response, 
                remediation, retesting, and closing of noncompliance 
                issues.
                    ``(D) Annual reports.--
                            ``(i) In general.--In accordance with rules 
                        prescribed by the Commission, the chief 
                        compliance officer shall annually prepare and 
                        sign a report that contains a description of--
                                    ``(I) the compliance of the swap 
                                execution facility with this Act; and
                                    ``(II) the policies and procedures, 
                                including the code of ethics and 
                                conflict of interest policies, of the 
                                swap execution facility.
                            ``(ii) Requirements.--The chief compliance 
                        officer shall--
                                    ``(I) submit each report described 
                                in clause (i) with the appropriate 
                                financial report of the swap execution 
                                facility that is required to be 
                                submitted to the Commission pursuant to 
                                this section; and
                                    ``(II) include in the report a 
                                certification that, under penalty of 
                                law, the report is accurate and 
                                complete.
    ``(e) Exemptions.--The Commission may exempt, conditionally or 
unconditionally, a swap execution facility from registration under this 
section if the Commission finds that the facility is subject to 
comparable, comprehensive supervision and regulation on a consolidated 
basis by the Securities and Exchange Commission, a prudential 
regulator, or the appropriate governmental authorities in the home 
country of the facility.
    ``(f) Rules.--The Commission shall prescribe rules governing the 
regulation of alternative swap execution facilities under this 
section.''.

SEC. 734. DERIVATIVES TRANSACTION EXECUTION FACILITIES AND EXEMPT 
              BOARDS OF TRADE.

    (a) In General.--Sections 5a and 5d of the Commodity Exchange Act 
(7 U.S.C. 7a, 7a-3) are repealed.
    (b) Conforming Amendments.--
            (1) Section 2 of the Commodity Exchange Act (7 U.S.C. 2) is 
        amended--
                    (A) in subsection (a)(1)(A), in the first sentence, 
                by striking ``or 5a''; and
                    (B) in paragraph (2) of subsection (g) (as 
                redesignated by section 723(a)(1)(B)), by striking 
                ``section 5a of this Act'' and all that follows through 
                ``5d of this Act'' and inserting ``section 5b of this 
                Act''.
            (2) Section 6(g)(1)(A) of the Securities Exchange Act of 
        1934 (15 U.S.C. 78f(g)(1)(A)) is amended--
                    (A) by striking ``that--'' and all that follows 
                through ``(i) has been designated'' and inserting 
                ``that has been designated'';
                    (B) by striking ``; or'' and inserting ``; and'' 
                and
                    (C) by striking clause (ii).

SEC. 735. DESIGNATED CONTRACT MARKETS.

    (a) Criteria for Designation.--Section 5 of the Commodity Exchange 
Act (7 U.S.C. 7) is amended by striking subsection (b).
    (b) Core Principles for Contract Markets.--Section 5 of the 
Commodity Exchange Act (7 U.S.C. 7) is amended by striking subsection 
(d) and inserting the following:
    ``(d) Core Principles for Contract Markets.--
            ``(1) Designation as contract market.--
                    ``(A) In general.--To be designated, and maintain a 
                designation, as a contract market, a board of trade 
                shall comply with--
                            ``(i) any core principle described in this 
                        subsection; and
                            ``(ii) any requirement that the Commission 
                        may impose by rule or regulation pursuant to 
                        section 8a(5).
                    ``(B) Reasonable discretion of contract market.--
                Unless otherwise determined by the Commission by rule 
                or regulation, a board of trade described in 
                subparagraph (A) shall have reasonable discretion in 
                establishing the manner in which the board of trade 
                complies with the core principles described in this 
                subsection.
            ``(2) Compliance with rules.--
                    ``(A) In general.--The board of trade shall 
                establish, monitor, and enforce compliance with the 
                rules of the contract market, including--
                            ``(i) access requirements;
                            ``(ii) the terms and conditions of any 
                        contracts to be traded on the contract market; 
                        and
                            ``(iii) rules prohibiting abusive trade 
                        practices on the contract market.
                    ``(B) Capacity of contract market.--The board of 
                trade shall have the capacity to detect, investigate, 
                and apply appropriate sanctions to any person that 
                violates any rule of the contract market.
                    ``(C) Requirement of rules.--The rules of the 
                contract market shall provide the board of trade with 
                the ability and authority to obtain any necessary 
                information to perform any function described in this 
                subsection, including the capacity to carry out such 
                international information-sharing agreements as the 
                Commission may require.
            ``(3) Contracts not readily subject to manipulation.--The 
        board of trade shall list on the contract market only contracts 
        that are not readily susceptible to manipulation.
            ``(4) Prevention of market disruption.--The board of trade 
        shall have the capacity and responsibility to prevent 
        manipulation, price distortion, and disruptions of the delivery 
        or cash-settlement process through market surveillance, 
        compliance, and enforcement practices and procedures, 
        including--
                    ``(A) methods for conducting real-time monitoring 
                of trading; and
                    ``(B) comprehensive and accurate trade 
                reconstructions.
            ``(5) Position limitations or accountability.--
                    ``(A) In general.--To reduce the potential threat 
                of market manipulation or congestion (especially during 
                trading in the delivery month), the board of trade 
                shall adopt for each contract of the board of trade, as 
                is necessary and appropriate, position limitations or 
                position accountability for speculators.
                    ``(B) Maximum allowable position limitation.--For 
                any contract that is subject to a position limitation 
                established by the Commission pursuant to section 
                4a(a), the board of trade shall set the position 
                limitation of the board of trade at a level not higher 
                than the position limitation established by the 
                Commission.
            ``(6) Emergency authority.--The board of trade, in 
        consultation or cooperation with the Commission, shall adopt 
        rules to provide for the exercise of emergency authority, as is 
        necessary and appropriate, including the authority--
                    ``(A) to liquidate or transfer open positions in 
                any contract;
                    ``(B) to suspend or curtail trading in any 
                contract; and
                    ``(C) to require market participants in any 
                contract to meet special margin requirements.
            ``(7) Availability of general information.--The board of 
        trade shall make available to market authorities, market 
        participants, and the public accurate information concerning--
                    ``(A) the terms and conditions of the contracts of 
                the contract market; and
                    ``(B)(i) the rules, regulations, and mechanisms for 
                executing transactions on or through the facilities of 
                the contract market; and
                    ``(ii) the rules and specifications describing the 
                operation of the contract market's--
                            ``(I) electronic matching platform; or
                            ``(II) trade execution facility.
            ``(8) Daily publication of trading information.--The board 
        of trade shall make public daily information on settlement 
        prices, volume, open interest, and opening and closing ranges 
        for actively traded contracts on the contract market.
            ``(9) Execution of transactions.--
                    ``(A) In general.--The board of trade shall provide 
                a competitive, open, and efficient market and mechanism 
                for executing transactions that protects the price 
                discovery process of trading in the centralized market 
                of the board of trade.
                    ``(B) Rules.--The rules of the board of trade may 
                authorize, for bona fide business purposes--
                            ``(i) transfer trades or office trades;
                            ``(ii) an exchange of--
                                    ``(I) futures in connection with a 
                                cash commodity transaction;
                                    ``(II) futures for cash 
                                commodities; or
                                    ``(III) futures for swaps; or
                            ``(iii) a futures commission merchant, 
                        acting as principal or agent, to enter into or 
                        confirm the execution of a contract for the 
                        purchase or sale of a commodity for future 
                        delivery if the contract is reported, recorded, 
                        or cleared in accordance with the rules of the 
                        contract market or a derivatives clearing 
                        organization.
            ``(10) Trade information.--The board of trade shall 
        maintain rules and procedures to provide for the recording and 
        safe storage of all identifying trade information in a manner 
        that enables the contract market to use the information--
                    ``(A) to assist in the prevention of customer and 
                market abuses; and
                    ``(B) to provide evidence of any violations of the 
                rules of the contract market.
            ``(11) Financial integrity of transactions.--The board of 
        trade shall establish and enforce--
                    ``(A) rules and procedures for ensuring the 
                financial integrity of transactions entered into on or 
                through the facilities of the contract market 
                (including the clearance and settlement of the 
                transactions with a derivatives clearing organization); 
                and
                    ``(B) rules to ensure--
                            ``(i) the financial integrity of any--
                                    ``(I) futures commission merchant; 
                                and
                                    ``(II) introducing broker; and
                            ``(ii) the protection of customer funds.
            ``(12) Protection of markets and market participants.--The 
        board of trade shall establish and enforce rules--
                    ``(A) to protect markets and market participants 
                from abusive practices committed by any party, 
                including abusive practices committed by a party acting 
                as an agent for a participant; and
                    ``(B) to promote fair and equitable trading on the 
                contract market.
            ``(13) Disciplinary procedures.--The board of trade shall 
        establish and enforce disciplinary procedures that authorize 
        the board of trade to discipline, suspend, or expel members or 
        market participants that violate the rules of the board of 
        trade, or similar methods for performing the same functions, 
        including delegation of the functions to third parties.
            ``(14) Dispute resolution.--The board of trade shall 
        establish and enforce rules regarding, and provide facilities 
        for alternative dispute resolution as appropriate for, market 
        participants and any market intermediaries.
            ``(15) Governance fitness standards.--The board of trade 
        shall establish and enforce appropriate fitness standards for 
        directors, members of any disciplinary committee, members of 
        the contract market, and any other person with direct access to 
        the facility (including any party affiliated with any person 
        described in this paragraph).
            ``(16) Conflicts of interest.--The board of trade shall 
        establish and enforce rules--
                    ``(A) to minimize conflicts of interest in the 
                decision-making process of the contract market; and
                    ``(B) to establish a process for resolving 
                conflicts of interest described in subparagraph (A).
            ``(17) Composition of governing boards of contract 
        markets.--The governance arrangements of the board of trade 
        shall be designed to promote the objectives of market 
        participants.
            ``(18) Recordkeeping.--The board of trade shall maintain 
        records of all activities relating to the business of the 
        contract market--
                    ``(A) in a form and manner that is acceptable to 
                the Commission; and
                    ``(B) for a period of at least 5 years.
            ``(19) Antitrust considerations.--Unless necessary or 
        appropriate to achieve the purposes of this Act, the board of 
        trade shall not--
                    ``(A) adopt any rule or taking any action that 
                results in any unreasonable restraint of trade; or
                    ``(B) impose any material anticompetitive burden on 
                trading on the contract market.
            ``(20) System safeguards.--The board of trade shall--
                    ``(A) establish and maintain a program of risk 
                analysis and oversight to identify and minimize sources 
                of operational risk, through the development of 
                appropriate controls and procedures, and the 
                development of automated systems, that are reliable, 
                secure, and have adequate scalable capacity;
                    ``(B) establish and maintain emergency procedures, 
                backup facilities, and a plan for disaster recovery 
                that allow for the timely recovery and resumption of 
                operations and the fulfillment of the responsibilities 
                and obligations of the board of trade; and
                    ``(C) periodically conduct tests to verify that 
                backup resources are sufficient to ensure continued 
                order processing and trade matching, price reporting, 
                market surveillance, and maintenance of a comprehensive 
                and accurate audit trail.
            ``(21) Financial resources.--
                    ``(A) In general.--The board of trade shall have 
                adequate financial, operational, and managerial 
                resources to discharge each responsibility of the board 
                of trade.
                    ``(B) Determination of adequacy.--The financial 
                resources of the board of trade shall be considered to 
                be adequate if the value of the financial resources 
                exceeds the total amount that would enable the contract 
                market to cover the operating costs of the contract 
                market for a 1-year period, as calculated on a rolling 
                basis.''.

SEC. 736. MARGIN.

    Section 8a(7) of the Commodity Exchange Act (7 U.S.C. 12a(7)) is 
amended--
            (1) in subparagraph (C), by striking ``, excepting the 
        setting of levels of margin'';
            (2) by redesignating subparagraphs (D) through (F) as 
        subparagraphs (E) through (G), respectively; and
            (3) by inserting after subparagraph (C) the following:
                    ``(D) margin requirements, provided that the rules, 
                regulations, or orders shall--
                            ``(i) be limited to protecting the 
                        financial integrity of the derivatives clearing 
                        organization;
                            ``(ii) be designed for risk management 
                        purposes to protect the financial integrity of 
                        transactions; and
                            ``(iii) not set specific margin amounts;''.

SEC. 737. POSITION LIMITS.

    (a) Aggregate Position Limits.--Section 4a(a) of the Commodity 
Exchange Act (7 U.S.C. 6a(a)) is amended--
            (1) by inserting after ``(a)'' the following:
            ``(1) In general.--'';
            (2) in the first sentence, by striking ``on electronic 
        trading facilities with respect to a significant price 
        discovery contract'' and inserting ``swaps that perform or 
        affect a significant price discovery function with respect to 
        registered entities'';
            (3) in the second sentence--
                    (A) by inserting ``, including any group or class 
                of traders,'' after ``held by any person''; and
                    (B) by striking ``on an electronic trading facility 
                with respect to a significant price discovery 
                contract,'' and inserting ``swaps traded on or subject 
                to the rules of an swaps execution facility, or swaps 
                not traded on or subject to the rules of an swaps 
                execution facility that perform a significant price 
                discovery function with respect to a registered 
                entity,''; and
            (4) by adding at the end the following:
            ``(2) Aggregate position limits.--The Commission shall, by 
        rule or regulation, establish limits (including related hedge 
        exemption provisions) on the aggregate number or amount of 
        positions in contracts based on the same underlying commodity 
        (as defined by the Commission) that may be held by any person, 
        including any group or class of traders, for each month 
        across--
                    ``(A) contracts listed by designated contract 
                markets;
                    ``(B) with respect to an agreement, contract, or 
                transaction that settles against, or in relation to, 
                any price (including the daily or final settlement 
                price) of 1 or more contracts listed for trading on a 
                registered entity, contracts traded on a foreign board 
                of trade that provides members or other participants 
                located in the United States with direct access to the 
                electronic trading and order matching system of the 
                foreign board of trade;
                    ``(C) swaps traded on or subject to the rules of a 
                swap execution facility; and
                    ``(D) swaps not traded on or subject to the rules 
                of a swap execution facility that perform or affect a 
                significant price discovery function with respect to a 
                registered entity.
            ``(3) Significant price discovery function.--In making a 
        determination as to whether a swap performs or affects a 
        significant price discovery function with respect to registered 
        entities, the Commission shall consider, as appropriate, the 
        following factors:
                    ``(A) Price linkage.--The extent to which the swap 
                uses or otherwise relies on a daily or final settlement 
                price, or other major price parameter, of another 
                contract traded on a registered entity based on the 
                same underlying commodity, to value a position, 
                transfer or convert a position, financially settle a 
                position, or close out a position.
                    ``(B) Arbitrage.--The extent to which the price for 
                the swap is sufficiently related to the price of 
                another contract traded on a registered entity based on 
                the same underlying commodity so as to permit market 
                participants to effectively arbitrage between the 
                markets by simultaneously maintaining positions or 
                executing trades in the swaps on a frequent and 
                recurring basis.
                    ``(C) Material price reference.--The extent to 
                which, on a frequent and recurring basis, bids, offers, 
                or transactions in a contract traded on a registered 
                entity are directly based on, or are determined by 
                referencing, the price generated by the swap.
                    ``(D) Material liquidity.--The extent to which the 
                volume of swaps being traded in the commodity is 
                sufficient to have a material effect on another 
                contract traded on a registered entity.
                    ``(E) Other material factors.--Such other material 
                factors as the Commission specifies by rule or 
                regulation as relevant to determine whether a swap 
                serves a significant price discovery function with 
                respect to a regulated market.
            ``(4) Exemptions.--The Commission, by rule, regulation, or 
        order, may exempt, conditionally or unconditionally, any person 
        or class of persons, any swap or class of swaps, or any 
        transaction or class of transactions from any requirement that 
        the Commission establishes under this section with respect to 
        position limits.''.
    (b) Conforming Amendments.--Section 4a(b) of the Commodity Exchange 
Act (7 U.S.C. 6a(b)) is amended--
            (1) in paragraph (1), by striking ``or derivatives 
        transaction execution facility or facilities or electronic 
        trading facility'' and inserting ``or swap execution facility 
        or facilities''; and
            (2) in paragraph (2), by striking ``or derivatives 
        transaction execution facility or facilities or electronic 
        trading facility'' and inserting ``or swap execution 
        facility''.

SEC. 738. FOREIGN BOARDS OF TRADE.

    (a) In General.--Section 4(b) of the Commodity Exchange Act (7 
U.S.C. 6(b)) is amended--
            (1) in the first sentence, by striking ``The Commission'' 
        and inserting the following:
            ``(2) Persons located in the united states.--
                    ``(A) In general.--The Commission'';
            (2) in the second sentence, by striking ``Such rules and 
        regulations'' and inserting the following:
                    ``(B) Different requirements.--Rules and 
                regulations described in subparagraph (A)'';
            (3) in the third sentence--
                    (A) by striking ``No rule or regulation'' and 
                inserting the following:
                    ``(C) Prohibition.--Except as provided in 
                paragraphs (1) and (2), no rule or regulation'';
                    (B) by striking ``that (1) requires'' and inserting 
                the following: ``that--
                            ``(i) requires''; and
                    (C) by striking ``market, or (2) governs'' and 
                inserting the following: ``market; or
                            ``(ii) governs''; and
            (4) by inserting before paragraph (2) (as designated by 
        paragraph (1)) the following:
            ``(1) Foreign boards of trade.--
                    ``(A) In general.--It shall be unlawful for a 
                foreign board of trade to provide to the members of the 
                foreign board of trade or other participants located in 
                the United States direct access to the electronic 
                trading and order-matching system of the foreign board 
                of trade with respect to an agreement, contract, or 
                transaction that settles against any price (including 
                the daily or final settlement price) of 1 or more 
                contracts listed for trading on a registered entity, 
                unless the Commission determines that--
                            ``(i) the foreign board of trade makes 
                        public daily trading information regarding the 
                        agreement, contract, or transaction that is 
                        comparable to the daily trading information 
                        published by the registered entity for the 1 or 
                        more contracts against which the agreement, 
                        contract, or transaction traded on the foreign 
                        board of trade settles; and
                            ``(ii) the foreign board of trade (or the 
                        foreign futures authority that oversees the 
                        foreign board of trade)--
                                    ``(I) adopts position limits 
                                (including related hedge exemption 
                                provisions) for the agreement, 
                                contract, or transaction that are 
                                comparable to the position limits 
                                (including related hedge exemption 
                                provisions) adopted by the registered 
                                entity for the 1 or more contracts 
                                against which the agreement, contract, 
                                or transaction traded on the foreign 
                                board of trade settles;
                                    ``(II) has the authority to require 
                                or direct market participants to limit, 
                                reduce, or liquidate any position the 
                                foreign board of trade (or the foreign 
                                futures authority that oversees the 
                                foreign board of trade) determines to 
                                be necessary to prevent or reduce the 
                                threat of price manipulation, excessive 
                                speculation as described in section 4a, 
                                price distortion, or disruption of 
                                delivery or the cash settlement 
                                process;
                                    ``(III) agrees to promptly notify 
                                the Commission, with regard to the 
                                agreement, contract, or transaction 
                                that settles against any price 
                                (including the daily or final 
                                settlement price) of 1 or more 
                                contracts listed for trading on a 
                                registered entity, of any change 
                                regarding--
                                            ``(aa) the information that 
                                        the foreign board of trade will 
                                        make publicly available;
                                            ``(bb) the position limits 
                                        that the foreign board of trade 
                                        or foreign futures authority 
                                        will adopt and enforce;
                                            ``(cc) the position 
                                        reductions required to prevent 
                                        manipulation, excessive 
                                        speculation as described in 
                                        section 4a, price distortion, 
                                        or disruption of delivery or 
                                        the cash settlement process; 
                                        and
                                            ``(dd) any other area of 
                                        interest expressed by the 
                                        Commission to the foreign board 
                                        of trade or foreign futures 
                                        authority;
                                    ``(IV) provides information to the 
                                Commission regarding large trader 
                                positions in the agreement, contract, 
                                or transaction that is comparable to 
                                the large trader position information 
                                collected by the Commission for the 1 
                                or more contracts against which the 
                                agreement, contract, or transaction 
                                traded on the foreign board of trade 
                                settles; and
                                    ``(V) provides the Commission such 
                                information as is necessary to publish 
                                reports on aggregate trader positions 
                                for the agreement, contract, or 
                                transaction traded on the foreign board 
                                of trade that are comparable to such 
                                reports on aggregate trader positions 
                                for the 1 or more contracts against 
                                which the agreement, contract, or 
                                transaction traded on the foreign board 
                                of trade settles.
                    ``(B) Existing foreign boards of trade.--
                Subparagraph (A) shall not be effective with respect to 
                any foreign board of trade to which, prior to the date 
                of enactment of this paragraph, the Commission granted 
                direct access permission until the date that is 180 
                days after that date of enactment.''.
    (b) Liability of Registered Persons Trading on a Foreign Board of 
Trade.--Section 4 of the Commodity Exchange Act (7 U.S.C. 6) is 
amended--
            (1) in subsection (a), in the matter preceding paragraph 
        (1), by inserting ``or by subsection (e)'' after ``Unless 
        exempted by the Commission pursuant to subsection (c)''; and
            (2) by adding at the end the following:
    ``(e) Liability of Registered Persons Trading on a Foreign Board of 
Trade.--A person registered with the Commission, or exempt from 
registration by the Commission, under this Act may not be found to have 
violated subsection (a) with respect to a transaction in, or in 
connection with, a contract of sale of a commodity for future delivery 
if the person has reason to believe that the transaction and the 
contract is made on or subject to the rules of a foreign board of trade 
that has complied with paragraphs (1) and (2) of subsection (b).''.
    (c) Contract Enforcement for Foreign Futures Contracts.--Section 
22(a) of the Commodity Exchange Act (7 U.S.C. 25(a)) (as amended by 
section 739) is amended by adding at the end the following:
            ``(6) Contract enforcement for foreign futures contracts.--
        A contract of sale of a commodity for future delivery traded or 
        executed on or through the facilities of a board of trade, 
        exchange, or market located outside the United States for 
        purposes of section 4(a) shall not be void, voidable, or 
        unenforceable, and a party to such a contract shall not be 
        entitled to rescind or recover any payment made with respect to 
        the contract, based on the failure of the foreign board of 
        trade to comply with any provision of this Act.''.

SEC. 739. LEGAL CERTAINTY FOR SWAPS.

    Section 22(a) of the Commodity Exchange Act (7 U.S.C. 25(a)) is 
amended by striking paragraph (4) and inserting the following:
            ``(4) Contract enforcement between eligible 
        counterparties.--
                    ``(A) In general.--No hybrid instrument sold to any 
                investor shall be void, voidable, or unenforceable, and 
                no party to a hybrid instrument shall be entitled to 
                rescind, or recover any payment made with respect to, 
                the hybrid instrument under this section or any other 
                provision of Federal or State law, based solely on the 
                failure of the hybrid instrument to comply with the 
                terms or conditions of section 2(f) or regulations of 
                the Commission.
                    ``(B) Swaps.--No agreement, contract, or 
                transaction between eligible contract participants or 
                persons reasonably believed to be eligible contract 
                participants shall be void, voidable, or unenforceable, 
                and no party to an agreement, contract, or transaction 
                shall be entitled to rescind, or recover any payment 
                made with respect to, the agreement, contract, or 
                transaction under this section or any other provision 
                of Federal or State law, based solely on the failure of 
                the agreement, contract, or transaction--
                            ``(i) to meet the definition of a swap 
                        under section 1a; or
                            ``(ii) to be cleared in accordance with 
                        section 2(h)(1).
            ``(5) Legal certainty for long-term swaps entered into 
        before the date of enactment of the wall street transparency 
        and accountability act of 2010.--
                    ``(A) In general.--Any swap entered into before the 
                date of enactment of the Wall Street Transparency and 
                Accountability Act of 2010, the terms of which have not 
                expired as of the date of enactment, shall not be 
                subject to the mandatory clearing requirements under 
                this Act.
                    ``(B) Effect on swaps.--Unless specifically 
                reserved in the applicable bilateral trading agreement, 
                neither the enactment of the Wall Street Transparency 
                and Accountability Act of 2010, nor any requirement 
                under that Act or an amendment made by that Act, shall 
                constitute a termination event, force majeure, 
                illegality, increased costs, regulatory change, or 
                similar event under a bilateral trading agreement 
                (including any related credit support arrangement) that 
                would permit a party to terminate, renegotiate, modify, 
                amend, or supplement 1 or more transactions under the 
                bilateral trading agreement.
                    ``(C) Position limits.--Any position limit 
                established under the Wall Street Transparency and 
                Accountability Act of 2010 shall not apply to a 
                position acquired in good faith prior to the effective 
                date of any rule, regulation, or order under the Act 
                that establishes the position limit; provided, however, 
                that such positions shall be attributed to the trader 
                if the trader's position is increased after the 
                effective date such position limit rule, regulation, or 
                order.''.

SEC. 740. MULTILATERAL CLEARING ORGANIZATIONS.

    Sections 408 and 409 of the Federal Deposit Insurance Corporation 
Improvement Act of 1991 (12 U.S.C. 4421, 4422) are repealed.

SEC. 741. ENFORCEMENT.

    (a) Enforcement Authority.--The Commodity Exchange Act is amended 
by inserting after section 4b (7 U.S.C. 6b) the following:

``SEC. 4B-1. ENFORCEMENT AUTHORITY.

    ``(a) Commission.--Except as provided in subsections (b), (c), and 
(d), the Commission shall have primary authority to enforce the 
amendments made by the Wall Street Transparency and Accountability Act 
of 2010 with respect to any person.
    ``(b) Appropriate Federal Banking Agencies.--The appropriate 
Federal banking agency for swap dealers or major swap participants that 
are depository institutions, as that term is defined under section 3 of 
the Federal Deposit Insurance Act (12 U.S.C. 1813), shall have 
exclusive authority to enforce the provisions of section 4s(e) and 
other prudential requirements of this Act, with respect to depository 
institutions that are swap dealers or major swap participants.
    ``(c) Referrals.--
            ``(1) Prudential regulators.--If the prudential regulator 
        for a swap dealer or major swap participant has cause to 
        believe that the swap dealer or major swap participant, or any 
        affiliate or division of the swap dealer or major swap 
        participant, may have engaged in conduct that constitutes a 
        violation of the nonprudential requirements of this Act 
        (including section 4s or rules adopted by the Commission under 
        that section), the prudential regulator shall promptly notify 
        the Commission in a written report that includes--
                    ``(A) a request that the Commission initiate an 
                enforcement proceeding under this Act; and
                    ``(B) an explanation of the facts and circumstances 
                that led to the preparation of the written report.
            ``(2) Commission.--If the Commission has cause to believe 
        that a swap dealer or major swap participant that has a 
        prudential regulator may have engaged in conduct that 
        constitutes a violation of any prudential requirement of 
        section 4s or rules adopted by the Commission under that 
        section, the Commission may notify the prudential regulator of 
        the conduct in a written report that includes--
                    ``(A) a request that the prudential regulator 
                initiate an enforcement proceeding under this Act or 
                any other Federal law (including regulations); and
                    ``(B) an explanation of the concerns of the 
                Commission, and a description of the facts and 
                circumstances, that led to the preparation of the 
                written report.
    ``(d) Backstop Enforcement Authority.--
            ``(1) Initiation of enforcement proceeding by prudential 
        regulator.--If the Commission does not initiate an enforcement 
        proceeding before the end of the 90-day period beginning on the 
        date on which the Commission receives a written report under 
        subsection (c)(1), the prudential regulator may initiate an 
        enforcement proceeding.
            ``(2) Initiation of enforcement proceeding by commission.--
        If the prudential regulator does not initiate an enforcement 
        proceeding before the end of the 90-day period beginning on the 
        date on which the prudential regulator receives a written 
        report under subsection (c)(2), the Commission may initiate an 
        enforcement proceeding.''.
    (b) Conforming Amendments.--
            (1) Section 4b of the Commodity Exchange Act (7 U.S.C. 6b) 
        is amended--
                    (A) in subsection (a)(2), by striking ``or other 
                agreement, contract, or transaction subject to 
                paragraphs (1) and (2) of section 5a(g),'' and 
                inserting ``or swap,'';
                    (B) in subsection (b), by striking ``or other 
                agreement, contract or transaction subject to 
                paragraphs (1) and (2) of section 5a(g),'' and 
                inserting ``or swap,''; and
                    (C) by adding at the end the following:
    ``(e) It shall be unlawful for any person, directly or indirectly, 
by the use of any means or instrumentality of interstate commerce, or 
of the mails, or of any facility of any registered entity, in or in 
connection with any order to make, or the making of, any contract of 
sale of any commodity for future delivery (or option on such a 
contract), or any swap, on a group or index of securities (or any 
interest therein or based on the value thereof)--
            ``(1) to employ any device, scheme, or artifice to defraud;
            ``(2) to make any untrue statement of a material fact or to 
        omit to state a material fact necessary in order to make the 
        statements made, in the light of the circumstances under which 
        they were made, not misleading; or
            ``(3) to engage in any act, practice, or course of business 
        which operates or would operate as a fraud or deceit upon any 
        person.''.
            (2) Section 4c(a)(1) of the Commodity Exchange Act (7 
        U.S.C. 6c(a)(1)) is amended by inserting ``or swap'' before 
        ``if the transaction is used or may be used''.
            (3) Section 6(c) of the Commodity Exchange Act (7 U.S.C. 9) 
        is amended in the first sentence by inserting ``or of any 
        swap,'' before ``or has willfully made''.
            (4) Section 6(d) of the Commodity Exchange Act (7 U.S.C. 
        13b) is amended in the first sentence, in the matter preceding 
        the proviso, by inserting ``or of any swap,'' before ``or 
        otherwise is violating''.
            (5) Section 6c(a) of the Commodity Exchange Act (7 U.S.C. 
        13a-1(a)) is amended in the matter preceding the proviso by 
        inserting ``or any swap'' after ``commodity for future 
        delivery''.
            (6) Section 9 of the Commodity Exchange Act (7 U.S.C. 13) 
        is amended--
                    (A) in subsection (a)--
                            (i) in paragraph (2), by inserting ``or of 
                        any swap,'' before ``or to corner''; and
                            (ii) in paragraph (4), by inserting ``swap 
                        data repository,'' before ``or futures 
                        association'' and
                    (B) in subsection (e)(1)--
                            (i) by inserting ``swap data repository,'' 
                        before ``or registered futures association''; 
                        and
                            (ii) by inserting ``, or swaps,'' before 
                        ``on the basis''.
            (7) Section 9(a) of the Commodity Exchange Act (7 U.S.C. 
        13(a)) is amended by adding at the end the following:
            ``(6) Any person to abuse the end user clearing exemption 
        under section 2(h)(4), as determined by the Commission.''.
            (8) Section 8(b) of the Federal Deposit Insurance Act (12 
        U.S.C. 1818(b)) is amended by adding at the end the following:
            ``(11) Swaps.--
                    ``(A) In general.--Subject to subparagraph (B), 
                this section shall apply to any swap dealer, major swap 
                participant, security-based swap dealer, major 
                security-based swap participant, derivatives clearing 
                organization, swap data repository, or swap execution 
                facility, regardless of whether the dealer, 
                participant, organization, repository, or facility is 
                an insured depository institution, for which the Board, 
                the Corporation, or the Office of the Comptroller of 
                the Currency is the appropriate Federal banking agency 
                or prudential regulator for purposes of the amendments 
                made by the Wall Street Transparency and Accountability 
                Act of 2010.
                    ``(B) Limitation.--The authority described in 
                subparagraph (A) shall be limited by, and exercised in 
                accordance with, section 4b-1 of the Commodity Exchange 
                Act.''.
            (9) Section 2(c)(2)(B) of the Commodity Exchange Act (7 
        U.S.C. 2(c)(2)(B)) is amended--
                    (A) by striking ``(dd),'' each place it appears;
                    (B) in clause (iii), by inserting ``, and accounts 
                or pooled investment vehicles described in clause 
                (vi),'' before ``shall be subject to''; and
                    (C) by adding at the end the following:
                            ``(vi) This Act applies to, and the 
                        Commission shall have jurisdiction over, an 
                        account or pooled investment vehicle that is 
                        offered for the purpose of trading, or that 
                        trades, any agreement, contract, or transaction 
                        in foreign currency described in clause (i).''.
            (10) Section 2(c)(2)(C) of the Commodity Exchange Act (7 
        U.S.C. 2(c)(2)(C)) is amended--
                    (A) by striking ``(dd),'' each place it appears;
                    (B) in clause (ii)(I), by inserting ``, and 
                accounts or pooled investment vehicles described in 
                clause (vii),'' before ``shall be subject to''; and
                    (C) by adding at the end the following:
                            ``(vii) This Act applies to, and the 
                        Commission shall have jurisdiction over, an 
                        account or pooled investment vehicle that is 
                        offered for the purpose of trading, or that 
                        trades, any agreement, contract, or transaction 
                        in foreign currency described in clause (i).''.
            (11) Section 1a(19)(A)(iv)(II) of the Commodity Exchange 
        Act (7 U.S.C. 1a(19)(A)(iv)(II)) (as redesignated by section 
        721(a)(1)) is amended by inserting before the semicolon at the 
        end the following: ``provided, however, that for purposes of 
        section 2(c)(2)(B)(vi) and section 2(c)(2)(C)(vii), the term 
        `eligible contract participant' shall not include a commodity 
        pool in which any participant is not otherwise an eligible 
        contract participant''.

SEC. 742. RETAIL COMMODITY TRANSACTIONS.

    (a) In General.--Section 2(c) of the Commodity Exchange Act (7 
U.S.C. 2(c)) is amended--
            (1) in paragraph (1), by striking ``(to the extent provided 
        in section 5a(g)), 5b, 5d, or 12(e)(2)(B))'' and inserting ``, 
        5b, or 12(e)(2)(B))''; and
            (2) in paragraph (2), by adding at the end the following:
                    ``(D) Retail commodity transactions.--
                            ``(i) Applicability.--Except as provided in 
                        clause (ii), this subparagraph shall apply to 
                        any agreement, contract, or transaction in any 
                        commodity that is--
                                    ``(I) entered into with, or offered 
                                to (even if not entered into with), a 
                                person that is not an eligible contract 
                                participant or eligible commercial 
                                entity; and
                                    ``(II) entered into, or offered 
                                (even if not entered into), on a 
                                leveraged or margined basis, or 
                                financed by the offeror, the 
                                counterparty, or a person acting in 
                                concert with the offeror or 
                                counterparty on a similar basis.
                            ``(ii) Exceptions.--This subparagraph shall 
                        not apply to--
                                    ``(I) an agreement, contract, or 
                                transaction described in paragraph (1) 
                                or subparagraphs (A), (B), or (C), 
                                including any agreement, contract, or 
                                transaction specifically excluded from 
                                subparagraph (A), (B), or (C);
                                    ``(II) any security;
                                    ``(III) a contract of sale that--
                                            ``(aa) results in actual 
                                        delivery within 28 days or such 
                                        other period as the Commission 
                                        may determine by rule or 
                                        regulation based upon the 
                                        typical commercial practice in 
                                        cash or spot markets for the 
                                        commodity involved; or
                                            ``(bb) creates an 
                                        enforceable obligation to 
                                        deliver between a seller and a 
                                        buyer that have the ability to 
                                        deliver and accept delivery, 
                                        respectively, in connection 
                                        with the line of business of 
                                        the seller and buyer; or
                                    ``(IV) an agreement, contract, or 
                                transaction that is listed on a 
                                national securities exchange registered 
                                under section 6(a) of the Securities 
                                Exchange Act of 1934 (15 U.S.C. 
                                78f(a)); or
                                    ``(V) an identified banking 
                                product, as defined in section 402(b) 
                                of the Legal Certainty for Bank 
                                Products Act of 2000 (7 U.S.C.27(b)).
                            ``(iii) Enforcement.--Sections 4(a), 4(b), 
                        and 4b apply to any agreement, contract, or 
                        transaction described in clause (i), as if the 
                        agreement, contract, or transaction was a 
                        contract of sale of a commodity for future 
                        delivery.
                            ``(iv) Eligible commercial entity.--For 
                        purposes of this subparagraph, an agricultural 
                        producer, packer, or handler shall be 
                        considered to be an eligible commercial entity 
                        for any agreement, contract, or transaction for 
                        a commodity in connection with the line of 
                        business of the agricultural producer, packer, 
                        or handler.
                            ``(v) Actual delivery.--For purposes of 
                        clause (ii)(III), the term `actual delivery' 
                        does not include delivery to a third party in a 
                        financed transaction in which the commodity is 
                        held as collateral.''.
    (b) Gramm-Leach-Bliley Act.--Section 206(a) of the Gramm-Leach-
Bliley Act (Public Law 106-102; 15 U.S.C. 78c note) is amended, in the 
matter preceding paragraph (1), by striking ``For purposes of'' and 
inserting ``Except as provided in subsection (e), for purposes of''.
    (c) Conforming Amendments Relating to Retail Foreign Exchange 
Transactions.--
            (1) Section 2(c)(2)(B)(i)(II) of the Commodity Exchange Act 
        (7 U.S.C. 2(c)(2)(B)(i)(II)) is amended--
                    (A) in item (aa), by inserting ``United States'' 
                before ``financial institution'';
                    (B) by striking items (dd) and (ff);
                    (C) by redesignating items (ee) and (gg) as items 
                (dd) and (ff), respectively; and
                    (D) in item (dd) (as so redesignated), by striking 
                the semicolon and inserting ``; or''.
            (2) Section 2(c)(2) of the Commodity Exchange Act (7 U.S.C. 
        2(c)(2)) (as amended by subsection (a)(2)) is amended by adding 
        at the end the following:
                    ``(E) Prohibition.--
                            ``(i) Definition of federal regulatory 
                        agency.--In this subparagraph, the term 
                        `Federal regulatory agency' means--
                                    ``(I) the Commission;
                                    ``(II) the Securities and Exchange 
                                Commission;
                                    ``(III) an appropriate Federal 
                                banking agency;
                                    ``(IV) the National Credit Union 
                                Association; and
                                    ``(V) the Farm Credit 
                                Administration.
                            ``(ii) Prohibition.--A person described in 
                        subparagraph (B)(i)(II) for which there is a 
                        Federal regulatory agency shall not offer to, 
                        or enter into with, a person that is not an 
                        eligible contract participant, any agreement, 
                        contract, or transaction in foreign currency 
                        described in subparagraph (B)(i)(I) except 
                        pursuant to a rule or regulation of a Federal 
                        regulatory agency allowing the agreement, 
                        contract, or transaction under such terms and 
                        conditions as the Federal regulatory agency 
                        shall prescribe.
                            ``(iii) Requirements of rules and 
                        regulations.--
                                    ``(I) In general.--The rules and 
                                regulations described in clause (ii) 
                                shall prescribe appropriate 
                                requirements with respect to--
                                            ``(aa) disclosure;
                                            ``(bb) recordkeeping;
                                            ``(cc) capital and margin;
                                            ``(dd) reporting;
                                            ``(ee) business conduct;
                                            ``(ff) documentation; and
                                            ``(gg) such other standards 
                                        or requirements as the Federal 
                                        regulatory agency shall 
                                        determine to be necessary.
                                    ``(II) Treatment.--The rules or 
                                regulations described in clause (ii) 
                                shall treat all agreements, contracts, 
                                and transactions in foreign currency 
                                described in subparagraph (B)(i)(I), 
                                and all agreements, contracts, and 
                                transactions in foreign currency that 
                                are functionally or economically 
                                similar to agreements, contracts, or 
                                transactions described in subparagraph 
                                (B)(i)(I), similarly.''.

SEC. 743. OTHER AUTHORITY.

    Unless otherwise provided by the amendments made by this subtitle, 
the amendments made by this subtitle do not divest any appropriate 
Federal banking agency, the Commodity Futures Trading Commission, the 
Securities and Exchange Commission, or other Federal or State agency of 
any authority derived from any other applicable law.

SEC. 744. RESTITUTION REMEDIES.

    Section 6c(d) of the Commodity Exchange Act (7 U.S.C. 13a-1(d)) is 
amended by adding at the end the following:
            ``(3) Equitable remedies.--In any action brought under this 
        section, the Commission may seek, and the court shall have 
        jurisdiction to impose, on a proper showing, on any person 
        found in the action to have committed any violation, equitable 
        remedies including--
                    ``(A) restitution to persons who have sustained 
                losses proximately caused by such violation (in the 
                amount of such losses); and
                    ``(B) disgorgement of gains received in connection 
                with such violation.''.

SEC. 745. ENHANCED COMPLIANCE BY REGISTERED ENTITIES.

    (a) Core Principles for Contract Markets.--Section 5(d) of the 
Commodity Exchange Act (7 U.S.C. 7(d)) (as amended by section 735(b)) 
is amended by striking paragraph (1) and inserting the following:
            ``(1) Designation.--
                    ``(A) In general.--To be designated as, and to 
                maintain the designation of, a board of trade as a 
                contract market, the board of trade shall comply with--
                            ``(i) the core principles described in this 
                        subsection; and
                            ``(ii) any requirement that the Commission 
                        may impose by rule or regulation pursuant to 
                        section 8a(5).
                    ``(B) Discretion of board of trade.--Unless the 
                Commission determines otherwise by rule or regulation, 
                the board of trade shall have reasonable discretion in 
                establishing the manner by which the board of trade 
                complies with each core principle.''.
    (b) Core Principles.--Section 5b(c)(2) of the Commodity Exchange 
Act (7 U.S.C. 7a-1(c)(2)) (as amended by section 725(c)) is amended by 
striking subparagraph (A) and inserting the following:
                    ``(A) Registration.--
                            ``(i) In general.--To be registered and to 
                        maintain registration as a derivatives clearing 
                        organization, a derivatives clearing 
                        organization shall comply with--
                                    ``(I) the core principles described 
                                in this paragraph; and
                                    ``(II) any requirement that the 
                                Commission may impose by rule or 
                                regulation pursuant to section 8a(5).
                            ``(ii) Discretion of commission.--Unless 
                        the Commission determines otherwise by rule or 
                        regulation, a derivatives clearing organization 
                        shall have reasonable discretion in 
                        establishing the manner by which the 
                        derivatives clearing organization complies with 
                        each core principle.''.
    (c) Effect of Interpretation.--Section 5c(a) of the Commodity 
Exchange Act (7 U.S.C. 7a-2(a)) is amended by striking paragraph (2) 
and inserting the following:
            ``(2) Effect of interpretation.--An interpretation issued 
        under paragraph (1) may provide the exclusive means for 
        complying with each section described in paragraph (1).''.
    (d) New Contracts, New Rules, and Rule Amendments.--
            (1) In general.--A registered entity may elect to list for 
        trading or accept for clearing any new contract, or other 
        instrument, or may elect to approve and implement any new rule 
        or rule amendment, by providing to the Commission (and the 
        Secretary of the Treasury, in the case of a contract of sale of 
        a government security for future delivery (or option on such a 
        contract) or a rule or rule amendment specifically related to 
        such a contract) a written certification that the new contract 
        or instrument or clearing of the new contract or instrument, 
        new rule, or rule amendment complies with this Act (including 
        regulations under this Act).
            (2) Rule review.--The new rule or rule amendment described 
        in paragraph (1) shall become effective, pursuant to the 
        certification of the registered entity, on the date that is 10 
        business days after the date on which the Commission receives 
        the certification (or such shorter period as determined by the 
        Commission by rule or regulation) unless the Commission 
        notifies the registered entity within such time that it is 
        staying the certification because there exist novel or complex 
        issues that require additional time to analyze, an inadequate 
        explanation by the submitting registered entity, or a potential 
        inconsistency with this Act (including regulations under this 
        Act).
            (3) Stay of certification for rules.--
                    (A) A notification by the Commission pursuant to 
                paragraph (2) shall stay the certification of the new 
                rule or rule amendment for up to an additional 90 days 
                from the date of the notification.
                    (B) A rule or rule amendment subject to a stay 
                pursuant to subparagraph (A) shall become effective, 
                pursuant to the certification of the registered entity, 
                at the expiration of the period described in 
                subparagraph (A) unless the Commission--
                            (i) withdraws the stay prior to that time; 
                        or
                            (ii) notifies the registered entity during 
                        such period that it objects to the proposed 
                        certification on the grounds that it is 
                        inconsistent with this Act (including 
                        regulations under this Act).
            (4) Prior approval.--
                    (A) In general.--A registered entity may request 
                that the Commission grant prior approval to any new 
                contract or other instrument, new rule, or rule 
                amendment.
                    (B) Prior approval required.--Notwithstanding any 
                other provision of this section, a designated contract 
                market shall submit to the Commission for prior 
                approval each rule amendment that materially changes 
                the terms and conditions, as determined by the 
                Commission, in any contract of sale for future delivery 
                of a commodity specifically enumerated in section 
                1a(10) (or any option thereon) traded through its 
                facilities if the rule amendment applies to contracts 
                and delivery months which have already been listed for 
                trading and have open interest.
                    (C) Deadline.--If prior approval is requested under 
                subparagraph (A), the Commission shall take final 
                action on the request not later than 90 days after 
                submission of the request, unless the person submitting 
                the request agrees to an extension of the time 
                limitation established under this subparagraph.
            (5) Approval.--
                    (A) Rules.--The Commission shall approve a new 
                rule, or rule amendment, of a registered entity unless 
                the Commission finds that the new rule, or rule 
                amendment, is inconsistent with this subtitle 
                (including regulations).
                    (B) Contracts and instruments.--The Commission 
                shall approve a new contract or other instrument unless 
                the Commission finds that the new contract or other 
                instrument would violate this subtitle (including 
                regulations).
                    (C) Special rule for review and approval of event 
                contracts and swaps contracts.--
                            (i) Event contracts.--In connection with 
                        the listing of agreements, contracts, 
                        transactions, or swaps in excluded commodities 
                        that are based upon the occurrence, extent of 
                        an occurrence, or contingency (other than a 
                        change in the price, rate, value, or levels of 
                        a commodity described in section 1a(2)(i)), by 
                        a designated contract market or swap execution 
                        facility, the Commission may determine that 
                        such agreements, contracts, or transactions are 
                        contrary to the public interest if the 
                        agreements, contracts, or transactions 
                        involve--
                                    (I) activity that is unlawful under 
                                any Federal or State law;
                                    (II) terrorism;
                                    (III) assassination;
                                    (IV) war;
                                    (V) gaming; or
                                    (VI) other similar activity 
                                determined by the Commission, by rule 
                                or regulation, to be contrary to the 
                                public interest.
                            (ii) Prohibition.--No agreement, contract, 
                        or transaction determined by the Commission to 
                        be contrary to the public interest under clause 
                        (i) may be listed or made available for 
                        clearing or trading on or through a registered 
                        entity.
                            (iii) Swaps contracts.--
                                    (I) In general.--In connection with 
                                the listing of a swap for clearing by a 
                                derivatives clearing organization, the 
                                Commission shall determine, upon 
                                request or on its own motion, the 
                                initial eligibility, or the continuing 
                                qualification, of a derivatives 
                                clearing organization to clear such a 
                                swap under those criteria, conditions, 
                                or rules that the Commission, in its 
                                discretion, determines.
                                    (II) Requirements.--Any such 
                                criteria, conditions, or rules shall 
                                consider--
                                            (aa) the financial 
                                        integrity of the derivatives 
                                        clearing organization; and
                                            (bb) any other factors 
                                        which the Commission determines 
                                        may be appropriate.
                            (iv) Deadline.--The Commission shall take 
                        final action under clauses (i) and (ii) in not 
                        later than 90 days from the commencement of its 
                        review unless the party seeking to offer the 
                        contract or swap agrees to an extension of this 
                        time limitation.
    (e) Violation of Core Principles.--Section 5c of the Commodity 
Exchange Act (7 U.S.C. 7a-2) is amended by striking subsection (d).

SEC. 746. INSIDER TRADING.

    Section 4c(a) of the Commodity Exchange Act (7 U.S.C. 6c(a)) is 
amended by adding at the end the following:
            ``(3) Contract of sale.--It shall be unlawful for any 
        employee or agent of any department or agency of the Federal 
        Government who, by virtue of the employment or position of the 
        employee or agent, acquires information that may affect or tend 
        to affect the price of any commodity in interstate commerce, or 
        for future delivery, or any swap, and which information has not 
        been disseminated by the department or agency of the Federal 
        Government holding or creating the information in a manner 
        which makes it generally available to the trading public, or 
        disclosed in a criminal, civil, or administrative hearing, or 
        in a congressional, administrative, or Government 
        Accountability Office report, hearing, audit, or investigation, 
        to use the information in his personal capacity and for 
        personal gain to enter into, or offer to enter into--
                    ``(A) a contract of sale of a commodity for future 
                delivery (or option on such a contract);
                    ``(B) an option (other than an option executed or 
                traded on a national securities exchange registered 
                pursuant to section 6(a) of the Securities Exchange Act 
                of 1934 (15 U.S.C. 78f(a)); or
                    ``(C) a swap.
            ``(4) Nonpublic information.--
                    ``(A) Imparting of nonpublic information.--It shall 
                be unlawful for any employee or agent of any department 
                or agency of the Federal Government who, by virtue of 
                the employment or position of the employee or agent, 
                acquires information that may affect or tend to affect 
                the price of any commodity in interstate commerce, or 
                for future delivery, or any swap, and which information 
                has not been disseminated by the department or agency 
                of the Federal Government holding or creating the 
                information in a manner which makes it generally 
                available to the trading public, or disclosed in a 
                criminal, civil, or administrative hearing, or in a 
                congressional, administrative, or Government 
                Accountability Office report, hearing, audit, or 
                investigation, to impart the information in his 
                personal capacity and for personal gain with intent to 
                assist another person, directly or indirectly, to use 
                the information to enter into, or offer to enter into--
                            ``(i) a contract of sale of a commodity for 
                        future delivery (or option on such a contract);
                            ``(ii) an option (other than an option 
                        executed or traded on a national securities 
                        exchange registered pursuant to section 6(a) of 
                        the Securities Exchange Act of 1934 (15 U.S.C. 
                        78f(a)); or
                            ``(iii) a swap.
                    ``(B) Knowing use.--It shall be unlawful for any 
                person who receives information imparted by any 
                employee or agent of any department or agency of the 
                Federal Government as described in subparagraph (A) to 
                knowingly use such information to enter into, or offer 
                to enter into--
                            ``(i) a contract of sale of a commodity for 
                        future delivery (or option on such a contract);
                            ``(ii) an option (other than an option 
                        executed or traded on a national securities 
                        exchange registered pursuant to section 6(a) of 
                        the Securities Exchange Act of 1934 (15 U.S.C. 
                        78f(a)); or
                            ``(iii) a swap.
                    ``(C) Theft of nonpublic information.--It shall be 
                unlawful for any person to steal, convert, or 
                misappropriate, by any means whatsoever, information 
                held or created by any department or agency of the 
                Federal Government that may affect or tend to affect 
                the price of any commodity in interstate commerce, or 
                for future delivery, or any swap, where such person 
                knows, or acts in reckless disregard of the fact, that 
                such information has not been disseminated by the 
                department or agency of the Federal Government holding 
                or creating the information in a manner which makes it 
                generally available to the trading public, or disclosed 
                in a criminal, civil, or administrative hearing, or in 
                a congressional, administrative, or Government 
                Accountability Office report, hearing, audit, or 
                investigation, and to use such information, or to 
                impart such information with the intent to assist 
                another person, directly or indirectly, to use such 
                information to enter into, or offer to enter into--
                            ``(i) a contract of sale of a commodity for 
                        future delivery (or option on such a contract);
                            ``(ii) an option (other than an option 
                        executed or traded on a national securities 
                        exchange registered pursuant to section 6(a) of 
                        the Securities Exchange Act of 1934 (15 U.S.C. 
                        78f(a)); or
                            ``(iii) a swap.
                        Provided, however, that nothing in this 
                        subparagraph shall preclude a person that has 
                        provided information concerning, or generated 
                        by, the person, its operations or activities, 
                        to any employee or agent of any department or 
                        agency of the Federal Government, voluntarily 
                        or as required by law, from using such 
                        information to enter into, or offer to enter 
                        into, a contract of sale, option, or swap 
                        described in clauses (i), (ii), or (iii).''.

SEC. 747. ANTIDISRUPTIVE PRACTICES AUTHORITY.

    Section 4c(a) of the Commodity Exchange Act (7 U.S.C. 6c(a)) (as 
amended by section 746) is amended by adding at the end the following:
            ``(5) Disruptive practices.--It shall be unlawful for any 
        person to engage in any trading, practice, or conduct on or 
        subject to the rules of a registered entity that--
                    ``(A) violates bids or offers;
                    ``(B) demonstrates intentional or reckless 
                disregard for the orderly execution of transactions 
                during the closing period; or
                    ``(C) is, is of the character of, or is commonly 
                known to the trade as, `spoofing' (bidding or offering 
                with the intent to cancel the bid or offer before 
                execution).
            ``(6) Rulemaking authority.--The Commission may make and 
        promulgate such rules and regulations as, in the judgment of 
        the Commission, are reasonably necessary to prohibit the 
        trading practices described in paragraph (5) and any other 
        trading practice that is disruptive of fair and equitable 
        trading.
            ``(7) Use of swaps to defraud.--It shall be unlawful for 
        any person to enter into a swap knowing, or acting in reckless 
        disregard of the fact, that its counterparty will use the swap 
        as part of a device, scheme, or artifice to defraud any third 
        party.''.

SEC. 748. COMMODITY WHISTLEBLOWER INCENTIVES AND PROTECTION.

    The Commodity Exchange Act (7 U.S.C. 1 et seq.) is amended by 
adding at the end the following:

``SEC. 23. COMMODITY WHISTLEBLOWER INCENTIVES AND PROTECTION.

    ``(a) Definitions.--In this section:
            ``(1) Covered judicial or administrative action.--The term 
        `covered judicial or administrative action' means any judicial 
        or administrative action brought by the Commission under this 
        Act that results in monetary sanctions exceeding $1,000,000.
            ``(2) Fund.--The term `Fund' means the Commodity Futures 
        Trading Commission Customer Protection Fund established under 
        subsection (g).
            ``(3) Monetary sanctions.--The term `monetary sanctions', 
        when used with respect to any judicial or administrative action 
        means--
                    ``(A) any monies, including penalties, 
                disgorgement, restitution, and interest ordered to be 
                paid; and
                    ``(B) any monies deposited into a disgorgement fund 
                or other fund pursuant to section 308(b) of the 
                Sarbanes-Oxley Act of 2002 (15 U.S.C. 7246(b)), as a 
                result of such action or any settlement of such action.
            ``(4) Original information.--The term `original 
        information' means information that--
                    ``(A) is derived from the independent knowledge or 
                analysis of a whistleblower;
                    ``(B) is not known to the Commission from any other 
                source, unless the whistleblower is the original source 
                of the information; and
                    ``(C) is not exclusively derived from an allegation 
                made in a judicial or administrative hearing, in a 
                governmental report, hearing, audit, or investigation, 
                or from the news media, unless the whistleblower is a 
                source of the information.
            ``(5) Related action.--The term `related action', when used 
        with respect to any judicial or administrative action brought 
        by the Commission under this Act, means any judicial or 
        administrative action brought by an entity described in 
        subclauses (i) through (vi) of subsection (g)(2)(B) that is 
        based upon the original information provided by a whistleblower 
        pursuant to subsection (a) that led to the successful 
        enforcement of the Commission action.
            ``(6) Successful resolution.--The term `successful 
        resolution', when used with respect to any judicial or 
        administrative action brought by the Commission under this Act, 
        includes any settlement of such action.
            ``(7) Whistleblower.--The term `whistleblower' means any 
        individual, or 2 or more individuals acting jointly, who 
        provides information relating to a violation of this Act to the 
        Commission, in a manner established by rule or regulation, by 
        the Commission.
    ``(b) Awards.--
            ``(1) In general.--In any covered judicial or 
        administrative action, or related action, the Commission, under 
        regulations prescribed by the Commission and subject to 
        subsection (c), shall pay an award or awards to 1 or more 
        whistleblowers who voluntarily provided original information to 
        the Commission that led to the successful enforcement of the 
        covered judicial or administrative action, or related action, 
        in an aggregate amount equal to--
                    ``(A) not less than 10 percent, in total, of what 
                has been collected of the monetary sanctions imposed in 
                the action or related actions; and
                    ``(B) not more than 30 percent, in total, of what 
                has been collected of the monetary sanctions imposed in 
                the action or related actions.
            ``(2) Payment of awards.--Any amount paid under paragraph 
        (1) shall be paid from the Fund.
    ``(c) Determination of Amount of Award; Denial of Award.--
            ``(1) Determination of amount of award.--
                    ``(A) Discretion.--The determination of the amount 
                of an award made under subsection (b) shall be in the 
                discretion of the Commission.
                    ``(B) Criteria.--In determining the amount of an 
                award made under subsection (b), the Commission shall 
                take into account--
                            ``(i) the significance of the information 
                        provided by the whistleblower to the success of 
                        the covered judicial or administrative action;
                            ``(ii) the degree of assistance provided by 
                        the whistleblower and any legal representative 
                        of the whistleblower in a covered judicial or 
                        administrative action;
                            ``(iii) the programmatic interest of the 
                        Commission in deterring violations of the Act 
                        (including regulations under the Act) by making 
                        awards to whistleblowers who provide 
                        information that leads to the successful 
                        enforcement of such laws; and
                            ``(iv) such additional relevant factors as 
                        the Commission may establish by rule or 
                        regulation.
            ``(2) Denial of award.--No award under subsection (b) shall 
        be made--
                    ``(A) to any whistleblower who is, or was at the 
                time the whistleblower acquired the original 
                information submitted to the Commission, a member, 
                officer, or employee of--
                            ``(i) a appropriate regulatory agency;
                            ``(ii) the Department of Justice;
                            ``(iii) a registered entity;
                            ``(iv) a registered futures association; or
                            ``(v) a self-regulatory organization as 
                        defined in section 3(a) of the Securities 
                        Exchange Act of 1934 (15 U.S.C. 78c(a)); or
                            ``(vi) a law enforcement organization;
                    ``(B) to any whistleblower who is convicted of a 
                criminal violation related to the judicial or 
                administrative action for which the whistleblower 
                otherwise could receive an award under this section;
                    ``(C) to any whistleblower who submits information 
                to the Commission that is based on the facts underlying 
                the covered action submitted previously by another 
                whistleblower;
                    ``(D) to any whistleblower who fails to submit 
                information to the Commission in such form as the 
                Commission may, by rule or regulation, require.
    ``(d) Representation.--
            ``(1) Permitted representation.--Any whistleblower who 
        makes a claim for an award under subsection (b) may be 
        represented by counsel.
            ``(2) Required representation.--
                    ``(A) In general.--Any whistleblower who 
                anonymously makes a claim for an award under subsection 
                (b) shall be represented by counsel if the 
                whistleblower submits the information upon which the 
                claim is based.
                    ``(B) Disclosure of identity.--Prior to the payment 
                of an award, a whistleblower shall disclose the 
                identity of the whistleblower and provide such other 
                information as the Commission may require, directly or 
                through counsel for the whistleblower.
    ``(e) No Contract Necessary.--No contract with the Commission is 
necessary for any whistleblower to receive an award under subsection 
(b), unless otherwise required by the Commission, by rule or 
regulation.
    ``(f) Appeals.--
            ``(1) In general.--Any determination made under this 
        section, including whether, to whom, or in what amount to make 
        awards, shall be in the discretion of the Commission.
            ``(2) Appeals.--Any determination described in paragraph 
        (1) may be appealed to the appropriate court of appeals of the 
        United States not more than 30 days after the determination is 
        issued by the Commission.
            ``(3) Review.--The court shall review the determination 
        made by the Commission in accordance with section 7064 of title 
        5, United States Code.
    ``(g) Commodity Futures Trading Commission Customer Protection 
Fund.--
            ``(1) Establishment.--There is established in the Treasury 
        of the United States a revolving fund to be known as the 
        `Commodity Futures Trading Commission Customer Protection 
        Fund'.
            ``(2) Use of fund.--The Fund shall be available to the 
        Commission, without further appropriation or fiscal year 
        limitation, for--
                    ``(A) the payment of awards to whistleblowers as 
                provided in subsection (a); and
                    ``(B) the funding of customer education initiatives 
                designed to help customers protect themselves against 
                fraud or other violations of this Act, or the rules and 
                regulations thereunder.
            ``(3) Deposits and credits.--There shall be deposited into 
        or credited to the Fund--
                    ``(A) any monetary judgment collected by the 
                Commission in any judicial or administrative action 
                brought by the Commission under this Act, that is not 
                otherwise distributed to victims of a violation of this 
                Act or the rules and regulations thereunder underlying 
                such action, unless the balance of the Fund at the time 
                the monetary judgment is collected exceeds 
                $100,000,000; and
                    ``(B) all income from investments made under 
                paragraph (4).
            ``(4) Investments.--
                    ``(A) Amounts in fund may be invested.--The 
                Commission may request the Secretary of the Treasury to 
                invest the portion of the Fund that is not, in the 
                Commission's judgment, required to meet the current 
                needs of the Fund.
                    ``(B) Eligible investments.--Investments shall be 
                made by the Secretary of the Treasury in obligations of 
                the United States or obligations that are guaranteed as 
                to principal and interest by the United States, with 
                maturities suitable to the needs of the Fund as 
                determined by the Commission.
                    ``(C) Interest and proceeds credited.--The interest 
                on, and the proceeds from the sale or redemption of, 
                any obligations held in the Fund shall be credited to, 
                and form a part of, the Fund.
            ``(5) Reports to congress.--Not later than October 30 of 
        each year, the Commission shall transmit to the Committee on 
        Agriculture, Nutrition, and Forestry of the Senate, and the 
        Committee on Agriculture of the House of Representatives a 
        report on--
                    ``(A) the Commission's whistleblower award program 
                under this section, including a description of the 
                number of awards granted and the types of cases in 
                which awards were granted during the preceding fiscal 
                year;
                    ``(B) customer education initiatives described in 
                paragraph (2)(B) that were funded by the Fund during 
                the preceding fiscal year;
                    ``(C) the balance of the Fund at the beginning of 
                the preceding fiscal year;
                    ``(D) the amounts deposited into or credited to the 
                Fund during the preceding fiscal year;
                    ``(E) the amount of earnings on investments of 
                amounts in the Fund during the preceding fiscal year;
                    ``(F) the amount paid from the Fund during the 
                preceding fiscal year to whistleblowers pursuant to 
                subsection (b);
                    ``(G) the amount paid from the Fund during the 
                preceding fiscal year for customer education 
                initiatives described in paragraph (2)(B);
                    ``(H) the balance of the Fund at the end of the 
                preceding fiscal year; and
                    ``(I) a complete set of audited financial 
                statements, including a balance sheet, income 
                statement, and cash flow analysis.
    ``(h) Protection of Whistleblowers.--
            ``(1) Prohibition against retaliation.--
                    ``(A) In general.--No employer may discharge, 
                demote, suspend, threaten, harass, directly or 
                indirectly, or in any other manner discriminate 
                against, a whistleblower in the terms and conditions of 
                employment because of any lawful act done by the 
                whistleblower--
                            ``(i) in providing information to the 
                        Commission in accordance with subsection (b); 
                        or
                            ``(ii) in assisting in any investigation or 
                        judicial or administrative action of the 
                        Commission based upon or related to such 
                        information.
                    ``(B) Enforcement.--
                            ``(i) Cause of action.--An individual who 
                        alleges discharge or other discrimination in 
                        violation of subparagraph (A) may bring an 
                        action under this subsection in the appropriate 
                        district court of the United States for the 
                        relief provided in subparagraph (C), unless the 
                        individual who is alleging discharge or other 
                        discrimination in violation of subparagraph (A) 
                        is an employee of the federal government, in 
                        which case the individual shall only bring an 
                        action under section 1221 of title 5 United 
                        States Code.
                            ``(ii) Subpoenas.--A subpoena requiring the 
                        attendance of a witness at a trial or hearing 
                        conducted under this subsection may be served 
                        at any place in the United States.
                            ``(iii) Statute of limitations.--An action 
                        under this subsection may not be brought more 
                        than 2 years after the date on which the 
                        violation reported in subparagraph (A) is 
                        committed.
                    ``(C) Relief.--Relief for an individual prevailing 
                in an action brought under subparagraph (B) shall 
                include--
                            ``(i) reinstatement with the same seniority 
                        status that the individual would have had, but 
                        for the discrimination;
                            ``(ii) the amount of back pay otherwise 
                        owed to the individual, with interest; and
                            ``(iii) compensation for any special 
                        damages sustained as a result of the discharge 
                        or discrimination, including litigation costs, 
                        expert witness fees, and reasonable attorney's 
                        fees.
            ``(2) Confidentiality.--
                    ``(A) Information provided.--
                            ``(i) In general.--Except as provided in 
                        subparagraph (B), all information provided to 
                        the Commission by a whistleblower shall be 
                        confidential and privileged as an evidentiary 
                        matter (and shall not be subject to civil 
                        discovery or other legal process) in any 
                        proceeding in any Federal or State court or 
                        administrative agency, and shall be exempt from 
                        disclosure, in the hands of a department or 
                        agency of the Federal Government, under section 
                        552 of title 5, United States Code (commonly 
                        known as the `Freedom of Information Act') or 
                        otherwise, unless and until required to be 
                        disclosed to a defendant or respondent in 
                        connection with a public proceeding instituted 
                        by the Commission or any entity described in 
                        subparagraph (B).
                            ``(ii) Construction.--For purposes of 
                        section 552 of title 5, United States Code, 
                        this paragraph shall be considered to be a 
                        statute described in subsection (b)(3)(B) of 
                        that section.
                            ``(iii) Effect.--Nothing in this paragraph 
                        is intended to limit the ability of the 
                        Attorney General to present such evidence to a 
                        grand jury or to share such evidence with 
                        potential witnesses or defendants in the course 
                        of an ongoing criminal investigation.
                    ``(B) Availability to government agencies.--
                            ``(i) In general.--Without the loss of its 
                        status as confidential and privileged in the 
                        hands of the Commission, all information 
                        referred to in subparagraph (A) may, in the 
                        discretion of the Commission, when determined 
                        by the Commission to be necessary or 
                        appropriate to accomplish the purposes of this 
                        Act and protect customers and in accordance 
                        with clause (ii), be made available to--
                                    ``(I) the Department of Justice;
                                    ``(II) an appropriate department or 
                                agency of the Federal Government, 
                                acting within the scope of its 
                                jurisdiction;
                                    ``(III) a registered entity, 
                                registered futures association, or 
                                self-regulatory organization as defined 
                                in section 3(a) of the Securities 
                                Exchange Act of 1934 (15 U.S.C. 
                                78c(a));
                                    ``(IV) a State attorney general in 
                                connection with any criminal 
                                investigation;
                                    ``(V) an appropriate department or 
                                agency of any State, acting within the 
                                scope of its jurisdiction; and
                                    ``(VI) a foreign futures authority.
                            ``(ii) Maintenance of information.--Each of 
                        the entities, agencies, or persons described in 
                        clause (i) shall maintain information described 
                        in that clause as confidential and privileged, 
                        in accordance with the requirements in 
                        subparagraph (A).
            ``(3) Rights retained.--Nothing in this section shall be 
        deemed to diminish the rights, privileges, or remedies of any 
        whistleblower under any Federal or State law, or under any 
        collective bargaining agreement.
    ``(i) Rulemaking Authority.--The Commission shall have the 
authority to issue such rules and regulations as may be necessary or 
appropriate to implement the provisions of this section consistent with 
the purposes of this section.
    ``(j) Implementing Rules.--The Commission shall issue final rules 
or regulations implementing the provisions of this section not later 
than 270 days after the date of enactment of the Wall Street 
Transparency and Accountability Act of 2010.
    ``(k) Original Information.--Information submitted to the 
Commission by a whistleblower in accordance with rules or regulations 
implementing this section shall not lose its status as original 
information solely because the whistleblower submitted such information 
prior to the effective date of such rules or regulations, provided such 
information was submitted after the date of enactment of the Wall 
Street Transparency and Accountability Act of 2010.
    ``(l) Awards.--A whistleblower may receive an award pursuant to 
this section regardless of whether any violation of a provision of this 
Act, or a rule or regulation thereunder, underlying the judicial or 
administrative action upon which the award is based occurred prior to 
the date of enactment of the Wall Street Transparency and 
Accountability Act of 2010.
    ``(m) Provision of False Information.--A whistleblower who 
knowingly and willfully makes any false, fictitious, or fraudulent 
statement or representation, or who makes or uses any false writing or 
document knowing the same to contain any false, fictitious, or 
fraudulent statement or entry, shall not be entitled to an award under 
this section and shall be subject to prosecution under section 1001 of 
title 18, United States Code.''.

SEC. 749. CONFORMING AMENDMENTS.

    (a) Section 2(c)(1) of the Commodity Exchange Act (7 U.S.C. 
2(c)(1)) is amended, in the matter preceding subparagraph (A), by 
striking ``5a (to the extent provided in section 5a(g)),''.
    (b) Section 4d of the Commodity Exchange Act (7 U.S.C. 6d) (as 
amended by section 724) is amended--
            (1) in subsection (a)--
                    (A) in the matter preceding paragraph (1)--
                            (i) by striking ``engage as'' and inserting 
                        ``be a''; and
                            (ii) by striking ``or introducing broker'' 
                        and all that follows through ``or derivatives 
                        transaction execution facility'';
                    (B) in paragraph (1), by striking ``or introducing 
                broker''; and
                    (C) in paragraph (2), by striking ``if a futures 
                commission merchant,''; and
            (2) by adding at the end the following:
    ``(g) It shall be unlawful for any person to be an introducing 
broker unless such person shall have registered under this Act with the 
Commission as an introducing broker and such registration shall not 
have expired nor been suspended nor revoked.''.
    (c) Section 4m(3) of the Commodity Exchange Act (7 U.S.C. 6m(3)) is 
amended--
            (1) by striking ``(3) Subsection (1) of this section'' and 
        inserting the following:
            ``(3) Exception.--
                    ``(A) In general.--Paragraph (1)''; and
            (2) by striking ``to any investment trust'' and all that 
        follows through the period at the end and inserting the 
        following: ``to any commodity pool that is engaged primarily in 
        trading commodity interests.
                    ``(B) Engaged primarily.--For purposes of 
                subparagraph (A), a commodity trading advisor or a 
                commodity pool shall be considered to be `engaged 
                primarily' in the business of being a commodity trading 
                advisor or commodity pool if it is or holds itself out 
                to the public as being engaged primarily, or proposes 
                to engage primarily, in the business of advising on 
                commodity interests or investing, reinvesting, owning, 
                holding, or trading in commodity interests, 
                respectively.
                    ``(C) Commodity interests.--For purposes of this 
                paragraph, commodity interests shall include contracts 
                of sale of a commodity for future delivery, options on 
                such contracts, security futures, swaps, leverage 
                contracts, foreign exchange, spot and forward contracts 
                on physical commodities, and any monies held in an 
                account used for trading commodity interests.''.
    (d) Section 5c of the Commodity Exchange Act (7 U.S.C. 7a-2) is 
amended--
            (1) in subsection (a)(1)--
                    (A) by striking ``, 5a(d),''; and
                    (B) by striking ``and section (2)(h)(7) with 
                respect to significant price discovery contracts,''; 
                and
            (2) in subsection (f)(1), by striking ``section 4d(c) of 
        this Act'' and inserting ``section 4d(e)''.
    (e) Section 5e of the Commodity Exchange Act (7 U.S.C. 7b) is 
amended by striking ``or revocation of the right of an electronic 
trading facility to rely on the exemption set forth in section 2(h)(3) 
with respect to a significant price discovery contract,''.
    (f) Section 6(b) of the Commodity Exchange Act (7 U.S.C. 8(b)) is 
amended in the first sentence by striking ``, or to revoke the right of 
an electronic trading facility to rely on the exemption set forth in 
section 2(h)(3) with respect to a significant price discovery 
contract,''.
    (g) Section 12(e)(2)(B) of the Commodity Exchange Act (7 U.S.C. 
16(e)(2)(B)) is amended--
            (1) by striking ``section 2(c), 2(d), 2(f), or 2(g) of this 
        Act'' and inserting ``section 2(c), 2(f), or 2(i) of this 
        Act''; and
            (2) by striking ``2(h) or''.
    (h) Section 17(r)(1) of the Commodity Exchange Act (7 U.S.C. 
21(r)(1)) is amended by striking ``section 4d(c) of this Act'' and 
inserting ``section 4d(e)''.
    (i) Section 22(b)(1)(A) of the Commodity Exchange Act (7 U.S.C. 
25(b)(1)(A)) is amended by striking ``section 2(h)(7) or''.
    (j) Section 408(2)(C) of the Federal Deposit Insurance Corporation 
Improvement Act of 1991 (12 U.S.C. 4421(2)(C)) is amended--
            (1) by striking ``section 2(c), 2(d), 2(f), or (2)(g) of 
        such Act'' and inserting ``section 2(c), 2(f), or 2(i) of that 
        Act''; and
            (2) by striking ``2(h) or''.

SEC. 750. STUDY ON OVERSIGHT OF CARBON MARKETS.

    (a) Interagency Working Group.--There is established to carry out 
this section an interagency working group (referred to in this section 
as the ``interagency group'') composed of the following members or 
designees:
            (1) The Chairman of the Commodity Futures Trading 
        Commission (referred to in this section as the ``Commission''), 
        who shall serve as Chairman of the interagency group.
            (2) The Secretary of Agriculture.
            (3) The Secretary of the Treasury.
            (4) The Chairman of the Securities and Exchange Commission.
            (5) The Administrator of the Environmental Protection 
        Agency.
            (6) The Chairman of the Federal Energy Regulatory 
        Commission.
            (7) The Commissioner of the Federal Trade Commission.
            (8) The Administrator of the Energy Information 
        Administration.
    (b) Administrative Support.--The Commission shall provide the 
interagency group such administrative support services as are necessary 
to enable the interagency group to carry out the functions of the 
interagency group under this section.
    (c) Consultation.--In carrying out this section, the interagency 
group shall consult with representatives of exchanges, clearinghouses, 
self-regulatory bodies, major carbon market participants, consumers, 
and the general public, as the interagency group determines to be 
appropriate.
    (d) Study.--The interagency group shall conduct a study on the 
oversight of existing and prospective carbon markets to ensure an 
efficient, secure, and transparent carbon market, including oversight 
of spot markets and derivative markets.
    (e) Report.--Not later than 180 days after the date of enactment of 
this Act, the interagency group shall submit to Congress a report on 
the results of the study conducted under subsection (b), including 
recommendations for the oversight of existing and prospective carbon 
markets to ensure an efficient, secure, and transparent carbon market, 
including oversight of spot markets and derivative markets.

SEC. 751. ENERGY AND ENVIRONMENTAL MARKETS ADVISORY COMMITTEE.

    Section 2(a) of the Commodity Exchange Act (7 U.S.C. 2(a)) (as 
amended by section 727) is amended by adding at the end the following:
            ``(15) Energy and environmental markets advisory 
        committee.--
                    ``(A) Establishment.--
                            ``(i) In general.--An Energy and 
                        Environmental Markets Advisory Committee is 
                        hereby established.
                            ``(ii) Membership.--The Committee shall 
                        have 9 members.
                            ``(iii) Activities.--The Committee's 
                        objectives and scope of activities shall be--
                                    ``(I) to conduct public meetings;
                                    ``(II) to submit reports and 
                                recommendations to the Commission 
                                (including dissenting or minority 
                                views, if any); and
                                    ``(III) otherwise to serve as a 
                                vehicle for discussion and 
                                communication on matters of concern to 
                                exchanges, firms, end users, and 
                                regulators regarding energy and 
                                environmental markets and their 
                                regulation by the Commission.
                    ``(B) Requirements.--
                            ``(i) In general.--The Committee shall hold 
                        public meetings at such intervals as are 
                        necessary to carry out the functions of the 
                        Committee, but not less frequently than 2 times 
                        per year.
                            ``(ii) Members.--Members shall be appointed 
                        to 3-year terms, but may be removed for cause 
                        by vote of the Commission.
                    ``(C) Appointment.--The Commission shall appoint 
                members with a wide diversity of opinion and who 
                represent a broad spectrum of interests, including 
                hedgers and consumers.
                    ``(D) Reimbursement.--Members shall be entitled to 
                per diem and travel expense reimbursement by the 
                Commission.
                    ``(E) FACA.--The Committee shall not be subject to 
                the Federal Advisory Committee Act (5 U.S.C. App.).''.

SEC. 752. INTERNATIONAL HARMONIZATION.

    In order to promote effective and consistent global regulation of 
swaps and security-based swaps, the Securities and Exchange Commission, 
the Commodity Futures Trading Commission, the Financial Stability 
Oversight Council, and the Treasury Department--
            (1) shall, both individually and collectively, consult and 
        coordinate with foreign regulatory authorities on the 
        establishment of consistent international standards with 
        respect to the regulation of such swaps; and
            (2) may, both individually and collectively, agree to such 
        information-sharing arrangements as may be deemed to be 
        necessary or appropriate in the public interest or for the 
        protection of investors and swap counterparties.

SEC. 753. ANTIMARKET MANIPULATION AUTHORITY.

    (a) Prohibition Regarding Manipulation and False Information.--
Subsection (c) of section 6 of the Commodity Exchange Act (7 U.S.C. 9, 
15) is amended to read as follows:
    ``(c) Prohibition Regarding Manipulation and False Information.--
            ``(1) Prohibition against manipulation.--It shall be 
        unlawful for any person, directly or indirectly, to use or 
        employ, or attempt to use or employ, in connection with any 
        swap, or a contract of sale of any commodity in interstate 
        commerce, or for future delivery on or subject to the rules of 
        any registered entity, any manipulative or deceptive device or 
        contrivance, in contravention of such rules and regulations as 
        the Commission shall promulgate by not later than 1 year after 
        the date of enactment of the Restoring American Financial 
        Stability Act of 2010.
                    ``(A) Special provision for manipulation by false 
                reporting.--Unlawful manipulation for purposes of this 
                paragraph shall include, but not be limited to, 
                delivering, or causing to be delivered for transmission 
                through the mails or interstate commerce, by any means 
                of communication whatsoever, a false or misleading or 
                inaccurate report concerning crop or market information 
                or conditions that affect or tend to affect the price 
                of any commodity in interstate commerce, knowing, or 
                acting in reckless disregard of the fact, that such 
                report is false, misleading or inaccurate.
                    ``(B) Effect on other law.--Nothing in this 
                paragraph shall affect, or be construed to affect, the 
                applicability of section 9(a)(2).
            ``(2) Prohibition regarding false information.--It shall be 
        unlawful for any person to make any false or misleading 
        statement of a material fact to the Commission, including in 
        any registration application or any report filed with the 
        Commission under this Act, or any other information relating to 
        a swap, or a contract of sale of a commodity, in interstate 
        commerce, or for future delivery on or subject to the rules of 
        any registered entity, or to omit to state in any such 
        statement any material fact that is necessary to make any 
        statement of a material fact made not misleading in any 
        material respect, if the person knew, or reasonably should have 
        known, the statement to be false or misleading.
            ``(3) Other manipulation.--In addition to the prohibition 
        in paragraph (1), it shall be unlawful for any person, directly 
        or indirectly, to manipulate or attempt to manipulate the price 
        of any swap, or of any commodity in interstate commerce, or for 
        future delivery on or subject to the rules of any registered 
        entity.
            ``(4) Enforcement.--
                    ``(A) Authority of commission.--If the Commission 
                has reason to believe that any person (other than a 
                registered entity) is violating or has violated this 
                subsection, or any other provision of this Act 
                (including any rule, regulation, or order of the 
                Commission promulgated in accordance with this 
                subsection or any other provision of this Act), the 
                Commission may serve upon the person a complaint.
                    ``(B) Contents of complaint.--A complaint under 
                subparagraph (A) shall--
                            ``(i) contain a description of the charges 
                        against the person that is the subject of the 
                        complaint; and
                            ``(ii) have attached or contain a notice of 
                        hearing that specifies the date and location of 
                        the hearing regarding the complaint.
                    ``(C) Hearing.--A hearing described in subparagraph 
                (B)(ii)--
                            ``(i) shall be held not later than 3 days 
                        after service of the complaint described in 
                        subparagraph (A);
                            ``(ii) shall require the person to show 
                        cause regarding why--
                                    ``(I) an order should not be made--
                                            ``(aa) to prohibit the 
                                        person from trading on, or 
                                        subject to the rules of, any 
                                        registered entity; and
                                            ``(bb) to direct all 
                                        registered entities to refuse 
                                        all privileges to the person 
                                        until further notice of the 
                                        Commission; and
                                    ``(II) the registration of the 
                                person, if registered with the 
                                Commission in any capacity, should not 
                                be suspended or revoked; and
                            ``(iii) may be held before--
                                    ``(I) the Commission; or
                                    ``(II) an administrative law judge 
                                designated by the Commission, under 
                                which the administrative law judge 
                                shall ensure that all evidence is 
                                recorded in written form and submitted 
                                to the Commission.
            ``(5) Subpoena.--For the purpose of securing effective 
        enforcement of the provisions of this Act, for the purpose of 
        any investigation or proceeding under this Act, and for the 
        purpose of any action taken under section 12(f) of this Act, 
        any member of the Commission or any Administrative Law Judge or 
        other officer designated by the Commission (except as provided 
        in paragraph (7)) may administer oaths and affirmations, 
        subpoena witnesses, compel their attendance, take evidence, and 
        require the production of any books, papers, correspondence, 
        memoranda, or other records that the Commission deems relevant 
        or material to the inquiry.
            ``(6) Witnesses.--The attendance of witnesses and the 
        production of any such records may be required from any place 
        in the United States, any State, or any foreign country or 
        jurisdiction at any designated place of hearing.
            ``(7) Service.--A subpoena issued under this section may be 
        served upon any person who is not to be found within the 
        territorial jurisdiction of any court of the United States in 
        such manner as the Federal Rules of Civil Procedure prescribe 
        for service of process in a foreign country, except that a 
        subpoena to be served on a person who is not to be found within 
        the territorial jurisdiction of any court of the United States 
        may be issued only on the prior approval of the Commission.
            ``(8) Refusal to obey.--In case of contumacy by, or refusal 
        to obey a subpoena issued to, any person, the Commission may 
        invoke the aid of any court of the United States within the 
        jurisdiction in which the investigation or proceeding is 
        conducted, or where such person resides or transacts business, 
        in requiring the attendance and testimony of witnesses and the 
        production of books, papers, correspondence, memoranda, and 
        other records. Such court may issue an order requiring such 
        person to appear before the Commission or member or 
        Administrative Law Judge or other officer designated by the 
        Commission, there to produce records, if so ordered, or to give 
        testimony touching the matter under investigation or in 
        question.
            ``(9) Failure to obey.--Any failure to obey such order of 
        the court may be punished by the court as a contempt thereof. 
        All process in any such case may be served in the judicial 
        district wherein such person is an inhabitant or transacts 
        business or wherever such person may be found.
            ``(10) Evidence.--On the receipt of evidence under 
        paragraph (4)(C)(iii), the Commission may--
                    ``(A) prohibit the person that is the subject of 
                the hearing from trading on, or subject to the rules 
                of, any registered entity and require all registered 
                entities to refuse the person all privileges on the 
                registered entities for such period as the Commission 
                may require in the order;
                    ``(B) if the person is registered with the 
                Commission in any capacity, suspend, for a period not 
                to exceed 180 days, or revoke, the registration of the 
                person;
                    ``(C) assess such person--
                            ``(i) a civil penalty of not more than an 
                        amount equal to the greater of--
                                    ``(I) $140,000; or
                                    ``(II) triple the monetary gain to 
                                such person for each such violation; or
                            ``(ii) in any case of manipulation or 
                        attempted manipulation in violation of this 
                        subsection or section 9(a)(2), a civil penalty 
                        of not more than an amount equal to the greater 
                        of--
                                    ``(I) $1,000,000; or
                                    ``(II) triple the monetary gain to 
                                the person for each such violation; and
                    ``(D) require restitution to customers of damages 
                proximately caused by violations of the person.
            ``(11) Orders.--
                    ``(A) Notice.--The Commission shall provide to a 
                person described in paragraph (10) and the appropriate 
                governing board of the registered entity notice of the 
                order described in paragraph (10) by--
                            ``(i) registered mail;
                            ``(ii) certified mail; or
                            ``(iii) personal delivery.
                    ``(B) Review.--
                            ``(i) In general.--A person described in 
                        paragraph (10) may obtain a review of the order 
                        or such other equitable relief as determined to 
                        be appropriate by a court described in clause 
                        (ii).
                            ``(ii) Petition.--To obtain a review or 
                        other relief under clause (i), a person may, 
                        not later than 15 days after notice is given to 
                        the person under clause (i), file a written 
                        petition to set aside the order with the United 
                        States Court of Appeals--
                                    ``(I) for the circuit in which the 
                                petitioner carries out the business of 
                                the petitioner; or
                                    ``(II) in the case of an order 
                                denying registration, the circuit in 
                                which the principal place of business 
                                of the petitioner is located, as listed 
                                on the application for registration of 
                                the petitioner.
                    ``(C) Procedure.--
                            ``(i) Duty of clerk of appropriate court.--
                        The clerk of the appropriate court under 
                        subparagraph (B)(ii) shall transmit to the 
                        Commission a copy of a petition filed under 
                        subparagraph (B)(ii).
                            ``(ii) Duty of commission.--In accordance 
                        with section 2112 of title 28, United States 
                        Code, the Commission shall file in the 
                        appropriate court described in subparagraph 
                        (B)(ii) the record theretofore made.
                            ``(iii) Jurisdiction of appropriate 
                        court.--Upon the filing of a petition under 
                        subparagraph (B)(ii), the appropriate court 
                        described in subparagraph (B)(ii) shall have 
                        jurisdiction to affirm, set aside, or modify 
                        the order of the Commission, and the findings 
                        of the Commission as to the facts, if supported 
                        by the weight of evidence, shall in like manner 
                        be conclusive.''.
    (b) Cease and Desist Orders, Fines.--Section 6(d) of the Commodity 
Exchange Act (7 U.S.C. 13b) is amended to read as follows:
    ``(d) If any person (other than a registered entity), is violating 
or has violated subsection (c) or any other provisions of this Act or 
of the rules, regulations, or orders of the Commission thereunder, the 
Commission may, upon notice and hearing, and subject to appeal as in 
other cases provided for in subsection (c), make and enter an order 
directing that such person shall cease and desist therefrom and, if 
such person thereafter and after the lapse of the period allowed for 
appeal of such order or after the affirmance of such order, shall fail 
or refuse to obey or comply with such order, such person shall be 
guilty of a misdemeanor and, upon conviction thereof, shall be fined 
not more than the higher of $140,000 or triple the monetary gain to 
such person, or imprisoned for not less than six months nor more than 
one year, or both, except that if such failure or refusal to obey or 
comply with such order involves any offense within subsection (a) or 
(b) of section 9 of this Act, such person shall be guilty of a felony 
and, upon conviction thereof, shall be subject to the penalties of said 
subsection (a) or (b): Provided, That any such cease and desist order 
under this subsection against any respondent in any case of 
manipulation shall be issued only in conjunction with an order issued 
against such respondent under subsection (c). Each day during which 
such failure or refusal to obey or comply with such order continues 
shall be deemed a separate offense.''.
    (c) Manipulations; Private Rights of Action.--Section 22(a)(1) of 
the Commodity Exchange Act (7 U.S.C. 25(a)(1)) is amended by striking 
subparagraph (D) and inserting the following:
                    ``(D) who purchased or sold a contract referred to 
                in subparagraph (B) hereof or swap if the violation 
                constitutes--
                            ``(i) the use or employment of, or an 
                        attempt to use or employ, in connection with a 
                        swap, or a contract of sale of a commodity, in 
                        interstate commerce, or for future delivery on 
                        or subject to the rules of any registered 
                        entity, any manipulative device or contrivance 
                        in contravention of such rules and regulations 
                        as the Commission shall promulgate by not later 
                        than 1 year after the date of enactment of the 
                        Restoring American Financial Stability Act of 
                        2010; or
                            ``(ii) a manipulation of the price of any 
                        such contract or swap or the price of the 
                        commodity underlying such contract or swap.''.
    (d) Effective Date.--
            (1) The amendments made by this section shall take effect 
        on the date on which the final rule promulgated by the 
        Commodity Futures Trading Commission pursuant to this Act takes 
        effect.
            (2) Paragraph (1) shall not preclude the Commission from 
        undertaking prior to the effective date any rulemaking 
        necessary to implement the amendments contained in this 
        section.

SEC. 754. EFFECTIVE DATE.

    Unless otherwise provided in this title, this subtitle shall take 
effect on the date that is 180 days after the date of enactment of this 
Act.

         Subtitle B--Regulation of Security-Based Swap Markets

SEC. 761. DEFINITIONS UNDER THE SECURITIES EXCHANGE ACT OF 1934.

    (a) Definitions.--Section 3(a) of the Securities Exchange Act of 
1934 (15 U.S.C. 78c(a)) is amended--
            (1) in subparagraphs (A) and (B) of paragraph (5), by 
        inserting ``(not including security-based swaps, other than 
        security-based swaps with or for persons that are not eligible 
        contract participants)'' after ``securities'' each place that 
        term appears;
            (2) in paragraph (10), by inserting ``security-based 
        swap,'' after ``security future,'';
            (3) in paragraph (13), by adding at the end the following: 
        ``For security-based swaps, such terms include the execution, 
        termination (prior to its scheduled maturity date), assignment, 
        exchange, or similar transfer or conveyance of, or 
        extinguishing of rights or obligations under, a security-based 
        swap, as the context may require.'';
            (4) in paragraph (14), by adding at the end the following: 
        ``For security-based swaps, such terms include the execution, 
        termination (prior to its scheduled maturity date), assignment, 
        exchange, or similar transfer or conveyance of, or 
        extinguishing of rights or obligations under, a security-based 
        swap, as the context may require.'';
            (5) in paragraph (39)--
                    (A) in subparagraph (B)(i)--
                            (i) in subclause (I), by striking ``or 
                        government securities dealer'' and inserting 
                        ``government securities dealer, security-based 
                        swap dealer, or major security-based swap 
                        participant''; and
                            (ii) in subclause (II), by inserting 
                        ``security-based swap dealer, major security-
                        based swap participant,'' after ``government 
                        securities dealer,'';
                    (B) in subparagraph (C), by striking ``or 
                government securities dealer'' and inserting 
                ``government securities dealer, security-based swap 
                dealer, or major security-based swap participant''; and
                    (C) in subparagraph (D), by inserting ``security-
                based swap dealer, major security-based swap 
                participant,'' after ``government securities dealer,''; 
                and
            (6) by adding at the end the following:
            ``(65) Eligible contract participant.--The term `eligible 
        contract participant' has the same meaning as in section 1a of 
        the Commodity Exchange Act (7 U.S.C. 1a).
            ``(66) Major swap participant.--The term `major swap 
        participant' has the same meaning as in section 1a of the 
        Commodity Exchange Act (7 U.S.C. 1a).
            ``(67) Major security-based swap participant.--
                    ``(A) In general.--The term `major security-based 
                swap participant' means any person--
                            ``(i) who is not a security-based swap 
                        dealer; and
                            ``(ii)(I) who maintains a substantial 
                        position in security-based swaps for any of the 
                        major security-based swap categories, as such 
                        categories are determined by the Commission, 
                        excluding--
                                    ``(aa) positions held for hedging 
                                or mitigating commercial risk; and
                                    ``(bb) positions maintained by any 
                                employee benefit plan (or any contract 
                                held by such a plan), as that term is 
                                defined in paragraphs (3) and (32) of 
                                section 3 of the Employee Retirement 
                                Income Security Act of 1974 (29 U.S.C. 
                                1002), for the primary purpose of 
                                hedging or mitigating any risk directly 
                                associated with the operation of the 
                                plan;
                            ``(II) whose outstanding security-based 
                        swaps create substantial counterparty exposure 
                        that could have serious adverse effects on the 
                        financial stability of the United States 
                        banking system or financial markets; or
                            ``(III) that is a financial entity that--
                                    ``(aa) is highly leveraged relative 
                                to the amount of capital such entity 
                                holds; and
                                    ``(bb) maintains a substantial 
                                position in outstanding security-based 
                                swaps in any major security-based swap 
                                category, as such categories are 
                                determined by the Commission.
                    ``(B) Definition of substantial position.--For 
                purposes of subparagraph (A), the Commission shall 
                define, by rule or regulation, the term `substantial 
                position' at the threshold that the Commission 
                determines to be prudent for the effective monitoring, 
                management, and oversight of entities that are 
                systemically important or can significantly impact the 
                financial system of the United States.
                    ``(C) Scope of designation.--For purposes of 
                subparagraph (A), a person may be designated as a major 
                security-based swap participant for 1 or more 
                categories of security-based swaps without being 
                classified as a major security-based swap participant 
                for all classes of security-based swaps.
                    ``(D) Capital.--In setting capital requirements for 
                a person that is designated as a major security-based 
                swap participant for a single type or single class or 
                category of security-based swap or activities, the 
                prudential regulator and the Commission shall take into 
                account the risks associated with other types of 
                security-based swaps or classes of security-based swaps 
                or categories of security-based swaps engaged in and 
                the other activities conducted by that person that are 
                not otherwise subject to regulation applicable to that 
                person by virtue of the status of the person as a major 
                security-based swap participant.
            ``(68) Security-based swap.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), the term `security-based swap' means 
                any agreement, contract, or transaction that--
                            ``(i) is a swap, as that term is defined 
                        under section 1a of the Commodity Exchange Act; 
                        and
                            ``(ii) is based on--
                                    ``(I) an index that is a narrow-
                                based security index, including any 
                                interest therein or on the value 
                                thereof;
                                    ``(II) a single security or loan, 
                                including any interest therein or on 
                                the value thereof; or
                                    ``(III) the occurrence, 
                                nonoccurrence, or extent of the 
                                occurrence of an event relating to a 
                                single issuer of a security or the 
                                issuers of securities in a narrow-based 
                                security index, provided that such 
                                event directly affects the financial 
                                statements, financial condition, or 
                                financial obligations of the issuer.
                    ``(B) Rule of construction regarding master 
                agreements.--The term `security-based swap' shall be 
                construed to include a master agreement that provides 
                for an agreement, contract, or transaction that is a 
                security-based swap pursuant to subparagraph (A), 
                together with all supplements to any such master 
                agreement, without regard to whether the master 
                agreement contains an agreement, contract, or 
                transaction that is not a security-based swap pursuant 
                to subparagraph (A), except that the master agreement 
                shall be considered to be a security-based swap only 
                with respect to each agreement, contract, or 
                transaction under the master agreement that is a 
                security-based swap pursuant to subparagraph (A).
                    ``(C) Exclusions.--The term `security-based swap' 
                does not include any agreement, contract, or 
                transaction that meets the definition of a security-
                based swap only because such agreement, contract, or 
                transaction references, is based upon, or settles 
                through the transfer, delivery, or receipt of an 
                exempted security under paragraph (12), as in effect on 
                the date of enactment of the Futures Trading Act of 
                1982 (other than any municipal security as defined in 
                paragraph (29) as in effect on the date of enactment of 
                the Futures Trading Act of 1982), unless such 
                agreement, contract, or transaction is of the character 
                of, or is commonly known in the trade as, a put, call, 
                or other option.
                    ``(D) Mixed swap.--The term `security-based swap' 
                includes any agreement, contract, or transaction that 
                is as described in subparagraph (A) and also is based 
                on the value of 1 or more interest or other rates, 
                currencies, commodities, instruments of indebtedness, 
                indices, quantitative measures, other financial or 
                economic interest or property of any kind (other than a 
                single security or a narrow-based security index), or 
                the occurrence, non-occurrence, or the extent of the 
                occurrence of an event or contingency associated with a 
                potential financial, economic, or commercial 
                consequence (other than an event described in 
                subparagraph (A)(ii)(III)).
            ``(69) Swap.--The term `swap' has the same meaning as in 
        section 1a of the Commodity Exchange Act (7 U.S.C. 1a).
            ``(70) Person associated with a security-based swap dealer 
        or major security-based swap participant.--
                    ``(A) In general.--The term `person associated with 
                a security-based swap dealer or major security-based 
                swap participant' or `associated person of a security-
                based swap dealer or major security-based swap 
                participant' means--
                            ``(i) any partner, officer, director, or 
                        branch manager of such security-based swap 
                        dealer or major security-based swap participant 
                        (or any person occupying a similar status or 
                        performing similar functions);
                            ``(ii) any person directly or indirectly 
                        controlling, controlled by, or under common 
                        control with such security-based swap dealer or 
                        major security-based swap participant; or
                            ``(iii) any employee of such security-based 
                        swap dealer or major security-based swap 
                        participant.
                    ``(B) Exclusion.--Other than for purposes of 
                section 15F(l)(2), the term `person associated with a 
                security-based swap dealer or major security-based swap 
                participant' or `associated person of a security-based 
                swap dealer or major security-based swap participant' 
                does not include any person associated with a security-
                based swap dealer or major security-based swap 
                participant whose functions are solely clerical or 
                ministerial.
            ``(71) Security-based swap dealer.--
                    ``(A) In general.--The term `security-based swap 
                dealer' means any person who--
                            ``(i) holds themself out as a dealer in 
                        security-based swaps;
                            ``(ii) makes a market in security-based 
                        swaps;
                            ``(iii) regularly engages in the purchase 
                        and sale of security-based swaps in the 
                        ordinary course of a business; or
                            ``(iv) engages in any activity causing it 
                        to be commonly known in the trade as a dealer 
                        or market maker in security-based swaps.
                    ``(B) Designation by type or class.--A person may 
                be designated as a security-based swap dealer for a 
                single type or single class or category of security-
                based swap or activities and considered not to be a 
                security-based swap dealer for other types, classes, or 
                categories of security-based swaps or activities.
                    ``(C) Capital.--In setting capital requirements for 
                a person that is designated as a security-based swap 
                dealer for a single type or single class or category of 
                security-based swap or activities, the prudential 
                regulator and the Commission shall take into account 
                the risks associated with other types of security-based 
                swaps or classes of security-based swaps or categories 
                of security-based swaps engaged in and the other 
                activities conducted by that person that are not 
                otherwise subject to regulation applicable to that 
                person by virtue of the status of the person as a 
                security-based swap dealer.
            ``(72) Appropriate federal banking agency.--The term 
        `appropriate Federal banking agency' has the same meaning as in 
        section 3(q) of the Federal Deposit Insurance Act (12 U.S.C. 
        1813(q)).
            ``(73) Board.--The term `Board' means the Board of 
        Governors of the Federal Reserve System.
            ``(74) Prudential regulator.--The term `prudential 
        regulator' has the same meaning as in section 1a of the 
        Commodity Exchange Act (7 U.S.C. 1a).
            ``(75) Security-based swap data repository.--The term 
        `security-based swap data repository' means any person that 
        collects, calculates, prepares, or maintains information or 
        records with respect to transactions or positions in, or the 
        terms and conditions of, security-based swaps entered into by 
        third parties.
            ``(76) Swap dealer.--The term `swap dealer' has the same 
        meaning as in section 1a of the Commodity Exchange Act (7 
        U.S.C. 1a).
            ``(77) Swap execution facility.--The term `swap execution 
        facility' means a facility in which multiple participants have 
        the ability to execute or trade security-based swaps by 
        accepting bids and offers made by other participants that are 
        open to multiple participants in the facility or system, or 
        confirmation facility, that--
                    ``(A) facilitates the execution of security-based 
                swaps between persons; and
                    ``(B) is not a designated contract market.
            ``(78) Security-based swap agreement.--
                    ``(A) In general.--For purposes of sections 9, 10, 
                16, 20, and 21A of this Act, and section 17 of the 
                Securities Act of 1933 (15 U.S.C. 77q), the term 
                `security-based swap agreement' means a swap agreement 
                as defined in section 206A of the Gramm-Leach-Bliley 
                Act (15 U.S.C. 78c note) of which a material term is 
                based on the price, yield, value, or volatility of any 
                security or any group or index of securities, or any 
                interest therein.
                    ``(B) Exclusions.--The term `security-based swap 
                agreement' does not include any security-based swap.''.
    (b) Authority To Further Define Terms.--The Securities and Exchange 
Commission may, by rule, further define the terms ``security-based 
swap'', ``security-based swap dealer'', ``major security-based swap 
participant'', and ``eligible contract participant'' with regard to 
security-based swaps (as such terms are defined in the amendments made 
by subsection (a)) for the purpose of including transactions and 
entities that have been structured to evade this subtitle or the 
amendments made by this subtitle.
    (c) Other Incorporated Definitions.--Except as the context 
otherwise requires, in this subtitle, the terms ``prudential 
regulator'', ``swap'', ``swap dealer'', ``major swap participant'', 
``swap data repository'', ``associated person of a swap dealer or major 
swap participant'', ``eligible contract participant'', ``swap execution 
facility'', ``security-based swap'', ``security-based swap dealer'', 
``major security-based swap participant'', ``security-based swap data 
repository'', and ``associated person of a security-based swap dealer 
or major security-based swap participant'' have the same meanings as in 
section 1a of the Commodity Exchange Act (7 U.S.C. 1a), as amended by 
this Act.

SEC. 762. REPEAL OF PROHIBITION ON REGULATION OF SECURITY-BASED SWAP 
              AGREEMENTS.

    (a) Repeal.--Sections 206B and 206C of the Gramm-Leach-Bliley Act 
(Public Law 106-102; 15 U.S.C. 78c note) are repealed.
    (b) Conforming Amendments to the Securities Act of 1933.--
            (1) Section 2A of the Securities Act of 1933 (15 U.S.C. 
        77b-1) is amended--
                    (A) by striking subsection (a) and reserving that 
                subsection; and
                    (B) by striking ``(as defined in section 206B of 
                the Gramm-Leach-Bliley Act)'' each place that such term 
                appears and inserting ``(as defined in section 3(a)(78) 
                of the Securities Exchange Act of 1934)''.
            (2) Section 17 of the Securities Act of 1933 (15 U.S.C. 
        77q) is amended--
                    (A) in subsection (a)--
                            (i) by inserting ``(including security-
                        based swaps)'' after ``securities''; and
                            (ii) by striking ``(as defined in section 
                        206B of the Gramm-Leach-Bliley Act)'' and 
                        inserting ``(as defined in section 3(a)(78) of 
                        the Securities Exchange Act)''; and
                    (B) in subsection (d), by striking ``206B of the 
                Gramm-Leach-Bliley Act'' and inserting ``3(a)(78) of 
                the Securities Exchange Act of 1934''.
    (c) Conforming Amendments to the Securities Exchange Act of 1934.--
The Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.) is 
amended--
            (1) in section 3A (15 U.S.C. 78c-1)--
                    (A) by striking subsection (a) and reserving that 
                subsection; and
                    (B) by striking ``(as defined in section 206B of 
                the Gramm-Leach-Bliley Act)'' each place that the term 
                appears;
            (2) in section 9 (15 U.S.C. 78i)--
                    (A) in subsection (a), by striking paragraphs (2) 
                through (5) and inserting the following:
    ``(2) To effect, alone or with 1 or more other persons, a series of 
transactions in any security registered on a national securities 
exchange, any security not so registered, or in connection with any 
security-based swap or security-based swap agreement with respect to 
such security creating actual or apparent active trading in such 
security, or raising or depressing the price of such security, for the 
purpose of inducing the purchase or sale of such security by others.
    ``(3) If a dealer, broker, security-based swap dealer, major 
security-based swap participant, or other person selling or offering 
for sale or purchasing or offering to purchase the security, a 
security-based swap, or a security-based swap agreement with respect to 
such security, to induce the purchase or sale of any security 
registered on a national securities exchange, any security not so 
registered, any security-based swap, or any security-based swap 
agreement with respect to such security by the circulation or 
dissemination in the ordinary course of business of information to the 
effect that the price of any such security will or is likely to rise or 
fall because of market operations of any 1 or more persons conducted 
for the purpose of raising or depressing the price of such security.
    ``(4) If a dealer, broker, security-based swap dealer, major 
security-based swap participant, or other person selling or offering 
for sale or purchasing or offering to purchase the security, a 
security-based swap, or security-based swap agreement with respect to 
such security, to make, regarding any security registered on a national 
securities exchange, any security not so registered, any security-based 
swap, or any security-based swap agreement with respect to such 
security, for the purpose of inducing the purchase or sale of such 
security, such security-based swap, or such security-based swap 
agreement any statement which was at the time and in the light of the 
circumstances under which it was made, false or misleading with respect 
to any material fact, and which that person knew or had reasonable 
ground to believe was so false or misleading.
    ``(5) For a consideration, received directly or indirectly from a 
broker, dealer, security-based swap dealer, major security-based swap 
participant, or other person selling or offering for sale or purchasing 
or offering to purchase the security, a security-based swap, or 
security-based swap agreement with respect to such security, to induce 
the purchase of any security registered on a national securities 
exchange, any security not so registered, any security-based swap, or 
any security-based swap agreement with respect to such security by the 
circulation or dissemination of information to the effect that the 
price of any such security will or is likely to rise or fall because of 
the market operations of any 1 or more persons conducted for the 
purpose of raising or depressing the price of such security.''; and
                    (B) in subsection (i), by striking ``(as defined in 
                section 206B of the Gramm-Leach-Bliley Act)'';
            (3) in section 10 (15 U.S.C. 78j)--
                    (A) in subsection (b), by striking ``(as defined in 
                section 206B of the Gramm-Leach-Bliley Act),'' each 
                place that term appears; and
                    (B) in the matter following subsection (b), by 
                striking ``(as defined in section 206B of the Gramm-
                Leach-Bliley Act)'';
            (4) in section 15 (15 U.S.C. 78o)--
                    (A) in subsection (c)(1)(A), by striking ``(as 
                defined in section 206B of the Gramm-Leach-Bliley 
                Act),'';
                    (B) in subparagraphs (B) and (C) of subsection 
                (c)(1), by striking ``(as defined in section 206B of 
                the Gramm-Leach-Bliley Act)'' each place that term 
                appears;
                    (C) by redesignating subsection (i), as added by 
                section 303(f) of the Commodity Futures Modernization 
                Act of 2000 (Public Law 106-554; 114 Stat. 2763A-455)), 
                as subsection (j); and
                    (D) in subsection (j), as redesignated by 
                subparagraph (C), by striking ``(as defined in section 
                206B of the Gramm-Leach-Bliley Act)'';
            (5) in section 16 (15 U.S.C. 78p)--
                    (A) in subsection (a)(2)(C), by striking ``(as 
                defined in section 206(b) of the Gramm-Leach-Bliley Act 
                (15 U.S.C. 78c note))'';
                    (B) in subsection (a)(3)(B), by inserting ``or 
                security-based swaps'' after ``security-based swap 
                agreement'';
                    (C) in the first sentence of subsection (b), by 
                striking ``(as defined in section 206B of the Gramm-
                Leach-Bliley Act)'';
                    (D) in the third sentence of subsection (b), by 
                striking ``(as defined in section 206B of the Gramm-
                Leach Bliley Act)'' and inserting ``or a security-based 
                swap''; and
                    (E) in subsection (g), by striking ``(as defined in 
                section 206B of the Gramm-Leach-Bliley Act)'';
            (6) in section 20 (15 U.S.C. 78t),
                    (A) in subsection (d), by striking ``(as defined in 
                section 206B of the Gramm-Leach-Bliley Act)''; and
                    (B) in subsection (f), by striking ``(as defined in 
                section 206B of the Gramm-Leach-Bliley Act)'';
            (7) in section 21A (15 U.S.C. 78u-1)--
                    (A) in subsection (a)(1), by striking ``(as defined 
                in section 206B of the Gramm-Leach-Bliley Act)''; and
                    (B) in subsection (g), by striking ``(as defined in 
                section 206B of the Gramm-Leach-Bliley Act)''.

SEC. 763. AMENDMENTS TO THE SECURITIES EXCHANGE ACT OF 1934.

    (a) Clearing for Security-based Swaps.--The Securities Exchange Act 
of 1934 (15 U.S.C. 78a et seq.) is amended by inserting after section 
3B (as added by section 717 of this Act):

``SEC. 3C. CLEARING FOR SECURITY-BASED SWAPS.

    ``(a) Clearing Requirement.--
            ``(1) Submission.--
                    ``(A) In general.--Except as provided in paragraphs 
                (9) and (10), any person who is a party to a security-
                based swap shall submit such security-based swap for 
                clearing to a clearing agency registered under section 
                17A of this title.
                    ``(B) Open access.--The rules of a registered 
                clearing agency shall--
                            ``(i) prescribe that all security-based 
                        swaps with the same terms and conditions are 
                        economically equivalent and may be offset with 
                        each other within the clearing agency; and
                            ``(ii) provide for nondiscriminatory 
                        clearing of a security-based swap executed 
                        bilaterally or on or through the rules of an 
                        unaffiliated national securities exchange or 
                        swap execution facility, subject to the 
                        requirements of section 5(b).
            ``(2) Commission approval.--
                    ``(A) In general.--A clearing agency shall submit 
                to the Commission for prior approval any group, 
                category, type, or class of security-based swaps that 
                the clearing agency seeks to accept for clearing, which 
                submission the Commission shall make available to the 
                public.
                    ``(B) Deadline.--The Commission shall take final 
                action on a request submitted pursuant to subparagraph 
                (A) not later than 90 days after submission of the 
                request, unless the clearing agency submitting the 
                request agrees to an extension of the time limitation 
                established under this subparagraph.
                    ``(C) Approval.--The Commission shall approve, 
                unconditionally or subject to such terms and conditions 
                as the Commission determines to be appropriate, any 
                request submitted pursuant to subparagraph (A) if the 
                Commission finds that the request is consistent with 
                the requirements of section 17A. The Commission shall 
                not approve any such request if the Commission does not 
                make such finding.
                    ``(D) Rules.--The Commission shall adopt rules for 
                a clearing agency's submission for approval, pursuant 
                to this paragraph, of any group, category, type, or 
                class of security-based swaps that the clearing agency 
                seeks to accept for clearing.
            ``(3) Stay of clearing requirement.--At any time after 
        issuance of an approval pursuant to paragraph (2):
                    ``(A) Review process.--The Commission, on 
                application of a counterparty to a security-based swap 
                or on its own initiative, may stay the clearing 
                requirement of paragraph (1) until the Commission 
                completes a review of the terms of the security-based 
                swap, or the group, category, type, or class of 
                security-based swaps, and the clearing arrangement.
                    ``(B) Deadline.--The Commission shall complete a 
                review undertaken pursuant to subparagraph (A) not 
                later than 90 days after issuance of the stay, unless 
                the clearing agency that clears the security-based 
                swap, or the group, category, type, or class of 
                security-based swaps, agrees to an extension of the 
                time limitation established under this subparagraph.
                    ``(C) Determination.--Upon completion of the review 
                undertaken pursuant to subparagraph (A)--
                            ``(i) the Commission may determine, 
                        unconditionally or subject to such terms and 
                        conditions as the Commission determines to be 
                        appropriate, that the security-based swap, or 
                        the group, category, type, or class of 
                        security-based swaps, must be cleared pursuant 
                        to this subsection if the Commission finds that 
                        such clearing--
                                    ``(I) is consistent with the 
                                requirements of section 17A; and
                                    ``(II) is otherwise in the public 
                                interest, for the protection of 
                                investors, and consistent with the 
                                purposes of this title;
                            ``(ii) the Commission may determine that 
                        the clearing requirement of paragraph (1) shall 
                        not apply to the security-based swap, or the 
                        group, category, type, or class of security-
                        based swaps; or
                            ``(iii) if a determination is made that the 
                        clearing requirement of paragraph (1) shall no 
                        longer apply, then the Commission may still 
                        permit such security-based swap, or the group, 
                        category, type, or class of security-based 
                        swaps to be cleared.
                    ``(D) Rules.--The Commission shall adopt rules for 
                reviewing, pursuant to this paragraph, a clearing 
                agency's clearing of a security-based swap, or a group, 
                category, type, or class of security-based swaps that 
                the Commission has accepted for clearing.
            ``(4) Security-based swaps required to be accepted for 
        clearing.--
                    ``(A) Rulemaking.--The Commission shall adopt rules 
                to further identify any group, category, type, or class 
                of security-based swaps not submitted for approval 
                under paragraph (2) that the Commission deems should be 
                accepted for clearing. In adopting such rules, the 
                Commission shall take into account the following 
                factors:
                            ``(i) The extent to which any of the terms 
                        of the group, category, type, or class of 
                        security-based swaps, including price, are 
                        disseminated to third parties or are referenced 
                        in other agreements, contracts, or 
                        transactions.
                            ``(ii) The volume of transactions in the 
                        group, category, type, or class of security-
                        based swaps.
                            ``(iii) The extent to which the terms of 
                        the group, category, type, or class of 
                        security-based swaps are similar to the terms 
                        of other agreements, contracts, or transactions 
                        that are cleared.
                            ``(iv) Whether any differences in the terms 
                        of the group, category, type, or class of 
                        security-based swaps, compared to other 
                        agreements, contracts, or transactions that are 
                        cleared, are of economic significance.
                            ``(v) Whether a clearing agency is prepared 
                        to clear the group, category, type, or class of 
                        security-based swaps and such clearing agency 
                        has in place effective risk management systems.
                            ``(vi) Any other factor the Commission 
                        determines to be appropriate.
                    ``(B) Other designations.--At any time after the 
                adoption of the rules required under subparagraph (A), 
                the Commission may separately designate a particular 
                security-based swap or class of security-based swaps as 
                subject to the clearing requirement of paragraph (1), 
                taking into account the factors established in clauses 
                (i) through (vi) of subparagraph (A) and the rules 
                adopted in such subparagraph.
                    ``(C) In general.--In accordance with subparagraph 
                (A), the Commission shall, consistent with the public 
                interest, adopt rules under the expedited process 
                described in subparagraph (D) to establish criteria for 
                determining that a swap, or any group, category, type, 
                or class of swap is required to be cleared.
                    ``(D) Expedited rulemaking authority.--
                            ``(i) Procedure.--The promulgation of 
                        regulations under subparagraph (A) may be made 
                        without regard to--
                                    ``(I) the notice and comment 
                                provisions of section 553 of title 5, 
                                United States Code; and
                                    ``(II) chapter 35 of title 44, 
                                United States Code (commonly known as 
                                the `Paperwork Reduction Act').
                            ``(ii) Agency rulemaking.--In carrying out 
                        subparagraph (A), the Commission shall use the 
                        authority provided under section 808 of title 
                        5, United States Code.
            ``(5) Prevention of evasion.--
                    ``(A) In general.--The Commission shall have 
                authority to prescribe rules under this section, or 
                issue interpretations of such rules, as necessary to 
                prevent evasions of this section.
                    ``(B) Duty of commission to investigate and take 
                certain actions.--To the extent the Commission finds 
                that a particular security-based swap or any group, 
                category, type, or class of security-based swaps that 
                would otherwise be subject to mandatory clearing but no 
                clearing agency has listed the security-based swap or 
                the group, category, type, or class of security-based 
                swaps for clearing, the Commission shall--
                            ``(i) investigate the relevant facts and 
                        circumstances;
                            ``(ii) within 30 days issue a public report 
                        containing the results of the investigation; 
                        and
                            ``(iii) take such actions as the Commission 
                        determines to be necessary and in the public 
                        interest, which may include requiring the 
                        retaining of adequate margin or capital by 
                        parties to the security-based swap or the 
                        group, category, type, or class of security-
                        based swaps.
                    ``(C) Effect on authority.--Nothing in this 
                paragraph--
                            ``(i) authorize the Commission to require a 
                        clearing agency to list for clearing a 
                        security-based swap or any group, category, 
                        type, or class of security-based swaps if the 
                        clearing of the security-based swap or the 
                        group, category, type, or class of security-
                        based swaps would adversely affect the business 
                        operations of the clearing agency, threaten the 
                        financial integrity of the clearing agency, or 
                        pose a systemic risk to the clearing agency; 
                        and
                            ``(ii) affect the authority of the 
                        Commission to enforce the open access 
                        provisions of paragraph (1) with respect to a 
                        security-based swap or the group, category, 
                        type, or class of security-based swaps that is 
                        listed for clearing by a clearing agency.
            ``(6) Required reporting.--
                    ``(A) Both counterparties.--Both counterparties to 
                a security-based swap that is not cleared by any 
                clearing agency shall report such a security-based swap 
                either to a registered security-based swap repository 
                described in section 13(n) or, if there is no 
                repository that would accept the security-based swap, 
                to the Commission pursuant to section 13A.
                    ``(B) Timing.--Counterparties to a security-based 
                swap shall submit the reports required under 
                subparagraph (A) not later than such time period as the 
                Commission may by rule or regulation prescribe.
            ``(7) Transition rules.--
                    ``(A) Reporting transition rules.--Rules adopted by 
                the Commission under this section shall provide for the 
                reporting of data, as follows:
                            ``(i) Security-based swaps entered into 
                        before the date of the enactment of this 
                        section shall be reported to a registered 
                        security-based swap repository or the 
                        Commission not later than 180 days after the 
                        effective date of this section.
                            ``(ii) Security-based swaps entered into on 
                        or after such date of enactment shall be 
                        reported to a registered security-based swap 
                        repository or the Commission not later than the 
                        later of--
                                    ``(I) 90 days after such effective 
                                date; or
                                    ``(II) such other time after 
                                entering into the security-based swap 
                                as the Commission may prescribe by rule 
                                or regulation.
                    ``(B) Clearing transition rules.--
                            ``(i) Security-based swaps entered into 
                        before the date of the enactment of this 
                        section are exempt from the clearing 
                        requirements of this subsection if reported 
                        pursuant to subparagraph (A)(i).
                            ``(ii) Security-based swaps entered into 
                        before application of the clearing requirement 
                        pursuant to this section are exempt from the 
                        clearing requirements of this section if 
                        reported pursuant to subparagraph (A)(ii).
            ``(8) Trade execution.--
                    ``(A) In general.--With respect to transactions 
                involving security-based swaps subject to the clearing 
                requirement of paragraph (1), counterparties shall--
                            ``(i) execute the transaction on an 
                        exchange; or
                            ``(ii) execute the transaction on a swap 
                        execution facility registered under section 3D 
                        or a swap execution facility that is exempt 
                        from registration under section 3D(e).
                    ``(B) Exception.--The requirements of clauses (i) 
                and (ii) of subparagraph (A) shall not apply--
                            ``(i) if no national securities exchange or 
                        security-based swap execution facility makes 
                        the security-based swap available to trade; or
                            ``(ii) to swap transactions where a 
                        commercial end user opts to use the clearing 
                        exemption under paragraph (10).
            ``(9) Required exemption.--Subject to paragraph (4), the 
        Commission shall exempt a security-based swap from the 
        requirements of paragraphs (1) and (8) and any rules issued 
        under this subsection, if no clearing agency registered under 
        this Act will accept the security-based swap from clearing.
            ``(10) End user clearing exemption.--
                    ``(A) Definition of commercial end user.--
                            ``(i) In general.--In this paragraph, the 
                        term `commercial end user' means any person 
                        other than a financial entity described in 
                        clause (ii) who, as its primary business 
                        activity, owns, uses, produces, processes, 
                        manufactures, distributes, merchandises, or 
                        markets services or commodities (which shall 
                        include coal, natural gas, electricity, 
                        ethanol, crude oil, distillates, and other 
                        hydrocarbons) either individually or in a 
                        fiduciary capacity.
                            ``(ii) Financial entity.--The term 
                        `financial entity' means--
                                    ``(I) a swap dealer, major swap 
                                participant, security-based swap 
                                dealer, or major security-based swap 
                                participant;
                                    ``(II) a person predominantly 
                                engaged in activities that are in the 
                                business of banking or financial in 
                                nature, as defined in Section 4(k) of 
                                the Bank Holding Company Act of 1956;
                                    ``(III) a person predominantly 
                                engaged in activities that are 
                                financial in nature;
                                    ``(IV) a private fund as defined in 
                                section 202(a) of the Investment 
                                Advisers Act of 1940 (15 U.S.C. 80b-
                                2(a)) or a commodity pool as defined in 
                                section 1a of the Commodity Exchange 
                                Act (7 U.S.C. 1a); or
                                    ``(V) a person that is registered 
                                or required to be registered with the 
                                Commission, but does not include a 
                                public company which registers its 
                                securities with the Commission.
                    ``(B) End user clearing exemption.--
                            ``(i) In general.--Subject to clause (ii), 
                        in the event that a security-based swap is 
                        subject to the mandatory clearing requirement 
                        under paragraph (1), and 1 of the 
                        counterparties to the security-based swap is a 
                        commercial end user that counterparty--
                                    ``(I)(aa) may elect not to clear 
                                the security-based swap, as required 
                                under paragraph (1); or
                                    ``(bb) may elect to require 
                                clearing of the security-based swap; 
                                and
                                    ``(II) if the end user makes an 
                                election under subclause (I)(bb), shall 
                                have the sole right to select the 
                                clearing agency at which the security-
                                based swap will be cleared.
                            ``(ii) Limitation.--A commercial end user 
                        may only make an election under clause (i) if 
                        the end user is using the security-based swap 
                        to hedge its own commercial risk.
                    ``(C) Treatment of affiliates.--
                            ``(i) In general.--An affiliate of a 
                        commercial end user (including affiliate 
                        entities predominantly engaged in providing 
                        financing for the purchase of the merchandise 
                        or manufactured goods of the commercial end 
                        user) may make an election under subparagraph 
                        (B)(i) only if the affiliate, acting on behalf 
                        of the commercial end user and as an agent, 
                        uses the security-based swap to hedge or 
                        mitigate the commercial risk of the commercial 
                        end user parent or other affiliates of the 
                        commercial end user that is not a financial 
                        entity.
                            ``(ii) Prohibition relating to certain 
                        affiliates.--An affiliate of a commercial end 
                        user shall not use the exemption under 
                        subparagraph (B) if the affiliate is--
                                    ``(I) a security-based swap dealer;
                                    ``(II) a security-based security-
                                based swap dealer;
                                    ``(III) a major security-based swap 
                                participant;
                                    ``(IV) a major security-based 
                                security-based swap participant;
                                    ``(V) an issuer that would be an 
                                investment company, as defined in 
                                section 3 of the Investment Company Act 
                                of 1940 (15 U.S.C. 80a-3), but for 
                                paragraph (1) or (7) of subsection (c) 
                                of that section 3 (15 U.S.C. 80a-3(c));
                                    ``(VI) a commodity pool;
                                    ``(VII) a bank holding company with 
                                over $50,000,000,000 in consolidated 
                                assets; or
                                    ``(VIII) an affiliate of any entity 
                                described in subclauses (I) through 
                                (VII).
                            ``(iii) Abuse of exemption.--The Commission 
                        may prescribe such rules, or issue 
                        interpretations of the rules, as the Commission 
                        determines to be necessary to prevent abuse of 
                        the exemption described in subparagraph (B).
                    ``(D) Option to clear.--
                            ``(i) Security-based swaps required to be 
                        cleared entered into with a financial entity.--
                        With respect to any securities-based swap that 
                        is required to be cleared by a clearing agency 
                        and entered into by a securities-based swap 
                        dealer or a major securities-based swap 
                        participant with a financial entity, the 
                        financial entity shall have the sole right to 
                        select the clearing agency at which the 
                        securities-based swap will be cleared.
                            ``(ii) Security-based swaps not required to 
                        be cleared entered into with a financial entity 
                        or commercial end user.--With respect to any 
                        securities-based swap that is not required to 
                        be cleared by a clearing agency and entered 
                        into by a securities-based swap dealer or a 
                        major securities-based swap participant with a 
                        financial entity or commercial end user, the 
                        financial entity or commercial end user--
                                    ``(I) may elect to require clearing 
                                of the securities-based swap; and
                                    ``(II) shall have the sole right to 
                                select the clearing agency at which the 
                                securities-based swap will be cleared.
    ``(b) Audit Committee Approval.--Exemptions from the requirements 
of this section to clear or trade a security-based swap through a 
national securities exchange or security-based swap execution facility 
shall be available to a counterparty that is an issuer of securities 
that are registered under section 12 or that is required to file 
reports pursuant to section 15(d), only if the issuer's audit committee 
has reviewed and approved the issuer's decision to enter into security-
based swaps that are subject to such exemptions.
    ``(c) Public Availability of Security-based Swap Transaction 
Data.--
            ``(1) In general.--
                    ``(A) Definition of real-time public reporting.--In 
                this paragraph, the term `real-time public reporting' 
                means to report data relating to a security-based swap 
                transaction as soon as technologically practicable 
                after the time at which the security-based swap 
                transaction has been executed.
                    ``(B) Purpose.--The purpose of this section is to 
                authorize the Commission to make security-based swap 
                transaction and pricing data available to the public in 
                such form and at such times as the Commission 
                determines appropriate to enhance price discovery.
                    ``(C) General rule.--The Commission is authorized 
                to provide by rule for the public availability of 
                security-based swap transaction and pricing data as 
                follows:
                            ``(i) With respect to those security-based 
                        swaps that are subject to the mandatory 
                        clearing requirement described in subsection 
                        (a)(1) (including those security-based swaps 
                        that are exempted from those requirements), the 
                        Commission shall require real-time public 
                        reporting for such transactions.
                            ``(ii) With respect to those security-based 
                        swaps that are not subject to the mandatory 
                        clearing requirement described in subsection 
                        (a)(1), but are cleared at a registered 
                        clearing agency, the Commission shall require 
                        real-time public reporting for such 
                        transactions.
                            ``(iii) With respect to security-based 
                        swaps that are not cleared at a registered 
                        clearing agency and which are reported to a 
                        security-based swap data repository or the 
                        Commission under subsection (a), the Commission 
                        shall make available to the public, in a manner 
                        that does not disclose the business 
                        transactions and market positions of any 
                        person, aggregate data on such security-based 
                        swap trading volumes and positions.
                            ``(iv) With respect to security-based swaps 
                        that are exempt from the requirements of 
                        subsection (a)(1), but are subject to the 
                        requirements of subsection (a)(8), the 
                        Commission shall require real-time public 
                        reporting for such transactions.
                    ``(D) Registered entities and public reporting.--
                The Commission may require registered entities to 
                publicly disseminate the security-based swap 
                transaction and pricing data required to be reported 
                under this paragraph.
                    ``(E) Rulemaking required.--With respect to the 
                rule providing for the public availability of 
                transaction and pricing data for security-based swaps 
                described in clauses (i) and (ii) of subparagraph (C), 
                the rule promulgated by the Commission shall contain 
                provisions--
                            ``(i) to ensure such information does not 
                        identify the participants;
                            ``(ii) to specify the criteria for 
                        determining what constitutes a large notional 
                        security-based swap transaction (block trade) 
                        for particular markets and contracts;
                            ``(iii) to specify the appropriate time 
                        delay for reporting large notional security-
                        based swap transactions (block trades) to the 
                        public; and
                            ``(iv) that take into account whether the 
                        public disclosure will materially reduce market 
                        liquidity.
                    ``(F) Timeliness of reporting.--Parties to a 
                security-based swap (including agents of the parties to 
                a security-based swap) shall be responsible for 
                reporting security-based swap transaction information 
                to the appropriate registered entity in a timely manner 
                as may be prescribed by the Commission.
            ``(2) Semiannual and annual public reporting of aggregate 
        security-based swap data.--
                    ``(A) In general.--In accordance with subparagraph 
                (B), the Commission shall issue a written report on a 
                semiannual and annual basis to make available to the 
                public information relating to--
                            ``(i) the trading and clearing in the major 
                        security-based swap categories; and
                            ``(ii) the market participants and 
                        developments in new products.
                    ``(B) Use; consultation.--In preparing a report 
                under subparagraph (A), the Commission shall--
                            ``(i) use information from security-based 
                        swap data repositories and clearing agencies; 
                        and
                            ``(ii) consult with the Office of the 
                        Comptroller of the Currency, the Bank for 
                        International Settlements, and such other 
                        regulatory bodies as may be necessary.
                    ``(C) Transition rule for preenactment security-
                based swaps.--
                            ``(i) Security-based swaps entered into 
                        before the date of enactment of the wall street 
                        transparency and accountability act of 2010.--
                        Each security-based swap entered into before 
                        the date of enactment of the Wall Street 
                        Transparency and Accountability Act of 2010, 
                        the terms of which have not expired as of the 
                        date of enactment of that Act, shall be 
                        reported to a registered security-based swap 
                        data repository or the Commission by a date 
                        that is not later than--
                                    ``(I) 30 days after the date of 
                                issuance of the interim final rule; or
                                    ``(II) such other period as the 
                                Commission determines to be 
                                appropriate.
                            ``(ii) Commission rulemaking.--The 
                        Commission shall promulgate an interim final 
                        rule within 90 days of the date of enactment of 
                        this section providing for the reporting of 
                        each security-based swap entered into before 
                        the date of enactment as referenced in clause 
                        (i).
                    ``(D) Effective date.--The reporting provisions 
                described in this paragraph shall be effective upon the 
                date of enactment of this section.
    ``(d) Designation of Chief Compliance Officer.--
            ``(1) In general.--Each registered clearing agency shall 
        designate an individual to serve as a chief compliance officer.
            ``(2) Duties.--The chief compliance officer shall--
                    ``(A) report directly to the board or to the senior 
                officer of the clearing agency;
                    ``(B) in consultation with its board, a body 
                performing a function similar thereto, or the senior 
                officer of the registered clearing agency, resolve any 
                conflicts of interest that may arise;
                    ``(C) be responsible for administering each policy 
                and procedure that is required to be established 
                pursuant to this section;
                    ``(D) ensure compliance with this title (including 
                regulations issued under this title) relating to 
                agreements, contracts, or transactions, including each 
                rule prescribed by the Commission under this section;
                    ``(E) establish procedures for the remediation of 
                noncompliance issues identified by the compliance 
                officer through any--
                            ``(i) compliance office review;
                            ``(ii) look-back;
                            ``(iii) internal or external audit finding;
                            ``(iv) self-reported error; or
                            ``(v) validated complaint; and
                    ``(F) establish and follow appropriate procedures 
                for the handling, management response, remediation, 
                retesting, and closing of noncompliance issues.
            ``(3) Annual reports.--
                    ``(A) In general.--In accordance with rules 
                prescribed by the Commission, the chief compliance 
                officer shall annually prepare and sign a report that 
                contains a description of--
                            ``(i) the compliance of the registered 
                        clearing agency or security-based swap 
                        execution facility of the compliance officer 
                        with respect to this title (including 
                        regulations under this title); and
                            ``(ii) each policy and procedure of the 
                        registered clearing agency of the compliance 
                        officer (including the code of ethics and 
                        conflict of interest policies of the registered 
                        clearing agency).
                    ``(B) Requirements.--A compliance report under 
                subparagraph (A) shall--
                            ``(i) accompany each appropriate financial 
                        report of the registered clearing agency that 
                        is required to be furnished to the Commission 
                        pursuant to this section; and
                            ``(ii) include a certification that, under 
                        penalty of law, the compliance report is 
                        accurate and complete.''.
    (b) Clearing Agency Requirements.--Section 17A of the Securities 
Exchange Act of 1934 (15 U.S.C. 78q-1) is amended by adding at the end 
the following:
    ``(g) Registration Requirement.--It shall be unlawful for a 
clearing agency, unless registered with the Commission, directly or 
indirectly to make use of the mails or any means or instrumentality of 
interstate commerce to perform the functions of a clearing agency with 
respect to a security-based swap.
    ``(h) Voluntary Registration.--A person that clears agreements, 
contracts, or transactions that are not required to be cleared under 
this title may register with the Commission as a clearing agency.
    ``(i) Standards for Clearing Agencies Clearing Security-based Swap 
Transactions.--To be registered and to maintain registration as a 
clearing agency that clears security-based swap transactions, a 
clearing agency shall comply with such standards as the Commission may 
establish by rule. In establishing any such standards, and in the 
exercise of its oversight of such a clearing agency pursuant to this 
title, the Commission may conform such standards or oversight to 
reflect evolving United States and international standards. Except 
where the Commission determines otherwise by rule or regulation, a 
clearing agency shall have reasonable discretion in establishing the 
manner in which it complies with any such standards.
    ``(j) Rules.--The Commission shall adopt rules governing persons 
that are registered as clearing agencies for security-based swaps under 
this title.
    ``(k) Exemptions.--
            ``(1) In general.--The Commission may exempt, conditionally 
        or unconditionally, a clearing agency from registration under 
        this section for the clearing of security-based swaps if the 
        Commission determines that the clearing agency is subject to 
        comparable, comprehensive supervision and regulation by the 
        Commodity Futures Trading Commission or the appropriate 
        government authorities in the home country of the agency. Such 
        conditions may include, but are not limited to, requiring that 
        the clearing agency be available for inspection by the 
        Commission and make available all information requested by the 
        Commission.
            ``(2) Derivatives clearing organizations.--A person that is 
        required to be registered as a derivatives clearing 
        organization under the Commodity Exchange Act, whose principal 
        business is clearing commodity futures and options on commodity 
        futures transactions and swaps and which is a derivatives 
        clearing organization registered with the Commodity Futures 
        Trading Commission under the Commodity Exchange Act (7 U.S.C. 1 
        et seq.), shall be unconditionally exempt from registration 
        under this section solely for the purpose of clearing security-
        based swaps, unless the Commission finds that such derivatives 
        clearing organization is not subject to comparable, 
        comprehensive supervision and regulation by the Commodity 
        Futures Trading Commission.
    ``(l) Modification of Core Principles.--The Commission may conform 
the core principles established in this section to reflect evolving 
United States and international standards.''.
    (c) Security-based Swap Execution Facilities.--The Securities 
Exchange Act of 1934 (15 U.S.C. 78a et seq.) is amended by inserting 
after section 3C (as added by subsection (a) of this section) the 
following:

``SEC. 3D. SECURITY-BASED SWAP EXECUTION FACILITIES.

    ``(a) Registration.--
            ``(1) In general.--No person may operate a facility for the 
        trading or processing of security-based swaps, unless the 
        facility is registered as a security-based swap execution 
        facility or as a national securities exchange under this 
        section.
            ``(2) Dual registration.--Any person that is registered as 
        a security-based swap execution facility under this section 
        shall register with the Commission regardless of whether the 
        person also is registered with the Commodity Futures Trading 
        Commission as a swap execution facility.
    ``(b) Trading and Trade Processing.--A security-based swap 
execution facility that is registered under subsection (a) may--
            ``(1) make available for trading any security-based swap; 
        and
            ``(2) facilitate trade processing of any security-based 
        swap.
    ``(c) Identification of Facility Used To Trade Security-based Swaps 
by National Securities Exchanges.--A national securities exchange 
shall, to the extent that the exchange also operates a security-based 
swap execution facility and uses the same electronic trade execution 
system for listing and executing trades of security-based swaps on or 
through the exchange and the facility, identify whether electronic 
trading of such security-based swaps is taking place on or through the 
national securities exchange or the security-based swap execution 
facility.
    ``(d) Core Principles for Security-based Swap Execution 
Facilities.--
            ``(1) Compliance with core principles.--
                    ``(A) In general.--To be registered, and maintain 
                registration, as a security-based swap execution 
                facility, the security-based swap execution facility 
                shall comply with--
                            ``(i) the core principles described in this 
                        subsection; and
                            ``(ii) any requirement that the Commission 
                        may impose by rule or regulation.
                    ``(B) Reasonable discretion of security-based swap 
                execution facility.--Unless otherwise determined by the 
                Commission, by rule or regulation, a security-based 
                swap execution facility described in subparagraph (A) 
                shall have reasonable discretion in establishing the 
                manner in which it complies with the core principles 
                described in this subsection.
            ``(2) Compliance with rules.--A security-based swap 
        execution facility shall--
                    ``(A) monitor and enforce compliance with any rule 
                established by such security-based swap execution 
                facility, including--
                            ``(i) the terms and conditions of the 
                        security-based swaps traded or processed on or 
                        through the facility; and
                            ``(ii) any limitation on access to the 
                        facility;
                    ``(B) establish and enforce trading, trade 
                processing, and participation rules that will deter 
                abuses and have the capacity to detect, investigate, 
                and enforce those rules, including means--
                            ``(i) to provide market participants with 
                        impartial access to the market; and
                            ``(ii) to capture information that may be 
                        used in establishing whether rule violations 
                        have occurred; and
                    ``(C) establish rules governing the operation of 
                the facility, including rules specifying trading 
                procedures to be used in entering and executing orders 
                traded or posted on the facility, including block 
                trades.
            ``(3) Security-based swaps not readily susceptible to 
        manipulation.--The security-based swap execution facility shall 
        permit trading only in security-based swaps that are not 
        readily susceptible to manipulation.
            ``(4) Monitoring of trading and trade processing.--The 
        security-based swap execution facility shall--
                    ``(A) establish and enforce rules or terms and 
                conditions defining, or specifications detailing--
                            ``(i) trading procedures to be used in 
                        entering and executing orders traded on or 
                        through the facilities of the security-based 
                        swap execution facility; and
                            ``(ii) procedures for trade processing of 
                        security-based swaps on or through the 
                        facilities of the security-based swap execution 
                        facility; and
                    ``(B) monitor trading in security-based swaps to 
                prevent manipulation, price distortion, and disruptions 
                of the delivery or cash settlement process through 
                surveillance, compliance, and disciplinary practices 
                and procedures, including methods for conducting real-
                time monitoring of trading and comprehensive and 
                accurate trade reconstructions.
            ``(5) Ability to obtain information.--The security-based 
        swap execution facility shall--
                    ``(A) establish and enforce rules that will allow 
                the facility to obtain any necessary information to 
                perform any of the functions described in this 
                subsection;
                    ``(B) provide the information to the Commission on 
                request; and
                    ``(C) have the capacity to carry out such 
                international information-sharing agreements as the 
                Commission may require.
            ``(6) Position limits or accountability.--
                    ``(A) In general.--To reduce the potential threat 
                of market manipulation or congestion, especially during 
                trading in the delivery month, a security-based swap 
                execution facility that is a trading facility shall 
                adopt for each of the contracts of the facility, as is 
                necessary and appropriate, position limitations or 
                position accountability for speculators.
                    ``(B) Position limits.--For any contract or 
                agreement that is subject to a position limitation 
                established by the Commission pursuant to section 10B, 
                the security-based swap execution facility shall set 
                its position limitation at a level no higher than the 
                limitation established by the Commission.
                    ``(C) Position enforcement.--For any contract or 
                agreement that is subject to a position limitation 
                established by the Commission pursuant to section 10B, 
                a security-based swap execution facility shall reject 
                any proposed security-based swap transaction if, based 
                on information readily available to a security-based 
                swap execution facility, any proposed security-based 
                swap transaction would cause a security-based swap 
                execution facility customer that would be a party to 
                such swap transaction to exceed such position 
                limitation.
            ``(7) Financial integrity of transactions.--The security-
        based swap execution facility shall establish and enforce rules 
        and procedures for ensuring the financial integrity of 
        security-based swaps entered on or through the facilities of 
        the security-based swap execution facility, including the 
        clearance and settlement of security-based swaps pursuant to 
        section 3C(a)(1).
            ``(8) Emergency authority.--The security-based swap 
        execution facility shall adopt rules to provide for the 
        exercise of emergency authority, in consultation or cooperation 
        with the Commission, as is necessary and appropriate, including 
        the authority to liquidate or transfer open positions in any 
        security-based swap or to suspend or curtail trading in a 
        security-based swap.
            ``(9) Timely publication of trading information.--
                    ``(A) In general.--The security-based swap 
                execution facility shall make public timely information 
                on price, trading volume, and other trading data on 
                security-based swaps to the extent prescribed by the 
                Commission.
                    ``(B) Capacity of security-based swap execution 
                facility.--The security-based swap execution facility 
                shall be required to have the capacity to 
                electronically capture trade information with respect 
                to transactions executed on the facility.
            ``(10) Recordkeeping and reporting.--
                    ``(A) In general.--A security-based swap execution 
                facility shall--
                            ``(i) maintain records of all activities 
                        relating to the business of the facility, 
                        including a complete audit trail, in a form and 
                        manner acceptable to the Commission for a 
                        period of 5 years; and
                            ``(ii) report to the Commission, in a form 
                        and manner acceptable to the Commission, such 
                        information as the Commission determines to be 
                        necessary or appropriate for the Commission to 
                        perform the duties of the Commission under this 
                        title.
                    ``(B) Requirements.--The Commission shall adopt 
                data collection and reporting requirements for 
                security-based swap execution facilities that are 
                comparable to corresponding requirements for clearing 
                agencies and security-based swap data repositories.
            ``(11) Antitrust considerations.--Unless necessary or 
        appropriate to achieve the purposes of this title, the 
        security-based swap execution facility shall not--
                    ``(A) adopt any rules or taking any actions that 
                result in any unreasonable restraint of trade; or
                    ``(B) impose any material anticompetitive burden on 
                trading or clearing.
            ``(12) Conflicts of interest.--The security-based swap 
        execution facility shall--
                    ``(A) establish and enforce rules to minimize 
                conflicts of interest in its decision-making process; 
                and
                    ``(B) establish a process for resolving the 
                conflicts of interest.
            ``(13) Financial resources.--
                    ``(A) In general.--The security-based swap 
                execution facility shall have adequate financial, 
                operational, and managerial resources to discharge each 
                responsibility of the security-based swap execution 
                facility, as determined by the Commission.
                    ``(B) Determination of resource adequacy.--The 
                financial resources of a security-based swap execution 
                facility shall be considered to be adequate if the 
                value of the financial resources--
                            ``(i) enables the organization to meet its 
                        financial obligations to its members and 
                        participants notwithstanding a default by the 
                        member or participant creating the largest 
                        financial exposure for that organization in 
                        extreme but plausible market conditions; and
                            ``(ii) exceeds the total amount that would 
                        enable the security-based swap execution 
                        facility to cover the operating costs of the 
                        security-based swap execution facility for a 1-
                        year period, as calculated on a rolling basis.
            ``(14) System safeguards.--The security-based swap 
        execution facility shall--
                    ``(A) establish and maintain a program of risk 
                analysis and oversight to identify and minimize sources 
                of operational risk, through the development of 
                appropriate controls and procedures, and automated 
                systems, that--
                            ``(i) are reliable and secure; and
                            ``(ii) have adequate scalable capacity;
                    ``(B) establish and maintain emergency procedures, 
                backup facilities, and a plan for disaster recovery 
                that are designed to allow for--
                            ``(i) the timely recovery and resumption of 
                        operations; and
                            ``(ii) the fulfillment of the 
                        responsibilities and obligation of the 
                        security-based swap execution facility; and
                    ``(C) periodically conduct tests to verify that the 
                backup resources of the security-based swap execution 
                facility are sufficient to ensure continued--
                            ``(i) order processing and trade matching;
                            ``(ii) price reporting;
                            ``(iii) market surveillance; and
                            ``(iv) maintenance of a comprehensive and 
                        accurate audit trail.
            ``(15) Designation of chief compliance officer.--
                    ``(A) In general.--Each security-based swap 
                execution facility shall designate an individual to 
                serve as a chief compliance officer.
                    ``(B) Duties.--The chief compliance officer shall--
                            ``(i) report directly to the board or to 
                        the senior officer of the facility;
                            ``(ii) review compliance with the core 
                        principles in this subsection;
                            ``(iii) in consultation with the board of 
                        the facility, a body performing a function 
                        similar to that of a board, or the senior 
                        officer of the facility, resolve any conflicts 
                        of interest that may arise;
                            ``(iv) be responsible for establishing and 
                        administering the policies and procedures 
                        required to be established pursuant to this 
                        section;
                            ``(v) ensure compliance with this title and 
                        the rules and regulations issued under this 
                        title, including rules prescribed by the 
                        Commission pursuant to this section;
                            ``(vi) establish procedures for the 
                        remediation of noncompliance issues found 
                        during--
                                    ``(I) compliance office reviews;
                                    ``(II) look backs;
                                    ``(III) internal or external audit 
                                findings;
                                    ``(IV) self-reported errors; or
                                    ``(V) through validated complaints; 
                                and
                            ``(vii) establish and follow appropriate 
                        procedures for the handling, management 
                        response, remediation, retesting, and closing 
                        of noncompliance issues.
                    ``(C) Annual reports.--
                            ``(i) In general.--In accordance with rules 
                        prescribed by the Commission, the chief 
                        compliance officer shall annually prepare and 
                        sign a report that contains a description of--
                                    ``(I) the compliance of the 
                                security-based swap execution facility 
                                with this title; and
                                    ``(II) the policies and procedures, 
                                including the code of ethics and 
                                conflict of interest policies, of the 
                                security-based security-based swap 
                                execution facility.
                            ``(ii) Requirements.--The chief compliance 
                        officer shall--
                                    ``(I) submit each report described 
                                in clause (i) with the appropriate 
                                financial report of the security-based 
                                swap execution facility that is 
                                required to be submitted to the 
                                Commission pursuant to this section; 
                                and
                                    ``(II) include in the report a 
                                certification that, under penalty of 
                                law, the report is accurate and 
                                complete.
    ``(e) Exemptions.--The Commission may exempt, conditionally or 
unconditionally, a security-based swap execution facility from 
registration under this section if the Commission finds that the 
facility is subject to comparable, comprehensive supervision and 
regulation on a consolidated basis by the Commodity Futures Trading 
Commission.
    ``(f) Rules.--The Commission shall prescribe rules governing the 
regulation of security-based swap execution facilities under this 
section.''.
    (d) Segregation of Assets Held as Collateral in Security-based Swap 
Transactions.--The Securities Exchange Act of 1934 (15 U.S.C. 78a et 
seq.) is amended by inserting after section 3D (as added by subsection 
(b)) the following:

``SEC. 3E. SEGREGATION OF ASSETS HELD AS COLLATERAL IN SECURITY-BASED 
              SWAP TRANSACTIONS.

    ``(a) Registration Requirement.--It shall be unlawful for any 
person to accept any money, securities, or property (or to extend any 
credit in lieu of money, securities, or property) from, for, or on 
behalf of a security-based swaps customer or to margin, guarantee, or 
secure a security-based swap cleared by or through a clearing agency 
(including money, securities, or property accruing to the customer as 
the result of such a security-based swap), unless the person shall have 
registered under this title with the Commission as a broker, dealer, or 
security-based swap dealer, and the registration shall not have expired 
nor been suspended nor revoked.
    ``(b) Cleared Security-based Swaps.--
            ``(1) Segregation required.--A broker, dealer, or security-
        based swap dealer shall treat and deal with all money, 
        securities, and property of any security-based swaps customer 
        received to margin, guarantee, or secure a security-based swap 
        cleared by or though a clearing agency (including money, 
        securities, or property accruing to the security-based swaps 
        customer as the result of such a security-based swap) as 
        belonging to the security-based swaps customer.
            ``(2) Commingling prohibited.--Money, securities, and 
        property of a security-based swaps customer described in 
        paragraph (1) shall be separately accounted for and shall not 
        be commingled with the funds of the broker, dealer, or 
        security-based swap dealer or be used to margin, secure, or 
        guarantee any trades or contracts of any security-based swaps 
        customer or person other than the person for whom the same are 
        held.
    ``(c) Exceptions.--
            ``(1) Use of funds.--
                    ``(A) In general.--Notwithstanding subsection (b), 
                money, securities, and property of a security-based 
                swaps customer of a broker, dealer, or security-based 
                swap dealer described in subsection (b) may, for 
                convenience, be commingled and deposited in the same 1 
                or more accounts with any bank or trust company or with 
                a clearing agency.
                    ``(B) Withdrawal.--Notwithstanding subsection (b), 
                such share of the money, securities, and property 
                described in subparagraph (A) as in the normal course 
                of business shall be necessary to margin, guarantee, 
                secure, transfer, adjust, or settle a cleared security-
                based swap with a clearing agency, or with any member 
                of the clearing agency, may be withdrawn and applied to 
                such purposes, including the payment of commissions, 
                brokerage, interest, taxes, storage, and other charges, 
                lawfully accruing in connection with the cleared 
                security-based swap.
            ``(2) Commission action.--Notwithstanding subsection (b), 
        in accordance with such terms and conditions as the Commission 
        may prescribe by rule, regulation, or order, any money, 
        securities, or property of the security-based swaps customer of 
        a broker, dealer, or security-based swap dealer described in 
        subsection (b) may be commingled and deposited as provided in 
        this section with any other money, securities, or property 
        received by the broker, dealer, or security-based swap dealer 
        and required by the Commission to be separately accounted for 
        and treated and dealt with as belonging to the security-based 
        swaps customer of the broker, dealer, or security-based swap 
        dealer.
    ``(d) Permitted Investments.--Money described in subsection (b) may 
be invested in obligations of the United States, in general obligations 
of any State or of any political subdivision of a State, and in 
obligations fully guaranteed as to principal and interest by the United 
States, or in any other investment that the Commission may by rule or 
regulation prescribe, and such investments shall be made in accordance 
with such rules and regulations and subject to such conditions as the 
Commission may prescribe.
    ``(e) Prohibition.--It shall be unlawful for any person, including 
any clearing agency and any depository institution, that has received 
any money, securities, or property for deposit in a separate account or 
accounts as provided in subsection (b) to hold, dispose of, or use any 
such money, securities, or property as belonging to the depositing 
broker, dealer, or security-based swap dealer or any person other than 
the swaps customer of the broker, dealer, or security-based swap 
dealer.''.
    (e) Trading in Security-based Swaps.--Section 6 of the Securities 
Exchange Act of 1934 (15 U.S.C. 78f) is amended by adding at the end 
the following:
    ``(l) Security-based Swaps.--It shall be unlawful for any person to 
effect a transaction in a security-based swap with or for a person that 
is not an eligible contract participant, unless such transaction is 
effected on a national securities exchange registered pursuant to 
subsection (b).''.
    (f) Additions of Security-based Swaps to Certain Enforcement 
Provisions.--Section 9(b) of the Securities Exchange Act of 1934 (15 
U.S.C. 78i(b)) is amended by striking paragraphs (1) through (3) and 
inserting the following:
            ``(1) any transaction in connection with any security 
        whereby any party to such transaction acquires--
                    ``(A) any put, call, straddle, or other option or 
                privilege of buying the security from or selling the 
                security to another without being bound to do so;
                    ``(B) any security futures product on the security; 
                or
                    ``(C) any security-based swap involving the 
                security or the issuer of the security;
            ``(2) any transaction in connection with any security with 
        relation to which such person has, directly or indirectly, any 
        interest in any--
                    ``(A) such put, call, straddle, option, or 
                privilege;
                    ``(B) such security futures product; or
                    ``(C) such security-based swap; or
            ``(3) any transaction in any security for the account of 
        any person who such person has reason to believe has, and who 
        actually has, directly or indirectly, any interest in any--
                    ``(A) such put, call, straddle, option, or 
                privilege;
                    ``(B) such security futures product with relation 
                to such security; or
                    ``(C) any security-based swap involving such 
                security or the issuer of such security.''.
    (g) Rulemaking Authority To Prevent Fraud, Manipulation and 
Deceptive Conduct in Security-based Swaps.--Section 9 of the Securities 
Exchange Act of 1934 (15 U.S.C. 78i) is amended by adding at the end 
the following:
    ``(j) It shall be unlawful for any person, directly or indirectly, 
by the use of any means or instrumentality of interstate commerce or of 
the mails, or of any facility of any national securities exchange, to 
effect any transaction in, or to induce or attempt to induce the 
purchase or sale of, any security-based swap, in connection with which 
such person engages in any fraudulent, deceptive, or manipulative act 
or practice, makes any fictitious quotation, or engages in any 
transaction, practice, or course of business which operates as a fraud 
or deceit upon any person. The Commission shall, for the purposes of 
this subsection, by rules and regulations define, and prescribe means 
reasonably designed to prevent, such transactions, acts, practices, and 
courses of business as are fraudulent, deceptive, or manipulative, and 
such quotations as are fictitious.''.
    (h) Position Limits and Position Accountability for Security-based 
Swaps.--The Securities Exchange Act of 1934 is amended by inserting 
after section 10A (15 U.S.C. 78j-1) the following:

``SEC. 10B. POSITION LIMITS AND POSITION ACCOUNTABILITY FOR SECURITY-
              BASED SWAPS AND LARGE TRADER REPORTING.

    ``(a) Position Limits.--As a means reasonably designed to prevent 
fraud and manipulation, the Commission shall, by rule or regulation, as 
necessary or appropriate in the public interest or for the protection 
of investors, establish limits (including related hedge exemption 
provisions) on the size of positions in any security-based swap that 
may be held by any person. In establishing such limits, the Commission 
may require any person to aggregate positions in--
            ``(1) any security-based swap and any security or loan or 
        group of securities or loans on which such security-based swap 
        is based, which such security-based swap references, or to 
        which such security-based swap is related as described in 
        paragraph (68) of section 3(a), and any other instrument 
        relating to such security or loan or group or index of 
        securities or loans; or
            ``(2) any security-based swap and--
                    ``(A) any security or group or index of securities, 
                the price, yield, value, or volatility of which, or of 
                which any interest therein, is the basis for a material 
                term of such security-based swap as described in 
                paragraph (68) of section 3(a); and
                    ``(B) any other instrument relating to the same 
                security or group or index of securities described 
                under subparagraph (A).
    ``(b) Exemptions.--The Commission, by rule, regulation, or order, 
may conditionally or unconditionally exempt any person or class of 
persons, any security-based swap or class of security-based swaps, or 
any transaction or class of transactions from any requirement the 
Commission may establish under this section with respect to position 
limits.
    ``(c) SRO Rules.--
            ``(1) In general.--As a means reasonably designed to 
        prevent fraud or manipulation, the Commission, by rule, 
        regulation, or order, as necessary or appropriate in the public 
        interest, for the protection of investors, or otherwise in 
        furtherance of the purposes of this title, may direct a self-
        regulatory organization--
                    ``(A) to adopt rules regarding the size of 
                positions in any security-based swap that may be held 
                by--
                            ``(i) any member of such self-regulatory 
                        organization; or
                            ``(ii) any person for whom a member of such 
                        self-regulatory organization effects 
                        transactions in such security-based swap; and
                    ``(B) to adopt rules reasonably designed to ensure 
                compliance with requirements prescribed by the 
                Commission under this subsection.
            ``(2) Requirement to aggregate positions.--In establishing 
        the limits under paragraph (1), the self-regulatory 
        organization may require such member or person to aggregate 
        positions in--
                    ``(A) any security-based swap and any security or 
                loan or group or narrow-based security narrow-based 
                security index of securities or loans on which such 
                security-based swap is based, which such security-based 
                swap references, or to which such security-based swap 
                is related as described in section 3(a)(68), and any 
                other instrument relating to such security or loan or 
                group or narrow-based security index of securities or 
                loans; or
                    ``(B)(i) any security-based swap; and
                    ``(ii) any security-based swap and any other 
                instrument relating to the same security or group or 
                narrow-based security index of securities.
    ``(d) Large Trader Reporting.--The Commission, by rule or 
regulation, may require any person that effects transactions for such 
person's own account or the account of others in any securities-based 
swap or uncleared security-based swap and any security or loan or group 
or narrow-based security index of securities or loans as set forth in 
paragraphs (1) and (2) of subsection (a) under this section to report 
such information as the Commission may prescribe regarding any position 
or positions in any security-based swap or uncleared security-based 
swap and any security or loan or group or narrow-based security index 
of securities or loans and any other instrument relating to such 
security or loan or group or narrow-based security index of securities 
or loans as set forth in paragraphs (1) and (2) of subsection (a) under 
this section.''.
    (i) Public Reporting and Repositories for Security-based Swaps.--
Section 13 of the Securities Exchange Act of 1934 (15 U.S.C. 78m) is 
amended by adding at the end the following:
    ``(m) Public Availability of Security-based Swap Transaction 
Data.--
            ``(1) In general.--
                    ``(A) Definition of real-time public reporting.--In 
                this paragraph, the term `real-time public reporting' 
                means to report data relating to a security-based swap 
                transaction as soon as technologically practicable 
                after the time at which the security-based swap 
                transaction has been executed.
                    ``(B) Purpose.--The purpose of this section is to 
                authorize the Commission to make security-based swap 
                transaction and pricing data available to the public in 
                such form and at such times as the Commission 
                determines appropriate to enhance price discovery.
                    ``(C) General rule.--The Commission is authorized 
                to provide by rule for the public availability of 
                security-based swap transaction and pricing data as 
                follows:
                            ``(i) With respect to those security-based 
                        swaps that are subject to the mandatory 
                        clearing requirement described in section 
                        3C(a)(1) (including those security-based swaps 
                        that are exempted from the requirement pursuant 
                        to section 3C(a)(10)), the Commission shall 
                        require real-time public reporting for such 
                        transactions.
                            ``(ii) With respect to those security-based 
                        swaps that are not subject to the mandatory 
                        clearing requirement described in subsection 
                        section 3C(a)(1), but are cleared at a 
                        registered clearing agency, the Commission 
                        shall require real-time public reporting for 
                        such transactions.
                            ``(iii) With respect to security-based 
                        swaps that are not cleared at a registered 
                        clearing agency and which are reported to a 
                        security-based swap data repository or the 
                        Commission under section 3C(a), the Commission 
                        shall make available to the public, in a manner 
                        that does not disclose the business 
                        transactions and market positions of any 
                        person, aggregate data on such security-based 
                        swap trading volumes and positions.
                            ``(iv) With respect to security-based swaps 
                        that are exempt from the requirements of 
                        section 3C(a)(1), but are subject to the 
                        requirements of section 3C(a)(8), the 
                        Commission shall require real-time public 
                        reporting for such transactions.
                    ``(D) Registered entities and public reporting.--
                The Commission may require registered entities to 
                publicly disseminate the security-based swap 
                transaction and pricing data required to be reported 
                under this paragraph.
                    ``(E) Rulemaking required.--With respect to the 
                rule providing for the public availability of 
                transaction and pricing data for security-based swaps 
                described in clauses (i) and (ii) of subparagraph (C), 
                the rule promulgated by the Commission shall contain 
                provisions--
                            ``(i) to ensure such information does not 
                        identify the participants;
                            ``(ii) to specify the criteria for 
                        determining what constitutes a large notional 
                        security-based swap transaction (block trade) 
                        for particular markets and contracts;
                            ``(iii) to specify the appropriate time 
                        delay for reporting large notional security-
                        based swap transactions (block trades) to the 
                        public; and
                            ``(iv) that take into account whether the 
                        public disclosure will materially reduce market 
                        liquidity.
                    ``(F) Timeliness of reporting.--Parties to a 
                security-based swap (including agents of the parties to 
                a security-based swap) shall be responsible for 
                reporting security-based swap transaction information 
                to the appropriate registered entity in a timely manner 
                as may be prescribed by the Commission.
            ``(2) Semiannual and annual public reporting of aggregate 
        security-based swap data.--
                    ``(A) In general.--In accordance with subparagraph 
                (B), the Commission shall issue a written report on a 
                semiannual and annual basis to make available to the 
                public information relating to--
                            ``(i) the trading and clearing in the major 
                        security-based swap categories; and
                            ``(ii) the market participants and 
                        developments in new products.
                    ``(B) Use; consultation.--In preparing a report 
                under subparagraph (A), the Commission shall--
                            ``(i) use information from security-based 
                        swap data repositories and derivatives clearing 
                        organizations; and
                            ``(ii) consult with the Office of the 
                        Comptroller of the Currency, the Bank for 
                        International Settlements, and such other 
                        regulatory bodies as may be necessary.
    ``(n) Security-based Swap Data Repositories.--
            ``(1) Registration requirement.--It shall be unlawful for 
        any person, unless registered with the Commission, directly or 
        indirectly, to make use of the mails or any means or 
        instrumentality of interstate commerce to perform the functions 
        of a security-based swap data repository.
            ``(2) Inspection and examination.--Each registered 
        security-based swap data repository shall be subject to 
        inspection and examination by any representative of the 
        Commission.
            ``(3) Compliance with core principles.--
                    ``(A) In general.--To be registered, and maintain 
                registration, as a security-based swap data repository, 
                the security-based swap data repository shall comply 
                with--
                            ``(i) the core principles described in this 
                        subsection; and
                            ``(ii) any requirement that the Commission 
                        may impose by rule or regulation.
                    ``(B) Reasonable discretion of security-based swap 
                data repository.--Unless otherwise determined by the 
                Commission, by rule or regulation, a security-based 
                swap data repository described in subparagraph (A) 
                shall have reasonable discretion in establishing the 
                manner in which the security-based swap data repository 
                complies with the core principles described in this 
                subsection.
            ``(4) Standard setting.--
                    ``(A) Data identification.--The Commission shall 
                prescribe standards that specify the data elements for 
                each security-based swap that shall be collected and 
                maintained by each registered security-based swap data 
                repository.
                    ``(B) Data collection and maintenance.--The 
                Commission shall prescribe data collection and data 
                maintenance standards for security-based swap data 
                repositories.
                    ``(C) Comparability.--The standards prescribed by 
                the Commission under this subsection shall be 
                comparable to the data standards imposed by the 
                Commission on clearing agencies in connection with 
                their clearing of security-based swaps.
            ``(5) Duties.--A security-based swap data repository 
        shall--
                    ``(A) accept data prescribed by the Commission for 
                each security-based swap under subsection (b);
                    ``(B) confirm with both counterparties to the 
                security-based swap the accuracy of the data that was 
                submitted;
                    ``(C) maintain the data described in subparagraph 
                (A) in such form, in such manner, and for such period 
                as may be required by the Commission;
                    ``(D)(i) provide direct electronic access to the 
                Commission (or any designee of the Commission, 
                including another registered entity); and
                    ``(ii) provide the information described in 
                subparagraph (A) in such form and at such frequency as 
                the Commission may require to comply with the public 
                reporting requirements set forth in subsection (m);
                    ``(E) at the direction of the Commission, establish 
                automated systems for monitoring, screening, and 
                analyzing security-based swap data;
                    ``(F) maintain the privacy of any and all security-
                based swap transaction information that the security-
                based swap data repository receives from a security-
                based swap dealer, counterparty, or any other 
                registered entity; and
                    ``(G) on a confidential basis pursuant to section 
                24, upon request, and after notifying the Commission of 
                the request, make available all data obtained by the 
                security-based swap data repository, including 
                individual counterparty trade and position data, to--
                            ``(i) each appropriate prudential 
                        regulator;
                            ``(ii) the Financial Stability Oversight 
                        Council;
                            ``(iii) the Commodity Futures Trading 
                        Commission;
                            ``(iv) the Department of Justice; and
                            ``(v) any other person that the Commission 
                        determines to be appropriate, including--
                                    ``(I) foreign financial supervisors 
                                (including foreign futures 
                                authorities);
                                    ``(II) foreign central banks; and
                                    ``(III) foreign ministries.
                    ``(H) Confidentiality and indemnification 
                agreement.--Before the security-based swap data 
                repository may share information with any entity 
                described in subparagraph (G)--
                            ``(i) the security-based swap data 
                        repository shall receive a written agreement 
                        from each entity stating that the entity shall 
                        abide by the confidentiality requirements 
                        described in section 24 relating to the 
                        information on security-based swap transactions 
                        that is provided; and
                            ``(ii) each entity shall agree to indemnify 
                        the security-based swap data repository and the 
                        Commission for any expenses arising from 
                        litigation relating to the information provided 
                        under section 24.
            ``(6) Designation of chief compliance officer.--
                    ``(A) In general.--Each security-based swap data 
                repository shall designate an individual to serve as a 
                chief compliance officer.
                    ``(B) Duties.--The chief compliance officer shall--
                            ``(i) report directly to the board or to 
                        the senior officer of the security-based swap 
                        data repository;
                            ``(ii) review the compliance of the 
                        security-based swap data repository with 
                        respect to the core principles described in 
                        paragraph (7);
                            ``(iii) in consultation with the board of 
                        the security-based swap data repository, a body 
                        performing a function similar to the board of 
                        the security-based swap data repository, or the 
                        senior officer of the security-based swap data 
                        repository, resolve any conflicts of interest 
                        that may arise;
                            ``(iv) be responsible for administering 
                        each policy and procedure that is required to 
                        be established pursuant to this section;
                            ``(v) ensure compliance with this title 
                        (including regulations) relating to agreements, 
                        contracts, or transactions, including each rule 
                        prescribed by the Commission under this 
                        section;
                            ``(vi) establish procedures for the 
                        remediation of noncompliance issues identified 
                        by the chief compliance officer through any--
                                    ``(I) compliance office review;
                                    ``(II) look-back;
                                    ``(III) internal or external audit 
                                finding;
                                    ``(IV) self-reported error; or
                                    ``(V) validated complaint; and
                            ``(vii) establish and follow appropriate 
                        procedures for the handling, management 
                        response, remediation, retesting, and closing 
                        of noncompliance issues.
                    ``(C) Annual reports.--
                            ``(i) In general.--In accordance with rules 
                        prescribed by the Commission, the chief 
                        compliance officer shall annually prepare and 
                        sign a report that contains a description of--
                                    ``(I) the compliance of the 
                                security-based swap data repository of 
                                the chief compliance officer with 
                                respect to this title (including 
                                regulations); and
                                    ``(II) each policy and procedure of 
                                the security-based swap data repository 
                                of the chief compliance officer 
                                (including the code of ethics and 
                                conflict of interest policies of the 
                                security-based swap data repository).
                            ``(ii) Requirements.--A compliance report 
                        under clause (i) shall--
                                    ``(I) accompany each appropriate 
                                financial report of the security-based 
                                swap data repository that is required 
                                to be furnished to the Commission 
                                pursuant to this section; and
                                    ``(II) include a certification 
                                that, under penalty of law, the 
                                compliance report is accurate and 
                                complete.
            ``(7) Core principles applicable to security-based swap 
        data repositories.--
                    ``(A) Antitrust considerations.--Unless necessary 
                or appropriate to achieve the purposes of this title, 
                the swap data repository shall not--
                            ``(i) adopt any rule or take any action 
                        that results in any unreasonable restraint of 
                        trade; or
                            ``(ii) impose any material anticompetitive 
                        burden on the trading, clearing, or reporting 
                        of transactions.
                    ``(B) Governance arrangements.--Each security-based 
                swap data repository shall establish governance 
                arrangements that are transparent--
                            ``(i) to fulfill public interest 
                        requirements; and
                            ``(ii) to support the objectives of the 
                        Federal Government, owners, and participants.
                    ``(C) Conflicts of interest.--Each security-based 
                swap data repository shall--
                            ``(i) establish and enforce rules to 
                        minimize conflicts of interest in the decision-
                        making process of the security-based swap data 
                        repository; and
                            ``(ii) establish a process for resolving 
                        any conflicts of interest described in clause 
                        (i).
            ``(8) Required registration for security-based swap data 
        repositories.--Any person that is required to be registered as 
        a security-based swap data repository under this subsection 
        shall register with the Commission, regardless of whether that 
        person is also licensed under the Commodity Exchange Act as a 
        swap data repository.
            ``(9) Rules.--The Commission shall adopt rules governing 
        persons that are registered under this subsection.''.

SEC. 764. REGISTRATION AND REGULATION OF SECURITY-BASED SWAP DEALERS 
              AND MAJOR SECURITY-BASED SWAP PARTICIPANTS.

    The Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.) is 
amended by inserting after section 15E (15 U.S.C. 78o-7) the following:

``SEC. 15F. REGISTRATION AND REGULATION OF SECURITY-BASED SWAP DEALERS 
              AND MAJOR SECURITY-BASED SWAP PARTICIPANTS.

    ``(a) Registration.--
            ``(1) Security-based swap dealers.--It shall be unlawful 
        for any person to act as a security-based swap dealer unless 
        the person is registered as a security-based swap dealer with 
        the Commission.
            ``(2) Major security-based swap participants.--It shall be 
        unlawful for any person to act as a major security-based swap 
        participant unless the person is registered as a major 
        security-based swap participant with the Commission.
    ``(b) Requirements.--
            ``(1) In general.--A person shall register as a security-
        based swap dealer or major security-based swap participant by 
        filing a registration application with the Commission.
            ``(2) Contents.--
                    ``(A) In general.--The application shall be made in 
                such form and manner as prescribed by the Commission, 
                and shall contain such information, as the Commission 
                considers necessary concerning the business in which 
                the applicant is or will be engaged.
                    ``(B) Continual reporting.--A person that is 
                registered as a security-based swap dealer or major 
                security-based swap participant shall continue to 
                submit to the Commission reports that contain such 
                information pertaining to the business of the person as 
                the Commission may require.
            ``(3) Expiration.--Each registration under this section 
        shall expire at such time as the Commission may prescribe by 
        rule or regulation.
            ``(4) Rules.--Except as provided in subsections (c), (e), 
        and (f), the Commission may prescribe rules applicable to 
        security-based swap dealers and major security-based swap 
        participants, including rules that limit the activities of non-
        bank security-based swap dealers and non-bank major security-
        based swap participants.
            ``(5) Transition.--Not later than 1 year after the date of 
        enactment of the Wall Street Transparency and Accountability 
        Act of 2010, the Commission shall issue rules under this 
        section to provide for the registration of security-based swap 
        dealers and major security-based swap participants.
            ``(6) Statutory disqualification.--Except to the extent 
        otherwise specifically provided by rule, regulation, or order 
        of the Commission, it shall be unlawful for a security-based 
        swap dealer or a major security-based swap participant to 
        permit any person associated with a security-based swap dealer 
        or a major security-based swap participant who is subject to a 
        statutory disqualification to effect or be involved in 
        effecting security-based swaps on behalf of the security-based 
        swap dealer or major security-based swap participant, if the 
        security-based swap dealer or major security-based swap 
        participant knew, or in the exercise of reasonable care should 
        have known, of the statutory disqualification.
    ``(c) Dual Registration.--
            ``(1) Security-based swap dealer.--Any person that is 
        required to be registered as a security-based swap dealer under 
        this section shall register with the Commission, regardless of 
        whether the person also is registered with the Commodity 
        Futures Trading Commission as a swap dealer.
            ``(2) Major security-based swap participant.--Any person 
        that is required to be registered as a major security-based 
        swap participant under this section shall register with the 
        Commission, regardless of whether the person also is registered 
        with the Commodity Futures Trading Commission as a major swap 
        participant.
    ``(d) Rulemaking.--
            ``(1) In general.--The Commission shall adopt rules for 
        persons that are registered as security-based swap dealers or 
        major security-based swap participants under this section.
            ``(2) Exception for prudential requirements.--
                    ``(A) In general.--The Commission may not prescribe 
                rules imposing prudential requirements on security-
                based swap dealers or major security-based swap 
                participants that are depository institutions, as that 
                term is defined in section 3 of the Federal Deposit 
                Insurance Act (12 U.S.C. 1813).
                    ``(B) Applicability.--Subparagraph (A) does not 
                limit the authority of the Commission to prescribe 
                appropriate business conduct, reporting, and 
                recordkeeping requirements on security-based swap 
                dealers or major security-based swap participants that 
                are depository institutions to protect investors.
    ``(e) Capital and Margin Requirements.--
            ``(1) In general.--
                    ``(A) Security-based swap dealers and major 
                security-based swap participants that are depository 
                institutions.--Each registered security-based swap 
                dealer and major security-based swap participant that 
                is a depository institution, as that term is defined in 
                section 3 of the Federal Deposit Insurance Act (12 
                U.S.C. 1813), shall meet such minimum capital 
                requirements and minimum initial and variation margin 
                requirements as the appropriate Federal banking agency 
                shall by rule or regulation prescribe under paragraph 
                (2)(A) to help ensure the safety and soundness of the 
                security-based swap dealer or major security-based swap 
                participant.
                    ``(B) Security-based swap dealers and major 
                security-based swap participants that are not 
                depository institutions.--Each registered security-
                based swap dealer and major security-based swap 
                participant that is not a depository institution, as 
                that term is defined in section 3 of the Federal 
                Deposit Insurance Act (12 U.S.C. 1813), shall meet such 
                minimum capital requirements and minimum initial and 
                variation margin requirements as the Commission shall 
                by rule or regulation prescribe under paragraph (2)(B) 
                to help ensure the safety and soundness of the 
                security-based swap dealer or major security-based swap 
                participant.
            ``(2) Rules.--
                    ``(A) Security-based swap dealers and major 
                security-based swap participants that are depository 
                institutions.--The appropriate Federal banking 
                agencies, in consultation with the Commission and the 
                Commodity Futures Trading Commission, shall adopt rules 
                imposing capital and margin requirements under this 
                subsection for security-based swap dealers and major 
                security-based swap participants that are depository 
                institutions, as that term is defined in section 3 of 
                the Federal Deposit Insurance Act (12 U.S.C. 1813).
                    ``(B) Security-based swap dealers and major 
                security-based swap participants that are not 
                depository institutions.--The Commission shall adopt 
                rules imposing capital and margin requirements under 
                this subsection for security-based swap dealers and 
                major security-based swap participants that are not 
                depository institutions, as that term is defined in 
                section 3 of the Federal Deposit Insurance Act (12 
                U.S.C. 1813).
            ``(3) Capital.--
                    ``(A) Security-based swap dealers and major 
                security-based swap participants that are depository 
                institutions.--The capital requirements prescribed 
                under paragraph (2)(A) for security-based swap dealers 
                and major security-based swap participants that are 
                depository institutions shall contain--
                            ``(i) a capital requirement that is greater 
                        than zero for security-based swaps that are 
                        cleared by a clearing agency; and
                            ``(ii) to offset the greater risk to the 
                        security-based swap dealer or major security-
                        based swap participant and to the financial 
                        system arising from the use of security-based 
                        swaps that are not cleared, substantially 
                        higher capital requirements for security-based 
                        swaps that are not cleared by a clearing agency 
                        than for security-based swaps that are cleared.
                    ``(B) Security-based swap dealers and major 
                security-based swap participants that are not 
                depository institutions.--The capital requirements 
                prescribed under paragraph (2)(B) for security-based 
                swap dealers and major security-based swap participants 
                that are not depository institutions shall be as strict 
                as or stricter than the capital requirements prescribed 
                for security-based swap dealers and major security-
                based swap participants that are depository 
                institutions under paragraph (2)(A).
                    ``(C) Rule of construction.--
                            ``(i) In general.--Nothing in this section 
                        shall limit, or be construed to limit, the 
                        authority--
                                    ``(I) of the Commission to set 
                                financial responsibility rules for a 
                                broker or dealer registered pursuant to 
                                section 15(b) (except for section 
                                15(b)(11) thereof) in accordance with 
                                section 15(c)(3); or
                                    ``(II) of the Commodity Futures 
                                Trading Commission to set financial 
                                responsibility rules for a futures 
                                commission merchant or introducing 
                                broker registered pursuant to section 
                                4f(a) of the Commodity Exchange Act 
                                (except for section 4f(a)(3) thereof) 
                                in accordance with section 4f(b) of the 
                                Commodity Exchange Act.
                            ``(ii) Futures commission merchants and 
                        other dealers.--A futures commission merchant, 
                        introducing broker, broker, or dealer shall 
                        maintain sufficient capital to comply with the 
                        stricter of any applicable capital requirements 
                        to which such futures commission merchant, 
                        introducing broker, broker, or dealer is 
                        subject to under this title or the Commodity 
                        Exchange Act.
            ``(4) Margin.--
                    ``(A) Security-based swap dealers and major 
                security-based swap participants that are depository 
                institutions.--The appropriate Federal banking agency 
                for security-based swap dealers and major security-
                based swap participants that are depository 
                institutions shall impose both initial and variation 
                margin requirements in accordance with paragraph (2)(A) 
                on all security-based swaps that are not cleared by a 
                clearing agency.
                    ``(B) Security-based swap dealers and major 
                security-based swap participants that are not 
                depository institutions.--The Commission shall impose 
                both initial and variation margin requirements in 
                accordance with paragraph (2)(B) for security-based 
                swap dealers and major security-based swap participants 
                that are not depository institutions on all security-
                based swaps that are not cleared by a clearing agency. 
                Any such initial and variation margin requirements 
                shall be as strict as or stricter than the margin 
                requirements prescribed under paragraph (4)(A).
            ``(5) Margin requirements.--In prescribing margin 
        requirements under this subsection, the appropriate Federal 
        banking agency with respect to security-based swap dealers and 
        major security-based swap participants that are depository 
        institutions, and the Commission with respect to security-based 
        swap dealers and major security-based swap participants that 
        are not depository institutions may permit the use of noncash 
        collateral, as the agency or the Commission determines to be 
        consistent with--
                    ``(A) preserving the financial integrity of markets 
                trading security-based swaps; and
                    ``(B) preserving the stability of the United States 
                financial system.
            ``(6) Comparability of capital and margin requirements.--
                    ``(A) In general.--The appropriate Federal banking 
                agencies, the Commission, and the Securities and 
                Exchange Commission shall periodically (but not less 
                frequently than annually) consult on minimum capital 
                requirements and minimum initial and variation margin 
                requirements.
                    ``(B) Comparability.--The entities described in 
                subparagraph (A) shall, to the maximum extent 
                practicable, establish and maintain comparable minimum 
                capital requirements and minimum initial and variation 
                margin requirements, including the use of noncash 
                collateral, for--
                            ``(i) security-based swap dealers; and
                            ``(ii) major security-based swap 
                        participants.
            ``(7) Requested margin.--If any party to a security-based 
        swap that is exempt from the margin requirements of paragraph 
        (4)(A) or paragraph (4)(B) requests that such security-based 
        swap be margined, then--
                    ``(A) the exemption shall not apply; and
                    ``(B) the counterparty to such security-based swap 
                shall provide the requested margin.
            ``(8) Applicability with respect to counterparties.--
        Paragraphs (4) and (5) shall not apply to initial and variation 
        margin for security-based swaps in which 1 of the 
        counterparties is not--
                    ``(A) a security-based swap dealer;
                    ``(B) a major security-based swap participant; or
                    ``(C) a financial entity as described in section 
                3C(a)(10)(A)(ii), and such counterparty is eligible for 
                and utilizing the commercial end user clearing 
                exemption under section 3C(a)(10).
    ``(f) Reporting and Recordkeeping.--
            ``(1) In general.--Each registered security-based swap 
        dealer and major security-based swap participant--
                    ``(A) shall make such reports as are required by 
                the Commission, by rule or regulation, regarding the 
                transactions and positions and financial condition of 
                the registered security-based swap dealer or major 
                security-based swap participant;
                    ``(B)(i) for which there is a prudential regulator, 
                shall keep books and records of all activities related 
                to the business as a security-based swap dealer or 
                major security-based swap participant in such form and 
                manner and for such period as may be prescribed by the 
                Commission by rule or regulation; and
                    ``(ii) for which there is no prudential regulator, 
                shall keep books and records in such form and manner 
                and for such period as may be prescribed by the 
                Commission by rule or regulation; and
                    ``(C) shall keep books and records described in 
                subparagraph (B) open to inspection and examination by 
                any representative of the Commission.
            ``(2) Rules.--The Commission shall adopt rules governing 
        reporting and recordkeeping for security-based swap dealers and 
        major security-based swap participants.
    ``(g) Daily Trading Records.--
            ``(1) In general.--Each registered security-based swap 
        dealer and major security-based swap participant shall maintain 
        daily trading records of the security-based swaps of the 
        registered security-based swap dealer and major security-based 
        swap participant and all related records (including related 
        cash or forward transactions) and recorded communications, 
        including electronic mail, instant messages, and recordings of 
        telephone calls, for such period as may be required by the 
        Commission by rule or regulation.
            ``(2) Information requirements.--The daily trading records 
        shall include such information as the Commission shall require 
        by rule or regulation.
            ``(3) Customer records.--Each registered security-based 
        swap dealer and major security-based swap participant shall 
        maintain daily trading records for each customer or 
        counterparty in a manner and form that is identifiable with 
        each security-based swap transaction.
            ``(4) Audit trail.--Each registered security-based swap 
        dealer and major security-based swap participant shall maintain 
        a complete audit trail for conducting comprehensive and 
        accurate trade reconstructions.
            ``(5) Rules.--The Commission shall adopt rules governing 
        daily trading records for security-based swap dealers and major 
        security-based swap participants.
    ``(h) Business Conduct Standards.--
            ``(1) In general.--Each registered security-based swap 
        dealer and major security-based swap participant shall conform 
        with such business conduct standards as may be prescribed by 
        the Commission, by rule or regulation, that relate to--
                    ``(A) fraud, manipulation, and other abusive 
                practices involving security-based swaps (including 
                security-based swaps that are offered but not entered 
                into);
                    ``(B) diligent supervision of the business of the 
                registered security-based swap dealer and major 
                security-based swap participant;
                    ``(C) adherence to all applicable position limits; 
                and
                    ``(D) such other matters as the Commission 
                determines to be appropriate.
            ``(2) Special rule; fiduciary duties to certain entities.--
                    ``(A) Governmental entities.--A security-based swap 
                dealer that provides advice regarding, or offers to 
                enter into, or enters into a security-based swap with a 
                State, State agency, city, county, municipality, or 
                other political subdivision of a State, or a Federal 
                agency shall have a fiduciary duty to the State, State 
                agency, city, county, municipality, or other political 
                subdivision of the State, or the Federal agency, as 
                appropriate.
                    ``(B) Pension plans; endowments; retirement 
                plans.--A security-based swap dealer that provides 
                advice regarding, or offers to enter into, or enters 
                into a security-based swap with a pension plan, 
                endowment, or retirement plan shall have a fiduciary 
                duty to the pension plan, endowment, or retirement 
                plan, as appropriate.
            ``(3) Business conduct requirements.--Business conduct 
        requirements adopted by the Commission under this subsection 
        shall--
                    ``(A) establish the standard of care for a 
                security-based swap dealer or major security-based swap 
                participant to verify that any counterparty meets the 
                eligibility standards for an eligible contract 
                participant;
                    ``(B) require disclosure by the security-based swap 
                dealer or major security-based swap participant to any 
                counterparty to the transaction (other than a security-
                based swap dealer or a major security-based swap 
                participant) of--
                            ``(i) information about the material risks 
                        and characteristics of the security-based swap;
                            ``(ii) the source and amount of any fees or 
                        other material remuneration that the security-
                        based swap dealer or major security-based swap 
                        participant would directly or indirectly expect 
                        to receive in connection with the security-
                        based swap;
                            ``(iii) any other material incentives or 
                        conflicts of interest that the security-based 
                        swap dealer or major security-based swap 
                        participant may have in connection with the 
                        security-based swap; and
                            ``(iv)(I) for cleared security-based swaps, 
                        upon the request of the counterparty, the daily 
                        mark from the appropriate clearing agency; and
                            ``(II) for uncleared security-based swaps, 
                        the daily mark of the security-based swap 
                        dealer or the major security-based swap 
                        participant;
                    ``(C) establish a standard of conduct for a 
                security-based swap dealer or major security-based swap 
                participant to communicate in a fair and balanced 
                manner based on principles of fair dealing and good 
                faith;
                    ``(D) establish a standard of conduct for a 
                security-based swap dealer or major security-based swap 
                participant, with respect to a counterparty that is an 
                eligible contract participant within the meaning of 
                subclause (I) or (II) of clause (vii) of section 1a(18) 
                of the Commodity Exchange Act, to have a reasonable 
                basis to believe that the counterparty has an 
                independent representative that--
                            ``(i) has sufficient knowledge to evaluate 
                        the transaction and risks;
                            ``(ii) is not subject to a statutory 
                        disqualification;
                            ``(iii) is independent of the security-
                        based swap dealer or major security-based swap 
                        participant;
                            ``(iv) undertakes a duty to act in the best 
                        interests of the counterparty it represents;
                            ``(v) makes appropriate disclosures; and
                            ``(vi) will provide written representations 
                        to the eligible contract participant regarding 
                        fair pricing and the appropriateness of the 
                        transaction; and
                    ``(E) establish such other standards and 
                requirements as the Commission may determine are 
                appropriate in the public interest, for the protection 
                of investors, or otherwise in furtherance of the 
                purposes of this title.
            ``(4) Rules.--The Commission shall prescribe rules under 
        this subsection governing business conduct standards for 
        security-based swap dealers and major security-based swap 
        participants.
    ``(i) Documentation and Back Office Standards.--
            ``(1) In general.--Each registered security-based swap 
        dealer and major security-based swap participant shall conform 
        with such standards as may be prescribed by the Commission, by 
        rule or regulation, that relate to timely and accurate 
        confirmation, processing, netting, documentation, and valuation 
        of all security-based swaps.
            ``(2) Rules.--The Commission shall adopt rules governing 
        documentation and back office standards for security-based swap 
        dealers and major security-based swap participants.
    ``(j) Duties.--Each registered security-based swap dealer and major 
security-based swap participant shall, at all times, comply with the 
following requirements:
            ``(1) Monitoring of trading.--The security-based swap 
        dealer or major security-based swap participant shall monitor 
        its trading in security-based swaps to prevent violations of 
        applicable position limits.
            ``(2) Risk management procedures.--The security-based swap 
        dealer or major security-based swap participant shall establish 
        robust and professional risk management systems adequate for 
        managing the day-to-day business of the security-based swap 
        dealer or major security-based swap participant.
            ``(3) Disclosure of general information.--The security-
        based swap dealer or major security-based swap participant 
        shall disclose to the Commission and to the prudential 
        regulator for the security-based swap dealer or major security-
        based swap participant, as applicable, information concerning--
                    ``(A) terms and conditions of its security-based 
                swaps;
                    ``(B) security-based swap trading operations, 
                mechanisms, and practices;
                    ``(C) financial integrity protections relating to 
                security-based swaps; and
                    ``(D) other information relevant to its trading in 
                security-based swaps.
            ``(4) Ability to obtain information.--The security-based 
        swap dealer or major security-based swap participant shall--
                    ``(A) establish and enforce internal systems and 
                procedures to obtain any necessary information to 
                perform any of the functions described in this section; 
                and
                    ``(B) provide the information to the Commission and 
                to the prudential regulator for the security-based swap 
                dealer or major security-based swap participant, as 
                applicable, on request.
            ``(5) Conflicts of interest.--The security-based swap 
        dealer and major security-based swap participant shall 
        implement conflict-of-interest systems and procedures that--
                    ``(A) establish structural and institutional 
                safeguards to ensure that the activities of any person 
                within the firm relating to research or analysis of the 
                price or market for any security-based swap or acting 
                in a role of providing clearing activities or making 
                determinations as to accepting clearing customers are 
                separated by appropriate informational partitions 
                within the firm from the review, pressure, or oversight 
                of persons whose involvement in pricing, trading, or 
                clearing activities might potentially bias their 
                judgment or supervision and contravene the core 
                principles of open access and the business conduct 
                standards described in this title; and
                    ``(B) address such other issues as the Commission 
                determines to be appropriate.
            ``(6) Antitrust considerations.--Unless necessary or 
        appropriate to achieve the purposes of this title, the 
        security-based swap dealer or major security-based swap 
        participant shall not--
                    ``(A) adopt any process or take any action that 
                results in any unreasonable restraint of trade; or
                    ``(B) impose any material anticompetitive burden on 
                trading or clearing.
    ``(k) Designation of Chief Compliance Officer.--
            ``(1) In general.--Each security-based swap dealer and 
        major security-based swap participant shall designate an 
        individual to serve as a chief compliance officer.
            ``(2) Duties.--The chief compliance officer shall--
                    ``(A) report directly to the board or to the senior 
                officer of the security-based swap dealer or major 
                security-based swap participant;
                    ``(B) review the compliance of the security-based 
                swap dealer or major security-based swap participant 
                with respect to the security-based swap dealer and 
                major security-based swap participant requirements 
                described in this section;
                    ``(C) in consultation with the board of directors, 
                a body performing a function similar to the board, or 
                the senior officer of the organization, resolve any 
                conflicts of interest that may arise;
                    ``(D) be responsible for administering each policy 
                and procedure that is required to be established 
                pursuant to this section;
                    ``(E) ensure compliance with this title (including 
                regulations) relating to security-based swaps, 
                including each rule prescribed by the Commission under 
                this section;
                    ``(F) establish procedures for the remediation of 
                noncompliance issues identified by the chief compliance 
                officer through any--
                            ``(i) compliance office review;
                            ``(ii) look-back;
                            ``(iii) internal or external audit finding;
                            ``(iv) self-reported error; or
                            ``(v) validated complaint; and
                    ``(G) establish and follow appropriate procedures 
                for the handling, management response, remediation, 
                retesting, and closing of noncompliance issues.
            ``(3) Annual reports.--
                    ``(A) In general.--In accordance with rules 
                prescribed by the Commission, the chief compliance 
                officer shall annually prepare and sign a report that 
                contains a description of--
                            ``(i) the compliance of the security-based 
                        swap dealer or major swap participant with 
                        respect to this title (including regulations); 
                        and
                            ``(ii) each policy and procedure of the 
                        security-based swap dealer or major security-
                        based swap participant of the chief compliance 
                        officer (including the code of ethics and 
                        conflict of interest policies).
                    ``(B) Requirements.--A compliance report under 
                subparagraph (A) shall--
                            ``(i) accompany each appropriate financial 
                        report of the security-based swap dealer or 
                        major security-based swap participant that is 
                        required to be furnished to the Commission 
                        pursuant to this section; and
                            ``(ii) include a certification that, under 
                        penalty of law, the compliance report is 
                        accurate and complete.
    ``(l) Enforcement and Administrative Proceeding Authority.--
            ``(1) Primary enforcement authority.--
                    ``(A) Securities and exchange commission.--Except 
                as provided in subparagraph (B), the Commission shall 
                have primary authority to enforce subtitle B, and the 
                amendments made by subtitle B of the Wall Street 
                Transparency and Accountability Act of 2010, with 
                respect to any person.
                    ``(B) Appropriate federal banking agencies.--The 
                appropriate Federal banking agency for security-based 
                swap dealers or major security-based swap participants 
                that are depository institutions, as that term is 
                defined under section 3 of the Federal Deposit 
                Insurance Act (12 U.S.C. 1813), shall have exclusive 
                authority to enforce the provisions of subsection (e) 
                and other prudential requirements of this title, with 
                respect to depository institutions that are security-
                based swap dealers or major security-based swap 
                participants.
                    ``(C) Referral.--
                            ``(i) Violations of nonprudential 
                        requirements.--If the appropriate Federal 
                        banking agency for security-based swap dealers 
                        or major security-based swap participants that 
                        are depository institutions has cause to 
                        believe that such security-based swap dealer or 
                        major security-based swap participant may have 
                        engaged in conduct that constitutes a violation 
                        of the nonprudential requirements of this 
                        section or rules adopted by the Commission 
                        thereunder, the agency may recommend in writing 
                        to the Commission that the Commission initiate 
                        an enforcement proceeding as authorized under 
                        this title. The recommendation shall be 
                        accompanied by a written explanation of the 
                        concerns giving rise to the recommendation.
                            ``(ii) Violations of prudential 
                        requirements.--If the Commission has cause to 
                        believe that a securities-based swap dealer or 
                        major securities-based swap participant that 
                        has a prudential regulator may have engaged in 
                        conduct that constitute a violation of the 
                        prudential requirements of subsection (e) or 
                        rules adopted thereunder, the Commission may 
                        recommend in writing to the prudential 
                        regulator that the prudential regulator 
                        initiate an enforcement proceeding as 
                        authorized under this title. The recommendation 
                        shall be accompanied by a written explanation 
                        of the concerns giving rise to the 
                        recommendation.
            ``(2) Censure, denial, suspension; notice and hearing.--The 
        Commission, by order, shall censure, place limitations on the 
        activities, functions, or operations of, or revoke the 
        registration of any security-based swap dealer or major 
        security-based swap participant that has registered with the 
        Commission pursuant to subsection (b) if the Commission finds, 
        on the record after notice and opportunity for hearing, that 
        such censure, placing of limitations, or revocation is in the 
        public interest and that such security-based swap dealer or 
        major security-based swap participant, or any person associated 
        with such security-based swap dealer or major security-based 
        swap participant effecting or involved in effecting 
        transactions in security-based swaps on behalf of such 
        security-based swap dealer or major security-based swap 
        participant, whether prior or subsequent to becoming so 
        associated--
                    ``(A) has committed or omitted any act, or is 
                subject to an order or finding, enumerated in 
                subparagraph (A), (D), or (E) of paragraph (4) of 
                section 15(b);
                    ``(B) has been convicted of any offense specified 
                in subparagraph (B) of such paragraph (4) within 10 
                years of the commencement of the proceedings under this 
                subsection;
                    ``(C) is enjoined from any action, conduct, or 
                practice specified in subparagraph (C) of such 
                paragraph (4);
                    ``(D) is subject to an order or a final order 
                specified in subparagraph (F) or (H), respectively, of 
                such paragraph (4); or
                    ``(E) has been found by a foreign financial 
                regulatory authority to have committed or omitted any 
                act, or violated any foreign statute or regulation, 
                enumerated in subparagraph (G) of such paragraph (4).
            ``(3) Associated persons.--With respect to any person who 
        is associated, who is seeking to become associated, or, at the 
        time of the alleged misconduct, who was associated or was 
        seeking to become associated with a security-based swap dealer 
        or major security-based swap participant for the purpose of 
        effecting or being involved in effecting security-based swaps 
        on behalf of such security-based swap dealer or major security-
        based swap participant, the Commission, by order, shall 
        censure, place limitations on the activities or functions of 
        such person, or suspend for a period not exceeding 12 months, 
        or bar such person from being associated with a security-based 
        swap dealer or major security-based swap participant, if the 
        Commission finds, on the record after notice and opportunity 
        for a hearing, that such censure, placing of limitations, 
        suspension, or bar is in the public interest and that such 
        person--
                    ``(A) has committed or omitted any act, or is 
                subject to an order or finding, enumerated in 
                subparagraph (A), (D), or (E) of paragraph (4) of 
                section 15(b);
                    ``(B) has been convicted of any offense specified 
                in subparagraph (B) of such paragraph (4) within 10 
                years of the commencement of the proceedings under this 
                subsection;
                    ``(C) is enjoined from any action, conduct, or 
                practice specified in subparagraph (C) of such 
                paragraph (4);
                    ``(D) is subject to an order or a final order 
                specified in subparagraph (F) or (H), respectively, of 
                such paragraph (4); or
                    ``(E) has been found by a foreign financial 
                regulatory authority to have committed or omitted any 
                act, or violated any foreign statute or regulation, 
                enumerated in subparagraph (G) of such paragraph (4).
            ``(4) Unlawful conduct.--It shall be unlawful--
                    ``(A) for any person as to whom an order under 
                paragraph (3) is in effect, without the consent of the 
                Commission, willfully to become, or to be, associated 
                with a security-based swap dealer or major security-
                based swap participant in contravention of such order; 
                or
                    ``(B) for any security-based swap dealer or major 
                security-based swap participant to permit such a 
                person, without the consent of the Commission, to 
                become or remain a person associated with the security-
                based swap dealer or major security-based swap 
                participant in contravention of such order, if such 
                security-based swap dealer or major security-based swap 
                participant knew, or in the exercise of reasonable care 
                should have known, of such order.''.

SEC. 765. RULEMAKING ON CONFLICT OF INTEREST.

    (a) In General.--Not later than 180 days after the date of 
enactment of the Wall Street Transparency and Accountability Act of 
2010, the Securities and Exchange Commission shall determine whether to 
adopt rules to establish limits on the control of any clearing agency 
that clears security-based swaps, or on the control of any security-
based swap execution facility or national securities exchange that 
posts or makes available for trading security-based swaps, by a bank 
holding company (as defined in section 2 of the Bank Holding Company 
Act of 1956 (12 U.S.C. 1841)) with total consolidated assets of 
$50,000,000,000 or more, a nonbank financial company (as defined in 
section 102) supervised by the Board of Governors of the Federal 
Reserve System, affiliate of such a bank holding company or nonbank 
financial company, a security-based swap dealer, major security-based 
swap participant, or person associated with a security-based swap 
dealer or major security-based swap participant.
    (b) Purposes.--The Commission shall adopt rules if the Commission 
determines, after the review described in subsection (a), that such 
rules are necessary or appropriate to improve the governance of, or to 
mitigate systemic risk, promote competition, or mitigate conflicts of 
interest in connection with a security-based swap dealer or major 
security-based swap participant's conduct of business with, a clearing 
agency, national securities exchange, or security-based swap execution 
facility that clears, posts, or makes available for trading security-
based swaps and in which such security-based swap dealer or major 
security-based swap participant has a material debt or equity 
investment.

SEC. 766. REPORTING AND RECORDKEEPING.

    (a) In General.--The Securities Exchange Act of 1934 (15 U.S.C. 78a 
et seq.) is amended by inserting after section 13 the following:

``SEC. 13A. REPORTING AND RECORDKEEPING FOR CERTAIN SECURITY-BASED 
              SWAPS.

    ``(a) Required Reporting of Security-based Swaps Not Accepted by 
Any Clearing Agency or Derivatives Clearing Organization.--
            ``(1) In general.--Each security-based swap that is not 
        accepted for clearing by any clearing agency or derivatives 
        clearing organization shall be reported to--
                    ``(A) a security-based swap data repository 
                described in section 10B(n); or
                    ``(B) in the case in which there is no security-
                based swap data repository that would accept the 
                security-based swap, to the Commission pursuant to this 
                section within such time period as the Commission may 
                by rule or regulation prescribe.
            ``(2) Transition rule for preenactment security-based 
        swaps.--
                    ``(A) Security-based swaps entered into before the 
                date of enactment of the wall street transparency and 
                accountability act of 2010.--Each security-based swap 
                entered into before the date of enactment of the Wall 
                Street Transparency and Accountability Act of 2010, the 
                terms of which have not expired as of the date of 
                enactment of that Act, shall be reported to a 
                registered security-based swap data repository or the 
                Commission by a date that is not later than--
                            ``(i) 30 days after issuance of the interim 
                        final rule; or
                            ``(ii) such other period as the Commission 
                        determines to be appropriate.
                    ``(B) Commission rulemaking.--The Commission shall 
                promulgate an interim final rule within 90 days of the 
                date of enactment of this section providing for the 
                reporting of each security-based swap entered into 
                before the date of enactment as referenced in 
                subparagraph (A).
                    ``(C) Effective date.--The reporting provisions 
                described in this section shall be effective upon the 
                date of the enactment of this section.
            ``(3) Reporting obligations.--
                    ``(A) Security-based swaps in which only 1 
                counterparty is a security-based swap dealer or major 
                security-based swap participant.--With respect to a 
                security-based swap in which only 1 counterparty is a 
                security-based swap dealer or major security-based swap 
                participant, the security-based swap dealer or major 
                security-based swap participant shall report the 
                security-based swap as required under paragraphs (1) 
                and (2).
                    ``(B) Security-based swaps in which 1 counterparty 
                is a security-based swap dealer and the other a major 
                security-based swap participant.--With respect to a 
                security-based swap in which 1 counterparty is a 
                security-based swap dealer and the other a major 
                security-based swap participant, the security-based 
                swap dealer shall report the security-based swap as 
                required under paragraphs (1) and (2).
                    ``(C) Other security-based swaps.--With respect to 
                any other security-based swap not described in 
                subparagraph (A) or (B), the counterparties to the 
                security-based swap shall select a counterparty to 
                report the security-based swap as required under 
                paragraphs (1) and (2).
    ``(b) Duties of Certain Individuals.--Any individual or entity that 
enters into a security-based swap shall meet each requirement described 
in subsection (c) if the individual or entity did not--
            ``(1) clear the security-based swap in accordance with 
        section 3C(a)(1); or
            ``(2) have the data regarding the security-based swap 
        accepted by a security-based swap data repository in accordance 
        with rules (including timeframes) adopted by the Commission 
        under this title.
    ``(c) Requirements.--An individual or entity described in 
subsection (b) shall--
            ``(1) upon written request from the Commission, provide 
        reports regarding the security-based swaps held by the 
        individual or entity to the Commission in such form and in such 
        manner as the Commission may request; and
            ``(2) maintain books and records pertaining to the 
        security-based swaps held by the individual or entity in such 
        form, in such manner, and for such period as the Commission may 
        require, which shall be open to inspection by--
                    ``(A) any representative of the Commission;
                    ``(B) an appropriate prudential regulator;
                    ``(C) the Commodity Futures Trading Commission;
                    ``(D) the Financial Stability Oversight Council; 
                and
                    ``(E) the Department of Justice.
    ``(d) Identical Data.--In prescribing rules under this section, the 
Commission shall require individuals and entities described in 
subsection (b) to submit to the Commission a report that contains data 
that is not less comprehensive than the data required to be collected 
by security-based swap data repositories under this title.''.
    (b) Beneficial Ownership Reporting.--Section 13 of the Securities 
Exchange Act of 1934 (15 U.S.C. 78m) is amended--
            (1) in subsection (d)(1), by inserting ``or otherwise 
        becomes or is deemed to become a beneficial owner of any of the 
        foregoing upon the purchase or sale of a security-based swap 
        that the Commission may define by rule, and'' after ``Alaska 
        Native Claims Settlement Act,''; and
            (2) in subsection (g)(1), by inserting ``or otherwise 
        becomes or is deemed to become a beneficial owner of any 
        security of a class described in subsection (d)(1) upon the 
        purchase or sale of a security-based swap that the Commission 
        may define by rule'' after ``subsection (d)(1) of this 
        section''.
    (c) Reports by Institutional Investment Managers.--Section 13(f)(1) 
of the Securities Exchange Act of 1934 (15 U.S.C. 78m(f)(1)) is amended 
by inserting ``or otherwise becomes or is deemed to become a beneficial 
owner of any security of a class described in subsection (d)(1) upon 
the purchase or sale of a security-based swap that the Commission may 
define by rule,'' after ``subsection (d)(1) of this section''.
    (d) Administrative Proceeding Authority.--Section 15(b)(4) of the 
Securities Exchange Act of 1934 (15 U.S.C. 78o(b)(4)) is amended--
            (1) in subparagraph (C), by inserting ``security-based swap 
        dealer, major security-based swap participant,'' after 
        ``government securities dealer,''; and
            (2) in subparagraph (F), by striking ``broker or dealer'' 
        and inserting ``broker, dealer, security-based swap dealer, or 
        a major security-based swap participant''.
    (e) Security-based Swap Beneficial Ownership.--Section 13 of the 
Securities Exchange Act of 1934 (15 U.S.C. 78m) is amended by adding at 
the end the following:
    ``(o) Beneficial Ownership.--For purposes of this section and 
section 16, a person shall be deemed to acquire beneficial ownership of 
an equity security based on the purchase or sale of a security-based 
swap, only to the extent that the Commission, by rule, determines after 
consultation with the prudential regulators and the Secretary of the 
Treasury, that the purchase or sale of the security-based swap, or 
class of security-based swap, provides incidents of ownership 
comparable to direct ownership of the equity security, and that it is 
necessary to achieve the purposes of this section that the purchase or 
sale of the security-based swaps, or class of security-based swap, be 
deemed the acquisition of beneficial ownership of the equity 
security.''.

SEC. 767. STATE GAMING AND BUCKET SHOP LAWS.

    Section 28(a) of the Securities Exchange Act of 1934 (15 U.S.C. 
78bb(a)) is amended to read as follows:
    ``(a) Limitation on Judgments.--
            ``(1) In general.--No person permitted to maintain a suit 
        for damages under the provisions of this title shall recover, 
        through satisfaction of judgment in 1 or more actions, a total 
        amount in excess of the actual damages to that person on 
        account of the act complained of. Except as otherwise 
        specifically provided in this title, nothing in this title 
        shall affect the jurisdiction of the securities commission (or 
        any agency or officer performing like functions) of any State 
        over any security or any person insofar as it does not conflict 
        with the provisions of this title or the rules and regulations 
        under this title.
            ``(2) Rule of construction.--Except as provided in 
        subsection (f), the rights and remedies provided by this title 
        shall be in addition to any and all other rights and remedies 
        that may exist at law or in equity.
            ``(3) State bucket shop laws.--No State law which prohibits 
        or regulates the making or promoting of wagering or gaming 
        contracts, or the operation of `bucket shops' or other similar 
        or related activities, shall invalidate--
                    ``(A) any put, call, straddle, option, privilege, 
                or other security subject to this title (except any 
                security that has a pari-mutuel payout or otherwise is 
                determined by the Commission, acting by rule, 
                regulation, or order, to be appropriately subject to 
                such laws), or apply to any activity which is 
                incidental or related to the offer, purchase, sale, 
                exercise, settlement, or closeout of any such security;
                    ``(B) any security-based swap between eligible 
                contract participants; or
                    ``(C) any security-based swap effected on a 
                national securities exchange registered pursuant to 
                section 6(b).
            ``(4) Other state provisions.--No provision of State law 
        regarding the offer, sale, or distribution of securities shall 
        apply to any transaction in a security-based swap or a security 
        futures product, except that this paragraph may not be 
        construed as limiting any State antifraud law of general 
        applicability. A security-based swap may not be regulated as an 
        insurance contract under any provision of State law.''.

SEC. 768. AMENDMENTS TO THE SECURITIES ACT OF 1933; TREATMENT OF 
              SECURITY-BASED SWAPS.

    (a) Definitions.--Section 2(a) of the Securities Act of 1933 (15 
U.S.C. 77b(a)) is amended--
            (1) in paragraph (1), by inserting ``security-based swap,'' 
        after ``security future,'';
            (2) in paragraph (3), by adding at the end the following: 
        ``Any offer or sale of a security-based swap by or on behalf of 
        the issuer of the securities upon which such security-based 
        swap is based or is referenced, an affiliate of the issuer, or 
        an underwriter, shall constitute a contract for sale of, sale 
        of, offer for sale, or offer to sell such securities.''; and
            (3) by adding at the end the following:
            ``(17) The terms `swap' and `security-based swap' have the 
        same meanings as in section 1a of the Commodity Exchange Act (7 
        U.S.C. 1a).
            ``(18) The terms `purchase' or `sale' of a security-based 
        swap shall be deemed to mean the execution, termination (prior 
        to its scheduled maturity date), assignment, exchange, or 
        similar transfer or conveyance of, or extinguishing of rights 
        or obligations under, a security-based swap, as the context may 
        require.''.
    (b) Registration of Security-based Swaps.--Section 5 of the 
Securities Act of 1933 (15 U.S.C. 77e) is amended by adding at the end 
the following:
    ``(d) Notwithstanding the provisions of section 3 or 4, unless a 
registration statement meeting the requirements of section 10(a) is in 
effect as to a security-based swap, it shall be unlawful for any 
person, directly or indirectly, to make use of any means or instruments 
of transportation or communication in interstate commerce or of the 
mails to offer to sell, offer to buy or purchase or sell a security-
based swap to any person who is not an eligible contract participant as 
defined in section 1a(18) of the Commodity Exchange Act (7 U.S.C. 
1a(18)).''.

SEC. 769. DEFINITIONS UNDER THE INVESTMENT COMPANY ACT OF 1940.

    Section 2(a) of the Investment Company Act of 1940 (15 U.S.C. 80a-
2) is amended by adding at the end the following:
            ``(54) The terms `commodity pool', `commodity pool 
        operator', `commodity trading advisor', `major swap 
        participant', `swap', `swap dealer', and `swap execution 
        facility' have the same meanings as in section 1a of the 
        Commodity Exchange Act (7 U.S.C. 1a).''.

SEC. 770. DEFINITIONS UNDER THE INVESTMENT ADVISORS ACT OF 1940.

    Section 202(a) of the Investment Advisers Act of 1940 (15 U.S.C. 
80b-2) is amended by adding at the end the following:
            ``(29) The terms `commodity pool', `commodity pool 
        operator', `commodity trading advisor', `major swap 
        participant', `swap', `swap dealer', and `swap execution 
        facility' have the same meanings as in section 1a of the 
        Commodity Exchange Act (7 U.S.C. 1a).''.

SEC. 771. OTHER AUTHORITY.

    Unless otherwise provided by its terms, this subtitle does not 
divest any appropriate Federal banking agency, the Securities and 
Exchange Commission, the Commodity Futures Trading Commission, or any 
other Federal or State agency, of any authority derived from any other 
provision of applicable law.

SEC. 772. JURISDICTION.

    (a) In General.--Section 36 of the Securities Exchange Act of 1934 
(15 U.S.C. 78mm) is amended by adding at the end the following:
    ``(c) Derivatives.--The Commission shall not grant exemptions from 
the security-based swap provisions of the Wall Street Transparency and 
Accountability Act of 2010 or the amendments made by that Act, except 
as expressly authorized under the provisions of that Act.''.
    (b) Rule of Construction.--Section 30 of the Securities Exchange 
Act of 1934 (15 U.S.C. 78dd) is amended by adding at the end the 
following:
    ``(c) Rule of Construction.--No provision of this title that was 
added by the Wall Street Transparency and Accountability Act of 2010, 
or any rule or regulation thereunder, shall apply to any person insofar 
as such person transacts a business in security-based swaps without the 
jurisdiction of the United States, unless such person transacts such 
business in contravention of such rules and regulations as the 
Commission may prescribe as necessary or appropriate to prevent the 
evasion of any provision of this title that was added by the Wall 
Street Transparency and Accountability Act of 2010. This subsection 
shall not be construed to limit the jurisdiction of the Commission 
under any provision of this title, as in effect prior to the date of 
enactment of the Wall Street Transparency and Accountability Act of 
2010.''.

SEC. 773. EFFECTIVE DATE.

    Unless otherwise specifically provided in this subtitle, this 
subtitle, the provisions of this subtitle, and the amendments made by 
this subtitle shall become effective 180 days after the date of 
enactment of this Act.

       TITLE VIII--PAYMENT, CLEARING, AND SETTLEMENT SUPERVISION

SEC. 801. SHORT TITLE.

    This title may be cited as the ``Payment, Clearing, and Settlement 
Supervision Act of 2010''.

SEC. 802. FINDINGS AND PURPOSES.

    (a) Findings.--Congress finds the following:
            (1) The proper functioning of the financial markets is 
        dependent upon safe and efficient arrangements for the clearing 
        and settlement of payment, securities, and other financial 
        transactions.
            (2) Financial market utilities that conduct or support 
        multilateral payment, clearing, or settlement activities may 
        reduce risks for their participants and the broader financial 
        system, but such utilities may also concentrate and create new 
        risks and thus must be well designed and operated in a safe and 
        sound manner.
            (3) Payment, clearing, and settlement activities conducted 
        by financial institutions also present important risks to the 
        participating financial institutions and to the financial 
        system.
            (4) Enhancements to the regulation and supervision of 
        systemically important financial market utilities and the 
        conduct of systemically important payment, clearing, and 
        settlement activities by financial institutions are necessary--
                    (A) to provide consistency;
                    (B) to promote robust risk management and safety 
                and soundness;
                    (C) to reduce systemic risks; and
                    (D) to support the stability of the broader 
                financial system.
    (b) Purpose.--The purpose of this title is to mitigate systemic 
risk in the financial system and promote financial stability by--
            (1) authorizing the Board of Governors to prescribe uniform 
        standards for the--
                    (A) management of risks by systemically important 
                financial market utilities; and
                    (B) conduct of systemically important payment, 
                clearing, and settlement activities by financial 
                institutions;
            (2) providing the Board of Governors an enhanced role in 
        the supervision of risk management standards for systemically 
        important financial market utilities;
            (3) strengthening the liquidity of systemically important 
        financial market utilities; and
            (4) providing the Board of Governors an enhanced role in 
        the supervision of risk management standards for systemically 
        important payment, clearing, and settlement activities by 
        financial institutions.

SEC. 803. DEFINITIONS.

    In this title, the following definitions shall apply:
            (1) Appropriate financial regulator.--The term 
        ``appropriate financial regulator'' means--
                    (A) the primary financial regulatory agency, as 
                defined in section 2 of this Act;
                    (B) the National Credit Union Administration, with 
                respect to any insured credit union under the Federal 
                Credit Union Act (12 U.S.C. 1751 et seq.); and
                    (C) the Board of Governors, with respect to 
                organizations operating under section 25A of the 
                Federal Reserve Act (12 U.S.C. 611), and any other 
                financial institution engaged in a designated activity.
            (2) Designated activity.--The term ``designated activity'' 
        means a payment, clearing, or settlement activity that the 
        Council has designated as systemically important under section 
        804.
            (3) Designated financial market utility.--The term 
        ``designated financial market utility'' means a financial 
        market utility that the Council has designated as systemically 
        important under section 804.
            (4) Financial institution.--The term ``financial 
        institution'' means--
                    (A) a depository institution, as defined in section 
                3 of the Federal Deposit Insurance Act (12 U.S.C. 
                1813);
                    (B) a branch or agency of a foreign bank, as 
                defined in section 1(b) of the International Banking 
                Act of 1978 (12 U.S.C. 3101);
                    (C) an organization operating under section 25 or 
                25A of the Federal Reserve Act (12 U.S.C. 601-604a and 
                611 through 631);
                    (D) a credit union, as defined in section 101 of 
                the Federal Credit Union Act (12 U.S.C. 1752);
                    (E) a broker or dealer, as defined in section 3 of 
                the Securities Exchange Act of 1934 (15 U.S.C. 78c);
                    (F) an investment company, as defined in section 3 
                of the Investment Company Act of 1940 (15 U.S.C. 80a-
                3);
                    (G) an insurance company, as defined in section 2 
                of the Investment Company Act of 1940 (15 U.S.C. 80a-
                2);
                    (H) an investment adviser, as defined in section 
                202 of the Investment Advisers Act of 1940 (15 U.S.C. 
                80b-2);
                    (I) a futures commission merchant, commodity 
                trading advisor, or commodity pool operator, as defined 
                in section 1a of the Commodity Exchange Act (7 U.S.C. 
                1a); and
                    (J) any company engaged in activities that are 
                financial in nature or incidental to a financial 
                activity, as described in section 4 of the Bank Holding 
                Company Act of 1956 (12 U.S.C. 1843(k)).
            (5) Financial market utility.--The term ``financial market 
        utility'' means any person that manages or operates a 
        multilateral system for the purpose of transferring, clearing, 
        or settling payments, securities, or other financial 
        transactions among financial institutions or between financial 
        institutions and the person.
            (6) Payment, clearing, or settlement activity.--
                    (A) In general.--The term ``payment, clearing, or 
                settlement activity'' means an activity carried out by 
                1 or more financial institutions to facilitate the 
                completion of financial transactions.
                    (B) Financial transaction.--For the purposes of 
                subparagraph (A), the term ``financial transaction'' 
                includes--
                            (i) funds transfers;
                            (ii) securities contracts;
                            (iii) contracts of sale of a commodity for 
                        future delivery;
                            (iv) forward contracts;
                            (v) repurchase agreements;
                            (vi) swaps;
                            (vii) security-based swaps;
                            (viii) swap agreements;
                            (ix) security-based swap agreements;
                            (x) foreign exchange contracts;
                            (xi) financial derivatives contracts; and
                            (xii) any similar transaction that the 
                        Council determines to be a financial 
                        transaction for purposes of this title.
                    (C) Included activities.--When conducted with 
                respect to a financial transaction, payment, clearing, 
                and settlement activities may include--
                            (i) the calculation and communication of 
                        unsettled financial transactions between 
                        counterparties;
                            (ii) the netting of transactions;
                            (iii) provision and maintenance of trade, 
                        contract, or instrument information;
                            (iv) the management of risks and activities 
                        associated with continuing financial 
                        transactions;
                            (v) transmittal and storage of payment 
                        instructions;
                            (vi) the movement of funds;
                            (vii) the final settlement of financial 
                        transactions; and
                            (viii) other similar functions that the 
                        Council may determine.
            (7) Supervisory agency.--
                    (A) In general.--The term ``Supervisory Agency'' 
                means the Federal agency that has primary jurisdiction 
                over a designated financial market utility under 
                Federal banking, securities, or commodity futures laws, 
                as follows:
                            (i) The Securities and Exchange Commission, 
                        with respect to a designated financial market 
                        utility that is a clearing agency registered 
                        with the Securities and Exchange Commission.
                            (ii) The Commodity Futures Trading 
                        Commission, with respect to a designated 
                        financial market utility that is a derivatives 
                        clearing organization registered with the 
                        Commodity Futures Trading Commission.
                            (iii) The appropriate Federal banking 
                        agency, with respect to a designated financial 
                        market utility that is an institution described 
                        in section 3(q) of the Federal Deposit 
                        Insurance Act.
                            (iv) The Board of Governors, with respect 
                        to a designated financial market utility that 
                        is otherwise not subject to the jurisdiction of 
                        any agency listed in clauses (i), (ii), and 
                        (iii).
                    (B) Multiple agency jurisdiction.--If a designated 
                financial market utility is subject to the 
                jurisdictional supervision of more than 1 agency listed 
                in subparagraph (A), then such agencies should agree on 
                1 agency to act as the Supervisory Agency, and if such 
                agencies cannot agree on which agency has primary 
                jurisdiction, the Council shall decide which agency is 
                the Supervisory Agency for purposes of this title.
            (8) Systemically important and systemic importance.--The 
        terms ``systemically important'' and ``systemic importance'' 
        mean a situation where the failure of or a disruption to the 
        functioning of a financial market utility or the conduct of a 
        payment, clearing, or settlement activity could create, or 
        increase, the risk of significant liquidity or credit problems 
        spreading among financial institutions or markets and thereby 
        threaten the stability of the financial system.

SEC. 804. DESIGNATION OF SYSTEMIC IMPORTANCE.

    (a) Designation.--
            (1) Financial stability oversight council.--The Council, on 
        a nondelegable basis and by a vote of not fewer than \2/3\ of 
        members then serving, including an affirmative vote by the 
        Chairperson of the Council, shall designate those financial 
        market utilities or payment, clearing, or settlement activities 
        that the Council determines are, or are likely to become, 
        systemically important.
            (2) Considerations.--In determining whether a financial 
        market utility or payment, clearing, or settlement activity is, 
        or is likely to become, systemically important, the Council 
        shall take into consideration the following:
                    (A) The aggregate monetary value of transactions 
                processed by the financial market utility or carried 
                out through the payment, clearing, or settlement 
                activity.
                    (B) The aggregate exposure of the financial market 
                utility or a financial institution engaged in payment, 
                clearing, or settlement activities to its 
                counterparties.
                    (C) The relationship, interdependencies, or other 
                interactions of the financial market utility or 
                payment, clearing, or settlement activity with other 
                financial market utilities or payment, clearing, or 
                settlement activities.
                    (D) The effect that the failure of or a disruption 
                to the financial market utility or payment, clearing, 
                or settlement activity would have on critical markets, 
                financial institutions, or the broader financial 
                system.
                    (E) Any other factors that the Council deems 
                appropriate.
    (b) Rescission of Designation.--
            (1) In general.--The Council, on a nondelegable basis and 
        by a vote of not fewer than \2/3\ of members then serving, 
        including an affirmative vote by the Chairperson of the 
        Council, shall rescind a designation of systemic importance for 
        a designated financial market utility or designated activity if 
        the Council determines that the utility or activity no longer 
        meets the standards for systemic importance.
            (2) Effect of rescission.--Upon rescission, the financial 
        market utility or financial institutions conducting the 
        activity will no longer be subject to the provisions of this 
        title or any rules or orders prescribed by the Council under 
        this title.
    (c) Consultation and Notice and Opportunity for Hearing.--
            (1) Consultation.--Before making any determination under 
        subsection (a) or (b), the Council shall consult with the 
        relevant Supervisory Agency and the Board of Governors.
            (2) Advance notice and opportunity for hearing.--
                    (A) In general.--Before making any determination 
                under subsection (a) or (b), the Council shall provide 
                the financial market utility or, in the case of a 
                payment, clearing, or settlement activity, financial 
                institutions with advance notice of the proposed 
                determination of the Council.
                    (B) Notice in federal register.--The Council shall 
                provide such advance notice to financial institutions 
                by publishing a notice in the Federal Register.
                    (C) Requests for hearing.--Within 30 days from the 
                date of any notice of the proposed determination of the 
                Council, the financial market utility or, in the case 
                of a payment, clearing, or settlement activity, a 
                financial institution engaged in the designated 
                activity may request, in writing, an opportunity for a 
                written or oral hearing before the Council to 
                demonstrate that the proposed designation or rescission 
                of designation is not supported by substantial 
                evidence.
                    (D) Written submissions.--Upon receipt of a timely 
                request, the Council shall fix a time, not more than 30 
                days after receipt of the request, unless extended at 
                the request of the financial market utility or 
                financial institution, and place at which the financial 
                market utility or financial institution may appear, 
                personally or through counsel, to submit written 
                materials, or, at the sole discretion of the Council, 
                oral testimony or oral argument.
            (3) Emergency exception.--
                    (A) Waiver or modification by vote of the 
                council.--The Council may waive or modify the 
                requirements of paragraph (2) if the Council 
                determines, by an affirmative vote of not less than \2/
                3\ of all members then serving, including an 
                affirmative vote by the Chairperson of the Council, 
                that the waiver or modification is necessary to prevent 
                or mitigate an immediate threat to the financial system 
                posed by the financial market utility or the payment, 
                clearing, or settlement activity.
                    (B) Notice of waiver or modification.--The Council 
                shall provide notice of the waiver or modification to 
                the financial market utility concerned or, in the case 
                of a payment, clearing, or settlement activity, to 
                financial institutions, as soon as practicable, which 
                shall be no later than 24 hours after the waiver or 
                modification in the case of a financial market utility 
                and 3 business days in the case of financial 
                institutions. The Council shall provide the notice to 
                financial institutions by posting a notice on the 
                website of the Council and by publishing a notice in 
                the Federal Register.
    (d) Notification of Final Determination.--
            (1) After hearing.--Within 60 days of any hearing under 
        subsection (c)(3), the Council shall notify the financial 
        market utility or financial institutions of the final 
        determination of the Council in writing, which shall include 
        findings of fact upon which the determination of the Council is 
        based.
            (2) When no hearing requested.--If the Council does not 
        receive a timely request for a hearing under subsection (c)(3), 
        the Council shall notify the financial market utility or 
        financial institutions of the final determination of the 
        Council in writing not later than 30 days after the expiration 
        of the date by which a financial market utility or a financial 
        institution could have requested a hearing. All notices to 
        financial institutions under this subsection shall be published 
        in the Federal Register.
    (e) Extension of Time Periods.--The Council may extend the time 
periods established in subsections (c) and (d) as the Council 
determines to be necessary or appropriate.

SEC. 805. STANDARDS FOR SYSTEMICALLY IMPORTANT FINANCIAL MARKET 
              UTILITIES AND PAYMENT, CLEARING, OR SETTLEMENT 
              ACTIVITIES.

    (a) Authority To Prescribe Standards.--The Board, by rule or order, 
and in consultation with the Council and the Supervisory Agencies, 
shall prescribe risk management standards, taking into consideration 
relevant international standards and existing prudential requirements, 
governing--
            (1) the operations related to the payment, clearing, and 
        settlement activities of designated financial market utilities; 
        and
            (2) the conduct of designated activities by financial 
        institutions.
    (b) Objectives and Principles.--The objectives and principles for 
the risk management standards prescribed under subsection (a) shall be 
to--
            (1) promote robust risk management;
            (2) promote safety and soundness;
            (3) reduce systemic risks; and
            (4) support the stability of the broader financial system.
    (c) Scope.--The standards prescribed under subsection (a) may 
address areas such as--
            (1) risk management policies and procedures;
            (2) margin and collateral requirements;
            (3) participant or counterparty default policies and 
        procedures;
            (4) the ability to complete timely clearing and settlement 
        of financial transactions;
            (5) capital and financial resource requirements for 
        designated financial market utilities; and
            (6) other areas that the Board determines are necessary to 
        achieve the objectives and principles in subsection (b).
    (d) Threshold Level.--The standards prescribed under subsection (a) 
governing the conduct of designated activities by financial 
institutions shall, where appropriate, establish a threshold as to the 
level or significance of engagement in the activity at which a 
financial institution will become subject to the standards with respect 
to that activity.
    (e) Compliance Required.--Designated financial market utilities and 
financial institutions subject to the standards prescribed by the Board 
of Governors for a designated activity shall conduct their operations 
in compliance with the applicable risk management standards prescribed 
by the Board of Governors.

SEC. 806. OPERATIONS OF DESIGNATED FINANCIAL MARKET UTILITIES.

    (a) Federal Reserve Account and Services.--The Board of Governors 
may authorize a Federal Reserve Bank to establish and maintain an 
account for a designated financial market utility and provide services 
to the designated financial market utility that the Federal Reserve 
Bank is authorized under the Federal Reserve Act to provide to a 
depository institution, subject to any applicable rules, orders, 
standards, or guidelines prescribed by the Board of Governors.
    (b) Advances.--The Board of Governors may authorize a Federal 
Reserve Bank to provide to a designated financial market utility the 
same discount and borrowing privileges as the Federal Reserve Bank may 
provide to a depository institution under the Federal Reserve Act, 
subject to any applicable rules, orders, standards, or guidelines 
prescribed by the Board of Governors.
    (c) Earnings on Federal Reserve Balances.--A Federal Reserve Bank 
may pay earnings on balances maintained by or on behalf of a designated 
financial market utility in the same manner and to the same extent as 
the Federal Reserve Bank may pay earnings to a depository institution 
under the Federal Reserve Act, subject to any applicable rules, orders, 
standards, or guidelines prescribed by the Board of Governors.
    (d) Reserve Requirements.--The Board of Governors may exempt a 
designated financial market utility from, or modify any, reserve 
requirements under section 19 of the Federal Reserve Act (12 U.S.C. 
461) applicable to a designated financial market utility.
    (e) Changes to Rules, Procedures, or Operations.--
            (1) Advance notice.--
                    (A) Advance notice of proposed changes required.--A 
                designated financial market utility shall provide 
                notice 60 days in advance advance notice to its 
                Supervisory Agency and the Board of Governors of any 
                proposed change to its rules, procedures, or operations 
                that could, as defined in rules of the Board of 
                Governors, materially affect, the nature or level of 
                risks presented by the designated financial market 
                utility.
                    (B) Terms and standards prescribed by the board of 
                governors.--The Board of Governors shall prescribe 
                regulations that define and describe the standards for 
                determining when notice is required to be provided 
                under subparagraph (A).
                    (C) Contents of notice.--The notice of a proposed 
                change shall describe--
                            (i) the nature of the change and expected 
                        effects on risks to the designated financial 
                        market utility, its participants, or the 
                        market; and
                            (ii) how the designated financial market 
                        utility plans to manage any identified risks.
                    (D) Additional information.--The Supervisory Agency 
                or the Board of Governors may require a designated 
                financial market utility to provide any information 
                necessary to assess the effect the proposed change 
                would have on the nature or level of risks associated 
                with the designated financial market utility's payment, 
                clearing, or settlement activities and the sufficiency 
                of any proposed risk management techniques.
                    (E) Notice of objection.--The Supervisory Agency or 
                the Board of Governors shall notify the designated 
                financial market utility of any objection regarding the 
                proposed change within 60 days from the later of--
                            (i) the date that the notice of the 
                        proposed change is received; or
                            (ii) the date any further information 
                        requested for consideration of the notice is 
                        received.
                    (F) Change not allowed if objection.--A designated 
                financial market utility shall not implement a change 
                to which the Board of Governors or the Supervisory 
                Agency has an objection.
                    (G) Change allowed if no objection within 60 
                days.--A designated financial market utility may 
                implement a change if it has not received an objection 
                to the proposed change within 60 days of the later of--
                            (i) the date that the Supervisory Agency or 
                        the Board of Governors receives the notice of 
                        proposed change; or
                            (ii) the date the Supervisory Agency or the 
                        Board of Governors receives any further 
                        information it requests for consideration of 
                        the notice.
                    (H) Review extension for novel or complex issues.--
                The Supervisory Agency or the Board of Governors may, 
                during the 60-day review period, extend the review 
                period for an additional 60 days for proposed changes 
                that raise novel or complex issues, subject to the 
                Supervisory Agency or the Board of Governors providing 
                the designated financial market utility with prompt 
                written notice of the extension. Any extension under 
                this subparagraph will extend the time periods under 
                subparagraphs (D) and (F).
                    (I) Change allowed earlier if notified of no 
                objection.--A designated financial market utility may 
                implement a change in less than 60 days from the date 
                of receipt of the notice of proposed change by the 
                Supervisory Agency or the Board of Governors, or the 
                date the Supervisory Agency or the Board of Governors 
                receives any further information it requested, if the 
                Supervisory Agency or the Board of Governors notifies 
                the designated financial market utility in writing that 
                it does not object to the proposed change and 
                authorizes the designated financial market utility to 
                implement the change on an earlier date, subject to any 
                conditions imposed by the Supervisory Agency or the 
                Board of Governors.
            (2) Emergency changes.--
                    (A) In general.--A designated financial market 
                utility may implement a change that would otherwise 
                require advance notice under this subsection if it 
                determines that--
                            (i) an emergency exists; and
                            (ii) immediate implementation of the change 
                        is necessary for the designated financial 
                        market utility to continue to provide its 
                        services in a safe and sound manner.
                    (B) Notice required within 24 hours.--The 
                designated financial market utility shall provide 
                notice of any such emergency change to its Supervisory 
                Agency and the Board of Governors, as soon as 
                practicable, which shall be no later than 24 hours 
                after implementation of the change.
                    (C) Contents of emergency notice.--In addition to 
                the information required for changes requiring advance 
                notice, the notice of an emergency change shall 
                describe--
                            (i) the nature of the emergency; and
                            (ii) the reason the change was necessary 
                        for the designated financial market utility to 
                        continue to provide its services in a safe and 
                        sound manner.
                    (D) Modification or rescission of change may be 
                required.--The Supervisory Agency or the Board of 
                Governors may require modification or rescission of the 
                change if it finds that the change is not consistent 
                with the purposes of this Act or any rules, orders, or 
                standards prescribed by the Board of Governors 
                hereunder.
            (3) Copying the board of governors.--The Supervisory Agency 
        shall provide the Board of Governors concurrently with a 
        complete copy of any notice, request, or other information it 
        issues, submits, or receives under this subsection.
            (4) Consultation with board of governors.--Before taking 
        any action on, or completing its review of, a change proposed 
        by a designated financial market utility, the Supervisory 
        Agency shall consult with the Board of Governors.

SEC. 807. EXAMINATION OF AND ENFORCEMENT ACTIONS AGAINST DESIGNATED 
              FINANCIAL MARKET UTILITIES.

    (a) Examination.--Notwithstanding any other provision of law and 
subject to subsection (d), the Supervisory Agency shall conduct 
examinations of a designated financial market utility at least once 
annually in order to determine the following:
            (1) The nature of the operations of, and the risks borne 
        by, the designated financial market utility.
            (2) The financial and operational risks presented by the 
        designated financial market utility to financial institutions, 
        critical markets, or the broader financial system.
            (3) The resources and capabilities of the designated 
        financial market utility to monitor and control such risks.
            (4) The safety and soundness of the designated financial 
        market utility.
            (5) The designated financial market utility's compliance 
        with--
                    (A) this title; and
                    (B) the rules and orders prescribed by the Board of 
                Governors under this title.
    (b) Service Providers.--Whenever a service integral to the 
operation of a designated financial market utility is performed for the 
designated financial market utility by another entity, whether an 
affiliate or non-affiliate and whether on or off the premises of the 
designated financial market utility, the Supervisory Agency may examine 
whether the provision of that service is in compliance with applicable 
law, rules, orders, and standards to the same extent as if the 
designated financial market utility were performing the service on its 
own premises.
    (c) Enforcement.--For purposes of enforcing the provisions of this 
section, a designated financial market utility shall be subject to, and 
the appropriate Supervisory Agency shall have authority under the 
provisions of subsections (b) through (n) of section 8 of the Federal 
Deposit Insurance Act (12 U.S.C. 1818) in the same manner and to the 
same extent as if the designated financial market utility was an 
insured depository institution and the Supervisory Agency was the 
appropriate Federal banking agency for such insured depository 
institution.
    (d) Board of Governors Involvement in Examinations.--
            (1) Board of governors consultation on examination 
        planning.--The Supervisory Agency shall consult with the Board 
        of Governors regarding the scope and methodology of any 
        examination conducted under subsections (a) and (b).
            (2) Board of governors participation in examination.--The 
        Board of Governors may, in its discretion, participate in any 
        examination led by a Supervisory Agency and conducted under 
        subsections (a) and (b).
    (e) Board of Governors Enforcement Recommendations.--
            (1) Recommendation.--The Board of Governors may at any time 
        recommend to the Supervisory Agency that such agency take 
        enforcement action against a designated financial market 
        utility. Any such recommendation for enforcement action shall 
        provide a detailed analysis supporting the recommendation of 
        the Board of Governors.
            (2) Consideration.--The Supervisory Agency shall consider 
        the recommendation of the Board of Governors and submit a 
        response to the Board of Governors within 60 days.
            (3) Mediation.--If the Supervisory Agency rejects, in whole 
        or in part, the recommendation of the Board of Governors, the 
        Board of Governors may dispute the matter by referring the 
        recommendation to the Council, which shall attempt to resolve 
        the dispute.
            (4) Enforcement action.--If the Council is unable to 
        resolve the dispute under paragraph (3) within 30 days from the 
        date of referral, the Board of Governors may, upon a vote of 
        its members--
                    (A) exercise the enforcement authority referenced 
                in subsection (c) as if it were the Supervisory Agency; 
                and
                    (B) take enforcement action against the designated 
                financial market utility.
    (f) Emergency Enforcement Actions by the Board of Governors.--
            (1) Imminent risk of substantial harm.--The Board of 
        Governors may, after consulting with the Council and the 
        Supervisory Agency, take enforcement action against a 
        designated financial market utility if the Board of Governors 
        has reasonable cause to believe that--
                    (A) either--
                            (i) an action engaged in, or contemplated 
                        by, a designated financial market utility 
                        (including any change proposed by the 
                        designated financial market utility to its 
                        rules, procedures, or operations that would 
                        otherwise be subject to section 806(e)) poses 
                        an imminent risk of substantial harm to 
                        financial institutions, critical markets, or 
                        the broader financial system; or
                            (ii) the condition of a designated 
                        financial market utility poses an imminent risk 
                        of substantial harm to financial institutions, 
                        critical markets, or the broader financial 
                        system; and
                    (B) the imminent risk of substantial harm precludes 
                the Board of Governors' use of the procedures in 
                subsection (e).
            (2) Enforcement authority.--For purposes of taking 
        enforcement action under paragraph (1), a designated financial 
        market utility shall be subject to, and the Board of Governors 
        shall have authority under the provisions of subsections (b) 
        through (n) of section 8 of the Federal Deposit Insurance Act 
        (12 U.S.C. 1818) in the same manner and to the same extent as 
        if the designated financial market utility was an insured 
        depository institution and the Board of Governors was the 
        appropriate Federal banking agency for such insured depository 
        institution.
            (3) Prompt notice to supervisory agency of enforcement 
        action.--Within 24 hours of taking an enforcement action under 
        this subsection, the Board of Governors shall provide written 
        notice to the designated financial market utility's Supervisory 
        Agency containing a detailed analysis of the action of the 
        Board of Governors, with supporting documentation included.

SEC. 808. EXAMINATION OF AND ENFORCEMENT ACTIONS AGAINST FINANCIAL 
              INSTITUTIONS SUBJECT TO STANDARDS FOR DESIGNATED 
              ACTIVITIES.

    (a) Examination.--The appropriate financial regulator is authorized 
to examine a financial institution subject to the standards prescribed 
by the Board of Governors for a designated activity in order to 
determine the following:
            (1) The nature and scope of the designated activities 
        engaged in by the financial institution.
            (2) The financial and operational risks the designated 
        activities engaged in by the financial institution may pose to 
        the safety and soundness of the financial institution.
            (3) The financial and operational risks the designated 
        activities engaged in by the financial institution may pose to 
        other financial institutions, critical markets, or the broader 
        financial system.
            (4) The resources available to and the capabilities of the 
        financial institution to monitor and control the risks 
        described in paragraphs (2) and (3).
            (5) The financial institution's compliance with this title 
        and the rules and orders prescribed by the Board of Governors 
        under this title.
    (b) Enforcement.--For purposes of enforcing the provisions of this 
section, and the rules and orders prescribed by the Board of Governors 
under this section, a financial institution subject to the standards 
prescribed by the Board of Governors for a designated activity shall be 
subject to, and the appropriate financial regulator shall have 
authority under the provisions of subsections (b) through (n) of 
section 8 of the Federal Deposit Insurance Act (12 U.S.C. 1818) in the 
same manner and to the same extent as if the financial institution was 
an insured depository institution and the appropriate financial 
regulator was the appropriate Federal banking agency for such insured 
depository institution.
    (c) Technical Assistance.--The Board of Governors shall consult 
with and provide such technical assistance as may be required by the 
appropriate financial regulators to ensure that the rules and orders 
prescribed by the Board of Governors under this title are interpreted 
and applied in as consistent and uniform a manner as practicable.
    (d) Delegation.--
            (1) Examination.--
                    (A) Request to board of governors.--The appropriate 
                financial regulator may request the Board of Governors 
                to conduct or participate in an examination of a 
                financial institution subject to the standards 
                prescribed by the Board of Governors for a designated 
                activity in order to assess the compliance of such 
                financial institution with--
                            (i) this title; or
                            (ii) the rules or orders prescribed by the 
                        Board of Governors under this title.
                    (B) Examination by board of governors.--Upon 
                receipt of an appropriate written request, the Board of 
                Governors will conduct the examination under such terms 
                and conditions to which the Board of Governors and the 
                appropriate financial regulator mutually agree.
            (2) Enforcement.--
                    (A) Request to board of governors.--The appropriate 
                financial regulator may request the Board of Governors 
                to enforce this title or the rules or orders prescribed 
                by the Board of Governors under this title against a 
                financial institution that is subject to the standards 
                prescribed by the Board of Governors for a designated 
                activity.
                    (B) Enforcement by board of governors.--Upon 
                receipt of an appropriate written request, the Board of 
                Governors shall determine whether an enforcement action 
                is warranted, and, if so, it shall enforce compliance 
                with this title or the rules or orders prescribed by 
                the Board of Governors under this title and, if so, the 
                financial institution shall be subject to, and the 
                Board of Governors shall have authority under the 
                provisions of subsections (b) through (n) of section 8 
                of the Federal Deposit Insurance Act (12 U.S.C. 1818) 
                in the same manner and to the same extent as if the 
                financial institution was an insured depository 
                institution and the Board of Governors was the 
                appropriate Federal banking agency for such insured 
                depository institution.
    (e) Back-up Authority of the Board of Governors.--
            (1) Examination and enforcement.--Notwithstanding any other 
        provision of law, the Board of Governors may--
                    (A) conduct an examination of the type described in 
                subsection (a) of any financial institution that is 
                subject to the standards prescribed by the Board of 
                Governors for a designated activity; and
                    (B) enforce the provisions of this title or any 
                rules or orders prescribed by the Board of Governors 
                under this title against any financial institution that 
                is subject to the standards prescribed by the Board of 
                Governors for a designated activity.
            (2) Limitations.--
                    (A) Examination.--The Board of Governors may 
                exercise the authority described in paragraph (1)(A) 
                only if the Board of Governors has--
                            (i) reasonable cause to believe that a 
                        financial institution is not in compliance with 
                        this title or the rules or orders prescribed by 
                        the Board of Governors under this title with 
                        respect to a designated activity;
                            (ii) notified, in writing, the appropriate 
                        financial regulator and the Council of its 
                        belief under clause (i) with supporting 
                        documentation included;
                            (iii) requested the appropriate financial 
                        regulator to conduct a prompt examination of 
                        the financial institution; and
                            (iv) either--
                                    (I) not been afforded a reasonable 
                                opportunity to participate in an 
                                examination of the financial 
                                institution by the appropriate 
                                financial regulator within 30 days 
                                after the date of the Board's 
                                notification under clause (ii); or
                                    (II) reasonable cause to believe 
                                that the financial institution's 
                                noncompliance with this title or the 
                                rules or orders prescribed by the Board 
                                of Governors under this title poses a 
                                substantial risk to other financial 
                                institutions, critical markets, or the 
                                broader financial system, subject to 
                                the Board of Governors affording the 
                                appropriate financial regulator a 
                                reasonable opportunity to participate 
                                in the examination.
                    (B) Enforcement.--The Board of Governors may 
                exercise the authority described in paragraph (1)(B) 
                only if the Board of Governors has--
                            (i) reasonable cause to believe that a 
                        financial institution is not in compliance with 
                        this title or the rules or orders prescribed by 
                        the Board of Governors under this title with 
                        respect to a designated activity;
                            (ii) notified, in writing, the appropriate 
                        financial regulator and the Council of its 
                        belief under clause (i) with supporting 
                        documentation included and with a 
                        recommendation that the appropriate financial 
                        regulator take 1 or more specific enforcement 
                        actions against the financial institution; and
                            (iii) either--
                                    (I) not been notified, in writing, 
                                by the appropriate financial regulator 
                                of the commencement of an enforcement 
                                action recommended by the Board of 
                                Governors against the financial 
                                institution within 60 days from the 
                                date of the notification under clause 
                                (ii); or
                                    (II) reasonable cause to believe 
                                that the financial institution's 
                                noncompliance with this title or the 
                                rules or orders prescribed by the Board 
                                of Governors under this title poses a 
                                substantial risk to other financial 
                                institutions, critical markets, or the 
                                broader financial system, subject to 
                                the Board of Governors notifying the 
                                appropriate financial regulator of the 
                                Board's enforcement action.
            (3) Enforcement provisions.--For purposes of taking 
        enforcement action under paragraph (1), the financial 
        institution shall be subject to, and the Board of Governors 
        shall have authority under the provisions of subsections (b) 
        through (n) of section 8 of the Federal Deposit Insurance Act 
        (12 U.S.C. 1818) in the same manner and to the same extent as 
        if the financial institution was an insured depository 
        institution and the Board of Governors was the appropriate 
        Federal banking agency for such insured depository institution.

SEC. 809. REQUESTS FOR INFORMATION, REPORTS, OR RECORDS.

    (a) Information To Assess Systemic Importance.--
            (1) Financial market utilities.--The Council is authorized 
        to require any financial market utility to submit such 
        information as the Council may require for the sole purpose of 
        assessing whether that financial market utility is systemically 
        important, but only if the Council has reasonable cause to 
        believe that the financial market utility meets the standards 
        for systemic importance set forth in section 804.
            (2) Financial institutions engaged in payment, clearing, or 
        settlement activities.--The Council is authorized to require 
        any financial institution to submit such information as the 
        Council may require for the sole purpose of assessing whether 
        any payment, clearing, or settlement activity engaged in or 
        supported by a financial institution is systemically important, 
        but only if the Council has reasonable cause to believe that 
        the activity meets the standards for systemic importance set 
        forth in section 804.
    (b) Reporting After Designation.--
            (1) Designated financial market utilities.--The Board of 
        Governors and the Council may require a designated financial 
        market utility to submit reports or data to the Board of 
        Governors and the Council in such frequency and form as deemed 
        necessary by the Board of Governors and the Council in order to 
        assess the safety and soundness of the utility and the systemic 
        risk that the utility's operations pose to the financial 
        system.
            (2) Financial institutions subject to standards for 
        designated activities.--The Board of Governors and the Council 
        may require 1 or more financial institutions subject to the 
        standards prescribed by the Board of Governors for a designated 
        activity to submit, in such frequency and form as deemed 
        necessary by the Board of Governors and the Council, reports 
        and data to the Board of Governors and the Council solely with 
        respect to the conduct of the designated activity and solely to 
        assess whether--
                    (A) the rules, orders, or standards prescribed by 
                the Board of Governors with respect to the designated 
                activity appropriately address the risks to the 
                financial system presented by such activity; and
                    (B) the financial institutions are in compliance 
                with this title and the rules and orders prescribed by 
                the Board of Governors under this title with respect to 
                the designated activity.
    (c) Coordination With Appropriate Federal Supervisory Agency.--
            (1) Advance coordination.--Before directly requesting any 
        material information from, or imposing reporting or 
        recordkeeping requirements on, any financial market utility or 
        any financial institution engaged in a payment, clearing, or 
        settlement activity, the Board of Governors and the Council 
        shall coordinate with the Supervisory Agency for a financial 
        market utility or the appropriate financial regulator for a 
        financial institution to determine if the information is 
        available from or may be obtained by the agency in the form, 
        format, or detail required by the Board of Governors and the 
        Council.
            (2) Supervisory reports.--Notwithstanding any other 
        provision of law, the Supervisory Agency, the appropriate 
        financial regulator, and the Board of Governors are authorized 
        to disclose to each other and the Council copies of its 
        examination reports or similar reports regarding any financial 
        market utility or any financial institution engaged in payment, 
        clearing, or settlement activities.
    (d) Timing of Response From Appropriate Federal Supervisory 
Agency.--If the information, report, records, or data requested by the 
Board of Governors or the Council under subsection (c)(1) are not 
provided in full by the Supervisory Agency or the appropriate financial 
regulator in less than 15 days after the date on which the material is 
requested, the Board of Governors or the Council may request the 
information or impose recordkeeping or reporting requirements directly 
on such persons as provided in subsections (a) and (b) with notice to 
the agency.
    (e) Sharing of Information.--
            (1) Material concerns.--Notwithstanding any other provision 
        of law, the Board of Governors, the Council, the appropriate 
        financial regulator, and any Supervisory Agency are authorized 
        to--
                    (A) promptly notify each other of material concerns 
                about a designated financial market utility or any 
                financial institution engaged in designated activities; 
                and
                    (B) share appropriate reports, information, or data 
                relating to such concerns.
            (2) Other information.--Notwithstanding any other provision 
        of law, the Board of Governors, the Council, the appropriate 
        financial regulator, or any Supervisory Agency may, under such 
        terms and conditions as it deems appropriate, provide 
        confidential supervisory information and other information 
        obtained under this title to other persons it deems 
        appropriate, including the Secretary, State financial 
        institution supervisory agencies, foreign financial 
        supervisors, foreign central banks, and foreign finance 
        ministries, subject to reasonable assurances of 
        confidentiality.
    (f) Privilege Maintained.--The Board of Governors, the Council, the 
appropriate financial regulator, and any Supervisory Agency providing 
reports or data under this section shall not be deemed to have waived 
any privilege applicable to those reports or data, or any portion 
thereof, by providing the reports or data to the other party or by 
permitting the reports or data, or any copies thereof, to be used by 
the other party.
    (g) Disclosure Exemption.--Information obtained by the Board of 
Governors or the Council under this section and any materials prepared 
by the Board of Governors or the Council regarding its assessment of 
the systemic importance of financial market utilities or any payment, 
clearing, or settlement activities engaged in by financial 
institutions, and in connection with its supervision of designated 
financial market utilities and designated activities, shall be 
confidential supervisory information exempt from disclosure under 
section 552 of title 5, United States Code. For purposes of such 
section 552, this subsection shall be considered a statute described in 
subsection (b)(3) of such section 552.

SEC. 810. RULEMAKING.

    The Board of Governors and the Council are authorized to prescribe 
such rules and issue such orders as may be necessary to administer and 
carry out the authorities and duties granted to the Board of Governors 
or the Council, respectively, and prevent evasions thereof.

SEC. 811. OTHER AUTHORITY.

    Unless otherwise provided by its terms, this title does not divest 
any appropriate financial regulator, any Supervisory Agency, or any 
other Federal or State agency, of any authority derived from any other 
applicable law, except that any standards prescribed by the Board of 
Governors under section 805 shall supersede any less stringent 
requirements established under other authority to the extent of any 
conflict.

SEC. 812. EFFECTIVE DATE.

    This title is effective as of the date of enactment of this Act.

 TITLE IX--INVESTOR PROTECTIONS AND IMPROVEMENTS TO THE REGULATION OF 
                               SECURITIES

               Subtitle A--Increasing Investor Protection

SEC. 911. INVESTOR ADVISORY COMMITTEE ESTABLISHED.

    Title I of the Securities Exchange Act of 1934 (15 U.S.C. 78a et 
seq.) is amended by adding at the end the following:

``SEC. 39. INVESTOR ADVISORY COMMITTEE.

    ``(a) Establishment and Purpose.--
            ``(1) Establishment.--There is established within the 
        Commission the Investor Advisory Committee (referred to in this 
        section as the `Committee').
            ``(2) Purpose.--The Committee shall--
                    ``(A) advise and consult with the Commission on--
                            ``(i) regulatory priorities of the 
                        Commission;
                            ``(ii) issues relating to the regulation of 
                        securities products, trading strategies, and 
                        fee structures, and the effectiveness of 
                        disclosure;
                            ``(iii) initiatives to protect investor 
                        interest; and
                            ``(iv) initiatives to promote investor 
                        confidence and the integrity of the securities 
                        marketplace; and
                    ``(B) submit to the Commission such findings and 
                recommendations as the Committee determines are 
                appropriate, including recommendations for proposed 
                legislative changes.
    ``(b) Membership.--
            ``(1) In general.--The members of the Committee shall be--
                    ``(A) the Investor Advocate;
                    ``(B) a representative of State securities 
                commissions;
                    ``(C) a representative of the interests of senior 
                citizens; and
                    ``(D) not fewer than 10, and not more than 20, 
                members appointed by the Commission, from among 
                individuals who--
                            ``(i) represent the interests of individual 
                        equity and debt investors, including investors 
                        in mutual funds;
                            ``(ii) represent the interests of 
                        institutional investors, including the 
                        interests of pension funds and registered 
                        investment companies;
                            ``(iii) are knowledgeable about investment 
                        issues and decisions; and
                            ``(iv) have reputations of integrity.
            ``(2) Term.--Each member of the Committee appointed under 
        paragraph (1)(B) shall serve for a term of 4 years.
            ``(3) Members not commission employees.--Members appointed 
        under paragraph (1)(B) shall not be deemed to be employees or 
        agents of the Commission solely because of membership on the 
        Committee.
    ``(c) Chairman; Vice Chairman; Secretary; Assistant Secretary.--
            ``(1) In general.--The members of the Committee shall 
        elect, from among the members of the Committee--
                    ``(A) a chairman, who may not be employed by an 
                issuer;
                    ``(B) a vice chairman, who may not be employed by 
                an issuer;
                    ``(C) a secretary; and
                    ``(D) an assistant secretary.
            ``(2) Term.--Each member elected under paragraph (1) shall 
        serve for a term of 3 years in the capacity for which the 
        member was elected under paragraph (1).
    ``(d) Meetings.--
            ``(1) Frequency of meetings.--The Committee shall meet--
                    ``(A) not less frequently than twice annually, at 
                the call of the chairman of the Committee; and
                    ``(B) from time to time, at the call of the 
                Commission.
            ``(2) Notice.--The chairman of the Committee shall give the 
        members of the Committee written notice of each meeting, not 
        later than 2 weeks before the date of the meeting.
    ``(e) Compensation and Travel Expenses.--Each member of the 
Committee who is not a full-time employee of the United States shall--
            ``(1) be compensated at a rate not to exceed the daily 
        equivalent of the annual rate of basic pay in effect for a 
        position at level V of the Executive Schedule under section 
        5316 of title 5, United States Code, for each day during which 
        the member is engaged in the actual performance of the duties 
        of the Committee; and
            ``(2) while away from the home or regular place of business 
        of the member in the performance of services for the Committee, 
        be allowed travel expenses, including per diem in lieu of 
        subsistence, in the same manner as persons employed 
        intermittently in the Government service are allowed expenses 
        under section 5703(b) of title 5, United States Code.
    ``(f) Staff.--The Commission shall make available to the Committee 
such staff as the chairman of the Committee determines are necessary to 
carry out this section.
    ``(g) Review by Commission.--The Commission shall--
            ``(1) review the findings and recommendations of the 
        Committee; and
            ``(2) each time the Committee submits a finding or 
        recommendation to the Commission, issue a public statement--
                    ``(A) assessing the finding or recommendation of 
                the Committee; and
                    ``(B) disclosing the action, if any, the Commission 
                intends to take with respect to the finding or 
                recommendation.
    ``(h) Committee Findings.--Nothing in this section shall require 
the Commission to agree to or act upon any finding or recommendation of 
the Committee.
    ``(i) Federal Advisory Committee Act.--The Federal Advisory 
Committee Act (5 U.S.C. App.) shall not apply with respect to the 
Committee and its activities.
    ``(j) Authorization of Appropriations.--There is authorized to be 
appropriated to the Commission such sums as are necessary to carry out 
this section.''.

SEC. 912. CLARIFICATION OF AUTHORITY OF THE COMMISSION TO ENGAGE IN 
              INVESTOR TESTING.

    Section 19 of the Securities Act of 1933 (15 U.S.C. 77s) is amended 
by adding at the end the following:
    ``(e) Evaluation of Rules or Programs.--For the purpose of 
evaluating any rule or program of the Commission issued or carried out 
under any provision of the securities laws, as defined in section 3 of 
the Securities Exchange Act of 1934 (15 U.S.C. 78c), and the purposes 
of considering, proposing, adopting, or engaging in any such rule or 
program or developing new rules or programs, the Commission may--
            ``(1) gather information from and communicate with 
        investors or other members of the public;
            ``(2) engage in such temporary investor testing programs as 
        the Commission determines are in the public interest or would 
        protect investors; and
            ``(3) consult with academics and consultants, as necessary 
        to carry out this subsection.
    ``(f) Rule of Construction.--For purposes of the Paperwork 
Reduction Act (44 U.S.C. 3501 et seq.), any action taken under 
subsection (e) shall not be construed to be a collection of 
information.''.

SEC. 913. STUDY AND RULEMAKING REGARDING OBLIGATIONS OF BROKERS, 
              DEALERS, AND INVESTMENT ADVISERS.

    (a) Definitions.--In this section--
            (1) the term ``FINRA'' means the Financial Industry 
        Regulatory Authority; and
            (2) the term ``retail customer'' means an individual 
        customer of a broker, dealer, investment adviser, person 
        associated with a broker or dealer, or a person associated with 
        an investment adviser.
    (b) In General.--The Commission shall conduct a study to evaluate--
            (1) the effectiveness of existing legal or regulatory 
        standards of care for brokers, dealers, investment advisers, 
        persons associated with brokers or dealers, and persons 
        associated with investment advisers for providing personalized 
        investment advice and recommendations about securities to 
        retail customers imposed by the Commission and FINRA, and other 
        Federal and State legal or regulatory standards; and
            (2) whether there are legal or regulatory gaps or overlap 
        in legal or regulatory standards in the protection of retail 
        customers relating to the standards of care for brokers, 
        dealers, investment advisers, persons associated with brokers 
        or dealers, and persons associated with investment advisers for 
        providing personalized investment advice about securities to 
        retail customers that should be addressed by rule or statute.
    (c) Considerations.--In conducting the study required under 
subsection (b), the Commission shall consider--
            (1) the regulatory, examination, and enforcement resources 
        devoted to, and activities of, the Commission and FINRA to 
        enforce the standards of care for brokers, dealers, investment 
        advisers, persons associated with brokers or dealers, and 
        persons associated with investment advisers when providing 
        personalized investment advice and recommendations about 
        securities to retail customers, including--
                    (A) the frequency of examinations of brokers, 
                dealers, and investment advisers; and
                    (B) the length of time of the examinations;
            (2) the substantive differences, compared and contrasted in 
        detail, in the regulation of brokers, dealers, and investment 
        advisers, when providing personalized investment advice and 
        recommendations about securities to retail customers, including 
        the differences in the amount of resources devoted to the 
        regulation and examination of brokers, dealers, and investment 
        advisers, by the Commission and FINRA;
            (3) the specific instances in which--
                    (A) the regulation and oversight of investment 
                advisers provide greater protection to retail customers 
                than the regulation and oversight of brokers and 
                dealers; and
                    (B) the regulation and oversight of brokers and 
                dealers provide greater protection to retail customers 
                than the regulation and oversight of investment 
                advisers;
            (4) the existing legal or regulatory standards of State 
        securities regulators and other regulators intended to protect 
        retail customers;
            (5) the potential impact on retail customers, including the 
        potential impact on access of retail customers to the range of 
        products and services offered by brokers and dealers, of 
        imposing upon brokers, dealers, and persons associated with 
        brokers or dealers--
                    (A) the standard of care applied under the 
                Investment Advisers Act of 1940 (15 U.S.C. 80b-1 et 
                seq.) for providing personalized investment advice 
                about securities to retail customers of investment 
                advisers; and
                    (B) other requirements of the Investment Advisers 
                Act of 1940 (15 U.S.C. 80b-1 et seq.);
            (6) the potential impact of--
                    (A) imposing on investment advisers the standard of 
                care applied by the Commission and FINRA under the 
                Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.) 
                for providing recommendations about securities to 
                retail customers of brokers and dealers and other 
                Commission and FINRA requirements applicable to brokers 
                and dealers; and
                    (B) authorizing the Commission to designate 1 or 
                more self-regulatory organizations to augment the 
                efforts of the Commission to oversee investment 
                advisers;
            (7) the potential impact of eliminating the broker and 
        dealer exclusion from the definition of ``investment adviser'' 
        under section 202(a)(11)(C) of the Investment Advisers Act of 
        1940 (15 U.S.C. 80b-2(a)(11)(C)), in terms of--
                    (A) the potential benefits or harm to retail 
                customers that could result from such a change, 
                including any potential impact on access to 
                personalized investment advice and recommendations 
                about securities to retail customers or the 
                availability of such advice and recommendations;
                    (B) the number of additional entities and 
                individuals that would be required to register under, 
                or become subject to, the Investment Advisers Act of 
                1940 (15 U.S.C. 80b-1 et seq.), and the additional 
                requirements to which brokers, dealers, and persons 
                associated with brokers and dealers would become 
                subject, including--
                            (i) any potential additional associated 
                        person licensing, registration, and examination 
                        requirements; and
                            (ii) the additional costs, if any, to the 
                        additional entities and individuals; and
                    (C) the impact on Commission resources to--
                            (i) conduct examinations of registered 
                        investment advisers and the representatives of 
                        registered investment advisers, including the 
                        impact on the examination cycle; and
                            (ii) enforce the standard of care and other 
                        applicable requirements imposed under the 
                        Investment Advisers Act of 1940 (15 U.S.C. 80b-
                        1 et seq.);
            (8) the ability of investors to understand the differences 
        in terms of regulatory oversight and examinations between 
        brokers, dealers, and investment advisers;
            (9) the varying level of services provided by brokers, 
        dealers, investment advisers, persons associated with brokers 
        or dealers, and persons associated with investment advisers to 
        retail customers and the varying scope and terms of retail 
        customer relationships of brokers, dealers, investment 
        advisers, persons associated with brokers or dealers, and 
        persons associated with investment advisers with such retail 
        customers;
            (10) any potential benefits or harm to retail customers 
        that could result from any potential changes in the regulatory 
        requirements or legal standards affecting brokers, dealers, 
        investment advisers, persons associated with brokers or 
        dealers, and persons associated with investment advisers 
        relating to their obligations to retail customers, including 
        any potential impact on--
                    (A) protection from fraud;
                    (B) access to personalized investment advice, and 
                recommendations about securities to retail customers; 
                or
                    (C) the availability of such advice and 
                recommendations;
            (11) the additional costs and expenses to retail customers 
        and to brokers, dealers, and investment advisers resulting from 
        potential changes in the regulatory requirements or legal 
        standards affecting brokers, dealers, investment advisers, 
        persons associated with brokers or dealers, and persons 
        associated with investment advisers relating to their 
        obligations to retail customers; and
            (12) any other consideration that the Commission deems 
        necessary and appropriate to effectively execute the study 
        required under subsection (b).
    (d) Report.--
            (1) In general.--Not later than 1 year after the date of 
        enactment of this Act, the Commission shall submit a report on 
        the study required under subsection (b) to--
                    (A) the Committee on Banking, Housing, and Urban 
                Affairs of the Senate; and
                    (B) the Committee on Financial Services of the 
                House of Representatives.
            (2) Content requirements.--The report required under 
        paragraph (1) shall describe the findings, conclusions, and 
        recommendations of the Commission from the study required under 
        subsection (b), including--
                    (A) a description of the considerations, analysis, 
                and public and industry input that the Commission 
                considered, as required under subsection (e), to make 
                such findings, conclusions, and policy recommendations; 
                and
                    (B) an analysis of--
                            (i) whether any identified legal or 
                        regulatory gaps or overlap in legal or 
                        regulatory standards in the protection of 
                        retail customers relating to the standards of 
                        care for brokers, dealers, investment advisers, 
                        persons associated with brokers or dealers, and 
                        persons associated with investment advisers for 
                        providing personalized investment advice about 
                        securities to retail customers can be addressed 
                        by rule; and
                            (ii) whether, and the extent to which, the 
                        Commission would require additional statutory 
                        authority to address such gaps or overlap.
    (e) Public Comment.--The Commission shall seek and consider public 
input, comments, and data in order to prepare the report required under 
subsection (d).
    (f) Rulemaking.--
            (1) In general.--If the study required under subsection (b) 
        identifies any gaps or overlap in the legal or regulatory 
        standards in the protection of retail customers relating to the 
        standards of care for brokers, dealers, investment advisers, 
        persons associated with brokers or dealers, and persons 
        associated with investment advisers for providing personalized 
        investment advice about securities to such retail customers, 
        the Commission, not later than 2 years after the date of 
        enactment of this Act, shall--
                    (A) commence a rulemaking, as necessary or 
                appropriate in the public interest and for the 
                protection of retail customers, to address such 
                regulatory gaps and overlap that can be addressed by 
                rule, using its authority under the Securities Exchange 
                Act of 1934 (15 U.S.C. 78a et seq.) and the Investment 
                Advisers Act of 1940 (15 U.S.C. 80b-1 et seq.); and
                    (B) consider and take into account the findings, 
                conclusions, and recommendations of the study required 
                under this section.
            (2) Rule of construction.--Nothing in this section shall be 
        construed to limit the rulemaking authority of the Commission 
        under any other provision of Federal law.

SEC. 914. OFFICE OF THE INVESTOR ADVOCATE.

    Section 4 of the Securities Exchange Act of 1934 (15 U.S.C. 78d) is 
amended by adding at the end the following:
    ``(g) Office of the Investor Advocate.--
            ``(1) Office established.--There is established within the 
        Commission the Office of the Investor Advocate (in this 
        subsection referred to as the `Office').
            ``(2) Investor advocate.--
                    ``(A) In general.--The head of the Office shall be 
                the Investor Advocate, who shall--
                            ``(i) report directly to the Chairman; and
                            ``(ii) be appointed by the Chairman, in 
                        consultation with the Commission, from among 
                        individuals having experience in advocating for 
                        the interests of investors in securities and 
                        investor protection issues, from the 
                        perspective of investors.
                    ``(B) Compensation.--The annual rate of pay for the 
                Investor Advocate shall be equal to the highest rate of 
                annual pay for a Senior Executive Service position 
                within the Commission.
                    ``(C) Limitation on service.--An individual who 
                serves as the Investor Advocate may not be employed by 
                the Commission--
                            ``(i) during the 2-year period ending on 
                        the date of appointment as Investor Advocate; 
                        or
                            ``(ii) during the 5-year period beginning 
                        on the date on which the person ceases to serve 
                        as the Investor Advocate.
            ``(3) Staff of office.--The Investor Advocate may retain or 
        employ independent counsel, research staff, and service staff, 
        as the Investor Advocate deems necessary to carry out the 
        functions, powers, and duties of the Office.
            ``(4) Functions of the investor advocate.--The Investor 
        Advocate shall--
                    ``(A) assist retail investors in resolving 
                significant problems such investors may have with the 
                Commission or with self-regulatory organizations;
                    ``(B) identify areas in which investors would 
                benefit from changes in the regulations of the 
                Commission or the rules of self-regulatory 
                organizations;
                    ``(C) identify problems that investors have with 
                financial service providers and investment products;
                    ``(D) analyze the potential impact on investors 
                of--
                            ``(i) proposed regulations of the 
                        Commission; and
                            ``(ii) proposed rules of self-regulatory 
                        organizations registered under this title; and
                    ``(E) to the extent practicable, propose to the 
                Commission changes in the regulations or orders of the 
                Commission and to Congress any legislative, 
                administrative, or personnel changes that may be 
                appropriate to mitigate problems identified under this 
                paragraph and to promote the interests of investors.
            ``(5) Access to documents.--The Commission shall ensure 
        that the Investor Advocate has full access to the documents of 
        the Commission and any self-regulatory organization, as 
        necessary to carry out the functions of the Office.
            ``(6) Annual reports.--
                    ``(A) Report on objectives.--
                            ``(i) In general.--Not later than June 30 
                        of each year after 2010, the Investor Advocate 
                        shall submit to the Committee on Banking, 
                        Housing, and Urban Affairs of the Senate and 
                        the Committee on Financial Services of the 
                        House of Representatives a report on the 
                        objectives of the Investor Advocate for the 
                        following fiscal year.
                            ``(ii) Contents.--Each report required 
                        under clause (i) shall contain full and 
                        substantive analysis and explanation.
                    ``(B) Report on activities.--
                            ``(i) In general.--Not later than December 
                        31 of each year after 2010, the Investor 
                        Advocate shall submit to the Committee on 
                        Banking, Housing, and Urban Affairs of the 
                        Senate and the Committee on Financial Services 
                        of the House of Representatives a report on the 
                        activities of the Investor Advocate during the 
                        immediately preceding fiscal year.
                            ``(ii) Contents.--Each report required 
                        under clause (i) shall include--
                                    ``(I) appropriate statistical 
                                information and full and substantive 
                                analysis;
                                    ``(II) information on steps that 
                                the Investor Advocate has taken during 
                                the reporting period to improve 
                                investor services and the 
                                responsiveness of the Commission and 
                                self-regulatory organizations to 
                                investor concerns;
                                    ``(III) a summary of the most 
                                serious problems encountered by 
                                investors during the reporting period;
                                    ``(IV) an inventory of the items 
                                described in subclauses (III) that 
                                includes--
                                            ``(aa) identification of 
                                        any action taken by the 
                                        Commission or the self-
                                        regulatory organization and the 
                                        result of such action;
                                            ``(bb) the length of time 
                                        that each item has remained on 
                                        such inventory; and
                                            ``(cc) for items on which 
                                        no action has been taken, the 
                                        reasons for inaction, and an 
                                        identification of any official 
                                        who is responsible for such 
                                        action;
                                    ``(V) recommendations for such 
                                administrative and legislative actions 
                                as may be appropriate to resolve 
                                problems encountered by investors; and
                                    ``(VI) any other information, as 
                                determined appropriate by the Investor 
                                Advocate.
                            ``(iii) Independence.--Each report required 
                        under this paragraph shall be provided directly 
                        to the Committees listed in clause (i) without 
                        any prior review or comment from the 
                        Commission, any commissioner, any other officer 
                        or employee of the Commission, or the Office of 
                        Management and Budget.
                            ``(iv) Confidentiality.--No report required 
                        under clause (i) may contain confidential 
                        information.
            ``(7) Regulations.--The Commission shall, by regulation, 
        establish procedures requiring a formal response to all 
        recommendations submitted to the Commission by the Investor 
        Advocate, not later than 3 months after the date of such 
        submission.''.

SEC. 915. STREAMLINING OF FILING PROCEDURES FOR SELF-REGULATORY 
              ORGANIZATIONS.

    (a) Filing Procedures.--Section 19(b) of the Securities Exchange 
Act of 1934 (15 U.S.C. 78s(b)) is amended by striking paragraph (2) 
(including the undesignated matter immediately following subparagraph 
(B)) and inserting the following:
            ``(2) Approval process.--
                    ``(A) Approval process established.--
                            ``(i) In general.--Except as provided in 
                        clause (ii), not later than 45 days after the 
                        date of publication of a proposed rule change 
                        under paragraph (1), the Commission shall--
                                    ``(I) by order, approve the 
                                proposed rule change; or
                                    ``(II) institute proceedings under 
                                subparagraph (B) to determine whether 
                                the proposed rule change should be 
                                disapproved.
                            ``(ii) Extension of time period.--The 
                        Commission may extend the period established 
                        under clause (i) by not more than an additional 
                        45 days, if--
                                    ``(I) the Commission determines 
                                that a longer period is appropriate and 
                                publishes the reasons for such 
                                determination; or
                                    ``(II) the self-regulatory 
                                organization that filed the proposed 
                                rule change consents to the longer 
                                period.
                    ``(B) Proceedings.--
                            ``(i) Notice and hearing.--If the 
                        Commission does not approve a proposed rule 
                        change under subparagraph (A), the Commission 
                        shall provide to the self-regulatory 
                        organization that filed the proposed rule 
                        change--
                                    ``(I) notice of the grounds for 
                                disapproval under consideration; and
                                    ``(II) opportunity for hearing, to 
                                be concluded not later than 180 days 
                                after the date of publication of notice 
                                of the filing of the proposed rule 
                                change.
                            ``(ii) Order of approval or disapproval.--
                                    ``(I) In general.--Except as 
                                provided in subclause (II), not later 
                                than 180 days after the date of 
                                publication under paragraph (1), the 
                                Commission shall issue an order 
                                approving or disapproving the proposed 
                                rule change.
                                    ``(II) Extension of time period.--
                                The Commission may extend the period 
                                for issuance under clause (I) by not 
                                more than 60 days, if--
                                            ``(aa) the Commission 
                                        determines that a longer period 
                                        is appropriate and publishes 
                                        the reasons for such 
                                        determination; or
                                            ``(bb) the self-regulatory 
                                        organization that filed the 
                                        proposed rule change consents 
                                        to the longer period.
                    ``(C) Standards for approval and disapproval.--
                            ``(i) Approval.--The Commission shall 
                        approve a proposed rule change of a self-
                        regulatory organization if it finds that such 
                        proposed rule change is consistent with the 
                        requirements of this title and the rules and 
                        regulations issued under this title that are 
                        applicable to such organization.
                            ``(ii) Disapproval.--The Commission shall 
                        disapprove a proposed rule change of a self-
                        regulatory organization if it does not make a 
                        finding described in clause (i).
                            ``(iii) Time for approval.--The Commission 
                        may not approve a proposed rule change earlier 
                        than 30 days after the date of publication 
                        under paragraph (1), unless the Commission 
                        finds good cause for so doing and publishes the 
                        reason for the finding.
                    ``(D) Result of failure to institute or conclude 
                proceedings.--A proposed rule change shall be deemed to 
                have been approved by the Commission, if--
                            ``(i) the Commission does not approve the 
                        proposed rule change or begin proceedings under 
                        subparagraph (B) within the period described in 
                        subparagraph (A); or
                            ``(ii) the Commission does not issue an 
                        order approving or disapproving the proposed 
                        rule change under subparagraph (B) within the 
                        period described in subparagraph (B)(ii).
                    ``(E) Publication date based on federal register 
                publishing.--For purposes of this paragraph, if, after 
                filing a proposed rule change with the Commission 
                pursuant to paragraph (1), a self-regulatory 
                organization publishes a notice of the filing of such 
                proposed rule change, together with the substantive 
                terms of such proposed rule change, on a publicly 
                accessible website, the Commission shall thereafter 
                send the notice to the Federal Register for publication 
                thereof under paragraph (1) within 15 days of the date 
                on which such website publication is made. If the 
                Commission fails to send the notice for publication 
                thereof within such 15 day period, then the date of 
                publication shall be deemed to be the date on which 
                such website publication was made.''.
    (b) Clarification of Filing Date.--
            (1) Rule of construction.--Section 19(b) of the Securities 
        Exchange Act of 1934 (15 U.S.C. 78s(b)) is amended by adding at 
        the end the following:
            ``(10) Rule of construction relating to filing date of 
        proposed rule changes.--
                    ``(A) In general.--For purposes of this subsection, 
                the date of filing of a proposed rule change shall be 
                deemed to be the date on which the Commission receives 
                the proposed rule change.
                    ``(B) Exception.--A proposed rule change has not 
                been received by the Commission for purposes of 
                subparagraph (A) if, not later than 7 days after the 
                date of receipt by the Commission, the Commission 
                notifies the self-regulatory organization that such 
                proposed rule change does not comply with the rules of 
                the Commission relating to the required form of a 
                proposed rule change.''.
            (2) Publication.--Section 19(b)(1) of the Securities 
        Exchange Act of 1934 (15 U.S.C. 78s(b)(1)) is amended by 
        striking ``upon'' and inserting ``as soon as practicable after 
        the date of''.
    (c) Effective Date of Proposed Rules.--Section 19(b)(3) of the 
Securities Exchange Act of 1934 (15 U.S.C. 78s(b)(3)) is amended--
            (1) in subparagraph (A)--
                    (A) by striking ``may take effect'' and inserting 
                ``shall take effect''; and
                    (B) by inserting ``on any person, whether or not 
                the person is a member of the self-regulatory 
                organization'' after ``charge imposed by the self-
                regulatory organization''; and
            (2) in subparagraph (C)--
                    (A) by amending the second sentence to read as 
                follows: ``At any time within the 60-day period 
                beginning on the date of filing of such a proposed rule 
                change in accordance with the provisions of paragraph 
                (1), the Commission summarily may temporarily suspend 
                the change in the rules of the self-regulatory 
                organization made thereby, if it appears to the 
                Commission that such action is necessary or appropriate 
                in the public interest, for the protection of 
                investors, or otherwise in furtherance of the purposes 
                of this title.'';
                    (B) by inserting after the second sentence the 
                following: ``If the Commission takes such action, the 
                Commission shall institute proceedings under paragraph 
                (2)(B) to determine whether the proposed rule should be 
                approved or disapproved.''; and
                    (C) in the third sentence, by striking ``the 
                preceding sentence'' and inserting ``this 
                subparagraph''.
    (d) Conforming Change.--Section 19(b)(4)(D) of the Securities 
Exchange Act of 1934 (15 U.S.C. 78s(b)(4)(D)) is amended to read as 
follows:
                    ``(D)(i) The Commission shall order the temporary 
                suspension of any change in the rules of a clearing 
                agency made by a proposed rule change that has taken 
                effect under paragraph (3), if the appropriate 
                regulatory agency for the clearing agency notifies the 
                Commission not later than 30 days after the date on 
                which the proposed rule change was filed of--
                            ``(I) the determination by the appropriate 
                        regulatory agency that the rules of such 
                        clearing agency, as so changed, may be 
                        inconsistent with the safeguarding of 
                        securities or funds in the custody or control 
                        of such clearing agency or for which it is 
                        responsible; and
                            ``(II) the reasons for the determination 
                        described in subclause (I).
                    ``(ii) If the Commission takes action under clause 
                (i), the Commission shall institute proceedings under 
                paragraph (2)(B) to determine if the proposed rule 
                change should be approved or disapproved.''.

SEC. 916. STUDY REGARDING FINANCIAL LITERACY AMONG INVESTORS.

    (a) In General.--The Commission shall conduct a study to identify--
            (1) the existing level of financial literacy among retail 
        investors, including subgroups of investors identified by the 
        Commission;
            (2) methods to improve the timing, content, and format of 
        disclosures to investors with respect to financial 
        intermediaries, investment products, and investment services;
            (3) the most useful and understandable relevant information 
        that retail investors need to make informed financial decisions 
        before engaging a financial intermediary or purchasing an 
        investment product or service that is typically sold to retail 
        investors, including shares of open-end companies, as that term 
        is defined in section 5 of the Investment Company Act of 1940 
        (15 U.S.C. 80a-5) that are registered under section 8 of that 
        Act;
            (4) methods to increase the transparency of expenses and 
        conflicts of interests in transactions involving investment 
        services and products, including shares of open-end companies 
        described in paragraph (3);
            (5) the most effective existing private and public efforts 
        to educate investors; and
            (6) in consultation with the Financial Literacy and 
        Education Commission, a strategy (including, to the extent 
        practicable, measurable goals and objectives) to increase the 
        financial literacy of investors in order to bring about a 
        positive change in investor behavior.
    (b) Report.--Not later than 2 years after the date of enactment of 
this Act, the Commission shall submit a report on the study required 
under subsection (a) to--
            (1) the Committee on Banking, Housing, and Urban Affairs of 
        the Senate; and
            (2) the Committee on Financial Services of the House of 
        Representatives.

SEC. 917. STUDY REGARDING MUTUAL FUND ADVERTISING.

    (a) In General.--The Comptroller General of the United States shall 
conduct a study on mutual fund advertising to identify--
            (1) existing and proposed regulatory requirements for open-
        end investment company advertisements;
            (2) current marketing practices for the sale of open-end 
        investment company shares, including the use of past 
        performance data, funds that have merged, and incubator funds;
            (3) the impact of such advertising on consumers; and
            (4) recommendations to improve investor protections in 
        mutual fund advertising and additional information necessary to 
        ensure that investors can make informed financial decisions 
        when purchasing shares.
    (b) Report.--Not later than 1 year after the date of enactment of 
this Act, the Comptroller General of the United States shall submit a 
report on the results of the study conducted under subsection (a) to--
            (1) the Committee on Banking, Housing, and Urban Affairs of 
        the United States Senate; and
            (2) the Committee on Financial Services of the House of 
        Representatives.

SEC. 918. CLARIFICATION OF COMMISSION AUTHORITY TO REQUIRE INVESTOR 
              DISCLOSURES BEFORE PURCHASE OF INVESTMENT PRODUCTS AND 
              SERVICES.

    Section 15 of the Securities Exchange Act of 1934 (15 U.S.C. 78o) 
is amended by adding at the end the following:
    ``(k) Disclosures to Retail Investors.--
            ``(1) In general.--Notwithstanding any other provision of 
        the securities laws, the Commission may issue rules designating 
        documents or information that shall be provided by a broker or 
        dealer to a retail investor before the purchase of an 
        investment product or service by the retail investor.
            ``(2) Considerations.--In developing any rules under 
        paragraph (1), the Commission shall consider whether the rules 
        will promote investor protection, efficiency, competition, and 
        capital formation.
            ``(3) Form and contents of documents and information.--Any 
        documents or information designated under a rule promulgated 
        under paragraph (1) shall--
                    ``(A) be in a summary format; and
                    ``(B) contain clear and concise information about--
                            ``(i) investment objectives, strategies, 
                        costs, and risks; and
                            ``(ii) any compensation or other financial 
                        incentive received by a broker, dealer, or 
                        other intermediary in connection with the 
                        purchase of retail investment products.''.

SEC. 919. STUDY ON CONFLICTS OF INTEREST.

    (a) In General.--The Comptroller General of the United States shall 
conduct a study--
            (1) to identify and examine potential conflicts of interest 
        that exist between the staffs of the investment banking and 
        equity and fixed income securities analyst functions within the 
        same firm; and
            (2) to make recommendations to Congress designed to protect 
        investors in light of such conflicts.
    (b) Considerations.--In conducting the study under subsection (a), 
the Comptroller General shall--
            (1) consider--
                    (A) the potential for investor harm resulting from 
                conflicts, including consideration of the forms of 
                misconduct engaged in by the several securities firms 
                and individuals that entered into the Global Analyst 
                Research Settlements in 2003 (also known as the 
                ``Global Settlement'');
                    (B) the nature and benefits of the undertakings to 
                which those firms agreed in enforcement proceedings, 
                including firewalls between research and investment 
                banking, separate reporting lines, dedicated legal and 
                compliance staffs, allocation of budget, physical 
                separation, compensation, employee performance 
                evaluations, coverage decisions, limitations on 
                soliciting investment banking business, disclosures, 
                transparency, and other measures;
                    (C) whether any such undertakings should be 
                codified and applied permanently to securities firms, 
                or whether the Commission should adopt rules applying 
                any such undertakings to securities firms; and
                    (D) whether to recommend regulatory or legislative 
                measures designed to mitigate possible adverse 
                consequences to investors arising from the conflicts of 
                interest or to enhance investor protection or 
                confidence in the integrity of the securities markets; 
                and
            (2) consult with State attorneys general, State securities 
        officials, the Commission, the Financial Industry Regulatory 
        Authority (``FINRA''), NYSE Regulation, investor advocates, 
        brokers, dealers, retail investors, institutional investors, 
        and academics.
    (c) Report.--The Comptroller General shall submit a report on the 
results of the study required by this section to the Committee on 
Banking, Housing, and Urban Affairs of the Senate and the Committee on 
Financial Services of the House of Representatives, not later than 18 
months after the date of enactment of this Act.

SEC. 919A. STUDY ON IMPROVED INVESTOR ACCESS TO INFORMATION ON 
              INVESTMENT ADVISERS AND BROKER-DEALERS.

    (a) Study.--
            (1) In general.--Not later than 6 months after the date of 
        enactment of this Act, the Commission shall complete a study, 
        including recommendations, of ways to improve the access of 
        investors to registration information (including disciplinary 
        actions, regulatory, judicial, and arbitration proceedings, and 
        other information) about registered and previously registered 
        investment advisers, associated persons of investment advisers, 
        brokers and dealers and their associated persons on the 
        existing Central Registration Depository and Investment Adviser 
        Registration Depository systems, as well as identify additional 
        information that should be made publicly available.
            (2) Contents.--The study required by subsection (a) shall 
        include an analysis of the advantages and disadvantages of 
        further centralizing access to the information contained in the 
        2 systems, including--
                    (A) identification of those data pertinent to 
                investors; and
                    (B) the identification of the method and format for 
                displaying and publishing such data to enhance 
                accessibility by and utility to investors.
    (b) Implementation.--Not later than 18 months after the date of 
completion of the study required by subsection (a), the Commission 
shall implement any recommendations of the study.

SEC. 919B. STUDY ON FINANCIAL PLANNERS AND THE USE OF FINANCIAL 
              DESIGNATIONS.

    (a) In General.--The Comptroller General of the United States shall 
conduct a study to evaluate--
            (1) the effectiveness of State and Federal regulations to 
        protect consumers from individuals who hold themselves out as 
        financial planners through the use of misleading designations;
            (2) current State and Federal oversight structure and 
        regulations for financial planners; and
            (3) legal or regulatory gaps in the regulation of financial 
        planners and other individuals who provide or offer to provide 
        financial planning services to consumers.
    (b) Considerations.--In conducting the study required under 
subsection (a), the Comptroller General shall consider--
            (1) the role of financial planners in providing advice 
        regarding the management of financial resources, including 
        investment planning, income tax planning, education planning, 
        retirement planning, estate planning, and risk management;
            (2) whether current regulations at the State and Federal 
        level provide adequate ethical and professional standards for 
        financial planners;
            (3) the use of the title ``financial planner'' and 
        misleading designations in connection with sale of financial 
        products, including insurance and securities;
            (4) the possible risk posed to consumers by individuals who 
        hold themselves out as financial planners through the use of 
        misleading designations, including ``financial advisor'' and 
        ``financial consultant'';
            (5) the ability of consumers to understand licensing 
        requirements and standards of care that apply to individuals 
        who provide financial advice;
            (6) the possible benefits to consumers of regulation and 
        professional oversight of financial planners; and
            (7) any other consideration that the Comptroller General 
        deems necessary or appropriate to effectively execute the study 
        required under subsection (a).
    (c) Recommendations.--In providing recommendations for the 
appropriate regulation of financial planners and other individuals who 
provide or offer to provide financial planning services, in order to 
protect consumers of financial planning services, the Comptroller 
General shall consider--
            (1) the appropriate structure for regulation of financial 
        planners and individuals providing financial planning services; 
        and
            (2) the appropriate scope of the regulations needed to 
        protect consumers, including but not limited to the need to 
        establish competency standards, practice standards, ethical 
        guidelines, disciplinary authority, and transparency to 
        consumers.
    (d) Report.--
            (1) In general.--Not later than 180 days after the date of 
        enactment of this Act, the Comptroller General shall submit a 
        report on the study required under subsection (a) to--
                    (A) the Committee on Banking, Housing, and Urban 
                Affairs of the Senate;
                    (B) the Special Committee on Aging of the Senate; 
                and
                    (C) the Committee on Financial Services of the 
                House of Representatives.
            (2) Content requirements.--The report required under 
        paragraph (1) shall describe the findings and determinations 
        made by the Comptroller General in carrying out the study 
        required under subsection (a), including a description of the 
        considerations, analysis, and government, public, industry, 
        nonprofit and consumer input that the Comptroller General 
        considered to make such findings, conclusions, and legislative, 
        regulatory, or other recommendations.

       Subtitle B--Increasing Regulatory Enforcement and Remedies

SEC. 921. AUTHORITY TO ISSUE RULES RELATED TO MANDATORY PREDISPUTE 
              ARBITRATION.

    (a) Amendment to Securities Exchange Act of 1934.--Section 15 of 
the Securities Exchange Act of 1934 (15 U.S.C. 78o), as amended by 
section 918, is amended by adding at the end the following:
    ``(l) Authority To Restrict Mandatory Predispute Arbitration.--The 
Commission may conduct a rulemaking to reaffirm or prohibit, or impose 
or not impose conditions or limitations on the use of, agreements that 
require customers or clients of any broker, dealer, or municipal 
securities dealer to arbitrate any dispute between them and such 
broker, dealer, or municipal securities dealer that arises under the 
securities laws or the rules of a self-regulatory organization, if the 
Commission finds that such reaffirmation, prohibition, imposition of 
conditions or limitations, or other action is in the public interest 
and for the protection of investors.''.
    (b) Amendment to Investment Advisers Act of 1940.--Section 205 of 
the Investment Advisers Act of 1940 (15 U.S.C. 80b-5) is amended by 
adding at the end the following:
    ``(f) Authority To Issue Rules Related to Mandatory Predispute 
Arbitration.--The Commission may conduct rulemaking to reaffirm or 
prohibit, or impose or not impose conditions or limitations on the use 
of, agreements that require customers or clients of any investment 
adviser to arbitrate any dispute between them and such investment 
adviser that arises under the securities laws, as defined in section 3 
of the Securities Exchange Act of 1934 (15 U.S.C. 78c), or the rules of 
a self-regulatory organization, if the Commission finds that such 
reaffirmation, prohibition, imposition of conditions or limitations, or 
other action is in the public interest and for the protection of 
investors.''.

SEC. 922. WHISTLEBLOWER PROTECTION.

    (a) In General.--The Securities Exchange Act of 1934 (15 U.S.C. 78a 
et seq.) is amended by inserting after section 21E the following:

``SEC. 21F. SECURITIES WHISTLEBLOWER INCENTIVES AND PROTECTION.

    ``(a) Definitions.--In this section the following definitions shall 
apply:
            ``(1) Covered judicial or administrative action.--The term 
        `covered judicial or administrative action' means any judicial 
        or administrative action brought by the Commission under the 
        securities laws that results in monetary sanctions exceeding 
        $1,000,000.
            ``(2) Fund.--The term `Fund' means the Securities and 
        Exchange Commission Investor Protection Fund.
            ``(3) Original information.--The term `original 
        information' means information that--
                    ``(A) is derived from the independent knowledge or 
                analysis of a whistleblower;
                    ``(B) is not known to the Commission from any other 
                source, unless the whistleblower is the original source 
                of the information; and
                    ``(C) is not exclusively derived from an allegation 
                made in a judicial or administrative hearing, in a 
                governmental report, hearing, audit, or investigation, 
                or from the news media, unless the whistleblower is a 
                source of the information.
            ``(4) Monetary sanctions.--The term `monetary sanctions', 
        when used with respect to any judicial or administrative 
        action, means--
                    ``(A) any monies, including penalties, 
                disgorgement, and interest, ordered to be paid; and
                    ``(B) any monies deposited into a disgorgement fund 
                or other fund pursuant to section 308(b) of the 
                Sarbanes-Oxley Act of 2002 (15 U.S.C. 7246(b)), as a 
                result of such action or any settlement of such action.
            ``(5) Related action.--The term `related action', when used 
        with respect to any judicial or administrative action brought 
        by the Commission under the securities laws, means any judicial 
        or administrative action brought by an entity described in 
        subclauses (I) through (IV) of subsection (h)(2)(D)(i) that is 
        based upon the original information provided by a whistleblower 
        pursuant to subsection (a) that led to the successful 
        enforcement of the Commission action.
            ``(6) Whistleblower.--The term `whistleblower' means any 
        individual, or 2 or more individuals acting jointly, who 
        provides information relating to a violation of the securities 
        laws to the Commission, in a manner established, by rule or 
        regulation, by the Commission.
    ``(b) Awards.--
            ``(1) In general.--In any covered judicial or 
        administrative action, or related action, the Commission, under 
        regulations prescribed by the Commission and subject to 
        subsection (c), shall pay an award or awards to 1 or more 
        whistleblowers who voluntarily provided original information to 
        the Commission that led to the successful enforcement of the 
        covered judicial or administrative action, or related action, 
        in an aggregate amount equal to--
                    ``(A) not less than 10 percent, in total, of what 
                has been collected of the monetary sanctions imposed in 
                the action or related actions; and
                    ``(B) not more than 30 percent, in total, of what 
                has been collected of the monetary sanctions imposed in 
                the action or related actions.
            ``(2) Payment of awards.--Any amount paid under paragraph 
        (1) shall be paid from the Fund.
    ``(c) Determination of Amount of Award; Denial of Award.--
            ``(1) Determination of amount of award.--
                    ``(A) Discretion.--The determination of the amount 
                of an award made under subsection (b) shall be in the 
                discretion of the Commission.
                    ``(B) Criteria.--In determining the amount of an 
                award made under subsection (b), the Commission shall 
                take into account--
                            ``(i) the significance of the information 
                        provided by the whistleblower to the success of 
                        the covered judicial or administrative action;
                            ``(ii) the degree of assistance provided by 
                        the whistleblower and any legal representative 
                        of the whistleblower in a covered judicial or 
                        administrative action;
                            ``(iii) the programmatic interest of the 
                        Commission in deterring violations of the 
                        securities laws by making awards to 
                        whistleblowers who provide information that 
                        lead to the successful enforcement of such 
                        laws; and
                            ``(iv) such additional relevant factors as 
                        the Commission may establish by rule or 
                        regulation.
            ``(2) Denial of award.--No award under subsection (b) shall 
        be made--
                    ``(A) to any whistleblower who is, or was at the 
                time the whistleblower acquired the original 
                information submitted to the Commission, a member, 
                officer, or employee of--
                            ``(i) an appropriate regulatory agency;
                            ``(ii) the Department of Justice;
                            ``(iii) a self-regulatory organization;
                            ``(iv) the Public Company Accounting 
                        Oversight Board; or
                            ``(v) a law enforcement organization;
                    ``(B) to any whistleblower who is convicted of a 
                criminal violation related to the judicial or 
                administrative action for which the whistleblower 
                otherwise could receive an award under this section;
                    ``(C) to any whistleblower who gains the 
                information through the performance of an audit of 
                financial statements required under the securities laws 
                and for whom such submission would be contrary to the 
                requirements of section 101A of the Securities Exchange 
                Act of 1934 (15 U.S.C. 78j-1); or
                    ``(D) to any whistleblower who fails to submit 
                information to the Commission in such form as the 
                Commission may, by rule, require.
    ``(d) Representation.--
            ``(1) Permitted representation.--Any whistleblower who 
        makes a claim for an award under subsection (b) may be 
        represented by counsel.
            ``(2) Required representation.--
                    ``(A) In general.--Any whistleblower who 
                anonymously makes a claim for an award under subsection 
                (b) shall be represented by counsel if the 
                whistleblower anonymously submits the information upon 
                which the claim is based.
                    ``(B) Disclosure of identity.--Prior to the payment 
                of an award, a whistleblower shall disclose the 
                identity of the whistleblower and provide such other 
                information as the Commission may require, directly or 
                through counsel for the whistleblower.
    ``(e) No Contract Necessary.--No contract with the Commission is 
necessary for any whistleblower to receive an award under subsection 
(b), unless otherwise required by the Commission by rule or regulation.
    ``(f) Appeals.--Any determination made under this section, 
including whether, to whom, or in what amount to make awards, shall be 
in the discretion of the Commission. Any such determination may be 
appealed to the appropriate court of appeals of the United States not 
more than 30 days after the determination is issued by the Commission. 
The court shall review the determination made by the Commission in 
accordance with section 706 of title 5, United States Code.
    ``(g) Investor Protection Fund.--
            ``(1) Fund established.--There is established in the 
        Treasury of the United States a fund to be known as the 
        `Securities and Exchange Commission Investor Protection Fund'.
            ``(2) Use of fund.--The Fund shall be available to the 
        Commission, without further appropriation or fiscal year 
        limitation, for--
                    ``(A) paying awards to whistleblowers as provided 
                in subsection (b); and
                    ``(B) funding the activities of the Inspector 
                General of the Commission under section 4(i).
            ``(3) Deposits and credits.--There shall be deposited into 
        or credited to the Fund an amount equal to--
                    ``(A) the amount awarded under subsection (b) from 
                any monetary sanction collected by the Commission in 
                any judicial or administrative action brought by the 
                Commission that is based on information provided by a 
                whistleblower under the securities laws, unless, the 
                balance of the Fund at the time the monetary sanction 
                is collected exceeds $200,000,000;
                    ``(B) any monetary sanction added to a disgorgement 
                fund or other fund pursuant to section 308 of the 
                Sarbanes-Oxley Act of 2002 (15 U.S.C. 7246) that is not 
                distributed to the victims for whom the disgorgement 
                fund was established, unless the balance of the 
                disgorgement fund at the time the determination is made 
                not to distribute the monetary sanction to such victims 
                exceeds $100,000,000; and
                    ``(C) all income from investments made under 
                paragraph (4).
            ``(4) Investments.--
                    ``(A) Amounts in fund may be invested.--The 
                Commission may request the Secretary of the Treasury to 
                invest the portion of the Fund that is not, in the 
                discretion of the Commission, required to meet the 
                current needs of the Fund.
                    ``(B) Eligible investments.--Investments shall be 
                made by the Secretary of the Treasury in obligations of 
                the United States or obligations that are guaranteed as 
                to principal and interest by the United States, with 
                maturities suitable to the needs of the Fund as 
                determined by the Commission on the record.
                    ``(C) Interest and proceeds credited.--The interest 
                on, and the proceeds from the sale or redemption of, 
                any obligations held in the Fund shall be credited to 
                the Fund.
            ``(5) Reports to congress.--Not later than October 30 of 
        each fiscal year beginning after the date of enactment of this 
        subsection, the Commission shall submit to the Committee on 
        Banking, Housing, and Urban Affairs of the Senate, and the 
        Committee on Financial Services of the House of Representatives 
        a report on--
                    ``(A) the whistleblower award program, established 
                under this section, including--
                            ``(i) a description of the number of awards 
                        granted; and
                            ``(ii) the types of cases in which awards 
                        were granted during the preceding fiscal year;
                    ``(B) the balance of the Fund at the beginning of 
                the preceding fiscal year;
                    ``(C) the amounts deposited into or credited to the 
                Fund during the preceding fiscal year;
                    ``(D) the amount of earnings on investments made 
                under paragraph (4) during the preceding fiscal year;
                    ``(E) the amount paid from the Fund during the 
                preceding fiscal year to whistleblowers pursuant to 
                subsection (b);
                    ``(F) the balance of the Fund at the end of the 
                preceding fiscal year; and
                    ``(G) a complete set of audited financial 
                statements, including--
                            ``(i) a balance sheet;
                            ``(ii) income statement; and
                            ``(iii) cash flow analysis.
    ``(h) Protection of Whistleblowers.--
            ``(1) Prohibition against retaliation.--
                    ``(A) In general.--No employer may discharge, 
                demote, suspend, threaten, harass, directly or 
                indirectly, or in any other manner discriminate 
                against, a whistleblower in the terms and conditions of 
                employment because of any lawful act done by the 
                whistleblower--
                            ``(i) in providing information to the 
                        Commission in accordance with subsection (a); 
                        or
                            ``(ii) in assisting in any investigation or 
                        judicial or administrative action of the 
                        Commission based upon or related to such 
                        information.
                    ``(B) Enforcement.--
                            ``(i) Cause of action.--An individual who 
                        alleges discharge or other discrimination in 
                        violation of subparagraph (A) may bring an 
                        action under this subsection in the appropriate 
                        district court of the United States for the 
                        relief provided in subparagraph (C).
                            ``(ii) Subpoenas.--A subpoena requiring the 
                        attendance of a witness at a trial or hearing 
                        conducted under this section may be served at 
                        any place in the United States.
                            ``(iii) Statute of limitations.--
                                    ``(I) In general.--An action under 
                                this subsection may not be brought--
                                            ``(aa) more than 6 years 
                                        after the date on which the 
                                        violation of subparagraph (A) 
                                        occurred; or
                                            ``(bb) more than 3 years 
                                        after the date when facts 
                                        material to the right of action 
                                        are known or reasonably should 
                                        have been known by the employee 
                                        alleging a violation of 
                                        subparagraph (A).
                                    ``(II) Required action within 10 
                                years.--Notwithstanding subclause (I), 
                                an action under this subsection may not 
                                in any circumstance be brought more 
                                than 10 years after the date on which 
                                the violation occurs.
                    ``(C) Relief.--Relief for an individual prevailing 
                in an action brought under subparagraph (B) shall 
                include--
                            ``(i) reinstatement with the same seniority 
                        status that the individual would have had, but 
                        for the discrimination;
                            ``(ii) 2 times the amount of back pay 
                        otherwise owed to the individual, with 
                        interest; and
                            ``(iii) compensation for litigation costs, 
                        expert witness fees, and reasonable attorneys' 
                        fees.
            ``(2) Confidentiality.--
                    ``(A) In general.--Unless and until required to be 
                disclosed to a defendant or respondent in connection 
                with a proceeding instituted by the Commission or any 
                entity described in subparagraph (D), all information 
                provided to the Commission by a whistleblower--
                            ``(i) in any proceeding in any Federal or 
                        State court or administrative agency--
                                    ``(I) shall be confidential and 
                                privileged as an evidentiary matter; 
                                and
                                    ``(II) shall not be subject to 
                                civil discovery or other legal process; 
                                and
                            ``(ii) shall not be subject to disclosure 
                        under section 552 of title 5, United States 
                        Code (commonly referred to as the Freedom of 
                        Information Act) or under any proceeding under 
                        that section.
                    ``(B) Exempted statute.--For purposes of section 
                552 of title 5, United States Code, this paragraph 
                shall be considered a statute described in subsection 
                (b)(3)(B) of such section 552.
                    ``(C) Rule of construction.--Nothing in this 
                section is intended to limit, or shall be construed to 
                limit, the ability of the Attorney General to present 
                such evidence to a grand jury or to share such evidence 
                with potential witnesses or defendants in the course of 
                an ongoing criminal investigation.
                    ``(D) Availability to government agencies.--
                            ``(i) In general.--Without the loss of its 
                        status as confidential and privileged in the 
                        hands of the Commission, all information 
                        referred to in subparagraph (A) may, in the 
                        discretion of the Commission, when determined 
                        by the Commission to be necessary to accomplish 
                        the purposes of this Act and to protect 
                        investors, be made available to--
                                    ``(I) the Attorney General of the 
                                United States;
                                    ``(II) an appropriate regulatory 
                                authority;
                                    ``(III) a self-regulatory 
                                organization;
                                    ``(IV) a State attorney general in 
                                connection with any criminal 
                                investigation;
                                    ``(V) any appropriate State 
                                regulatory authority;
                                    ``(VI) the Public Company 
                                Accounting Oversight Board;
                                    ``(VII) a foreign securities 
                                authority; and
                                    ``(VIII) a foreign law enforcement 
                                authority.
                            ``(ii) Confidentiality.--
                                    ``(I) In general.--Each of the 
                                entities described in subclauses (I) 
                                through (VI) of clause (i) shall 
                                maintain such information as 
                                confidential and privileged, in 
                                accordance with the requirements 
                                established under subparagraph (A).
                                    ``(II) Foreign authorities.--Each 
                                of the entities described in subclauses 
                                (VII) and (VIII) of clause (i) shall 
                                maintain such information in accordance 
                                with such assurances of confidentiality 
                                as the Commission determines 
                                appropriate.
            ``(3) Rights retained.--Nothing in this section shall be 
        deemed to diminish the rights, privileges, or remedies of any 
        whistleblower under any Federal or State law, or under any 
        collective bargaining agreement.
    ``(i) Provision of False Information.--A whistleblower shall not be 
entitled to an award under this section if the whistleblower--
            ``(1) knowingly and willfully makes any false, fictitious, 
        or fraudulent statement or representation; or
            ``(2) uses any false writing or document knowing the 
        writing or document contains any false, fictitious, or 
        fraudulent statement or entry.
    ``(j) Rulemaking Authority.--The Commission shall have the 
authority to issue such rules and regulations as may be necessary or 
appropriate to implement the provisions of this section consistent with 
the purposes of this section.''.
    (b) Protection for Employees of Nationally Recognized Statistical 
Rating Organizations.--Section 1514A(a) of title 18, United States 
Code, is amended--
            (1) by inserting ``or nationally recognized statistical 
        rating organization (as defined in section 3(a) of the 
        Securities Exchange Act of 1934 (15 U.S.C. 78c),'' after 
        ``78o(d)),''; and
            (2) by inserting ``or nationally recognized statistical 
        rating organization'' after ``such company''.

SEC. 923. CONFORMING AMENDMENTS FOR WHISTLEBLOWER PROTECTION.

    (a) In General.--
            (1) Securities act of 1933.--Section 20(d)(3)(A) of the 
        Securities Act of 1933 (15 U.S.C. 77t(d)(3)(A)) is amended by 
        inserting ``and section 21F of the Securities Exchange Act of 
        1934'' after ``the Sarbanes-Oxley Act of 2002''.
            (2) Investment company act of 1940.--Section 42(e)(3)(A) of 
        the Investment Company Act of 1940 (15 U.S.C. 80a-41(e)(3)(A)) 
        is amended by inserting ``and section 21F of the Securities 
        Exchange Act of 1934'' after ``the Sarbanes-Oxley Act of 
        2002''.
            (3) Investment advisers act of 1940.--Section 209(e)(3)(A) 
        of the Investment Advisers Act of 1940 (15 U.S.C. 80b-
        9(e)(3)(A)) is amended by inserting ``and section 21F of the 
        Securities Exchange Act of 1934'' after ``the Sarbanes-Oxley 
        Act of 2002''.
    (b) Securities Exchange Act.--
            (1) Section 21.--Section 21(d)(3)(C)(i) of the Securities 
        Exchange Act of 1934 (15 U.S.C. 78u(d)(3)(C)(i)) is amended by 
        inserting ``and section 21F of this title'' after ``the 
        Sarbanes-Oxley Act of 2002''.
            (2) Section 21a.--Section 21A of the Securities Exchange 
        Act of 1934 (15 U.S.C. 78u-1) is amended--
                    (A) in subsection (d)(1) by--
                            (i) striking ``(subject to subsection 
                        (e))''; and
                            (ii) inserting ``and section 21F of this 
                        title'' after ``the Sarbanes-Oxley Act of 
                        2002'';
                    (B) by striking subsection (e); and
                    (C) by redesignating subsections (f) and (g) as 
                subsections (e) and (f), respectively.

SEC. 924. IMPLEMENTATION AND TRANSITION PROVISIONS FOR WHISTLEBLOWER 
              PROTECTION.

    (a) Implementing Rules.--The Commission shall issue final 
regulations implementing the provisions of section 21F of the 
Securities Exchange Act of 1934, as added by this subtitle, not later 
than 270 days after the date of enactment of this Act.
    (b) Original Information.--Information provided to the Commission 
by a whistleblower in accordance with the regulations referenced in 
subsection (a) shall not lose the status of original information (as 
defined in section 21F(i)(1) of the Securities Exchange Act of 1934, as 
added by this subtitle) solely because the whistleblower provided the 
information prior to the effective date of the regulations, provided 
that the information is--
            (1) provided by the whistleblower after the date of 
        enactment of this subtitle, or monetary sanctions are collected 
        after the date of enactment of this subtitle; or
            (2) related to a violation for which an award under section 
        21F of the Securities Exchange Act of 1934, as added by this 
        subtitle, could have been paid at the time the information was 
        provided by the whistleblower.
    (c) Awards.--A whistleblower may receive an award pursuant to 
section 21F of the Securities Exchange Act of 1934, as added by this 
subtitle, regardless of whether any violation of a provision of the 
securities laws, or a rule or regulation thereunder, underlying the 
judicial or administrative action upon which the award is based, 
occurred prior to the date of enactment of this subtitle.

SEC. 925. COLLATERAL BARS.

    (a) Securities Exchange Act of 1934.--
            (1) Section 15.--Section 15(b)(6)(A) of the Securities 
        Exchange Act of 1934 (15 U.S.C. 78o(b)(6)(A)) is amended by 
        striking ``12 months, or bar such person from being associated 
        with a broker or dealer,'' and inserting ``12 months, or bar 
        any such person from being associated with a broker, dealer, 
        investment adviser, municipal securities dealer, municipal 
        advisor, transfer agent, or nationally recognized statistical 
        rating organization,''.
            (2) Section 15b.--Section 15B(c)(4) of the Securities 
        Exchange Act of 1934 (15 U.S.C. 78o-4(c)(4)) is amended by 
        striking ``twelve months or bar any such person from being 
        associated with a municipal securities dealer,'' and inserting 
        ``12 months or bar any such person from being associated with a 
        broker, dealer, investment adviser, municipal securities 
        dealer, municipal advisor, transfer agent, or nationally 
        recognized statistical rating organization,''.
            (3) Section 17a.--Section 17A(c)(4)(C) of the Securities 
        Exchange Act of 1934 (15 U.S.C. 78q-1(c)(4)(C)) is amended by 
        striking ``twelve months or bar any such person from being 
        associated with the transfer agent,'' and inserting ``12 months 
        or bar any such person from being associated with any transfer 
        agent, broker, dealer, investment adviser, municipal securities 
        dealer, municipal advisor, or nationally recognized statistical 
        rating organization,''.
    (b) Investment Advisers Act of 1940.--Section 203(f) of the 
Investment Advisers Act of 1940 (15 U.S.C. 80b-3(f)) is amended by 
striking ``twelve months or bar any such person from being associated 
with an investment adviser,'' and inserting ``12 months or bar any such 
person from being associated with an investment adviser, broker, 
dealer, municipal securities dealer, municipal advisor, transfer agent, 
or nationally recognized statistical rating organization,''.

SEC. 926. DISQUALIFYING FELONS AND OTHER ``BAD ACTORS'' FROM REGULATION 
              D OFFERINGS.

    Not later than 1 year after the date of enactment of this Act, the 
Commission shall issue rules for the disqualification of offerings and 
sales of securities made under section 230.506 of title 17, Code of 
Federal Regulations, that--
            (1) are substantially similar to the provisions of section 
        230.262 of title 17, Code of Federal Regulations, or any 
        successor thereto; and
            (2) disqualify any offering or sale of securities by a 
        person that--
                    (A) is subject to a final order of a State 
                securities commission (or an agency or officer of a 
                State performing like functions), a State authority 
                that supervises or examines banks, savings 
                associations, or credit unions, a State insurance 
                commission (or an agency or officer of a State 
                performing like functions), an appropriate Federal 
                banking agency, or the National Credit Union 
                Administration, that--
                            (i) bars the person from--
                                    (I) association with an entity 
                                regulated by such commission, 
                                authority, agency, or officer;
                                    (II) engaging in the business of 
                                securities, insurance, or banking; or
                                    (III) engaging in savings 
                                association or credit union activities; 
                                or
                            (ii) constitutes a final order based on a 
                        violation of any law or regulation that 
                        prohibits fraudulent, manipulative, or 
                        deceptive conduct within the 10-year period 
                        ending on the date of the filing of the offer 
                        or sale; or
                    (B) has been convicted of any felony or misdemeanor 
                in connection with the purchase or sale of any security 
                or involving the making of any false filing with the 
                Commission.

SEC. 927. EQUAL TREATMENT OF SELF-REGULATORY ORGANIZATION RULES.

    Section 29(a) of the Securities Exchange Act of 1934 (15 U.S.C. 
78cc(a)) is amended by striking ``an exchange required thereby'' and 
inserting ``a self-regulatory organization,''.

SEC. 928. CLARIFICATION THAT SECTION 205 OF THE INVESTMENT ADVISERS ACT 
              OF 1940 DOES NOT APPLY TO STATE-REGISTERED ADVISERS.

    Section 205(a) of the Investment Advisers Act of 1940 (15 U.S.C. 
80b-5(a)) is amended, in the matter preceding paragraph (1)--
            (1) by striking ``, unless exempt from registration 
        pursuant to section 203(b),'' and inserting ``registered or 
        required to be registered with the Commission'';
            (2) by striking ``make use of the mails or any means or 
        instrumentality of interstate commerce, directly or indirectly, 
        to''; and
            (3) by striking ``to'' after ``in any way''.

SEC. 929. UNLAWFUL MARGIN LENDING.

    Section 7(c)(1)(A) of the Securities Exchange Act of 1934 (15 
U.S.C. 78g(c)(1)(A)) is amended by striking ``; and'' and inserting ``; 
or''.

SEC. 929A. PROTECTION FOR EMPLOYEES OF SUBSIDIARIES AND AFFILIATES OF 
              PUBLICLY TRADED COMPANIES.

    Section 1514A of title 18, United States Code, is amended by 
inserting ``including any subsidiary or affiliate whose financial 
information is included in the consolidated financial statements of 
such company'' after ``the Securities Exchange Act of 1934 (15 U.S.C. 
78o(d))''.

SEC. 929B. FAIR FUND AMENDMENTS.

    Section 308 of the Sarbanes-Oxley Act of 2002 (15 U.S.C. 7246(a)) 
is amended--
            (1) by striking subsection (a) and inserting the following:
    ``(a) Civil Penalties To Be Used for the Relief of Victims.--If, in 
any judicial or administrative action brought by the Commission under 
the securities laws, the Commission obtains a civil penalty against any 
person for a violation of such laws, or such person agrees, in 
settlement of any such action, to such civil penalty, the amount of 
such civil penalty shall, on the motion or at the direction of the 
Commission, be added to and become part of a disgorgement fund or other 
fund established for the benefit of the victims of such violation.'';
            (2) in subsection (b)--
                    (A) by striking ``for a disgorgement fund described 
                in subsection (a)'' and inserting ``for a disgorgement 
                fund or other fund described in subsection (a)''; and
                    (B) by striking ``in the disgorgement fund'' and 
                inserting ``in such fund''; and
            (3) by striking subsection (e).

SEC. 929C. INCREASING THE BORROWING LIMIT ON TREASURY LOANS.

    Section 4(h) of the Securities Investor Protection Act of 1970 (15 
U.S.C. 78ddd(h)) is amended in the first sentence, by striking 
``$1,000,000,000'' and inserting ``$2,500,000,000''.

  Subtitle C--Improvements to the Regulation of Credit Rating Agencies

SEC. 931. FINDINGS.

    Congress finds the following:
            (1) Because of the systemic importance of credit ratings 
        and the reliance placed on credit ratings by individual and 
        institutional investors and financial regulators, the 
        activities and performances of credit rating agencies, 
        including nationally recognized statistical rating 
        organizations, are matters of national public interest, as 
        credit rating agencies are central to capital formation, 
        investor confidence, and the efficient performance of the 
        United States economy.
            (2) Credit rating agencies, including nationally recognized 
        statistical rating organizations, play a critical 
        ``gatekeeper'' role in the debt market that is functionally 
        similar to that of securities analysts, who evaluate the 
        quality of securities in the equity market, and auditors, who 
        review the financial statements of firms. Such role justifies a 
        similar level of public oversight and accountability.
            (3) Because credit rating agencies perform evaluative and 
        analytical services on behalf of clients, much as other 
        financial ``gatekeepers'' do, the activities of credit rating 
        agencies are fundamentally commercial in character and should 
        be subject to the same standards of liability and oversight as 
        apply to auditors, securities analysts, and investment bankers.
            (4) In certain activities, particularly in advising 
        arrangers of structured financial products on potential ratings 
        of such products, credit rating agencies face conflicts of 
        interest that need to be carefully monitored and that therefore 
        should be addressed explicitly in legislation in order to give 
        clearer authority to the Securities and Exchange Commission.
            (5) In the recent financial crisis, the ratings on 
        structured financial products have proven to be inaccurate. 
        This inaccuracy contributed significantly to the mismanagement 
        of risks by financial institutions and investors, which in turn 
        adversely impacted the health of the economy in the United 
        States and around the world. Such inaccuracy necessitates 
        increased accountability on the part of credit rating agencies.

SEC. 932. ENHANCED REGULATION, ACCOUNTABILITY, AND TRANSPARENCY OF 
              NATIONALLY RECOGNIZED STATISTICAL RATING ORGANIZATIONS.

    Section 15E of the Securities Exchange Act of 1934 (15 U.S.C. 78o-
7) is amended--
            (1) in subsection (c)--
                    (A) in paragraph (2)--
                            (i) in the second sentence, by inserting 
                        ``any other provision of this section, or'' 
                        after ``Notwithstanding''; and
                            (ii) by inserting after the period at the 
                        end the following: ``Nothing in this paragraph 
                        may be construed to afford a defense against 
                        any action or proceeding brought by the 
                        Commission to enforce the antifraud provisions 
                        of the securities laws.''; and
                    (B) by adding at the end the following:
            ``(3) Internal controls over processes for determining 
        credit ratings.--
                    ``(A) In general.--Each nationally recognized 
                statistical rating organization shall establish, 
                maintain, enforce, and document an effective internal 
                control structure governing the implementation of and 
                adherence to policies, procedures, and methodologies 
                for determining credit ratings, taking into 
                consideration such factors as the Commission may 
                prescribe, by rule.
                    ``(B) Attestation requirement.--The Commission 
                shall prescribe rules requiring each nationally 
                recognized statistical rating organization to submit to 
                the Commission an annual internal controls report, 
                which shall contain--
                            ``(i) a description of the responsibility 
                        of the management of the nationally recognized 
                        statistical rating organization in establishing 
                        and maintaining an effective internal control 
                        structure under subparagraph (A);
                            ``(ii) an assessment of the effectiveness 
                        of the internal control structure of the 
                        nationally recognized statistical rating 
                        organization; and
                            ``(iii) the attestation of the chief 
                        executive officer, or equivalent individual, of 
                        the nationally recognized statistical rating 
                        organization.'';
            (2) in subsection (d)--
                    (A) in the subsection heading, by inserting 
                ``Fine,'' after ``Censure,'';
                    (B) by inserting ``fine,'' after ``censure,'' each 
                place that term appears;
                    (C) in paragraph (2), by redesignating 
                subparagraphs (A) and (B) as clauses (i) and (ii), 
                respectively, and adjusting the clause margins 
                accordingly;
                    (D) by redesignating paragraphs (1) through (5) as 
                subparagraphs (A) through (E), respectively, and 
                adjusting the subparagraph margins accordingly;
                    (E) in the matter preceding subparagraph (A), as so 
                redesignated, by striking ``The Commission'' and 
                inserting the following:
            ``(1) In general.--The Commission'';
                    (F) in subparagraph (D), as so redesignated, by 
                striking ``or'' at the end;
                    (G) in subparagraph (E), as so redesignated, by 
                striking the period at the end and inserting a 
                semicolon; and
                    (H) by adding at the end the following:
                    ``(F) has failed reasonably to supervise, with a 
                view to preventing a violation of the securities laws, 
                an individual who commits such a violation, if the 
                individual is subject to the supervision of that 
                person.
            ``(2) Suspension or revocation for particular class of 
        securities.--
                    ``(A) In general.--The Commission may temporarily 
                suspend or permanently revoke the registration of a 
                nationally recognized statistical rating organization 
                with respect to a particular class or subclass of 
                securities, if the Commission finds, on the record 
                after notice and opportunity for hearing, that the 
                nationally recognized statistical rating organization 
                does not have adequate financial and managerial 
                resources to consistently produce credit ratings with 
                integrity.
                    ``(B) Considerations.--In making any determination 
                under subparagraph (A), the Commission shall consider--
                            ``(i) whether the nationally recognized 
                        statistical rating organization has failed over 
                        a sustained period of time, as determined by 
                        the Commission, to produce ratings that are 
                        accurate for that class or subclass of 
                        securities; and
                            ``(ii) such other factors as the Commission 
                        may determine.'';
            (3) in subsection (h), by adding at the end the following:
            ``(3) Separation of ratings from sales and marketing.--
                    ``(A) Rules required.--The Commission shall issue 
                rules to prevent the sales and marketing considerations 
                of a nationally recognized statistical rating 
                organization from influencing the production of ratings 
                by the nationally recognized statistical rating 
                organization.
                    ``(B) Contents of rules.--The rules issued under 
                subparagraph (A) shall provide for--
                            ``(i) exceptions for small nationally 
                        recognized statistical rating organizations 
                        with respect to which the Commission determines 
                        that the separation of the production of 
                        ratings and sales and marketing activities is 
                        not appropriate; and
                            ``(ii) suspension or revocation of the 
                        registration of a nationally recognized 
                        statistical rating organization, if the 
                        Commission finds, on the record, after notice 
                        and opportunity for a hearing, that--
                                    ``(I) the nationally recognized 
                                statistical rating organization has 
                                committed a violation of a rule issued 
                                under this subsection; and
                                    ``(II) the violation of a rule 
                                issued under this subsection affected a 
                                rating.'';
            (4) in subsection (j)--
                    (A) by striking ``Each'' and inserting the 
                following:
            ``(1) In general.--Each''; and
                    (B) by adding at the end the following:
            ``(2) Limitations.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), an individual designated under 
                paragraph (1) may not, while serving in the designated 
                capacity--
                            ``(i) perform credit ratings;
                            ``(ii) participate in the development of 
                        ratings methodologies or models;
                            ``(iii) perform marketing or sales 
                        functions; or
                            ``(iv) participate in establishing 
                        compensation levels, other than for employees 
                        working for that individual.
                    ``(B) Exception.--The Commission may exempt a small 
                nationally recognized statistical rating organization 
                from the limitations under this paragraph, if the 
                Commission finds that compliance with such limitations 
                would impose an unreasonable burden on the nationally 
                recognized statistical rating organization.
            ``(3) Other duties.--Each individual designated under 
        paragraph (1) shall establish procedures for the receipt, 
        retention, and treatment of--
                    ``(A) complaints regarding credit ratings, models, 
                methodologies, and compliance with the securities laws 
                and the policies and procedures developed under this 
                section; and
                    ``(B) confidential, anonymous complaints by 
                employees or users of credit ratings.
            ``(4) Annual reports required.--
                    ``(A) Annual reports required.--Each individual 
                designated under paragraph (1) shall submit to the 
                nationally recognized statistical rating organization 
                an annual report on the compliance of the nationally 
                recognized statistical rating organization with the 
                securities laws and the policies and procedures of the 
                nationally recognized statistical rating organization 
                that includes--
                            ``(i) a description of any material changes 
                        to the code of ethics and conflict of interest 
                        policies of the nationally recognized 
                        statistical rating organization; and
                            ``(ii) a certification that the report is 
                        accurate and complete.
                    ``(B) Submission of reports to the commission.--
                Each nationally recognized statistical rating 
                organization shall file the reports required under 
                subparagraph (A) together with the financial report 
                that is required to be submitted to the Commission 
                under this section.''; and
            (5) by striking subsection (p) and inserting the following:
    ``(p) Regulation of Nationally Recognized Statistical Rating 
Organizations.--
            ``(1) Establishment of office of credit ratings.--
                    ``(A) Office established.--The Commission shall 
                establish within the Commission an Office of Credit 
                Ratings (referred to in this subsection as the 
                `Office') to administer the rules of the Commission--
                            ``(i) with respect to the practices of 
                        nationally recognized statistical rating 
                        organizations in determining ratings, for the 
                        protection of users of credit ratings and in 
                        the public interest;
                            ``(ii) to promote accuracy in credit 
                        ratings issued by nationally recognized 
                        statistical rating organizations; and
                            ``(iii) to ensure that such ratings are not 
                        unduly influenced by conflicts of interest.
                    ``(B) Director of the office.--The head of the 
                Office shall be the Director, who shall report to the 
                Chairman.
            ``(2) Staffing.--The Office established under this 
        subsection shall be staffed sufficiently to carry out fully the 
        requirements of this section. The staff shall include persons 
        with knowledge of and expertise in corporate, municipal, and 
        structured debt finance.
            ``(3) Commission examinations.--
                    ``(A) Annual examinations required.--The Office 
                shall conduct an examination of each nationally 
                recognized statistical rating organization at least 
                annually.
                    ``(B) Conduct of examinations.--Each examination 
                under subparagraph (A) shall include a review of--
                            ``(i) whether the nationally recognized 
                        statistical rating organization conducts 
                        business in accordance with the policies, 
                        procedures, and rating methodologies of the 
                        nationally recognized statistical rating 
                        organization;
                            ``(ii) the management of conflicts of 
                        interest by the nationally recognized 
                        statistical rating organization;
                            ``(iii) implementation of ethics policies 
                        by the nationally recognized statistical rating 
                        organization;
                            ``(iv) the internal supervisory controls of 
                        the nationally recognized statistical rating 
                        organization;
                            ``(v) the governance of the nationally 
                        recognized statistical rating organization;
                            ``(vi) the activities of the individual 
                        designated by the nationally recognized 
                        statistical rating organization under 
                        subsection (j)(1);
                            ``(vii) the processing of complaints by the 
                        nationally recognized statistical rating 
                        organization; and
                            ``(viii) the policies of the nationally 
                        recognized statistical rating organization 
                        governing the post-employment activities of 
                        former staff of the nationally recognized 
                        statistical rating organization.
                    ``(C) Inspection reports.--The Commission shall 
                make available to the public, in an easily 
                understandable format, an annual report summarizing--
                            ``(i) the essential findings of all 
                        examinations conducted under subparagraph (A), 
                        as deemed appropriate by the Commission;
                            ``(ii) the responses by the nationally 
                        recognized statistical rating organizations to 
                        any material regulatory deficiencies identified 
                        by the Commission under clause (i); and
                            ``(iii) whether the nationally recognized 
                        statistical rating organizations have 
                        appropriately addressed the recommendations of 
                        the Commission contained in previous reports 
                        under this subparagraph.
            ``(4) Rulemaking authority.--The Commission shall--
                    ``(A) establish, by rule, fines, and other 
                penalties applicable to any nationally recognized 
                statistical rating organization that violates the 
                requirements of this subsection and the rules 
                thereunder; and
                    ``(B) issue such rules as may be necessary to carry 
                out this subsection.
    ``(q) Transparency of Ratings Performance.--
            ``(1) Rulemaking required.--The Commission shall, by rule, 
        require that each nationally recognized statistical rating 
        organization publicly disclose information on the initial 
        credit ratings determined by the nationally recognized 
        statistical rating organization for each type of obligor, 
        security, and money market instrument, and any subsequent 
        changes to such credit ratings, for the purpose of allowing 
        users of credit ratings to evaluate the accuracy of ratings and 
        compare the performance of ratings by different nationally 
        recognized statistical rating organizations.
            ``(2) Content.--The rules of the Commission under this 
        subsection shall require, at a minimum, disclosures that--
                    ``(A) are comparable among nationally recognized 
                statistical rating organizations, to allow users of 
                credit ratings to compare the performance of credit 
                ratings across nationally recognized statistical rating 
                organizations;
                    ``(B) are clear and informative for investors who 
                use or might use credit ratings;
                    ``(C) include performance information over a range 
                of years and for a variety of types of credit ratings, 
                including for credit ratings withdrawn by the 
                nationally recognized statistical rating organization;
                    ``(D) are published and made freely available by 
                the nationally recognized statistical rating 
                organization, on an easily accessible portion of its 
                website, and in writing, when requested; and
                    ``(E) are appropriate to the business model of a 
                nationally recognized statistical rating organization.
    ``(r) Credit Ratings Methodologies.--The Commission shall prescribe 
rules, for the protection of investors and in the public interest, with 
respect to the procedures and methodologies, including qualitative and 
quantitative data and models, used by nationally recognized statistical 
rating organizations that require each nationally recognized 
statistical rating organization--
            ``(1) to ensure that credit ratings are determined using 
        procedures and methodologies, including qualitative and 
        quantitative data and models, that are--
                    ``(A) approved by the board of the nationally 
                recognized statistical rating organization, a body 
                performing a function similar to that of a board, or 
                the senior credit officer of the nationally recognized 
                statistical rating organization; and
                    ``(B) in accordance with the policies and 
                procedures of the nationally recognized statistical 
                rating organization for the development and 
                modification of credit rating procedures and 
                methodologies;
            ``(2) to ensure that when material changes to credit rating 
        procedures and methodologies (including changes to qualitative 
        and quantitative data and models) are made, that--
                    ``(A) the changes are applied consistently to all 
                credit ratings to which the changed procedures and 
                methodologies apply;
                    ``(B) to the extent that changes are made to credit 
                rating surveillance procedures and methodologies, the 
                changes are applied to then-current credit ratings by 
                the nationally recognized statistical rating 
                organization within a reasonable time period determined 
                by the Commission, by rule; and
                    ``(C) the nationally recognized statistical rating 
                organization publicly discloses the reason for the 
                change; and
            ``(3) to notify users of credit ratings--
                    ``(A) of the version of a procedure or methodology, 
                including the qualitative methodology or quantitative 
                inputs, used with respect to a particular credit 
                rating;
                    ``(B) when a material change is made to a procedure 
                or methodology, including to a qualitative model or 
                quantitative inputs;
                    ``(C) when a significant error is identified in a 
                procedure or methodology, including a qualitative or 
                quantitative model, that may result in credit rating 
                actions; and
                    ``(D) of the likelihood of a material change 
                described in subparagraph (B) resulting in a change in 
                current credit ratings.
    ``(s) Transparency of Credit Rating Methodologies and Information 
Reviewed.--
            ``(1) Form for disclosures.--The Commission shall require, 
        by rule, each nationally recognized statistical rating 
        organization to prescribe a form to accompany the publication 
        of each credit rating that discloses--
                    ``(A) information relating to--
                            ``(i) the assumptions underlying the credit 
                        rating procedures and methodologies;
                            ``(ii) the data that was relied on to 
                        determine the credit rating; and
                            ``(iii) if applicable, how the nationally 
                        recognized statistical rating organization used 
                        servicer or remittance reports, and with what 
                        frequency, to conduct surveillance of the 
                        credit rating; and
                    ``(B) information that can be used by investors and 
                other users of credit ratings to better understand 
                credit ratings in each class of credit rating issued by 
                the nationally recognized statistical rating 
                organization.
            ``(2) Format.--The form developed under paragraph (1) 
        shall--
                    ``(A) be easy to use and helpful for users of 
                credit ratings to understand the information contained 
                in the report;
                    ``(B) require the nationally recognized statistical 
                rating organization to provide the content described in 
                paragraph (3)(B) in a manner that is directly 
                comparable across types of securities; and
                    ``(C) be made readily available to users of credit 
                ratings, in electronic or paper form, as the Commission 
                may, by rule, determine.
            ``(3) Content of form.--
                    ``(A) Qualitative content.--Each nationally 
                recognized statistical rating organization shall 
                disclose on the form developed under paragraph (1)--
                            ``(i) the credit ratings produced by the 
                        nationally recognized statistical rating 
                        organization;
                            ``(ii) the main assumptions and principles 
                        used in constructing procedures and 
                        methodologies, including qualitative 
                        methodologies and quantitative inputs and 
                        assumptions about the correlation of defaults 
                        across obligors used in rating structured 
                        products;
                            ``(iii) the potential limitations of the 
                        credit ratings, and the types of risks excluded 
                        from the credit ratings that the nationally 
                        recognized statistical rating organization does 
                        not comment on, including liquidity, market, 
                        and other risks;
                            ``(iv) information on the uncertainty of 
                        the credit rating, including--
                                    ``(I) information on the 
                                reliability, accuracy, and quality of 
                                the data relied on in determining the 
                                credit rating; and
                                    ``(II) a statement relating to the 
                                extent to which data essential to the 
                                determination of the credit rating were 
                                reliable or limited, including--
                                            ``(aa) any limits on the 
                                        scope of historical data; and
                                            ``(bb) any limits in 
                                        accessibility to certain 
                                        documents or other types of 
                                        information that would have 
                                        better informed the credit 
                                        rating;
                            ``(v) whether and to what extent third 
                        party due diligence services have been used by 
                        the nationally recognized statistical rating 
                        organization, a description of the information 
                        that such third party reviewed in conducting 
                        due diligence services, and a description of 
                        the findings or conclusions of such third 
                        party;
                            ``(vi) a description of the data about any 
                        obligor, issuer, security, or money market 
                        instrument that were relied upon for the 
                        purpose of determining the credit rating;
                            ``(vii) a statement containing an overall 
                        assessment of the quality of information 
                        available and considered in producing a rating 
                        for an obligor, security, or money market 
                        instrument, in relation to the quality of 
                        information available to the nationally 
                        recognized statistical rating organization in 
                        rating similar issuances;
                            ``(viii) information relating to conflicts 
                        of interest of the nationally recognized 
                        statistical rating organization; and
                            ``(ix) such additional information as the 
                        Commission may require.
                    ``(B) Quantitative content.--Each nationally 
                recognized statistical rating organization shall 
                disclose on the form developed under this subsection--
                            ``(i) an explanation or measure of the 
                        potential volatility of the credit rating, 
                        including--
                                    ``(I) any factors that might lead 
                                to a change in the credit ratings; and
                                    ``(II) the magnitude of the change 
                                that a user can expect under different 
                                market conditions;
                            ``(ii) information on the content of the 
                        rating, including--
                                    ``(I) the historical performance of 
                                the rating; and
                                    ``(II) the expected probability of 
                                default and the expected loss in the 
                                event of default;
                            ``(iii) information on the sensitivity of 
                        the rating to assumptions made by the 
                        nationally recognized statistical rating 
                        organization; and
                            ``(iv) such additional information as may 
                        be required by the Commission.
            ``(4) Due diligence services for asset-backed securities.--
                    ``(A) Findings.--The issuer or underwriter of any 
                asset-backed security shall make publicly available the 
                findings and conclusions of any third-party due 
                diligence report obtained by the issuer or underwriter.
                    ``(B) Certification required.--In any case in which 
                third-party due diligence services are employed by a 
                nationally recognized statistical rating organization, 
                an issuer, or an underwriter, the person providing the 
                due diligence services shall provide to any nationally 
                recognized statistical rating organization that 
                produces a rating to which such services relate, 
                written certification, as provided in subparagraph (C).
                    ``(C) Format and content.--The Commission shall 
                establish the appropriate format and content for the 
                written certifications required under subparagraph (B), 
                to ensure that providers of due diligence services have 
                conducted a thorough review of data, documentation, and 
                other relevant information necessary for a nationally 
                recognized statistical rating organization to provide 
                an accurate rating.
                    ``(D) Disclosure of certification.--The Commission 
                shall adopt rules requiring a nationally recognized 
                statistical rating organization, at the time at which 
                the nationally recognized statistical rating 
                organization produces a rating, to disclose the 
                certification described in subparagraph (B) to the 
                public in a manner that allows the public to determine 
                the adequacy and level of due diligence services 
                provided by a third party.
    ``(t) Corporate Governance, Organization, and Management of 
Conflicts of Interest.--
            ``(1) Board of directors.--Each nationally recognized 
        statistical rating organization shall have a board of 
        directors.
            ``(2) Independent directors.--
                    ``(A) In general.--At least \1/2\ of the board of 
                directors, but not fewer than 2 of the members thereof, 
                shall be independent of the nationally recognized 
                statistical rating agency. A portion of the independent 
                directors shall include users of ratings from a 
                nationally recognized statistical rating organization.
                    ``(B) Independence determination.--In order to be 
                considered independent for purposes of this subsection, 
                a member of the board of directors of a nationally 
                recognized statistical rating organization--
                            ``(i) may not, other than in his or her 
                        capacity as a member of the board of directors 
                        or any committee thereof--
                                    ``(I) accept any consulting, 
                                advisory, or other compensatory fee 
                                from the nationally recognized 
                                statistical rating organization; or
                                    ``(II) be a person associated with 
                                the nationally recognized statistical 
                                rating organization or with any 
                                affiliated company thereof; and
                            ``(ii) shall be disqualified from any 
                        deliberation involving a specific rating in 
                        which the independent board member has a 
                        financial interest in the outcome of the 
                        rating.
                    ``(C) Compensation and term.--The compensation of 
                the independent members of the board of directors of a 
                nationally recognized statistical rating organization 
                shall not be linked to the business performance of the 
                nationally recognized statistical rating organization, 
                and shall be arranged so as to ensure the independence 
                of their judgment. The term of office of the 
                independent directors shall be for a pre-agreed fixed 
                period, not to exceed 5 years, and shall not be 
                renewable.
            ``(3) Duties of board of directors.--In addition to the 
        overall responsibilities of the board of directors, the board 
        shall oversee--
                    ``(A) the establishment, maintenance, and 
                enforcement of policies and procedures for determining 
                credit ratings;
                    ``(B) the establishment, maintenance, and 
                enforcement of policies and procedures to address, 
                manage, and disclose any conflicts of interest;
                    ``(C) the effectiveness of the internal control 
                system with respect to policies and procedures for 
                determining credit ratings; and
                    ``(D) the compensation and promotion policies and 
                practices of the nationally recognized statistical 
                rating organization.
            ``(4) Treatment of nrsro subsidiaries.--If a nationally 
        recognized statistical rating organization is a subsidiary of a 
        parent entity, the board of the directors of the parent entity 
        may satisfy the requirements of this subsection by assigning to 
        a committee of such board of directors the duties under 
        paragraph (3), if--
                    ``(A) at least \1/2\ of the members of the 
                committee (including the chairperson of the committee) 
                are independent, as defined in this section; and
                    ``(B) at least 1 member of the committee is a user 
                of ratings from a nationally recognized statistical 
                rating organization.
            ``(5) Exception authority.--If the Commission finds that 
        compliance with the provisions of this subsection present an 
        unreasonable burden on a small nationally recognized 
        statistical rating organization, the Commission may permit the 
        nationally recognized statistical rating organization to 
        delegate such responsibilities to a committee that includes at 
        least one individual who is a user of ratings of a nationally 
        recognized statistical rating organization.''.

SEC. 933. STATE OF MIND IN PRIVATE ACTIONS.

    (a) Accountability.--Section 15E(m) of the Securities Exchange Act 
of 1934 (15 U.S.C. 78o-7(m)) is amended to read as follows:
    ``(m) Accountability.--
            ``(1) In general.--The enforcement and penalty provisions 
        of this title shall apply to statements made by a credit rating 
        agency in the same manner and to the same extent as such 
        provisions apply to statements made by a registered public 
        accounting firm or a securities analyst under the securities 
        laws, and such statements shall not be deemed forward-looking 
        statements for the purposes of section 21E.
            ``(2) Rulemaking.--The Commission shall issue such rules as 
        may be necessary to carry out this subsection.''.
    (b) State of Mind.--Section 21D(b)(2) of the Securities Exchange 
Act of 1934 (15 U.S.C. 78u-4(b)(2)) is amended--
            (1) by striking ``In any'' and inserting the following:
                    ``(A) In general.--Except as provided in 
                subparagraph (B), in any''; and
            (2) by adding at the end the following:
                    ``(B) Exception.--In the case of an action for 
                money damages brought against a credit rating agency or 
                a controlling person under this title, it shall be 
                sufficient, for purposes of pleading any required state 
                of mind in relation to such action, that the complaint 
                state with particularity facts giving rise to a strong 
                inference that the credit rating agency knowingly or 
                recklessly failed--
                            ``(i) to conduct a reasonable investigation 
                        of the rated security with respect to the 
                        factual elements relied upon by its own 
                        methodology for evaluating credit risk; or
                            ``(ii) to obtain reasonable verification of 
                        such factual elements (which verification may 
                        be based on a sampling technique that does not 
                        amount to an audit) from other sources that the 
                        credit rating agency considered to be competent 
                        and that were independent of the issuer and 
                        underwriter.''.

SEC. 934. REFERRING TIPS TO LAW ENFORCEMENT OR REGULATORY AUTHORITIES.

    Section 15E of the Securities Exchange Act of 1934 (15 U.S.C. 78o-
7), as amended by this subtitle, is amended by adding at the end the 
following:
    ``(u) Duty To Report Tips Alleging Material Violations of Law.--
            ``(1) Duty to report.--Each nationally recognized 
        statistical rating organization shall refer to the appropriate 
        law enforcement or regulatory authorities any information that 
        the nationally recognized statistical rating organization 
        receives from a third party and finds credible that alleges 
        that an issuer of securities rated by the nationally recognized 
        statistical rating organization has committed or is committing 
        a material violation of law that has not been adjudicated by a 
        Federal or State court.
            ``(2) Rule of construction.--Nothing in paragraph (1) may 
        be construed to require a nationally recognized statistical 
        rating organization to verify the accuracy of the information 
        described in paragraph (1).''.

SEC. 935. CONSIDERATION OF INFORMATION FROM SOURCES OTHER THAN THE 
              ISSUER IN RATING DECISIONS.

    Section 15E of the Securities Exchange Act of 1934 (15 U.S.C. 78o-
7), as amended by this subtitle, is amended by adding at the end the 
following:
    ``(v) Information From Sources Other Than the Issuer.--In producing 
a credit rating, a nationally recognized statistical rating 
organization shall consider information about an issuer that the 
nationally recognized statistical rating organization has, or receives 
from a source other than the issuer, that the nationally recognized 
statistical rating organization finds credible and potentially 
significant to a rating decision.''.

SEC. 936. QUALIFICATION STANDARDS FOR CREDIT RATING ANALYSTS.

    Not later than 1 year after the date of enactment of this Act, the 
Commission shall issue rules that are reasonably designed to ensure 
that any person employed by a nationally recognized statistical rating 
organization to perform credit ratings--
            (1) meets standards of training, experience, and competence 
        necessary to produce accurate ratings for the categories of 
        issuers whose securities the person rates; and
            (2) is tested for knowledge of the credit rating process.

SEC. 937. TIMING OF REGULATIONS.

    Unless otherwise specifically provided in this subtitle, the 
Commission shall issue final regulations, as required by this subtitle 
and the amendments made by this subtitle, not later than 1 year after 
the date of enactment of this Act.

SEC. 938. UNIVERSAL RATINGS SYMBOLS.

    (a) Rulemaking.--The Commission shall require, by rule, each 
nationally recognized statistical rating organization to establish, 
maintain, and enforce written policies and procedures that--
            (1) assess the probability that an issuer of a security or 
        money market instrument will default, fail to make timely 
        payments, or otherwise not make payments to investors in 
        accordance with the terms of the security or money market 
        instrument;
            (2) clearly define and disclose the meaning of any symbol 
        used by the nationally recognized statistical rating 
        organization to denote a credit rating; and
            (3) apply any symbol described in paragraph (2) in a manner 
        that is consistent for all types of securities and money market 
        instruments for which the symbol is used.
    (b) Rule of Construction.--Nothing in this section shall prohibit a 
nationally recognized statistical rating organization from using 
distinct sets of symbols to denote credit ratings for different types 
of securities or money market instruments.

SEC. 939. REMOVAL OF STATUTORY REFERENCES TO CREDIT RATINGS.

    (a) Federal Deposit Insurance Act.--The Federal Deposit Insurance 
Act (12 U.S.C. 1811 et seq.) is amended--
            (1) in section 7(b)(1)(E)(i), by striking ``credit rating 
        entities, and other private economic'' and insert ``private 
        economic, credit,'';
            (2) in section 28(d)--
                    (A) in the subsection heading, by striking ``Not of 
                Investment Grade'';
                    (B) in paragraph (1), by striking ``not of 
                investment grade'' and inserting ``that does not meet 
                standards of credit-worthiness as established by the 
                Corporation'';
                    (C) in paragraph (2), by striking ``not of 
                investment grade'';
                    (D) by striking paragraph (3);
                    (E) by redesignating paragraph (4) as paragraph 
                (3); and
                    (F) in paragraph (3), as so redesignated--
                            (i) by striking subparagraph (A);
                            (ii) by redesignating subparagraphs (B) and 
                        (C) as subparagraphs (A) and (B), respectively; 
                        and
                            (iii) in subparagraph (B), as so 
                        redesignated, by striking ``not of investment 
                        grade'' and inserting ``that does not meet 
                        standards of credit-worthiness as established 
                        by the Corporation''; and
            (3) in section 28(e)--
                    (A) in the subsection heading, by striking ``Not of 
                Investment Grade'';
                    (B) in paragraph (1), by striking ``not of 
                investment grade'' and inserting ``that does not meet 
                standards of credit-worthiness as established by the 
                Corporation''; and
                    (C) in paragraphs (2) and (3), by striking ``not of 
                investment grade'' each place that it appears and 
                inserting ``that does not meet standards of credit-
                worthiness established by the Corporation''.
    (b) Federal Housing Enterprises Financial Safety and Soundness Act 
of 1992.--Section 1319 of the Federal Housing Enterprises Financial 
Safety and Soundness Act of 1992 (12 U.S.C. 4519) is amended by 
striking ``that is a nationally registered statistical rating 
organization, as such term is defined in section 3(a) of the Securities 
Exchange Act of 1934,''.
    (c) Investment Company Act of 1940.--Section 6(a)(5)(A)(iv)(I) 
Investment Company Act of 1940 (15 U.S.C. 80a-6(a)(5)(A)(iv)(I)) is 
amended by striking ``is rated investment grade by not less than 1 
nationally registered statistical rating organization'' and inserting 
``meets such standards of credit-worthiness as the Commission shall 
adopt''.
    (d) Revised Statutes.--Section 5136A of title LXII of the Revised 
Statutes of the United States (12 U.S.C. 24a) is amended--
            (1) in subsection (a)(2)(E), by striking ``any applicable 
        rating'' and inserting ``standards of credit-worthiness 
        established by the Comptroller of the Currency'';
            (2) in the heading for subsection (a)(3) by striking 
        ``Rating or Comparable Requirement'' and inserting 
        ``Requirement'';
            (3) subsection (a)(3), by amending subparagraph (A) to read 
        as follows:
                    ``(A) In general.--A national bank meets the 
                requirements of this paragraph if the bank is one of 
                the 100 largest insured banks and has not fewer than 1 
                issue of outstanding debt that meets standards of 
                credit-worthiness or other criteria as the Secretary of 
                the Treasury and the Board of Governors of the Federal 
                Reserve System may jointly establish.''.
            (4) in the heading for subsection (f), by striking 
        ``Maintain Public Rating or'' and inserting ``Meet Standards of 
        Credit-worthiness''; and
            (5) in subsection (f)(1), by striking ``any applicable 
        rating'' and inserting ``standards of credit-worthiness 
        established by the Comptroller of the Currency''.
    (e) Securities Exchange Act of 1934.--Section 3(a) Securities 
Exchange Act of 1934 (15 U.S.C. 78a(3)(a)) is amended--
            (1) in paragraph (41), by striking ``is rated in one of the 
        two highest rating categories by at least one nationally 
        registered statistical rating organization'' and inserting 
        ``meets standards of credit-worthiness as established by the 
        Commission''; and
            (2) in paragraph (53)(A), by striking ``is rated in 1 of 
        the 4 highest rating categories by at least 1 nationally 
        registered statistical rating organization'' and inserting 
        ``meets standards of credit-worthiness as established by the 
        Commission''.
    (f) World Bank Discussions.--Section 3(a)(6) of the amendment in 
the nature of a substitute to the text of H.R. 4645, as ordered 
reported from the Committee on Banking, Finance and Urban Affairs on 
September 22, 1988, as enacted into law by section 555 of Public Law 
100-461, (22 U.S.C. 286hh(a)(6)), is amended by striking ``credit 
rating'' and inserting ``credit-worthiness''.
    (g) Effective Date.--The amendments made by this section shall take 
effect 2 years after the date of enactment of this Act.
            (1) In general.--Commission shall undertake a study on the 
        feasability and desirability of--
                    (A) standardizing credit ratings terminology, so 
                that all credit rating agencies issue credit ratings 
                using identical terms;
                    (B) standardizing the market stress conditions 
                under which ratings are evaluated;
                    (C) requiring a quantitative correspondence between 
                credit ratings and a range of default probabilities and 
                loss expectations under standardized conditions of 
                economic stress; and
                    (D) standardizing credit rating terminology across 
                asset classes, so that named ratings correspond to a 
                standard range of default probabilities and expected 
                losses independent of asset class and issuing entity.
            (2) Report.--Not later than 1 year after the date of 
        enactment of this Act, the Commission shall submit to Congress 
        a report containing the findings of the study under paragraph 
        (1) and the recommendations, if any, of the Commission with 
        respect to the study.

SEC. 939A. SECURITIES AND EXCHANGE COMMISSION STUDY ON STRENGTHENING 
              CREDIT RATING AGENCY INDEPENDENCE.

    (a) Study.--The Commission shall conduct a study of--
            (1) the independence of nationally recognized statistical 
        rating organizations; and
            (2) how the independence of nationally recognized 
        statistical rating organizations affects the ratings issued by 
        the nationally recognized statistical rating organizations.
    (b) Subjects for Evaluation.--In conducting the study under 
subsection (a), the Commission shall evaluate--
            (1) the management of conflicts of interest raised by a 
        nationally recognized statistical rating organization providing 
        other services, including risk management advisory services, 
        ancillary assistance, or consulting services;
            (2) the potential impact of rules prohibiting a nationally 
        recognized statistical rating organization that provides a 
        rating to an issuer from providing other services to the 
        issuer; and
            (3) any other issue relating to nationally recognized 
        statistical rating organizations, as the Chairman of the 
        Commission determines is appropriate.
    (c) Report.--Not later than 3 years after the date of enactment of 
this Act, the Chairman of the Commission shall submit to the Committee 
on Banking, Housing, and Urban Affairs of the Senate and the Committee 
on Financial Services of the House of Representatives a report on the 
results of the study conducted under subsection (a), including 
recommendations, if any, for improving the integrity of ratings issued 
by nationally recognized statistical rating organizations.

SEC. 939B. GOVERNMENT ACCOUNTABILITY OFFICE STUDY ON ALTERNATIVE 
              BUSINESS MODELS.

    (a) Study.--The Comptroller General of the United States shall 
conduct a study on alternative means for compensating nationally 
recognized statistical rating organizations in order to create 
incentives for nationally recognized statistical rating organizations 
to provide more accurate credit ratings, including any statutory 
changes that would be required to facilitate the use of an alternative 
means of compensation.
    (b) Report.--Not later than 1 year after the date of enactment of 
this Act, the Comptroller General shall submit to the Committee on 
Banking, Housing, and Urban Affairs of the Senate and the Committee on 
Financial Services of the House of Representatives a report on the 
results of the study conducted under subsection (a), including 
recommendations, if any, for providing incentives to credit rating 
agencies to improve the credit rating process.

SEC. 939C. GOVERNMENT ACCOUNTABILITY OFFICE STUDY ON THE CREATION OF AN 
              INDEPENDENT PROFESSIONAL ANALYST ORGANIZATION.

    (a) Study.--The Comptroller General of the United States shall 
conduct a study on the feasibility and merits of creating an 
independent professional organization for rating analysts employed by 
nationally recognized statistical rating organizations that would be 
responsible for--
            (1) establishing independent standards for governing the 
        profession of rating analysts;
            (2) establishing a code of ethical conduct; and
            (3) overseeing the profession of rating analysts.
    (b) Report.--Not later than 1 year after the date of enactment of 
this Act, the Comptroller General shall submit to the Committee on 
Banking, Housing, and Urban Affairs of the Senate and the Committee on 
Financial Services of the House of Representatives a report on the 
results of the study conducted under subsection (a).

SEC. 939D. INITIAL CREDIT RATING ASSIGNMENTS.

    Section 15E of the Securities Exchange Act of 1934 (15 U.S.C. 78o-
7), as amended by this Act, is amended by adding at the end the 
following:
    ``(w) Initial Credit Rating Assignments.--
            ``(1) Definitions.--In this subsection the following 
        definitions shall apply:
                    ``(A) Board.--The term `Board' means the Credit 
                Rating Agency Board established under paragraph (2).
                    ``(B) Qualified nationally recognized statistical 
                rating organization.--The term `qualified nationally 
                recognized statistical rating organization', with 
                respect to a category of structured finance products, 
                means a nationally recognized statistical rating 
                organization that the Board determines, under paragraph 
                (3)(B), to be qualified to issue initial credit ratings 
                with respect to such category.
                    ``(C) Regulations.--
                            ``(i) Category of structured finance 
                        products.--
                                    ``(I) In general.--The term 
                                `category of structured finance 
                                products'--
                                            ``(aa) shall include any 
                                        asset backed security and any 
                                        structured product based on an 
                                        asset-backed security; and
                                            ``(bb) shall be further 
                                        defined and expanded by the 
                                        Commission, by rule, as 
                                        necessary.
                                    ``(II) Considerations.--In issuing 
                                the regulations required under 
                                subclause (I), the Commission shall 
                                consider--
                                            ``(aa) the types of issuers 
                                        that issue structured finance 
                                        products;
                                            ``(bb) the types of 
                                        investors who purchase 
                                        structured finance products;
                                            ``(cc) the different 
                                        categories of structured 
                                        finance products according to--

                                                    ``(AA) the types of 
                                                capital flow and legal 
                                                structure used;

                                                    ``(BB) the types of 
                                                underlying products 
                                                used; and

                                                    ``(CC) the types of 
                                                terms used in debt 
                                                securities;

                                            ``(dd) the different values 
                                        of debt securities; and
                                            ``(ee) the different 
                                        numbers of units of debt 
                                        securities that are issued 
                                        together.
                            ``(ii) Reasonable fee.--The Board shall 
                        issue regulations to define the term 
                        `reasonable fee'.
            ``(2) Credit rating agency board.--
                    ``(A) In general.--Not later than 180 days after 
                the date of enactment of the Restoring American 
                Financial Stability Act of 2010, the Commission shall--
                            ``(i) establish the Credit Rating Agency 
                        Board, which shall be a self-regulatory 
                        organization;
                            ``(ii) subject to subparagraph (C), select 
                        the initial members of the Board; and
                            ``(iii) establish a schedule to ensure that 
                        the Board begins assigning qualified nationally 
                        recognized statistical rating organizations to 
                        provide initial ratings not later than 1 year 
                        after the selection of the members of the 
                        Board.
                    ``(B) Schedule.--The schedule established under 
                subparagraph (A)(iii) shall prescribe when--
                            ``(i) the Board will conduct a study of the 
                        securitization and ratings process and provide 
                        recommendations to the Commission;
                            ``(ii) the Commission will issue rules and 
                        regulations under this section;
                            ``(iii) the Board may issue rules under 
                        this subsection; and
                            ``(iv) the Board will--
                                    ``(I) begin accepting applications 
                                to select qualified national recognized 
                                statistical rating organizations; and
                                    ``(II) begin assigning qualified 
                                national recognized statistical rating 
                                organizations to provide initial 
                                ratings.
                    ``(C) Membership.--
                            ``(i) In general.--The Board shall 
                        initially be composed of an odd number of 
                        members selected from the industry, with the 
                        total numerical membership of the Board to be 
                        determined by the Commission.
                            ``(ii) Specifications.--Of the members 
                        initially selected to serve on the Board--
                                    ``(I) not less than a majority of 
                                the members shall be representatives of 
                                the investor industry who do not 
                                represent issuers;
                                    ``(II) not less than 1 member 
                                should be a representative of the 
                                issuer industry;
                                    ``(III) not less than 1 member 
                                should be a representative of the 
                                credit rating agency industry; and
                                    ``(IV) not less than 1 member 
                                should be an independent member.
                            ``(iii) Terms.--Initial members shall be 
                        appointed by the Commission for a term of 4 
                        years.
                            ``(iv) Nomination and election of 
                        members.--
                                    ``(I) In general.--Prior to the 
                                expiration of the terms of office of 
                                the initial members, the Commission 
                                shall establish fair procedures for the 
                                nomination and election of future 
                                members of the Board.
                                    ``(II) Modifications of the 
                                board.--Prior to the expiration of the 
                                terms of office of the initial members, 
                                the Commission--
                                            ``(aa) may increase the 
                                        size of the board to a larger 
                                        odd number and adjust the 
                                        length of future terms; and
                                            ``(bb) shall retain the 
                                        composition of members 
                                        described in clause (ii).
                            ``(v) Responsibilities of members.--Members 
                        shall perform, at a minimum, the duties 
                        described in this subsection.
                            ``(vi) Rulemaking authority.--The 
                        Commission shall, if it determines necessary 
                        and appropriate, issue further rules and 
                        regulations on the composition of the 
                        membership of the Board and the 
                        responsibilities of the members.
                    ``(D) Other authorities of the board.--The Board 
                shall have the authority to levy fees from qualified 
                nationally recognized statistical rating organization 
                applicants, and periodically from qualified nationally 
                recognized statistical rating organizations as 
                necessary to fund expenses of the Board.
                    ``(E) Regulation.--The Commission has the authority 
                to regulate the activities of the Board, and issue any 
                further regulations of the Board it deems necessary, 
                not in contravention with the intent of this section.
            ``(3) Board selection of qualified nationally recognized 
        statistical rating organization.--
                    ``(A) Application.--
                            ``(i) In general.--A nationally recognized 
                        statistical rating organization may submit an 
                        application to the Board, in such form and 
                        manner as the Board may require, to become a 
                        qualified nationally recognized statistical 
                        rating organization with respect to a category 
                        of structured finance products.
                            ``(ii) Contents.--An application submitted 
                        under clause (i) shall contain--
                                    ``(I) information regarding the 
                                institutional and technical capacity of 
                                the nationally recognized statistical 
                                rating organization to issue credit 
                                ratings;
                                    ``(II) information on whether the 
                                nationally recognized statistical 
                                rating organization has been exempted 
                                by the Commission from any requirements 
                                under any other provision of this 
                                section; and
                                    ``(III) any additional information 
                                the Board may require.
                            ``(iii) Rejection of applications.--The 
                        Board may reject an application submitted under 
                        this paragraph if the nationally recognized 
                        statistical rating organization has been 
                        exempted by the Commission from any 
                        requirements under any other provision of this 
                        section.
                    ``(B) Selection.--The Board shall select qualified 
                national recognized statistical rating organizations 
                with respect to each category of structured finance 
                products from among nationally recognized statistical 
                rating organizations that submit applications under 
                subparagraph (A).
                    ``(C) Retention of status and obligations after 
                selection.--An entity selected as a qualified 
                nationally recognized statistical rating organization 
                shall retain its status and obligations under the law 
                as a nationally recognized statistical rating 
                organization, and nothing in this subsection grants 
                authority to the Commission or the Board to exempt 
                qualified nationally recognized statistical rating 
                organizations from obligations or requirements 
                otherwise imposed by Federal law on nationally 
                recognized statistical rating organizations.
            ``(4) Requesting an initial credit rating.--An issuer that 
        seeks an initial credit rating for a structured finance 
        product--
                    ``(A) may not request an initial credit rating from 
                a nationally recognized statistical rating 
                organization; and
                    ``(B) shall submit a request for an initial credit 
                rating to the Board, in such form and manner as the 
                Board may prescribe.
            ``(5) Assignment of rating duties.--
                    ``(A) In general.--For each request received by the 
                Board under paragraph (4)(B), the Board shall select a 
                qualified nationally recognized statistical rating 
                organization to provide the initial credit rating to 
                the issuer.
                    ``(B) Method of selection.--
                            ``(i) In general.--The Board shall--
                                    ``(I) evaluate a number of 
                                selection methods, including a lottery 
                                or rotating assignment system, 
                                incorporating the factors described in 
                                clause (ii), to reduce the conflicts of 
                                interest that exist under the issuer-
                                pays model; and
                                    ``(II) prescribe and publish the 
                                selection method to be used under 
                                subparagraph (A).
                            ``(ii) Consideration.--In evaluating a 
                        selection method described in clause (i)(I), 
                        the Board shall consider--
                                    ``(I) the information submitted by 
                                the qualified nationally recognized 
                                statistical rating organization under 
                                paragraph (3)(A)(ii) regarding the 
                                institutional and technical capacity of 
                                the qualified nationally recognized 
                                statistical rating organization to 
                                issue credit ratings;
                                    ``(II) evaluations conducted under 
                                paragraph (7);
                                    ``(III) formal feedback from 
                                institutional investors; and
                                    ``(IV) information from subclauses 
                                (I) and (II) to implement a mechanism 
                                which increases or decreases 
                                assignments based on past performance.
                            ``(iii) Prohibition.--The Board, in 
                        choosing a selection method, may not use a 
                        method that would allow for the solicitation or 
                        consideration of the preferred national 
                        recognized statistical rating organizations of 
                        the issuer.
                            ``(iv) Adjustment of process.--The Board 
                        shall issue rules describing the process by 
                        which it can modify the assignment process 
                        described in clause (i).
                    ``(C) Right of refusal.--
                            ``(i) Refusal.--A qualified nationally 
                        recognized statistical rating organization 
                        selected under subparagraph (A) may refuse to 
                        accept a selection for a particular request 
                        by--
                                    ``(I) notifying the Board of such 
                                refusal; and
                                    ``(II) submitting to the Board a 
                                written explanation of the refusal.
                            ``(ii) Selection.--Upon receipt of a 
                        notification under clause (i), the Board shall 
                        make an additional selection under subparagraph 
                        (A).
                            ``(iii) Inspection reports.--The Board 
                        shall annually submit any explanations of 
                        refusals received under clause (i)(II) to the 
                        Commission, and such explanatory submissions 
                        shall be published in the annual inspection 
                        reports required under subsection (p)(3)(C).
            ``(6) Disclaimer required.--Each initial credit rating 
        issued under this subsection shall include, in writing, the 
        following disclaimer: `This initial rating has not been 
        evaluated, approved, or certified by the Government of the 
        United States or by a Federal agency.'.
            ``(7) Evaluation of performance.--
                    ``(A) In general.--The Board shall prescribe rules 
                by which the Board will evaluate the performance of 
                each qualified nationally recognized statistical rating 
                organization, including rules that require, at a 
                minimum, an annual evaluation of each qualified 
                nationally recognized statistical rating organization.
                    ``(B) Considerations.--The Board, in conducting an 
                evaluation under subparagraph (A), shall consider--
                            ``(i) the results of the annual examination 
                        conducted under subsection (p)(3);
                            ``(ii) surveillance of credit ratings 
                        conducted by the qualified nationally 
                        recognized statistical rating organization 
                        after the credit ratings are issued, 
                        including--
                                    ``(I) how the rated instruments 
                                perform;
                                    ``(II) the accuracy of the ratings 
                                provided by the qualified nationally 
                                recognized statistical rating 
                                organization as compared to the other 
                                nationally recognized statistical 
                                rating organizations; and
                                    ``(III) the effectiveness of the 
                                methodologies used by the qualified 
                                nationally recognized statistical 
                                rating organization; and
                            ``(iii) any additional factors the Board 
                        determines to be relevant.
                    ``(C) Request for reevaluation.--Subject to rules 
                prescribed by the Board, and not less frequently than 
                once a year, a qualified nationally recognized 
                statistical rating organization may request that the 
                Board conduct an evaluation under this paragraph.
                    ``(D) Disclosure.--The Board shall make the 
                evaluations conducted under this paragraph available to 
                Congress.
            ``(8) Rating fees charged to issuers.--
                    ``(A) Limited to reasonable fees.--A qualified 
                nationally recognized statistical rating organization 
                shall charge an issuer a reasonable fee, as determined 
                by the Commission, for an initial credit rating 
                provided under this section.
                    ``(B) Fees.--Fees may be determined by the 
                qualified national recognized statistical rating 
                organizations unless the Board determines it is 
                necessary to issue rules on fees.
            ``(9) No prohibition on additional ratings.--Nothing in 
        this section shall prohibit an issuer from requesting or 
        receiving additional credit ratings with respect to a debt 
        security, if the initial credit rating is provided in 
        accordance with this section.
            ``(10) No prohibition on independent ratings offered by 
        nationally recognized statistical rating organizations.--
                    ``(A) In general.--Nothing in this section shall 
                prohibit a nationally recognized statistical rating 
                organization from independently providing a credit 
                rating with respect to a debt security, if--
                            ``(i) the nationally recognized statistical 
                        rating organization does not enter into a 
                        contract with the issuer of the debt security 
                        to provide the initial credit rating; and
                            ``(ii) the nationally recognized 
                        statistical rating organization is not paid by 
                        the issuer of the debt security to provide the 
                        initial credit rating.
                    ``(B) Rule of construction.--For purposes of this 
                section, a credit rating described in subparagraph (A) 
                may not be construed to be an initial credit rating.
            ``(11) Public communications.--Any communications made with 
        the public by an issuer with respect to the credit rating of a 
        debt security shall clearly specify whether the credit rating 
        was made by--
                    ``(A) a qualified nationally recognized statistical 
                rating organization selected under paragraph (5)(A) to 
                provide the initial credit rating for such debt 
                security; or
                    ``(B) a nationally recognized statistical rating 
                organization not selected under paragraph (5)(A).
            ``(12) Prohibition on misrepresentation.--With respect to a 
        debt security, it shall be unlawful for any person to 
        misrepresent any subsequent credit rating provided for such 
        debt security as an initial credit rating provided for such 
        debt security by a qualified nationally recognized statistical 
        rating organization selected under paragraph (5)(A).
            ``(13) Initial credit rating revision after material change 
        in circumstance.--If the Board determines that it is necessary 
        or appropriate in the public interest or for the protection of 
        investors, the Board may issue regulations requiring that an 
        issuer that has received an initial credit rating under this 
        subsection request a revised initial credit rating, using the 
        same method as provided under paragraph (4), each time the 
        issuer experiences a material change in circumstances, as 
        defined by the Board.
            ``(14) Conflicts.--
                    ``(A) Members or employees of the board.--
                            ``(i) Loan of money or securities 
                        prohibited.--
                                    ``(I) In general.--A member or 
                                employee of the Board shall not accept 
                                any loan of money or securities, or 
                                anything above nominal value, from any 
                                nationally recognized statistical 
                                rating organization, issuer, or 
                                investor.
                                    ``(II) Exception.--The prohibition 
                                in subclause (I) does not apply to a 
                                loan made in the context of disclosed, 
                                routine banking and brokerage 
                                agreements, or a loan that is clearly 
                                motivated by a personal or family 
                                relationship.
                            ``(ii) Employment negotiations 
                        prohibition.--A member or employee of the Board 
                        shall not engage in employment negotiations 
                        with any nationally recognized statistical 
                        rating organization, issuer, or investor, 
                        unless the member or employee--
                                    ``(I) discloses the negotiations 
                                immediately upon initiation of the 
                                negotiations; and
                                    ``(II) recuses himself from all 
                                proceedings concerning the entity 
                                involved in the negotiations until 
                                termination of negotiations or until 
                                termination of his employment by the 
                                Board, if an offer of employment is 
                                accepted.
                    ``(B) Credit analysts.--
                            ``(i) In general.--A credit analyst of a 
                        qualified nationally recognized statistical 
                        rating organization shall not accept any loan 
                        of money or securities, or anything above 
                        nominal value, from any issuer or investor.
                            ``(ii) Exception.--The prohibition 
                        described in clause (i) does not apply to a 
                        loan made in the context of disclosed, routine 
                        banking and brokerage agreements, or a loan 
                        that is clearly motivated by a personal or 
                        family relationship.
            ``(15) Evaluation of credit rating agency board.--Not later 
        than 5 years after the date that the Board begins assigning 
        qualified nationally recognized statistical rating 
        organizations to provide initial ratings, the Commission shall 
        submit to Congress a report that provides recommendations of--
                    ``(A) the continuation of the Board;
                    ``(B) any modification to the procedures of the 
                Board; and
                    ``(C) modifications to the provisions in this 
                subsection.''.

  Subtitle D--Improvements to the Asset-Backed Securitization Process

SEC. 941. REGULATION OF CREDIT RISK RETENTION.

    (a) Definition of Asset-backed Security.--Section 3(a) of the 
Securities Exchange Act of 1934 (15 U.S.C. 78c(a)) is amended by adding 
at the end the following:
            ``(77) Asset-backed security.--The term `asset-backed 
        security'--
                    ``(A) means a fixed-income or other security 
                collateralized by any type of self-liquidating 
                financial asset (including a loan, a lease, a mortgage, 
                or a secured or unsecured receivable) that allows the 
                holder of the security to receive payments that depend 
                primarily on cash flow from the asset, including--
                            ``(i) a collateralized mortgage obligation;
                            ``(ii) a collateralized debt obligation;
                            ``(iii) a collateralized bond obligation;
                            ``(iv) a collateralized debt obligation of 
                        asset-backed securities;
                            ``(v) a collateralized debt obligation of 
                        collateralized debt obligations; and
                            ``(vi) a security that the Commission, by 
                        rule, determines to be an asset-backed security 
                        for purposes of this section; and
                    ``(B) does not include a security issued by a 
                finance subsidiary held by the parent company or a 
                company controlled by the parent company, if none of 
                the securities issued by the finance subsidiary are 
                held by an entity that is not controlled by the parent 
                company.''.
    (b) Credit Risk Retention.--The Securities Exchange Act of 1934 (15 
U.S.C. 78a et seq.) is amended by inserting after section 15F, as added 
by this Act, the following:

``SEC. 15G. CREDIT RISK RETENTION.

    ``(a) Definitions.--In this section--
            ``(1) the term `Federal banking agencies' means the Office 
        of the Comptroller of the Currency, the Board of Governors of 
        the Federal Reserve System, and the Federal Deposit Insurance 
        Corporation;
            ``(2) the term `insured depository institution' has the 
        same meaning as in section 3(c) of the Federal Deposit 
        Insurance Act (12 U.S.C. 1813(c));
            ``(3) the term `securitizer' means--
                    ``(A) an issuer of an asset-backed security; or
                    ``(B) a person who organizes and initiates an 
                asset-backed securities transaction by selling or 
                transferring assets, either directly or indirectly, 
                including through an affiliate, to the issuer; and
            ``(4) the term `originator' means a person who--
                    ``(A) through the extension of credit or otherwise, 
                creates a financial asset that collateralizes an asset-
                backed security; and
                    ``(B) sells an asset to a securitizer.
    ``(b) In General.--Not later than 270 days after the date of 
enactment of this section, the Federal banking agencies and the 
Commission shall jointly prescribe regulations to require any 
securitizer to retain an economic interest in a portion of the credit 
risk for any asset that the securitizer, through the issuance of an 
asset-backed security, transfers, sells, or conveys to a third party.
    ``(c) Standards for Regulations.--
            ``(1) Standards.--The regulations prescribed under 
        subsection (b) shall--
                    ``(A) prohibit a securitizer from directly or 
                indirectly hedging or otherwise transferring the credit 
                risk that the securitizer is required to retain with 
                respect to an asset;
                    ``(B) require a securitizer to retain--
                            ``(i) not less than 5 percent of the credit 
                        risk for any asset--
                                    ``(I) that is not a qualified 
                                residential mortgage that is 
                                transferred, sold, or conveyed through 
                                the issuance of an asset-backed 
                                security by the securitizer; or
                                    ``(II) that is a qualified 
                                residential mortgage that is 
                                transferred, sold, or conveyed through 
                                the issuance of an asset-backed 
                                security by the securitizer, if 1 or 
                                more of the assets that collateralize 
                                the asset-backed security are not 
                                qualified residential mortgages; or
                            ``(ii) less than 5 percent of the credit 
                        risk for an asset that is not a qualified 
                        residential mortgage that is transferred, sold, 
                        or conveyed through the issuance of an asset-
                        backed security by the securitizer, if the 
                        originator of the asset meets the underwriting 
                        standards prescribed under paragraph (2)(B);
                    ``(C) specify--
                            ``(i) the permissible forms of risk 
                        retention for purposes of this section;
                            ``(ii) the minimum duration of the risk 
                        retention required under this section; and
                            ``(iii) that a securitizer is not required 
                        to retain any part of the credit risk for an 
                        asset that is transferred, sold or conveyed 
                        through the issuance of an asset-backed 
                        security by the securitizer, if all of the 
                        assets that collateralize the asset-backed 
                        security are qualified residential mortgages;
                    ``(D) apply, regardless of whether the securitizer 
                is an insured depository institution; and
                    ``(E) with respect to a commercial mortgage, 
                specify the permissible types, forms, and amounts of 
                risk retention that would meet the requirements of 
                subparagraph (B), such as--
                            ``(i) retention of a specified amount or 
                        percentage of the total credit risk of the 
                        asset;
                            ``(ii) retention of the first-loss position 
                        by a third-party purchaser that specifically 
                        negotiates for the purchase of such first-loss 
                        position and provides due diligence on all 
                        individual assets in the pool before the 
                        issuance of the asset-backed securities;
                            ``(iii) a determination by a Federal 
                        banking agency or the Commission that the 
                        underwriting standards and controls for the 
                        asset are adequate; and
                            ``(iv) provision of adequate 
                        representations and warranties and related 
                        enforcement mechanisms; and
                    ``(F) provide for--
                            ``(i) a total or partial exemption of any 
                        securitization, as may be appropriate in the 
                        public interest and for the protection of 
                        investors; and
                            ``(ii) the allocation of risk retention 
                        obligations between a securitizer and an 
                        originator in the case of a securitizer that 
                        purchases assets from an originator, as the 
                        Federal banking agencies and the Commission 
                        jointly determine appropriate.
            ``(2) Asset classes.--
                    ``(A) Asset classes.--The regulations prescribed 
                under subsection (b) shall establish asset classes with 
                separate rules for securitizers of different classes of 
                assets, including residential mortgages, commercial 
                mortgages, commercial loans, auto loans, and any other 
                class of assets that the Federal banking agencies and 
                the Commission deem appropriate.
                    ``(B) Contents.--For each asset class established 
                under subparagraph (A), the regulations prescribed 
                under subsection (b) shall establish underwriting 
                standards that specify the terms, conditions, and 
                characteristics of a loan within the asset class that 
                indicate a reduced credit risk with respect to the 
                loan.
    ``(d) Originators.--In determining how to allocate risk retention 
obligations between a securitizer and an originator under subsection 
(c)(1)(E)(ii), the Federal banking agencies and the Commission shall--
            ``(1) reduce the percentage of risk retention obligations 
        required of the securitizer by the percentage of risk retention 
        obligations required of the originator; and
            ``(2) consider--
                    ``(A) whether the assets sold to the securitizer 
                have terms, conditions, and characteristics that 
                reflect reduced credit risk;
                    ``(B) whether the form or volume of transactions in 
                securitization markets creates incentives for imprudent 
                origination of the type of loan or asset to be sold to 
                the securitizer; and
                    ``(C) the potential impact of the risk retention 
                obligations on the access of consumers and businesses 
                to credit on reasonable terms, which may not include 
                the transfer of credit risk to a third party.
    ``(e) Exemptions, Exceptions, and Adjustments.--
            ``(1) In general.--The Federal banking agencies and the 
        Commission may jointly adopt or issue exemptions, exceptions, 
        or adjustments to the rules issued under this section, 
        including exemptions, exceptions, or adjustments for classes of 
        institutions or assets relating to the risk retention 
        requirement and the prohibition on hedging under subsection 
        (c)(1).
            ``(2) Applicable standards.--Any exemption, exception, or 
        adjustment adopted or issued by the Federal banking agencies 
        and the Commission under this paragraph shall--
                    ``(A) help ensure high quality underwriting 
                standards for the securitizers and originators of 
                assets that are securitized or available for 
                securitization; and
                    ``(B) encourage appropriate risk management 
                practices by the securitizers and originators of 
                assets, improve the access of consumers and businesses 
                to credit on reasonable terms, or otherwise be in the 
                public interest and for the protection of investors.
            ``(3) Farm credit system institutions.--A Farm Credit 
        System institution, including the Federal Agricultural Mortgage 
        Corporation, that is chartered and subject to the provisions of 
        the Farm Credit Act of 1971, as amended (12 U.S.C. 2001 et 
        seq.), shall be exempt from the risk retention provisions of 
        this subsection.
            ``(4) Exemption for qualified residential mortgages.--
                    ``(A) In general.--The Federal banking agencies, 
                the Commission, the Secretary of Housing and Urban 
                Development, and the Director of the Federal Housing 
                Finance Agency shall jointly issue regulations to 
                exempt qualified residential mortgages from the risk 
                retention requirements of this subsection.
                    ``(B) Qualified residential mortgage.--The Federal 
                banking agencies, the Commission, the Secretary of 
                Housing and Urban Development, and the Director of the 
                Federal Housing Finance Agency shall jointly define the 
                term `qualified residential mortgage' for purposes of 
                this subsection, taking into consideration underwriting 
                and product features that historical loan performance 
                data indicate result in a lower risk of default, such 
                as--
                            ``(i) documentation and verification of the 
                        financial resources relied upon to qualify the 
                        mortgagor;
                            ``(ii) standards with respect to--
                                    ``(I) the residual income of the 
                                mortgagor after all monthly 
                                obligations;
                                    ``(II) the ratio of the housing 
                                payments of the mortgagor to the 
                                monthly income of the mortgagor;
                                    ``(III) the ratio of total monthly 
                                installment payments of the mortgagor 
                                to the income of the mortgagor;
                            ``(iii) mitigating the potential for 
                        payment shock on adjustable rate mortgages 
                        through product features and underwriting 
                        standards;
                            ``(iv) mortgage guarantee insurance 
                        obtained at the time of origination for loans 
                        with combined loan-to-value ratios of greater 
                        than 80 percent; and
                            ``(v) prohibiting or restricting the use of 
                        balloon payments, negative amortization, 
                        prepayment penalties, interest-only payments, 
                        and other features that have been demonstrated 
                        to exhibit a higher risk of borrower default.
            ``(5) Condition for qualified residential mortgage 
        exemption.--The regulations issued under paragraph (4) shall 
        provide that an asset-backed security that is collateralized by 
        tranches of other asset-backed securities shall not be exempt 
        from the risk retention requirements of this subsection.
            ``(6) Certification.--The Commission shall require an 
        issuer to certify, for each issuance of an asset-backed 
        security collateralized exclusively by qualified residential 
        mortgages, that the issuer has evaluated the effectiveness of 
        the internal supervisory controls of the issuer with respect to 
        the process for ensuring that all assets that collateralize the 
        asset-backed security are qualified residential mortgages.
    ``(f) Enforcement.--The regulations issued under this section shall 
be enforced by--
            ``(1) the appropriate Federal banking agency, with respect 
        to any securitizer that is an insured depository institution; 
        and
            ``(2) the Commission, with respect to any securitizer that 
        is not an insured depository institution.
    ``(g) Authority of Commission.--The authority of the Commission 
under this section shall be in addition to the authority of the 
Commission to otherwise enforce the securities laws.
    ``(h) Effective Date of Regulations.--The regulations issued under 
this section shall become effective--
            ``(1) with respect to securitizers and originators of 
        asset-backed securities backed by residential mortgages, 1 year 
        after the date on which final rules under this section are 
        published in the Federal Register; and
            ``(2) with respect to securitizers and originators of all 
        other classes of asset-backed securities, 2 years after the 
        date on which final rules under this section are published in 
        the Federal Register.''.

SEC. 942. DISCLOSURES AND REPORTING FOR ASSET-BACKED SECURITIES.

    (a) Securities Exchange Act of 1934.--Section 15(d) of the 
Securities Exchange Act of 1934 (15 U.S.C. 78o(d)) is amended--
            (1) by striking ``(d) Each'' and inserting the following:
    ``(d) Supplementary and Periodic Information.--
            ``(1) In general.--Each'';
            (2) in the third sentence, by inserting after ``securities 
        of each class'' the following: ``, other than any class of 
        asset-backed securities,''; and
            (3) by adding at the end the following:
            ``(2) Asset-backed securities.--
                    ``(A) Suspension of duty to file.--The Commission 
                may, by rule or regulation, provide for the suspension 
                or termination of the duty to file under this 
                subsection for any class of asset-backed security, on 
                such terms and conditions and for such period or 
                periods as the Commission deems necessary or 
                appropriate in the public interest or for the 
                protection of investors.
                    ``(B) Classification of issuers.--The Commission 
                may, for purposes of this subsection, classify issuers 
                and prescribe requirements appropriate for each class 
                of issuers of asset-backed securities.''.
    (b) Securities Act of 1933.--Section 7 of the Securities Act of 
1933 (15 U.S.C. 77g) is amended by adding at the end the following:
    ``(c) Disclosure Requirements.--
            ``(1) In general.--The Commission shall adopt regulations 
        under this subsection requiring each issuer of an asset-backed 
        security to disclose, for each tranche or class of security, 
        information regarding the assets backing that security.
            ``(2) Content of regulations.--In adopting regulations 
        under this subsection, the Commission shall--
                    ``(A) set standards for the format of the data 
                provided by issuers of an asset-backed security, which 
                shall, to the extent feasible, facilitate comparison of 
                such data across securities in similar types of asset 
                classes; and
                    ``(B) require issuers of asset-backed securities, 
                at a minimum, to disclose asset-level or loan-level 
                data necessary for investors to independently perform 
                due diligence, including--
                            ``(i) data having unique identifiers 
                        relating to loan brokers or originators;
                            ``(ii) the nature and extent of the 
                        compensation of the broker or originator of the 
                        assets backing the security; and
                            ``(iii) the amount of risk retention by the 
                        originator and the securitizer of such 
                        assets.''.

SEC. 943. REPRESENTATIONS AND WARRANTIES IN ASSET-BACKED OFFERINGS.

    Not later than 180 days after the date of enactment of this Act, 
the Securities and Exchange Commission shall prescribe regulations on 
the use of representations and warranties in the market for asset-
backed securities (as that term is defined in section 3(a)(77) of the 
Securities Exchange Act of 1934, as added by this subtitle) that--
            (1) require each national recognized statistical rating 
        organization to include in any report accompanying a credit 
        rating a description of--
                    (A) the representations, warranties, and 
                enforcement mechanisms available to investors; and
                    (B) how they differ from the representations, 
                warranties, and enforcement mechanisms in issuances of 
                similar securities; and
            (2) require any securitizer (as that term is defined in 
        section 15G(a) of the Securities Exchange Act of 1934, as added 
        by this subtitle) to disclose fulfilled and unfulfilled 
        repurchase requests across all trusts aggregated by the 
        securitizer, so that investors may identify asset originators 
        with clear underwriting deficiencies.

SEC. 944. EXEMPTED TRANSACTIONS UNDER THE SECURITIES ACT OF 1933.

    (a) Exemption Eliminated.--Section 4 of the Securities Act of 1933 
(15 U.S.C. 77d) is amended--
            (1) by striking paragraph (5); and
            (2) by striking ``(6) transactions'' and inserting the 
        following:
            ``(5) transactions''.
    (b) Conforming Amendment.--Section 3(a)(4)(B)(vii)(I) of the 
Securities Exchange Act of 1934 (15 U.S.C. 78c(a)(4)(B)(vii)(I)) is 
amended by striking ``4(6)'' and inserting ``4(5)''.

SEC. 945. DUE DILIGENCE ANALYSIS AND DISCLOSURE IN ASSET-BACKED 
              SECURITIES ISSUES.

    Section 7 of the Securities Act of 1933 (15 U.S.C. 77g), as amended 
by this subtitle, is amended by adding at the end the following:
    ``(d) Registration Statement for Asset-backed Securities.--Not 
later than 180 days after the date of enactment of this subsection, the 
Commission shall issue rules relating to the registration statement 
required to be filed by any issuer of an asset-backed security (as that 
term is defined in section 3(a)(77) of the Securities Exchange Act of 
1934) that require any issuer of an asset-backed security--
            ``(1) to perform a due diligence analysis of the assets 
        underlying the asset-backed security; and
            ``(2) to disclose the nature of the analysis under 
        paragraph (1).''.

         Subtitle E--Accountability and Executive Compensation

SEC. 951. SHAREHOLDER VOTE ON EXECUTIVE COMPENSATION DISCLOSURES.

    The Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.) is 
amended by inserting after section 14 (15 U.S.C. 78n) the following:

``SEC. 14A. ANNUAL SHAREHOLDER APPROVAL OF EXECUTIVE COMPENSATION.

    ``(a) Separate Resolution Required.--Any proxy or consent or 
authorization for an annual or other meeting of the shareholders 
occurring after the end of the 6-month period beginning on the date of 
enactment of this section, for which the proxy solicitation rules of 
the Commission require compensation disclosure, shall include a 
separate resolution subject to shareholder vote to approve the 
compensation of executives, as disclosed pursuant to section 229.402 of 
title 17, Code of Federal Regulations, or any successor thereto.
    ``(b) Rule of Construction.--The shareholder vote referred to in 
subsection (a) shall not be binding on the issuer or the board of 
directors of an issuer, and may not be construed--
            ``(1) as overruling a decision by such issuer or board of 
        directors;
            ``(2) to create or imply any change to the fiduciary duties 
        of such issuer or board of directors;
            ``(3) to create or imply any additional fiduciary duties 
        for such issuer or board of directors; or
            ``(4) to restrict or limit the ability of shareholders to 
        make proposals for inclusion in proxy materials related to 
        executive compensation.''.

SEC. 952. COMPENSATION COMMITTEE INDEPENDENCE.

    The Securities Exchange Act of 1934 (15 U.S.C. 78 et seq.) is 
amended by inserting after section 10B, as added by section 753, the 
following:

``SEC. 10C. COMPENSATION COMMITTEES.

    ``(a) Independence of Compensation Committees.--
            ``(1) Listing standards.--The Commission shall, by rule, 
        direct the national securities exchanges and national 
        securities associations to prohibit the listing of any security 
        of an issuer that does not comply with the requirements of this 
        subsection.
            ``(2) Independence of compensation committees.--The rules 
        of the Commission under paragraph (1) shall require that each 
        member of the compensation committee of the board of directors 
        of an issuer be--
                    ``(A) a member of the board of directors of the 
                issuer; and
                    ``(B) independent.
            ``(3) Independence.--The rules of the Commission under 
        paragraph (1) shall require that, in determining the definition 
        of the term `independence' for purposes of paragraph (2), the 
        national securities exchanges and the national securities 
        associations shall consider relevant factors, including--
                    ``(A) the source of compensation of a member of the 
                board of directors of an issuer, including any 
                consulting, advisory, or other compensatory fee paid by 
                the issuer to such member of the board of directors; 
                and
                    ``(B) whether a member of the board of directors of 
                an issuer is affiliated with the issuer, a subsidiary 
                of the issuer, or an affiliate of a subsidiary of the 
                issuer.
            ``(4) Exemption authority.--The rules of the Commission 
        under paragraph (1) shall permit a national securities exchange 
        or a national securities association to exempt a particular 
        relationship from the requirements of paragraph (2), with 
        respect to the members of a compensation committee, as the 
        national securities exchange or national securities association 
        determines is appropriate, taking into consideration the size 
        of an issuer and any other relevant factors.
    ``(b) Independence of Compensation Consultants and Other 
Compensation Committee Advisers.--
            ``(1) In general.--The compensation committee of an issuer 
        may only select a compensation consultant, legal counsel, or 
        other adviser to the compensation committee after taking into 
        consideration the factors identified by the Commission under 
        paragraph (2).
            ``(2) Rules.--The Commission shall identify factors that 
        affect the independence of a compensation consultant, legal 
        counsel, or other adviser to a compensation committee of an 
        issuer, including--
                    ``(A) the provision of other services to the issuer 
                by the person that employs the compensation consultant, 
                legal counsel, or other adviser;
                    ``(B) the amount of fees received from the issuer 
                by the person that employs the compensation consultant, 
                legal counsel, or other adviser, as a percentage of the 
                total revenue of the person that employs the 
                compensation consultant, legal counsel, or other 
                adviser;
                    ``(C) the policies and procedures of the person 
                that employs the compensation consultant, legal 
                counsel, or other adviser that are designed to prevent 
                conflicts of interest;
                    ``(D) any business or personal relationship of the 
                compensation consultant, legal counsel, or other 
                adviser with a member of the compensation committee; 
                and
                    ``(E) any stock of the issuer owned by the 
                compensation consultant, legal counsel, or other 
                adviser.
    ``(c) Compensation Committee Authority Relating to Compensation 
Consultants.--
            ``(1) Authority to retain compensation consultant.--
                    ``(A) In general.--The compensation committee of an 
                issuer, in its capacity as a committee of the board of 
                directors, may, in its sole discretion, retain or 
                obtain the advice of a compensation consultant.
                    ``(B) Direct responsibility of compensation 
                committee.--The compensation committee of an issuer 
                shall be directly responsible for the appointment, 
                compensation, and oversight of the work of a 
                compensation consultant.
                    ``(C) Rule of construction.--This paragraph may not 
                be construed--
                            ``(i) to require the compensation committee 
                        to implement or act consistently with the 
                        advice or recommendations of the compensation 
                        consultant; or
                            ``(ii) to affect the ability or obligation 
                        of a compensation committee to exercise its own 
                        judgment in fulfillment of the duties of the 
                        compensation committee.
            ``(2) Disclosure.--In any proxy or consent solicitation 
        material for an annual meeting of the shareholders (or a 
        special meeting in lieu of the annual meeting) occurring on or 
        after the date that is 1 year after the date of enactment of 
        this section, each issuer shall disclose in the proxy or 
        consent material, in accordance with regulations of the 
        Commission, whether--
                    ``(A) the compensation committee of the issuer 
                retained or obtained the advice of a compensation 
                consultant; and
                    ``(B) the work of the compensation consultant has 
                raised any conflict of interest and, if so, the nature 
                of the conflict and how the conflict is being 
                addressed.
    ``(d) Authority To Engage Independent Legal Counsel and Other 
Advisers.--
            ``(1) In general.--The compensation committee of an issuer, 
        in its capacity as a committee of the board of directors, may, 
        in its sole discretion, retain and obtain the advice of 
        independent legal counsel and other advisers.
            ``(2) Direct responsibility of compensation committee.--The 
        compensation committee of an issuer shall be directly 
        responsible for the appointment, compensation, and oversight of 
        the work of independent legal counsel and other advisers.
            ``(3) Rule of construction.--This subsection may not be 
        construed--
                    ``(A) to require a compensation committee to 
                implement or act consistently with the advice or 
                recommendations of independent legal counsel or other 
                advisers under this subsection; or
                    ``(B) to affect the ability or obligation of a 
                compensation committee to exercise its own judgment in 
                fulfillment of the duties of the compensation 
                committee.
    ``(e) Compensation of Compensation Consultants, Independent Legal 
Counsel, and Other Advisers.--Each issuer shall provide for appropriate 
funding, as determined by the compensation committee in its capacity as 
a committee of the board of directors, for payment of reasonable 
compensation--
            ``(1) to a compensation consultant; and
            ``(2) to independent legal counsel or any other adviser to 
        the compensation committee.
    ``(f) Commission Rules.--
            ``(1) In general.--Not later than 360 days after the date 
        of enactment of this section, the Commission shall, by rule, 
        direct the national securities exchanges and national 
        securities associations to prohibit the listing of any security 
        of an issuer that is not in compliance with the requirements of 
        this section.
            ``(2) Opportunity to cure defects.--The rules of the 
        Commission under paragraph (1) shall provide for appropriate 
        procedures for an issuer to have a reasonable opportunity to 
        cure any defects that would be the basis for the prohibition 
        under paragraph (1), before the imposition of such prohibition.
            ``(3) Exemption authority.--
                    ``(A) In general.--The rules of the Commission 
                under paragraph (1) shall permit a national securities 
                exchange or a national securities association to exempt 
                a category of issuers from the requirements under this 
                section, as the national securities exchange or the 
                national securities association determines is 
                appropriate.
                    ``(B) Considerations.--In determining appropriate 
                exemptions under subparagraph (A), the national 
                securities exchange or the national securities 
                association shall take into account the potential 
                impact of the requirements of this section on smaller 
                reporting issuers.''.

SEC. 953. EXECUTIVE COMPENSATION DISCLOSURES.

    (a) Disclosure of Pay Versus Performance.--Section 14 of the 
Securities Exchange Act of 1934 (15 U.S.C. 78n), as amended by this 
title, is amended by adding at the end the following:
    ``(i) Disclosure of Pay Versus Performance.--The Commission shall, 
by rule, require each issuer to disclose in any proxy or consent 
solicitation material for an annual meeting of the shareholders of the 
issuer a clear description of any compensation required to be disclosed 
by the issuer under section 229.402 of title 17, Code of Federal 
Regulations (or any successor thereto), including information that 
shows the relationship between executive compensation actually paid and 
the financial performance of the issuer, taking into account any change 
in the value of the shares of stock and dividends of the issuer and any 
distributions. The disclosure under this subsection may include a 
graphic representation of the information required to be disclosed.''.
    (b) Additional Disclosure Requirements.--
            (1) In general.--The Commission shall amend section 229.402 
        of title 17, Code of Federal Regulations, to require each 
        issuer to disclose in any filing of the issuer described in 
        section 229.10(a) of title 17, Code of Federal Regulations (or 
        any successor thereto)--
                    (A) the median of the annual total compensation of 
                all employees of the issuer, except the chief executive 
                officer (or any equivalent position) of the issuer;
                    (B) the annual total compensation of the chief 
                executive officer (or any equivalent position) of the 
                issuer; and
                    (C) the ratio of the amount described in 
                subparagraph (A) to the amount described in 
                subparagraph (B).
            (2) Total compensation.--For purposes of this subsection, 
        the total compensation of an employee of an issuer shall be 
        determined in accordance with section 229.402(c)(2)(x) of title 
        17, Code of Federal Regulations, as in effect on the day before 
        the date of enactment of this Act.

SEC. 954. RECOVERY OF ERRONEOUSLY AWARDED COMPENSATION.

    The Securities Exchange Act of 1934 is amended by inserting after 
section 10C, as added by section 952, the following:

``SEC. 10D. RECOVERY OF ERRONEOUSLY AWARDED COMPENSATION POLICY.

    ``(a) Listing Standards.--The Commission shall, by rule, direct the 
national securities exchanges and national securities associations to 
prohibit the listing of any security of an issuer that does not comply 
with the requirements of this section.
    ``(b) Recovery of Funds.--The rules of the Commission under 
subsection (a) shall require each issuer to develop and implement a 
policy providing--
            ``(1) for disclosure of the policy of the issuer on 
        incentive-based compensation that is based on financial 
        information required to be reported under the securities laws; 
        and
            ``(2) that, in the event that the issuer is required to 
        prepare an accounting restatement due to the material 
        noncompliance of the issuer with any financial reporting 
        requirement under the securities laws, the issuer will recover 
        from any current or former executive officer of the issuer who 
        received incentive-based compensation (including stock options 
        awarded as compensation) during the 3-year period preceding the 
        date on which the issuer is required to prepare an accounting 
        restatement, based on the erroneous data, in excess of what 
        would have been paid to the executive officer under the 
        accounting restatement.''.

SEC. 955. DISCLOSURE REGARDING EMPLOYEE AND DIRECTOR HEDGING.

    Section 14 of the Securities Exchange Act of 1934 (15 U.S.C. 78n), 
as amended by this title, is amended by adding at the end the 
following:
    ``(j) Disclosure of Hedging by Employees and Directors.--The 
Commission shall, by rule, require each issuer to disclose in any proxy 
or consent solicitation material for an annual meeting of the 
shareholders of the issuer whether any employee or member of the board 
of directors of the issuer, or any designee of such employee or member, 
is permitted to purchase financial instruments (including prepaid 
variable forward contracts, equity swaps, collars, and exchange funds) 
that are designed to hedge or offset any decrease in the market value 
of equity securities--
            ``(1) granted to the employee or member of the board of 
        directors by the issuer as part of the compensation of the 
        employee or member of the board of directors; or
            ``(2) held, directly or indirectly, by the employee or 
        member of the board of directors.''.

SEC. 956. EXCESSIVE COMPENSATION BY HOLDING COMPANIES OF DEPOSITORY 
              INSTITUTIONS.

    Section 5 of the Bank Holding Company Act of 1956 (12 U.S.C. 1844) 
is amended by adding at the end the following:
    ``(i) Excessive Compensation.--
            ``(1) In general.--Not later than 180 days after the 
        transfer date established under section 311 of the Restoring 
        American Financial Stability Act of 2010, the Board of 
        Governors, in consultation with the Comptroller of the Currency 
        and the Federal Deposit Insurance Corporation, shall, by rule, 
        establish standards prohibiting as an unsafe and unsound 
        practice any compensation plan of a bank holding company that--
                    ``(A) provides an executive officer, employee, 
                director, or principal shareholder of the bank holding 
                company with excessive compensation, fees, or benefits; 
                or
                    ``(B) could lead to material financial loss to the 
                bank holding company.
            ``(2) Considerations.--In establishing the standards under 
        paragraph (1), the Board of Governors shall take into 
        consideration the compensation standards described in section 
        39(c) of the Federal Deposit Insurance Act (12 U.S.C. 1831p-
        1(c)) and the views and recommendations of the Comptroller of 
        the Currency and the Federal Deposit Insurance Corporation.''.

SEC. 957. VOTING BY BROKERS.

    Section 6(b) of the Securities Exchange Act of 1934 (15 U.S.C. 
78f(b)) is amended--
            (1) in paragraph (9)--
                    (A) in subparagraph (A), by redesignating clauses 
                (i) through (v) as subclauses (I) through (V), 
                respectively, and adjusting the margins accordingly;
                    (B) by redesignating subparagraphs (A) through (D) 
                as clauses (i) through (iv), respectively, and 
                adjusting the margins accordingly;
                    (C) by inserting ``(A)'' after ``(9)''; and
                    (D) in the matter immediately following clause 
                (iv), as so redesignated, by striking ``As used'' and 
                inserting the following:
            ``(B) As used''.
            (2) by adding at the end the following:
            ``(10)(A) The rules of the exchange prohibit any member 
        that is not the beneficial owner of a security registered under 
        section 12 from granting a proxy to vote the security in 
        connection with a shareholder vote described in subparagraph 
        (B), unless the beneficial owner of the security has instructed 
        the member to vote the proxy in accordance with the voting 
        instructions of the beneficial owner.
            ``(B) A shareholder vote described in this subparagraph is 
        a shareholder vote with respect to the election of a member of 
        the board of directors of an issuer, executive compensation, or 
        any other significant matter, as determined by the Commission, 
        by rule.
            ``(C) Nothing in this paragraph shall be construed to 
        prohibit a national securities exchange from prohibiting a 
        member that is not the beneficial owner of a security 
        registered under section 12 from granting a proxy to vote the 
        security in connection with a shareholder vote not described in 
        subparagraph (A).''.

   Subtitle F--Improvements to the Management of the Securities and 
                          Exchange Commission

SEC. 961. REPORT AND CERTIFICATION OF INTERNAL SUPERVISORY CONTROLS.

    (a) Annual Reports and Certification.--Not later than 90 days after 
the end of each fiscal year, the Commission shall submit a report to 
the Committee on Banking, Housing, and Urban Affairs of the Senate and 
the Committee on Financial Services of the House of Representatives on 
the conduct by the Commission of examinations of registered entities, 
enforcement investigations, and review of corporate financial 
securities filings.
    (b) Contents of Reports.--Each report under subsection (a) shall 
contain--
            (1) an assessment, as of the end of the most recent fiscal 
        year, of the effectiveness of--
                    (A) the internal supervisory controls of the 
                Commission; and
                    (B) the procedures of the Commission applicable to 
                the staff of the Commission who perform examinations of 
                registered entities, enforcement investigations, and 
                reviews of corporate financial securities filings;
            (2) a certification that the Commission has adequate 
        internal supervisory controls to carry out the duties of the 
        Commission described in paragraph (1)(B); and
            (3) a summary by the Comptroller General of the United 
        States of the review carried out under subsection (d).
    (c) Certification.--
            (1) Signature.--The certification under subsection (b)(2) 
        shall be signed by the Director of the Division of Enforcement, 
        the Director of the Division of Corporation Finance, and the 
        Director of the Office of Compliance Inspections and 
        Examinations (or the head of any successor division or office).
            (2) Content of certification.--Each individual described in 
        paragraph (1) shall certify that the individual--
                    (A) is directly responsible for establishing and 
                maintaining the internal supervisory controls of the 
                Division or Office of which the individual is the head;
                    (B) is knowledgeable about the internal supervisory 
                controls of the Division or Office of which the 
                individual is the head;
                    (C) has evaluated the effectiveness of the internal 
                supervisory controls during the 90-day period ending on 
                the final day of the fiscal year to which the report 
                relates; and
                    (D) has disclosed to the Commission any significant 
                deficiencies in the design or operation of internal 
                supervisory controls that could adversely affect the 
                ability of the Division or Office to consistently 
                conduct inspections, or investigations, or reviews of 
                filings with professional competence and integrity.
    (d) Review by the Comptroller General.--Not later than the date on 
which the first report is submitted under subsection (a), the 
Comptroller General of the United States shall submit to the Committee 
on Banking, Housing, and Urban Affairs of the Senate and the Committee 
on Financial Services of the House of Representatives an initial report 
that contains a review of the adequacy and effectiveness of the 
internal supervisory control structure and procedures described in 
subsection (b)(1).

SEC. 962. TRIENNIAL REPORT ON PERSONNEL MANAGEMENT.

    (a) Triennial Report Required.--Once every 3 years, the Comptroller 
General of the United States shall submit a report to the Committee on 
Banking, Housing, and Urban Affairs of the Senate and the Committee on 
Financial Services of the House of Representatives on the quality of 
personnel management by the Commission.
    (b) Contents of Report.--Each report under subsection (a) shall 
include--
            (1) an evaluation of--
                    (A) the effectiveness of supervisors in using the 
                skills, talents, and motivation of the employees of the 
                Commission to achieve the goals of the Commission;
                    (B) the criteria for promoting employees of the 
                Commission to supervisory positions;
                    (C) the fairness of the application of the 
                promotion criteria to the decisions of the Commission;
                    (D) the competence of the professional staff of the 
                Commission;
                    (E) the efficiency of communication between the 
                units of the Commission regarding the work of the 
                Commission (including communication between divisions 
                and between subunits of a division) and the efforts by 
                the Commission to promote such communication;
                    (F) the turnover within subunits of the Commission, 
                including the identification of supervisors whose 
                subordinates have an unusually high rate of turnover;
                    (G) whether there are excessive numbers of low-
                level, mid-level, or senior-level managers;
                    (H) any initiatives of the Commission that increase 
                the competence of the staff of the Commission;
                    (I) the actions taken by the Commission regarding 
                employees of the Commission who have failed to perform 
                their duties; and
                    (J) such other factors relating to the management 
                of the Commission as the Comptroller General determines 
                are appropriate;
            (2) an evaluation of any improvements made with respect to 
        the areas described in paragraph (1) since the date of 
        submission of the previous report; and
            (3) recommendations for how the Commission can use the 
        human resources of the Commission more effectively and 
        efficiently to carry out the mission of the Commission.
    (c) Consultation.--In preparing the report under subsection (a), 
the Comptroller General shall consult with current employees of the 
Commission, retired employees and other former employees of the 
Commission, the Inspector General of the Commission, persons that have 
business before the Commission, any union representing the employees of 
the Commission, private management consultants, academics, and any 
other source that the Comptroller General deems appropriate.
    (d) Report by Commission.--Not later than 90 days after the date on 
which the Comptroller General submits each report under subsection (a), 
the Commission shall submit to the Committee on Banking, Housing, and 
Urban Affairs of the Senate and the Committee on Financial Services of 
the House of Representatives a report describing the actions taken by 
the Commission in response to the recommendations contained in the 
report under subsection (a).
    (e) Reimbursements for Cost of Reports.--
            (1) Reimbursements required.--The Commission shall 
        reimburse the Government Accountability Office for the full 
        cost of making the reports under this section, as billed 
        therefor by the Comptroller General.
            (2) Crediting and use of reimbursements.--Such 
        reimbursements shall--
                    (A) be credited to the appropriation account 
                ``Salaries and Expenses, Government Accountability 
                Office'' current when the payment is received; and
                    (B) remain available until expended.

SEC. 963. ANNUAL FINANCIAL CONTROLS AUDIT.

    (a) Reports of Commission.--
            (1) Annual reports required.--Not later than 6 months after 
        the end of each fiscal year, the Commission shall publish and 
        submit to Congress a report that--
                    (A) describes the responsibility of the management 
                of the Commission for establishing and maintaining an 
                adequate internal control structure and procedures for 
                financial reporting; and
                    (B) contains an assessment of the effectiveness of 
                the internal control structure and procedures for 
                financial reporting of the Commission during that 
                fiscal year.
            (2) Attestation.--The reports required under paragraph (1) 
        shall be attested to by the Chairman and chief financial 
        officer of the Commission.
    (b) Report by Comptroller General.--
            (1) Report required.--Not later than 6 months after the end 
        of the first fiscal year after the date of enactment of this 
        Act, the Comptroller General of the United States shall submit 
        a report to Congress that assesses--
                    (A) the effectiveness of the internal control 
                structure and procedures of the Commission for 
                financial reporting; and
                    (B) the assessment of the Commission under 
                subsection (a)(1)(B).
            (2) Attestation.--The Comptroller General shall attest to, 
        and report on, the assessment made by the Commission under 
        subsection (a).
    (c) Reimbursements for Cost of Reports.--
            (1) Reimbursements required.--The Commission shall 
        reimburse the Government Accountability Office for the full 
        cost of making the reports under subsection (b), as billed 
        therefor by the Comptroller General.
            (2) Crediting and use of reimbursements.--Such 
        reimbursements shall--
                    (A) be credited to the appropriation account 
                ``Salaries and Expenses, Government Accountability 
                Office'' current when the payment is received; and
                    (B) remain available until expended.

SEC. 964. REPORT ON OVERSIGHT OF NATIONAL SECURITIES ASSOCIATIONS.

    (a) Report Required.--Not later than 2 years after the date of 
enactment of this Act, and every 3 years thereafter, the Comptroller 
General of the United States shall submit to the Committee on Banking, 
Housing, and Urban Affairs of the Senate and the Committee on Financial 
Services of the House of Representatives a report that includes an 
evaluation of the oversight by the Commission of national securities 
associations registered under section 15A of the Securities Exchange 
Act of 1934 (15 U.S.C. 78o-3) with respect to--
            (1) the governance of such national securities 
        associations, including the identification and management of 
        conflicts of interest by such national securities associations, 
        together with an analysis of the impact of any conflicts of 
        interest on the regulatory enforcement or rulemaking by such 
        national securities associations;
            (2) the examinations carried out by the national securities 
        associations, including the expertise of the examiners;
            (3) the executive compensation practices of such national 
        securities associations;
            (4) the arbitration services provided by the national 
        securities associations;
            (5) the review performed by national securities 
        associations of advertising by the members of the national 
        securities associations;
            (6) the cooperation with and assistance to State securities 
        administrators by the national securities associations to 
        promote investor protection;
            (7) how the funding of national securities associations is 
        used to support the mission of the national securities 
        associations, including--
                    (A) the methods of funding;
                    (B) the sufficiency of funds;
                    (C) how funds are invested by the national 
                securities association pending use; and
                    (D) the impact of the methods, sufficiency, and 
                investment of funds on regulatory enforcement by the 
                national securities associations;
            (8) the policies regarding the employment of former 
        employees of national securities associations by regulated 
        entities;
            (9) the ongoing effectiveness of the rules of the national 
        securities associations in achieving the goals of the rules;
            (10) the transparency of governance and activities of the 
        national securities associations; and
            (11) any other issue that has an impact, as determined by 
        the Comptroller General, on the effectiveness of such national 
        securities associations in performing their mission and in 
        dealing fairly with investors and members;
    (b) Reimbursements for Cost of Reports.--
            (1) Reimbursements required.--The Commission shall 
        reimburse the Government Accountability Office for the full 
        cost of making the reports under subsection (a), as billed 
        therefor by the Comptroller General.
            (2) Crediting and use of reimbursements.--Such 
        reimbursements shall--
                    (A) be credited to the appropriation account 
                ``Salaries and Expenses, Government Accountability 
                Office'' current when the payment is received; and
                    (B) remain available until expended.

SEC. 965. COMPLIANCE EXAMINERS.

    Section 4 of the Securities Exchange Act of 1934 (15 U.S.C. 78d) is 
amended by adding at the end the following:
    ``(h) Examiners.--
            ``(1) Division of trading and markets.--The Division of 
        Trading and Markets of the Commission, or any successor 
        organizational unit, shall have a staff of examiners who 
        shall--
                    ``(A) perform compliance inspections and 
                examinations of entities under the jurisdiction of that 
                Division; and
                    ``(B) report to the Director of that Division.
            ``(2) Division of investment management.--The Division of 
        Investment Management of the Commission, or any successor 
        organizational unit, shall have a staff of examiners who 
        shall--
                    ``(A) perform compliance inspections and 
                examinations of entities under the jurisdiction of that 
                Division; and
                    ``(B) report to the Director of that Division.''.

SEC. 966. SUGGESTION PROGRAM FOR EMPLOYEES OF THE COMMISSION.

    The Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.) is 
amended by inserting after section 4C (15 U.S.C. 78d-3) the following:

``SEC. 4D. ADDITIONAL DUTIES OF INSPECTOR GENERAL.

    ``(a) Suggestion Submissions by Commission Employees.--
            ``(1) Hotline established.--The Inspector General of the 
        Commission shall establish and maintain a telephone hotline or 
        other electronic means for the receipt of--
                    ``(A) suggestions by employees of the Commission 
                for improvements in the work efficiency, effectiveness, 
                and productivity, and the use of the resources, of the 
                Commission; and
                    ``(B) allegations by employees of the Commission of 
                waste, abuse, misconduct, or mismanagement within the 
                Commission.
            ``(2) Confidentiality.--The Inspector General shall 
        maintain as confidential--
                    ``(A) the identity of any individual who provides 
                information by the means established under paragraph 
                (1), unless the individual requests otherwise, in 
                writing; and
                    ``(B) at the request of any such individual, any 
                specific information provided by the individual.
    ``(b) Consideration of Reports.--The Inspector General shall 
consider any suggestions or allegations received by the means 
established under subsection (a)(1), and shall recommend appropriate 
action in relation to such suggestions or allegations.
    ``(c) Recognition.--The Inspector General may recognize any 
employee who makes a suggestion under subsection (a)(1) (or by other 
means) that would or does--
            ``(1) increase the work efficiency, effectiveness, or 
        productivity of the Commission; or
            ``(2) reduce waste, abuse, misconduct, or mismanagement 
        within the Commission.
    ``(d) Report.--The Inspector General of the Commission shall submit 
to Congress an annual report containing a description of--
            ``(1) the nature, number, and potential benefits of any 
        suggestions received under subsection (a);
            ``(2) the nature, number, and seriousness of any 
        allegations received under subsection (a);
            ``(3) any recommendations made or actions taken by the 
        Inspector General in response to substantiated allegations 
        received under subsection (a); and
            ``(4) any action the Commission has taken in response to 
        suggestions or allegations received under subsection (a).
    ``(e) Funding.--The activities of the Inspector General under this 
subsection shall be funded by the Securities and Exchange Commission 
Investor Protection Fund established under section 21F.''.

             Subtitle G--Strengthening Corporate Governance

SEC. 971. ELECTION OF DIRECTORS BY MAJORITY VOTE IN UNCONTESTED 
              ELECTIONS.

    The Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.) is 
amended by inserting after section 14A, as added by this title, the 
following:

``SEC. 14B. CORPORATE GOVERNANCE.

    ``(a) Corporate Governance Standards.--
            ``(1) Listing standards.--
                    ``(A) In general.--Not later than 1 year after the 
                date of enactment of this subsection, the Commission 
                shall, by rule, direct the national securities 
                exchanges and national securities associations to 
                prohibit the listing of any security of an issuer that 
                is not in compliance with any of the requirements of 
                this subsection.
                    ``(B) Opportunity to comply and cure.--The rules 
                established under this paragraph shall allow an issuer 
                to have an opportunity to come into compliance with the 
                requirements of this subsection, and to cure any defect 
                that would be the basis for a prohibition under 
                subparagraph (A), before the imposition of such 
                prohibition.
                    ``(C) Authority to exempt.--The Commission may, by 
                rule or order, exempt an issuer from any or all of the 
                requirements of this subsection and the rules issued 
                under this subsection, based on the size of the issuer, 
                the market capitalization of the issuer, the number of 
                shareholders of record of the issuer, or any other 
                criteria, as the Commission deems necessary and 
                appropriate in the public interest or for the 
                protection of investors.
            ``(2) Commission rules on elections.--In an election for 
        membership on the board of directors of an issuer--
                    ``(A) that is uncontested, each director who 
                receives a majority of the votes cast shall be deemed 
                to be elected;
                    ``(B) that is contested, if the number of nominees 
                exceeds the number of directors to be elected, each 
                director shall be elected by the vote of a plurality of 
                the shares represented at a meeting and entitled to 
                vote; and
                    ``(C) if a director of an issuer receives less than 
                a majority of the votes cast in an uncontested 
                election--
                            ``(i) the director shall tender the 
                        resignation of the director to the board of 
                        directors; and
                            ``(ii) the board of directors--
                                    ``(I) shall--
                                            ``(aa) accept the 
                                        resignation of the director;
                                            ``(bb) determine a date on 
                                        which the resignation will take 
                                        effect, within a reasonable 
                                        period of time, as established 
                                        by the Commission; and
                                            ``(cc) make the date under 
                                        item (bb) public within a 
                                        reasonable period of time, as 
                                        established by the Commission; 
                                        or
                                    ``(II) shall, upon a unanimous vote 
                                of the board, decline to accept the 
                                resignation and, not later than 30 days 
                                after the date of the vote (or within 
                                such shorter period as the Commission 
                                may establish), make public, together 
                                with a discussion of the analysis used 
                                in reaching the conclusion, the 
                                specific reasons that--
                                            ``(aa) the board chose not 
                                        to accept the resignation; and
                                            ``(bb) the decision was in 
                                        the best interests of the 
                                        issuer and the shareholders of 
                                        the issuer.''.

SEC. 972. PROXY ACCESS.

    (a) Proxy Access.--Section 14(a) of the Securities Exchange Act of 
1934 (15 U.S.C. 78n(a)) is amended--
            (1) by inserting ``(1)'' after ``(a)''; and
            (2) by adding at the end the following:
    ``(2) The rules and regulations prescribed by the Commission under 
paragraph (1) may include--
            ``(A) a requirement that a solicitation of proxy, consent, 
        or authorization by (or on behalf of) an issuer include a 
        nominee submitted by a shareholder to serve on the board of 
        directors of the issuer; and
            ``(B) a requirement that an issuer follow a certain 
        procedure in relation to a solicitation described in 
        subparagraph (A).''.
    (b) Regulations.--The Commission may issue rules permitting the use 
by shareholders of proxy solicitation materials supplied by an issuer 
of securities for the purpose of nominating individuals to membership 
on the board of directors of the issuer, under such terms and 
conditions as the Commission determines are in the interests of 
shareholders and for the protection of investors.

SEC. 973. DISCLOSURES REGARDING CHAIRMAN AND CEO STRUCTURES.

    Section 14B of the Securities Exchange Act of 1934, as added by 
section 971, is amended by adding at the end the following:
    ``(b) Disclosures Regarding Chairman and CEO Structures.--Not later 
than 180 days after the date of enactment of this subsection, the 
Commission shall issue rules that require an issuer to disclose in the 
annual proxy sent to investors the reasons why the issuer has chosen--
            ``(1) the same person to serve as chairman of the board of 
        directors and chief executive officer (or in equivalent 
        positions); or
            ``(2) different individuals to serve as chairman of the 
        board of directors and chief executive officer (or in 
        equivalent positions of the issuer).''.

                    Subtitle H--Municipal Securities

SEC. 975. REGULATION OF MUNICIPAL SECURITIES AND CHANGES TO THE BOARD 
              OF THE MSRB.

    (a) Registration of Municipal Securities Dealers and Municipal 
Advisors.--Section 15B(a) of the Securities Exchange Act of 1934 (15 
U.S.C. 78o-4(a)) is amended--
            (1) in paragraph (1)--
                    (A) by inserting ``(A)'' after ``(1)''; and
                    (B) by adding at the end the following:
                    ``(B) It shall be unlawful for a municipal advisor 
                to provide advice to or on behalf of a municipal entity 
                or obligated person with respect to municipal financial 
                products or the issuance of municipal securities, or to 
                undertake a solicitation of a municipal entity or 
                obligated person, unless the municipal advisor is 
                registered in accordance with this subsection.'';
            (2) in paragraph (2), by inserting ``or municipal advisor'' 
        after ``municipal securities dealer'' each place that term 
        appears;
            (3) in paragraph (3), by inserting ``or municipal advisor'' 
        after ``municipal securities dealer'' each place that term 
        appears;
            (4) in paragraph (4), by striking ``dealer, or municipal 
        securities dealer or class of brokers, dealers, or municipal 
        securities dealers'' and inserting ``dealer, municipal 
        securities dealer, or municipal advisor, or class of brokers, 
        dealers, municipal securities dealers, or municipal advisors''; 
        and
            (5) by adding at the end the following:
            ``(5) No municipal advisor shall make use of the mails or 
        any means or instrumentality of interstate commerce to provide 
        advice to or on behalf of a municipal entity or obligated 
        person with respect to municipal financial products, the 
        issuance of municipal securities, or participation in the 
        issuance of municipal securities, or to undertake a 
        solicitation of a municipal entity or obligated person, in 
        connection with which such municipal advisor engages in any 
        fraudulent, deceptive, or manipulative act or practice.''.
    (b) Municipal Securities Rulemaking Board.--Section 15B(b) of the 
Securities Exchange Act of 1934 (15 U.S.C. 78o-4(b)) is amended--
            (1) in paragraph (1)--
                    (A) in the first sentence, by striking ``Not later 
                than'' and all that follows through ``appointed by the 
                Commission'' and inserting ``The Municipal Securities 
                Rulemaking Board shall be composed of 15 members, or 
                such other number of members as specified by rules of 
                the Board pursuant to paragraph (2)(B),'';
                    (B) by striking the second sentence and inserting 
                the following: ``The members of the Board shall serve 
                as members for a term of 3 years or for such other 
                terms as specified by rules of the Board pursuant to 
                paragraph (2)(B), and shall consist of (A) 8 
                individuals who are not associated with any broker, 
                dealer, municipal securities dealer, or municipal 
                advisor (other than by reason of being under common 
                control with, or indirectly controlling, any broker or 
                dealer which is not a municipal securities broker or 
                municipal securities dealer), at least 1 of whom shall 
                be representative of institutional or retail investors 
                in municipal securities, at least 1 of whom shall be 
                representative of municipal entities, and at least 1 of 
                whom shall be a member of the public with knowledge of 
                or experience in the municipal industry (which members 
                are hereinafter referred to as `public 
                representatives'); and (B) 7 individuals who are 
                associated with a broker, dealer, municipal securities 
                dealer, or municipal advisor, including at least 1 
                individual who is associated with and representative of 
                brokers, dealers, or municipal securities dealers that 
                are not banks or subsidiaries or departments or 
                divisions of banks (which members are hereinafter 
                referred to as `broker-dealer representatives'), at 
                least 1 individual who is associated with and 
                representative of municipal securities dealers which 
                are banks or subsidiaries or departments or divisions 
                of banks (which members are hereinafter referred to as 
                `bank representatives'), and at least 1 individual who 
                is associated with a municipal advisor (which member is 
                hereinafter referred to as the `advisor 
                representative').''; and
                    (C) in the third sentence, by striking ``initial'';
            (2) in paragraph (2)--
                    (A) in the matter preceding subparagraph (A)--
                            (i) by inserting before the period at the 
                        end of the first sentence the following: ``and 
                        advice provided to or on behalf of municipal 
                        entities or obligated persons by brokers, 
                        dealers, municipal securities dealers, and 
                        municipal advisors with respect to municipal 
                        financial products, the issuance of municipal 
                        securities, or participation in the issuance of 
                        municipal securities, and solicitations of 
                        municipal entities or obligated persons 
                        undertaken by brokers, dealers, municipal 
                        securities dealers, and municipal advisors''; 
                        and
                            (ii) by striking the second sentence;
                    (B) in subparagraph (A)--
                            (i) in the matter preceding clause (i)--
                                    (I) by inserting ``, and no broker, 
                                dealer, municipal securities dealer, or 
                                municipal advisor shall provide advice 
                                to or on behalf of a municipal entity 
                                or obligated person with respect to 
                                municipal financial products, the 
                                issuance of municipal securities, or 
                                participation in the issuance of 
                                municipal securities'' after ``sale of, 
                                any municipal security''; and
                                    (II) by inserting ``and municipal 
                                entities or obligated persons'' after 
                                ``protection of investors'';
                            (ii) in clause (i), by striking ``municipal 
                        securities brokers and municipal securities 
                        dealers'' each place that term appears and 
                        inserting ``municipal securities brokers, 
                        municipal securities dealers, and municipal 
                        advisors'';
                            (iii) in clause (ii), by adding ``and'' at 
                        the end;
                            (iv) in clause (iii), by striking ``; and'' 
                        and inserting a period; and
                            (v) by striking clause (iv);
                    (C) in subparagraph (B), by striking ``nominations 
                and elections'' and all that follows through 
                ``specify'' and inserting ``nominations and elections 
                of public representatives, broker-dealer 
                representatives, bank representatives, and advisor 
                representatives. Such rules shall provide that the 
                membership of the Board shall at all times be as evenly 
                divided in number as possible between entities or 
                individuals who are subject to regulation by the Board 
                and entities or individuals not subject to regulation 
                by the Board, provided, however, that a majority of the 
                members of the Board shall at all times be public 
                representatives. Such rules shall also specify'';
                    (D) in subparagraph (C)--
                            (i) by inserting ``and municipal financial 
                        products'' after ``municipal securities'' the 
                        first two times that term appears;
                            (ii) by inserting ``, municipal entities, 
                        obligated persons,'' before ``and the public 
                        interest'';
                            (iii) by striking ``between'' and inserting 
                        ``among'';
                            (iv) by striking ``issuers, municipal 
                        securities brokers, or municipal securities 
                        dealers, to fix'' and inserting ``municipal 
                        entities, obligated persons, municipal 
                        securities brokers, municipal securities 
                        dealers, or municipal advisors, to fix''; and
                            (v) by striking ``brokers or municipal 
                        securities dealers, to regulate'' and inserting 
                        ``brokers, municipal securities dealers, or 
                        municipal advisors, to regulate'';
                    (E) in subparagraph (D)--
                            (i) by inserting ``and advice concerning 
                        municipal financial products'' after 
                        ``transactions in municipal securities'';
                            (ii) by striking ``That no'' and inserting 
                        ``that no'';
                            (iii) by inserting ``municipal advisor,'' 
                        before ``or person associated''; and
                            (iv) by striking ``a municipal securities 
                        broker or municipal securities dealer may be 
                        compelled'' and inserting ``a municipal 
                        securities broker, municipal securities dealer, 
                        or municipal advisor may be compelled'';
                    (F) in subparagraph (E)--
                            (i) by striking ``municipal securities 
                        brokers and municipal securities dealers'' and 
                        inserting ``municipal securities brokers, 
                        municipal securities dealers, and municipal 
                        advisors''; and
                            (ii) by striking ``municipal securities 
                        broker or municipal securities dealer'' and 
                        inserting ``municipal securities broker, 
                        municipal securities dealer, or municipal 
                        advisor'';
                    (G) in subparagraph (G), by striking ``municipal 
                securities brokers and municipal securities dealers'' 
                and inserting ``municipal securities brokers, municipal 
                securities dealers, and municipal advisors'';
                    (H) in subparagraph (J)--
                            (i) by striking ``municipal securities 
                        broker and each municipal securities dealer'' 
                        and inserting ``municipal securities broker, 
                        municipal securities dealer, and municipal 
                        advisor''; and
                            (ii) by striking the period at the end of 
                        the second sentence and inserting ``, which may 
                        include charges for failure to submit to the 
                        Board required information or documents to any 
                        information system operated by the Board in a 
                        full, accurate, or timely manner, or any other 
                        failure to comply with the rules of the 
                        Board.'';
                    (I) in subparagraph (K)--
                            (i) by inserting ``broker, dealer, or'' 
                        before ``municipal securities dealer'' each 
                        place that term appears; and
                            (ii) by striking ``municipal securities 
                        investment portfolio'' and inserting ``related 
                        account of a broker, dealer, or municipal 
                        securities dealer''; and
                    (J) by adding at the end the following:
                    ``(L) provide continuing education requirements for 
                municipal advisors.
                    ``(M) provide professional standards.
                    ``(N) not impose a regulatory burden on small 
                municipal advisors that is not necessary or appropriate 
                in the public interest and for the protection of 
                investors, municipal entities, and obligated 
                persons.'';
            (3) by redesignating paragraph (3) as paragraph (7); and
            (4) by inserting after paragraph (2) the following:
            ``(3) The Board, in conjunction with or on behalf of any 
        Federal financial regulator or self-regulatory organization, 
        may--
                    ``(A) establish information systems; and
                    ``(B) assess such reasonable fees and charges for 
                the submission of information to, or the receipt of 
                information from, such systems from any persons which 
                systems may be developed for the purposes of serving as 
                a repository of information from municipal market 
                participants or otherwise in furtherance of the 
                purposes of the Board, a Federal financial regulator, 
                or a self-regulatory organization.
            ``(4) The Board shall provide guidance and assistance in 
        the enforcement of, and examination for, compliance with the 
        rules of the Board to the Commission, a registered securities 
        association under section 15A, or any other appropriate 
        regulatory agency, as applicable.''.
    (c) Discipline of Dealers and Municipal Advisors and Other 
Matters.--Section 15B(c) of the Securities Exchange Act of 1934 (15 
U.S.C. 78o-4(c)) is amended--
            (1) in paragraph (1), by inserting ``, and no broker, 
        dealer, municipal securities dealer, or municipal advisor shall 
        make use of the mails or any means or instrumentality of 
        interstate commerce to provide advice to or on behalf of a 
        municipal entity or obligated person with respect to municipal 
        financial products, the issuance of municipal securities, or 
        participation in the issuance of municipal securities, or to 
        undertake a solicitation of a municipal entity or obligated 
        person,'' after ``any municipal security'';
            (2) in paragraph (2), by inserting ``or municipal advisor'' 
        after ``municipal securities dealer'' each place that term 
        appears;
            (3) in paragraph (3)--
                    (A) by inserting ``or municipal entities or 
                obligated person'' after ``protection of investors'' 
                each place that term appears; and
                    (B) by inserting ``or municipal advisor'' after 
                ``municipal securities dealer'' each place that term 
                appears;
            (4) in paragraph (4), by inserting ``or municipal advisor'' 
        after ``municipal securities dealer or obligated person'' each 
        place that term appears;
            (5) in paragraph (6)(B), by inserting ``or municipal 
        entities'' after ``protection of investors'';
            (6) in paragraph (7)--
                    (A) in subparagraph (A)--
                            (i) in clause (i), by striking ``; and'' 
                        and inserting a semicolon;
                            (ii) in clause (ii), by striking the period 
                        and inserting ``; and''; and
                            (iii) by adding at the end the following:
                            ``(iii) the Commission, or its designee, in 
                        the case of municipal advisors.''.
                    (B) in subparagraph (B), by inserting ``or 
                municipal entities or obligated person'' after 
                ``protection of investors''; and
            (7) by adding at the end the following:
            ``(9)(A) Fines collected by the Commission for violations 
        of the rules of the Board shall be equally divided between the 
        Commission and the Board.
            ``(B) Fines collected by a registered securities 
        association under section 15A(7) with respect to violations of 
        the rules of the Board shall be accounted for by such 
        registered securities association separately from other fines 
        collected under section 15A(7) and shall be allocated between 
        such registered securities association and the Board at the 
        direction of the Commission.''.
    (d) Issuance of Municipal Securities.--Section 15B(d)(2) of the 
Securities Exchange Act of 1934 (15 U.S.C. 78o-4(d)) is amended--
            (1) by striking ``through a municipal securities broker or 
        municipal securities dealer or otherwise'' and inserting 
        ``through a municipal securities broker, municipal securities 
        dealer, municipal advisor, or otherwise''; and
            (2) by inserting ``or municipal advisors'' before ``to 
        furnish''.
    (e) Definitions.--Section 15B of the Securities Exchange Act of 
1934 (15 U.S.C. 78o-4) is amended by adding at the end the following:
    ``(e) Definitions.--For purposes of this section--
            ``(1) the term `Board' means the Municipal Securities 
        Rulemaking Board established under subsection (b)(1);
            ``(2) the term `guaranteed investment contract' includes 
        any investment that has specified withdrawal or reinvestment 
        provisions and a specifically negotiated or bid interest rate, 
        and also includes any agreement to supply investments on 2 or 
        more future dates, such as a forward supply contract;
            ``(3) the term `investment strategies' includes plans or 
        programs for the investment of the proceeds of municipal 
        securities that are not municipal derivatives, guaranteed 
        investment contracts, and the recommendation of and brokerage 
        of municipal escrow investments;
            ``(4) the term `municipal advisor'--
                    ``(A) means a person (who is not a municipal entity 
                or an employee of a municipal entity) that--
                            ``(i) provides advice to or on behalf of a 
                        municipal entity or obligated person with 
                        respect to municipal financial products or the 
                        issuance of municipal securities, including 
                        advice with respect to the structure, timing, 
                        terms, and other similar matters concerning 
                        such financial products or issues;
                            ``(ii) participates in the issuance of 
                        municipal securities; or
                            ``(iii) undertakes a solicitation of a 
                        municipal entity;
                    ``(B) includes financial advisors, guaranteed 
                investment contract brokers, third-party marketers, 
                placement agents, solicitors, finders, and swap 
                advisors, if such persons are described in any of 
                clauses (i) through (iii) of subparagraph (A); and
                    ``(C) does not include a broker, dealer, or 
                municipal securities dealer serving as an underwriter 
                (as defined in section 2(a)(11) of the Securities Act 
                of 1933) (15 U.S.C. 77b(a)(11)), any investment adviser 
                registered under the Investment Advisers Act of 1940, 
                or persons associated with such investment advisers who 
                are providing investment advice, attorneys offering 
                legal advice or providing services that are of a 
                traditional legal nature, or engineers providing 
                engineering advice;
            ``(5) the term `municipal derivative' means any financial 
        instrument or contract designed to hedge a risk (including 
        interest rate swaps, basis swaps, credit default swaps, caps, 
        floors, and collars);
            ``(6) the term `municipal financial product' means 
        municipal derivatives, guaranteed investment contracts, and 
        investment strategies;
            ``(7) the term `rules of the Board' means the rules 
        proposed and adopted by the Board under subsection (b)(2);
            ``(8) the term `person associated with a municipal advisor' 
        or `associated person of an advisor' means--
                    ``(A) any partner, officer, director, or branch 
                manager of such municipal advisor (or any person 
                occupying a similar status or performing similar 
                functions);
                    ``(B) any other employee of such municipal advisor 
                who is engaged in the management, direction, 
                supervision, or performance of any activities relating 
                to the provision of advice to or on behalf of a 
                municipal entity or obligated person with respect to 
                municipal financial products, the issuance of municipal 
                securities, or participation in the issuance of 
                municipal securities; and
                    ``(C) any person directly or indirectly 
                controlling, controlled by, or under common control 
                with such municipal advisor;
            ``(9) the term `municipal entity' means any State, 
        political subdivision of a State, or municipal corporate 
        instrumentality of a State, including--
                    ``(A) any agency, authority, or instrumentality of 
                the State, political subdivision, or municipal 
                corporate instrumentality;
                    ``(B) any plan, program, or pool of assets 
                sponsored or established by the State, political 
                subdivision, or municipal corporate instrumentality or 
                any agency, authority, or instrumentality thereof; and
                    ``(C) any other issuer of municipal securities;
            ``(10) the term `solicitation of a municipal entity or 
        obligated person' means a direct or indirect communication with 
        a municipal entity or obligated person made by a person, for 
        direct or indirect compensation, on behalf of a broker, dealer, 
        municipal securities dealer, municipal advisor, or investment 
        adviser (as defined in section 202 of the Investment Advisers 
        Act of 1940) that does not control, is not controlled by, or is 
        not under common control with the person undertaking such 
        solicitation for the purpose of obtaining or retaining an 
        engagement by a municipal entity or obligated person of a 
        broker, dealer, municipal securities dealer, or municipal 
        advisor for or in connection with municipal financial products, 
        the issuance of municipal securities, or participation in the 
        issuance of municipal securities, or of an investment adviser 
        to provide investment advisory services to or on behalf of a 
        municipal entity; and
            ``(11) the term `obligated person' means any person, 
        including an issuer of municipal securities, who is either 
        generally or through an enterprise, fund, or account of such 
        person, committed by contract or other arrangement to support 
        the payment of all or part of the obligations on the municipal 
        securities to be sold in an offering of municipal 
        securities.''.
    (f) Registered Securities Association.--Section 15A(b) of the 
Securities Exchange Act of 1934 (15 U.S.C. 78o-3(b)) is amended by 
adding at the end the following:
            ``(15) The rules of the association provide that the 
        association shall--
                    ``(A) request guidance from the Municipal 
                Securities Rulemaking Board in interpretation of the 
                rules of the Municipal Securities Rulemaking Board; and
                    ``(B) provide information to the Municipal 
                Securities Rulemaking Board about the enforcement 
                actions and examinations of the association under 
                section 15B(b)(2)(E), so that the Municipal Securities 
                Rulemaking Board may--
                            ``(i) assist in such enforcement actions 
                        and examinations; and
                            ``(ii) evaluate the ongoing effectiveness 
                        of the rules of the Board.''.
    (g) Registration and Regulation of Brokers and Dealers.--Section 15 
of the Securities Exchange Act of 1934 is amended--
            (1) in subsection (b)(4), by inserting ``municipal 
        advisor,'' after ``municipal securities dealer'' each place 
        that term appears; and
            (2) in subsection (c), by inserting ``broker, dealer, or'' 
        before ``municipal securities dealer'' each place that term 
        appears.
    (h) Accounts and Records, Reports, Examinations of Exchanges, 
Members, and Others.--Section 17(a)(1) of the Securities Exchange Act 
of 1934 is amended by inserting ``municipal advisor,'' after 
``municipal securities dealer''.
    (i) Savings Clause.--Notwithstanding any provision of the Over-the-
Counter Derivatives Markets Act of 2010, or any amendment made pursuant 
to such Act, the provisions of this section, and the amendments made 
pursuant to this section, shall apply to any municipal derivative.
    (j) Effective Date.--This section, and the amendments made by this 
section, shall take effect on October 1, 2010.

SEC. 976. GOVERNMENT ACCOUNTABILITY OFFICE STUDY OF INCREASED 
              DISCLOSURE TO INVESTORS.

    (a) Study.--The Comptroller General of the United States shall 
conduct a study and review of the disclosure required to be made by 
issuers of municipal securities.
    (b) Subjects for Evaluation.--In conducting the study under 
subsection (a), the Comptroller General of the United States shall--
            (1) broadly describe--
                    (A) the size of the municipal securities markets 
                and the issuers and investors; and
                    (B) the disclosures provided by issuers to 
                investors;
            (2) compare the amount, frequency, and quality of 
        disclosures that issuers of municipal securities are required 
        by law to provide for the benefit of municipal securities 
        holders, including the amount of and frequency of disclosures 
        actually provided by issuers of municipal securities, with the 
        amount of and frequency of disclosures that issuers of 
        corporate securities provide for the benefit of corporate 
        securities holders, taking into account the differences between 
        issuers of municipal securities and issuers of corporate 
        securities;
            (3) evaluate the costs and benefits to various types of 
        issuers of municipal securities of requiring issuers of 
        municipal bonds to provide additional financial disclosures for 
        the benefit of investors;
            (4) evaluate the potential benefit to investors from 
        additional financial disclosures by issuers of municipal bonds; 
        and
            (5) make recommendations relating to disclosure 
        requirements for municipal issuers, including the advisability 
        of the repeal or retention of section 15B(d) of the Securities 
        Exchange Act of 1934 (15 U.S.C. 78o-4(d)) (commonly known as 
        the ``Tower Amendment'').
    (c) Report.--Not later than 1 year after the date of enactment of 
this Act, the Comptroller General of the United States shall submit a 
report to Congress on the results of the study conducted under 
subsection (a), including recommendations for how to improve disclosure 
by issuers of municipal securities.

SEC. 977. GOVERNMENT ACCOUNTABILITY OFFICE STUDY ON THE MUNICIPAL 
              SECURITIES MARKETS.

    (a) Study.--The Comptroller General of the United States shall 
conduct a study of the municipal securities markets.
    (b) Report.--Not later than 180 days after the date of enactment of 
this Act, the Comptroller General of the United States shall submit a 
report to the Committee on Banking, Housing, and Urban Affairs of the 
Senate, and the Committee on Financial Services of the House of 
Representatives, with copies to the Special Committee on Aging of the 
Senate and the Commission, on the results of the study conducted under 
subsection (a), including--
            (1) an analysis of the mechanisms for trading, quality of 
        trade executions, market transparency, trade reporting, price 
        discovery, settlement clearing, and credit enhancements;
            (2) the needs of the markets and investors and the impact 
        of recent innovations;
            (3) recommendations for how to improve the transparency, 
        efficiency, fairness, and liquidity of trading in the municipal 
        securities markets, including with reference to items listed in 
        paragraph (1); and
            (4) potential uses of derivatives in the municipal 
        securities markets.
    (c) Responses.--Not later than 180 days after receipt of the report 
required under subsection (b), the Commission shall submit a response 
to the Committee on Banking, Housing, and Urban Affairs of the Senate, 
and the Committee on Financial Services of the House of 
Representatives, with a copy to the Special Committee on Aging of the 
Senate, stating the actions the Commission has taken in response to the 
recommendations contained in such report.

SEC. 978. STUDY OF FUNDING FOR GOVERNMENT ACCOUNTING STANDARDS BOARD.

    (a) Study.--The Commission shall conduct a study that evaluates--
            (1) the role and importance of the Government Accounting 
        Standards Board in the municipal securities markets;
            (2) the manner in which the Government Accounting Standards 
        Board is funded, and how such manner of funding affects the 
        financial information available to securities investors;
            (3) the advisability of changes to the manner in which the 
        Government Accounting Standards Board is funded; and
            (4) whether legislative changes to the manner in which the 
        Government Accounting Standards Board is funded are necessary 
        for the benefit of investors and in the public interest.
    (b) Consultation.--In conducting the study required under 
subsection (a), the Commission shall consult with State and local 
government financial officers.
    (c) Report.--Not later than 270 days after the date of enactment of 
this Act, the Commission shall submit to the Committee on Banking, 
Housing, and Urban Affairs of the Senate and the Committee on Financial 
Services of the House of Representatives a report on the study required 
under subsection (a).

SEC. 979. COMMISSION OFFICE OF MUNICIPAL SECURITIES.

    (a) In General.--There shall be in the Commission an Office of 
Municipal Securities, which shall--
            (1) administer the rules of the Commission with respect to 
        the practices of municipal securities brokers and dealers, 
        municipal securities advisors, municipal securities investors, 
        and municipal securities issuers; and
            (2) coordinate with the Municipal Securities Rulemaking 
        Board for rulemaking and enforcement actions as required by 
        law.
    (b) Director of the Office.--The head of the Office of Municipal 
Securities shall be the Director, who shall report to the Chairman.
    (c) Staffing.--
            (1) In general.--The Office of Municipal Securities shall 
        be staffed sufficiently to carry out the requirements of this 
        section.
            (2) Requirement.--The staff of the Office of Municipal 
        Securities shall include individuals with knowledge of and 
        expertise in municipal finance.

   Subtitle I--Public Company Accounting Oversight Board, Portfolio 
                      Margining, and Other Matters

SEC. 981. AUTHORITY TO SHARE CERTAIN INFORMATION WITH FOREIGN 
              AUTHORITIES.

    (a) Definition.--Section 2(a) of the Sarbanes-Oxley Act of 2002 (15 
U.S.C. 7201(a)) is amended by adding at the end the following:
            ``(17) Foreign auditor oversight authority.--The term 
        `foreign auditor oversight authority' means any governmental 
        body or other entity empowered by a foreign government to 
        conduct inspections of public accounting firms or otherwise to 
        administer or enforce laws related to the regulation of public 
        accounting firms.''.
    (b) Availability To Share Information.--Section 105(b)(5) of the 
Sarbanes-Oxley Act of 2002 (15 U.S.C. 7215(b)(5)) is amended by adding 
at the end the following:
                    ``(C) Availability to foreign oversight 
                authorities.--Without the loss of its status as 
                confidential and privileged in the hands of the Board, 
                all information referred to in subparagraph (A) that 
                relates to a public accounting firm that a foreign 
                government has empowered a foreign auditor oversight 
                authority to inspect or otherwise enforce laws with 
                respect to, may, at the discretion of the Board, be 
                made available to the foreign auditor oversight 
                authority, if--
                            ``(i) the Board finds that it is necessary 
                        to accomplish the purposes of this Act or to 
                        protect investors;
                            ``(ii) the foreign auditor oversight 
                        authority provides--
                                    ``(I) such assurances of 
                                confidentiality as the Board may 
                                request;
                                    ``(II) a description of the 
                                applicable information systems and 
                                controls of the foreign auditor 
                                oversight authority; and
                                    ``(III) a description of the laws 
                                and regulations of the foreign 
                                government of the foreign auditor 
                                oversight authority that are relevant 
                                to information access; and
                            ``(iii) the Board determines that it is 
                        appropriate to share such information.''.
    (c) Conforming Amendment.--Section 105(b)(5)(A) of the Sarbanes-
Oxley Act of 2002 (15 U.S.C. 7215(b)(5)(A)) is amended by striking 
``subparagraph (B)'' and inserting ``subparagraphs (B) and (C)''.

SEC. 982. OVERSIGHT OF BROKERS AND DEALERS.

    (a) Definitions.--
            (1) Definitions amended.--Title I of the Sarbanes-Oxley Act 
        of 2002 (15 U.S.C. 7201 et seq.) is amended by adding at the 
        end the following new section:

``SEC. 110. DEFINITIONS.

    ``For the purposes of this title, the following definitions shall 
apply:
            ``(1) Audit.--The term `audit' means an examination of the 
        financial statements, reports, documents, procedures, controls, 
        or notices of any issuer, broker, or dealer by an independent 
        public accounting firm in accordance with the rules of the 
        Board or the Commission, for the purpose of expressing an 
        opinion on the financial statements or providing an audit 
        report.
            ``(2) Audit report.--The term `audit report' means a 
        document, report, notice, or other record--
                    ``(A) prepared following an audit performed for 
                purposes of compliance by an issuer, broker, or dealer 
                with the requirements of the securities laws; and
                    ``(B) in which a public accounting firm either--
                            ``(i) sets forth the opinion of that firm 
                        regarding a financial statement, report, 
                        notice, or other document, procedures, or 
                        controls; or
                            ``(ii) asserts that no such opinion can be 
                        expressed.
            ``(3) Broker.--The term `broker' means a broker (as such 
        term is defined in section 3(a)(4) of the Securities Exchange 
        Act of 1934 (15 U.S.C. 78c(a)(4))) that is required to file a 
        balance sheet, income statement, or other financial statement 
        under section 17(e)(1)(A) of such Act (15 U.S.C. 78q(e)(1)(A)), 
        where such balance sheet, income statement, or financial 
        statement is required to be certified by a registered public 
        accounting firm.
            ``(4) Dealer.--The term `dealer' means a dealer (as such 
        term is defined in section 3(a)(5) of the Securities Exchange 
        Act of 1934 (15 U.S.C. 78c(a)(5))) that is required to file a 
        balance sheet, income statement, or other financial statement 
        under section 17(e)(1)(A) of such Act (15 U.S.C. 78q(e)(1)(A)), 
        where such balance sheet, income statement, or financial 
        statement is required to be certified by a registered public 
        accounting firm.
            ``(5) Professional standards.--The term `professional 
        standards' means--
                    ``(A) accounting principles that are--
                            ``(i) established by the standard setting 
                        body described in section 19(b) of the 
                        Securities Act of 1933, as amended by this Act, 
                        or prescribed by the Commission under section 
                        19(a) of that Act (15 U.S.C. 17a(s)) or section 
                        13(b) of the Securities Exchange Act of 1934 
                        (15 U.S.C. 78a(m)); and
                            ``(ii) relevant to audit reports for 
                        particular issuers, brokers, or dealers, or 
                        dealt with in the quality control system of a 
                        particular registered public accounting firm; 
                        and
                    ``(B) auditing standards, standards for attestation 
                engagements, quality control policies and procedures, 
                ethical and competency standards, and independence 
                standards (including rules implementing title II) that 
                the Board or the Commission determines--
                            ``(i) relate to the preparation or issuance 
                        of audit reports for issuers, brokers, or 
                        dealers; and
                            ``(ii) are established or adopted by the 
                        Board under section 103(a), or are promulgated 
                        as rules of the Commission.
            ``(6) Self-regulatory organization.--The term `self-
        regulatory organization' has the same meaning as in section 
        3(a) of the Securities Exchange Act of 1934 (15 U.S.C. 
        78c(a)).''.
            (2) Conforming amendment.--Section 2(a) of the Sarbanes-
        Oxley Act of 2002 (15 U.S.C. 7201(a)) is amended in the matter 
        preceding paragraph (1), by striking ``In this'' and inserting 
        ``Except as otherwise specifically provided in this Act, in 
        this''.
    (b) Establishment and Administration of the Public Company 
Accounting Oversight Board.--Section 101 of the Sarbanes-Oxley Act of 
2002 (15 U.S.C. 7211) is amended--
            (1) by striking ``issuers'' each place that term appears 
        and inserting ``issuers, brokers, and dealers''; and
            (2) in subsection (a)--
                    (A) by striking ``public companies'' and inserting 
                ``companies''; and
                    (B) by striking ``for companies the securities of 
                which are sold to, and held by and for, public 
                investors''.
    (c) Registration With the Board.--Section 102 of the Sarbanes-Oxley 
Act of 2002 (15 U.S.C. 7212) is amended--
            (1) in subsection (a)--
                    (A) by striking ``Beginning 180'' and all that 
                follows through ``101(d), it'' and inserting ``It''; 
                and
                    (B) by striking ``issuer'' and inserting ``issuer, 
                broker, or dealer'';
            (2) in subsection (b)--
                    (A) in paragraph (2)(A), by striking ``issuers'' 
                and inserting ``issuers, brokers, and dealers''; and
                    (B) by striking ``issuer'' each place that term 
                appears and inserting ``issuer, broker, or dealer''.
    (d) Auditing and Independence.--Section 103(a) of the Sarbanes-
Oxley Act of 2002 (15 U.S.C. 7213(a)) is amended--
            (1) in paragraph (1), by striking ``and such ethics 
        standards'' and inserting ``such ethics standards, and such 
        independence standards'';
            (2) in paragraph (2)(A)(iii), by striking ``describe in 
        each audit report'' and inserting ``in each audit report for an 
        issuer, describe''; and
            (3) in paragraph (2)(B)(i), by striking ``issuers'' and 
        inserting ``issuers, brokers, and dealers''.
    (e) Inspections of Registered Public Accounting Firms.--Section 104 
of the Sarbanes-Oxley Act of 2002 (15 U.S.C. 7214) is amended--
            (1) in subsection (a), by striking ``issuers'' and 
        inserting ``issuers, brokers, and dealers''; and
            (2) in subsection (b)(1)--
                    (A) by striking ``audit reports for'' each place 
                that term appears and inserting ``audit reports on 
                annual financial statements for'';
                    (B) in subparagraph (A), by striking ``and'' at the 
                end;
                    (C) in subparagraph (B), by striking the period at 
                the end and inserting ``; and''; and
                    (D) by adding at the end the following:
                    ``(C) with respect to each registered public 
                accounting firm that regularly provides audit reports 
                and that is not described in subparagraph (A) or (B), 
                on a basis determined by the Board, by rule, that is 
                consistent with the public interest and protection of 
                investors.''.
    (f) Investigations and Disciplinary Proceedings.--Section 
105(c)(7)(B) of the Sarbanes-Oxley Act of 2002 (15 U.S.C. 
7215(c)(7)(B)) is amended--
            (1) in the subparagraph heading, by inserting ``, broker, 
        or dealer'' after ``issuer'';
            (2) by striking ``any issuer'' each place that term appears 
        and inserting ``any issuer, broker, or dealer''; and
            (3) by striking ``an issuer under this subsection'' and 
        inserting ``a registered public accounting firm under this 
        subsection''.
    (g) Foreign Public Accounting Firms.--Section 106(a) of the 
Sarbanes-Oxley Act of 2002 (15 U.S.C. 7216(a)) is amended--
            (1) in paragraph (1), by striking ``issuer'' and inserting 
        ``issuer, broker, or dealer''; and
            (2) in paragraph (2), by striking ``issuers'' and inserting 
        ``issuers, brokers, or dealers''.
    (h) Funding.--Section 109 of the Sarbanes-Oxley Act of 2002 (15 
U.S.C. 7219) is amended--
            (1) in subsection (c)(2), by striking ``subsection (i)'' 
        and inserting ``subsection (j)'';
            (2) in subsection (d)--
                    (A) in paragraph (2), by striking ``allowing for 
                differentiation among classes of issuers, as 
                appropriate'' and inserting ``and among brokers and 
                dealers, in accordance with subsection (h), and 
                allowing for differentiation among classes of issuers, 
                brokers and dealers, as appropriate''; and
                    (B) by adding at the end the following:
            ``(3) Brokers and dealers.--The Board shall begin the 
        allocation, assessment, and collection of fees under paragraph 
        (2) with respect to brokers and dealers with the payment of 
        support fees to fund the first full fiscal year beginning after 
        the effective date of this paragraph.'';
            (3) by redesignating subsections (h), (i), and (j) as 
        subsections (i), (j), and (k), respectively; and
            (4) by inserting after subsection (g) the following:
    ``(h) Allocation of Accounting Support Fees Among Brokers and 
Dealers.--
            ``(1) Obligation to pay.--Each broker or dealer shall pay 
        to the Board the annual accounting support fee allocated to 
        such broker or dealer under this section.
            ``(2) Allocation.--Any amount due from a broker or dealer 
        (or from a particular class of brokers and dealers) under this 
        section shall be allocated among brokers and dealers and 
        payable by the broker or dealer (or the brokers and dealers in 
        the particular class, as applicable).
            ``(3) Proportionality.--The amount due from a broker or 
        dealer shall be in proportion to the net capital of the broker 
        or dealer, compared to the total net capital of all brokers and 
        dealers, in accordance with rules issued by the Board.''.
    (i) Referral of Investigations to a Self-regulatory Organization.--
Section 105(b)(4)(B) of the Sarbanes-Oxley Act of 2002 (15 U.S.C. 
7215(b)(4)(B)) is amended--
            (1) by redesignating clauses (ii) and (iii) as clauses 
        (iii) and (iv), respectively; and
            (2) by inserting after clause (i) the following:
                            ``(ii) to a self-regulatory organization, 
                        in the case of an investigation that concerns 
                        an audit report for a broker or dealer that is 
                        under the jurisdiction of such self-regulatory 
                        organization;''.
    (j) Use of Documents Related to an Inspection or Investigation.--
Section 105(b)(5)(B)(ii) of the Sarbanes-Oxley Act of 2002 (15 U.S.C. 
7215(b)(5)(B)(ii)) is amended--
            (1) in subclause (III), by striking ``and'' at the end;
            (2) in subclause (IV), by striking the comma and inserting 
        ``; and''; and
            (3) by inserting after subclause (IV) the following:
                                    ``(V) a self-regulatory 
                                organization, with respect to an audit 
                                report for a broker or dealer that is 
                                under the jurisdiction of such self-
                                regulatory organization,''.
    (k) Effective Date.--The amendments made by this section shall take 
effect 180 days after the date of enactment of this Act.

SEC. 983. PORTFOLIO MARGINING.

    (a) Advances.--Section 9(a)(1) of the Securities Investor 
Protection Act of 1970 (15 U.S.C. 78fff-3(a)(1)) is amended by 
inserting ``or options on commodity futures contracts'' after ``claim 
for securities''.
    (b) Definitions.--Section 16 of the Securities Investor Protection 
Act of 1970 (15 U.S.C. 78lll) is amended--
            (1) by striking paragraph (2) and inserting the following:
            ``(2) Customer.--
                    ``(A) In general.--The term `customer' of a debtor 
                means any person (including any person with whom the 
                debtor deals as principal or agent) who has a claim on 
                account of securities received, acquired, or held by 
                the debtor in the ordinary course of its business as a 
                broker or dealer from or for the securities accounts of 
                such person for safekeeping, with a view to sale, to 
                cover consummated sales, pursuant to purchases, as 
                collateral, security, or for purposes of effecting 
                transfer.
                    ``(B) Included persons.--The term `customer' 
                includes--
                            ``(i) any person who has deposited cash 
                        with the debtor for the purpose of purchasing 
                        securities;
                            ``(ii) any person who has a claim against 
                        the debtor for cash, securities, futures 
                        contracts, or options on futures contracts 
                        received, acquired, or held in a portfolio 
                        margining account carried as a securities 
                        account pursuant to a portfolio margining 
                        program approved by the Commission; and
                            ``(iii) any person who has a claim against 
                        the debtor arising out of sales or conversions 
                        of such securities.
                    ``(C) Excluded persons.--The term `customer' does 
                not include any person, to the extent that--
                            ``(i) the claim of such person arises out 
                        of transactions with a foreign subsidiary of a 
                        member of SIPC; or
                            ``(ii) such person has a claim for cash or 
                        securities which by contract, agreement, or 
                        understanding, or by operation of law, is part 
                        of the capital of the debtor, or is 
                        subordinated to the claims of any or all 
                        creditors of the debtor, notwithstanding that 
                        some ground exists for declaring such contract, 
                        agreement, or understanding void or voidable in 
                        a suit between the claimant and the debtor.'';
            (2) in paragraph (4)--
                    (A) in subparagraph (C), by striking ``and'' at the 
                end;
                    (B) by redesignating subparagraph (D) as 
                subparagraph (E); and
                    (C) by inserting after subparagraph (C) the 
                following:
                    ``(D) in the case of a portfolio margining account 
                of a customer that is carried as a securities account 
                pursuant to a portfolio margining program approved by 
                the Commission, a futures contract or an option on a 
                futures contract received, acquired, or held by or for 
                the account of a debtor from or for such portfolio 
                margining account, and the proceeds thereof; and'';
            (3) in paragraph (9), in the matter following subparagraph 
        (L), by inserting after ``Such term'' the following: ``includes 
        revenues earned by a broker or dealer in connection with a 
        transaction in the portfolio margining account of a customer 
        carried as securities accounts pursuant to a portfolio 
        margining program approved by the Commission. Such term''; and
            (4) in paragraph (11)--
                    (A) in subparagraph (A)--
                            (i) by striking ``filing date, all'' and 
                        all that follows through the end of the 
                        subparagraph and inserting the following: 
                        ``filing date--
                            ``(i) all securities positions of such 
                        customer (other than customer name securities 
                        reclaimed by such customer); and
                            ``(ii) all positions in futures contracts 
                        and options on futures contracts held in a 
                        portfolio margining account carried as a 
                        securities account pursuant to a portfolio 
                        margining program approved by the Commission, 
                        including all property collateralizing such 
                        positions, to the extent that such property is 
                        not otherwise included herein; minus''; and
                    (B) in the matter following subparagraph (C), by 
                striking ``In determining'' and inserting the 
                following: ``A claim for a commodity futures contract 
                received, acquired, or held in a portfolio margining 
                account pursuant to a portfolio margining program 
                approved by the Commission or a claim for a security 
                futures contract, shall be deemed to be a claim with 
                respect to such contract as of the filing date, and 
                such claim shall be treated as a claim for cash. In 
                determining''.

SEC. 984. LOAN OR BORROWING OF SECURITIES.

    (a) Rulemaking Authority.--Section 10 of the Securities Exchange 
Act of 1934 (15 U.S.C. 78j) is amended by adding at the end the 
following:
            ``(c)(1) To effect, accept, or facilitate a transaction 
        involving the loan or borrowing of securities in contravention 
        of such rules and regulations as the Commission may prescribe 
        as necessary or appropriate in the public interest or for the 
        protection of investors.
            ``(2) Nothing in paragraph (1) may be construed to limit 
        the authority of the appropriate Federal banking agency (as 
        defined in section 3(q) of the Federal Deposit Insurance Act 
        (12 U.S.C. 1813(q))), the National Credit Union Administration, 
        or any other Federal department or agency having a 
        responsibility under Federal law to prescribe rules or 
        regulations restricting transactions involving the loan or 
        borrowing of securities in order to protect the safety and 
        soundness of a financial institution or to protect the 
        financial system from systemic risk.''.
    (b) Rulemaking Required.--Not later than 2 years after the date of 
enactment of this Act, the Commission shall promulgate rules that are 
designed to increase the transparency of information available to 
brokers, dealers, and investors, with respect to the loan or borrowing 
of securities.

SEC. 985. TECHNICAL CORRECTIONS TO FEDERAL SECURITIES LAWS.

    (a) Securities Act of 1933.--The Securities Act of 1933 (15 U.S.C. 
77a et seq.) is amended--
            (1) in section 3(a)(4) (15 U.S.C. 77c(a)(4)), by striking 
        ``individual;'' and inserting ``individual,'';
            (2) in section 18 (15 U.S.C. 77r)--
                    (A) in subsection (b)(1)(C), by striking ``is a 
                security'' and inserting ``a security''; and
                    (B) in subsection (c)(2)(B)(i), by striking 
                ``State, or'' and inserting ``State or'';
            (3) in section 19(d)(6)(A) (15 U.S.C. 77s(d)(6)(A)), by 
        striking ``in paragraph (1) of (3)'' and inserting ``in 
        paragraph (1) or (3)''; and
            (4) in section 27A(c)(1)(B)(ii) (15 U.S.C. 77z-
        2(c)(1)(B)(ii)), by striking ``business entity;'' and inserting 
        ``business entity,''.
    (b) Securities Exchange Act of 1934.--The Securities Exchange Act 
of 1934 (15 U.S.C. 78a et seq.) is amended--
            (1) in section 2 (15 U.S.C. 78b), by striking ``affected'' 
        and inserting ``effected'';
            (2) in section 3 (15 U.S.C. 78c)--
                    (A) in subsection (a)(55)(A), by striking ``section 
                3(a)(12) of the Securities Exchange Act of 1934'' and 
                inserting ``section 3(a)(12) of this title''; and
                    (B) in subsection (g), by striking ``company, 
                account person, or entity'' and inserting ``company, 
                account, person, or entity'';
            (3) in section 10A(i)(1)(B) (15 U.S.C. 78j-1(i)(1)(B))--
                    (A) in the subparagraph heading, by striking 
                ``minimus'' and inserting ``minimis''; and
                    (B) in clause (i), by striking ``nonaudit'' and 
                inserting ``non-audit'';
            (4) in section 13(b)(1) (15 U.S.C. 78m(b)(1)), by striking 
        ``earning statement'' and inserting ``earnings statement'';
            (5) in section 15 (15 U.S.C. 78o)--
                    (A) in subsection (b)(1)--
                            (i) in subparagraph (B), by striking ``The 
                        order granting'' and all that follows through 
                        ``from such membership.''; and
                            (ii) in the undesignated matter immediately 
                        following subparagraph (B), by inserting after 
                        the first sentence the following: ``The order 
                        granting registration shall not be effective 
                        until such broker or dealer has become a member 
                        of a registered securities association, or 
                        until such broker or dealer has become a member 
                        of a national securities exchange, if such 
                        broker or dealer effects transactions solely on 
                        that exchange, unless the Commission has 
                        exempted such broker or dealer, by rule or 
                        order, from such membership.'';
            (6) in section 15C(a)(2) (15 U.S.C. 78o-5(a)(2))--
                    (A) by redesignating clauses (i) and (ii) as 
                subparagraphs (A) and (B), respectively, and adjusting 
                the subparagraph margins accordingly;
                    (B) in subparagraph (B), as so redesignated, by 
                striking ``The order granting'' and all that follows 
                through ``from such membership.''; and
                    (C) in the matter following subparagraph (B), as so 
                redesignated, by inserting after the first sentence the 
                following: ``The order granting registration shall not 
                be effective until such government securities broker or 
                government securities dealer has become a member of a 
                national securities exchange registered under section 6 
                of this title, or a securities association registered 
                under section 15A of this title, unless the Commission 
                has exempted such government securities broker or 
                government securities dealer, by rule or order, from 
                such membership.'';
            (7) in section 17(b)(1)(B) (15 U.S.C. 78q(b)(1)(B)), by 
        striking ``15A(k) gives'' and inserting ``15A(k), give''; and
            (8) in section 21C(c)(2) (15 U.S.C. 78u-3(c)(2)), by 
        striking ``paragraph (1) subsection'' and inserting ``Paragraph 
        (1)''.
    (c) Trust Indenture Act of 1939.--The Trust Indenture Act of 1939 
(15 U.S.C. 77aaa et seq.) is amended--
            (1) in section 304(b) (15 U.S.C. 77ddd(b)), by striking 
        ``section 2 of such Act'' and inserting ``section 2(a) of such 
        Act''; and
            (2) in section 317(a)(1) (15 U.S.C. 77qqq(a)(1)), by 
        striking ``, in the'' and inserting ``in the''.
    (d) Investment Company Act of 1940.--The Investment Company Act of 
1940 (15 U.S.C. 80a-1 et seq.) is amended--
            (1) in section 2(a)(19) (15 U.S.C. 80a-2(a)(19)), in the 
        matter following subparagraph (B)(vii)--
                    (A) by striking ``clause (vi)'' each place that 
                term appears and inserting ``clause (vii)''; and
                    (B) in each of subparagraphs (A)(vi) and (B)(vi), 
                by adding ``and'' at the end of subclause (III);
            (2) in section 9(b)(4)(B) (15 U.S.C. 80a-9(b)(4)(B)), by 
        adding ``or'' after the semicolon at the end;
            (3) in section 12(d)(1)(J) (15 U.S.C. 80a-12(d)(1)(J)), by 
        striking ``any provision of this subsection'' and inserting 
        ``any provision of this paragraph'';
            (4) in section 17(f) (15 U.S.C. 80a-17(f))--
                    (A) in paragraph (4), by striking ``No such 
                member'' and inserting ``No member of a national 
                securities exchange''; and
                    (B) in paragraph (6), by striking ``company may 
                serve'' and inserting ``company, may serve''; and
            (5) in section 61(a)(3)(B)(iii) (15 U.S.C. 80a-
        60(a)(3)(B)(iii))--
                    (A) by striking ``paragraph (1) of section 205'' 
                and inserting ``section 205(a)(1)''; and
                    (B) by striking ``clause (A) or (B) of that 
                section'' and inserting ``paragraph (1) or (2) of 
                section 205(b)''.
    (e) Investment Advisers Act of 1940.--The Investment Advisers Act 
of 1940 (15 U.S.C. 80b-1 et seq.) is amended--
            (1) in section 203 (15 U.S.C. 80b-3)--
                    (A) in subsection (c)(1)(A), by striking 
                ``principal business office and'' and inserting 
                ``principal office, principal place of business, and''; 
                and
                    (B) in subsection (k)(4)(B), in the matter 
                following clause (ii), by striking ``principal place of 
                business'' and inserting ``principal office or place of 
                business'';
            (2) in section 206(3) (15 U.S.C. 80b-6(3)), by adding 
        ``or'' after the semicolon at the end;
            (3) in section 213(a) (15 U.S.C. 80b-13(a)), by striking 
        ``principal place of business'' and inserting ``principal 
        office or place of business''; and
            (4) in section 222 (15 U.S.C. 80b-18a), by striking 
        ``principal place of business'' each place that term appears 
        and inserting ``principal office and place of business''.

SEC. 986. CONFORMING AMENDMENTS RELATING TO REPEAL OF THE PUBLIC 
              UTILITY HOLDING COMPANY ACT OF 1935.

    (a) Securities Exchange Act of 1934.--The Securities Exchange Act 
of 1934 (15 U.S.C. 78 et seq.) is amended--
            (1) in section 3(a)(47) (15 U.S.C. 78c(a)(47)), by striking 
        ``the Public Utility Holding Company Act of 1935 (15 U.S.C. 79a 
        et seq.),'';
            (2) in section 12(k) (15 U.S.C. 78l(k)), by amending 
        paragraph (7) to read as follows:  
            ``(7) Definition.--For purposes of this subsection, the 
        term `emergency' means--
                    ``(A) a major market disturbance characterized by 
                or constituting--
                            ``(i) sudden and excessive fluctuations of 
                        securities prices generally, or a substantial 
                        threat thereof, that threaten fair and orderly 
                        markets; or
                            ``(ii) a substantial disruption of the safe 
                        or efficient operation of the national system 
                        for clearance and settlement of transactions in 
                        securities, or a substantial threat thereof; or
                    ``(B) a major disturbance that substantially 
                disrupts, or threatens to substantially disrupt--
                            ``(i) the functioning of securities 
                        markets, investment companies, or any other 
                        significant portion or segment of the 
                        securities markets; or
                            ``(ii) the transmission or processing of 
                        securities transactions.''; and
            (3) in section 21(h)(2) (15 U.S.C. 78u(h)(2)), by striking 
        ``section 18(c) of the Public Utility Holding Company Act of 
        1935,''.
    (b) Trust Indenture Act of 1939.--The Trust Indenture Act of 1939 
(15 U.S.C. 77aaa et seq.) is amended--
            (1) in section 303 (15 U.S.C. 77ccc), by striking paragraph 
        (17) and inserting the following:
            ``(17) The terms `Securities Act of 1933' and `Securities 
        Exchange Act of 1934' shall be deemed to refer, respectively, 
        to such Acts, as amended, whether amended prior to or after the 
        enactment of this title.'';
            (2) in section 308 (15 U.S.C. 77hhh), by striking 
        ``Securities Act of 1933, the Securities Exchange Act of 1934, 
        or the Public Utility Holding Company Act of 1935'' each place 
        that term appears and inserting ``Securities Act of 1933 or the 
        Securities Exchange Act of 1934'';
            (3) in section 310 (15 U.S.C. 77jjj), by striking 
        subsection (c);
            (4) in section 311 (15 U.S.C. 77kkk), by striking 
        subsection (c);
            (5) in section 323(b) (15 U.S.C. 77www(b)), by striking 
        ``Securities Act of 1933, or the Securities Exchange Act of 
        1934, or the Public Utility Holding Company Act of 1935'' and 
        inserting ``Securities Act of 1933 or the Securities Exchange 
        Act of 1934''; and
            (6) in section 326 (15 U.S.C. 77zzz), by striking 
        ``Securities Act of 1933, or the Securities Exchange Act of 
        1934, or the Public Utility Holding Company Act of 1935,'' and 
        inserting ``Securities Act of 1933 or the Securities Exchange 
        Act of 1934''.
    (c) Investment Company Act of 1940.--The Investment Company Act of 
1940 (15 U.S.C. 80a-1 et seq.) is amended--
            (1) in section 2(a)(44) (15 U.S.C. 80a-2(a)(44)), by 
        striking ```Public Utility Holding Company Act of 1935','';
            (2) in section 3(c) (15 U.S.C. 80a-3(c)), by striking 
        paragraph (8) and inserting the following:
            ``(8) [Repealed]'';
            (3) in section 38(b) (15 U.S.C. 80a-37(b)), by striking 
        ``the Public Utility Holding Company Act of 1935,''; and
            (4) in section 50 (15 U.S.C. 80a-49), by striking ``the 
        Public Utility Holding Company Act of 1935,''.
    (d) Investment Advisers Act of 1940.--Section 202(a)(21) of the 
Investment Advisers Act of 1940 (15 U.S.C. 80b-2(a)(21)) is amended by 
striking ```Public Utility Holding Company Act of 1935',''.

SEC. 987. AMENDMENT TO DEFINITION OF MATERIAL LOSS AND NONMATERIAL 
              LOSSES TO THE DEPOSIT INSURANCE FUND FOR PURPOSES OF 
              INSPECTOR GENERAL REVIEWS.

    (a) In General.--Section 38(k) of the Federal Deposit Insurance Act 
(U.S.C. 1831o(k)) is amended--
            (1) in paragraph (2), by striking subparagraph (B) and 
        inserting the following:
                    ``(B) Material loss defined.--The term `material 
                loss' means any estimated loss in excess of--
                            ``(i) $100,000,000, if the loss occurs 
                        during the period beginning on September 30, 
                        2009, and ending on December 31, 2010;
                            ``(ii) $75,000,000, if the loss occurs 
                        during the period beginning on January 1, 2011, 
                        and ending on December 31, 2011; and
                            ``(iii) $50,000,000, if the loss occurs on 
                        or after January 1, 2012.'';
            (2) in paragraph (4)(A) by striking ``the report'' and 
        inserting ``any report on losses required under this 
        subsection,'';
            (3) by striking paragraph (6);
            (4) by redesignating paragraph (5) as paragraph (6); and
            (5) by inserting after paragraph (4) the following:
            ``(5) Losses that are not material.--
                    ``(A) Semiannual report.--For the 6-month period 
                ending on March 31, 2010, and each 6-month period 
                thereafter, the Inspector General of each Federal 
                banking agency shall--
                            ``(i) identify losses that the Inspector 
                        General estimates have been incurred by the 
                        Deposit Insurance Fund during that 6-month 
                        period, with respect to the insured depository 
                        institutions supervised by the Federal banking 
                        agency;
                            ``(ii) for each loss incurred by the 
                        Deposit Insurance Fund that is not a material 
                        loss, determine--
                                    ``(I) the grounds identified by the 
                                Federal banking agency or State bank 
                                supervisor for appointing the 
                                Corporation as receiver under section 
                                11(c)(5); and
                                    ``(II) whether any unusual 
                                circumstances exist that might warrant 
                                an in-depth review of the loss; and
                            ``(iii) prepare and submit a written report 
                        to the appropriate Federal banking agency and 
                        to Congress on the results of any determination 
                        by the Inspector General, including--
                                    ``(I) an identification of any loss 
                                that warrants an in-depth review, 
                                together with the reasons why such 
                                review is warranted, or, if the 
                                Inspector General determines that no 
                                review is warranted, an explanation of 
                                such determination; and
                                    ``(II) for each loss identified 
                                under subclause (I) that warrants an 
                                in-depth review, the date by which such 
                                review, and a report on such review 
                                prepared in a manner consistent with 
                                reports under paragraph (1)(A), will be 
                                completed and submitted to the Federal 
                                banking agency and Congress.
                    ``(B) Deadline for semiannual report.--The 
                Inspector General of each Federal banking agency 
                shall--
                            ``(i) submit each report required under 
                        paragraph (A) expeditiously, and not later than 
                        90 days after the end of the 6-month period 
                        covered by the report; and
                            ``(ii) provide a copy of the report 
                        required under paragraph (A) to any Member of 
                        Congress, upon request.''.
    (b) Technical and Conforming Amendment.--The heading for subsection 
(k) of section 38 of the Federal Deposit Insurance Act (U.S.C. 
1831o(k)) is amended to read as follows:
    ``(k) Reviews Required When Deposit Insurance Fund Incurs Losses.--
''.

SEC. 988. AMENDMENT TO DEFINITION OF MATERIAL LOSS AND NONMATERIAL 
              LOSSES TO THE NATIONAL CREDIT UNION SHARE INSURANCE FUND 
              FOR PURPOSES OF INSPECTOR GENERAL REVIEWS.

    (a) In General.--Section 216(j) of the Federal Credit Union Act (12 
U.S.C. 1790d(j)) is amended to read as follows:
    ``(j) Reviews Required When Share Insurance Fund Experiences 
Losses.--
            ``(1) In general.--If the Fund incurs a material loss with 
        respect to an insured credit union, the Inspector General of 
        the Board shall--
                    ``(A) submit to the Board a written report 
                reviewing the supervision of the credit union by the 
                Administration (including the implementation of this 
                section by the Administration), which shall include--
                            ``(i) a description of the reasons why the 
                        problems of the credit union resulted in a 
                        material loss to the Fund; and
                            ``(ii) recommendations for preventing any 
                        such loss in the future; and
                    ``(B) submit a copy of the report under 
                subparagraph (A) to--
                            ``(i) the Comptroller General of the United 
                        States;
                            ``(ii) the Corporation;
                            ``(iii) in the case of a report relating to 
                        a State credit union, the appropriate State 
                        supervisor; and
                            ``(iv) to any Member of Congress, upon 
                        request.
            ``(2) Material loss defined.--For purposes of determining 
        whether the Fund has incurred a material loss with respect to 
        an insured credit union, a loss is material if it exceeds the 
        sum of--
                    ``(A) $25,000,000; and
                    ``(B) an amount equal to 10 percent of the total 
                assets of the credit union on the date on which the 
                Board initiated assistance under section 208 or was 
                appointed liquidating agent.
            ``(3) Public disclosure required.--
                    ``(A) In general.--The Board shall disclose a 
                report under this subsection, upon request under 
                section 552 of title 5, United States Code, without 
                excising--
                            ``(i) any portion under section 552(b)(5) 
                        of title 5, United States Code; or
                            ``(ii) any information about the insured 
                        credit union (other than trade secrets) under 
                        section 552(b)(8) of title 5, United States 
                        Code.
                    ``(B) Rule of construction.--Subparagraph (A) may 
                not be construed as requiring the agency to disclose 
                the name of any customer of the insured credit union 
                (other than an institution-affiliated party), or 
                information from which the identity of such customer 
                could reasonably be ascertained.
            ``(4) Losses that are not material.--
                    ``(A) Semiannual report.--For the 6-month period 
                ending on March 31, 2010, and each 6-month period 
                thereafter, the Inspector General of the Board shall--
                            ``(i) identify any losses that the 
                        Inspector General estimates were incurred by 
                        the Fund during such 6-month period, with 
                        respect to insured credit unions;
                            ``(ii) for each loss to the Fund that is 
                        not a material loss, determine--
                                    ``(I) the grounds identified by the 
                                Board or the State official having 
                                jurisdiction over a State credit union 
                                for appointing the Board as the 
                                liquidating agent for any Federal or 
                                State credit union; and
                                    ``(II) whether any unusual 
                                circumstances exist that might warrant 
                                an in-depth review of the loss; and
                            ``(iii) prepare and submit a written report 
                        to the Board and to Congress on the results of 
                        the determinations of the Inspector General 
                        that includes--
                                    ``(I) an identification of any loss 
                                that warrants an in-depth review, and 
                                the reasons such review is warranted, 
                                or if the Inspector General determines 
                                that no review is warranted, an 
                                explanation of such determination; and
                                    ``(II) for each loss identified in 
                                subclause (I) that warrants an in-depth 
                                review, the date by which such review, 
                                and a report on the review prepared in 
                                a manner consistent with reports under 
                                paragraph (1)(A), will be completed.
                    ``(B) Deadline for semiannual report.--The 
                Inspector General of the Board shall--
                            ``(i) submit each report required under 
                        subparagraph (A) expeditiously, and not later 
                        than 90 days after the end of the 6-month 
                        period covered by the report; and
                            ``(ii) provide a copy of the report 
                        required under subparagraph (A) to any Member 
                        of Congress, upon request.
            ``(5) GAO review.--The Comptroller General of the United 
        States shall, under such conditions as the Comptroller General 
        determines to be appropriate--
                    ``(A) review each report made under paragraph (1), 
                including the extent to which the Inspector General of 
                the Board complied with the requirements under section 
                8L of the Inspector General Act of 1978 (5 U.S.C. App.) 
                with respect to each such report; and
                    ``(B) recommend improvements to the supervision of 
                insured credit unions (including improvements relating 
                to the implementation of this section).''.

SEC. 989. GOVERNMENT ACCOUNTABILITY OFFICE STUDY ON PROPRIETARY 
              TRADING.

    (a) Definitions.--In this section--
            (1) the term ``covered entity'' means--
                    (A) an insured depository institution, an affiliate 
                of an insured depository institution, a bank holding 
                company, a financial holding company, or a subsidiary 
                of a bank holding company or a financial holding 
                company, as those terms are defined in the Bank Holding 
                Company Act of 1956 (12 U.S.C. 1841 et seq.); and
                    (B) any other entity, as the Comptroller General of 
                the United States may determine; and
            (2) the term ``proprietary trading'' means the act of a 
        covered entity investing as a principal in securities, 
        commodities, derivatives, hedge funds, private equity firms, or 
        such other financial products or entities as the Comptroller 
        General may determine.
    (b) Study.--
            (1) In general.--The Comptroller General of the United 
        States shall conduct a study regarding the risks and conflicts 
        associated with proprietary trading by and within covered 
        entities, including an evaluation of--
                    (A) whether proprietary trading presents a material 
                systemic risk to the stability of the United States 
                financial system, and if so, the costs and benefits of 
                options for mitigating such systemic risk;
                    (B) whether proprietary trading presents material 
                risks to the safety and soundness of the covered 
                entities that engage in such activities, and if so, the 
                costs and benefits of options for mitigating such 
                risks;
                    (C) whether proprietary trading presents material 
                conflicts of interest between covered entities that 
                engage in proprietary trading and the clients of the 
                institutions who use the firm to execute trades or who 
                rely on the firm to manage assets, and if so, the costs 
                and benefits of options for mitigating such conflicts 
                of interest;
                    (D) whether adequate disclosure regarding the risks 
                and conflicts of proprietary trading is provided to the 
                depositors, trading and asset management clients, and 
                investors of covered entities that engage in 
                proprietary trading, and if not, the costs and benefits 
                of options for the improvement of such disclosure; and
                    (E) whether the banking, securities, and 
                commodities regulators of institutions that engage in 
                proprietary trading have in place adequate systems and 
                controls to monitor and contain any risks and conflicts 
                of interest related to proprietary trading, and if not, 
                the costs and benefits of options for the improvement 
                of such systems and controls.
            (2) Considerations.--In carrying out the study required 
        under paragraph (1), the Comptroller General shall consider--
                    (A) current practice relating to proprietary 
                trading;
                    (B) the advisability of a complete ban on 
                proprietary trading;
                    (C) limitations on the scope of activities that 
                covered entities may engage in with respect to 
                proprietary trading;
                    (D) the advisability of additional capital 
                requirements for covered entities that engage in 
                proprietary trading;
                    (E) enhanced restrictions on transactions between 
                affiliates related to proprietary trading;
                    (F) enhanced accounting disclosures relating to 
                proprietary trading;
                    (G) enhanced public disclosure relating to 
                proprietary trading; and
                    (H) any other options the Comptroller General deems 
                appropriate.
    (c) Report to Congress.--Not later than 15 months after the date of 
enactment of this Act, the Comptroller General shall submit a report to 
Congress on the results of the study conducted under subsection (b).
    (d) Access by Comptroller General.--For purposes of conducting the 
study required under subsection (b), the Comptroller General shall have 
access, upon request, to any information, data, schedules, books, 
accounts, financial records, reports, files, electronic communications, 
or other papers, things, or property belonging to or in use by a 
covered entity that engages in proprietary trading, and to the 
officers, directors, employees, independent public accountants, 
financial advisors, staff, and agents and representatives of a covered 
entity (as related to the activities of the agent or representative on 
behalf of the covered entity), at such reasonable times as the 
Comptroller General may request. The Comptroller General may make and 
retain copies of books, records, accounts, and other records, as the 
Comptroller General deems appropriate.
    (e) Confidentiality of Reports.--
            (1) In general.--Except as provided in paragraph (2), the 
        Comptroller General may not disclose information regarding--
                    (A) any proprietary trading activity of a covered 
                entity, unless such information is disclosed at a level 
                of generality that does not reveal the investment or 
                trading position or strategy of the covered entity for 
                any specific security, commodity, derivative, or other 
                investment or financial product; or
                    (B) any individual interviewed by the Comptroller 
                General for purposes of the study under subsection (b), 
                unless such information is disclosed at a level of 
                generality that does not reveal--
                            (i) the name of or identifying details 
                        relating to such individual; or
                            (ii) in the case of an individual who is an 
                        employee of a third party that provides 
                        professional services to a covered entity 
                        believed to be engaged in proprietary trading, 
                        the name of or any identifying details relating 
                        to such third party.
            (2) Exceptions.--The Comptroller General may disclose the 
        information described in paragraph (1)--
                    (A) to a department, agency, or official of the 
                Federal Government, for official use, upon request;
                    (B) to a committee of Congress, upon request; and
                    (C) to a court, upon an order of such court.

SEC. 989A. SENIOR INVESTOR PROTECTIONS.

    (a) Definitions.--As used in this section--
            (1) the term ``eligible entity'' means--
                    (A) a securities commission (or any agency or 
                office performing like functions) of a State that the 
                Office determines has adopted rules on the appropriate 
                use of designations in the offer or sale of securities 
                or investment advice that meet or exceed the minimum 
                requirements of the NASAA Model Rule on the Use of 
                Senior-Specific Certifications and Professional 
                Designations (or any successor thereto);
                    (B) the insurance commission (or any agency or 
                office performing like functions) of any State that the 
                Office determines has--
                            (i) adopted rules on the appropriate use of 
                        designations in the sale of insurance products 
                        that, to the extent practicable, conform to the 
                        minimum requirements of the National 
                        Association of Insurance Commissioners Model 
                        Regulation on the Use of Senior-Specific 
                        Certifications and Professional Designations in 
                        the Sale of Life Insurance and Annuities (or 
                        any successor thereto); and
                            (ii) adopted rules with respect to 
                        fiduciary or suitability requirements in the 
                        sale of annuities that meet or exceed the 
                        minimum requirements established by the 
                        Suitability in Annuity Transactions Model 
                        Regulation of the National Association of 
                        Insurance Commissioners (or any successor 
                        thereto); or
                    (C) a consumer protection agency of any State, if--
                            (i) the securities commission (or any 
                        agency or office performing like functions) of 
                        the State is eligible under subparagraph (A); 
                        or
                            (ii) the insurance commission (or any 
                        agency or office performing like functions) of 
                        the State is eligible under subparagraph (B);
            (2) the term ``financial product'' means a security, an 
        insurance product (including an insurance product that pays a 
        return, whether fixed or variable), a bank product, and a loan 
        product;
            (3) the term ``misleading designation''--
                    (A) means a certification, professional 
                designation, or other purported credential that 
                indicates or implies that a salesperson or adviser has 
                special certification or training in advising or 
                servicing seniors; and
                    (B) does not include a certification, professional 
                designation, license, or other credential that--
                            (i) was issued by or obtained from an 
                        academic institution having regional 
                        accreditation;
                            (ii) meets the standards for 
                        certifications, licenses, and professional 
                        designations outlined by the NASAA Model Rule 
                        on the Use of Senior-Specific Certifications 
                        and Professional Designations in the Sale of 
                        Life Insurance and Annuities, adopted by the 
                        National Association of Insurance Commissioners 
                        (or any successor thereto); or
                            (iii) was issued by or obtained from a 
                        State;
            (4) the term ``misleading or fraudulent marketing'' means 
        the use of a misleading designation by a person that sells to 
        or advises a senior in connection with the sale of a financial 
        product;
            (5) the term ``NASAA'' means the North American Securities 
        Administrators Association;
            (6) the term ``Office'' means the Office of Financial 
        Literacy of the Bureau; and
            (7) the term ``senior'' means any individual who has 
        attained the age of 62 years or older.
    (b) Grants to States for Enhanced Protection of Seniors From Being 
Misled by False Designations.--The Office shall establish a program 
under which the Office may make grants to States or eligible entities--
            (1) to hire staff to identify, investigate, and prosecute 
        (through civil, administrative, or criminal enforcement 
        actions) cases involving misleading or fraudulent marketing;
            (2) to fund technology, equipment, and training for 
        regulators, prosecutors, and law enforcement officers, in order 
        to identify salespersons and advisers who target seniors 
        through the use of misleading designations;
            (3) to fund technology, equipment, and training for 
        prosecutors to increase the successful prosecution of 
        salespersons and advisers who target seniors with the use of 
        misleading designations;
            (4) to provide educational materials and training to 
        regulators on the appropriateness of the use of designations by 
        salespersons and advisers in connection with the sale and 
        marketing of financial products;
            (5) to provide educational materials and training to 
        seniors to increase awareness and understanding of misleading 
        or fraudulent marketing;
            (6) to develop comprehensive plans to combat misleading or 
        fraudulent marketing of financial products to seniors; and
            (7) to enhance provisions of State law to provide 
        protection for seniors against misleading or fraudulent 
        marketing.
    (c) Applications.--A State or eligible entity desiring a grant 
under this section shall submit an application to the Office, in such 
form and in such a manner as the Office may determine, that includes--
            (1) a proposal for activities to protect seniors from 
        misleading or fraudulent marketing that are proposed to be 
        funded using a grant under this section, including--
                    (A) an identification of the scope of the problem 
                of misleading or fraudulent marketing in the State;
                    (B) a description of how the proposed activities 
                would--
                            (i) protect seniors from misleading or 
                        fraudulent marketing in the sale of financial 
                        products, including by proactively identifying 
                        victims of misleading and fraudulent marketing 
                        who are seniors;
                            (ii) assist in the investigation and 
                        prosecution of those using misleading or 
                        fraudulent marketing; and
                            (iii) discourage and reduce cases of 
                        misleading or fraudulent marketing; and
                    (C) a description of how the proposed activities 
                would be coordinated with other State efforts; and
            (2) any other information, as the Office determines is 
        appropriate.
    (d) Performance Objectives and Reporting Requirements.--The Office 
may establish such performance objectives and reporting requirements 
for States and eligible entities receiving a grant under this section 
as the Office determines are necessary to carry out and assess the 
effectiveness of the program under this section.
    (e) Maximum Amount.--The amount of a grant under this section may 
not exceed--
            (1) $500,000 for each of 3 consecutive fiscal years, if the 
        recipient is a State, or an eligible entity of a State, that 
        has adopted rules--
                    (A) on the appropriate use of designations in the 
                offer or sale of securities or investment advice that 
                meet or exceed the minimum requirements of the NASAA 
                Model Rule on the Use of Senior-Specific Certifications 
                and Professional Designations (or any successor 
                thereto);
                    (B) on the appropriate use of designations in the 
                sale of insurance products that, to the extent 
                practicable, conform to the minimum requirements of the 
                National Association of Insurance Commissioners Model 
                Regulation on the Use of Senior-Specific Certifications 
                and Professional Designations in the Sale of Life 
                Insurance and Annuities (or any successor thereto); and
                    (C) with respect to fiduciary or suitability 
                requirements in the sale of annuities that meet or 
                exceed the minimum requirements established by the 
                Suitability in Annuity Transactions Model Regulation of 
                the National Association of Insurance Commissioners (or 
                any successor thereto); and
            (2) $100,000 for each of 3 consecutive fiscal years, if the 
        recipient is a State, or an eligible entity of a State, that 
        has adopted--
                    (A) rules on the appropriate use of designations in 
                the offer or sale of securities or investment advice 
                that meet or exceed the minimum requirements of the 
                NASAA Model Rule on the Use of Senior-Specific 
                Certifications and Professional Designations (or any 
                successor thereto); or
                    (B) rules--
                            (i) on the appropriate use of designations 
                        in the sale of insurance products that, to the 
                        extent practicable, conform to the minimum 
                        requirements of the National Association of 
                        Insurance Commissioners Model Regulation on the 
                        Use of Senior-Specific Certifications and 
                        Professional Designations in the Sale of Life 
                        Insurance and Annuities (or any successor 
                        thereto); and
                            (ii) with respect to fiduciary or 
                        suitability requirements in the sale of 
                        annuities that meet or exceed the minimum 
                        requirements established by the Suitability in 
                        Annuity Transactions Model Regulation of the 
                        National Association of Insurance Commissioners 
                        (or any successor thereto).
    (f) Subgrants.--A State or eligible entity that receives a grant 
under this section may make a subgrant, as the State or eligible entity 
determines is necessary to carry out the activities funded using a 
grant under this section.
    (g) Reapplication.--A State or eligible entity that receives a 
grant under this section may reapply for a grant under this section, 
notwithstanding the limitations on grant amounts under subsection (e).
    (h) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section, $8,000,000 for each of fiscal 
years 2011 through 2015.

SEC. 989B. DESIGNATED FEDERAL ENTITY INSPECTORS GENERAL INDEPENDENCE.

    Section 8G of the Inspector General Act of 1978 (5 U.S.C. App.) is 
amended--
            (1) in subsection (a)(4)--
                    (A) in the matter preceding subparagraph (A), by 
                inserting ``the board or commission of the designated 
                Federal entity, or in the event the designated Federal 
                entity does not have a board or commission,'' after 
                ``means'';
                    (B) in subparagraph (A), by striking ``and'' after 
                the semicolon; and
                    (C) by adding after subparagraph (B) the following:
                    ``(C) with respect to the Federal Labor Relations 
                Authority, such term means the members of the Authority 
                (described under section 7104 of title 5, United States 
                Code);
                    ``(D) with respect to the National Archives and 
                Records Administration, such term means the Archivist 
                of the United States;
                    ``(E) with respect to the National Credit Union 
                Administration, such term means the National Credit 
                Union Administration Board (described under section 102 
                of the Federal Credit Union Act (12 U.S.C. 1752a);
                    ``(F) with respect to the National Endowment of the 
                Arts, such term means the National Council on the Arts;
                    ``(G) with respect to the National Endowment for 
                the Humanities, such term means the National Council on 
                the Humanities; and
                    ``(H) with respect to the Peace Corps, such term 
                means the Director of the Peace Corps;''; and
            (2) in subsection (h), by inserting ``if the designated 
        Federal entity is not a board or commission, include'' after 
        ``designated Federal entities and''.

SEC. 989C. STRENGTHENING INSPECTOR GENERAL ACCOUNTABILITY.

    Section 5(a) of the Inspector General Act of 1978 (5 U.S.C. App.) 
is amended--
            (1) in paragraph (12), by striking ``and'' after the 
        semicolon;
            (2) in paragraph (13), by striking the period and inserting 
        a semicolon; and
            (3) by adding at the end the following:
            ``(14)(A) an appendix containing the results of any peer 
        review conducted by another Office of Inspector General during 
        the reporting period; or
            ``(B) if no peer review was conducted within that reporting 
        period, a statement identifying the date of the last peer 
        review conducted by another Office of Inspector General;
            ``(15) a list of any outstanding recommendations from any 
        peer review conducted by another Office of Inspector General 
        that have not been fully implemented, including a statement 
        describing the status of the implementation and why 
        implementation is not complete; and
            ``(16) a list of any peer reviews conducted by the 
        Inspector General of another Office of the Inspector General 
        during the reporting period, including a list of any 
        outstanding recommendations made from any previous peer review 
        (including any peer review conducted before the reporting 
        period) that remain outstanding or have not been fully 
        implemented.''.

SEC. 989D. REMOVAL OF INSPECTORS GENERAL OF DESIGNATED FEDERAL 
              ENTITIES.

    Section 8G(e) of the Inspector General Act of 1978 (5 U.S.C. App.) 
is amended--
            (1) by redesignating the sentences following ``(e)'' as 
        paragraph (2); and
            (2) by striking ``(e)'' and inserting the following:
    ``(e)(1) In the case of a designated Federal entity for which a 
board or commission is the head of the designated Federal entity, a 
removal under this subsection may only be made upon the written 
concurrence of a \2/3\ majority of the board or commission.''.

SEC. 989E. ADDITIONAL OVERSIGHT OF FINANCIAL REGULATORY SYSTEM.

    (a) Council of Inspectors General on Financial Oversight.--
            (1) Establishment and membership.--There is established a 
        Council of Inspectors General on Financial Oversight (in this 
        section referred to as the ``Council of Inspectors General'') 
        chaired by the Inspector General of the Department of the 
        Treasury and composed of the inspectors general of the 
        following:
                    (A) The Board of Governors of the Federal Reserve 
                System.
                    (B) The Commodity Futures Trading Commission.
                    (C) The Department of Housing and Urban 
                Development.
                    (D) The Department of the Treasury.
                    (E) The Federal Deposit Insurance Corporation.
                    (F) The Federal Housing Finance Agency.
                    (G) The National Credit Union Administration.
                    (H) The Securities and Exchange Commission.
                    (I) The Troubled Asset Relief Program (until the 
                termination of the authority of the Special Inspector 
                General for such program under section 121(k) of the 
                Emergency Economic Stabilization Act of 2008 (12 U.S.C. 
                5231(k))).
            (2) Duties.--
                    (A) Meetings.--The Council of Inspectors General 
                shall meet not less than once each quarter, or more 
                frequently if the chair considers it appropriate, to 
                facilitate the sharing of information among inspectors 
                general and to discuss the ongoing work of each 
                inspector general who is a member of the Council of 
                Inspectors General, with a focus on concerns that may 
                apply to the broader financial sector and ways to 
                improve financial oversight.
                    (B) Annual report.--Each year the Council of 
                Inspectors General shall submit to the Council and to 
                Congress a report including--
                            (i) for each inspector general who is a 
                        member of the Council of Inspectors General, a 
                        section within the exclusive editorial control 
                        of such inspector general that highlights the 
                        concerns and recommendations of such inspector 
                        general in such inspector general's ongoing and 
                        completed work, with a focus on issues that may 
                        apply to the broader financial sector; and
                            (ii) a summary of the general observations 
                        of the Council of Inspectors General based on 
                        the views expressed by each inspector general 
                        as required by clause (i), with a focus on 
                        measures that should be taken to improve 
                        financial oversight.
            (3) Working groups to evaluate council.--
                    (A) Convening a working group.--The Council of 
                Inspectors General may, by majority vote, convene a 
                Council of Inspectors General Working Group to evaluate 
                the effectiveness and internal operations of the 
                Council.
                    (B) Personnel and resources.--The inspectors 
                general who are members of the Council of Inspectors 
                General may detail staff and resources to a Council of 
                Inspectors General Working Group established under this 
                paragraph to enable it to carry out its duties.
                    (C) Reports.--A Council of Inspectors General 
                Working Group established under this paragraph shall 
                submit regular reports to the Council and to Congress 
                on its evaluations pursuant to this paragraph.
    (b) Response to Report by Council.--The Council shall respond to 
the concerns raised in the report of the Council of Inspectors General 
under subsection (a)(2)(B) for such year.

   Subtitle J--Self-funding of the Securities and Exchange Commission

SEC. 991. SECURITIES AND EXCHANGE COMMISSION SELF-FUNDING.

    (a) Self-funding Authority.--Section 4 of the Securities Exchange 
Act of 1934 (15 U.S.C. 78d) is amended--
            (1) in subsection (c), in the second sentence, by striking 
        ``credited to the appropriated funds of the Commission'' and 
        inserting ``deposited in the account described in subsection 
        (i)(4)'';
            (2) in subsection (f), in the second sentence, by striking 
        ``considered a reimbursement to the appropriated funds of the 
        Commission'' and inserting ``deposited in the account described 
        in subsection (i)(4)''; and
            (3) by adding at the end the following:
    ``(i) Funding of the Commission.--
            ``(1) Budget.--For each fiscal year, the Chairman of the 
        Commission shall prepare and submit to Congress a budget to 
        Congress. Such budget shall be submitted at the same time the 
        President submits a budget of the United States to Congress for 
        such fiscal year. The budget submitted by the Chairman of the 
        Commission pursuant to this paragraph shall not be considered a 
        request for appropriations.
            ``(2) Treasury payment.--
                    ``(A) On the first day of each fiscal year, the 
                Treasury shall pay into the account described in 
                paragraph (4) an amount equal to the budget submitted 
                by the Chairman of the Commission pursuant to paragraph 
                (1) for such fiscal year.
                    ``(B) At or prior to the end of each fiscal year, 
                the Commission shall pay to the Treasury from fees and 
                assessments deposited in the account described in 
                paragraph (4) an amount equal to the amount paid by the 
                Treasury pursuant to subparagraph (A) for such fiscal 
                year, unless there are not sufficient fees and 
                assessments deposited in such account at or prior to 
                the end of the fiscal year to make such payment, in 
                which case the Commission shall make such payment in a 
                subsequent fiscal year.
            ``(3) Obligations and expenses.--
                    ``(A) In general.--The Commission shall determine 
                and prescribe the manner in which--
                            ``(i) the obligations of the Commission 
                        shall be incurred; and
                            ``(ii) the disbursements and expenses of 
                        the Commission allowed and paid.
                    ``(B) Insufficient funds.--If, in the course of any 
                fiscal year, the Chairman of the Commission determines 
                that, due to unforeseen circumstances, the obligations 
                of the Commission will exceed those provided for in the 
                budget submitted under paragraph (1), the Chairman of 
                the Commission may notify Congress of the amount and 
                expected uses of the additional obligations.
                    ``(C) Authority to incur excess obligations.--The 
                Commission may incur obligations in excess of the 
                budget submitted under paragraph (1) from amounts 
                available in the account described in paragraph (4).
                    ``(D) Rule of construction.--Any notification to 
                Congress under this paragraph shall not be considered a 
                request for appropriations.
            ``(4) Account.--
                    ``(A) Establishment.--Fees and assessments 
                collected under this title, section 6(b) of the 
                Securities Act of 1933 (15 U.S.C. 77f(b)), and section 
                24(f) of the Investment Company Act of 1940 (15 U.S.C. 
                80a-24(f)) and payments made by the Treasury pursuant 
                to paragraph (2)(A) for any fiscal year shall be 
                deposited into an account established at any regular 
                Government depositary or any State or national bank.
                    ``(B) Rule of construction.--Any amounts deposited 
                into the account established under subparagraph (A) 
                shall not be construed to be Government funds or 
                appropriated monies.
                    ``(C) No apportionment.--Any amounts deposited into 
                the account established under subparagraph (A) shall 
                not be subject to apportionment for the purpose of 
                chapter 15 of title 31, United States Code, or under 
                any other authority.
            ``(5) Use of account funds.--
                    ``(A) Permissible uses.--Amounts available in the 
                account described in paragraph (4) may be withdrawn by 
                the Commission and used for the purposes described in 
                paragraphs (2) and (3).
                    ``(B) Impermissible use.--Except as provided in 
                paragraph (6), no amounts available in the account 
                described in paragraph (4) shall be deposited and 
                credited as general revenue of the Treasury.
            ``(6) Excess funds.--If, at the end of any fiscal year and 
        after all payments have been made to the Treasury pursuant to 
        paragraph (2)(B) for such fiscal year and all prior fiscal 
        years, the balance of the account described in paragraph (4) 
        exceeds 25 percent of the budget of the Commission for the 
        following fiscal year, the amount by which the balance exceeds 
        25 percent of such budget shall be credited as general revenue 
        of the Treasury.''.
    (b) Conforming Amendments to Transaction Fee Provisions.--Section 
31 of the Securities Exchange Act of 1934 (15 U.S.C. 78ee) is amended--
            (1) by amending subsection (a) to read as follows:
    ``(a) Recovery of Costs and Expenses.--
            ``(1) In general.--The Commission shall, in accordance with 
        this section, collect transaction fees and assessments that are 
        designed--
                    ``(A) to recover the reasonable costs and expenses 
                of the Commission, as set forth in the annual budget of 
                the Commission; and
                    ``(B) to provide funds necessary to maintain a 
                reserve.
            ``(2) Overpayments.--The authority to collect transaction 
        fees and assessments in accordance with this section shall 
        include the authority to offset from such collection any 
        overpayment of transaction fees or assessments, regardless of 
        the fiscal year in which such overpayment is made.'';
            (2) in subsection (e)(2), by striking ``September 30'' and 
        inserting ``September 25'';
            (3) in subsection (g), by striking ``April 30'' and 
        inserting ``August 31'';
            (4) by amending subsection (i) to read as follows:
    ``(i) Fee Collections.--Fees and assessments collected pursuant to 
this section shall be deposited and credited in accordance with section 
4(g) of this title.'';
            (5) by amending subsection (j) to read as follows:
    ``(j) Adjustments to Transaction Fee Rates.--
            ``(1) Annual adjustment.--For each fiscal year, the 
        Commission shall by order adjust each of the rates applicable 
        under subsections (b) and (c) for such fiscal year to a uniform 
        adjusted rate that, when applied to the baseline estimate of 
        the aggregate dollar amount of sales for such fiscal year, is 
        reasonably likely to produce aggregate fee collections under 
        this section (including assessments collected under subsection 
        (d)) that are equal to the budget of the Commission for such 
        fiscal year, plus amounts necessary to maintain a reserve.
            ``(2) Mid-year adjustment.--For each fiscal year, the 
        Commission shall determine, by March 1 of such fiscal year, 
        whether, based on the actual aggregate dollar volume of sales 
        during the first 4 months of such fiscal year, the baseline 
        estimate of the aggregate dollar volume of sales used under 
        paragraph (1) for such fiscal year is reasonably likely to be 
        10 percent (or more) greater or less than the actual aggregate 
        dollar volume of sales for such fiscal year. If the Commission 
        so determines, the Commission shall by order, not later than 
        March 1, adjust each of the rates applicable under subsections 
        (b) and (c) for such fiscal year to a uniform adjusted rate 
        that, when applied to the revised estimate of the aggregate 
        dollar amount of sales for the remainder of such fiscal year, 
        is reasonably likely to produce aggregate fee collections under 
        this section (including fees estimated to be collected under 
        subsections (b) and (c) during such fiscal year prior to the 
        effective date of the new uniform adjusted rate and assessments 
        collected under subsection (d)) that are equal to the budget of 
        the Commission for such fiscal year, plus amounts necessary to 
        maintain a reserve. In making such revised estimate, the 
        Commission shall, after consultation with the Congressional 
        Budget Office and the Office of Management and Budget, use the 
        same methodology required by paragraph (4).
            ``(3) Review and effective date.--In exercising its 
        authority under this subsection, the Commission shall not be 
        required to comply with the provisions of section 553 of title 
        5 United States Code. An adjusted rate prescribed under 
        paragraph (1) or (2) and published under subsection (g) shall 
        not be subject to judicial review. An adjusted rate prescribed 
        under paragraph (1) shall take effect on the first day of the 
        fiscal year to which such rate applies. An adjusted rate 
        prescribed under paragraph (2) shall take effect on April 1 of 
        the fiscal year to which such rate applies.
            ``(4) Baseline estimate of the aggregate dollar amount of 
        sales.--For purposes of this subsection, the baseline estimate 
        of the aggregate dollar amount of sales for any fiscal year is 
        the baseline estimate of the aggregate dollar amount of sales 
        of securities (other than bonds, debentures, other evidences of 
        indebtedness, security futures products, and options on 
        securities indexes excluding a narrow-based security index) to 
        be transacted on each national securities exchange and by or 
        through any member of each national securities association 
        (otherwise than on a national securities exchange) during such 
        fiscal year as determined by the Commission, after consultation 
        with the Congressional Budget Office and the Office of 
        Management and Budget, using the methodology required for 
        making projections pursuant to section 907 of title 2.''; and
            (6) by striking subsections (k) and (l).
    (c) Conforming Amendments to Registration Fee Provisions.--
            (1) Section 6(b) of the securities act of 1933.--Section 
        6(b) of the Securities Act of 1933 (15 U.S.C. 77f(b)) is 
        amended--
                    (A) by striking ``offsetting'' each place that term 
                appears and inserting ``fee'';
                    (B) in paragraph (3), in the paragraph heading, by 
                striking ``Offsetting'' and inserting ``Fee'';
                    (C) in paragraph (11)(A), in the subparagraph 
                heading, by striking ``offsetting'' and inserting 
                ``fee'';
                    (D) by striking paragraphs (1), (3), (4), (6), (8), 
                and (9);
                    (E) by redesignating paragraph (2) as paragraph 
                (1);
                    (F) in paragraph (1), as so redesignated, by 
                striking ``(5) or (6)'' and inserting ``(3)'';
                    (G) by inserting after paragraph (1), as so 
                redesignated, the following:
            ``(2) Fee collections.--Fees collected pursuant to this 
        subsection shall be deposited and credited in accordance with 
        section 4(i) of the Securities Exchange Act of 1934.'';
                    (H) by redesignating paragraph (5) as paragraph 
                (3);
                    (I) in paragraph (3), as redesignated--
                            (i) by striking ``of the fiscal years 2003 
                        through 2011'' and inserting ``fiscal year''; 
                        and
                            (ii) by striking ``paragraph (2)'' and 
                        inserting ``paragraph (1)'';
                    (J) by redesignating paragraph (7) as paragraph 
                (4);
                    (K) by inserting after paragraph (4), as so 
                redesignated, the following:
            ``(5) Review and effective date.--In exercising its 
        authority under this subsection, the Commission shall not be 
        required to comply with the provisions of section 553 of title 
        5, United States Code. An adjusted rate prescribed under 
        paragraph (3) and published under paragraph (6) shall not be 
        subject to judicial review. An adjusted rate prescribed under 
        paragraph (3) shall take effect on the first day of the fiscal 
        year to which such rate applies.'';
                    (L) by redesignating paragraphs (10) and (11), as 
                paragraphs (6) and (7);
                    (M) in paragraph (6), as redesignated, by striking 
                ``April 30'' and inserting ``August 31''; and
                    (N) in paragraph (7), as redesignated--
                            (i) by striking ``of the fiscal years 2002 
                        through 2011'' and inserting ``fiscal year''; 
                        and
                            (ii) by inserting at the end of the table 
                        in subparagraph (A) the following:

 
 
----------------------------------------------------------------------------------------------------------------
2012 and each succeeding fiscal year                                     An amount that is equal to the target
                                                                          fee collection amount for the prior
                                                                          fiscal year adjusted by the rate of
                                                                          inflation.
----------------------------------------------------------------------------------------------------------------

            (2) Section 13(e) of the securities exchange act of 1934.--
        Section 13(e) of the Securities Exchange Act of 1934 (15 U.S.C. 
        78m(e)) is amended--
                    (A) by striking ``offsetting'' each place that term 
                appears and inserting ``fee'';
                    (B) in paragraph (3) by striking ``paragraphs (5) 
                and (6)'' and inserting ``paragraph (5)'';
                    (C) by amending paragraph (4) to read as follows:
            ``(4) Fee collections.--Fees collected pursuant to this 
        subsection shall be deposited and credited in accordance with 
        section 4(g) of this title.'';
                    (D) in paragraph (5), by striking ``of the fiscal 
                years 2003 through 2011'' and inserting ``fiscal 
                year'';
                    (E) by striking paragraphs (6), (7), and (8);
                    (F) by redesignating paragraph (7) as paragraph 
                (6);
                    (G) by inserting after paragraph (6), as so 
                redesignated, the following:
            ``(7) Review and effective date.--In exercising its 
        authority under this subsection, the Commission shall not be 
        required to comply with the provisions of section 553 of title 
        5. An adjusted rate prescribed under paragraph (5) and 
        published under paragraph (8) shall not be subject to judicial 
        review. An adjusted rate prescribed under paragraph (5) shall 
        take effect on the first day of the fiscal year to which such 
        rate applies.'';
                    (H) by striking paragraph (9);
                    (I) by redesignating paragraph (10) as paragraph 
                (8); and
                    (J) in paragraph (8), as so redesignated, by 
                striking ``6(b)(10)'' and inserting ``6(b)(6)''.
            (3) Section 14 of the securities exchange act of 1934.--
        Section 14(g) of the Securities Exchange Act of 1934 (15 U.S.C. 
        78n(g)) is amended--
                    (A) by striking the word ``offsetting'' each time 
                that it appears and inserting in its place the word 
                ``fee'';
                    (B) in paragraph (1)(A), by striking ``paragraphs 
                (5) and (6)'' each time it appears and inserting 
                ``paragraph (5)'';
                    (C) in paragraph (3), by striking ``paragraphs (5) 
                and (6)'' and inserting ``paragraph (5)'';
                    (D) by amending paragraph (4) to read as follows:
            ``(4) Fee collections.--Fees collected pursuant to this 
        subsection shall be deposited and credited in accordance with 
        section 4(g) of this title.'';
                    (E) in paragraph (5), by striking ``of the fiscal 
                years 2003 through 2011'' and inserting ``fiscal 
                year'';
                    (F) by striking paragraphs (6), (8), and (9);
                    (G) by redesignating paragraph (7) as paragraph 
                (6);
                    (H) by inserting after paragraph (6), as so 
                redesignated, the following:
            ``(7) Review and effective date.--In exercising its 
        authority under this subsection, the Commission shall not be 
        required to comply with the provisions of section 553 of title 
        5. An adjusted rate prescribed under paragraph (5) and 
        published under paragraph (8) shall not be subject to judicial 
        review. An adjusted rate prescribed under paragraph (5) shall 
        take effect on the first day of the fiscal year to which such 
        rate applies.'';
                    (I) by redesignating paragraphs (10) and (11) as 
                paragraphs (8) and (9), respectively; and
                    (J) in paragraph (9), as so redesignated, by 
                striking ``6(b)(10)'' and inserting ``6(b)(7)''.
    (d) Repeal of Authorization of Appropriations.--Section 35 of the 
Securities Exchange Act of 1934 (15 U.S.C. 78kk) is repealed.
    (e) Effective Date and Transition Provisions.--
            (1) In general.--Except as provided in paragraphs (2) and 
        (3), the amendments made by this section shall be effective on 
        the first day of the fiscal year following the fiscal year in 
        which this Act is enacted.
            (2) Transition period.--For the fiscal year following the 
        fiscal year in which this Act is enacted, the budget of the 
        Commission shall be deemed to be the budget submitted by the 
        Chairman of the Commission to the President for such fiscal 
        year in accordance with the provisions of section 1108 of title 
        31, United States Code.
            (3) Other provisions.--The amendments made by this section 
        to subsections (g) and (j)(1) of section 31 of the Securities 
        Exchange Act of 1934 (15 U.S.C. 78ee) shall be effective on the 
        date of enactment of this Act, and shall require the Commission 
        to make and publish an annual adjustment to the fee rates 
        applicable under subsections (b) and (c) of section 31 of the 
        Securities Exchange Act of 1934 (15 U.S.C. 78ee) for the fiscal 
        year following the fiscal year in which this Act is enacted. 
        The adjusted rate described in the preceding sentence shall 
        supersede any previously published adjusted rate applicable 
        under subsections (b) and (c) of section 31 of the Securities 
        Exchange Act of 1934 for the fiscal year following the fiscal 
        year in which this Act is enacted and shall take effect on the 
        first day of the fiscal year following the fiscal year in which 
        this Act is enacted, except that, if this Act is enacted on or 
        after August 31 and on or prior to September 30, the adjusted 
        rate described in the first sentence shall be published not 
        later than 15 days after the date of enactment of this Act and 
        take effect 30 days thereafter, and the Commission shall 
        continue to collect fees under subsections (b) and (c) of 
        section 31 of the Securities Exchange Act of 1934 at the rate 
        in effect during the preceding fiscal year until the adjusted 
        rate is effective.

            TITLE X--BUREAU OF CONSUMER FINANCIAL PROTECTION

SEC. 1001. SHORT TITLE.

    This title may be cited as the ``Consumer Financial Protection Act 
of 2010''.

SEC. 1002. DEFINITIONS.

    Except as otherwise provided in this title, for purposes of this 
title, the following definitions shall apply:
            (1) Affiliate.--The term ``affiliate'' means any person 
        that controls, is controlled by, or is under common control 
        with another person.
            (2) Bureau.--The term ``Bureau'' means the Bureau of 
        Consumer Financial Protection.
            (3) Business of insurance.--The term ``business of 
        insurance'' means the writing of insurance or the reinsuring of 
        risks by an insurer, including all acts necessary to such 
        writing or reinsuring and the activities relating to the 
        writing of insurance or the reinsuring of risks conducted by 
        persons who act as, or are, officers, directors, agents, or 
        employees of insurers or who are other persons authorized to 
        act on behalf of such persons.
            (4) Consumer.--The term ``consumer'' means an individual or 
        an agent, trustee, or representative acting on behalf of an 
        individual.
            (5) Consumer financial product or service.--The term 
        ``consumer financial product or service'' means any financial 
        product or service that is described in one or more categories 
        under--
                    (A) paragraph (13) and is offered or provided for 
                use by consumers primarily for personal, family, or 
                household purposes; or
                    (B) clause (i), (iii), (ix), or (x) of paragraph 
                (13)(A), and is delivered, offered, or provided in 
                connection with a consumer financial product or service 
                referred to in subparagraph (A).
            (6) Covered person.--The term ``covered person'' means--
                    (A) any person that engages in offering or 
                providing a consumer financial product or service; and
                    (B) any affiliate of a person described in 
                subparagraph (A) if such affiliate acts as a service 
                provider to such person.
            (7) Credit.--The term ``credit'' means the right granted by 
        a person to a consumer to defer payment of a debt, incur debt 
        and defer its payment, or purchase property or services and 
        defer payment for such purchase.
            (8) Deposit-taking activity.--The term ``deposit-taking 
        activity'' means--
                    (A) the acceptance of deposits, maintenance of 
                deposit accounts, or the provision of services related 
                to the acceptance of deposits or the maintenance of 
                deposit accounts;
                    (B) the acceptance of funds, the provision of other 
                services related to the acceptance of funds, or the 
                maintenance of member share accounts by a credit union; 
                or
                    (C) the receipt of funds or the equivalent thereof, 
                as the Bureau may determine by rule or order, received 
                or held by a covered person (or an agent for a covered 
                person) for the purpose of facilitating a payment or 
                transferring funds or value of funds between a consumer 
                and a third party.
            (9) Designated transfer date.--The term ``designated 
        transfer date'' means the date established under section 1062.
            (10) Director.--The term ``Director'' means the Director of 
        the Bureau.
            (11) Enumerated consumer laws.--The term ``enumerated 
        consumer laws'' means--
                    (A) the Alternative Mortgage Transaction Parity Act 
                of 1982 (12 U.S.C. 3801 et seq.);
                    (B) the Consumer Leasing Act of 1976 (15 U.S.C. 
                1667 et seq.);
                    (C) the Electronic Fund Transfer Act (15 U.S.C. 
                1693 et seq.);
                    (D) the Equal Credit Opportunity Act (15 U.S.C. 
                1691 et seq.);
                    (E) the Fair Credit Billing Act (15 U.S.C. 1666 et 
                seq.);
                    (F) the Fair Credit Reporting Act (15 U.S.C. 1681 
                et seq.), except with respect to sections 615(e) and 
                628 of that Act (15 U.S.C. 1681m(e), 1681w);
                    (G) the Home Owners Protection Act of 1998 (12 
                U.S.C. 4901 et seq.);
                    (H) the Fair Debt Collection Practices Act (15 
                U.S.C. 1692 et seq.);
                    (I) subsections (b) through (f) of section 43 of 
                the Federal Deposit Insurance Act (12 U.S.C. 1831t(c)-
                (f));
                    (J) sections 502 through 509 of the Gramm-Leach-
                Bliley Act (15 U.S.C. 6802-6809) except for section 505 
                as it applies to section 501(b);
                    (K) the Home Mortgage Disclosure Act of 1975 (12 
                U.S.C. 2801 et seq.);
                    (L) the Home Ownership and Equity Protection Act of 
                1994 (15 U.S.C. 1601 note);
                    (M) the Real Estate Settlement Procedures Act of 
                1974 (12 U.S.C. 2601 et seq.);
                    (N) the S.A.F.E. Mortgage Licensing Act of 2008 (12 
                U.S.C. 5101 et seq.);
                    (O) the Truth in Lending Act (15 U.S.C. 1601 et 
                seq.);
                    (P) the Truth in Savings Act (12 U.S.C. 4301 et 
                seq.); and
                    (Q) section 626 of the Omnibus Appropriations Act, 
                2009 (Public Law 111-8).
            (12) Federal consumer financial law.--The term ``Federal 
        consumer financial law'' means the provisions of this title, 
        the enumerated consumer laws, the laws for which authorities 
        are transferred under subtitles F and H, and any rule or order 
        prescribed by the Bureau under this title, an enumerated 
        consumer law, or pursuant to the authorities transferred under 
        subtitles F and H. The term does not include the Federal Trade 
        Commission Act.
            (13) Financial product or service.--The term ``financial 
        product or service''--
                    (A) means--
                            (i) extending credit and servicing loans, 
                        including acquiring, purchasing, selling, 
                        brokering, or other extensions of credit (other 
                        than solely extending commercial credit to a 
                        person who originates consumer credit 
                        transactions);
                            (ii) extending or brokering leases of 
                        personal or real property that are the 
                        functional equivalent of purchase finance 
                        arrangements, if--
                                    (I) the lease is on a non-operating 
                                basis;
                                    (II) the initial term of the lease 
                                is at least 90 days; and
                                    (III) in the case of a lease 
                                involving real property, at the 
                                inception of the initial lease, the 
                                transaction is intended to result in 
                                ownership of the leased property to be 
                                transferred to the lessee, subject to 
                                standards prescribed by the Bureau;
                            (iii) providing real estate settlement 
                        services or performing appraisals of real 
                        estate or personal property;
                            (iv) engaging in deposit-taking activities, 
                        transmitting or exchanging funds, or otherwise 
                        acting as a custodian of funds or any financial 
                        instrument for use by or on behalf of a 
                        consumer;
                            (v) selling, providing, or issuing stored 
                        value or payment instruments, except that, in 
                        the case of a sale of, or transaction to 
                        reload, stored value, only if the seller 
                        exercises substantial control over the terms or 
                        conditions of the stored value provided to the 
                        consumer where, for purposes of this clause--
                                    (I) a seller shall not be found to 
                                exercise substantial control over the 
                                terms or conditions of the stored value 
                                if the seller is not a party to the 
                                contract with the consumer for the 
                                stored value product, and another 
                                person is principally responsible for 
                                establishing the terms or conditions of 
                                the stored value; and
                                    (II) advertising the nonfinancial 
                                goods or services of the seller on the 
                                stored value card or device is not in 
                                itself an exercise of substantial 
                                control over the terms or conditions;
                            (vi) providing check cashing, check 
                        collection, or check guaranty services;
                            (vii) providing payments or other financial 
                        data processing products or services to a 
                        consumer by any technological means, including 
                        processing or storing financial or banking data 
                        for any payment instrument, or through any 
                        payments systems or network used for processing 
                        payments data, including payments made through 
                        an online banking system or mobile 
                        telecommunications network, except that a 
                        person shall not be deemed to be a covered 
                        person with respect to financial data 
                        processing solely because the person--
                                    (I) unknowingly or incidentally 
                                processes, stores, or transmits over 
                                the Internet, telephone line, mobile 
                                network, or any other mode of 
                                transmission, as part of a stream of 
                                other types of data, financial data in 
                                a manner that such data is 
                                undifferentiated from other types of 
                                data of the same form that the person 
                                processes, stores, or transmits;
                                    (II) is a merchant, retailer, or 
                                seller of any nonfinancial good or 
                                service who engages in financial data 
                                processing by transmitting or storing 
                                payments data about a consumer 
                                exclusively for purpose of initiating 
                                payments instructions by the consumer 
                                to pay such person for the purchase of, 
                                or to complete a commercial transaction 
                                for, such nonfinancial good or service 
                                sold directly by such person to the 
                                consumer; or
                                    (III) provides access to a host 
                                server to a person for purposes of 
                                enabling that person to establish and 
                                maintain a website;
                            (viii) providing financial advisory 
                        services to consumers on individual financial 
                        matters or relating to proprietary financial 
                        products or services (other than by publishing 
                        any bona fide newspaper, news magazine, or 
                        business or financial publication of general 
                        and regular circulation, including publishing 
                        market data, news, or data analytics or 
                        investment information or recommendations that 
                        are not tailored to the individual needs of a 
                        particular consumer), including--
                                    (I) providing credit counseling to 
                                any consumer; and
                                    (II) providing services to assist a 
                                consumer with debt management or debt 
                                settlement, modifying the terms of any 
                                extension of credit, or avoiding 
                                foreclosure;
                            (ix) collecting, analyzing, maintaining, or 
                        providing consumer report information or other 
                        account information, including information 
                        relating to the credit history of consumers, 
                        used or expected to be used in connection with 
                        any decision regarding the offering or 
                        provision of a consumer financial product or 
                        service, except to the extent that--
                                    (I) a person--
                                            (aa) collects, analyzes, or 
                                        maintains information that 
                                        relates solely to the 
                                        transactions between a consumer 
                                        and such person; or
                                            (bb) provides the 
                                        information described in item 
                                        (aa) to an affiliate of such 
                                        person; and
                                    (II) the information described in 
                                subclause (I)(aa) is not used by such 
                                person or affiliate in connection with 
                                any decision regarding the offering or 
                                provision of a consumer financial 
                                product or service to the consumer, 
                                other than credit described in section 
                                1027(a)(2)(A);
                            (x) collecting debt related to any consumer 
                        financial product or service; and
                            (xi) such other financial product or 
                        service as may be defined by the Bureau, by 
                        regulation, for purposes of this title, if the 
                        Bureau finds that such financial product or 
                        service is--
                                    (I) entered into or conducted as a 
                                subterfuge or with a purpose to evade 
                                any Federal consumer financial law; or
                                    (II) permissible for a bank or for 
                                a financial holding company to offer or 
                                to provide under any provision of a 
                                Federal law or regulation applicable to 
                                a bank or a financial holding company, 
                                and has, or likely will have, a 
                                material impact on consumers; and
                    (B) does not include the business of insurance.
            (14) Foreign exchange.--The term ``foreign exchange'' means 
        the exchange, for compensation, of currency of the United 
        States or of a foreign government for currency of another 
        government.
            (15) Insured credit union.--The term ``insured credit 
        union'' has the same meaning as in section 101 of the Federal 
        Credit Union Act (12 U.S.C. 1752).
            (16) Payment instrument.--The term ``payment instrument'' 
        means a check, draft, warrant, money order, traveler's check, 
        electronic instrument, or other instrument, payment of funds, 
        or monetary value (other than currency).
            (17) Person.--The term ``person'' means an individual, 
        partnership, company, corporation, association (incorporated or 
        unincorporated), trust, estate, cooperative organization, or 
        other entity.
            (18) Person regulated by the commodity futures trading 
        commission.--The term ``person regulated by the Commodity 
        Futures Trading Commission'' means any person that is 
        registered, or required by statute or regulation to be 
        registered, with the Commodity Futures Trading Commission, but 
        only to the extent that the activities of such person are 
        subject to the jurisdiction of the Commodity Futures Trading 
        Commission under the Commodity Exchange Act.
            (19) Person regulated by the commission.--The term ``person 
        regulated by the Commission'' means a person who is--
                    (A) a broker or dealer that is required to be 
                registered under the Securities Exchange Act of 1934;
                    (B) an investment adviser that is registered under 
                the Investment Advisers Act of 1940;
                    (C) an investment company that is required to be 
                registered under the Investment Company Act of 1940, 
                and any company that has elected to be regulated as a 
                business development company under that Act;
                    (D) a national securities exchange that is required 
                to be registered under the Securities Exchange Act of 
                1934;
                    (E) a transfer agent that is required to be 
                registered under the Securities Exchange Act of 1934;
                    (F) a clearing corporation that is required to be 
                registered under the Securities Exchange Act of 1934;
                    (G) any self-regulatory organization that is 
                required to be registered with the Commission;
                    (H) any nationally recognized statistical rating 
                organization that is required to be registered with the 
                Commission;
                    (I) any securities information processor that is 
                required to be registered with the Commission;
                    (J) any municipal securities dealer that is 
                required to be registered with the Commission;
                    (K) any other person that is required to be 
                registered with the Commission under the Securities 
                Exchange Act of 1934; and
                    (L) any employee, agent, or contractor acting on 
                behalf of, registered with, or providing services to, 
                any person described in any of subparagraphs (A) 
                through (K), but only to the extent that any person 
                described in any of subparagraphs (A) through (K), or 
                the employee, agent, or contractor of such person, acts 
                in a regulated capacity.
            (20) Person regulated by a state insurance regulator.--The 
        term ``person regulated by a State insurance regulator'' means 
        any person that is engaged in the business of insurance and 
        subject to regulation by any State insurance regulator, but 
        only to the extent that such person acts in such capacity.
            (21) Person that performs income tax preparation activities 
        for consumers.--The term ``person that performs income tax 
        preparation activities for consumers'' means--
                    (A) any tax return preparer (as defined in section 
                7701(a)(36) of the Internal Revenue Code of 1986), 
                regardless of whether compensated, but only to the 
                extent that the person acts in such capacity;
                    (B) any person regulated by the Secretary under 
                section 330 of title 31, United States Code, but only 
                to the extent that the person acts in such capacity; 
                and
                    (C) any authorized IRS e-file Providers (as defined 
                for purposes of section 7216 of the Internal Revenue 
                Code of 1986), but only to the extent that the person 
                acts in such capacity.
            (22) Prudential regulator.--The term ``prudential 
        regulator'' means--
                    (A) in the case of an insured depository 
                institution, the appropriate Federal banking agency, as 
                that term is defined in section 3 of the Federal 
                Deposit Insurance Act; and
                    (B) in the case of an insured credit union, the 
                National Credit Union Administration.
            (23) Related person.--The term ``related person''--
                    (A) shall apply only with respect to a covered 
                person that is not a bank holding company (as that term 
                is defined in section 2 of the Bank Holding Company Act 
                of 1956), credit union, or depository institution;
                    (B) shall be deemed to mean a covered person for 
                all purposes of any provision of Federal consumer 
                financial law; and
                    (C) means--
                            (i) any director, officer, or employee 
                        charged with managerial responsibility for, or 
                        controlling shareholder of, or agent for, such 
                        covered person;
                            (ii) any shareholder, consultant, joint 
                        venture partner, or other person, as determined 
                        by the Bureau (by rule or on a case-by-case 
                        basis) who materially participates in the 
                        conduct of the affairs of such covered person; 
                        and
                            (iii) any independent contractor (including 
                        any attorney, appraiser, or accountant) who 
                        knowingly or recklessly participates in any--
                                    (I) violation of any provision of 
                                law or regulation; or
                                    (II) breach of a fiduciary duty.
            (24) Service provider.--
                    (A) In general.--The term ``service provider'' 
                means any person that provides a material service to a 
                covered person in connection with the offering or 
                provision by such covered person of a consumer 
                financial product or service, including a person that--
                            (i) participates in designing, operating, 
                        or maintaining the consumer financial product 
                        or service; or
                            (ii) processes transactions relating to the 
                        consumer financial product or service (other 
                        than unknowingly or incidentally transmitting 
                        or processing financial data in a manner that 
                        such data is undifferentiated from other types 
                        of data of the same form as the person 
                        transmits or processes).
                    (B) Exceptions.--The term ``service provider'' does 
                not include a person solely by virtue of such person 
                offering or providing to a covered person--
                            (i) a support service of a type provided to 
                        businesses generally or a similar ministerial 
                        service; or
                            (ii) time or space for an advertisement for 
                        a consumer financial product or service through 
                        print, newspaper, or electronic media.
                    (C) Rule of construction.--A person that is a 
                service provider shall be deemed to be a covered person 
                to the extent that such person engages in the offering 
                or provision of its own consumer financial product or 
                service.
            (25) State.--The term ``State'' means any State, territory, 
        or possession of the United States, the District of Columbia, 
        the Commonwealth of Puerto Rico, the Commonwealth of the 
        Northern Mariana Islands, Guam, American Samoa, or the United 
        States Virgin Islands or any federally recognized Indian tribe, 
        as defined by the Secretary of the Interior under section 
        104(a) of the Federally Recognized Indian Tribe List Act of 
        1994 (25 U.S.C. 479a-1(a)).
            (26) Stored value.--The term ``stored value'' means funds 
        or monetary value represented in any electronic format, whether 
        or not specially encrypted, and stored or capable of storage on 
        electronic media in such a way as to be retrievable and 
        transferred electronically, and includes a prepaid debit card 
        or product, or any other similar product, regardless of whether 
        the amount of the funds or monetary value may be increased or 
        reloaded.
            (27) Transmitting or exchanging funds.--The term 
        ``transmitting or exchanging funds'' means receiving currency, 
        monetary value, or payment instruments from a consumer for the 
        purpose of exchanging or transmitting the same by any means, 
        including transmission by wire, facsimile, electronic transfer, 
        courier, the Internet, or through bill payment services or 
        through other businesses that facilitate third-party transfers 
        within the United States or to or from the United States.

          Subtitle A--Bureau of Consumer Financial Protection

SEC. 1011. ESTABLISHMENT OF THE BUREAU.

    (a) Bureau Established.--There is established in the Federal 
Reserve System the Bureau of Consumer Financial Protection, which shall 
regulate the offering and provision of consumer financial products or 
services under the Federal consumer financial laws.
    (b) Director and Deputy Director.--
            (1) In general.--There is established the position of the 
        Director, who shall serve as the head of the Bureau.
            (2) Appointment.--Subject to paragraph (3), the Director 
        shall be appointed by the President, by and with the advice and 
        consent of the Senate.
            (3) Qualification.--The President shall nominate the 
        Director from among individuals who are citizens of the United 
        States.
            (4) Compensation.--The Director shall be compensated at the 
        rate prescribed for level II of the Executive Schedule under 
        section 5313 of title 5, United States Code.
            (5) Deputy director.--There is established the position of 
        Deputy Director, who shall--
                    (A) be appointed by the Director; and
                    (B) serve as acting Director in the absence or 
                unavailability of the Director.
    (c) Term.--
            (1) In general.--The Director shall serve for a term of 5 
        years.
            (2) Expiration of term.--An individual may serve as 
        Director after the expiration of the term for which appointed, 
        until a successor has been appointed and qualified.
            (3) Removal for cause.--The President may remove the 
        Director for inefficiency, neglect of duty, or malfeasance in 
        office.
    (d) Service Restriction.--No Director or Deputy Director may hold 
any office, position, or employment in any Federal reserve bank, 
Federal home loan bank, covered person, or service provider during the 
period of service of such person as Director or Deputy Director.
    (e) Offices.--The principal office of the Bureau shall be in the 
District of Columbia. The Director may establish regional offices of 
the Bureau, including in cities in which the Federal reserve banks, or 
branches of such banks, are located, in order to carry out the 
responsibilities assigned to the Bureau under the Federal consumer 
financial laws.

SEC. 1012. EXECUTIVE AND ADMINISTRATIVE POWERS.

    (a) Powers of the Bureau.--The Bureau is authorized to establish 
the general policies of the Bureau with respect to all executive and 
administrative functions, including--
            (1) the establishment of rules for conducting the general 
        business of the Bureau, in a manner not inconsistent with this 
        title;
            (2) to bind the Bureau and enter into contracts;
            (3) directing the establishment and maintenance of 
        divisions or other offices within the Bureau, in order to carry 
        out the responsibilities under the Federal consumer financial 
        laws, and to satisfy the requirements of other applicable law;
            (4) to coordinate and oversee the operation of all 
        administrative, enforcement, and research activities of the 
        Bureau;
            (5) to adopt and use a seal;
            (6) to determine the character of and the necessity for the 
        obligations and expenditures of the Bureau;
            (7) the appointment and supervision of personnel employed 
        by the Bureau;
            (8) the distribution of business among personnel appointed 
        and supervised by the Director and among administrative units 
        of the Bureau;
            (9) the use and expenditure of funds;
            (10) implementing the Federal consumer financial laws 
        through rules, orders, guidance, interpretations, statements of 
        policy, examinations, and enforcement actions; and
            (11) performing such other functions as may be authorized 
        or required by law.
    (b) Delegation of Authority.--The Director of the Bureau may 
delegate to any duly authorized employee, representative, or agent any 
power vested in the Bureau by law.
    (c) Autonomy of the Bureau.--
            (1) Coordination with the board of governors.--
        Notwithstanding section 18 of the Federal Trade Commission Act 
        (15 U.S.C. 57a) and any other provision of law applicable to 
        the supervision or examination of persons with respect to 
        Federal consumer financial laws, the Board of Governors may 
        delegate to the Bureau the authorities to examine persons 
        subject to the jurisdiction of the Board of Governors for 
        compliance with the Federal consumer financial laws.
            (2) Autonomy.--Notwithstanding the authorities granted to 
        the Board of Governors under the Federal Reserve Act, the Board 
        of Governors may not--
                    (A) intervene in any matter or proceeding before 
                the Director, including examinations or enforcement 
                actions, unless otherwise specifically provided by law;
                    (B) appoint, direct, or remove any officer or 
                employee of the Bureau; or
                    (C) merge or consolidate the Bureau, or any of the 
                functions or responsibilities of the Bureau, with any 
                division or office of the Board of Governors or the 
                Federal reserve banks.
            (3) Rules and orders.--No rule or order of the Bureau shall 
        be subject to approval or review by the Board of Governors. The 
        Board of Governors may not delay or prevent the issuance of any 
        rule or order of the Bureau.
            (4) Recommendations and testimony.--No officer or agency of 
        the United States shall have any authority to require the 
        Director or any other officer of the Bureau to submit 
        legislative recommendations, or testimony or comments on 
        legislation, to any officer or agency of the United States for 
        approval, comments, or review prior to the submission of such 
        recommendations, testimony, or comments to the Congress, if 
        such recommendations, testimony, or comments to the Congress 
        include a statement indicating that the views expressed therein 
        are those of the Director or such officer, and do not 
        necessarily reflect the views of the Board of Governors or the 
        President.

SEC. 1013. ADMINISTRATION.

    (a) Personnel.--
            (1) Appointment.--
                    (A) In general.--The Director may fix the number 
                of, and appoint and direct, all employees of the 
                Bureau.
                    (B) Employees of the bureau.--The Director is 
                authorized to employ attorneys, compliance examiners, 
                compliance supervision analysts, economists, 
                statisticians, and other employees as may be deemed 
                necessary to conduct the business of the Bureau. 
                Notwithstanding any other provision of law, all such 
                employees shall be appointed and compensated on terms 
                and conditions that are consistent with the terms and 
                conditions set forth in section 11(l) of the Federal 
                Reserve Act (12 U.S.C. 248(l)).
            (2) Compensation.--The Director shall at all times provide 
        compensation and benefits to each class of employees that, at a 
        minimum, are equivalent to the compensation and benefits then 
        being provided by the Board of Governors for the corresponding 
        class of employees.
    (b) Specific Functional Units.--
            (1) Research.--The Director shall establish a unit whose 
        functions shall include researching, analyzing, and reporting 
        on--
                    (A) developments in markets for consumer financial 
                products or services, including market areas of 
                alternative consumer financial products or services 
                with high growth rates and areas of risk to consumers;
                    (B) access to fair and affordable credit for 
                traditionally underserved communities;
                    (C) consumer awareness, understanding, and use of 
                disclosures and communications regarding consumer 
                financial products or services;
                    (D) consumer awareness and understanding of costs, 
                risks, and benefits of consumer financial products or 
                services; and
                    (E) consumer behavior with respect to consumer 
                financial products or services.
            (2) Community affairs.--The Director shall establish a unit 
        whose functions shall include providing information, guidance, 
        and technical assistance regarding the offering and provision 
        of consumer financial products or services to traditionally 
        underserved consumers and communities.
            (3) Collecting and tracking complaints.--
                    (A) In general.--The Director shall establish a 
                unit whose functions shall include establishing a 
                single, toll-free telephone number, a website, and a 
                database or utilizing an existing database to 
                facilitate the centralized collection of, monitoring 
                of, and response to consumer complaints regarding 
                consumer financial products or services. The Director 
                shall coordinate with the Federal Trade Commission or 
                other Federal agencies to route complaints to such 
                agencies, where appropriate.
                    (B) Routing calls to states.--To the extent 
                practicable, State agencies may receive appropriate 
                complaints from the systems established under 
                subparagraph (A), if--
                            (i) the State agency system has the 
                        functional capacity to receive calls or 
                        electronic reports routed by the Bureau 
                        systems; and
                            (ii) the State agency has satisfied any 
                        conditions of participation in the system that 
                        the Bureau may establish, including treatment 
                        of personally identifiable information and 
                        sharing of information on complaint resolution 
                        or related compliance procedures and resources.
                    (C) Reports to the congress.--The Director shall 
                present an annual report to Congress not later than 
                March 31 of each year on the complaints received by the 
                Bureau in the prior year regarding consumer financial 
                products and services. Such report shall include 
                information and analysis about complaint numbers, 
                complaint types, and, where applicable, information 
                about resolution of complaints.
                    (D) Data sharing required.--To facilitate 
                preparation of the reports required under subparagraph 
                (C), supervision and enforcement activities, and 
                monitoring of the market for consumer financial 
                products and services, the Bureau shall share consumer 
                complaint information with prudential regulators, the 
                Federal Trade Commission, other Federal agencies, and 
                State agencies, consistent with Federal law applicable 
                to personally identifiable information. The prudential 
                regulators, the Federal Trade Commission, and other 
                Federal agencies shall share data relating to consumer 
                complaints regarding consumer financial products and 
                services with the Bureau, consistent with Federal law 
                applicable to personally identifiable information.
    (c) Office of Fair Lending and Equal Opportunity.--
            (1) Establishment.--The Director shall establish within the 
        Bureau the Office of Fair Lending and Equal Opportunity.
            (2) Functions.--The Office of Fair Lending and Equal 
        Opportunity shall have such powers and duties as the Director 
        may delegate to the Office, including--
                    (A) providing oversight and enforcement of Federal 
                laws intended to ensure the fair, equitable, and 
                nondiscriminatory access to credit for both individuals 
                and communities that are enforced by the Bureau, 
                including the Equal Credit Opportunity Act and the Home 
                Mortgage Disclosure Act;
                    (B) coordinating fair lending and fair housing 
                efforts of the Bureau with other Federal agencies and 
                State regulators, as appropriate, to promote 
                consistent, efficient, and effective enforcement of 
                Federal fair lending laws;
                    (C) working with private industry, fair lending, 
                civil rights, consumer and community advocates on the 
                promotion of fair lending compliance and education; and
                    (D) providing annual reports to Congress on the 
                efforts of the Bureau to fulfill its fair lending 
                mandate.
            (3) Administration of office.--There is established the 
        position of Assistant Director of the Bureau for Fair Lending 
        and Equal Opportunity, who--
                    (A) shall be appointed by the Director; and
                    (B) shall carry out such duties as the Director may 
                delegate to such Assistant Director.
    (d) Office of Financial Literacy.--
            (1) Establishment.--The Director shall establish an Office 
        of Financial Literacy, which shall be responsible for 
        developing and implementing initiatives intended to educate and 
        empower consumers to make better informed financial decisions.
            (2) Other duties.--The Office of Financial Literacy shall 
        develop and implement a strategy to improve the financial 
        literacy of consumers that includes measurable goals and 
        objectives, in consultation with the Financial Literacy and 
        Education Commission, consistent with the National Strategy for 
        Financial Education, through activities including providing 
        opportunities for consumers to access--
                    (A) financial counseling;
                    (B) information to assist with the evaluation of 
                credit products and the understanding of credit 
                histories and scores;
                    (C) savings, borrowing, and other services found at 
                mainstream financial institutions;
                    (D) activities intended to--
                            (i) prepare the consumer for educational 
                        expenses and the submission of financial aid 
                        applications, and other major purchases;
                            (ii) reduce debt; and
                            (iii) improve the financial situation of 
                        the consumer;
                    (E) assistance in developing long-term savings 
                strategies; and
                    (F) wealth building and financial services during 
                the preparation process to claim earned income tax 
                credits and Federal benefits.
            (3) Coordination.--The Office of Financial Literacy shall 
        coordinate with other units within the Bureau in carrying out 
        its functions, including--
                    (A) working with the Community Affairs Office to 
                implement the strategy to improve financial literacy of 
                consumers; and
                    (B) working with the research unit established by 
                the Director to conduct research related to consumer 
                financial education and counseling.
            (4) Report.--Not later than 24 months after the designated 
        transfer date, and annually thereafter, the Director shall 
        submit a report on its financial literacy activities and 
        strategy to improve financial literacy of consumers to--
                    (A) the Committee on Banking, Housing, and Urban 
                Affairs of the Senate; and
                    (B) the Committee on Financial Services of the 
                House of Representatives.
            (5) Membership in financial literacy and education 
        commission.--Section 513(c)(1) of the Financial Literacy and 
        Education Improvement Act (20 U.S.C. 9702(c)(1)) is amended--
                    (A) in subparagraph (B), by striking ``and'' at the 
                end;
                    (B) by redesignating subparagraph (C) as 
                subparagraph (D); and
                    (C) by inserting after subparagraph (B) the 
                following new subparagraph:
                    ``(C) the Director of the Bureau of Consumer 
                Financial Protection; and''.
            (6) Conforming amendment.--Section 513(d) of the Financial 
        Literacy and Education Improvement Act (20 U.S.C. 9702(d)) is 
        amended by adding at the end the following: ``The Director of 
        the Bureau of Consumer Financial Protection shall serve as the 
        Vice Chairman.''.
    (e) Office of Service Member Affairs.--
            (1) In general.--The Director shall establish an Office of 
        Service Member Affairs, which shall be responsible for 
        developing and implementing initiatives for service members and 
        their families intended to--
                    (A) educate and empower service members and their 
                families to make better informed decisions regarding 
                consumer financial products and services;
                    (B) coordinate with the unit of the Bureau 
                established under subsection (b)(3), in order to 
                monitor complaints by service members and their 
                families and responses to those complaints by the 
                Bureau or other appropriate Federal or State agency; 
                and
                    (C) coordinate efforts among Federal and State 
                agencies, as appropriate, regarding consumer protection 
                measures relating to consumer financial products and 
                services offered to, or used by, service members and 
                their families.
            (2) Coordination.--
                    (A) Regional services.--The Director is authorized 
                to assign employees of the Bureau as may be deemed 
                necessary to conduct the business of the Office of 
                Service Member Affairs, including by establishing and 
                maintaining the functions of the Office in regional 
                offices of the Bureau located near military bases, 
                military treatment facilities, or other similar 
                military facilities.
                    (B) Agreements.--The Director is authorized to 
                enter into memoranda of understanding and similar 
                agreements with the Department of Defense, including 
                any branch or agency as authorized by the department, 
                in order to carry out the business of the Office of 
                Service Member Affairs.
            (3) Definition.--As used in this subsection, the term 
        ``service member'' means any member of the United States Armed 
        Forces and any member of the National Guard or Reserves.

SEC. 1014. CONSUMER ADVISORY BOARD.

    (a) Establishment Required.--The Director shall establish a 
Consumer Advisory Board to advise and consult with the Bureau in the 
exercise of its functions under the Federal consumer financial laws, 
and to provide information on emerging practices in the consumer 
financial products or services industry, including regional trends, 
concerns, and other relevant information.
    (b) Membership.--In appointing the members of the Consumer Advisory 
Board, the Director shall seek to assemble experts in consumer 
protection, financial services, community development, fair lending, 
and consumer financial products or services and seek representation of 
the interests of covered persons and consumers, without regard to party 
affiliation. Not fewer than 6 members shall be appointed upon the 
recommendation of the regional Federal Reserve Bank Presidents, on a 
rotating basis.
    (c) Meetings.--The Consumer Advisory Board shall meet from time to 
time at the call of the Director, but, at a minimum, shall meet at 
least twice in each year.
    (d) Compensation and Travel Expenses.--Members of the Consumer 
Advisory Board who are not full-time employees of the United States 
shall--
            (1) be entitled to receive compensation at a rate fixed by 
        the Director while attending meetings of the Consumer Advisory 
        Board, including travel time; and
            (2) be allowed travel expenses, including transportation 
        and subsistence, while away from their homes or regular places 
        of business.

SEC. 1015. COORDINATION.

    The Bureau shall coordinate with the Commission, the Commodity 
Futures Trading Commission, the Federal Trade Commission, and other 
Federal agencies and State regulators, as appropriate, to promote 
consistent regulatory treatment of consumer financial and investment 
products and services.

SEC. 1016. APPEARANCES BEFORE AND REPORTS TO CONGRESS.

    (a) Appearances Before Congress.--The Director of the Bureau shall 
appear before the Committee on Banking, Housing, and Urban Affairs of 
the Senate and the Committee on Financial Services of the House of 
Representatives at semi-annual hearings regarding the reports required 
under subsection (b).
    (b) Reports Required.--The Bureau shall, concurrent with each semi-
annual hearing referred to in subsection (a), prepare and submit to the 
President and to the Committee on Banking, Housing, and Urban Affairs 
of the Senate and the Committee on Financial Services of the House of 
Representatives, a report, beginning with the session following the 
designated transfer date.
    (c) Contents.--The reports required by subsection (b) shall 
include--
            (1) a discussion of the significant problems faced by 
        consumers in shopping for or obtaining consumer financial 
        products or services;
            (2) a justification of the budget request of the previous 
        year;
            (3) a list of the significant rules and orders adopted by 
        the Bureau, as well as other significant initiatives conducted 
        by the Bureau, during the preceding year and the plan of the 
        Bureau for rules, orders, or other initiatives to be undertaken 
        during the upcoming period;
            (4) an analysis of complaints about consumer financial 
        products or services that the Bureau has received and collected 
        in its central database on complaints during the preceding 
        year;
            (5) a list, with a brief statement of the issues, of the 
        public supervisory and enforcement actions to which the Bureau 
        was a party during the preceding year;
            (6) the actions taken regarding rules, orders, and 
        supervisory actions with respect to covered persons which are 
        not credit unions or depository institutions;
            (7) an assessment of significant actions by State attorneys 
        general or State regulators relating to Federal consumer 
        financial law; and
            (8) an analysis of the efforts of the Bureau to fulfill the 
        fair lending mission of the Bureau.

SEC. 1017. FUNDING; PENALTIES AND FINES.

    (a) Transfer of Funds From Board Of Governors.--
            (1) In general.--Each year (or quarter of such year), 
        beginning on the designated transfer date, and each quarter 
        thereafter, the Board of Governors shall transfer to the Bureau 
        from the combined earnings of the Federal Reserve System, the 
        amount determined by the Director to be reasonably necessary to 
        carry out the authorities of the Bureau under Federal consumer 
        financial law, taking into account such other sums made 
        available to the Bureau from the preceding year (or quarter of 
        such year).
            (2) Funding cap.--
                    (A) In general.--Notwithstanding paragraph (1), and 
                in accordance with this paragraph, the amount that 
                shall be transferred to the Bureau in each fiscal year 
                shall not exceed a fixed percentage of the total 
                operating expenses of the Federal Reserve System, as 
                reported in the Annual Report, 2009, of the Board of 
                Governors, equal to--
                            (i) 10 percent of such expenses in fiscal 
                        year 2011;
                            (ii) 11 percent of such expenses in fiscal 
                        year 2012; and
                            (iii) 12 percent of such expenses in fiscal 
                        year 2013, and in each year thereafter.
                    (B) Amount adjusted for inflation.--The dollar 
                amount referred to in subparagraph (A)(iii) shall be 
                adjusted annually, using the percent by which the 
                average urban consumer price index for the quarter 
                preceding the date of the payment differs from the 
                average of that index for the same quarter in the prior 
                year.
            (3) Transition period.--Beginning on the date of enactment 
        of this Act and until the designated transfer date, the Board 
        of Governors shall transfer to the Bureau the amount estimated 
        by the Secretary needed to carry out the authorities granted to 
        the Bureau under Federal consumer financial law, from the date 
        of enactment of this Act until the designated transfer date.
            (4) Budget and financial management.--
                    (A) Financial operating plans and forecasts.--The 
                Director shall provide to the Director of the Office of 
                Management and Budget copies of the financial operating 
                plans and forecasts of the Director, as prepared by the 
                Director in the ordinary course of the operations of 
                the Bureau, and copies of the quarterly reports of the 
                financial condition and results of operations of the 
                Bureau, as prepared by the Director in the ordinary 
                course of the operations of the Bureau.
                    (B) Financial statements.--The Bureau shall prepare 
                annually a statement of--
                            (i) assets and liabilities and surplus or 
                        deficit;
                            (ii) income and expenses; and
                            (iii) sources and application of funds.
                    (C) Financial management systems.--The Bureau shall 
                implement and maintain financial management systems 
                that comply substantially with Federal financial 
                management systems requirements and applicable Federal 
                accounting standards.
                    (D) Assertion of internal controls.--The Director 
                shall provide to the Comptroller General of the United 
                States an assertion as to the effectiveness of the 
                internal controls that apply to financial reporting by 
                the Bureau, using the standards established in section 
                3512(c) of title 31, United States Code.
                    (E) Rule of construction.--This subsection may not 
                be construed as implying any obligation on the part of 
                the Director to consult with or obtain the consent or 
                approval of the Director of the Office of Management 
                and Budget with respect to any report, plan, forecast, 
                or other information referred to in subparagraph (A) or 
                any jurisdiction or oversight over the affairs or 
                operations of the Bureau.
            (5) Audit of the bureau.--
                    (A) In general.--The Comptroller General shall 
                annually audit the financial transactions of the Bureau 
                in accordance with the United States generally accepted 
                government auditing standards, as may be prescribed by 
                the Comptroller General of the United States. The audit 
                shall be conducted at the place or places where 
                accounts of the Bureau are normally kept. The 
                representatives of the Government Accountability Office 
                shall have access to the personnel and to all books, 
                accounts, documents, papers, records (including 
                electronic records), reports, files, and all other 
                papers, automated data, things, or property belonging 
                to or under the control of or used or employed by the 
                Bureau pertaining to its financial transactions and 
                necessary to facilitate the audit, and such 
                representatives shall be afforded full facilities for 
                verifying transactions with the balances or securities 
                held by depositories, fiscal agents, and custodians. 
                All such books, accounts, documents, records, reports, 
                files, papers, and property of the Bureau shall remain 
                in possession and custody of the Bureau. The 
                Comptroller General may obtain and duplicate any such 
                books, accounts, documents, records, working papers, 
                automated data and files, or other information relevant 
                to such audit without cost to the Comptroller General, 
                and the right of access of the Comptroller General to 
                such information shall be enforceable pursuant to 
                section 716(c) of title 31, United States Code.
                    (B) Report.--The Comptroller General shall submit 
                to the Congress a report of each annual audit conducted 
                under this subsection. The report to the Congress shall 
                set forth the scope of the audit and shall include the 
                statement of assets and liabilities and surplus or 
                deficit, the statement of income and expenses, the 
                statement of sources and application of funds, and such 
                comments and information as may be deemed necessary to 
                inform Congress of the financial operations and 
                condition of the Bureau, together with such 
                recommendations with respect thereto as the Comptroller 
                General may deem advisable. A copy of each report shall 
                be furnished to the President and to the Bureau at the 
                time submitted to the Congress.
                    (C) Assistance and costs.--For the purpose of 
                conducting an audit under this subsection, the 
                Comptroller General may, in the discretion of the 
                Comptroller General, employ by contract, without regard 
                to section 3709 of the Revised Statutes of the United 
                States (41 U.S.C. 5), professional services of firms 
                and organizations of certified public accountants for 
                temporary periods or for special purposes. Upon the 
                request of the Comptroller General, the Director of the 
                Bureau shall transfer to the Government Accountability 
                Office from funds available, the amount requested by 
                the Comptroller General to cover the full costs of any 
                audit and report conducted by the Comptroller General. 
                The Comptroller General shall credit funds transferred 
                to the account established for salaries and expenses of 
                the Government Accountability Office, and such amount 
                shall be available upon receipt and without fiscal year 
                limitation to cover the full costs of the audit and 
                report.
    (b) Consumer Financial Protection Fund.--
            (1) Separate fund in federal reserve board established.--
        There is established in the Federal Reserve Board a separate 
        fund, to be known as the ``Consumer Financial Protection Fund'' 
        (referred to in this section as the ``Bureau Fund'').
            (2) Fund receipts.--All amounts transferred to the Bureau 
        under subsection (a) shall be deposited into the Bureau Fund.
            (3) Investment authority.--
                    (A) Amounts in bureau fund may be invested.--The 
                Bureau may request the Board of Governors to invest the 
                portion of the Bureau Fund that is not, in the judgment 
                of the Bureau, required to meet the current needs of 
                the Bureau.
                    (B) Eligible investments.--Investments authorized 
                by this paragraph shall be made by the Board of 
                Governors in obligations of the United States or 
                obligations that are guaranteed as to principal and 
                interest by the United States, with maturities suitable 
                to the needs of the Bureau Fund, as determined by the 
                Bureau.
                    (C) Interest and proceeds credited.--The interest 
                on, and the proceeds from the sale or redemption of, 
                any obligations held in the Bureau Fund shall be 
                credited to the Bureau Fund.
    (c) Use of Funds.--
            (1) In general.--Funds obtained by, transferred to, or 
        credited to the Bureau Fund shall be immediately available to 
        the Bureau and under the control of the Director, and shall 
        remain available until expended, to pay the expenses of the 
        Bureau in carrying out its duties and responsibilities. The 
        compensation of the Director and other employees of the Bureau 
        and all other expenses thereof may be paid from, obtained by, 
        transferred to, or credited to the Bureau Fund under this 
        section.
            (2) Funds that are not government funds.--Funds obtained by 
        or transferred to the Bureau Fund shall not be construed to be 
        Government funds or appropriated monies.
            (3) Amounts not subject to apportionment.--Notwithstanding 
        any other provision of law, amounts in the Bureau Fund and in 
        the Civil Penalty Fund established under subsection (d) shall 
        not be subject to apportionment for purposes of chapter 15 of 
        title 31, United States Code, or under any other authority.
    (d) Penalties and Fines.--
            (1) Establishment of victims relief fund.--There is 
        established in the Federal Reserve Board a fund to be known as 
        the ``Consumer Financial Protection Civil Penalty Fund'' 
        (referred to in this subsection as the ``Civil Penalty Fund''). 
        If the Bureau obtains a civil penalty against any person in any 
        judicial or administrative action under Federal consumer 
        financial laws, the Bureau shall deposit into the Civil Penalty 
        Fund, the amount of the penalty collected.
            (2) Payment to victims.--Amounts in the Civil Penalty Fund 
        shall be available to the Bureau, without fiscal year 
        limitation, for payments to the victims of activities for which 
        civil penalties have been imposed under the Federal consumer 
        financial laws. To the extent such victims cannot be located or 
        such payments are otherwise not practicable, the Bureau may use 
        such funds for the purpose of consumer education and financial 
        literacy programs.

SEC. 1018. EFFECTIVE DATE.

    This subtitle shall become effective on the date of enactment of 
this Act.

                Subtitle B--General Powers of the Bureau

SEC. 1021. PURPOSE, OBJECTIVES, AND FUNCTIONS.

    (a) Purpose.--The Bureau shall seek to implement and, where 
applicable, enforce Federal consumer financial law consistently for the 
purpose of ensuring that markets for consumer financial products and 
services are fair, transparent, and competitive.
    (b) Objectives.--The Bureau is authorized to exercise its 
authorities under Federal consumer financial law for the purposes of 
ensuring that, with respect to consumer financial products and 
services--
            (1) consumers are provided with timely and understandable 
        information to make responsible decisions about financial 
        transactions;
            (2) consumers are protected from unfair, deceptive, or 
        abusive acts and practices and from discrimination;
            (3) outdated, unnecessary, or unduly burdensome regulations 
        are regularly identified and addressed in order to reduce 
        unwarranted regulatory burdens;
            (4) Federal consumer financial law is enforced 
        consistently, without regard to the status of a person as a 
        depository institution, in order to promote fair competition; 
        and
            (5) markets for consumer financial products and services 
        operate transparently and efficiently to facilitate access and 
        innovation.
    (c) Functions.--The primary functions of the Bureau are--
            (1) conducting financial education programs;
            (2) collecting, investigating, and responding to consumer 
        complaints;
            (3) collecting, researching, monitoring, and publishing 
        information relevant to the functioning of markets for consumer 
        financial products and services to identify risks to consumers 
        and the proper functioning of such markets;
            (4) subject to sections 1024 through 1026, supervising 
        covered persons for compliance with Federal consumer financial 
        law, and taking appropriate enforcement action to address 
        violations of Federal consumer financial law;
            (5) issuing rules, orders, and guidance implementing 
        Federal consumer financial law; and
            (6) performing such support activities as may be necessary 
        or useful to facilitate the other functions of the Bureau.

SEC. 1022. RULEMAKING AUTHORITY.

    (a) In General.--The Bureau is authorized to exercise its 
authorities under Federal consumer financial law to administer, 
enforce, and otherwise implement the provisions of Federal consumer 
financial law.
    (b) Rulemaking, Orders, and Guidance.--
            (1) General authority.--The Director may prescribe rules 
        and issue orders and guidance, as may be necessary or 
        appropriate to enable the Bureau to administer and carry out 
        the purposes and objectives of the Federal consumer financial 
        laws, and to prevent evasions thereof.
            (2) Standards for rulemaking.--In prescribing a rule under 
        the Federal consumer financial laws--
                    (A) the Bureau shall consider the potential 
                benefits and costs to consumers and covered persons, 
                including the potential reduction of access by 
                consumers to consumer financial products or services 
                resulting from such rule;
                    (B) the Bureau shall consult with the appropriate 
                prudential regulators or other Federal agencies prior 
                to proposing a rule and during the comment process 
                regarding consistency with prudential, market, or 
                systemic objectives administered by such agencies; and
                    (C) if, during the consultation process described 
                in subparagraph (B), a prudential regulator provides 
                the Bureau with a written objection to the proposed 
                rule of the Bureau or a portion thereof, the Bureau 
                shall include in the adopting release a description of 
                the objection and the basis for the Bureau decision, if 
                any, regarding such objection, except that nothing in 
                this clause shall be construed as altering or limiting 
                the procedures under section 1023 that may apply to any 
                rule prescribed by the Bureau.
            (3) Exemptions.--
                    (A) In general.--The Bureau, by rule, may 
                conditionally or unconditionally exempt any class of 
                covered persons, service providers, or consumer 
                financial products or services, from any provision of 
                this title, or from any rule issued under this title, 
                as the Bureau determines necessary or appropriate to 
                carry out the purposes and objectives of this title, 
                taking into consideration the factors in subparagraph 
                (B).
                    (B) Factors.--In issuing an exemption, as permitted 
                under subparagraph (A), the Bureau shall, as 
                appropriate, take into consideration--
                            (i) the total assets of the class of 
                        covered persons;
                            (ii) the volume of transactions involving 
                        consumer financial products or services in 
                        which the class of covered persons engages; and
                            (iii) existing provisions of law which are 
                        applicable to the consumer financial product or 
                        service and the extent to which such provisions 
                        provide consumers with adequate protections.
            (4) Exclusive rulemaking authority.--Notwithstanding any 
        other provisions of Federal law and except as provided in 
        section 1061(b)(5), to the extent that a provision of Federal 
        consumer financial law authorizes the Bureau and another 
        Federal agency to issue regulations under that provision of law 
        for purposes of assuring compliance with Federal consumer 
        financial law and any regulations thereunder, the Bureau shall 
        have the exclusive authority to prescribe rules subject to 
        those provisions of law.
    (c) Monitoring.--
            (1) In general.--In order to support its rulemaking and 
        other functions, the Bureau shall monitor for risks to 
        consumers in the offering or provision of consumer financial 
        products or services, including developments in markets for 
        such products or services.
            (2) Considerations.--In allocating its resources to perform 
        the monitoring required by this section, the Bureau may 
        consider, among other factors--
                    (A) likely risks and costs to consumers associated 
                with buying or using a type of consumer financial 
                product or service;
                    (B) understanding by consumers of the risks of a 
                type of consumer financial product or service;
                    (C) the legal protections applicable to the 
                offering or provision of a consumer financial product 
                or service, including the extent to which the law is 
                likely to adequately protect consumers;
                    (D) rates of growth in the offering or provision of 
                a consumer financial product or service;
                    (E) the extent, if any, to which the risks of a 
                consumer financial product or service may 
                disproportionately affect traditionally underserved 
                consumers; or
                    (F) the types, number, and other pertinent 
                characteristics of covered persons that offer or 
                provide the consumer financial product or service.
            (3) Reports.--The Bureau shall publish not fewer than 1 
        report of significant findings of its monitoring required by 
        this subsection in each calendar year, beginning with the first 
        calendar year that begins at least 1 year after the designated 
        transfer date.
            (4) Collection of information.--In conducting research on 
        the offering and provision of consumer financial products or 
        services, the Bureau shall have the authority to gather 
        information from time to time regarding the organization, 
        business conduct, markets, and activities of persons operating 
        in consumer financial services markets. In order to gather such 
        information, the Bureau may--
                    (A) gather and compile information from examination 
                reports concerning covered persons or service 
                providers, assessment of consumer complaints, surveys, 
                and interviews of covered persons and consumers, and 
                review of available databases;
                    (B) require persons to file with the Bureau, under 
                oath or otherwise, in such form and within such 
                reasonable period of time as the Bureau may prescribe, 
                by rule or order, annual or special reports, or answers 
                in writing to specific questions, furnishing such 
                information as the Bureau may require; and
                    (C) make public such information obtained by the 
                Bureau under this section, as is in the public interest 
                in reports or otherwise in the manner best suited for 
                public information and use.
            (5) Confidentiality rules.--The Bureau shall prescribe 
        rules regarding the confidential treatment of information 
        obtained from persons in connection with the exercise of its 
        authorities under Federal consumer financial law.
                    (A) Access by the bureau to reports of other 
                regulators.--
                            (i) Examination and financial condition 
                        reports.--Upon providing reasonable assurances 
                        of confidentiality, the Bureau shall have 
                        access to any report of examination or 
                        financial condition made by a prudential 
                        regulator or other Federal agency having 
                        jurisdiction over a covered person or service 
                        provider, and to all revisions made to any such 
                        report.
                            (ii) Provision of other reports to the 
                        bureau.--In addition to the reports described 
                        in clause (i), a prudential regulator or other 
                        Federal agency having jurisdiction over a 
                        covered person or service provider may, in its 
                        discretion, furnish to the Bureau any other 
                        report or other confidential supervisory 
                        information concerning any insured depository 
                        institution, credit union, or other entity 
                        examined by such agency under authority of any 
                        provision of Federal law.
                    (B) Access by other regulators to reports of the 
                bureau.--
                            (i) Examination reports.--Upon providing 
                        reasonable assurances of confidentiality, a 
                        prudential regulator, a State regulator, or any 
                        other Federal agency having jurisdiction over a 
                        covered person or service provider shall have 
                        access to any report of examination made by the 
                        Bureau with respect to such person, and to all 
                        revisions made to any such report.
                            (ii) Provision of other reports to other 
                        regulators.--In addition to the reports 
                        described in clause (i), the Bureau may, in its 
                        discretion, furnish to a prudential regulator 
                        or other agency having jurisdiction over a 
                        covered person or service provider any other 
                        report or other confidential supervisory 
                        information concerning such person examined by 
                        the Bureau under the authority of any other 
                        provision of Federal law.
            (6) Privacy considerations.--In collecting information from 
        any person, publicly releasing information held by the Bureau, 
        or requiring covered persons to publicly report information, 
        the Bureau shall take steps to ensure that proprietary, 
        personal, or confidential consumer information that is 
        protected from public disclosure under section 552(b) or 552a 
        of title 5, United States Code, or any other provision of law, 
        is not made public under this title.
    (d) Assessment of Significant Rules.--
            (1) In general.--The Bureau shall conduct an assessment of 
        each significant rule or order adopted by the Bureau under 
        Federal consumer financial law. The assessment shall address, 
        among other relevant factors, the effectiveness of the rule or 
        order in meeting the purposes and objectives of this title and 
        the specific goals stated by the Bureau. The assessment shall 
        reflect available evidence and any data that the Bureau 
        reasonably may collect.
            (2) Reports.--The Bureau shall publish a report of its 
        assessment under this subsection not later than 5 years after 
        the effective date of the subject rule or order.
            (3) Public comment required.--Before publishing a report of 
        its assessment, the Bureau shall invite public comment on 
        recommendations for modifying, expanding, or eliminating the 
        newly adopted significant rule or order.
    (e) Information Gathering.--In conducting any monitoring or 
assessment required by this section, the Bureau may gather information 
through a variety of methods, including by conducting surveys or 
interviews of consumers.

SEC. 1023. REVIEW OF BUREAU REGULATIONS.

    (a) Review of Bureau Regulations.--On the petition of a member 
agency of the Council, the Council may set aside a final regulation 
prescribed by the Bureau, or any provision thereof, if the Council 
decides, in accordance with subsection (c), that the regulation or 
provision would put the safety and soundness of the United States 
banking system or the stability of the financial system of the United 
States at risk.
    (b) Petition.--
            (1) Procedure.--An agency represented by a member of the 
        Council may petition the Council, in writing, and in accordance 
        with rules prescribed pursuant to subsection (f), to stay the 
        effectiveness of, or set aside, a regulation if the member 
        agency filing the petition--
                    (A) has in good faith attempted to work with the 
                Bureau to resolve concerns regarding the effect of the 
                rule on the safety and soundness of the United States 
                banking system or the stability of the financial system 
                of the United States; and
                    (B) files the petition with the Council not later 
                than 10 days after the date on which the regulation has 
                been published in the Federal Register.
            (2) Publication.--Any petition filed with the Council under 
        this section shall be published in the Federal Register and 
        transmitted contemporaneously with filing to the Committee on 
        Banking, Housing, and Urban Affairs of the Senate and the 
        Committee on Financial Services of the House of 
        Representatives.
    (c) Stays and Set Asides.--
            (1) Stay.--
                    (A) In general.--Upon the request of any member 
                agency, the Chairperson of the Council may stay the 
                effectiveness of a regulation for the purpose of 
                allowing appropriate consideration of the petition by 
                the Council.
                    (B) Expiration.--A stay issued under this paragraph 
                shall expire on the earlier of--
                            (i) 90 days after the date of filing of the 
                        petition under subsection (b); or
                            (ii) the date on which the Council makes a 
                        decision under paragraph (3).
            (2) No adverse inference.--After the expiration of any stay 
        imposed under this section, no inference shall be drawn 
        regarding the validity or enforceability of a regulation which 
        was the subject of the petition.
            (3) Vote.--
                    (A) In general.--The decision to issue a stay of, 
                or set aside, any regulation under this section shall 
                be made only with the affirmative vote in accordance 
                with subparagraph (B) of \2/3\ of the members of the 
                Council then serving.
                    (B) Authorization to vote.--A member of the Council 
                may vote to stay the effectiveness of, or set aside, a 
                final regulation prescribed by the Bureau only if the 
                agency or department represented by that member has--
                            (i) considered any relevant information 
                        provided by the agency submitting the petition 
                        and by the Bureau; and
                            (ii) made an official determination, at a 
                        public meeting where applicable, that the 
                        regulation which is the subject of the petition 
                        would put the safety and soundness of the 
                        United States banking system or the stability 
                        of the financial system of the United States at 
                        risk.
            (4) Decisions to set aside.--
                    (A) Effect of decision.--A decision by the Council 
                to set aside a regulation prescribed by the Bureau, or 
                provision thereof, shall render such regulation, or 
                provision thereof, unenforceable.
                    (B) Timely action required.--The Council may not 
                issue a decision to set aside a regulation, or 
                provision thereof, which is the subject of a petition 
                under this section after the expiration of the later 
                of--
                            (i) 45 days following the date of filing of 
                        the petition, unless a stay is issued under 
                        paragraph (1); or
                            (ii) the expiration of a stay issued by the 
                        Council under this section.
                    (C) Separate authority.--The issuance of a stay 
                under this section does not affect the authority of the 
                Council to set aside a regulation.
            (5) Dismissal due to inaction.--A petition under this 
        section shall be deemed dismissed if the Council has not issued 
        a decision to set aside a regulation, or provision thereof, 
        within the period for timely action under paragraph (4)(B).
            (6) Publication of decision.--Any decision under this 
        subsection to issue a stay of, or set aside, a regulation or 
        provision thereof shall be published by the Council in the 
        Federal Register as soon as practicable after the decision is 
        made, with an explanation of the reasons for the decision.
            (7) Rulemaking procedures inapplicable.--The notice and 
        comment procedures under section 553 of title 5, United States 
        Code, shall not apply to any decision under this section of the 
        Council to issue a stay of, or set aside, a regulation.
            (8) Judicial review of decisions by the council.--A 
        decision by the Council to set aside a regulation prescribed by 
        the Bureau, or provision thereof, shall be subject to review 
        under chapter 7 of title 5, United States Code.
    (d) Application of Other Law.--Nothing in this section shall be 
construed as altering, limiting, or restricting the application of any 
other provision of law, except as otherwise specifically provided in 
this section, including chapter 5 and chapter 7 of title 5, United 
States Code, to a regulation which is the subject of a petition filed 
under this section.
    (e) Savings Clause.--Nothing in this section shall be construed as 
limiting or restricting the Bureau from engaging in a rulemaking in 
accordance with applicable law.
    (f) Implementing Rules.--The Council shall prescribe procedural 
rules to implement this section.

SEC. 1024. SUPERVISION OF NONDEPOSITORY COVERED PERSONS.

    (a) Scope of Coverage.--
            (1) Applicability.--Notwithstanding any other provision of 
        this title, and except as provided in paragraph (3), this 
        section shall apply to any covered person who--
                    (A) offers or provides origination, brokerage, or 
                servicing of loans secured by real estate for use by 
                consumers primarily for personal, family, or household 
                purposes, or loan modification or foreclosure relief 
                services in connection with such loans; or
                    (B) is a larger participant of a market for other 
                consumer financial products or services, as defined by 
                rule in accordance with paragraph (2).
            (2) Rulemaking to define covered persons subject to this 
        section.--The Bureau shall consult with the Federal Trade 
        Commission prior to issuing a rule to define covered persons 
        subject to this section, in accordance with paragraph (1)(B). 
        The Bureau shall issue its initial rule within 1 year of the 
        designated transfer date.
            (3) Rules of construction.--
                    (A) Certain persons excluded.--This section shall 
                not apply to persons described in section 1025(a) or 
                1026(a).
                    (B) Activity levels.--For purposes of computing 
                activity levels under paragraph (1) or rules issued 
                thereunder, activities of affiliated companies (other 
                than insured depository institutions or insured credit 
                unions) shall be aggregated.
    (b) Supervision.--
            (1) In general.--The Bureau shall require reports and 
        conduct examinations on a periodic basis of persons described 
        in subsection (a)(1) for purposes of--
                    (A) assessing compliance with the requirements of 
                Federal consumer financial law;
                    (B) obtaining information about the activities and 
                compliance systems or procedures of such person; and
                    (C) detecting and assessing risks to consumers and 
                to markets for consumer financial products and 
                services.
            (2) Risk-based supervision program.--The Bureau shall 
        exercise its authority under paragraph (1) in a manner designed 
        to ensure that such exercise, with respect to persons described 
        in subsection (a)(1), is based on the assessment by the Bureau 
        of the risks posed to consumers in the relevant product markets 
        and geographic markets, and taking into consideration, as 
        applicable--
                    (A) the asset size of the covered person;
                    (B) the volume of transactions involving consumer 
                financial products or services in which the covered 
                person engages;
                    (C) the risks to consumers created by the provision 
                of such consumer financial products or services;
                    (D) the extent to which such institutions are 
                subject to oversight by State authorities for consumer 
                protection; and
                    (E) any other factors that the Bureau determines to 
                be relevant to a class of covered persons.
            (3) Coordination.--To minimize regulatory burden, the 
        Bureau shall coordinate its supervisory activities with the 
        supervisory activities conducted by prudential regulators and 
        the State bank regulatory authorities, including establishing 
        their respective schedules for examining persons described in 
        subsection (a)(1) and requirements regarding reports to be 
        submitted by such persons.
            (4) Use of existing reports.--The Bureau shall, to the 
        fullest extent possible, use--
                    (A) reports pertaining to persons described in 
                subsection (a)(1) that have been provided or required 
                to have been provided to a Federal or State agency; and
                    (B) information that has been reported publicly.
            (5) Preservation of authority.--Nothing in this title may 
        be construed as limiting the authority of the Director to 
        require reports from persons described in subsection (a)(1), as 
        permitted under paragraph (1), regarding information owned or 
        under the control of such person, regardless of whether such 
        information is maintained, stored, or processed by another 
        person.
            (6) Reports of tax law noncompliance.--The Bureau shall 
        provide the Commissioner of Internal Revenue with any report of 
        examination or related information identifying possible tax law 
        noncompliance.
            (7) Registration, recordkeeping, and other requirements for 
        certain persons.--
                    (A) In general.--The Bureau shall prescribe rules 
                to facilitate supervision of persons described in 
                subsection (a)(1) and assessment and detection of risks 
                to consumers.
                    (B) Registration.--
                            (i) In general.--The Bureau shall prescribe 
                        rules regarding registration requirements for 
                        persons described in subsection (a)(1).
                            (ii) Exception for related persons.--The 
                        Bureau may not impose requirements under this 
                        section regarding the registration of a related 
                        person.
                            (iii) Registration information.--Subject to 
                        rules prescribed by the Bureau, the Bureau 
                        shall publicly disclose the registration 
                        information about persons described in 
                        subsection (a)(1) to facilitate the ability of 
                        consumers to identify persons described in 
                        subsection (a)(1) registered with the Bureau.
                    (C) Recordkeeping.--The Bureau may require a person 
                described in subsection (a)(1), to generate, provide, 
                or retain records for the purposes of facilitating 
                supervision of such persons and assessing and detecting 
                risks to consumers.
                    (D) Requirements concerning obligations.--The 
                Bureau may prescribe rules regarding a person described 
                in subsection (a)(1), to ensure that such persons are 
                legitimate entities and are able to perform their 
                obligations to consumers. Such requirements may include 
                background checks for principals, officers, directors, 
                or key personnel and bonding or other appropriate 
                financial requirements.
                    (E) Consultation with state agencies.--In 
                developing and implementing requirements under this 
                paragraph, the Bureau shall consult with State agencies 
                regarding requirements or systems (including 
                coordinated or combined systems for registration), 
                where appropriate.
    (c) Enforcement Authority.--
            (1) The bureau to have enforcement authority.--Except as 
        provided in paragraph (3) and section 1061(b)(5), with respect 
        to any person described in subsection (a)(1), to the extent 
        that Federal law authorizes the Bureau and another Federal 
        agency to enforce Federal consumer financial law, the Bureau 
        shall have exclusive authority to enforce that Federal consumer 
        financial law.
            (2) Referral.--Any Federal agency authorized to enforce a 
        Federal consumer financial law described in paragraph (1) may 
        recommend in writing to the Bureau that the Bureau initiate an 
        enforcement proceeding, as the Bureau is authorized by that 
        Federal law or by this title.
            (3) Coordination with the federal trade commission.--
                    (A) In general.--The Bureau and the Federal Trade 
                Commission shall negotiate an agreement for 
                coordinating with respect to enforcement actions by 
                each agency regarding the offering or provision of 
                consumer financial products or services by any covered 
                person that is described in subsection (a)(1), or 
                service providers thereto. The agreement shall include 
                procedures for notice to the other agency, where 
                feasible, prior to initiating a civil action to enforce 
                any Federal law regarding the offering or provision of 
                consumer financial products or services.
                    (B) Civil actions.--Whenever a civil action has 
                been filed by, or on behalf of, the Bureau or the 
                Federal Trade Commission for any violation of any 
                provision of Federal law described in subparagraph (A), 
                or any regulation prescribed under such provision of 
                law--
                            (i) the other agency may not, during the 
                        pendency of that action, institute a civil 
                        action under such provision of law against any 
                        defendant named in the complaint in such 
                        pending action for any violation alleged in the 
                        complaint; and
                            (ii) the Bureau or the Federal Trade 
                        Commission may intervene as a party in any such 
                        action brought by the other agency, and, upon 
                        intervening--
                                    (I) be heard on all matters arising 
                                in such enforcement action; and
                                    (II) file petitions for appeal in 
                                such actions.
                    (C) Agreement terms.--The terms of any agreement 
                negotiated under subparagraph (A) may modify or 
                supersede the provisions of subparagraph (B).
                    (D) Deadline.--The agencies shall reach the 
                agreement required under subparagraph (A) not later 
                than 6 months after the designated transfer date.
    (d) Exclusive Rulemaking and Examination Authority.--
Notwithstanding any other provision of Federal law and except as 
provided in section 1061(b)(5), to the extent that Federal law 
authorizes the Bureau and another Federal agency to issue regulations 
or guidance, conduct examinations, or require reports from a person 
described in subsection (a)(1) under such law for purposes of assuring 
compliance with Federal consumer financial law and any regulations 
thereunder, the Bureau shall have the exclusive authority to prescribe 
rules, issue guidance, conduct examinations, require reports, or issue 
exemptions with regard to a person described in subsection (a)(1), 
subject to those provisions of law.
    (e) Service Providers.--A service provider to a person described in 
subsection (a)(1) shall be subject to the authority of the Bureau under 
this section, to the same extent as if such service provider were 
engaged in a service relationship with a bank, and the Bureau were an 
appropriate Federal banking agency under section 7(c) of the Bank 
Service Company Act (12 U.S.C. 1867(c)). In conducting any examination 
or requiring any report from a service provider subject to this 
subsection, the Bureau shall coordinate with the appropriate prudential 
regulator, as applicable.
    (f) Preservation of Farm Credit Administration Authority.--No 
provision of this title may be construed as modifying, limiting, or 
otherwise affecting the authority of the Farm Credit Administration.

SEC. 1025. SUPERVISION OF VERY LARGE BANKS, SAVINGS ASSOCIATIONS, AND 
              CREDIT UNIONS.

    (a) Scope of Coverage.--
            (1) Applicability.--This section shall apply to any covered 
        person that is--
                    (A) an insured depository institution with total 
                assets of more than $10,000,000,000 and any affiliate 
                thereof; or
                    (B) an insured credit union with total assets of 
                more than $10,000,000,000 and any affiliate thereof.
            (2) Rule of construction.--For purposes of determining 
        total assets under this section and section 1026, the Bureau 
        shall rely on the same regulations and interim methodologies 
        specified in section 312(e).
    (b) Supervision.--
            (1) In general.--The Bureau shall require reports and 
        conduct examinations on a periodic basis of persons described 
        in subsection (a) for purposes of--
                    (A) assessing compliance with the requirements of 
                Federal consumer financial laws;
                    (B) obtaining information about the activities and 
                compliance systems or procedures of such persons; and
                    (C) detecting and assessing risks to consumers and 
                to markets for consumer financial products and 
                services.
            (2) Coordination.--To minimize regulatory burden, the 
        Bureau shall coordinate its supervisory activities with the 
        supervisory activities conducted by prudential regulators and 
        the State bank regulatory authorities, including establishing 
        their respective schedules for examining such persons described 
        in subsection (a) and requirements regarding reports to be 
        submitted by such persons.
            (3) Use of existing reports.--The Bureau shall, to the 
        fullest extent possible, use--
                    (A) reports pertaining to a person described in 
                subsection (a) that have been provided or required to 
                have been provided to a Federal or State agency; and
                    (B) information that has been reported publicly.
            (4) Preservation of authority.--Nothing in this title may 
        be construed as limiting the authority of the Director to 
        require reports from a person described in subsection (a), as 
        permitted under paragraph (1), regarding information owned or 
        under the control of such person, regardless of whether such 
        information is maintained, stored, or processed by another 
        person.
            (5) Reports of tax law noncompliance.--The Bureau shall 
        provide the Commissioner of Internal Revenue with any report of 
        examination or related information identifying possible tax law 
        noncompliance.
    (c) Primary Enforcement Authority.--
            (1) The bureau to have primary enforcement authority.--To 
        the extent that the Bureau and another Federal agency are 
        authorized to enforce a Federal consumer financial law, the 
        Bureau shall have primary authority to enforce that Federal 
        consumer financial law with respect to any person described in 
        subsection (a).
            (2) Referral.--Any Federal agency, other than the Federal 
        Trade Commission, that is authorized to enforce a Federal 
        consumer financial law may recommend, in writing, to the Bureau 
        that the Bureau initiate an enforcement proceeding with respect 
        to a person described in subsection (a), as the Bureau is 
        authorized to do by that Federal consumer financial law.
            (3) Backup enforcement authority of other federal agency.--
        If the Bureau does not, before the end of the 120-day period 
        beginning on the date on which the Bureau receives a 
        recommendation under paragraph (2), initiate an enforcement 
        proceeding, the other agency referred to in paragraph (2) may 
        initiate an enforcement proceeding, as permitted by the subject 
        provision of Federal law.
    (d) Service Providers.--A service provider to a person described in 
subsection (a) shall be subject to the authority of the Bureau under 
this section, to the same extent as if the Bureau were an appropriate 
Federal banking agency under section 7(c) of the Bank Service Company 
Act 12 U.S.C. 1867(c). In conducting any examination or requiring any 
report from a service provider subject to this subsection, the Bureau 
shall coordinate with the appropriate prudential regulator.
    (e) Simultaneous and Coordinated Supervisory Action.--
            (1) Examinations.--A prudential regulator and the Bureau 
        shall, with respect to each insured depository institution, 
        insured credit union, or other covered person described in 
        subsection (a) that is supervised by the prudential regulator 
        and the Bureau, respectively--
                    (A) coordinate the scheduling of examinations of 
                the insured depository institution, insured credit 
                union, or other covered person described in subsection 
                (a);
                    (B) conduct simultaneous examinations of each 
                insured depository institution, insured credit union, 
                or other covered person described in subsection (a), 
                unless such institution requests examinations to be 
                conducted separately;
                    (C) share each draft report of examination with the 
                other agency and permit the receiving agency a 
                reasonable opportunity (which shall not be less than a 
                period of 30 days after the date of receipt) to comment 
                on the draft report before such report is made final; 
                and
                    (D) prior to issuing a final report of examination 
                or taking supervisory action, take into consideration 
                concerns, if any, raised in the comments made by the 
                other agency.
            (2) Coordination with state bank supervisors.--The Bureau 
        shall pursue arrangements and agreements with State bank 
        supervisors to coordinate examinations, consistent with 
        paragraph (1).
            (3) Avoidance of conflict in supervision.--
                    (A) Request.--If the proposed supervisory 
                determinations of the Bureau and a prudential regulator 
                (in this section referred to collectively as the 
                ``agencies'') are conflicting, an insured depository 
                institution, insured credit union, or other covered 
                person described in subsection (a) may request the 
                agencies to coordinate and present a joint statement of 
                coordinated supervisory action.
                    (B) Joint statement.--The agencies shall provide a 
                joint statement under subparagraph (A), not later than 
                30 days after the date of receipt of the request of the 
                insured depository institution, credit union, or 
                covered person described in subsection (a).
            (4) Appeals to governing panel.--
                    (A) In general.--If the agencies do not resolve the 
                conflict or issue a joint statement required by 
                subparagraph (B), or if either of the agencies takes or 
                attempts to take any supervisory action relating to the 
                request for the joint statement without the consent of 
                the other agency, an insured depository institution, 
                insured credit union, or other covered person described 
                in subsection (a) may institute an appeal to a 
                governing panel, as provided in this subsection, not 
                later than 30 days after the expiration of the period 
                during which a joint statement is required to be filed 
                under paragraph (3)(B).
                    (B) Composition of governing panel.--The governing 
                panel for an appeal under this paragraph shall be 
                composed of--
                            (i) a representative from the Bureau and a 
                        representative of the prudential regulator, 
                        both of whom--
                                    (I) have not participated in the 
                                material supervisory determinations 
                                under appeal; and
                                    (II) do not directly or indirectly 
                                report to the person who participated 
                                materially in the supervisory 
                                determinations under appeal; and
                            (ii) one individual representative, to be 
                        determined on a rotating basis, from among the 
                        Board of Governors, the Corporation, the 
                        National Credit Union Administration, and the 
                        Office of the Comptroller of the Currency, 
                        other than any agency involved in the subject 
                        dispute.
                    (C) Conduct of appeal.--In an appeal under this 
                paragraph--
                            (i) the insured depository institution, 
                        insured credit union, or other covered person 
                        described in subsection (a)--
                                    (I) shall include in its appeal all 
                                the facts and legal arguments 
                                pertaining to the matter; and
                                    (II) may, through counsel, 
                                employees, or representatives, appear 
                                before the governing panel in person or 
                                by telephone; and
                            (ii) the governing panel--
                                    (I) may request the insured 
                                depository institution, insured credit 
                                union, or other covered person 
                                described in subsection (a), the 
                                Bureau, or the prudential regulator to 
                                produce additional information relevant 
                                to the appeal; and
                                    (II) by a majority vote of its 
                                members, shall provide a final 
                                determination, in writing, not later 
                                than 30 days after the date of filing 
                                of an informationally complete appeal, 
                                or such longer period as the panel and 
                                the insured depository institution, 
                                insured credit union, or other covered 
                                person described in subsection (a) may 
                                jointly agree.
                    (D) Public availability of determinations.--A 
                governing panel shall publish all information contained 
                in a determination by the governing panel, with 
                appropriate redactions of information that would be 
                subject to an exemption from disclosure under section 
                552 of title 5, United States Code.
                    (E) Prohibition against retaliation.--The Bureau 
                and the prudential regulators shall prescribe rules to 
                provide safeguards from retaliation against the insured 
                depository institution, insured credit union, or other 
                covered person described in subsection (a) instituting 
                an appeal under this paragraph, as well as their 
                officers and employees.
                    (F) Limitation.--The process provided in this 
                paragraph shall not apply to a determination by a 
                prudential regulator to appoint a conservator or 
                receiver for an insured depository institution or a 
                liquidating agent for an insured credit union, as the 
                case may be, or a decision to take action pursuant to 
                section 38 of the Federal Deposit Insurance Act (12 
                U.S.C. 1831o) or section 212 of the Federal Credit 
                Union Act (112 U.S.C. 1790a), as applicable.
                    (G) Effect on other authority.--Nothing in this 
                section shall modify or limit the authority of the 
                Bureau to interpret, or take enforcement action under, 
                any Federal consumer financial law.

SEC. 1026. OTHER BANKS, SAVINGS ASSOCIATIONS, AND CREDIT UNIONS.

    (a) Scope of Coverage.--This section shall apply to any covered 
person that is--
            (1) an insured depository institution with total assets of 
        $10,000,000,000 or less; or
            (2) an insured credit union with total assets of 
        $10,000,000,000 or less.
    (b) Reports.--The Director may require reports from a person 
described in subsection (a), as necessary to support the role of the 
Bureau in implementing Federal consumer financial law, to support its 
examination activities under subsection (c), and to assess and detect 
risks to consumers and consumer financial markets.
            (1) Use of existing reports.--The Bureau shall, to the 
        fullest extent possible, use--
                    (A) reports pertaining to a person described in 
                subsection (a) that have been provided or required to 
                have been provided to a Federal or State agency; and
                    (B) information that has been reported publicly.
            (2) Preservation of authority.--Nothing in this subsection 
        may be construed as limiting the authority of the Director from 
        requiring from a person described in subsection (a), as 
        permitted under paragraph (1), information owned or under the 
        control of such person, regardless of whether such information 
        is maintained, stored, or processed by another person.
            (3) Reports of tax law noncompliance.--The Bureau shall 
        provide the Commissioner of Internal Revenue with any report of 
        examination or related information identifying possible tax law 
        noncompliance.
    (c) Examinations.--
            (1) In general.--The Bureau may, at its discretion, include 
        examiners on a sampling basis of the examinations performed by 
        the prudential regulator of persons described in subsection 
        (a).
            (2) Agency coordination.--The prudential regulator shall--
                    (A) provide all reports, records, and documentation 
                related to the examination process for any institution 
                included in the sample referred to in paragraph (1) to 
                the Bureau on a timely and continual basis;
                    (B) involve such Bureau examiner in the entire 
                examination process for such person; and
                    (C) consider input of the Bureau concerning the 
                scope of an examination, conduct of the examination, 
                the contents of the examination report, the designation 
                of matters requiring attention, and examination 
                ratings.
    (d) Enforcement.--
            (1) In general.--Except for requiring reports under 
        subsection (b), the prudential regulator shall have exclusive 
        authority to enforce compliance with respect to a person 
        described in subsection (a).
            (2) Coordination with prudential regulator.--
                    (A) Referral.--When the Bureau has reason to 
                believe that a person described in subsection (a) has 
                engaged in a material violation of a Federal consumer 
                financial law, the Bureau shall notify the prudential 
                regulator in writing and recommend appropriate action 
                to respond.
                    (B) Response.--Upon receiving a recommendation 
                under subparagraph (A), the prudential regulator shall 
                provide a written response to the Bureau not later than 
                60 days thereafter.
    (e) Service Providers.--A service provider to a substantial number 
of persons described in subsection (a) shall be subject to the 
authority of the Bureau under section 1025 to the same extent as if the 
Bureau were an appropriate Federal bank agency under section 7(c) of 
the Bank Service Company Act (12 U.S.C. 1867(c)). When conducting any 
examination or requiring any report from a service provider subject to 
this subsection, the Bureau shall coordinate with the appropriate 
prudential regulator.

SEC. 1027. LIMITATIONS ON AUTHORITIES OF THE BUREAU; PRESERVATION OF 
              AUTHORITIES.

    (a) Exclusion for Merchants, Retailers, and Other Sellers of 
Nonfinancial Goods or Services.--
            (1) Sale or brokerage of nonfinancial good or service.--The 
        Bureau may not exercise any rulemaking, supervisory, 
        enforcement or other authority under this title with respect to 
        a person who is a merchant, retailer, or seller of any 
        nonfinancial good or service and is engaged in the sale or 
        brokerage of such nonfinancial good or service, except to the 
        extent that such person is engaged in offering or providing any 
        consumer financial product or service, or is otherwise subject 
        to any enumerated consumer law or any law for which authorities 
        are transferred under subtitle F or H.
            (2) Offering or provision of certain consumer financial 
        products or services in connection with the sale or brokerage 
        of nonfinancial good or service.--
                    (A) In general.--Except as provided in subparagraph 
                (B), and subject to subparagraph (C), the Bureau may 
                not exercise any rulemaking, supervisory, enforcement, 
                or other authority under this title with respect to a 
                merchant, retailer, or seller of nonfinancial goods or 
                services, but only to the extent that such person--
                            (i) extends credit directly to a consumer, 
                        in a case in which the good or service being 
                        provided is not itself a consumer financial 
                        product or service (other than credit described 
                        in this subparagraph), exclusively for the 
                        purpose of enabling that consumer to purchase 
                        such nonfinancial good or service directly from 
                        the merchant, retailer, or seller;
                            (ii) directly, or through an agreement with 
                        another person, collects debt arising from 
                        credit extended as described in clause (i); or
                            (iii) sells or conveys debt described in 
                        clause (i) that is delinquent or otherwise in 
                        default.
                    (B) Applicability.--Subparagraph (A) does not apply 
                to any credit transaction or collection of debt, other 
                than as described in subparagraph (C)(i), arising from 
                a transaction described in subparagraph (A)--
                            (i) in which the merchant, retailer, or 
                        seller of nonfinancial goods or services 
                        assigns, sells or otherwise conveys to another 
                        person such debt owed by the consumer (except 
                        for a sale of debt that is delinquent or 
                        otherwise in default, as described in 
                        subparagraph (A)(iii));
                            (ii) in which the credit extended exceeds 
                        the market value of the nonfinancial good or 
                        service provided, or the Bureau otherwise finds 
                        that the sale of the nonfinancial good or 
                        service is done as a subterfuge, so as to evade 
                        or circumvent the provisions of this title; or
                            (iii) in which the merchant, retailer, or 
                        seller of nonfinancial goods or services 
                        regularly extends credit and the credit is 
                        subject to a finance charge.
                    (C) Limitations.--
                            (i) In general.--Notwithstanding 
                        subparagraph (B), and except as provided in 
                        clause (ii), the Bureau may not exercise any 
                        rulemaking, supervisory, enforcement, or other 
                        authority under this title with respect to a 
                        merchant, retailer, or seller of nonfinancial 
                        goods or services that is not engaged 
                        significantly in offering or providing consumer 
                        financial products or services.
                            (ii) Exception.--Subparagraph (A) and 
                        clause (i) of this subparagraph do not apply to 
                        any merchant, retailer, or seller of 
                        nonfinancial goods or services, to the extent 
                        that such person is subject to any enumerated 
                        consumer law or any law for which authorities 
                        are transferred under subtitle F or H.
                    (D) Rules.--
                            (i) Authority of other agencies.--No 
                        provision of this title shall be construed as 
                        modifying, limiting, or superseding the 
                        supervisory or enforcement authority of the 
                        Federal Trade Commission or any other agency 
                        (other than the Bureau) with respect to credit 
                        extended, or the collection of debt arising 
                        from such extension, directly by a merchant or 
                        retailer to a consumer exclusively for the 
                        purpose of enabling that consumer to purchase 
                        nonfinancial goods or services directly from 
                        the merchant or retailer.
                            (ii) Small businesses.--A merchant, 
                        retailer, or seller of nonfinancial goods or 
                        services that would otherwise be subject to the 
                        authority of the Bureau solely by virtue of the 
                        application of subparagraph (B)(iii) shall be 
                        deemed not to be engaged significantly in 
                        offering or providing consumer financial 
                        products or services under subparagraph (C)(i), 
                        if such person--
                                    (I) only extends credit for the 
                                sale of nonfinancial goods or services, 
                                as described in subparagraph (A)(i);
                                    (II) retains such credit on its own 
                                accounts (except to sell or convey such 
                                debt that is delinquent or otherwise in 
                                default); and
                                    (III) meets the relevant industry 
                                size threshold to be a small business 
                                concern, based on annual receipts, 
                                pursuant to section 3 of the Small 
                                Business Act (15 U.S.C. 632) and the 
                                implementing rules thereunder.
                            (iii) Initial year.--A merchant, retailer, 
                        or seller of nonfinancial goods or services 
                        shall be deemed to meet the relevant industry 
                        size threshold described in clause (ii)(III) 
                        during the first year of operations of that 
                        business concern if, during that year, the 
                        receipts of that business concern reasonably 
                        are expected to meet that size threshold.
                    (E) Exception from state enforcement.--To the 
                extent that the Bureau may not exercise authority under 
                this subsection with respect to a merchant, retailer, 
                or seller of nonfinancial goods or services, no action 
                by a State attorney general or State regulator with 
                respect to a claim made under this title may be brought 
                under subsection 1042(a), with respect to an activity 
                described in any of clauses (i) through (iii) of 
                subparagraph (A) by such merchant, retailer, or seller 
                of nonfinancial goods or services.
    (b) Exclusion for Real Estate Brokerage Activities.--
            (1) Real estate brokerage activities excluded.--Without 
        limiting subsection (a), and except as permitted in paragraph 
        (2), the Bureau may not exercise any rulemaking, supervisory, 
        enforcement, or other authority under this title with respect 
        to a person that is licensed or registered as a real estate 
        broker or real estate agent, in accordance with State law, to 
        the extent that such person--
                    (A) acts as a real estate agent or broker for a 
                buyer, seller, lessor, or lessee of real property;
                    (B) brings together parties interested in the sale, 
                purchase, lease, rental, or exchange of real property;
                    (C) negotiates, on behalf of any party, any portion 
                of a contract relating to the sale, purchase, lease, 
                rental, or exchange of real property (other than in 
                connection with the provision of financing with respect 
                to any such transaction); or
                    (D) offers to engage in any activity, or act in any 
                capacity, described in subparagraph (A), (B), or (C).
            (2) Description of activities.--Paragraph (1) shall not 
        apply to any person to the extent that such person is engaged 
        in the offering or provision of any consumer financial product 
        or service or is otherwise subject to any enumerated consumer 
        law or any law for which authorities are transferred under 
        subtitle F or H.
    (c) Exclusion for Manufactured Home Retailers and Modular Home 
Retailers.--
            (1) In general.--The Director may not exercise any 
        rulemaking, supervisory, enforcement, or other authority over a 
        person to the extent that--
                    (A) such person is not described in paragraph (2); 
                and
                    (B) such person--
                            (i) acts as an agent or broker for a buyer 
                        or seller of a manufactured home or a modular 
                        home;
                            (ii) facilitates the purchase by a consumer 
                        of a manufactured home or modular home, by 
                        negotiating the purchase price or terms of the 
                        sales contract (other than providing financing 
                        with respect to such transaction); or
                            (iii) offers to engage in any activity 
                        described in clause (i) or (ii).
            (2) Description of activities.--A person is described in 
        this paragraph to the extent that such person is engaged in the 
        offering or provision of any consumer financial product or 
        service or is otherwise subject to any enumerated consumer law 
        or any law for which authorities are transferred under subtitle 
        F or H.
            (3) Definitions.--For purposes of this subsection, the 
        following definitions shall apply:
                    (A) Manufactured home.--The term ``manufactured 
                home'' has the same meaning as in section 603 of the 
                National Manufactured Housing Construction and Safety 
                Standards Act of 1974 (42 U.S.C. 5402).
                    (B) Modular home.--The term ``modular home'' means 
                a house built in a factory in 2 or more modules that 
                meet the State or local building codes where the house 
                will be located, and where such modules are transported 
                to the building site, installed on foundations, and 
                completed.
    (d) Exclusion for Accountants and Tax Preparers.--
            (1) In general.--Except as permitted in paragraph (2), the 
        Bureau may not exercise any rulemaking, supervisory, 
        enforcement, or other authority over--
                    (A) any person that is a certified public 
                accountant, permitted to practice as a certified public 
                accounting firm, or certified or licensed for such 
                purpose by a State, or any individual who is employed 
                by or holds an ownership interest with respect to a 
                person described in this subparagraph, when such person 
                is performing or offering to perform--
                            (i) customary and usual accounting 
                        activities, including the provision of 
                        accounting, tax, advisory, or other services 
                        that are subject to the regulatory authority of 
                        a State board of accountancy or a Federal 
                        authority; or
                            (ii) other services that are incidental to 
                        such customary and usual accounting activities, 
                        to the extent that such incidental services are 
                        not offered or provided--
                                    (I) by the person separate and 
                                apart from such customary and usual 
                                accounting activities; or
                                    (II) to consumers who are not 
                                receiving such customary and usual 
                                accounting activities; or
                    (B) any person, other than a person described in 
                subparagraph (A) that performs income tax preparation 
                activities for consumers.
            (2) Description of activities.--
                    (A) In general.--Paragraph (1) shall not apply to 
                any person described in paragraph (1)(A) or (1)(B) to 
                the extent that such person is engaged in any activity 
                which is not a customary and usual accounting activity 
                described in paragraph (1)(A) or incidental thereto but 
                which is the offering or provision of any consumer 
                financial product or service, except to the extent that 
                a person described in paragraph (1)(A) is engaged in an 
                activity which is a customary and usual accounting 
                activity described in paragraph (1)(A), or incidental 
                thereto.
                    (B) Not a customary and usual accounting 
                activity.--For purposes of this subsection, extending 
                or brokering credit is not a customary and usual 
                accounting activity, or incidental thereto.
                    (C) Rule of construction.--For purposes of 
                subparagraphs (A) and (B), a person described in 
                paragraph (1)(A) shall not be deemed to be extending 
                credit, if such person is only extending credit 
                directly to a consumer, exclusively for the purpose of 
                enabling such consumer to purchase services described 
                in clause (i) or (ii) of paragraph (1)(A) directly from 
                such person, and such credit is--
                            (i) not subject to a finance charge; and
                            (ii) not payable by written agreement in 
                        more than 4 installments.
                    (D) Other limitations.--Paragraph (1) does not 
                apply to any person described in paragraph (1)(A) or 
                (1)(B) that is otherwise subject to any enumerated 
                consumer law or any law for which authorities are 
                transferred under subtitle F or H.
    (e) Exclusion for Attorneys.--
            (1) In general.--The Bureau may not exercise any authority 
        to conduct examinations of an attorney licensed by a State, to 
        the extent that the attorney is engaged in the practice of law 
        under the laws of such State.
            (2) Exception for enumerated consumer laws and transferred 
        authorities.--Paragraph (1) shall not apply to an attorney who 
        is engaged in the offering or provision of any consumer 
        financial product or service, or is otherwise subject to any 
        enumerated consumer law or any law for which authorities are 
        transferred under subtitle F or H.
    (f) Exclusion for Persons Regulated by a State Insurance 
Regulator.--
            (1) In general.--No provision of this title shall be 
        construed as altering, amending, or affecting the authority of 
        any State insurance regulator to adopt rules, initiate 
        enforcement proceedings, or take any other action with respect 
        to a person regulated by a State insurance regulator. Except as 
        provided in paragraph (2), the Bureau shall have no authority 
        to exercise any power to enforce this title with respect to a 
        person regulated by a State insurance regulator.
            (2) Description of activities.--Paragraph (1) does not 
        apply to any person described in such paragraph to the extent 
        that such person is engaged in the offering or provision of any 
        consumer financial product or service or is otherwise subject 
        to any enumerated consumer law or any law for which authorities 
        are transferred under subtitle F or H.
    (g) Exclusion for Employee Benefit and Compensation Plans and 
Certain Other Arrangements Under the Internal Revenue Code of 1986.--
            (1) Preservation of authority of other agencies.--No 
        provision of this title shall be construed as altering, 
        amending, or affecting the authority of the Secretary of the 
        Treasury, the Secretary of Labor, or the Commissioner of 
        Internal Revenue to adopt regulations, initiate enforcement 
        proceedings, or take any actions with respect to any specified 
        plan or arrangement.
            (2) Activities not constituting the offering or provision 
        of any consumer financial product or service.--For purposes of 
        this title, a person shall not be treated as having engaged in 
        the offering or provision of any consumer financial product or 
        service solely because such person is a specified plan or 
        arrangement, or is engaged in the activity of establishing or 
        maintaining, for the benefit of employees of such person (or 
        for members of an employee organization), any specified plan or 
        arrangement.
            (3) Limitation on bureau authority.--
                    (A) In general.--Except as provided under 
                subparagraphs (B) and (C), the Bureau may not exercise 
                any rulemaking or enforcement authority with respect to 
                products or services that relate to any specified plan 
                or arrangement.
                    (B) Bureau action only pursuant to agency 
                request.--The Secretary and the Secretary of Labor may 
                jointly issue a written request to the Bureau regarding 
                implementation of appropriate consumer protection 
                standards under this title with respect to the 
                provision of services relating to any specified plan or 
                arrangement. Subject to a request made under this 
                subparagraph, the Bureau may exercise rulemaking 
                authority, and may act to enforce a rule prescribed 
                pursuant to such request, in accordance with the 
                provisions of this title. A request made by the 
                Secretary and the Secretary of Labor under this 
                subparagraph shall describe the basis for, and scope 
                of, appropriate consumer protection standards to be 
                implemented under this title with respect to the 
                provision of services relating to any specified plan or 
                arrangement.
                    (C) Description of products or services.--To the 
                extent that a person engaged in providing products or 
                services relating to any specified plan or arrangement 
                is subject to any enumerated consumer law or any law 
                for which authorities are transferred under subtitle F 
                or H, subparagraph (A) shall not apply with respect to 
                that law.
            (4) Specified plan or arrangement.--For purposes of this 
        subsection, the term ``specified plan or arrangement'' means 
        any plan, account, or arrangement described in section 220, 
        223, 401(a), 403(a), 403(b), 408, 408A, 529, or 530 of the 
        Internal Revenue Code of 1986, or any employee benefit or 
        compensation plan or arrangement, including a plan that is 
        subject to title I of the Employee Retirement Income Security 
        Act of 1974.
    (h) Persons Regulated by a State Securities Commission.--
            (1) In general.--No provision of this title shall be 
        construed as altering, amending, or affecting the authority of 
        any securities commission (or any agency or office performing 
        like functions) of any State to adopt rules, initiate 
        enforcement proceedings, or take any other action with respect 
        to a person regulated by any securities commission (or any 
        agency or office performing like functions) of any State. 
        Except as permitted in paragraph (2) and subsection (f), the 
        Bureau shall have no authority to exercise any power to enforce 
        this title with respect to a person regulated by any securities 
        commission (or any agency or office performing like functions) 
        of any State, but only to the extent that the person acts in 
        such regulated capacity.
            (2) Description of activities.--Paragraph (1) shall not 
        apply to any person to the extent such person is engaged in the 
        offering or provision of any consumer financial product or 
        service, or is otherwise subject to any enumerated consumer law 
        or any law for which authorities are transferred under subtitle 
        F or H.
    (i) Exclusion for Persons Regulated by the Commission.--
            (1) In general.--No provision of this title may be 
        construed as altering, amending, or affecting the authority of 
        the Commission to adopt rules, initiate enforcement 
        proceedings, or take any other action with respect to a person 
        regulated by the Commission. The Bureau shall have no authority 
        to exercise any power to enforce this title with respect to a 
        person regulated by the Commission.
            (2) Consultation and coordination.--Notwithstanding 
        paragraph (1), the Commission shall consult and coordinate, 
        where feasible, with the Bureau with respect to any rule 
        (including any advance notice of proposed rulemaking) regarding 
        an investment product or service that is the same type of 
        product as, or that competes directly with, a consumer 
        financial product or service that is subject to the 
        jurisdiction of the Bureau under this title or under any other 
        law. In carrying out this paragraph, the agencies shall 
        negotiate an agreement to establish procedures for such 
        coordination, including procedures for providing advance notice 
        to the Bureau when the Commission is initiating a rulemaking.
    (j) Exclusion for Persons Regulated by the Commodity Futures 
Trading Commission.--
            (1) In general.--No provision of this title shall be 
        construed as altering, amending, or affecting the authority of 
        the Commodity Futures Trading Commission to adopt rules, 
        initiate enforcement proceedings, or take any other action with 
        respect to a person regulated by the Commodity Futures Trading 
        Commission. The Bureau shall have no authority to exercise any 
        power to enforce this title with respect to a person regulated 
        by the Commodity Futures Trading Commission.
            (2) Consultation and coordination.--Notwithstanding 
        paragraph (1), the Commodity Futures Trading Commission shall 
        consult and coordinate with the Bureau with respect to any rule 
        (including any advance notice of proposed rulemaking) regarding 
        a product or service that is the same type of product as, or 
        that competes directly with, a consumer financial product or 
        service that is subject to the jurisdiction of the Bureau under 
        this title or under any other law.
    (k) Exclusion for Persons Regulated by the Farm Credit 
Administration.--
            (1) In general.--No provision of this title shall be 
        construed as altering, amending, or affecting the authority of 
        the Farm Credit Administration to adopt rules, initiate 
        enforcement proceedings, or take any other action with respect 
        to a person regulated by the Farm Credit Administration. The 
        Bureau shall have no authority to exercise any power to enforce 
        this title with respect to a person regulated by the Farm 
        Credit Administration.
            (2) Definition.--For purposes of this subsection, the term 
        ``person regulated by the Farm Credit Administration'' means 
        any Farm Credit System institution that is chartered and 
        subject to the provisions of the Farm Credit Act of 1971 (12 
        U.S.C. 2001 et seq.).
    (l) Exclusion for Activities Relating to Charitable 
Contributions.--
            (1) In general.--The Director and the Bureau may not 
        exercise any rulemaking, supervisory, enforcement, or other 
        authority, including authority to order penalties, over any 
        activities related to the solicitation or making of voluntary 
        contributions to a tax-exempt organization as recognized by the 
        Internal Revenue Service, by any agent, volunteer, or 
        representative of such organizations to the extent the 
        organization, agent, volunteer, or representative thereof is 
        soliciting or providing advice, information, education, or 
        instruction to any donor or potential donor relating to a 
        contribution to the organization.
            (2) Limitation.--The exclusion in paragraph (1) does not 
        apply to other activities not described in paragraph (1) that 
        are the offering or provision of any consumer financial product 
        or service, or are otherwise subject to any enumerated consumer 
        law or any law for which authorities are transferred under 
        subtitle F or H.
    (m) Insurance.--The Bureau may not define as a financial product or 
service, by regulation or otherwise, engaging in the business of 
insurance.
    (n) Limited Authority of the Bureau.--Notwithstanding subsections 
(a) through (h) and (l), a person subject to or described in one or 
more of such subsections--
            (1) may be a service provider; and
            (2) may be subject to requests from, or requirements 
        imposed by, the Bureau regarding information in order to carry 
        out the responsibilities and functions of the Bureau and in 
        accordance with section 1022, 1052, or 1053.
    (o) No Authority To Impose Usury Limit.--No provision of this title 
shall be construed as conferring authority on the Bureau to establish a 
usury limit applicable to an extension of credit offered or made by a 
covered person to a consumer, unless explicitly authorized by law.
    (p) Attorney General.--No provision of this title, including 
section 1024(c)(1), shall affect the authorities of the Attorney 
General under otherwise applicable provisions of law.
    (q) Secretary of the Treasury.--No provision of this title shall 
affect the authorities of the Secretary, including with respect to 
prescribing rules, initiating enforcement proceedings, or taking other 
actions with respect to a person that performs income tax preparation 
activities for consumers.
    (r) Deposit Insurance and Share Insurance.--Nothing in this title 
shall affect the authority of the Corporation under the Federal Deposit 
Insurance Act or the National Credit Union Administration Board under 
the Federal Credit Union Act as to matters related to deposit insurance 
and share insurance, respectively.

SEC. 1028. AUTHORITY TO RESTRICT MANDATORY PRE-DISPUTE ARBITRATION.

    (a) Study and Report.--The Bureau shall conduct a study of, and 
shall provide a report to Congress concerning, the use of agreements 
providing for arbitration of any future dispute between covered persons 
and consumers in connection with the offering or providing of consumer 
financial products or services.
    (b) Further Authority.--The Bureau, by regulation, may prohibit or 
impose conditions or limitations on the use of an agreement between a 
covered person and a consumer for a consumer financial product or 
service providing for arbitration of any future dispute between the 
parties, if the Bureau finds that such a prohibition or imposition of 
conditions or limitations is in the public interest and for the 
protection of consumers. The findings in such rule shall be consistent 
with the study conducted under subsection (a).
    (c) Limitation.--The authority described in subsection (b) may not 
be construed to prohibit or restrict a consumer from entering into a 
voluntary arbitration agreement with a covered person after a dispute 
has arisen.
    (d) Effective Date.--Notwithstanding any other provision of law, 
any regulation prescribed by the Bureau under subsection (a) shall 
apply, consistent with the terms of the regulation, to any agreement 
between a consumer and a covered person entered into after the end of 
the 180-day period beginning on the effective date of the regulation, 
as established by the Bureau.

SEC. 1029. EFFECTIVE DATE.

    This subtitle shall become effective on the designated transfer 
date.

                Subtitle C--Specific Bureau Authorities

SEC. 1031. PROHIBITING UNFAIR, DECEPTIVE, OR ABUSIVE ACTS OR PRACTICES.

    (a) In General.--The Bureau may take any action authorized under 
subtitle E to prevent a covered person or service provider from 
committing or engaging in an unfair, deceptive, or abusive act or 
practice under Federal law in connection with any transaction with a 
consumer for a consumer financial product or service, or the offering 
of a consumer financial product or service.
    (b) Rulemaking.--The Bureau may prescribe rules applicable to a 
covered person or service provider identifying as unlawful unfair, 
deceptive, or abusive acts or practices in connection with any 
transaction with a consumer for a consumer financial product or 
service, or the offering of a consumer financial product or service. 
Rules under this section may include requirements for the purpose of 
preventing such acts or practices.
    (c) Unfairness.--
            (1) In general.--The Bureau shall have no authority under 
        this section to declare an act or practice in connection with a 
        transaction with a consumer for a consumer financial product or 
        service, or the offering of a consumer financial product or 
        service, to be unlawful on the grounds that such act or 
        practice is unfair, unless the Bureau has a reasonable basis to 
        conclude that--
                    (A) the act or practice causes or is likely to 
                cause substantial injury to consumers which is not 
                reasonably avoidable by consumers; and
                    (B) such substantial injury is not outweighed by 
                countervailing benefits to consumers or to competition.
            (2) Consideration of public policies.--In determining 
        whether an act or practice is unfair, the Bureau may consider 
        established public policies as evidence to be considered with 
        all other evidence. Such public policy considerations may not 
        serve as a primary basis for such determination.
    (d) Abusive.--The Bureau shall have no authority under this section 
to declare an act or practice abusive in connection with the provision 
of a consumer financial product or service, unless the act or 
practice--
            (1) materially interferes with the ability of a consumer to 
        understand a term or condition of a consumer financial product 
        or service; or
            (2) takes unreasonable advantage of--
                    (A) a lack of understanding on the part of the 
                consumer of the material risks, costs, or conditions of 
                the product or service;
                    (B) the inability of the consumer to protect the 
                interests of the consumer in selecting or using a 
                consumer financial product or service; or
                    (C) the reasonable reliance by the consumer on a 
                covered person to act in the interests of the consumer.
    (e) Consultation.--In prescribing rules under this section, the 
Bureau shall consult with the Federal banking agencies, or other 
Federal agencies, as appropriate, concerning the consistency of the 
proposed rule with prudential, market, or systemic objectives 
administered by such agencies.
    (f) Consideration of Seasonal Income.--The rules of the Bureau 
under this section shall provide, with respect to an extension of 
credit secured by residential real estate or a dwelling, if documented 
income of the borrower, including income from a small business, is a 
repayment source for an extension of credit secured by residential real 
estate or a dwelling, the creditor may consider the seasonality and 
irregularity of such income in the underwriting of and scheduling of 
payments for such credit.

SEC. 1032. DISCLOSURES.

    (a) In General.--The Bureau may prescribe rules to ensure that the 
features of any consumer financial product or service, both initially 
and over the term of the product or service, are fully, accurately, and 
effectively disclosed to consumers in a manner that permits consumers 
to understand the costs, benefits, and risks associated with the 
product or service, in light of the facts and circumstances.
    (b) Model Disclosures.--
            (1) In general.--Any final rule prescribed by the Bureau 
        under this section requiring disclosures may include a model 
        form that may be used at the option of the covered person for 
        provision of the required disclosures.
            (2) Format.--A model form issued pursuant to paragraph (1) 
        shall contain a clear and conspicuous disclosure that, at a 
        minimum--
                    (A) uses plain language comprehensible to 
                consumers;
                    (B) contains a clear format and design, such as an 
                easily readable type font; and
                    (C) succinctly explains the information that must 
                be communicated to the consumer.
            (3) Consumer testing.--Any model form issued pursuant to 
        this subsection shall be validated through consumer testing.
    (c) Basis for Rulemaking.--In prescribing rules under this section, 
the Bureau shall consider available evidence about consumer awareness, 
understanding of, and responses to disclosures or communications about 
the risks, costs, and benefits of consumer financial products or 
services.
    (d) Safe Harbor.--Any covered person that uses a model form 
included with a rule issued under this section shall be deemed to be in 
compliance with the disclosure requirements of this section with 
respect to such model form.
    (e) Trial Disclosure Programs.--
            (1) In general.--The Bureau may permit a covered person to 
        conduct a trial program that is limited in time and scope, 
        subject to specified standards and procedures, for the purpose 
        of providing trial disclosures to consumers that are designed 
        to improve upon any model form issued pursuant to subsection 
        (b)(1), or any other model form issued to implement an 
        enumerated statute, as applicable.
            (2) Safe harbor.--The standards and procedures issued by 
        the Bureau shall be designed to encourage covered persons to 
        conduct trial disclosure programs. For the purposes of 
        administering this subsection, the Bureau may establish a 
        limited period during which a covered person conducting a trial 
        disclosure program shall be deemed to be in compliance with, or 
        may be exempted from, a requirement of a rule or an enumerated 
        consumer law.
            (3) Public disclosure.--The rules of the Bureau shall 
        provide for public disclosure of trial disclosure programs, 
        which public disclosure may be limited, to the extent necessary 
        to encourage covered persons to conduct effective trials.
    (f) Combined Mortgage Loan Disclosure.--Not later than 1 year after 
the designated transfer date, the Bureau shall propose for public 
comment rules and model disclosures that combine the disclosures 
required under the Truth in Lending Act and the Real Estate Settlement 
Procedures Act of 1974, into a single, integrated disclosure for 
mortgage loan transactions covered by those laws, unless the Bureau 
determines that any proposal issued by the Board of Governors and the 
Secretary of Housing and Urban Development carries out the same 
purpose.

SEC. 1033. CONSUMER RIGHTS TO ACCESS INFORMATION.

    (a) In General.--Subject to rules prescribed by the Bureau, a 
covered person shall make available to a consumer, upon request, 
information in the control or possession of the covered person 
concerning the consumer financial product or service that the consumer 
obtained from such covered person, including information relating to 
any transaction, series of transactions, or to the account including 
costs, charges and usage data. The information shall be made available 
in an electronic form usable by consumers.
    (b) Exceptions.--A covered person may not be required by this 
section to make available to the consumer--
            (1) any confidential commercial information, including an 
        algorithm used to derive credit scores or other risk scores or 
        predictors;
            (2) any information collected by the covered person for the 
        purpose of preventing fraud or money laundering, or detecting, 
        or making any report regarding other unlawful or potentially 
        unlawful conduct;
            (3) any information required to be kept confidential by any 
        other provision of law; or
            (4) any information that the covered person cannot retrieve 
        in the ordinary course of its business with respect to that 
        information.
    (c) No Duty To Maintain Records.--Nothing in this section shall be 
construed to impose any duty on a covered person to maintain or keep 
any information about a consumer.
    (d) Standardized Formats for Data.--The Bureau, by rule, shall 
prescribe standards applicable to covered persons to promote the 
development and use of standardized formats for information, including 
through the use of machine readable files, to be made available to 
consumers under this section.
    (e) Consultation.--The Bureau shall, when prescribing any rule 
under this section, consult with the Federal banking agencies and the 
Federal Trade Commission to ensure, to the extent appropriate, that the 
rules--
            (1) impose substantively similar requirements on covered 
        persons;
            (2) take into account conditions under which covered 
        persons do business both in the United States and in other 
        countries; and
            (3) do not require or promote the use of any particular 
        technology in order to develop systems for compliance.

SEC. 1034. RESPONSE TO CONSUMER COMPLAINTS AND INQUIRIES.

    (a) Timely Regulator Response to Consumers.--The Bureau shall 
establish, in consultation with the appropriate Federal regulatory 
agencies, reasonable procedures to provide a timely response to 
consumers, in writing where appropriate, to complaints against, or 
inquiries concerning, a covered person, including--
            (1) steps that have been taken by the regulator in response 
        to the complaint or inquiry of the consumer;
            (2) any responses received by the regulator from the 
        covered person; and
            (3) any follow-up actions or planned follow-up actions by 
        the regulator in response to the complaint or inquiry of the 
        consumer.
    (b) Timely Response to Regulator by Covered Person.--A covered 
person subject to supervision and primary enforcement by the Bureau 
pursuant to section 1025 shall provide a timely response, in writing 
where appropriate, to the Bureau, the prudential regulators, and any 
other agency having jurisdiction over such covered person concerning a 
consumer complaint or inquiry, including--
            (1) steps that have been taken by the covered person to 
        respond to the complaint or inquiry of the consumer;
            (2) responses received by the covered person from the 
        consumer; and
            (3) follow-up actions or planned follow-up actions by the 
        covered person to respond to the complaint or inquiry of the 
        consumer.
    (c) Provision of Information to Consumers.--
            (1) In general.--A covered person subject to supervision 
        and primary enforcement by the Bureau pursuant to section 1025 
        shall, in a timely manner, comply with a consumer request for 
        information in the control or possession of such covered person 
        concerning the consumer financial product or service that the 
        consumer obtained from such covered person, including 
        supporting written documentation, concerning the account of the 
        consumer.
            (2) Exceptions.--A covered person subject to supervision 
        and primary enforcement by the Bureau pursuant to section 1025, 
        a prudential regulator, and any other agency having 
        jurisdiction over a covered person subject to supervision and 
        primary enforcement by the Bureau pursuant to section 1025 may 
        not be required by this section to make available to the 
        consumer--
                    (A) any confidential commercial information, 
                including an algorithm used to derive credit scores or 
                other risk scores or predictors;
                    (B) any information collected by the covered person 
                for the purpose of preventing fraud or money 
                laundering, or detecting or making any report regarding 
                other unlawful or potentially unlawful conduct;
                    (C) any information required to be kept 
                confidential by any other provision of law; or
                    (D) any nonpublic or confidential information, 
                including confidential supervisory information.
    (d) Agreements With Other Agencies.--The Bureau shall enter into a 
memorandum of understanding with any affected Federal regulatory agency 
regarding procedures by which any covered person, and the prudential 
regulators, and any other agency having jurisdiction over a covered 
person, including the Secretary of the Department of Housing and Urban 
Development and the Secretary of Education, shall comply with this 
section.

SEC. 1035. PRIVATE EDUCATION LOAN OMBUDSMAN.

    (a) Establishment.--The Secretary, in consultation with the 
Director, shall designate a Private Education Loan Ombudsman (in this 
section referred to as the ``Ombudsman'') within the Bureau, to provide 
timely assistance to borrowers of private education loans.
    (b) Public Information.--The Secretary and the Director shall 
disseminate information about the availability and functions of the 
Ombudsman to borrowers and potential borrowers, as well as institutions 
of higher education, lenders, guaranty agencies, loan servicers, and 
other participants in private education student loan programs.
    (c) Functions of Ombudsman.--The Ombudsman designated under this 
subsection shall--
            (1) in accordance with regulations of the Director, 
        receive, review, and attempt to resolve informally complaints 
        from borrowers of loans described in subsection (a), including, 
        as appropriate, attempts to resolve such complaints in 
        collaboration with the Department of Education and with 
        institutions of higher education, lenders, guaranty agencies, 
        loan servicers, and other participants in private education 
        loan programs;
            (2) not later than 90 days after the designated transfer 
        date, establish a memorandum of understanding with the student 
        loan ombudsman established under section 141(f) of the Higher 
        Education Act of 1965 (20 U.S.C. 1018(f)), to ensure 
        coordination in providing assistance to and serving borrowers 
        seeking to resolve complaints related to their private 
        education or Federal student loans;
            (3) compile and analyze data on borrower complaints 
        regarding private education loans; and
            (4) make appropriate recommendations to the Director, the 
        Secretary, the Secretary of Education, the Committee on 
        Banking, Housing, and Urban Affairs and the Committee on 
        Health, Education, Labor, and Pensions of the Senate and the 
        Committee on Financial Services and the Committee on Education 
        and Labor of the House of Representatives.
    (d) Annual Reports.--
            (1) In general.--The Ombudsman shall prepare an annual 
        report that describes the activities, and evaluates the 
        effectiveness of the Ombudsman during the preceding year.
            (2) Submission.--The report required by paragraph (1) shall 
        be submitted on the same date annually to the Secretary, the 
        Secretary of Education, the Committee on Banking, Housing, and 
        Urban Affairs and the Committee on Health, Education, Labor, 
        and Pensions of the Senate and the Committee on Financial 
        Services and the Committee on Education and Labor of the House 
        of Representatives.
    (e) Definitions.--For purposes of this section, the terms ``private 
education loan'' and ``institution of higher education'' have the same 
meanings as in section 140 of the Truth in Lending Act (15 U.S.C. 
1650).

SEC. 1036. PROHIBITED ACTS.

    It shall be unlawful for any person--
            (1) to--
                    (A) advertise, market, offer, or sell a consumer 
                financial product or service not in conformity with 
                this title or applicable rules or orders issued by the 
                Bureau;
                    (B) enforce, or attempt to enforce, any agreement 
                with a consumer (including any term or change in terms 
                in respect of such agreement), or impose, or attempt to 
                impose, any fee or charge on a consumer in connection 
                with a consumer financial product or service that is 
                not in conformity with this title or applicable rules 
                or orders issued by the Bureau; or
                    (C) engage in any unfair, deceptive, or abusive act 
                or practice,
                except that no person shall be held to have violated 
                this paragraph solely by virtue of providing or selling 
                time or space to a person placing an advertisement;
            (2) to fail or refuse, as required by Federal consumer 
        financial law, or any rule or order issued by the Bureau 
        thereunder--
                    (A) to permit access to or copying of records;
                    (B) to establish or maintain records; or
                    (C) to make reports or provide information to the 
                Bureau; or
            (3) knowingly or recklessly to provide substantial 
        assistance to another person in violation of the provisions of 
        section 1031, or any rule or order issued thereunder, and 
        notwithstanding any provision of this title, the provider of 
        such substantial assistance shall be deemed to be in violation 
        of that section to the same extent as the person to whom such 
        assistance is provided.

SEC. 1037. EFFECTIVE DATE.

    This subtitle shall take effect on the designated transfer date.

                 Subtitle D--Preservation of State Law

SEC. 1041. RELATION TO STATE LAW.

    (a) In General.--
            (1) Rule of construction.--This title, other than sections 
        1044 through 1048, may not be construed as annulling, altering, 
        or affecting, or exempting any person subject to the provisions 
        of this title from complying with, the statutes, regulations, 
        orders, or interpretations in effect in any State, except to 
        the extent that any such provision of law is inconsistent with 
        the provisions of this title, and then only to the extent of 
        the inconsistency.
            (2) Greater protection under state law.--For purposes of 
        this subsection, a statute, regulation, order, or 
        interpretation in effect in any State is not inconsistent with 
        the provisions of this title if the protection that such 
        statute, regulation, order, or interpretation affords to 
        consumers is greater than the protection provided under this 
        title. A determination regarding whether a statute, regulation, 
        order, or interpretation in effect in any State is inconsistent 
        with the provisions of this title may be made by the Bureau on 
        its own motion or in response to a nonfrivolous petition 
        initiated by any interested person.
    (b) Relation to Other Provisions of Enumerated Consumer Laws That 
Relate to State Law.--No provision of this title, except as provided in 
section 1083, shall be construed as modifying, limiting, or superseding 
the operation of any provision of an enumerated consumer law that 
relates to the application of a law in effect in any State with respect 
to such Federal law.
    (c) Additional Consumer Protection Regulations in Response to State 
Action.--
            (1) Notice of proposed rule required.--The Bureau shall 
        issue a notice of proposed rulemaking whenever a majority of 
        the States has enacted a resolution in support of the 
        establishment or modification of a consumer protection 
        regulation by the Bureau.
            (2) Bureau considerations required for issuance of final 
        regulation.--Before prescribing a final regulation based upon a 
        notice issued pursuant to paragraph (1), the Bureau shall take 
        into account whether--
                    (A) the proposed regulation would afford greater 
                protection to consumers than any existing regulation;
                    (B) the intended benefits of the proposed 
                regulation for consumers would outweigh any increased 
                costs or inconveniences for consumers, and would not 
                discriminate unfairly against any category or class of 
                consumers; and
                    (C) a Federal banking agency has advised that the 
                proposed regulation is likely to present an 
                unacceptable safety and soundness risk to insured 
                depository institutions.
            (3) Explanation of considerations.--The Bureau--
                    (A) shall include a discussion of the 
                considerations required in paragraph (2) in the Federal 
                Register notice of a final regulation prescribed 
                pursuant to this subsection; and
                    (B) whenever the Bureau determines not to prescribe 
                a final regulation, shall publish an explanation of 
                such determination in the Federal Register, and provide 
                a copy of such explanation to each State that enacted a 
                resolution in support of the proposed regulation, the 
                Committee on Financial Services of the House of 
                Representatives, and the Committee on Banking, Housing, 
                and Urban Affairs of the Senate.
            (4) Reservation of authority.--No provision of this 
        subsection shall be construed as limiting or restricting the 
        authority of the Bureau to enhance consumer protection 
        standards established pursuant to this title in response to its 
        own motion or in response to a request by any other interested 
        person.
            (5) Rule of construction.--No provision of this subsection 
        shall be construed as exempting the Bureau from complying with 
        subchapter II of chapter 5 of title 5, United States Code.
            (6) Definition.--For purposes of this subsection, the term 
        ``consumer protection regulation'' means a regulation that the 
        Bureau is authorized to prescribe under the Federal consumer 
        financial laws.

SEC. 1042. PRESERVATION OF ENFORCEMENT POWERS OF STATES.

    (a) In General.--
            (1) Action by state.--Except as provided in paragraph (2), 
        the attorney general (or the equivalent thereof) of any State 
        may bring a civil action in the name of such State in any 
        district court of the United States in that State or in State 
        court that is located in that State and that has jurisdiction 
        over the defendant, to enforce provisions of this title or 
        regulations issued under this title, and to secure remedies 
        under provisions of this title or remedies otherwise provided 
        under other law. A State regulator may bring a civil action or 
        other appropriate proceeding to enforce the provisions of this 
        title or regulations issued under this title with respect to 
        any entity that is State-chartered, incorporated, licensed, or 
        otherwise authorized to do business under State law (except as 
        provided in paragraph (2)), and to secure remedies under 
        provisions of this title or remedies otherwise provided under 
        other provisions of law with respect to such an entity.
            (2) Action by state against national bank or federal 
        savings association to enforce rules.--
                    (A) In general.--Except as permitted under 
                subparagraph (B), the attorney general (or equivalent 
                thereof) of any State may not bring a civil action in 
                the name of such State against a national bank or 
                Federal savings association with respect to an act or 
                omission that would be a violation of a provision of 
                this title.
                    (B) Enforcement of rules permitted.--The attorney 
                general (or the equivalent thereof) of any State may 
                bring a civil action in the name of such State against 
                a national bank or Federal savings association in any 
                district court of the United States in the State or in 
                State court that is located in that State and that has 
                jurisdiction over the defendant to enforce a regulation 
                prescribed by the Bureau under a provision of this 
                title and to secure remedies under provisions of this 
                title or remedies otherwise provided under other law.
            (3) Rule of construction.--No provision of this title shall 
        be construed as modifying, limiting, or superseding the 
        operation of any provision of an enumerated consumer law that 
        relates to the authority of a State attorney general or State 
        regulator to enforce such Federal law.
    (b) Consultation Required.--
            (1) Notice.--
                    (A) In general.--Before initiating any action in a 
                court or other administrative or regulatory proceeding 
                against any covered person as authorized by subsection 
                (a) to enforce any provision of this title, including 
                any regulation prescribed by the Bureau under this 
                title, a State attorney general or State regulator 
                shall timely provide a copy of the complete complaint 
                to be filed and written notice describing such action 
                or proceeding to the Bureau and the prudential 
                regulator, if any, or the designee thereof.
                    (B) Emergency action.--If prior notice is not 
                practicable, the State attorney general or State 
                regulator shall provide a copy of the complete 
                complaint and the notice to the Bureau and the 
                prudential regulator, if any, immediately upon 
                instituting the action or proceeding.
                    (C) Contents of notice.--The notification required 
                under this paragraph shall, at a minimum, describe--
                            (i) the identity of the parties;
                            (ii) the alleged facts underlying the 
                        proceeding; and
                            (iii) whether there may be a need to 
                        coordinate the prosecution of the proceeding so 
                        as not to interfere with any action, including 
                        any rulemaking, undertaken by the Bureau, a 
                        prudential regulator, or another Federal 
                        agency.
            (2) Bureau response.--In any action described in paragraph 
        (1), the Bureau may--
                    (A) intervene in the action as a party;
                    (B) upon intervening--
                            (i) remove the action to the appropriate 
                        United States district court, if the action was 
                        not originally brought there; and
                            (ii) be heard on all matters arising in the 
                        action; and
                    (C) appeal any order or judgment, to the same 
                extent as any other party in the proceeding may.
    (c) Regulations.--The Bureau shall prescribe regulations to 
implement the requirements of this section and, from time to time, 
provide guidance in order to further coordinate actions with the State 
attorneys general and other regulators.
    (d) Preservation of State Authority.--
            (1) State claims.--No provision of this section shall be 
        construed as altering, limiting, or affecting the authority of 
        a State attorney general or any other regulatory or enforcement 
        agency or authority to bring an action or other regulatory 
        proceeding arising solely under the law in effect in that 
        State.
            (2) State securities regulators.--No provision of this 
        title shall be construed as altering, limiting, or affecting 
        the authority of a State securities commission (or any agency 
        or office performing like functions) under State law to adopt 
        rules, initiate enforcement proceedings, or take any other 
        action with respect to a person regulated by such commission or 
        authority.
            (3) State insurance regulators.--No provision of this title 
        shall be construed as altering, limiting, or affecting the 
        authority of a State insurance commission or State insurance 
        regulator under State law to adopt rules, initiate enforcement 
        proceedings, or take any other action with respect to a person 
        regulated by such commission or regulator.

SEC. 1043. PRESERVATION OF EXISTING CONTRACTS.

    This title, and regulations, orders, guidance, and interpretations 
prescribed, issued, or established by the Bureau, shall not be 
construed to alter or affect the applicability of any regulation, 
order, guidance, or interpretation prescribed, issued, and established 
by the Comptroller of the Currency or the Director of the Office of 
Thrift Supervision regarding the applicability of State law under 
Federal banking law to any contract entered into on or before the date 
of enactment of this Act, by national banks, Federal savings 
associations, or subsidiaries thereof that are regulated and supervised 
by the Comptroller of the Currency or the Director of the Office of 
Thrift Supervision, respectively.

SEC. 1044. STATE LAW PREEMPTION STANDARDS FOR NATIONAL BANKS AND 
              SUBSIDIARIES CLARIFIED.

    (a) In General.--Chapter one of title LXII of the Revised Statutes 
of the United States (12 U.S.C. 21 et seq.) is amended by inserting 
after section 5136B the following new section:

``SEC. 5136C. STATE LAW PREEMPTION STANDARDS FOR NATIONAL BANKS AND 
              SUBSIDIARIES CLARIFIED.

    ``(a) Definitions.--For purposes of this section, the following 
definitions shall apply:
            ``(1) National bank.--The term `national bank' includes--
                    ``(A) any bank organized under the laws of the 
                United States; and
                    ``(B) any Federal branch established in accordance 
                with the International Banking Act of 1978.
            ``(2) State consumer financial laws.--The term `State 
        consumer financial law' means a State law that does not 
        directly or indirectly discriminate against national banks and 
        that directly and specifically regulates the manner, content, 
        or terms and conditions of any financial transaction (as may be 
        authorized for national banks to engage in), or any account 
        related thereto, with respect to a consumer.
            ``(3) Other definitions.--The terms `affiliate', 
        `subsidiary', `includes', and `including' have the same 
        meanings as in section 3 of the Federal Deposit Insurance Act.
    ``(b) Preemption Standard.--
            ``(1) In general.--State consumer financial laws are 
        preempted, only if--
                    ``(A) application of a State consumer financial law 
                would have a discriminatory effect on national banks, 
                in comparison with the effect of the law on a bank 
                chartered by that State;
                    ``(B) the State consumer financial law is preempted 
                in accordance with the legal standard of the decision 
                of the Supreme Court of the United States in Barnett 
                Bank of Marion County, N.A. v. Nelson, Florida 
                Insurance Commissioner, et al., 517 U.S. 25 (1996), and 
                any preemption determination under this subparagraph 
                may be made by a court, or by regulation or order of 
                the Comptroller of the Currency on a case-by-case 
                basis, in accordance with applicable law; or
                    ``(C) the State consumer financial law is preempted 
                by a provision of Federal law other than this title.
            ``(2) Savings clause.--This title and section 24 of the 
        Federal Reserve Act (12 U.S.C. 371) do not preempt, annul, or 
        affect the applicability of any State law to any subsidiary or 
        affiliate of a national bank (other than a subsidiary or 
        affiliate that is chartered as a national bank).
            ``(3) Case-by-case basis.--
                    ``(A) Definition.--As used in this section the term 
                `case-by-case basis' refers to a determination pursuant 
                to this section made by the Comptroller concerning the 
                impact of a particular State consumer financial law on 
                any national bank that is subject to that law, or the 
                law of any other State with substantively equivalent 
                terms.
                    ``(B) Consultation.--When making a determination on 
                a case-by-case basis that a State consumer financial 
                law of another State has substantively equivalent terms 
                as one that the Comptroller is preempting, the 
                Comptroller shall first consult with the Bureau of 
                Consumer Financial Protection and shall take the views 
                of the Bureau into account when making the 
                determination.
            ``(4) Rule of construction.--This title does not occupy the 
        field in any area of State law.
            ``(5) Standards of review.--
                    ``(A) Preemption.--A court reviewing any 
                determinations made by the Comptroller regarding 
                preemption of a State law by this title or section 24 
                of the Federal Reserve Act (12 U.S.C. 371) shall assess 
                the validity of such determinations, depending upon the 
                thoroughness evident in the consideration of the 
                agency, the validity of the reasoning of the agency, 
                the consistency with other valid determinations made by 
                the agency, and other factors which the court finds 
                persuasive and relevant to its decision.
                    ``(B) Savings clause.--Except as provided in 
                subparagraph (A), nothing in this section shall affect 
                the deference that a court may afford to the 
                Comptroller in making determinations regarding the 
                meaning or interpretation of title LXII of the Revised 
                Statutes of the United States or other Federal laws.
            ``(6) Comptroller determination not delegable.--Any 
        regulation, order, or determination made by the Comptroller of 
        the Currency under paragraph (1)(B) shall be made by the 
        Comptroller, and shall not be delegable to another officer or 
        employee of the Comptroller of the Currency.
    ``(c) Substantial Evidence.--No regulation or order of the 
Comptroller of the Currency prescribed under subsection (b)(1)(B), 
shall be interpreted or applied so as to invalidate, or otherwise 
declare inapplicable to a national bank, the provision of the State 
consumer financial law, unless substantial evidence, made on the record 
of the proceeding, supports the specific finding regarding the 
preemption of such provision in accordance with the legal standard of 
the decision of the Supreme Court of the United States in Barnett Bank 
of Marion County, N.A. v. Nelson, Florida Insurance Commissioner, et 
al., 517 U.S. 25 (1996).
    ``(d) Periodic Review of Preemption Determinations.--
            ``(1) In general.--The Comptroller of the Currency shall 
        periodically conduct a review, through notice and public 
        comment, of each determination that a provision of Federal law 
        preempts a State consumer financial law. The agency shall 
        conduct such review within the 5-year period after prescribing 
        or otherwise issuing such determination, and at least once 
        during each 5-year period thereafter. After conducting the 
        review of, and inspecting the comments made on, the 
        determination, the agency shall publish a notice in the Federal 
        Register announcing the decision to continue or rescind the 
        determination or a proposal to amend the determination. Any 
        such notice of a proposal to amend a determination and the 
        subsequent resolution of such proposal shall comply with the 
        procedures set forth in subsections (a) and (b) of section 5244 
        of the Revised Statutes of the United States (12 U.S.C. 43 (a), 
        (b)).
            ``(2) Reports to congress.--At the time of issuing a review 
        conducted under paragraph (1), the Comptroller of the Currency 
        shall submit a report regarding such review to the Committee on 
        Financial Services of the House of Representatives and the 
        Committee on Banking, Housing, and Urban Affairs of the Senate. 
        The report submitted to the respective committees shall address 
        whether the agency intends to continue, rescind, or propose to 
        amend any determination that a provision of Federal law 
        preempts a State consumer financial law, and the reasons 
        therefor.
    ``(e) Application of State Consumer Financial Law to Subsidiaries 
and Affiliates.--Notwithstanding any provision of this title or section 
24 of Federal Reserve Act (12 U.S.C. 371), a State consumer financial 
law shall apply to a subsidiary or affiliate of a national bank (other 
than a subsidiary or affiliate that is chartered as a national bank) to 
the same extent that the State consumer financial law applies to any 
person, corporation, or other entity subject to such State law.
    ``(f) Preservation of Powers Related to Charging Interest.--No 
provision of this title shall be construed as altering or otherwise 
affecting the authority conferred by section 5197 of the Revised 
Statutes of the United States (12 U.S.C. 85) for the charging of 
interest by a national bank at the rate allowed by the laws of the 
State, territory, or district where the bank is located, including with 
respect to the meaning of `interest' under such provision.
    ``(g) Transparency of OCC Preemption Determinations.--The 
Comptroller of the Currency shall publish and update no less frequently 
than quarterly, a list of preemption determinations by the Comptroller 
of the Currency then in effect that identifies the activities and 
practices covered by each determination and the requirements and 
constraints determined to be preempted.''.
    (b) Clerical Amendment.--The table of sections for chapter one of 
title LXII of the Revised Statutes of the United States is amended by 
inserting after the item relating to section 5136B the following new 
item:

``Sec. 5136C. State law preemption standards for national banks and 
                            subsidiaries clarified.''.

SEC. 1045. CLARIFICATION OF LAW APPLICABLE TO NONDEPOSITORY INSTITUTION 
              SUBSIDIARIES.

    Section 5136C of the Revised Statutes of the United States (as 
added by this subtitle) is amended by adding at the end the following:
    ``(h) Clarification of Law Applicable to Nondepository Institution 
Subsidiaries and Affiliates of National Banks.--
            ``(1) Definitions.--For purposes of this subsection, the 
        terms `depository institution', `subsidiary', and `affiliate' 
        have the same meanings as in section 3 of the Federal Deposit 
        Insurance Act.
            ``(2) Rule of construction.--No provision of this title or 
        section 24 of the Federal Reserve Act (12 U.S.C. 371) shall be 
        construed as preempting, annulling, or affecting the 
        applicability of State law to any subsidiary, affiliate, or 
        agent of a national bank (other than a subsidiary, affiliate, 
        or agent that is chartered as a national bank).''.

SEC. 1046. STATE LAW PREEMPTION STANDARDS FOR FEDERAL SAVINGS 
              ASSOCIATIONS AND SUBSIDIARIES CLARIFIED.

    (a) In General.--The Home Owners' Loan Act (12 U.S.C. 1461 et seq.) 
is amended by inserting after section 5 the following new section:

``SEC. 6. STATE LAW PREEMPTION STANDARDS FOR FEDERAL SAVINGS 
              ASSOCIATIONS CLARIFIED.

    ``(a) In General.--Any determination by a court or by the Director 
or any successor officer or agency regarding the relation of State law 
to a provision of this Act or any regulation or order prescribed under 
this Act shall be made in accordance with the laws and legal standards 
applicable to national banks regarding the preemption of State law.
    ``(b) Principles of Conflict Preemption Applicable.--
Notwithstanding the authorities granted under sections 4 and 5, this 
Act does not occupy the field in any area of State law.''.
    (b) Clerical Amendment.--The table of sections for the Home Owners' 
Loan Act (12 U.S.C. 1461 et seq.) is amended by striking the item 
relating to section 6 and inserting the following new item:

        ``Sec. 6. State law preemption standards for Federal savings 
                            associations and subsidiaries clarified.''.

SEC. 1047. VISITORIAL STANDARDS FOR NATIONAL BANKS AND SAVINGS 
              ASSOCIATIONS.

    (a) National Banks.--Section 5136C of the Revised Statutes of the 
United States (as added by this subtitle) is amended by adding at the 
end the following:
    ``(i) Visitorial Powers.--
            ``(1) In general.--In accordance with the decision of the 
        Supreme Court of the United States in Cuomo v. Clearing House 
        Assn., L. L. C. (129 S. Ct. 2710 (2009)), no provision of this 
        title which relates to visitorial powers or otherwise limits or 
        restricts the visitorial authority to which any national bank 
        is subject shall be construed as limiting or restricting the 
        authority of any attorney general (or other chief law 
        enforcement officer) of any State to bring an action against a 
        national bank in a court of appropriate jurisdiction to enforce 
        an applicable law and to seek relief as authorized by such law.
    ``(j) Enforcement Actions.--The ability of the Comptroller of the 
Currency to bring an enforcement action under this title or section 5 
of the Federal Trade Commission Act does not preclude any private party 
from enforcing rights granted under Federal or State law in the 
courts.''.
    (b) Savings Associations.--Section 6 of the Home Owners' Loan Act 
(as added by this title) is amended by adding at the end the following:
    ``(c) Visitorial Powers.--The provisions of sections 5136C(i) of 
the Revised Statutes of the United States shall apply to Federal 
savings associations, and any subsidiary thereof, to the same extent 
and in the same manner as if such savings associations, or subsidiaries 
thereof, were national banks or subsidiaries of national banks, 
respectively.''
    ``(d) Enforcement Actions.--The ability of the Comptroller of the 
Currency to bring an enforcement action under this Act or section 5 of 
the Federal Trade Commission Act does not preclude any private party 
from enforcing rights granted under Federal or State law in the 
courts.''.

SEC. 1048. EFFECTIVE DATE.

    This subtitle shall become effective on the designated transfer 
date.

                     Subtitle E--Enforcement Powers

SEC. 1051. DEFINITIONS.

    For purposes of this subtitle, the following definitions shall 
apply:
            (1) Bureau investigation.--The term ``Bureau 
        investigation'' means any inquiry conducted by a Bureau 
        investigator for the purpose of ascertaining whether any person 
        is or has been engaged in any conduct that is a violation, as 
        defined in this section.
            (2) Bureau investigator.--The term ``Bureau investigator'' 
        means any attorney or investigator employed by the Bureau who 
        is charged with the duty of enforcing or carrying into effect 
        any Federal consumer financial law.
            (3) Civil investigative demand and demand.--The terms 
        ``civil investigative demand'' and ``demand'' mean any demand 
        issued by the Bureau.
            (4) Custodian.--The term ``custodian'' means the custodian 
        or any deputy custodian designated by the Bureau.
            (5) Documentary material.--The term ``documentary 
        material'' includes the original or any copy of any book, 
        document, record, report, memorandum, paper, communication, 
        tabulation, chart, logs, electronic files, or other data or 
        data compilations stored in any medium.
            (6) Violation.--The term ``violation'' means any act or 
        omission that, if proved, would constitute a violation of any 
        provision of Federal consumer financial law.

SEC. 1052. INVESTIGATIONS AND ADMINISTRATIVE DISCOVERY.

    (a) Joint Investigations.--
            (1) In general.--The Bureau or, where appropriate, a Bureau 
        investigator, may engage in joint investigations and requests 
        for information, as authorized under this title.
            (2) Fair lending.--The authority under paragraph (1) 
        includes matters relating to fair lending, and where 
        appropriate, joint investigations with, and requests for 
        information from, the Secretary of Housing and Urban 
        Development, the Attorney General of the United States, or 
        both.
    (b) Subpoenas.--
            (1) In general.--The Bureau or a Bureau investigator may 
        issue subpoenas for the attendance and testimony of witnesses 
        and the production of relevant papers, books, documents, or 
        other material in connection with hearings under this title.
            (2) Failure to obey.--In the case of contumacy or refusal 
        to obey a subpoena issued pursuant to this paragraph and served 
        upon any person, the district court of the United States for 
        any district in which such person is found, resides, or 
        transacts business, upon application by the Bureau or a Bureau 
        investigator and after notice to such person, may issue an 
        order requiring such person to appear and give testimony or to 
        appear and produce documents or other material.
            (3) Contempt.--Any failure to obey an order of the court 
        under this subsection may be punished by the court as a 
        contempt thereof.
    (c) Demands.--
            (1) In general.--Whenever the Bureau has reason to believe 
        that any person may be in possession, custody, or control of 
        any documentary material or tangible things, or may have any 
        information, relevant to a violation, the Bureau may, before 
        the institution of any proceedings under the Federal consumer 
        financial law, issue in writing, and cause to be served upon 
        such person, a civil investigative demand requiring such person 
        to--
                    (A) produce such documentary material for 
                inspection and copying or reproduction in the form or 
                medium requested by the Bureau;
                    (B) submit such tangible things;
                    (C) file written reports or answers to questions;
                    (D) give oral testimony concerning documentary 
                material, tangible things, or other information; or
                    (E) furnish any combination of such material, 
                answers, or testimony.
            (2) Requirements.--Each civil investigative demand shall 
        state the nature of the conduct constituting the alleged 
        violation which is under investigation and the provision of law 
        applicable to such violation.
            (3) Production of documents.--Each civil investigative 
        demand for the production of documentary material shall--
                    (A) describe each class of documentary material to 
                be produced under the demand with such definiteness and 
                certainty as to permit such material to be fairly 
                identified;
                    (B) prescribe a return date or dates which will 
                provide a reasonable period of time within which the 
                material so demanded may be assembled and made 
                available for inspection and copying or reproduction; 
                and
                    (C) identify the custodian to whom such material 
                shall be made available.
            (4) Production of things.--Each civil investigative demand 
        for the submission of tangible things shall--
                    (A) describe each class of tangible things to be 
                submitted under the demand with such definiteness and 
                certainty as to permit such things to be fairly 
                identified;
                    (B) prescribe a return date or dates which will 
                provide a reasonable period of time within which the 
                things so demanded may be assembled and submitted; and
                    (C) identify the custodian to whom such things 
                shall be submitted.
            (5) Demand for written reports or answers.--Each civil 
        investigative demand for written reports or answers to 
        questions shall--
                    (A) propound with definiteness and certainty the 
                reports to be produced or the questions to be answered;
                    (B) prescribe a date or dates at which time written 
                reports or answers to questions shall be submitted; and
                    (C) identify the custodian to whom such reports or 
                answers shall be submitted.
            (6) Oral testimony.--Each civil investigative demand for 
        the giving of oral testimony shall--
                    (A) prescribe a date, time, and place at which oral 
                testimony shall be commenced; and
                    (B) identify a Bureau investigator who shall 
                conduct the investigation and the custodian to whom the 
                transcript of such investigation shall be submitted.
            (7) Service.--Any civil investigative demand and any 
        enforcement petition filed under this section may be served--
                    (A) by any Bureau investigator at any place within 
                the territorial jurisdiction of any court of the United 
                States; and
                    (B) upon any person who is not found within the 
                territorial jurisdiction of any court of the United 
                States--
                            (i) in such manner as the Federal Rules of 
                        Civil Procedure prescribe for service in a 
                        foreign nation; and
                            (ii) to the extent that the courts of the 
                        United States have authority to assert 
                        jurisdiction over such person, consistent with 
                        due process, the United States District Court 
                        for the District of Columbia shall have the 
                        same jurisdiction to take any action respecting 
                        compliance with this section by such person 
                        that such district court would have if such 
                        person were personally within the jurisdiction 
                        of such district court.
            (8) Method of service.--Service of any civil investigative 
        demand or any enforcement petition filed under this section may 
        be made upon a person, including any legal entity, by--
                    (A) delivering a duly executed copy of such demand 
                or petition to the individual or to any partner, 
                executive officer, managing agent, or general agent of 
                such person, or to any agent of such person authorized 
                by appointment or by law to receive service of process 
                on behalf of such person;
                    (B) delivering a duly executed copy of such demand 
                or petition to the principal office or place of 
                business of the person to be served; or
                    (C) depositing a duly executed copy in the United 
                States mails, by registered or certified mail, return 
                receipt requested, duly addressed to such person at the 
                principal office or place of business of such person.
            (9) Proof of service.--
                    (A) In general.--A verified return by the 
                individual serving any civil investigative demand or 
                any enforcement petition filed under this section 
                setting forth the manner of such service shall be proof 
                of such service.
                    (B) Return receipts.--In the case of service by 
                registered or certified mail, such return shall be 
                accompanied by the return post office receipt of 
                delivery of such demand or enforcement petition.
            (10) Production of documentary material.--The production of 
        documentary material in response to a civil investigative 
        demand shall be made under a sworn certificate, in such form as 
        the demand designates, by the person, if a natural person, to 
        whom the demand is directed or, if not a natural person, by any 
        person having knowledge of the facts and circumstances relating 
        to such production, to the effect that all of the documentary 
        material required by the demand and in the possession, custody, 
        or control of the person to whom the demand is directed has 
        been produced and made available to the custodian.
            (11) Submission of tangible things.--The submission of 
        tangible things in response to a civil investigative demand 
        shall be made under a sworn certificate, in such form as the 
        demand designates, by the person to whom the demand is directed 
        or, if not a natural person, by any person having knowledge of 
        the facts and circumstances relating to such production, to the 
        effect that all of the tangible things required by the demand 
        and in the possession, custody, or control of the person to 
        whom the demand is directed have been submitted to the 
        custodian.
            (12) Separate answers.--Each reporting requirement or 
        question in a civil investigative demand shall be answered 
        separately and fully in writing under oath, unless it is 
        objected to, in which event the reasons for the objection shall 
        be stated in lieu of an answer, and it shall be submitted under 
        a sworn certificate, in such form as the demand designates, by 
        the person, if a natural person, to whom the demand is directed 
        or, if not a natural person, by any person responsible for 
        answering each reporting requirement or question, to the effect 
        that all information required by the demand and in the 
        possession, custody, control, or knowledge of the person to 
        whom the demand is directed has been submitted.
            (13) Testimony.--
                    (A) In general.--
                            (i) Oath or affirmation.--Any Bureau 
                        investigator before whom oral testimony is to 
                        be taken shall put the witness under oath or 
                        affirmation, and shall personally, or by any 
                        individual acting under the direction of and in 
                        the presence of the Bureau investigator, record 
                        the testimony of the witness.
                            (ii) Transcription.--The testimony shall be 
                        taken stenographically and transcribed.
                            (iii) Transmission to custodian.--After the 
                        testimony is fully transcribed, the Bureau 
                        investigator before whom the testimony is taken 
                        shall promptly transmit a copy of the 
                        transcript of the testimony to the custodian.
                    (B) Parties present.--Any Bureau investigator 
                before whom oral testimony is to be taken shall exclude 
                from the place where the testimony is to be taken all 
                other persons, except the person giving the testimony, 
                the attorney of that person, the officer before whom 
                the testimony is to be taken, and any stenographer 
                taking such testimony.
                    (C) Location.--The oral testimony of any person 
                taken pursuant to a civil investigative demand shall be 
                taken in the judicial district of the United States in 
                which such person resides, is found, or transacts 
                business, or in such other place as may be agreed upon 
                by the Bureau investigator before whom the oral 
                testimony of such person is to be taken and such 
                person.
                    (D) Attorney representation.--
                            (i) In general.--Any person compelled to 
                        appear under a civil investigative demand for 
                        oral testimony pursuant to this section may be 
                        accompanied, represented, and advised by an 
                        attorney.
                            (ii) Authority.--The attorney may advise a 
                        person described in clause (i), in confidence, 
                        either upon the request of such person or upon 
                        the initiative of the attorney, with respect to 
                        any question asked of such person.
                            (iii) Objections.--A person described in 
                        clause (i), or the attorney for that person, 
                        may object on the record to any question, in 
                        whole or in part, and such person shall briefly 
                        state for the record the reason for the 
                        objection. An objection may properly be made, 
                        received, and entered upon the record when it 
                        is claimed that such person is entitled to 
                        refuse to answer the question on grounds of any 
                        constitutional or other legal right or 
                        privilege, including the privilege against 
                        self-incrimination, but such person shall not 
                        otherwise object to or refuse to answer any 
                        question, and such person or attorney shall not 
                        otherwise interrupt the oral examination.
                            (iv) Refusal to answer.--If a person 
                        described in clause (i) refuses to answer any 
                        question--
                                    (I) the Bureau may petition the 
                                district court of the United States 
                                pursuant to this section for an order 
                                compelling such person to answer such 
                                question; and
                                    (II) on grounds of the privilege 
                                against self-incrimination, the 
                                testimony of such person may be 
                                compelled in accordance with the 
                                provisions of section 6004 of title 18, 
                                United States Code.
                    (E) Transcripts.--For purposes of this subsection--
                            (i) after the testimony of any witness is 
                        fully transcribed, the Bureau investigator 
                        shall afford the witness (who may be 
                        accompanied by an attorney) a reasonable 
                        opportunity to examine the transcript;
                            (ii) the transcript shall be read to or by 
                        the witness, unless such examination and 
                        reading are waived by the witness;
                            (iii) any changes in form or substance 
                        which the witness desires to make shall be 
                        entered and identified upon the transcript by 
                        the Bureau investigator, with a statement of 
                        the reasons given by the witness for making 
                        such changes;
                            (iv) the transcript shall be signed by the 
                        witness, unless the witness in writing waives 
                        the signing, is ill, cannot be found, or 
                        refuses to sign; and
                            (v) if the transcript is not signed by the 
                        witness during the 30-day period following the 
                        date on which the witness is first afforded a 
                        reasonable opportunity to examine the 
                        transcript, the Bureau investigator shall sign 
                        the transcript and state on the record the fact 
                        of the waiver, illness, absence of the witness, 
                        or the refusal to sign, together with any 
                        reasons given for the failure to sign.
                    (F) Certification by investigator.--The Bureau 
                investigator shall certify on the transcript that the 
                witness was duly sworn by him or her and that the 
                transcript is a true record of the testimony given by 
                the witness, and the Bureau investigator shall promptly 
                deliver the transcript or send it by registered or 
                certified mail to the custodian.
                    (G) Copy of transcript.--The Bureau investigator 
                shall furnish a copy of the transcript (upon payment of 
                reasonable charges for the transcript) to the witness 
                only, except that the Bureau may for good cause limit 
                such witness to inspection of the official transcript 
                of his testimony.
                    (H) Witness fees.--Any witness appearing for the 
                taking of oral testimony pursuant to a civil 
                investigative demand shall be entitled to the same fees 
                and mileage which are paid to witnesses in the district 
                courts of the United States.
    (d) Confidential Treatment of Demand Material.--
            (1) In general.--Documentary materials and tangible things 
        received as a result of a civil investigative demand shall be 
        subject to requirements and procedures regarding 
        confidentiality, in accordance with rules established by the 
        Bureau.
            (2) Disclosure to congress.--No rule established by the 
        Bureau regarding the confidentiality of materials submitted to, 
        or otherwise obtained by, the Bureau shall be intended to 
        prevent disclosure to either House of Congress or to an 
        appropriate committee of the Congress, except that the Bureau 
        is permitted to adopt rules allowing prior notice to any party 
        that owns or otherwise provided the material to the Bureau and 
        had designated such material as confidential.
    (e) Petition for Enforcement.--
            (1) In general.--Whenever any person fails to comply with 
        any civil investigative demand duly served upon him under this 
        section, or whenever satisfactory copying or reproduction of 
        material requested pursuant to the demand cannot be 
        accomplished and such person refuses to surrender such 
        material, the Bureau, through such officers or attorneys as it 
        may designate, may file, in the district court of the United 
        States for any judicial district in which such person resides, 
        is found, or transacts business, and serve upon such person, a 
        petition for an order of such court for the enforcement of this 
        section.
            (2) Service of process.--All process of any court to which 
        application may be made as provided in this subsection may be 
        served in any judicial district.
    (f) Petition for Order Modifying or Setting Aside Demand.--
            (1) In general.--Not later than 20 days after the service 
        of any civil investigative demand upon any person under 
        subsection (b), or at any time before the return date specified 
        in the demand, whichever period is shorter, or within such 
        period exceeding 20 days after service or in excess of such 
        return date as may be prescribed in writing, subsequent to 
        service, by any Bureau investigator named in the demand, such 
        person may file with the Bureau a petition for an order by the 
        Bureau modifying or setting aside the demand.
            (2) Compliance during pendency.--The time permitted for 
        compliance with the demand in whole or in part, as determined 
        proper and ordered by the Bureau, shall not run during the 
        pendency of a petition under paragraph (1) at the Bureau, 
        except that such person shall comply with any portions of the 
        demand not sought to be modified or set aside.
            (3) Specific grounds.--A petition under paragraph (1) shall 
        specify each ground upon which the petitioner relies in seeking 
        relief, and may be based upon any failure of the demand to 
        comply with the provisions of this section, or upon any 
        constitutional or other legal right or privilege of such 
        person.
    (g) Custodial Control.--At any time during which any custodian is 
in custody or control of any documentary material, tangible things, 
reports, answers to questions, or transcripts of oral testimony given 
by any person in compliance with any civil investigative demand, such 
person may file, in the district court of the United States for the 
judicial district within which the office of such custodian is 
situated, and serve upon such custodian, a petition for an order of 
such court requiring the performance by such custodian of any duty 
imposed upon him by this section or rule promulgated by the Bureau.
    (h) Jurisdiction of Court.--
            (1) In general.--Whenever any petition is filed in any 
        district court of the United States under this section, such 
        court shall have jurisdiction to hear and determine the matter 
        so presented, and to enter such order or orders as may be 
        required to carry out the provisions of this section.
            (2) Appeal.--Any final order entered as described in 
        paragraph (1) shall be subject to appeal pursuant to section 
        1291 of title 28, United States Code.

SEC. 1053. HEARINGS AND ADJUDICATION PROCEEDINGS.

    (a) In General.--The Bureau is authorized to conduct hearings and 
adjudication proceedings with respect to any person in the manner 
prescribed by chapter 5 of title 5, United States Code in order to 
ensure or enforce compliance with--
            (1) the provisions of this title, including any rules 
        prescribed by the Bureau under this title; and
            (2) any other Federal law that the Bureau is authorized to 
        enforce, including an enumerated consumer law, and any 
        regulations or order prescribed thereunder, unless such Federal 
        law specifically limits the Bureau from conducting a hearing or 
        adjudication proceeding and only to the extent of such 
        limitation.
    (b) Special Rules for Cease-and-desist Proceedings.--
            (1) Orders authorized.--
                    (A) In general.--If, in the opinion of the Bureau, 
                any covered person or service provider is engaging or 
                has engaged in an activity that violates a law, rule, 
                or any condition imposed in writing on the person by 
                the Bureau, the Bureau may, subject to sections 1024, 
                1025, and 1026, issue and serve upon the covered person 
                or service provider a notice of charges in respect 
                thereof.
                    (B) Content of notice.--The notice under 
                subparagraph (A) shall contain a statement of the facts 
                constituting the alleged violation or violations, and 
                shall fix a time and place at which a hearing will be 
                held to determine whether an order to cease and desist 
                should issue against the covered person or service 
                provider, such hearing to be held not earlier than 30 
                days nor later than 60 days after the date of service 
                of such notice, unless an earlier or a later date is 
                set by the Bureau, at the request of any party so 
                served.
                    (C) Consent.--Unless the party or parties served 
                under subparagraph (B) appear at the hearing personally 
                or by a duly authorized representative, such person 
                shall be deemed to have consented to the issuance of 
                the cease-and-desist order.
                    (D) Procedure.--In the event of consent under 
                subparagraph (C), or if, upon the record, made at any 
                such hearing, the Bureau finds that any violation 
                specified in the notice of charges has been 
                established, the Bureau may issue and serve upon the 
                covered person or service provider an order to cease 
                and desist from the violation or practice. Such order 
                may, by provisions which may be mandatory or otherwise, 
                require the covered person or service provider to cease 
                and desist from the subject activity, and to take 
                affirmative action to correct the conditions resulting 
                from any such violation.
            (2) Effectiveness of order.--A cease-and-desist order shall 
        become effective at the expiration of 30 days after the date of 
        service of an order under paragraph (1) upon the covered person 
        or service provider concerned (except in the case of a cease-
        and-desist order issued upon consent, which shall become 
        effective at the time specified therein), and shall remain 
        effective and enforceable as provided therein, except to such 
        extent as the order is stayed, modified, terminated, or set 
        aside by action of the Bureau or a reviewing court.
            (3) Decision and appeal.--Any hearing provided for in this 
        subsection shall be held in the Federal judicial district or in 
        the territory in which the residence or principal office or 
        place of business of the person is located unless the person 
        consents to another place, and shall be conducted in accordance 
        with the provisions of chapter 5 of title 5 of the United 
        States Code. After such hearing, and within 90 days after the 
        Bureau has notified the parties that the case has been 
        submitted to the Bureau for final decision, the Bureau shall 
        render its decision (which shall include findings of fact upon 
        which its decision is predicated) and shall issue and serve 
        upon each party to the proceeding an order or orders consistent 
        with the provisions of this section. Judicial review of any 
        such order shall be exclusively as provided in this subsection. 
        Unless a petition for review is timely filed in a court of 
        appeals of the United States, as provided in paragraph (4), and 
        thereafter until the record in the proceeding has been filed as 
        provided in paragraph (4), the Bureau may at any time, upon 
        such notice and in such manner as the Bureau shall determine 
        proper, modify, terminate, or set aside any such order. Upon 
        filing of the record as provided, the Bureau may modify, 
        terminate, or set aside any such order with permission of the 
        court.
            (4) Appeal to court of appeals.--Any party to any 
        proceeding under this subsection may obtain a review of any 
        order served pursuant to this subsection (other than an order 
        issued with the consent of the person concerned) by the filing 
        in the court of appeals of the United States for the circuit in 
        which the principal office of the covered person is located, or 
        in the United States Court of Appeals for the District of 
        Columbia Circuit, within 30 days after the date of service of 
        such order, a written petition praying that the order of the 
        Bureau be modified, terminated, or set aside. A copy of such 
        petition shall be forthwith transmitted by the clerk of the 
        court to the Bureau, and thereupon the Bureau shall file in the 
        court the record in the proceeding, as provided in section 2112 
        of title 28 of the United States Code. Upon the filing of such 
        petition, such court shall have jurisdiction, which upon the 
        filing of the record shall except as provided in the last 
        sentence of paragraph (3) be exclusive, to affirm, modify, 
        terminate, or set aside, in whole or in part, the order of the 
        Bureau. Review of such proceedings shall be had as provided in 
        chapter 7 of title 5 of the United States Code. The judgment 
        and decree of the court shall be final, except that the same 
        shall be subject to review by the Supreme Court of the United 
        States, upon certiorari, as provided in section 1254 of title 
        28 of the United States Code.
            (5) No stay.--The commencement of proceedings for judicial 
        review under paragraph (4) shall not, unless specifically 
        ordered by the court, operate as a stay of any order issued by 
        the Bureau.
    (c) Special Rules for Temporary Cease-and-desist Proceedings.--
            (1) In general.--Whenever the Bureau determines that the 
        violation specified in the notice of charges served upon a 
        person, including a service provider, pursuant to subsection 
        (b), or the continuation thereof, is likely to cause the person 
        to be insolvent or otherwise prejudice the interests of 
        consumers before the completion of the proceedings conducted 
        pursuant to subsection (b), the Bureau may issue a temporary 
        order requiring the person to cease and desist from any such 
        violation or practice and to take affirmative action to prevent 
        or remedy such insolvency or other condition pending completion 
        of such proceedings. Such order may include any requirement 
        authorized under this subtitle. Such order shall become 
        effective upon service upon the person and, unless set aside, 
        limited, or suspended by a court in proceedings authorized by 
        paragraph (2), shall remain effective and enforceable pending 
        the completion of the administrative proceedings pursuant to 
        such notice and until such time as the Bureau shall dismiss the 
        charges specified in such notice, or if a cease-and-desist 
        order is issued against the person, until the effective date of 
        such order.
            (2) Appeal.--Not later than 10 days after the covered 
        person or service provider concerned has been served with a 
        temporary cease-and-desist order, the person may apply to the 
        United States district court for the judicial district in which 
        the residence or principal office or place of business of the 
        person is located, or the United States District Court for the 
        District of Columbia, for an injunction setting aside, 
        limiting, or suspending the enforcement, operation, or 
        effectiveness of such order pending the completion of the 
        administrative proceedings pursuant to the notice of charges 
        served upon the person under subsection (b), and such court 
        shall have jurisdiction to issue such injunction.
            (3) Incomplete or inaccurate records.--
                    (A) Temporary order.--If a notice of charges served 
                under subsection (b) specifies, on the basis of 
                particular facts and circumstances, that the books and 
                records of a covered person or service provider are so 
                incomplete or inaccurate that the Bureau is unable to 
                determine the financial condition of that person or the 
                details or purpose of any transaction or transactions 
                that may have a material effect on the financial 
                condition of that person, the Bureau may issue a 
                temporary order requiring--
                            (i) the cessation of any activity or 
                        practice which gave rise, whether in whole or 
                        in part, to the incomplete or inaccurate state 
                        of the books or records; or
                            (ii) affirmative action to restore such 
                        books or records to a complete and accurate 
                        state, until the completion of the proceedings 
                        under subsection (b)(1).
                    (B) Effective period.--Any temporary order issued 
                under subparagraph (A)--
                            (i) shall become effective upon service; 
                        and
                            (ii) unless set aside, limited, or 
                        suspended by a court in proceedings under 
                        paragraph (2), shall remain in effect and 
                        enforceable until the earlier of--
                                    (I) the completion of the 
                                proceeding initiated under subsection 
                                (b) in connection with the notice of 
                                charges; or
                                    (II) the date the Bureau 
                                determines, by examination or 
                                otherwise, that the books and records 
                                of the covered person or service 
                                provider are accurate and reflect the 
                                financial condition thereof.
    (d) Special Rules for Enforcement of Orders.--
            (1) In general.--The Bureau may in its discretion apply to 
        the United States district court within the jurisdiction of 
        which the principal office or place of business of the person 
        is located, for the enforcement of any effective and 
        outstanding notice or order issued under this section, and such 
        court shall have jurisdiction and power to order and require 
        compliance herewith.
            (2) Exception.--Except as otherwise provided in this 
        subsection, no court shall have jurisdiction to affect by 
        injunction or otherwise the issuance or enforcement of any 
        notice or order or to review, modify, suspend, terminate, or 
        set aside any such notice or order.
    (e) Rules.--The Bureau shall prescribe rules establishing such 
procedures as may be necessary to carry out this section.

SEC. 1054. LITIGATION AUTHORITY.

    (a) In General.--If any person violates a Federal consumer 
financial law, the Bureau may, subject to sections 1024, 1025, and 
1026, commence a civil action against such person to impose a civil 
penalty or to seek all appropriate legal and equitable relief including 
a permanent or temporary injunction as permitted by law.
    (b) Representation.--The Bureau may act in its own name and through 
its own attorneys in enforcing any provision of this title, rules 
thereunder, or any other law or regulation, or in any action, suit, or 
proceeding to which the Bureau is a party.
    (c) Compromise of Actions.--The Bureau may compromise or settle any 
action if such compromise is approved by the court.
    (d) Notice to the Attorney General.--When commencing a civil action 
under Federal consumer financial law, or any rule thereunder, the 
Bureau shall notify the Attorney General and, with respect to a civil 
action against an insured depository institution or insured credit 
union, the appropriate prudential regulator.
    (e) Appearance Before the Supreme Court.--The Bureau may represent 
itself in its own name before the Supreme Court of the United States, 
provided that the Bureau makes a written request to the Attorney 
General within the 10-day period which begins on the date of entry of 
the judgment which would permit any party to file a petition for writ 
of certiorari, and the Attorney General concurs with such request or 
fails to take action within 60 days of the request of the Bureau.
    (f) Forum.--Any civil action brought under this title may be 
brought in a United States district court or in any court of competent 
jurisdiction of a state in a district in which the defendant is located 
or resides or is doing business, and such court shall have jurisdiction 
to enjoin such person and to require compliance with any Federal 
consumer financial law.
    (g) Time for Bringing Action.--
            (1) In general.--Except as otherwise permitted by law or 
        equity, no action may be brought under this title more than 3 
        years after the date of discovery of the violation to which an 
        action relates.
            (2) Limitations under other federal laws.--
                    (A) In general.--For purposes of this subsection, 
                an action arising under this title does not include 
                claims arising solely under enumerated consumer laws.
                    (B) Bureau authority.--In any action arising solely 
                under an enumerated consumer law, the Bureau may 
                commence, defend, or intervene in the action in 
                accordance with the requirements of that provision of 
                law, as applicable.
                    (C) Transferred authority.--In any action arising 
                solely under laws for which authorities were 
                transferred under subtitles F and H, the Bureau may 
                commence, defend, or intervene in the action in 
                accordance with the requirements of that provision of 
                law, as applicable.

SEC. 1055. RELIEF AVAILABLE.

    (a) Administrative Proceedings or Court Actions.--
            (1) Jurisdiction.--The court (or the Bureau, as the case 
        may be) in an action or adjudication proceeding brought under 
        Federal consumer financial law, shall have jurisdiction to 
        grant any appropriate legal or equitable relief with respect to 
        a violation of Federal consumer financial law, including a 
        violation of a rule or order prescribed under a Federal 
        consumer financial law.
            (2) Relief.--Relief under this section may include, without 
        limitation--
                    (A) rescission or reformation of contracts;
                    (B) refund of moneys or return of real property;
                    (C) restitution;
                    (D) disgorgement or compensation for unjust 
                enrichment;
                    (E) payment of damages or other monetary relief;
                    (F) public notification regarding the violation, 
                including the costs of notification;
                    (G) limits on the activities or functions of the 
                person; and
                    (H) civil money penalties, as set forth more fully 
                in subsection (c).
            (3) No exemplary or punitive damages.--Nothing in this 
        subsection shall be construed as authorizing the imposition of 
        exemplary or punitive damages.
    (b) Recovery of Costs.--In any action brought by the Bureau, a 
State attorney general, or any State regulator to enforce any Federal 
consumer financial law, the Bureau, the State attorney general, or the 
State regulator may recover its costs in connection with prosecuting 
such action if the Bureau, the State attorney general, or the State 
regulator is the prevailing party in the action.
    (c) Civil Money Penalty in Court and Administrative Actions.--
            (1) In general.--Any person that violates, through any act 
        or omission, any provision of Federal consumer financial law 
        shall forfeit and pay a civil penalty pursuant to this 
        subsection.
            (2) Penalty amounts.--
                    (A) First tier.--For any violation of a law, rule, 
                or final order or condition imposed in writing by the 
                Bureau, a civil penalty may not exceed $5,000 for each 
                day during which such violation or failure to pay 
                continues.
                    (B) Second tier.--Notwithstanding paragraph (A), 
                for any person that recklessly engages in a violation 
                of a Federal consumer financial law, a civil penalty 
                may not exceed $25,000 for each day during which such 
                violation continues.
                    (C) Third tier.--Notwithstanding subparagraphs (A) 
                and (B), for any person that knowingly violates a 
                Federal consumer financial law, a civil penalty may not 
                exceed $1,000,000 for each day during which such 
                violation continues.
            (3) Mitigating factors.--In determining the amount of any 
        penalty assessed under paragraph (2), the Bureau or the court 
        shall take into account the appropriateness of the penalty with 
        respect to--
                    (A) the size of financial resources and good faith 
                of the person charged;
                    (B) the gravity of the violation or failure to pay;
                    (C) the severity of the risks to or losses of the 
                consumer, which may take into account the number of 
                products or services sold or provided;
                    (D) the history of previous violations; and
                    (E) such other matters as justice may require.
            (4) Authority to modify or remit penalty.--The Bureau may 
        compromise, modify, or remit any penalty which may be assessed 
        or had already been assessed under paragraph (2). The amount of 
        such penalty, when finally determined, shall be exclusive of 
        any sums owed by the person to the United States in connection 
        with the costs of the proceeding, and may be deducted from any 
        sums owing by the United States to the person charged.
            (5) Notice and hearing.--No civil penalty may be assessed 
        under this subsection with respect to a violation of any 
        Federal consumer financial law, unless--
                    (A) the Bureau gives notice and an opportunity for 
                a hearing to the person accused of the violation; or
                    (B) the appropriate court has ordered such 
                assessment and entered judgment in favor of the Bureau.

SEC. 1056. REFERRALS FOR CRIMINAL PROCEEDINGS.

    If the Bureau obtains evidence that any person, domestic or 
foreign, has engaged in conduct that may constitute a violation of 
Federal criminal law, the Bureau shall have the power to transmit such 
evidence to the Attorney General of the United States, who may 
institute criminal proceedings under appropriate law. Nothing in this 
section affects any other authority of the Bureau to disclose 
information.

SEC. 1057. EMPLOYEE PROTECTION.

    (a) In General.--No covered person or service provider shall 
terminate or in any other way discriminate against, or cause to be 
terminated or discriminated against, any covered employee or any 
authorized representative of covered employees by reason of the fact 
that such employee or representative, whether at the initiative of the 
employee or in the ordinary course of the duties of the employee (or 
any person acting pursuant to a request of the employee), has--
            (1) provided, caused to be provided, or is about to provide 
        or cause to be provided, information to the employer, the 
        Bureau, or any other State, local, or Federal, government 
        authority or law enforcement agency relating to any violation 
        of, or any act or omission that the employee reasonably 
        believes to be a violation of, any provision of this title or 
        any other provision of law that is subject to the jurisdiction 
        of the Bureau, or any rule, order, standard, or prohibition 
        prescribed by the Bureau;
            (2) testified or will testify in any proceeding resulting 
        from the administration or enforcement of any provision of this 
        title or any other provision of law that is subject to the 
        jurisdiction of the Bureau, or any rule, order, standard, or 
        prohibition prescribed by the Bureau;
            (3) filed, instituted, or caused to be filed or instituted 
        any proceeding under any Federal consumer financial law; or
            (4) objected to, or refused to participate in, any 
        activity, policy, practice, or assigned task that the employee 
        (or other such person) reasonably believed to be in violation 
        of any law, rule, order, standard, or prohibition, subject to 
        the jurisdiction of, or enforceable by, the Bureau.
    (b) Definition of Covered Employee.--For the purposes of this 
section, the term ``covered employee'' means any individual performing 
tasks related to the offering or provision of a consumer financial 
product or service.
    (c) Procedures and Timetables.--
            (1) Complaint.--
                    (A) In general.--A person who believes that he or 
                she has been discharged or otherwise discriminated 
                against by any person in violation of subsection (a) 
                may, not later than 180 days after the date on which 
                such alleged violation occurs, file (or have any person 
                file on his or her behalf) a complaint with the 
                Secretary of Labor alleging such discharge or 
                discrimination and identifying the person responsible 
                for such act.
                    (B) Actions of secretary of labor.--Upon receipt of 
                such a complaint, the Secretary of Labor shall notify, 
                in writing, the person named in the complaint who is 
                alleged to have committed the violation, of--
                            (i) the filing of the complaint;
                            (ii) the allegations contained in the 
                        complaint;
                            (iii) the substance of evidence supporting 
                        the complaint; and
                            (iv) opportunities that will be afforded to 
                        such person under paragraph (2).
            (2) Investigation by secretary of labor.--
                    (A) In general.--Not later than 60 days after the 
                date of receipt of a complaint filed under paragraph 
                (1), and after affording the complainant and the person 
                named in the complaint who is alleged to have committed 
                the violation that is the basis for the complaint an 
                opportunity to submit to the Secretary of Labor a 
                written response to the complaint and an opportunity to 
                meet with a representative of the Secretary of Labor to 
                present statements from witnesses, the Secretary of 
                Labor shall--
                            (i) initiate an investigation and determine 
                        whether there is reasonable cause to believe 
                        that the complaint has merit; and
                            (ii) notify the complainant and the person 
                        alleged to have committed the violation of 
                        subsection (a), in writing, of such 
                        determination.
                    (B) Notice of relief available.--If the Secretary 
                of Labor concludes that there is reasonable cause to 
                believe that a violation of subsection (a) has 
                occurred, the Secretary of Labor shall, together with 
                the notice under subparagraph (A)(ii), issue a 
                preliminary order providing the relief prescribed by 
                paragraph (4)(B).
                    (C) Request for hearing.--Not later than 30 days 
                after the date of receipt of notification of a 
                determination of the Secretary of Labor under this 
                paragraph, either the person alleged to have committed 
                the violation or the complainant may file objections to 
                the findings or preliminary order, or both, and request 
                a hearing on the record. The filing of such objections 
                shall not operate to stay any reinstatement remedy 
                contained in the preliminary order. Any such hearing 
                shall be conducted expeditiously, and if a hearing is 
                not requested in such 30-day period, the preliminary 
                order shall be deemed a final order that is not subject 
                to judicial review.
            (3) Grounds for determination of complaints.--
                    (A) In general.--The Secretary of Labor shall 
                dismiss a complaint filed under this subsection, and 
                shall not conduct an investigation otherwise required 
                under paragraph (2), unless the complainant makes a 
                prima facie showing that any behavior described in 
                paragraphs (1) through (4) of subsection (a) was a 
                contributing factor in the unfavorable personnel action 
                alleged in the complaint.
                    (B) Rebuttal evidence.--Notwithstanding a finding 
                by the Secretary of Labor that the complainant has made 
                the showing required under subparagraph (A), no 
                investigation otherwise required under paragraph (2) 
                shall be conducted, if the employer demonstrates, by 
                clear and convincing evidence, that the employer would 
                have taken the same unfavorable personnel action in the 
                absence of that behavior.
                    (C) Evidentiary standards.--The Secretary of Labor 
                may determine that a violation of subsection (a) has 
                occurred only if the complainant demonstrates that any 
                behavior described in paragraphs (1) through (4) of 
                subsection (a) was a contributing factor in the 
                unfavorable personnel action alleged in the complaint. 
                Relief may not be ordered under subparagraph (A) if the 
                employer demonstrates by clear and convincing evidence 
                that the employer would have taken the same unfavorable 
                personnel action in the absence of that behavior.
            (4) Issuance of final orders; review procedures.--
                    (A) Timing.--Not later than 120 days after the date 
                of conclusion of any hearing under paragraph (2), the 
                Secretary of Labor shall issue a final order providing 
                the relief prescribed by this paragraph or denying the 
                complaint. At any time before issuance of a final 
                order, a proceeding under this subsection may be 
                terminated on the basis of a settlement agreement 
                entered into by the Secretary of Labor, the 
                complainant, and the person alleged to have committed 
                the violation.
                    (B) Penalties.--
                            (i) Order of secretary of labor.--If, in 
                        response to a complaint filed under paragraph 
                        (1), the Secretary of Labor determines that a 
                        violation of subsection (a) has occurred, the 
                        Secretary of Labor shall order the person who 
                        committed such violation--
                                    (I) to take affirmative action to 
                                abate the violation;
                                    (II) to reinstate the complainant 
                                to his or her former position, together 
                                with compensation (including back pay) 
                                and restore the terms, conditions, and 
                                privileges associated with his or her 
                                employment; and
                                    (III) to provide compensatory 
                                damages to the complainant.
                            (ii) Penalty.--If an order is issued under 
                        clause (i), the Secretary of Labor, at the 
                        request of the complainant, shall assess 
                        against the person against whom the order is 
                        issued, a sum equal to the aggregate amount of 
                        all costs and expenses (including attorney fees 
                        and expert witness fees) reasonably incurred, 
                        as determined by the Secretary of Labor, by the 
                        complainant for, or in connection with, the 
                        bringing of the complaint upon which the order 
                        was issued.
                    (C) Penalty for frivolous claims.--If the Secretary 
                of Labor finds that a complaint under paragraph (1) is 
                frivolous or has been brought in bad faith, the 
                Secretary of Labor may award to the prevailing employer 
                a reasonable attorney fee, not exceeding $1,000, to be 
                paid by the complainant.
                    (D) De novo review.--
                            (i) Failure of the secretary to act.--If 
                        the Secretary of Labor has not issued a final 
                        order within 210 days after the date of filing 
                        of a complaint under this subsection, or within 
                        90 days after the date of receipt of a written 
                        determination, the complainant may bring an 
                        action at law or equity for de novo review in 
                        the appropriate district court of the United 
                        States having jurisdiction, which shall have 
                        jurisdiction over such an action without regard 
                        to the amount in controversy, and which action 
                        shall, at the request of either party to such 
                        action, be tried by the court with a jury.
                            (ii) Procedures.--A proceeding under clause 
                        (i) shall be governed by the same legal burdens 
                        of proof specified in paragraph (3). The court 
                        shall have jurisdiction to grant all relief 
                        necessary to make the employee whole, including 
                        injunctive relief and compensatory damages, 
                        including--
                                    (I) reinstatement with the same 
                                seniority status that the employee 
                                would have had, but for the discharge 
                                or discrimination;
                                    (II) the amount of back pay, with 
                                interest; and
                                    (III) compensation for any special 
                                damages sustained as a result of the 
                                discharge or discrimination, including 
                                litigation costs, expert witness fees, 
                                and reasonable attorney fees.
                    (E) Other appeals.--Unless the complainant brings 
                an action under subparagraph (D), any person adversely 
                affected or aggrieved by a final order issued under 
                subparagraph (A) may file a petition for review of the 
                order in the United States Court of Appeals for the 
                circuit in which the violation with respect to which 
                the order was issued, allegedly occurred or the circuit 
                in which the complainant resided on the date of such 
                violation, not later than 60 days after the date of the 
                issuance of the final order of the Secretary of Labor 
                under subparagraph (A). Review shall conform to chapter 
                7 of title 5, United States Code. The commencement of 
                proceedings under this subparagraph shall not, unless 
                ordered by the court, operate as a stay of the order. 
                An order of the Secretary of Labor with respect to 
                which review could have been obtained under this 
                subparagraph shall not be subject to judicial review in 
                any criminal or other civil proceeding.
            (5) Failure to comply with order.--
                    (A) Actions by the secretary.--If any person has 
                failed to comply with a final order issued under 
                paragraph (4), the Secretary of Labor may file a civil 
                action in the United States district court for the 
                district in which the violation was found to have 
                occurred, or in the United States district court for 
                the District of Columbia, to enforce such order. In 
                actions brought under this paragraph, the district 
                courts shall have jurisdiction to grant all appropriate 
                relief including injunctive relief and compensatory 
                damages.
                    (B) Civil actions to compel compliance.--A person 
                on whose behalf an order was issued under paragraph (4) 
                may commence a civil action against the person to whom 
                such order was issued to require compliance with such 
                order. The appropriate United States district court 
                shall have jurisdiction, without regard to the amount 
                in controversy or the citizenship of the parties, to 
                enforce such order.
                    (C) Award of costs authorized.--The court, in 
                issuing any final order under this paragraph, may award 
                costs of litigation (including reasonable attorney and 
                expert witness fees) to any party, whenever the court 
                determines such award is appropriate.
                    (D) Mandamus proceedings.--Any nondiscretionary 
                duty imposed by this section shall be enforceable in a 
                mandamus proceeding brought under section 1361 of title 
                28, United States Code.
    (d) Unenforceability of Certain Agreements.--
            (1) No waiver of rights and remedies.--Except as provided 
        under paragraph (3), and notwithstanding any other provision of 
        law, the rights and remedies provided for in this section may 
        not be waived by any agreement, policy, form, or condition of 
        employment, including by any predispute arbitration agreement.
            (2) No predispute arbitration agreements.--Except as 
        provided under paragraph (3), and notwithstanding any other 
        provision of law, no predispute arbitration agreement shall be 
        valid or enforceable to the extent that it requires arbitration 
        of a dispute arising under this section.
            (3) Exception.--Notwithstanding paragraphs (1) and (2), an 
        arbitration provision in a collective bargaining agreement 
        shall be enforceable as to disputes arising under subsection 
        (a)(4), unless the Bureau determines, by rule, that such 
        provision is inconsistent with the purposes of this title.

SEC. 1058. EFFECTIVE DATE.

    This subtitle shall become effective on the designated transfer 
date.

     Subtitle F--Transfer of Functions and Personnel; Transitional 
                               Provisions

SEC. 1061. TRANSFER OF CONSUMER FINANCIAL PROTECTION FUNCTIONS.

    (a) Defined Terms.--For purposes of this subtitle--
            (1) the term ``consumer financial protection functions'' 
        means research, rulemaking, issuance of orders or guidance, 
        supervision, examination, and enforcement activities, powers, 
        and duties relating to the offering or provision of consumer 
        financial products or services; and
            (2) the terms ``transferor agency'' and ``transferor 
        agencies'' mean, respectively--
                    (A) the Board of Governors (and any Federal reserve 
                bank, as the context requires), the Federal Deposit 
                Insurance Corporation, the Federal Trade Commission, 
                the National Credit Union Administration, the Office of 
                the Comptroller of the Currency, the Office of Thrift 
                Supervision, and the Department of Housing and Urban 
                Development, and the heads of those agencies; and
                    (B) the agencies listed in subparagraph (A), 
                collectively.
    (b) In General.--Except as provided in subsection (c), consumer 
financial protection functions are transferred as follows:
            (1) Board of governors.--
                    (A) Transfer of functions.--All consumer financial 
                protection functions of the Board of Governors are 
                transferred to the Bureau.
                    (B) Board of governors authority.--The Bureau shall 
                have all powers and duties that were vested in the 
                Board of Governors, relating to consumer financial 
                protection functions, on the day before the designated 
                transfer date.
            (2) Comptroller of the currency.--
                    (A) Transfer of functions.--All consumer financial 
                protection functions of the Comptroller of the Currency 
                are transferred to the Bureau.
                    (B) Comptroller authority.--The Bureau shall have 
                all powers and duties that were vested in the 
                Comptroller of the Currency, relating to consumer 
                financial protection functions, on the day before the 
                designated transfer date.
            (3) Director of the office of thrift supervision.--
                    (A) Transfer of functions.--All consumer financial 
                protection functions of the Director of the Office of 
                Thrift Supervision are transferred to the Bureau.
                    (B) Director authority.--The Bureau shall have all 
                powers and duties that were vested in the Director of 
                the Office of Thrift Supervision, relating to consumer 
                financial protection functions, on the day before the 
                designated transfer date.
            (4) Federal deposit insurance corporation.--
                    (A) Transfer of functions.--All consumer financial 
                protection functions of the Federal Deposit Insurance 
                Corporation are transferred to the Bureau.
                    (B) Corporation authority.--The Bureau shall have 
                all powers and duties that were vested in the Federal 
                Deposit Insurance Corporation, relating to consumer 
                financial protection functions, on the day before the 
                designated transfer date.
            (5) Federal trade commission.--
                    (A) Transfer of functions.--The authority of the 
                Federal Trade Commission under an enumerated consumer 
                law to prescribe rules, issue guidelines, or conduct a 
                study or issue a report mandated under such law shall 
                be transferred to the Bureau on the designated transfer 
                date. Nothing in this title shall be construed to 
                require a mandatory transfer of any employee of the 
                Federal Trade Commission.
                    (B) Bureau authority.--
                            (i) In general.--The Bureau shall have all 
                        powers and duties under the enumerated consumer 
                        laws to prescribe rules, issue guidelines, or 
                        to conduct studies or issue reports mandated by 
                        such laws, that were vested in the Federal 
                        Trade Commission on the day before the 
                        designated transfer date.
                            (ii) Federal trade commission act.--Subject 
                        to subtitle B, the Bureau may enforce a rule 
                        prescribed under the Federal Trade Commission 
                        Act by the Federal Trade Commission with 
                        respect to an unfair or deceptive act or 
                        practice to the extent that such rule applies 
                        to a covered person or service provider with 
                        respect to the offering or provision of a 
                        consumer financial product or service as if it 
                        were a rule prescribed under section 1031 of 
                        this title.
                    (C) Authority of the federal trade commission.--
                            (i) In general.--No provision of this title 
                        shall be construed as modifying, limiting, or 
                        otherwise affecting the authority of the 
                        Federal Trade Commission under the Federal 
                        Trade Commission Act or any other law, other 
                        than the authority under an enumerated consumer 
                        law to prescribe rules, issue official 
                        guidelines, or conduct a study or issue a 
                        report mandated under such law.
                            (ii) Commission authority relating to rules 
                        prescribed by the bureau.--Subject to subtitle 
                        B, the Federal Trade Commission shall have 
                        authority to enforce under the Federal Trade 
                        Commission Act (15 U.S.C. 41 et seq.) a rule 
                        prescribed by the Bureau under this title with 
                        respect to a covered person subject to the 
                        jurisdiction of the Federal Trade Commission 
                        under that Act, and a violation of such a rule 
                        by such a person shall be treated as a 
                        violation of a rule issued under section 18 of 
                        that Act (15 U.S.C. 57a) with respect to unfair 
                        or deceptive acts or practices.
                    (D) Coordination.--To avoid duplication of or 
                conflict between rules prescribed by the Bureau under 
                section 1031 of this title and the Federal Trade 
                Commission under section 18(a)(1)(B) of the Federal 
                Trade Commission Act that apply to a covered person or 
                service provider with respect to the offering or 
                provision of consumer financial products or services, 
                the agencies shall negotiate an agreement with respect 
                to rulemaking by each agency, including consultation 
                with the other agency prior to proposing a rule and 
                during the comment period.
                    (E) Deference.--No provision of this title shall be 
                construed as altering, limiting, expanding, or 
                otherwise affecting the deference that a court affords 
                to the--
                            (i) Federal Trade Commission in making 
                        determinations regarding the meaning or 
                        interpretation of any provision of the Federal 
                        Trade Commission Act, or of any other Federal 
                        law for which the Commission has authority to 
                        prescribe rules; or
                            (ii) Bureau in making determinations 
                        regarding the meaning or interpretation of any 
                        provision of a Federal consumer financial law 
                        (other than any law described in clause (i)).
            (6) National credit union administration.--
                    (A) Transfer of functions.--All consumer financial 
                protection functions of the National Credit Union 
                Administration are transferred to the Bureau.
                    (B) National credit union administration 
                authority.--The Bureau shall have all powers and duties 
                that were vested in the National Credit Union 
                Administration, relating to consumer financial 
                protection functions, on the day before the designated 
                transfer date.
            (7) Department of housing and urban development.--
                    (A) Transfer of functions.--All consumer protection 
                functions of the Secretary of the Department of Housing 
                and Urban Development relating to the Real Estate 
                Settlement Procedures Act of 1974 (12 U.S.C. 2601 et 
                seq.) and the Secure and Fair Enforcement for Mortgage 
                Licensing Act of 2008 (12 U.S.C. 5102 et seq.) are 
                transferred to the Bureau.
                    (B) Authority of the department of housing and 
                urban development.--The Bureau shall have all powers 
                and duties that were vested in the Secretary of the 
                Department of Housing and Urban Development relating to 
                the Real Estate Settlement Procedures Act of 1974 (12 
                U.S.C. 2601 et seq.), and the Secure and Fair 
                Enforcement for Mortgage Licensing Act of 2008 (12 
                U.S.C. 5101 et seq.), on the day before the designated 
                transfer date.
    (c) Transfers of Functions Subject to Examination and Enforcement 
Authority Remaining With Transferor Agencies.--The transfers of 
functions in subsection (b) do not affect the authority of the agencies 
identified in subsection (b) from conducting examinations or initiating 
and maintaining enforcement proceedings, including performing 
appropriate supervisory and support functions relating thereto, in 
accordance with sections 1024, 1025, and 1026.
    (d) Effective Date.--Subsections (b) and (c) shall become effective 
on the designated transfer date.

SEC. 1062. DESIGNATED TRANSFER DATE.

    (a) In General.--Not later than 60 days after the date of enactment 
of this Act, the Secretary shall--
            (1) in consultation with the Chairman of the Board of 
        Governors, the Chairperson of the Corporation, the Chairman of 
        the Federal Trade Commission, the Chairman of the National 
        Credit Union Administration Board, the Comptroller of the 
        Currency, the Director of the Office of Thrift Supervision, the 
        Secretary of the Department of Housing and Urban Development, 
        and the Director of the Office of Management and Budget, 
        designate a single calendar date for the transfer of functions 
        to the Bureau under section 1061; and
            (2) publish notice of that designated date in the Federal 
        Register.
    (b) Changing Designation.--The Secretary--
            (1) may, in consultation with the Chairman of the Board of 
        Governors, the Chairperson of the Federal Deposit Insurance 
        Corporation, the Chairman of the Federal Trade Commission, the 
        Chairman of the National Credit Union Administration Board, the 
        Comptroller of the Currency, the Director of the Office of 
        Thrift Supervision, the Secretary of the Department of Housing 
        and Urban Development, and the Director of the Office of 
        Management and Budget, change the date designated under 
        subsection (a); and
            (2) shall publish notice of any changed designated date in 
        the Federal Register.
    (c) Permissible Dates.--
            (1) In general.--Except as provided in paragraph (2), any 
        date designated under this section shall be not earlier than 
        180 days, nor later than 18 months, after the date of enactment 
        of this Act.
            (2) Extension of time.--The Secretary may designate a date 
        that is later than 18 months after the date of enactment of 
        this Act if the Secretary transmits to appropriate committees 
        of Congress--
                    (A) a written determination that orderly 
                implementation of this title is not feasible before the 
                date that is 18 months after the date of enactment of 
                this Act;
                    (B) an explanation of why an extension is necessary 
                for the orderly implementation of this title; and
                    (C) a description of the steps that will be taken 
                to effect an orderly and timely implementation of this 
                title within the extended time period.
            (3) Extension limited.--In no case may any date designated 
        under this section be later than 24 months after the date of 
        enactment of this Act.

SEC. 1063. SAVINGS PROVISIONS.

    (a) Board of Governors.--
            (1) Existing rights, duties, and obligations not 
        affected.--Section 1061(b)(1) does not affect the validity of 
        any right, duty, or obligation of the United States, the Board 
        of Governors (or any Federal reserve bank), or any other person 
        that--
                    (A) arises under any provision of law relating to 
                any consumer financial protection function of the Board 
                of Governors transferred to the Bureau by this title; 
                and
                    (B) existed on the day before the designated 
                transfer date.
            (2) Continuation of suits.--No provision of this Act shall 
        abate any proceeding commenced by or against the Board of 
        Governors (or any Federal reserve bank) before the designated 
        transfer date with respect to any consumer financial protection 
        function of the Board of Governors (or any Federal reserve 
        bank) transferred to the Bureau by this title, except that the 
        Bureau, subject to sections 1024, 1025, and 1026, shall be 
        substituted for the Board of Governors (or Federal reserve 
        bank) as a party to any such proceeding as of the designated 
        transfer date.
    (b) Federal Deposit Insurance Corporation.--
            (1) Existing rights, duties, and obligations not 
        affected.--Section 1061(b)(4) does not affect the validity of 
        any right, duty, or obligation of the United States, the 
        Federal Deposit Insurance Corporation, the Board of Directors 
        of that Corporation, or any other person, that--
                    (A) arises under any provision of law relating to 
                any consumer financial protection function of the 
                Federal Deposit Insurance Corporation transferred to 
                the Bureau by this title; and
                    (B) existed on the day before the designated 
                transfer date.
            (2) Continuation of suits.--No provision of this Act shall 
        abate any proceeding commenced by or against the Federal 
        Deposit Insurance Corporation (or the Board of Directors of 
        that Corporation) before the designated transfer date with 
        respect to any consumer financial protection function of the 
        Federal Deposit Insurance Corporation transferred to the Bureau 
        by this title, except that the Bureau, subject to sections 
        1024, 1025, and 1026, shall be substituted for the Federal 
        Deposit Insurance Corporation (or Board of Directors) as a 
        party to any such proceeding as of the designated transfer 
        date.
    (c) Federal Trade Commission.--Section 1061(b)(5) does not affect 
the validity of any right, duty, or obligation of the United States, 
the Federal Trade Commission, or any other person, that--
            (1) arises under any provision of law relating to any 
        consumer financial protection function of the Federal Trade 
        Commission transferred to the Bureau by this title; and
            (2) existed on the day before the designated transfer date.
    (d) National Credit Union Administration.--
            (1) Existing rights, duties, and obligations not 
        affected.--Section 1061(b)(6) does not affect the validity of 
        any right, duty, or obligation of the United States, the 
        National Credit Union Administration, the National Credit Union 
        Administration Board, or any other person, that--
                    (A) arises under any provision of law relating to 
                any consumer financial protection function of the 
                National Credit Union Administration transferred to the 
                Bureau by this title; and
                    (B) existed on the day before the designated 
                transfer date.
            (2) Continuation of suits.--No provision of this Act shall 
        abate any proceeding commenced by or against the National 
        Credit Union Administration (or the National Credit Union 
        Administration Board) before the designated transfer date with 
        respect to any consumer financial protection function of the 
        National Credit Union Administration transferred to the Bureau 
        by this title, except that the Bureau, subject to sections 
        1024, 1025, and 1026, shall be substituted for the National 
        Credit Union Administration (or National Credit Union 
        Administration Board) as a party to any such proceeding as of 
        the designated transfer date.
    (e) Office of the Comptroller of the Currency.--
            (1) Existing rights, duties, and obligations not 
        affected.--Section 1061(b)(2) does not affect the validity of 
        any right, duty, or obligation of the United States, the 
        Comptroller of the Currency, the Office of the Comptroller of 
        the Currency, or any other person, that--
                    (A) arises under any provision of law relating to 
                any consumer financial protection function of the 
                Comptroller of the Currency transferred to the Bureau 
                by this title; and
                    (B) existed on the day before the designated 
                transfer date.
            (2) Continuation of suits.--No provision of this Act shall 
        abate any proceeding commenced by or against the Comptroller of 
        the Currency (or the Office of the Comptroller of the Currency) 
        with respect to any consumer financial protection function of 
        the Comptroller of the Currency transferred to the Bureau by 
        this title before the designated transfer date, except that the 
        Bureau, subject to sections 1024, 1025, and 1026, shall be 
        substituted for the Comptroller of the Currency (or the Office 
        of the Comptroller of the Currency) as a party to any such 
        proceeding as of the designated transfer date.
    (f) Office of Thrift Supervision.--
            (1) Existing rights, duties, and obligations not 
        affected.--Section 1061(b)(3) does not affect the validity of 
        any right, duty, or obligation of the United States, the 
        Director of the Office of Thrift Supervision, the Office of 
        Thrift Supervision, or any other person, that--
                    (A) arises under any provision of law relating to 
                any consumer financial protection function of the 
                Director of the Office of Thrift Supervision 
                transferred to the Bureau by this title; and
                    (B) that existed on the day before the designated 
                transfer date.
            (2) Continuation of suits.--No provision of this Act shall 
        abate any proceeding commenced by or against the Director of 
        the Office of Thrift Supervision (or the Office of Thrift 
        Supervision) with respect to any consumer financial protection 
        function of the Director of the Office of Thrift Supervision 
        transferred to the Bureau by this title before the designated 
        transfer date, except that the Bureau, subject to sections 
        1024, 1025, and 1026, shall be substituted for the Director (or 
        the Office of Thrift Supervision) as a party to any such 
        proceeding as of the designated transfer date.
    (g) Department of Housing and Urban Development.--
            (1) Existing rights, duties, and obligations not 
        affected.--Section 1061(b)(7) shall not affect the validity of 
        any right, duty, or obligation of the United States, the 
        Secretary of the Department of Housing and Urban Development 
        (or the Department of Housing and Urban Development), or any 
        other person, that--
                    (A) arises under any provision of law relating to 
                any function of the Secretary of the Department of 
                Housing and Urban Development with respect to the Real 
                Estate Settlement Procedures Act of 1974 (12 U.S.C. 
                2601 et seq.) or the Secure and Fair Enforcement for 
                Mortgage Licensing Act of 2008 (12 U.S.C. 5102 et seq.) 
                transferred to the Bureau by this title; and
                    (B) existed on the day before the designated 
                transfer date.
            (2) Continuation of suits.--This title shall not abate any 
        proceeding commenced by or against the Secretary of the 
        Department of Housing and Urban Development (or the Department 
        of Housing and Urban Development) with respect to any consumer 
        financial protection function of the Secretary of the 
        Department of Housing and Urban Development transferred to the 
        Bureau by this title before the designated transfer date, 
        except that the Bureau, subject to sections 1024, 1025, and 
        1026, shall be substituted for the Secretary of the Department 
        of Housing and Urban Development (or the Department of Housing 
        and Urban Development) as a party to any such proceeding as of 
        the designated transfer date.
    (h) Continuation of Existing Orders, Rules, Determinations, 
Agreements, and Resolutions.--All orders, resolutions, determinations, 
agreements, and rules that have been issued, made, prescribed, or 
allowed to become effective by any transferor agency or by a court of 
competent jurisdiction, in the performance of consumer financial 
protection functions that are transferred by this title and that are in 
effect on the day before the designated transfer date, shall continue 
in effect according to the terms of those orders, resolutions, 
determinations, agreements, and rules, and shall not be enforceable by 
or against the Bureau.
    (i) Identification of Rules Continued.--Not later than the 
designated transfer date, the Bureau--
            (1) shall, after consultation with the head of each 
        transferor agency, identify the rules continued under 
        subsection (h) that will be enforced by the Bureau; and
            (2) shall publish a list of such rules in the Federal 
        Register.
    (j) Status of Rules Proposed or Not Yet Effective.--
            (1) Proposed rules.--Any proposed rule of a transferor 
        agency which that agency, in performing consumer financial 
        protection functions transferred by this title, has proposed 
        before the designated transfer date, but has not been published 
        as a final rule before that date, shall be deemed to be a 
        proposed rule of the Bureau.
            (2) Rules not yet effective.--Any interim or final rule of 
        a transferor agency which that agency, in performing consumer 
        financial protection functions transferred by this title, has 
        published before the designated transfer date, but which has 
        not become effective before that date, shall become effective 
        as a rule of the Bureau according to its terms.

SEC. 1064. TRANSFER OF CERTAIN PERSONNEL.

    (a) In General.--
            (1) Certain federal reserve system employees transferred.--
                    (A) Identifying employees for transfer.--The Bureau 
                and the Board of Governors shall--
                            (i) jointly determine the number of 
                        employees of the Board of Governors necessary 
                        to perform or support the consumer financial 
                        protection functions of the Board of Governors 
                        that are transferred to the Bureau by this 
                        title; and
                            (ii) consistent with the number determined 
                        under clause (i), jointly identify employees of 
                        the Board of Governors for transfer to the 
                        Bureau, in a manner that the Bureau and the 
                        Board of Governors, in their sole discretion, 
                        determine equitable.
                    (B) Identified employees transferred.--All 
                employees of the Board of Governors identified under 
                subparagraph (A)(ii) shall be transferred to the Bureau 
                for employment.
                    (C) Federal reserve bank employees.--Employees of 
                any Federal reserve bank who, on the day before the 
                designated transfer date, are performing consumer 
                financial protection functions on behalf of the Board 
                of Governors shall be treated as employees of the Board 
                of Governors for purposes of subparagraphs (A) and (B).
            (2) Certain fdic employees transferred.--
                    (A) Identifying employees for transfer.--The Bureau 
                and the Board of Directors of the Federal Deposit 
                Insurance Corporation shall--
                            (i) jointly determine the number of 
                        employees of that Corporation necessary to 
                        perform or support the consumer financial 
                        protection functions of the Corporation that 
                        are transferred to the Bureau by this title; 
                        and
                            (ii) consistent with the number determined 
                        under clause (i), jointly identify employees of 
                        the Corporation for transfer to the Bureau, in 
                        a manner that the Bureau and the Board of 
                        Directors of the Corporation, in their sole 
                        discretion, determine equitable.
                    (B) Identified employees transferred.--All 
                employees of the Corporation identified under 
                subparagraph (A)(ii) shall be transferred to the Bureau 
                for employment.
            (3) Certain ncua employees transferred.--
                    (A) Identifying employees for transfer.--The Bureau 
                and the National Credit Union Administration Board 
                shall--
                            (i) jointly determine the number of 
                        employees of the National Credit Union 
                        Administration necessary to perform or support 
                        the consumer financial protection functions of 
                        the National Credit Union Administration that 
                        are transferred to the Bureau by this title; 
                        and
                            (ii) consistent with the number determined 
                        under clause (i), jointly identify employees of 
                        the National Credit Union Administration for 
                        transfer to the Bureau, in a manner that the 
                        Bureau and the National Credit Union 
                        Administration Board, in their sole discretion, 
                        determine equitable.
                    (B) Identified employees transferred.--All 
                employees of the National Credit Union Administration 
                identified under subparagraph (A)(ii) shall be 
                transferred to the Bureau for employment.
            (4) Certain office of the comptroller of the currency 
        employees transferred.--
                    (A) Identifying employees for transfer.--The Bureau 
                and the Comptroller of the Currency shall--
                            (i) jointly determine the number of 
                        employees of the Office of the Comptroller of 
                        the Currency necessary to perform or support 
                        the consumer financial protection functions of 
                        the Office of the Comptroller of the Currency 
                        that are transferred to the Bureau by this 
                        title; and
                            (ii) consistent with the number determined 
                        under clause (i), jointly identify employees of 
                        the Office of the Comptroller of the Currency 
                        for transfer to the Bureau, in a manner that 
                        the Bureau and the Office of the Comptroller of 
                        the Currency, in their sole discretion, 
                        determine equitable.
                    (B) Identified employees transferred.--All 
                employees of the Office of the Comptroller of the 
                Currency identified under subparagraph (A)(ii) shall be 
                transferred to the Bureau for employment.
            (5) Certain office of thrift supervision employees 
        transferred.--
                    (A) Identifying employees for transfer.--The Bureau 
                and the Director of the Office of Thrift Supervision 
                shall--
                            (i) jointly determine the number of 
                        employees of the Office of Thrift Supervision 
                        necessary to perform or support the consumer 
                        financial protection functions of the Office of 
                        Thrift Supervision that are transferred to the 
                        Bureau by this title; and
                            (ii) consistent with the number determined 
                        under clause (i), jointly identify employees of 
                        the Office of Thrift Supervision for transfer 
                        to the Bureau, in a manner that the Bureau and 
                        the Office of Thrift Supervision, in their sole 
                        discretion, determine equitable.
                    (B) Identified employees transferred.--All 
                employees of the Office of Thrift Supervision 
                identified under subparagraph (A)(ii) shall be 
                transferred to the Bureau for employment.
            (6) Certain employees of department of housing and urban 
        development transferred.--
                    (A) Identifying employees for transfer.--The Bureau 
                and the Secretary of the Department of Housing and 
                Urban Development shall--
                            (i) jointly determine the number of 
                        employees of the Department of Housing and 
                        Urban Development necessary to perform or 
                        support the consumer protection functions of 
                        the Department that are transferred to the 
                        Bureau by this title; and
                            (ii) consistent with the number determined 
                        under clause (i), jointly identify employees of 
                        the Department of Housing and Urban Development 
                        for transfer to the Bureau in a manner that the 
                        Bureau and the Secretary of the Department of 
                        Housing and Urban Development, in their sole 
                        discretion, deem equitable.
                    (B) Identified employees transferred.--All 
                employees of the Department of Housing and Urban 
                Development identified under subparagraph (A)(ii) shall 
                be transferred to the Bureau for employment.
            (7) Appointment authority for excepted service and senior 
        executive service transferred.--
                    (A) In general.--In the case of an employee 
                occupying a position in the excepted service or the 
                Senior Executive Service, any appointment authority 
                established pursuant to law or regulations of the 
                Office of Personnel Management for filling such 
                positions shall be transferred, subject to subparagraph 
                (B).
                    (B) Declining transfers allowed.--An agency or 
                entity may decline to make a transfer of authority 
                under subparagraph (A) (and the employees appointed 
                pursuant thereto) to the extent that such authority 
                relates to positions excepted from the competitive 
                service because of their confidential, policy-making, 
                policy-determining, or policy-advocating character, and 
                non-career positions in the Senior Executive Service 
                (within the meaning of section 3132(a)(7) of title 5, 
                United States Code).
    (b) Timing of Transfers and Position Assignments.--Each employee to 
be transferred under this section shall--
            (1) be transferred not later than 90 days after the 
        designated transfer date; and
            (2) receive notice of a position assignment not later than 
        120 days after the effective date of his or her transfer.
    (c) Transfer of Function.--
            (1) In general.--Notwithstanding any other provision of 
        law, the transfer of employees shall be deemed a transfer of 
        functions for the purpose of section 3503 of title 5, United 
        States Code.
            (2) Priority of this title.--If any provisions of this 
        title conflict with any protection provided to transferred 
        employees under section 3503 of title 5, United States Code, 
        the provisions of this title shall control.
    (d) Equal Status and Tenure Positions.--
            (1) Employees transferred from fdic, hud, ncua, occ, and 
        ots.--Each employee transferred from the Federal Deposit 
        Insurance Corporation, the National Credit Union 
        Administration, the Office of the Comptroller of the Currency, 
        the Office of Thrift Supervision, or the Department of Housing 
        and Urban Development shall be placed in a position at the 
        Bureau with the same status and tenure as that employee held on 
        the day before the designated transfer date.
            (2) Employees transferred from the federal reserve 
        system.--
                    (A) Comparability.--Each employee transferred from 
                the Board of Governors or from a Federal reserve bank 
                shall be placed in a position with the same status and 
                tenure as that of an employee transferring to the 
                Bureau from the Office of the Comptroller of the 
                Currency who perform similar functions and have similar 
                periods of service.
                    (B) Service periods credited.--For purposes of this 
                paragraph, periods of service with the Board of 
                Governors or a Federal reserve bank shall be credited 
                as periods of service with a Federal agency.
    (e) Additional Certification Requirements Limited.--Examiners 
transferred to the Bureau are not subject to any additional 
certification requirements before being placed in a comparable examiner 
position at the Bureau examining the same types of institutions as they 
examined before they were transferred.
    (f) Personnel Actions Limited.--
            (1) 2-year protection.--Except as provided in paragraph 
        (2), each transferred employee holding a permanent position on 
        the day before the designated transfer date may not, during the 
        2-year period beginning on the designated transfer date, be 
        involuntarily separated, or involuntarily reassigned outside 
        his or her locality pay area, as defined by the Office of 
        Personnel Management.
            (2) Exceptions.--Paragraph (1) does not limit the right of 
        the Bureau--
                    (A) to separate an employee for cause or for 
                unacceptable performance;
                    (B) to terminate an appointment to a position 
                excepted from the competitive service because of its 
                confidential policy-making, policy-determining, or 
                policy-advocating character; or
                    (C) to reassign a supervisory employee outside his 
                or her locality pay area, as defined by the Office of 
                Personnel Management, when the Bureau determines that 
                the reassignment is necessary for the efficient 
                operation of the Bureau.
    (g) Pay.--
            (1) 2-year protection.--Except as provided in paragraph 
        (2), each transferred employee shall, during the 2-year period 
        beginning on the designated transfer date, receive pay at a 
        rate equal to not less than the basic rate of pay (including 
        any geographic differential) that the employee received during 
        the pay period immediately preceding the date of transfer.
            (2) Exceptions.--Paragraph (1) does not limit the right of 
        the Bureau to reduce the rate of basic pay of a transferred 
        employee--
                    (A) for cause;
                    (B) for unacceptable performance; or
                    (C) with the consent of the employee.
            (3) Protection only while employed.--Paragraph (1) applies 
        to a transferred employee only while that employee remains 
        employed by the Bureau.
            (4) Pay increases permitted.--Paragraph (1) does not limit 
        the authority of the Bureau to increase the pay of a 
        transferred employee.
    (h) Reorganization.--
            (1) Between 1st and 3rd year.--
                    (A) In general.--If the Bureau determines, during 
                the 2-year period beginning 1 year after the designated 
                transfer date, that a reorganization of the staff of 
                the Bureau is required--
                            (i) that reorganization shall be deemed a 
                        ``major reorganization'' for purposes of 
                        affording affected employees retirement under 
                        section 8336(d)(2) or 8414(b)(1)(B) of title 5, 
                        United States Code;
                            (ii) before the reorganization occurs, all 
                        employees in the same locality pay area as 
                        defined by the Office of Personnel Management 
                        shall be placed in a uniform position 
                        classification system; and
                            (iii) any resulting reduction in force 
                        shall be governed by the provisions of chapter 
                        35 of title 5, United States Code, except that 
                        the Bureau shall--
                                    (I) establish competitive areas (as 
                                that term is defined in regulations 
                                issued by the Office of Personnel 
                                Management) to include at a minimum all 
                                employees in the same locality pay area 
                                as defined by the Office of Personnel 
                                Management;
                                    (II) establish competitive levels 
                                (as that term is defined in regulations 
                                issued by the Office of Personnel 
                                Management) without regard to whether 
                                the particular employees have been 
                                appointed to positions in the 
                                competitive service or the excepted 
                                service; and
                                    (III) afford employees appointed to 
                                positions in the excepted service 
                                (other than to a position excepted from 
                                the competitive service because of its 
                                confidential policy-making, policy-
                                determining, or policy-advocating 
                                character) the same assignment rights 
                                to positions within the Bureau as 
                                employees appointed to positions in the 
                                competitive service.
                    (B) Service credit for reductions in force.--For 
                purposes of this paragraph, periods of service with a 
                Federal home loan bank, a joint office of the Federal 
                home loan banks, the Board of Governors, a Federal 
                reserve bank, the Federal Deposit Insurance 
                Corporation, or the National Credit Union 
                Administration shall be credited as periods of service 
                with a Federal agency.
            (2) After 3rd year.--
                    (A) In general.--If the Bureau determines, at any 
                time after the 3-year period beginning on the 
                designated transfer date, that a reorganization of the 
                staff of the Bureau is required, any resulting 
                reduction in force shall be governed by the provisions 
                of chapter 35 of title 5, United States Code, except 
                that the Bureau shall establish competitive levels (as 
                that term is defined in regulations issued by the 
                Office of Personnel Management) without regard to types 
                of appointment held by particular employees transferred 
                under this section.
                    (B) Service credit for reductions in force.--For 
                purposes of this paragraph, periods of service with a 
                Federal home loan bank, a joint office of the Federal 
                home loan banks, the Board of Governors, a Federal 
                reserve bank, the Federal Deposit Insurance 
                Corporation, or the National Credit Union 
                Administration shall be credited as periods of service 
                with a Federal agency.
    (i) Benefits.--
            (1) Retirement benefits for transferred employees.--
                    (A) In general.--
                            (i) Continuation of existing retirement 
                        plan.--Except as provided in subparagraph (B), 
                        each transferred employee shall remain enrolled 
                        in his or her existing retirement plan, through 
                        any period of continuous employment with the 
                        Bureau.
                            (ii) Employer contribution.--The Bureau 
                        shall pay any employer contributions to the 
                        existing retirement plan of each transferred 
                        employee, as required under that plan.
                    (B) Option for employees transferred from federal 
                reserve system to be subject to federal employee 
                retirement program.--
                            (i) Election.--Any transferred employee who 
                        was enrolled in a Federal Reserve System 
                        retirement plan on the day before his or her 
                        transfer to the Bureau may, during the 1-year 
                        period beginning 6 months after the designated 
                        transfer date, elect to be subject to the 
                        Federal employee retirement program.
                            (ii) Effective date of coverage.--For any 
                        employee making an election under clause (i), 
                        coverage by the Federal employee retirement 
                        program shall begin 1 year after the designated 
                        transfer date.
                    (C) Bureau participation in federal reserve system 
                retirement plan.--
                            (i) Separate account in federal reserve 
                        system retirement plan established.--
                        Notwithstanding any other provision of law, and 
                        subject to the terms and conditions of this 
                        section, a separate account in the Federal 
                        Reserve System retirement plan shall be 
                        established for Bureau employees who do not 
                        make the election under subparagraph (B).
                            (ii) Funds attributable to transferred 
                        employees remaining in federal reserve system 
                        retirement plan transferred.--The proportionate 
                        share of funds in the Federal Reserve System 
                        retirement plan, including the proportionate 
                        share of any funding surplus in that plan, 
                        attributable to a transferred employee who does 
                        not make the election under subparagraph (B), 
                        shall be transferred to the account established 
                        under clause (i).
                            (iii) Employer contributions deposited.--
                        The Bureau shall deposit into the account 
                        established under clause (i) the employer 
                        contributions that the Bureau makes on behalf 
                        of employees who do not make the election under 
                        subparagraph (B).
                            (iv) Account administration.--The Bureau 
                        shall administer the account established under 
                        clause (i) as a participating employer in the 
                        Federal Reserve System retirement plan.
                    (D) Definitions.--For purposes of this paragraph--
                            (i) the term ``existing retirement plan'' 
                        means, with respect to any employee transferred 
                        under this section, the particular retirement 
                        plan (including the Financial Institutions 
                        Retirement Fund) and any associated thrift 
                        savings plan of the agency or Federal reserve 
                        bank from which the employee was transferred, 
                        in which the employee was enrolled on the day 
                        before the designated transfer date; and
                            (ii) the term ``Federal employee retirement 
                        program'' means the retirement program for 
                        Federal employees established by chapter 84 of 
                        title 5, United States Code.
            (2) Benefits other than retirement benefits for transferred 
        employees.--
                    (A) During 1st year.--
                            (i) Existing plans continue.--Each 
                        transferred employee may, for 1 year after the 
                        designated transfer date, retain membership in 
                        any other employee benefit program of the 
                        agency or bank from which the employee 
                        transferred, including a dental, vision, long 
                        term care, or life insurance program, to which 
                        the employee belonged on the day before the 
                        designated transfer date.
                            (ii) Employer contribution.--The Bureau 
                        shall reimburse the agency or bank from which 
                        an employee was transferred for any cost 
                        incurred by that agency or bank in continuing 
                        to extend coverage in the benefit program to 
                        the employee, as required under that program or 
                        negotiated agreements.
                    (B) Dental, vision, or life insurance after 1st 
                year.--If, after the 1-year period beginning on the 
                designated transfer date, the Bureau decides not to 
                continue participation in any dental, vision, or life 
                insurance program of an agency or bank from which an 
                employee transferred, a transferred employee who is a 
                member of such a program may, before the decision of 
                the Bureau takes effect, elect to enroll, without 
                regard to any regularly scheduled open season, in--
                            (i) the enhanced dental benefits 
                        established by chapter 89A of title 5, United 
                        States Code;
                            (ii) the enhanced vision benefits 
                        established by chapter 89B of title 5, United 
                        States Code; or
                            (iii) the Federal Employees Group Life 
                        Insurance Program established by chapter 87 of 
                        title 5, United States Code, without regard to 
                        any requirement of insurability.
                    (C) Long term care insurance after 1st year.--If, 
                after the 1-year period beginning on the designated 
                transfer date, the Bureau decides not to continue 
                participation in any long term care insurance program 
                of an agency or bank from which an employee 
                transferred, a transferred employee who is a member of 
                such a program may, before the decision of the Bureau 
                takes effect, elect to apply for coverage under the 
                Federal Long Term Care Insurance Program established by 
                chapter 90 of title 5, United States Code, under the 
                underwriting requirements applicable to a new active 
                workforce member (as defined in part 875, title 5, Code 
                of Federal Regulations).
                    (D) Employee contribution.--An individual enrolled 
                in the Federal Employees Health Benefits program shall 
                pay any employee contribution required by the plan.
                    (E) Additional funding.--The Bureau shall transfer 
                to the Federal Employees Health Benefits Fund 
                established under section 8909 of title 5, United 
                States Code, an amount determined by the Director of 
                the Office of Personnel Management, after consultation 
                with the Bureau and the Office of Management and 
                Budget, to be necessary to reimburse the Fund for the 
                cost to the Fund of providing benefits under this 
                paragraph.
                    (F) Credit for time enrolled in other plans.--For 
                employees transferred under this title, enrollment in a 
                health benefits plan administered by a transferor 
                agency or a Federal reserve bank, as the case may be, 
                immediately before enrollment in a health benefits plan 
                under chapter 89 of title 5, United States Code, shall 
                be considered as enrollment in a health benefits plan 
                under that chapter for purposes of section 
                8905(b)(1)(A) of title 5, United States Code.
                    (G) Special provisions to ensure continuation of 
                life insurance benefits.--
                            (i) In general.--An annuitant (as defined 
                        in section 8901(3) of title 5, United States 
                        Code) who is enrolled in a life insurance plan 
                        administered by a transferor agency on the day 
                        before the designated transfer date shall be 
                        eligible for coverage by a life insurance plan 
                        under sections 8706(b), 8714a, 8714b, and 8714c 
                        of title 5, United States Code, or in a life 
                        insurance plan established by the Bureau, 
                        without regard to any regularly scheduled open 
                        season and requirement of insurability.
                            (ii) Employee contribution.--An individual 
                        enrolled in a life insurance plan under this 
                        subparagraph shall pay any employee 
                        contribution required by the plan.
                            (iii) Additional funding.--The Bureau shall 
                        transfer to the Employees' Life Insurance Fund 
                        established under section 8714 of title 5, 
                        United States Code, an amount determined by the 
                        Director of the Office of Personnel Management, 
                        after consultation with the Bureau and the 
                        Office of Management and Budget, to be 
                        necessary to reimburse the Fund for the cost to 
                        the Fund of providing benefits under this 
                        subparagraph not otherwise paid for by the 
                        employee under clause (ii).
                            (iv) Credit for time enrolled in other 
                        plans.--For employees transferred under this 
                        title, enrollment in a life insurance plan 
                        administered by a transferor agency immediately 
                        before enrollment in a life insurance plan 
                        under chapter 87 of title 5, United States 
                        Code, shall be considered as enrollment in a 
                        life insurance plan under that chapter for 
                        purposes of section 8706(b)(1)(A) of title 5, 
                        United States Code.
            (3) OPM rules.--The Office of Personnel Management shall 
        issue such rules as are necessary to carry out this subsection.
    (j) Implementation of Uniform Pay and Classification System.--Not 
later than 2 years after the designated transfer date, the Bureau shall 
implement a uniform pay and classification system for all employees 
transferred under this title.
    (k) Equitable Treatment.--In administering the provisions of this 
section, the Bureau--
            (1) shall take no action that would unfairly disadvantage 
        transferred employees relative to each other based on their 
        prior employment by the Board of Governors, the Federal Deposit 
        Insurance Corporation, the Federal Trade Commission, the 
        National Credit Union Administration, the Office of the 
        Comptroller of the Currency, the Office of Thrift Supervision, 
        a Federal reserve bank, a Federal home loan bank, or a joint 
        office of the Federal home loan banks; and
            (2) may take such action as is appropriate in individual 
        cases so that employees transferred under this section receive 
        equitable treatment, with respect to the status, tenure, pay, 
        benefits (other than benefits under programs administered by 
        the Office of Personnel Management), and accrued leave or 
        vacation time of those employees, for prior periods of service 
        with any Federal agency, including the Board of Governors, the 
        Corporation, the Federal Trade Commission, the National Credit 
        Union Administration, the Office of the Comptroller of the 
        Currency, the Office of Thrift Supervision, a Federal reserve 
        bank, a Federal home loan bank, or a joint office of the 
        Federal home loan banks.
    (l) Implementation.--In implementing the provisions of this 
section, the Bureau shall coordinate with the Office of Personnel 
Management and other entities having expertise in matters related to 
employment to ensure a fair and orderly transition for affected 
employees.

SEC. 1065. INCIDENTAL TRANSFERS.

    (a) Incidental Transfers Authorized.--The Director of the Office of 
Management and Budget, in consultation with the Secretary, shall make 
such additional incidental transfers and dispositions of assets and 
liabilities held, used, arising from, available, or to be made 
available, in connection with the functions transferred by this title, 
as the Director may determine necessary to accomplish the purposes of 
this title.
    (b) Sunset.--The authority provided in this section shall terminate 
5 years after the date of enactment of this Act.

SEC. 1066. INTERIM AUTHORITY OF THE SECRETARY.

    (a) In General.--The Secretary is authorized to perform the 
functions of the Bureau under this subtitle until the Director of the 
Bureau is confirmed by the Senate in accordance with section 1011.
    (b) Interim Administrative Services by the Department of the 
Treasury.--The Department of the Treasury may provide administrative 
services necessary to support the Bureau before the designated transfer 
date.

SEC. 1067. TRANSITION OVERSIGHT.

    (a) Purpose.--The purpose of this section is to ensure that the 
Bureau--
            (1) has an orderly and organized startup;
            (2) attracts and retains a qualified workforce; and
            (3) establishes comprehensive employee training and 
        benefits programs.
    (b) Reporting Requirement.--
            (1) In general.--The Bureau shall submit an annual report 
        to the Committee on Banking, Housing, and Urban Affairs of the 
        Senate and the Committee on Financial Services of the House of 
        Representatives that includes the plans described in paragraph 
        (2).
            (2) Plans.--The plans described in this paragraph are as 
        follows:
                    (A) Training and workforce development plan.--The 
                Bureau shall submit a training and workforce 
                development plan that includes, to the extent 
                practicable--
                            (i) identification of skill and technical 
                        expertise needs and actions taken to meet those 
                        requirements;
                            (ii) steps taken to foster innovation and 
                        creativity;
                            (iii) leadership development and succession 
                        planning; and
                            (iv) effective use of technology by 
                        employees.
                    (B) Workplace flexibilities plan.--The Bureau shall 
                submit a workforce flexibility plan that includes, to 
                the extent practicable--
                            (i) telework;
                            (ii) flexible work schedules;
                            (iii) phased retirement;
                            (iv) reemployed annuitants;
                            (v) part-time work;
                            (vi) job sharing;
                            (vii) parental leave benefits and childcare 
                        assistance;
                            (viii) domestic partner benefits;
                            (ix) other workplace flexibilities; or
                            (x) any combination of the items described 
                        in clauses (i) through (ix).
                    (C) Recruitment and retention plan.--The Bureau 
                shall submit a recruitment and retention plan that 
                includes, to the extent practicable, provisions 
                relating to--
                            (i) the steps necessary to target highly 
                        qualified applicant pools with diverse 
                        backgrounds;
                            (ii) streamlined employment application 
                        processes;
                            (iii) the provision of timely notification 
                        of the status of employment applications to 
                        applicants; and
                            (iv) the collection of information to 
                        measure indicators of hiring effectiveness.
    (c) Expiration.--The reporting requirement under subsection (b) 
shall terminate 5 years after the date of enactment of this Act.
    (d) Rule of Construction.--Nothing in this section may be construed 
to affect--
            (1) a collective bargaining agreement, as that term is 
        defined in section 7103(a)(8) of title 5, United States Code, 
        that is in effect on the date of enactment of this Act; or
            (2) the rights of employees under chapter 71 of title 5, 
        United States Code.

                  Subtitle G--Regulatory Improvements

SEC. 1071. SMALL BUSINESS DATA COLLECTION.

    (a) In General.--The Equal Credit Opportunity Act (15 U.S.C. 1691 
et seq.) is amended by inserting after section 704A the following:

``SEC. 740B. SMALL BUSINESS LOAN DATA COLLECTION.

    ``(a) Purpose.--The purpose of this section is to facilitate 
enforcement of fair lending laws and enable communities, governmental 
entities, and creditors to identify business and community development 
needs and opportunities of women-owned and minority-owned small 
businesses.
    ``(b) Information Gathering.--Subject to the requirements of this 
section, in the case of any application to a financial institution for 
credit for a small business, the financial institution shall--
            ``(1) inquire whether the small business is a women- or 
        minority-owned small business, without regard to whether such 
        application is received in person, by mail, by telephone, by 
        electronic mail or other form of electronic transmission, or by 
        any other means, and whether or not such application is in 
        response to a solicitation by the financial institution; and
            ``(2) maintain a record of the responses to such inquiry, 
        separate from the application and accompanying information.
    ``(c) Right To Refuse.--Any applicant for credit may refuse to 
provide any information requested pursuant to subsection (b) in 
connection with any application for credit.
    ``(d) No Access by Underwriters.--
            ``(1) Limitation.--Where feasible, no loan underwriter or 
        other officer or employee of a financial institution, or any 
        affiliate of a financial institution, involved in making any 
        determination concerning an application for credit shall have 
        access to any information provided by the applicant pursuant to 
        a request under subsection (b) in connection with such 
        application.
            ``(2) Limited access.--If a financial institution 
        determines that a loan underwriter or other officer or employee 
        of a financial institution, or any affiliate of a financial 
        institution, involved in making any determination concerning an 
        application for credit should have access to any information 
        provided by the applicant pursuant to a request under 
        subsection (b), the financial institution shall provide notice 
        to the applicant of the access of the underwriter to such 
        information, along with notice that the financial institution 
        may not discriminate on the basis of such information.
    ``(e) Form and Manner of Information.--
            ``(1) In general.--Each financial institution shall compile 
        and maintain, in accordance with regulations of the Bureau, a 
        record of the information provided by any loan applicant 
        pursuant to a request under subsection (b).
            ``(2) Itemization.--Information compiled and maintained 
        under paragraph (1) shall be itemized in order to clearly and 
        conspicuously disclose--
                    ``(A) the number of the application and the date on 
                which the application was received;
                    ``(B) the type and purpose of the loan or other 
                credit being applied for;
                    ``(C) the amount of the credit or credit limit 
                applied for, and the amount of the credit transaction 
                or the credit limit approved for such applicant;
                    ``(D) the type of action taken with respect to such 
                application, and the date of such action;
                    ``(E) the census tract in which is located the 
                principal place of business of the small business loan 
                applicant;
                    ``(F) the gross annual revenue of the business in 
                the last fiscal year of the small business loan 
                applicant preceding the date of the application;
                    ``(G) the race and ethnicity of the principal 
                owners of the business; and
                    ``(H) any additional data that the Bureau 
                determines would aid in fulfilling the purposes of this 
                section.
            ``(3) No personally identifiable information.--In compiling 
        and maintaining any record of information under this section, a 
        financial institution may not include in such record the name, 
        specific address (other than the census tract required under 
        paragraph (1)(E)), telephone number, electronic mail address, 
        or any other personally identifiable information concerning any 
        individual who is, or is connected with, the small business 
        loan applicant.
            ``(4) Discretion to delete or modify publicly available 
        data.--The Bureau may, at its discretion, delete or modify data 
        collected under this section which is or will be available to 
        the public, if the Bureau determines that the deletion or 
        modification of the data would advance a compelling privacy 
        interest.
    ``(f) Availability of Information.--
            ``(1) Submission to bureau.--The data required to be 
        compiled and maintained under this section by any financial 
        institution shall be submitted annually to the Bureau.
            ``(2) Availability of information.--Information compiled 
        and maintained under this section shall be--
                    ``(A) retained for not less than 3 years after the 
                date of preparation;
                    ``(B) made available to any member of the public, 
                upon request, in the form required under regulations 
                prescribed by the Bureau;
                    ``(C) annually made available to the public 
                generally by the Bureau, in such form and in such 
                manner as is determined appropriate by the Bureau.
            ``(3) Compilation of aggregate data.--The Bureau may, at 
        its discretion--
                    ``(A) compile and aggregate data collected under 
                this section for its own use; and
                    ``(B) make public such compilations of aggregate 
                data.
    ``(g) Bureau Action.--
            ``(1) In general.--The Bureau shall prescribe such rules 
        and issue such guidance as may be necessary to carry out, 
        enforce, and compile data pursuant to this section.
            ``(2) Exceptions.--The Bureau, by rule or order, may adopt 
        exceptions to any requirement of this section and may, 
        conditionally or unconditionally, exempt any financial 
        institution or class of financial institutions from the 
        requirements of this section, as the Bureau deems necessary or 
        appropriate to carry out the purposes of this section.
            ``(3) Guidance.--The Bureau shall issue guidance designed 
        to facilitate compliance with the requirements of this section, 
        including assisting financial institutions in working with 
        applicants to determine whether the applicants are women- or 
        minority-owned for purposes of this section.
    ``(h) Definitions.--For purposes of this section, the following 
definitions shall apply:
            ``(1) Financial institution.--The term `financial 
        institution' means any partnership, company, corporation, 
        association (incorporated or unincorporated), trust, estate, 
        cooperative organization, or other entity that engages in any 
        financial activity.
            ``(2) Minority.--The term `minority' has the same meaning 
        as in section 1204(c)(3) of the Financial Institutions Reform, 
        Recovery, and Enforcement Act of 1989.
            ``(3) Minority-owned small business.--The term `minority-
        owned small business' means a small business--
                    ``(A) more than 50 percent of the ownership or 
                control of which is held by 1 or more minority 
                individuals; and
                    ``(B) more than 50 percent of the net profit or 
                loss of which accrues to 1 or more minority 
                individuals.
            ``(4) Small business loan.--The term `small business loan' 
        shall be defined by the Bureau, which may take into account--
                    ``(A) the gross revenues of the borrower;
                    ``(B) the total number of employees of the 
                borrower;
                    ``(C) the industry in which the borrower has its 
                primary operations; and
                    ``(D) the size of the loan.
            ``(5) Women-owned small business.--The term `women-owned 
        small business' means a business--
                    ``(A) more than 50 percent of the ownership or 
                control of which is held by 1 or more women; and
                    ``(B) more than 50 percent of the net profit or 
                loss of which accrues to 1 or more women.''.
    (b) Technical and Conforming Amendments.--Section 701(b) of the 
Equal Credit Opportunity Act (15 U.S.C. 1691(b)) is amended--
            (1) in paragraph (3), by striking ``or'' at the end;
            (2) in paragraph (4), by striking the period at the end and 
        inserting ``; or''; and
            (3) by inserting after paragraph (4), the following:
            ``(5) to make an inquiry under section 704B, in accordance 
        with the requirements of that section.''.
    (c) Clerical Amendment.--The table of sections for title VII of the 
Consumer Credit Protection Act is amended by inserting after the item 
relating to section 704A the following new item:

``704B. Small business loan data collection.''.
    (d) Effective Date.--This section shall become effective on the 
designated transfer date.

SEC. 1072. GAO STUDY ON THE EFFECTIVENESS AND IMPACT OF VARIOUS 
              APPRAISAL METHODS.

    (a) In General.--The Government Accountability Office shall conduct 
a study on the effectiveness and impact of various appraisal methods, 
including the cost approach, the comparative sales approach, the income 
approach, and others that may be available.
    (b) Study.--Not later than--
            (1) 1 year after the date of enactment of this Act, the 
        Government Accountability Office shall submit a study to the 
        Committee on Banking, Housing, and Urban Affairs of the Senate 
        and the Committee on Financial Services of the House of 
        Representatives;
            (2) 90 days after the date of enactment of this Act, the 
        Government Accountability Office shall provide a report on the 
        status of the study and any preliminary findings to the 
        Committee on Banking, Housing, and Urban Affairs of the Senate 
        and the Committee on Financial Services of the House of 
        Representatives.
    (c) Content of Study.--The study required by this section shall 
include an examination of--
            (1) the prevalence, alone or in combination, of these 
        approaches in purchase-money and refinance mortgage 
        transactions;
            (2) the accuracy of the various approaches in assessing the 
        property as collateral;
            (3) whether and how the approaches contributed to price 
        speculation in the previous cycle;
            (4) the costs to consumers of these approaches;
            (5) the disclosure of fees to consumers in the appraisal 
        process;
            (6) to what extent such approaches may be influenced by a 
        conflict of interest between the mortgage lender and the 
        appraiser and the mechanism by which the lender selects and 
        compensates the appraiser; and
            (7) the suitability of appraisal approaches in rural versus 
        urban areas.

SEC. 1073. PROHIBITED PAYMENTS TO MORTGAGE ORIGINATORS.

    Section 129 of the Truth in Lending Act (15 U.S.C. 1639) is amended 
by inserting after subsection (j) the following:
    ``(k) Prohibition on Steering Incentives.--
            ``(1) In general.--For any consumer credit transaction 
        secured by real property or a dwelling, no loan originator 
        shall receive from any person and no person shall pay to a loan 
        originator, directly or indirectly, compensation that varies 
        based on the terms of the loan (other than the amount of the 
        principal).
            ``(2) Restructuring of financing origination fee.--
                    ``(A) In general.--For any consumer credit 
                transaction secured by real property or a dwelling, a 
                loan originator may not arrange for a consumer to 
                finance through the rate any origination fee or cost 
                except bona fide third party settlement charges not 
                retained by the creditor or loan originator.
                    ``(B) Exception.--Notwithstanding subparagraph (A), 
                a loan originator may arrange for a consumer to finance 
                through the rate an origination fee or cost if--
                            ``(i) the loan originator does not receive 
                        any other compensation, directly or indirectly, 
                        from the consumer except the compensation that 
                        is financed through the rate;
                            ``(ii) no person who knows or has reason to 
                        know of the consumer-paid compensation to the 
                        loan originator, other than the consumer, pays 
                        any compensation to the loan originator, 
                        directly or indirectly, in connection with the 
                        transaction; and
                            ``(iii) the consumer does not make an 
                        upfront payment of discount points, origination 
                        points, or fees, however denominated (other 
                        than bona fide third party settlement charges).
            ``(3) Rules of construction.--No provision of this 
        subsection shall be construed as--
                    ``(A) limiting or affecting the amount of 
                compensation received by a creditor upon the sale of a 
                consummated loan to a subsequent purchaser;
                    ``(B) restricting a consumer's ability to finance, 
                at the option of the consumer, including through 
                principal or rate, any origination fees or costs 
                permitted under this subsection, or the loan 
                originator's right to receive such fees or costs 
                (including compensation) from any person, subject to 
                paragraph (2)(B), so long as such fees or costs do not 
                vary based on the terms of the loan (other than the 
                amount of the principal) or the consumer's decision 
                about whether to finance such fees or costs; or
                    ``(C) prohibiting incentive payments to a loan 
                originator based on the number of loans originated 
                within a specified period of time.
            ``(4) Loan originator.--For the purposes of this section, 
        the term `loan originator'--
                    ``(A) means any person who, for direct or indirect 
                compensation or gain, or in the expectation of direct 
                or indirect compensation or gain, with respect to 
                credit to be secured by real property or a dwelling--
                            ``(i) arranges for an extension, renewal, 
                        or continuation of such credit;
                            ``(ii) takes an application for credit or 
                        assists a consumer in applying for such credit; 
                        or
                            ``(iii) offers or negotiates terms of such 
                        credit;
                    ``(B) does not include any person who is not 
                otherwise described in subparagraph (A) and who 
                performs purely administrative or clerical tasks on 
                behalf of a person who is described in subparagraph 
                (A); and
                    ``(C) does not include a person that only performs 
                real estate brokerage activities and is licensed or 
                registered in accordance with applicable State law, 
                unless the person is compensated by a lender or other 
                loan originator or by any agent of such lender or other 
                loan originator.''.

SEC. 1074. MINIMUM STANDARDS FOR RESIDENTIAL MORTGAGE LOANS.

    (a) In General.--No rule, order, or guidance issued by the Bureau 
under this title shall be construed as requiring a depository 
institution to apply mortgage underwriting standards that do not meet 
the minimum underwriting standards required by the appropriate 
prudential regulator of the depository institution.
    (b) Ability To Repay.--
            (1) TILA amendment.--Section 129 of the Truth in Lending 
        Act (15 U.S.C. 1639), as amended by section 1074 of this Act, 
        is further amended by inserting after subsection (k) the 
        following:
    ``(l) Ability To Repay.--
            ``(1) In general.--No creditor may make a loan secured by 
        real property or a dwelling unless the creditor, based on 
        verified and documented information, determines that, at the 
        time the loan is consummated, the consumer has a reasonable 
        ability to repay the loan, according to its terms, and all 
        applicable taxes, insurance, and assessments.
            ``(2) Multiple loans.--If the creditor knows, or has reason 
        to know, that 1 or more loans secured by the same real property 
        or dwelling will be made to the same consumer, the creditor 
        shall, based on verified and documented information, determine 
        that the consumer has a reasonable ability to repay the 
        combined payments of all loans on the same real property or 
        dwelling according to the terms of those loans and all 
        applicable taxes, insurance, and assessments.
            ``(3) Basis for determination.--A determination under this 
        subsection of a consumer's ability to repay a loan described in 
        paragraph (1) shall include consideration of the consumer's 
        credit history, current income, expected income the consumer is 
        reasonably assured of receiving, current obligations, debt-to-
        income ratio or the residual income the consumer will have 
        after paying non-mortgage debt and mortgage-related 
        obligations, employment status, and other financial resources 
        other than the consumer's equity in the dwelling or real 
        property that secures repayment of the loan.
            ``(4) Income verification.--A creditor shall verify amounts 
        of income or assets that such creditor relies on to determine 
        repayment ability, including expected income or assets, by 
        reviewing the consumer's Internal Revenue Service Form W-2, tax 
        returns, payroll receipts, financial institution records, or 
        other third-party documents that provide reasonably reliable 
        evidence of the consumer's income or assets. In order to 
        safeguard against fraudulent reporting, any consideration of a 
        consumer's income history in making a determination under this 
        subsection shall include the verification of such income by the 
        use of--
                    ``(A) Internal Revenue Service transcripts of tax 
                returns; or
                    ``(B) a method that quickly and effectively 
                verifies income documentation by a third party subject 
                to rules prescribed by the Board.
            ``(5) Presumption of ability to repay.--Any creditor with 
        respect to any consumer loan secured by real property or a 
        dwelling is presumed to have complied with this subsection with 
        respect to such loan if the creditor--
                    ``(A) verifies the consumer's ability to repay as 
                provided in paragraphs (1), (2), (3), and (4); and
                    ``(B) determines the consumer's ability to repay 
                using the maximum rate permitted under the loan during 
                the first 5 years following consummation and a payment 
                schedule that fully amortizes the loan and taking into 
                account current obligations and all applicable taxes, 
                insurance, and assessments.
            ``(6) Exceptions to presumption.--Notwithstanding paragraph 
        (5), no presumption of compliance shall be applied to a loan--
                    ``(A) for which the regular periodic payments for 
                the loan may--
                            ``(i) result in an increase of the 
                        principal balance; or
                            ``(ii) allow the consumer to defer 
                        repayment of principal.
                    ``(B) the terms of which result in a balloon 
                payment, where a `balloon payment' is a scheduled 
                payment that is more than twice as large as the average 
                of earlier scheduled payments; or
                    ``(C) for which the total points and fees payable 
                in connection with the loan exceed 3 percent of the 
                total loan amount, where `points and fees' means points 
                and fees as defined by section 103(aa)(4) of the Truth 
                in Lending Act (15 U.S.C. 1602(aa)(4)), except that, 
                for the purposes of computing the total points and fees 
                under this subparagraph, the total points and fees 
                attributable to any premium for mortgage guarantee 
                insurance provided by an agency of the Federal 
                Government or an agency of a State shall exclude any 
                amount of the points and fees for such insurance 
                greater than 1 percent of the total loan amount.
            ``(7) Exemption.--
                    ``(A) The Board may revise, add to, or subtract 
                from the criteria under paragraphs (5) and (6) and 
                subparagraphs (B) and (C) of this paragraph upon a 
                finding that such regulations are necessary or 
                appropriate to effectuate the purposes of this title, 
                to prevent circumvention or evasion thereof, or to 
                facilitate compliance with this subsection.
                    ``(B) Bridge loans.--This subsection does not apply 
                to a temporary or `bridge' loan with a term of 12 
                months or less, including to any loan to purchase a new 
                dwelling where the consumer plans to sell a current 
                dwelling within 12 months.
                    ``(C) Reverse mortgages.--This subsection does not 
                apply with respect to any reverse mortgage.
            ``(8) Seasonal income.--If documented income, including 
        income from a small business, is a repayment source for an 
        extension of credit secured by residential real estate or a 
        dwelling, a creditor may consider the seasonality and 
        irregularity of such income in the underwriting of and 
        scheduling of payments for such credit.''.
            (2) Conforming amendment.--Section 129 of the Truth in 
        Lending Act (15 U.S.C. 1639), as amended by this Act, is 
        amended--
                    (A) by redesignating subsections (k), (l), and (m) 
                as subsections (m), (n), and (o), respectively; and
                    (B) in subsection (o), as so redesignated, by 
                striking ``(l)(2)'' and inserting ``(n)(2)''.

SEC. 1075. PROHIBITION ON CERTAIN PREPAYMENT PENALTIES.

    (a) In General.--Chapter 2 of the Truth in Lending Act (15 U.S.C. 
1631 et seq.) is amended by inserting after section 129A (15 U.S.C. 
1639a) the following new section:

``SEC. 129B. PROHIBITION ON CERTAIN PREPAYMENT PENALTIES.

    ``(a) Prohibited on Certain Loans.--A residential mortgage loan 
that is not a qualified mortgage may not contain terms under which a 
consumer is required to pay a prepayment penalty for paying all or part 
of the principal after the loan is consummated.
    ``(b) Phased-out Penalties on Qualified Mortgages.--
            ``(1) In general.--A qualified mortgage may not contain 
        terms under which a consumer is required to pay a prepayment 
        penalty for paying all or part of the principal after the loan 
        is consummated in excess of--
                    ``(A) during the 1-year period beginning on the 
                date on which the loan is consummated, an amount equal 
                to 3 percent of the outstanding balance on the loan;
                    ``(B) during the 1-year period beginning 
                immediately after the end of the period described in 
                subparagraph (A), an amount equal to 2 percent of the 
                outstanding balance on the loan; and
                    ``(C) during the 1-year period beginning 
                immediately after the end of the 1-year period 
                described in subparagraph (B), an amount equal to 1 
                percent of the outstanding balance on the loan.
            ``(2) Prohibition.--After the end of the 3-year period 
        beginning on the date on which the loan is consummated, no 
        prepayment penalty may be imposed on a qualified mortgage.
    ``(c) Option for No Prepayment Penalty Required.--A creditor may 
not offer a consumer a residential mortgage loan product that has a 
prepayment penalty for paying all or part of the principal after the 
loan is consummated as a term of the loan, without offering to the 
consumer a residential mortgage loan product that does not have a 
prepayment penalty as a term of the loan.
    ``(d) Prohibitions on Evasions, Structuring of Transactions, and 
Reciprocal Arrangements.--A creditor may not take any action in 
connection with a residential mortgage loan--
            ``(1) to structure a loan transaction as an open end 
        consumer credit plan or another form of loan for the purpose 
        and with the intent of evading the provisions of this section; 
        or
            ``(2) to divide any loan transaction into separate parts 
        for the purpose and with the intent of evading provisions of 
        this section.
    ``(e) Publication of Average Prime Offer Rate and APR Thresholds.--
The Board--
            ``(1) shall publish, and update at least weekly, average 
        prime offer rates;
            ``(2) may publish multiple rates based on varying types of 
        mortgage transactions; and
            ``(3) shall adjust the thresholds of 1.50 percentage points 
        in subsection (g)(3)(A)(v)(I), 2.50 percentage points in 
        subsection (g)(3)(A)(v)(II), and 3.50 percentage points in 
        subsection (g)(3)(A)(v)(III), as necessary to reflect 
        significant changes in market conditions and to effectuate the 
        purposes of this section.
    ``(f) Regulations.--
            ``(1) In general.--The Bureau shall prescribe regulations 
        to carry out this section.
            ``(2) Revision of safe harbor criteria.--The Bureau may 
        prescribe regulations that revise, add to, or subtract from the 
        criteria that define a qualified mortgage, upon a finding that 
        such regulations are necessary or appropriate--
                    ``(A) to ensure that responsible, affordable 
                mortgage credit remains available to consumers in a 
                manner consistent with the purposes of this section;
                    ``(B) to effectuate the purposes of this section;
                    ``(C) to prevent circumvention or evasion thereof; 
                or
                    ``(D) to facilitate compliance with this section.
            ``(3) Interagency harmonization.--
                    ``(A) Determination of qualifying mortgage 
                treatment.--The agencies and officials described in 
                subparagraph (B) shall, in consultation with the 
                Bureau, prescribe rules defining the types of loans 
                they insure, guarantee, or administer, as the case may 
                be, that are qualified mortgages for purposes of this 
                section, upon a finding that such rules are consistent 
                with the purposes of this section or are appropriate to 
                prevent circumvention or evasion thereof or to 
                facilitate compliance with this section.
                    ``(B) Agencies and officials.--The agencies and 
                officials described in this subparagraph are--
                            ``(i) the Secretary of the Department of 
                        Housing and Urban Development, with regard to 
                        mortgages insured under title II of the 
                        National Housing Act (12 U.S.C. 1707 et seq.);
                            ``(ii) the Secretary of Veterans Affairs, 
                        with regard to a loan made or guaranteed by the 
                        Secretary of Veterans Affairs;
                            ``(iii) the Secretary of Agriculture, with 
                        regard to loans guaranteed by the Secretary of 
                        Agriculture pursuant to section 502 of the 
                        Housing Act of 1949 (42 U.S.C. 1472(h));
                            ``(iv) the Federal Housing Finance Agency, 
                        with regard to loans meeting the conforming 
                        loan standards of the Federal National Mortgage 
                        Association or the Federal Home Loan Mortgage 
                        Corporation; and
                            ``(v) the Rural Housing Service, with 
                        regard to loans insured by the Rural Housing 
                        Service.
            ``(4) Implementation.--Regulations required or authorized 
        to be prescribed under this subsection--
                    ``(A) shall be prescribed in final form before the 
                end of the 12-month period beginning on the date of 
                enactment of this section; and
                    ``(B) shall take effect not later than 18 months 
                after the date of enactment of this section.
    ``(g) Definitions.--For purposes of this section, the following 
definitions shall apply:
            ``(1) Average prime offer rate.--The term `average prime 
        offer rate' means an annual percentage rate that is derived 
        from average interest rates, points, and other loan pricing 
        terms currently offered to consumers by a representative sample 
        of creditors for mortgage transactions that have low-risk 
        pricing characteristics.
            ``(2) Prepayment penalty.--The term `prepayment penalty' 
        means any penalty for paying all or part of the principal on an 
        extension of credit before the date on which the principal is 
        due, including a computation of a refund of unearned interest 
        by a method that is less favorable to the consumer than the 
        actuarial method, as defined in section 933(d) of the Housing 
        and Community Development Act of 1992 (15 U.S.C. 1615(d)).
            ``(3) Qualified mortgage.--The term `qualified mortgage' 
        means--
                    ``(A) any residential mortgage loan--
                            ``(i) that does not have an adjustable 
                        rate;
                            ``(ii) that does not allow a consumer to 
                        defer repayment of principal or interest, or is 
                        not otherwise deemed a `non-traditional 
                        mortgage' under guidance, advisories, or 
                        regulations prescribed by the Bureau;
                            ``(iii) that does not provide for a 
                        repayment schedule that results in negative 
                        amortization at any time;
                            ``(iv) for which the terms are fully 
                        amortizing and which does not result in a 
                        balloon payment, where a `balloon payment' is a 
                        scheduled payment that is more than twice as 
                        large as the average of earlier scheduled 
                        payments;
                            ``(v) which has an annual percentage rate 
                        that does not exceed the average prime offer 
                        rate for a comparable transaction, as of the 
                        date on which the interest rate is set--
                                    ``(I) by 1.5 or more percentage 
                                points, in the case of a first lien 
                                residential mortgage loan having an 
                                original principal obligation amount 
                                that is equal to or less than the 
                                amount of the maximum limitation on the 
                                original principal obligation of a 
                                mortgage in effect for a residence of 
                                the applicable size, as of the date on 
                                which such interest rate is set, 
                                pursuant to the sixth sentence of 
                                section 305(a)(2) of the Federal Home 
                                Loan Mortgage Corporation Act (12 
                                U.S.C. 1454(a)(2));
                                    ``(II) by 2.5 or more percentage 
                                points, in the case of a first lien 
                                residential mortgage loan having an 
                                original principal obligation amount 
                                that is more than the amount of the 
                                maximum limitation on the original 
                                principal obligation of a mortgage in 
                                effect for a residence of the 
                                applicable size, as of the date on 
                                which such interest rate is set, 
                                pursuant to the sixth sentence of 
                                section 305(a)(2) of the Federal Home 
                                Loan Mortgage Corporation Act (12 
                                U.S.C. 1454(a)(2)); or
                                    ``(III) by 3.5 or more percentage 
                                points, in the case of a subordinate 
                                lien residential mortgage loan;
                            ``(vi) for which the income and financial 
                        resources relied upon to qualify the obligors 
                        on the loan are verified and documented;
                            ``(vii) for which the underwriting process 
                        is based on a payment schedule that fully 
                        amortizes the loan over the loan term and takes 
                        into account all applicable taxes, insurance, 
                        and assessments;
                            ``(viii) that does not cause the total 
                        monthly debts of the consumer, including 
                        amounts under the loan, to exceed a percentage 
                        established by regulation of the monthly gross 
                        income of the consumer, or such other maximum 
                        percentage of such income, as may be prescribed 
                        by regulation under subsection (g), which rules 
                        shall take into consideration the income of the 
                        consumer available to pay regular expenses 
                        after payment of all installment and revolving 
                        debt;
                            ``(ix) for which the total points and fees 
                        payable in connection with the loan do not 
                        exceed 2 percent of the total loan amount, 
                        where the term `points and fees' means points 
                        and fees as defined by Section 103(aa)(4) of 
                        the Truth in Lending Act (15 U.S.C. 
                        1602(aa)(4)); and
                            ``(x) for which the term of the loan does 
                        not exceed 30 years, except as such term may be 
                        extended under subsection (g); and
                    ``(B) any reverse mortgage that is insured by the 
                Federal Housing Administration or complies with the 
                condition established in subparagraph (A)(v).
            ``(4) Residential mortgage loan.--The term `residential 
        mortgage loan' means any consumer credit transaction that is 
        secured by a mortgage, deed of trust, or other equivalent 
        consensual security interest on a dwelling or on residential 
        real property that includes a dwelling, other than a consumer 
        credit transaction under an open end credit plan or an 
        extension of credit relating to a plan described in section 
        101(53D) of title 11, United States Code.''.
    (b) Conforming Amendments.--Section 129(c) of the Truth in Lending 
Act (15 U.S.C. 1639(c)) is amended--
            (1) by striking paragraph (2);
            (2) by striking ``(1) In general.--''; and
            (3) by redesignating subparagraphs (A) and (B) as 
        paragraphs (1) and (2), respectively.

SEC. 1076. ASSISTANCE FOR ECONOMICALLY VULNERABLE INDIVIDUALS AND 
              FAMILIES.

    (a) HERA Amendments.--Section 1132 of the Housing and Economic 
Recovery Act of 2008 (12 U.S.C. 1701x note) is amended--
            (1) in subsection (a), by inserting in each of paragraphs 
        (1), (2), (3), and (4) ``or economically vulnerable individuals 
        and families'' after ``homebuyers'' each place that term 
        appears;
            (2) in subsection (b)(1), by inserting ``or economically 
        vulnerable individuals and families'' after ``homebuyers'';
            (3) in subsection (c)(1)--
                    (A) in subparagraph (A), by striking ``or'' at the 
                end;
                    (B) in subparagraph (B), by striking the period at 
                the end and inserting ``; or''; and
                    (C) by adding at the end the following:
                    ``(C) a nonprofit corporation that--
                            ``(i) is exempt from taxation under section 
                        501(c)(3) of the Internal Revenue Code of 1986; 
                        and
                            ``(ii) specializes or has expertise in 
                        working with economically vulnerable 
                        individuals and families, but whose primary 
                        purpose is not provision of credit counseling 
                        services.''; and
            (4) in subsection (d)(1), by striking ``not more than 5''.
    (b) Applicability.--Amendments made by subsection (a) shall not 
apply to programs authorized by section 1132 of the Housing and 
Economic Recovery Act of 2008 (12 U.S.C. 1701x note) that are funded 
with appropriations prior to fiscal year 2011.

SEC. 1077. REMITTANCE TRANSFERS.

    (a) Treatment of Remittance Transfers.--The Electronic Fund 
Transfer Act (15 U.S.C. 1693 et seq.) is amended--
            (1) in section 902(b) (15 U.S.C. 1693(b)), by inserting 
        ``and remittance'' after ``electronic fund'';
            (2) by redesignating sections 919, 920, 921, and 922 as 
        sections 920, 921, 922, and 923, respectively; and
            (3) by inserting after section 918 the following:

``SEC. 919. REMITTANCE TRANSFERS.

    ``(a) Disclosures Required for Remittance Transfers.--
            ``(1) In general.--Each remittance transfer provider shall 
        make disclosures as required under this section and in 
        accordance with rules prescribed by the Board.
            ``(2) Storefront disclosures.--
                    ``(A) In general.--At every physical storefront 
                location owned or controlled by a remittance transfer 
                provider (with respect to remittance transfer 
                activities), the remittance transfer provider shall 
                prominently post, and update daily, a notice describing 
                a model transfer for the amounts of $100 and $200 (in 
                United States dollars) showing the amount of currency 
                that will be received by the designated recipient, 
                using the values of the currency into which the funds 
                will be exchanged for the 3 currencies to which that 
                particular storefront sends the greatest number of 
                remittance transfer payments, measured irrespective of 
                the value of such payments. The values shall include 
                all fees charged by the remittance transfer provider, 
                taken out of the $100 and $200 amounts.
                    ``(B) Electronic disclosure.--Subject to the rules 
                prescribed by the Board, a remittance transfer provider 
                shall prominently post, and update daily, a notice 
                describing a model transfer, as described in 
                subparagraph (A), on the Internet site owned or 
                controlled by the remittance transfer provider which 
                senders use to electronically conduct remittance 
                transfer transactions.
            ``(3) Specific disclosures.--In addition to any other 
        disclosures applicable under this title, and subject to 
        paragraph (4), a remittance transfer provider shall provide, in 
        writing and in a form that the sender may keep, to each sender 
        requesting a remittance transfer, as applicable to the 
        transaction--
                    ``(A) at the time at which the sender requests a 
                remittance transfer to be initiated, and prior to the 
                sender making any payment in connection with the 
                remittance transfer, a disclosure describing the amount 
                of currency that will be sent to the designated 
                recipient, using the values of the currency into which 
                the funds will be exchanged; and
                    ``(B) at the time at which the sender makes payment 
                in connection with the remittance transfer--
                            ``(i) a receipt showing--
                                    ``(I) the information described in 
                                subparagraph (A);
                                    ``(II) the promised date of 
                                delivery to the designated recipient; 
                                and
                                    ``(III) the name and either the 
                                telephone number or the address of the 
                                designated recipient; and
                            ``(ii) a statement containing--
                                    ``(I) information about the rights 
                                of the sender under this section 
                                regarding the resolution of errors; and
                                    ``(II) appropriate contact 
                                information for--
                                            ``(aa) the remittance 
                                        transfer provider; and
                                            ``(bb) each State or 
                                        Federal agency supervising the 
                                        remittance transfer provider, 
                                        including its State licensing 
                                        authority or Federal regulator, 
                                        as applicable.
            ``(4) Requirements relating to disclosures.--With respect 
        to each disclosure required to be provided under paragraph (3), 
        and subject to paragraph (5), a remittance transfer provider 
        shall--
                    ``(A) provide an initial notice and receipt, as 
                required by subparagraphs (A) and (B) of paragraph (3), 
                and an error resolution statement, as required by 
                subsection (c), that clearly and conspicuously describe 
                the information required to be disclosed therein; and
                    ``(B) with respect to any transaction that a sender 
                conducts electronically, comply with the Electronic 
                Signatures in Global and National Commerce Act (15 
                U.S.C. 7001 et seq.).
            ``(5) Exemption authority.--The Board may, by rule, permit 
        a remittance transfer provider to satisfy the requirements of--
                    ``(A) paragraph (3)(A) orally, if the transaction 
                is conducted entirely by telephone;
                    ``(B) paragraph (3)(B), by mailing the documents 
                required under such subparagraph to the sender, not 
                later than 1 business day after the date on which the 
                transaction is conducted, if the transaction is 
                conducted entirely by telephone;
                    ``(C) subparagraphs (A) and (B) of paragraph (3) 
                together in one written disclosure, but only to the 
                extent that the information provided in accordance with 
                paragraph (3)(A) is accurate at the time at which 
                payment is made in connection with the subject 
                remittance transfer;
                    ``(D) paragraph (3)(A), if a sender initiates a 
                transaction to one of those countries displayed, in the 
                exact amount of the transfers displayed pursuant to 
                paragraph (2), if the Board finds it to be appropriate; 
                and
                    ``(E) paragraph (3)(A), without compliance with 
                section 101(c) of the Electronic Signatures in Global 
                Commerce Act, if a sender initiates the transaction 
                electronically and the information is displayed 
                electronically in a manner that the sender can keep.
    ``(b) Foreign Language Disclosures.--
            ``(1) In general.--The disclosures required under this 
        section shall be made in English and in each of the same 
        foreign languages principally used by the remittance transfer 
        provider, or any of its agents, to advertise, solicit, or 
        market, either orally or in writing, at that office.
            ``(2) Accounts.--In the case of a sender who holds a demand 
        deposit, savings deposit, or other asset account with the 
        remittance transfer provider (other than an occasional or 
        incidental credit balance under an open end credit plan, as 
        defined in section 103(i) of the Truth in Lending Act), the 
        disclosures required under this section shall be made in the 
        language or languages principally used by the remittance 
        transfer provider to communicate to the sender with respect to 
        the account.
    ``(c) Remittance Transfer Errors.--
            ``(1) Error resolution.--
                    ``(A) In general.--If a remittance transfer 
                provider receives oral or written notice from the 
                sender within 180 days of the promised date of delivery 
                that an error occurred with respect to a remittance 
                transfer, including the amount of currency designated 
                in subsection (a)(3)(A) that was to be sent to the 
                designated recipient of the remittance transfer, using 
                the values of the currency into which the funds should 
                have been exchanged, but was not made available to the 
                designated recipient in the foreign country, the 
                remittance transfer provider shall resolve the error 
                pursuant to this subsection and investigate the reason 
                for the error.
                    ``(B) Remedies.--Not later than 90 days after the 
                date of receipt of a notice from the sender pursuant to 
                subparagraph (A), the remittance transfer provider 
                shall, as applicable to the error and as designated by 
                the sender--
                            ``(i) refund to the sender the total amount 
                        of funds tendered by the sender in connection 
                        with the remittance transfer which was not 
                        properly transmitted;
                            ``(ii) make available to the designated 
                        recipient, without additional cost to the 
                        designated recipient or to the sender, the 
                        amount appropriate to resolve the error;
                            ``(iii) provide such other remedy, as 
                        determined appropriate by rule of the Board for 
                        the protection of senders; or
                            ``(iv) provide written notice to the sender 
                        that there was no error with an explanation 
                        responding to the specific complaint of the 
                        sender.
            ``(2) Rules.--The Board shall establish, by rule issued not 
        later than 1 calendar year after the date of enactment of the 
        Restoring American Financial Stability Act of 2010, clear and 
        appropriate standards for remittance transfer providers with 
        respect to error resolution relating to remittance transfers, 
        to protect senders from such errors. Standards prescribed under 
        this paragraph shall include appropriate standards regarding 
        record keeping, as required, including documentation--
                    ``(A) of the complaint of the sender;
                    ``(B) that the sender provides the remittance 
                transfer provider with respect to the alleged error; 
                and
                    ``(C) of the findings of the remittance transfer 
                provider regarding the investigation of the alleged 
                error that the sender brought to their attention.
    ``(d) Applicability of This Title.--
            ``(1) In general.--A remittance transfer that is not an 
        electronic fund transfer, as defined in section 903, shall not 
        be subject to any of the provisions of sections 905 through 
        913. A remittance transfer that is an electronic fund transfer, 
        as defined in section 903, shall be subject to all provisions 
        of this title, except for section 908, that are otherwise 
        applicable to electronic fund transfers under this title.
            ``(2) Rule of construction.--Nothing in this section shall 
        be construed--
                    ``(A) to affect the application to any transaction, 
                to any remittance provider, or to any other person of 
                any of the provisions of subchapter II of chapter 53 of 
                title 31, United States Code, section 21 of the Federal 
                Deposit Insurance Act (12 U.S.C. 1829b), or chapter 2 
                of title I of Public Law 91-508 (12 U.S.C. 1951-1959), 
                or any regulations promulgated thereunder; or
                    ``(B) to cause any fund transfer that would not 
                otherwise be treated as such under paragraph (1) to be 
                treated as an electronic fund transfer, or as otherwise 
                subject to this title, for the purposes of any of the 
                provisions referred to in subparagraph (A) or any 
                regulations promulgated thereunder.
    ``(e) Acts of Agents.--A remittance transfer provider shall be 
liable for any violation of this section by any agent, authorized 
delegate, or person affiliated with such provider, when such agent, 
authorized delegate, or affiliate acts for that remittance transfer 
provider.
    ``(f) Definitions.--As used in this section--
            ``(1) the term `designated recipient' means any person 
        located in a foreign country and identified by the sender as 
        the authorized recipient of a remittance transfer to be made by 
        a remittance transfer provider, except that a designated 
        recipient shall not be deemed to be a consumer for purposes of 
        this Act;
            ``(2) the term `remittance transfer' means the electronic 
        (as defined in section 106(2) of the Electronic Signatures in 
        Global and National Commerce Act (15 U.S.C. 7006(2))) transfer 
        of funds requested by a sender located in any State to a 
        designated recipient that is initiated by a remittance transfer 
        provider, whether or not the sender holds an account with the 
        remittance transfer provider or whether or not the remittance 
        transfer is also an electronic fund transfer, as defined in 
        section 903;
            ``(3) the term `remittance transfer provider' means any 
        person or financial institution that provides remittance 
        transfers for a consumer in the normal course of its business, 
        whether or not the consumer holds an account with such person 
        or financial institution; and
            ``(4) the term `sender' means a consumer who requests a 
        remittance provider to send a remittance transfer for the 
        consumer to a designated recipient.''.
    (b) Automated Clearinghouse System.--
            (1) Expansion of system.--The Board of Governors shall work 
        with the Federal reserve banks to expand the use of the 
        automated clearinghouse system for remittance transfers to 
        foreign countries, with a focus on countries that receive 
        significant remittance transfers from the United States, based 
        on--
                    (A) the number, volume, and size of such transfers;
                    (B) the significance of the volume of such 
                transfers relative to the external financial flows of 
                the receiving country, including--
                            (i) the total amount transferred; and
                            (ii) the total volume of payments made by 
                        United States Government agencies to 
                        beneficiaries and retirees living abroad;
                    (C) the feasibility of such an expansion; and
                    (D) the ability of the Federal Reserve System to 
                establish payment gateways in different geographic 
                regions and currency zones to receive remittance 
                transfers and route them through the payments systems 
                in the destination countries.
            (2) Report to congress.--Not later than one calendar year 
        after the date of enactment of this Act, and on April 30 
        biennially thereafter during the 10-year period beginning on 
        that date of enactment, the Board of Governors shall submit a 
        report to the Committee on Banking, Housing, and Urban Affairs 
        of the Senate and the Committee on Financial Services of the 
        House of Representatives on the status of the automated 
        clearinghouse system and its progress in complying with the 
        requirements of this subsection. The report shall include an 
        analysis of adoption rates of International ACH Transactions 
        rules and formats, the efficacy of increasing adoption rates, 
        and potential recommendations to increase adoption.
    (c) Expansion of Financial Institution Provision of Remittance 
Transfers.--
            (1) Provision of guidelines to institutions.--Each of the 
        Federal banking agencies and the National Credit Union 
        Administration shall provide guidelines to financial 
        institutions under the jurisdiction of the agency regarding the 
        offering of low-cost remittance transfers and no-cost or low-
        cost basic consumer accounts, as well as agency services to 
        remittance transfer providers.
            (2) Assistance to financial literacy commission.--As part 
        of its duties as members of the Financial Literacy and 
        Education Commission, the Bureau, the Federal banking agencies, 
        and the National Credit Union Administration shall assist the 
        Financial Literacy and Education Commission in executing the 
        Strategy for Assuring Financial Empowerment (or the ``SAFE 
        Strategy''), as it relates to remittances.
    (d) Federal Credit Union Act Conforming Amendment.--Paragraph (12) 
of section 107 of the Federal Credit Union Act (12 U.S.C. 1757) is 
amended to read as follows:
            ``(12) in accordance with regulations prescribed by the 
        Board--
                    ``(A) to sell, to persons in the field of 
                membership, negotiable checks (including travelers 
                checks), money orders, and other similar money transfer 
                instruments (including international and domestic 
                electronic fund transfers);
                    ``(B) to provide remittance transfers, as defined 
                in section 919 of the Electronic Fund Transfer Act, to 
                persons in the field of membership; and
                    ``(C) to cash checks and money orders for persons 
                in the field of membership for a fee;''.

SEC. 1078. DEPARTMENT OF THE TREASURY STUDY ON ENDING THE 
              CONSERVATORSHIP OF FANNIE MAE, FREDDIE MAC, AND REFORMING 
              THE HOUSING FINANCE SYSTEM.

    (a) Study Required.--
            (1) In general.--The Secretary of the Treasury shall 
        conduct a study of and develop recommendations regarding the 
        options for ending the conservatorship of the Federal National 
        Mortgage Association (in this section referred to as ``Fannie 
        Mae'') and the Federal Home Loan Mortgage Corporation (in this 
        section referred to as ``Freddie Mac''), while minimizing the 
        cost to taxpayers, including such options as--
                    (A) the gradual wind-down and liquidation of such 
                entities;
                    (B) the privatization of such entities;
                    (C) the incorporation of the functions of such 
                entities into a Federal agency;
                    (D) the dissolution of Fannie Mae and Freddie Mac 
                into smaller companies; or
                    (E) any other measures the Secretary determines 
                appropriate.
            (2) Analyses.--The study required under paragraph (1) shall 
        include an analysis of--
                    (A) the role of the Federal Government in 
                supporting a stable, well-functioning housing finance 
                system, and whether and to what extent the Federal 
                Government should bear risks in meeting Federal housing 
                finance objectives;
                    (B) how the current structure of the housing 
                finance system can be improved;
                    (C) how the housing finance system should support 
                the continued availability of mortgage credit to all 
                segments of the market;
                    (D) how the housing finance system should be 
                structured to ensure that consumers continue to have 
                access to 30-year, fixed rate, pre-payable mortgages 
                and other mortgage products that have simple terms that 
                can be easily understood;
                    (E) the role of the Federal Housing Administration 
                and the Department of Veterans Affairs in a future 
                housing system;
                    (F) the impact of reforms of the housing finance 
                system on the financing of rental housing;
                    (G) the impact of reforms of the housing finance 
                system on secondary market liquidity;
                    (H) the role of standardization in the housing 
                finance system;
                    (I) how housing finance systems in other countries 
                offer insights that can help inform options for reform 
                in the United States; and
                    (J) the options for transition to a reformed 
                housing finance system.
    (b) Report and Recommendations.--Not later than January 31, 2011, 
the Secretary of the Treasury shall submit the report and 
recommendations required under subsection (a) to the Committee on 
Banking, Housing, and Urban Affairs of the Senate and the Committee on 
Financial Services of the House of Representatives.

SEC. 1079. REASONABLE FEES AND RULES FOR PAYMENT CARD TRANSACTIONS.

    The Electronic Fund Transfer Act (15 U.S.C. 1693 et seq.) is 
amended--
            (1) by redesignating sections 920 and 921 as sections 921 
        and 922, respectively; and
            (2) by inserting after section 919 the following:

``SEC. 920. REASONABLE FEES AND RULES FOR PAYMENT CARD TRANSACTIONS.

    ``(a) Reasonable Interchange Transaction Fees for Electronic Debit 
Transactions.--
            ``(1) Regulatory authority.--The Board shall have authority 
        to establish rules, pursuant to section 553 of title 5, United 
        States Code, regarding any interchange transaction fee that an 
        issuer or payment card network may charge with respect to an 
        electronic debit transaction.
            ``(2) Reasonable fees.--The amount of any interchange 
        transaction fee that an issuer or payment card network may 
        charge with respect to an electronic debit transaction shall be 
        reasonable and proportional to the actual cost incurred by the 
        issuer or payment card network with respect to the transaction.
            ``(3) Rulemaking required.--The Board shall issue final 
        rules, not later than 9 months after the date of enactment of 
        the Consumer Financial Protection Act of 2010, to establish 
        standards for assessing whether the amount of any interchange 
        transaction fee described in paragraph (2) is reasonable and 
        proportional to the actual cost incurred by the issuer or 
        payment card network with respect to the transaction.
            ``(4) Considerations.--In issuing rules required by this 
        section, the Board shall--
                    ``(A) consider the functional similarity between--
                            ``(i) electronic debit transactions; and
                            ``(ii) checking transactions that are 
                        required within the Federal Reserve bank system 
                        to clear at par;
                    ``(B) distinguish between--
                            ``(i) the actual incremental cost incurred 
                        by an issuer or payment card network for the 
                        role of the issuer or the payment card network 
                        in the authorization, clearance, or settlement 
                        of a particular electronic debit transaction, 
                        which cost shall be considered under paragraph 
                        (2); and
                            ``(ii) other costs incurred by an issuer or 
                        payment card network which are not specific to 
                        a particular electronic debit transaction, 
                        which costs shall not be considered under 
                        paragraph (2); and
                    ``(C) consult, as appropriate, with the Comptroller 
                of the Currency, the Board of Directors of the Federal 
                Deposit Insurance Corporation, the Director of the 
                Office of Thrift Supervision, the National Credit Union 
                Administration Board, the Administrator of the Small 
                Business Administration, and the Director of the Bureau 
                of Consumer Financial Protection.
            ``(5) Exemption for small issuers.--This subsection shall 
        not apply to issuers that, together with affiliates, have 
        assets of less than $10,000,000,000, and the Board shall exempt 
        such issuers from rules issued under paragraph (3).
            ``(6) Effective date.--Paragraph (2) shall become effective 
        12 months after the date of enactment of the Consumer Financial 
        Protection Act of 2010.
    ``(b) Limitation on Anti-competitive Payment Card Network 
Restrictions.--
            ``(1) No restrictions on offering discounts for use of a 
        competing payment card network.--A payment card network shall 
        not, directly or through any agent, processor, or licensed 
        member of the network, by contract, requirement, condition, 
        penalty, or otherwise, inhibit the ability of any person to 
        provide a discount or in-kind incentive for payment through the 
        use of a card or device of another payment card network, 
        provided that the discount or in-kind incentive only 
        differentiates between payment card networks and not between 
        other issuers.
            ``(2) No restrictions on offering discounts for use of a 
        form of payment.--A payment card network shall not, directly or 
        through any agent, processor, or licensed member of the 
        network, by contract, requirement, condition, penalty, or 
        otherwise, inhibit the ability of any person to provide a 
        discount or in-kind incentive for payment by the use of cash, 
        check, debit card, or credit card.
            ``(3) No restrictions on setting transaction minimums or 
        maximums.--A payment card network shall not, directly or 
        through any agent, processor, or licensed member of the 
        network, by contract, requirement, condition, penalty, or 
        otherwise, inhibit the ability of any person to set a minimum 
        or maximum dollar value for the acceptance by that person of 
        credit cards, provided that such minimum or maximum dollar 
        value does not differentiate between issuers or between payment 
        card networks.
    ``(c) Definitions.--For purposes of this section, the following 
definitions shall apply:
            ``(1) Debit card.--The term `debit card'--
                    ``(A) means any card, or other payment code or 
                device, issued or approved for use through a payment 
                card network to debit an asset account for the purpose 
                of transferring money between accounts or obtaining 
                goods or services, whether authorization is based on 
                signature, PIN, or other means;
                    ``(B) includes general use prepaid cards, as that 
                term is defined in section 915(a)(2)(A) (15 U.S.C. 
                1693l-1(a)(2)(A)); and
                    ``(C) does not include paper checks.
            ``(2) Credit card.--The term `credit card' has the same 
        meaning as in section 103 of the Truth in Lending Act (15 
        U.S.C. 1602).
            ``(3) Discount.--The term `discount'--
                    ``(A) means a reduction made from the price that 
                customers are informed is the regular price; and
                    ``(B) does not include any means of increasing the 
                price that customers are informed is the regular price.
            ``(4) Electronic debit transaction.--The term `electronic 
        debit transaction' means a transaction in which a person uses a 
        debit card to debit an asset account.
            ``(5) Interchange transaction fee.--The term `interchange 
        transaction fee' means any fee established by a payment card 
        network that has been established for the purpose of 
        compensating an issuer or payment card network for its 
        involvement in an electronic debit transaction.
            ``(6) Issuer.--The term `issuer' means any person who 
        issues a debit card, or credit card, or the agent of such 
        person with respect to such card.
            ``(7) Payment card network.--The term `payment card 
        network' means an entity that directly, or through licensed 
        members, processors, or agents, provides the proprietary 
        services, infrastructure, and software that route information 
        and data to conduct transaction authorization, clearance, and 
        settlement, and that a person uses in order to accept as a form 
        of payment a brand of debit card, credit card or other device 
        that may be used to carry out debit or credit transactions.''.

SEC. 1079A. USE OF CONSUMER REPORTS.

    Section 615 of the Fair Credit Reporting Act (15 U.S.C. 1681m) is 
amended--
            (1) in subsection (a)--
                    (A) by redesignating paragraphs (2) and (3) as 
                paragraphs (3) and (4), respectively;
                    (B) by inserting after paragraph (1) the following:
            ``(2) provide to the consumer written or electronic 
        disclosure--
                    ``(A) of a numerical credit score as defined in 
                section 609(f)(2)(A) used by such person in taking any 
                adverse action based in whole or in part on any 
                information in a consumer report; and
                    ``(B) of the information set forth in subparagraphs 
                (B) through (E) of section 609(f)(1);''; and
                    (C) in paragraph (4) (as so redesignated), by 
                striking ``paragraph (2)'' and inserting ``paragraph 
                (3)''; and
            (2) in subsection (h)(5)--
                    (A) in subparagraph (C), by striking ``; and'' and 
                inserting a semicolon;
                    (B) in subparagraph (D), by striking the period and 
                inserting ``; and''; and
                    (C) by inserting at the end the following:
                    ``(E) include a statement informing the consumer 
                of--
                            ``(i) a numerical credit score as defined 
                        in section 609(f)(2)(A), used by such person in 
                        connection with the credit decision described 
                        in paragraph (1) based in whole or in part on 
                        any information in a consumer report; and
                            ``(ii) the information set forth in 
                        subparagraphs (B) through (E) of section 
                        609(f)(1).''.

                   Subtitle H--Conforming Amendments

SEC. 1081. AMENDMENTS TO THE INSPECTOR GENERAL ACT.

    Effective on the date of enactment of this Act, the Inspector 
General Act of 1978 (5 U.S.C. App. 3) is amended--
            (1) in section 8G(a)(2), by inserting ``and the Bureau of 
        Consumer Financial Protection'' after ``Board of Governors of 
        the Federal Reserve System'';
            (2) in section 8G(c), by adding at the end the following: 
        ``For purposes of implementing this section, the Chairman of 
        the Board of Governors of the Federal Reserve System shall 
        appoint the Inspector General of the Board of Governors of the 
        Federal Reserve System and the Bureau of Consumer Financial 
        Protection. The Inspector General of the Board of Governors of 
        the Federal Reserve System and the Bureau of Consumer Financial 
        Protection shall have all of the authorities and 
        responsibilities provided by this Act with respect to the 
        Bureau of Consumer Financial Protection, as if the Bureau were 
        part of the Board of Governors of the Federal Reserve 
        System.''; and
            (3) in section 8G(g)(3), by inserting ``and the Bureau of 
        Consumer Financial Protection'' after ``Board of Governors of 
        the Federal Reserve System'' the first place that term appears.

SEC. 1082. AMENDMENTS TO THE PRIVACY ACT OF 1974.

    Effective on the date of enactment of this Act, section 552a of 
title 5, United States Code, is amended by adding at the end the 
following:
    ``(w) Applicability to Bureau of Consumer Financial Protection.--
Except as provided in the Consumer Financial Protection Act of 2010, 
this section shall apply with respect to the Bureau of Consumer 
Financial Protection.''.

SEC. 1083. AMENDMENTS TO THE ALTERNATIVE MORTGAGE TRANSACTION PARITY 
              ACT OF 1982.

    (a) In General.--The Alternative Mortgage Transaction Parity Act of 
1982 (12 U.S.C. 3801 et seq.) is amended--
            (1) in section 803 (12 U.S.C. 3802(1)), by striking 
        ``1974'' and all that follows through ``described and defined'' 
        and inserting the following: ``1974), in which the interest 
        rate or finance charge may be adjusted or renegotiated, 
        described and defined''; and
            (2) in section 804 (12 U.S.C. 3803)--
                    (A) in subsection (a)--
                            (i) in each of paragraphs (1), (2), and 
                        (3), by inserting after ``transactions made'' 
                        each place that term appears ``on or before the 
                        designated transfer date, as determined under 
                        section 1062 of the Consumer Financial 
                        Protection Act of 2010,'';
                            (ii) in paragraph (2), by striking ``and'' 
                        at the end;
                            (iii) in paragraph (3), by striking the 
                        period at the end and inserting ``; and''; and
                            (iv) by adding at the end the following new 
                        paragraph:
            ``(4) with respect to transactions made after the 
        designated transfer date, only in accordance with regulations 
        governing alternative mortgage transactions, as issued by the 
        Bureau of Consumer Financial Protection for federally chartered 
        housing creditors, in accordance with the rulemaking authority 
        granted to the Bureau of Consumer Financial Protection with 
        regard to federally chartered housing creditors under 
        provisions of law other than this section.'';
                    (B) by striking subsection (c) and inserting the 
                following:
    ``(c) Preemption of State Law.--An alternative mortgage transaction 
may be made by a housing creditor in accordance with this section, 
notwithstanding any State constitution, law, or regulation that 
prohibits an alternative mortgage transaction. For purposes of this 
subsection, a State constitution, law, or regulation that prohibits an 
alternative mortgage transaction does not include any State 
constitution, law, or regulation that regulates mortgage transactions 
generally, including any restriction on prepayment penalties or late 
charges.''; and
                    (C) by adding at the end the following:
    ``(d) Bureau Actions.--The Bureau of Consumer Financial Protection 
shall--
            ``(1) review the regulations identified by the Comptroller 
        of the Currency and the National Credit Union Administration, 
        (as those rules exist on the designated transfer date), as 
        applicable under paragraphs (1) through (3) of subsection (a);
            ``(2) determine whether such regulations are fair and not 
        deceptive and otherwise meet the objectives of the Consumer 
        Financial Protection Act of 2010; and
            ``(3) promulgate regulations under subsection (a)(4) after 
        the designated transfer date.
    ``(e) Designated Transfer Date.--As used in this section, the term 
`designated transfer date' means the date determined under section 1062 
of the Consumer Financial Protection Act of 2010.''.
    (b) Effective Date.--This section and the amendments made by this 
section shall become effective on the designated transfer date.
    (c) Rule of Construction.--The amendments made by subsection (a) 
shall not affect any transaction covered by the Alternative Mortgage 
Transaction Parity Act of l982 (12 U.S.C. 3801 et seq.) and entered 
into on or before the designated transfer date.

SEC. 1084. AMENDMENTS TO THE ELECTRONIC FUND TRANSFER ACT.

    The Electronic Fund Transfer Act (15 U.S.C. 1693 et seq.) is 
amended--
            (1) by striking ``Board'' each place that term appears and 
        inserting ``Bureau'', except in section 918 (as so designated 
        by the Credit Card Act of 2009) (15 U.S.C. 1693o);
            (2) in section 903 (15 U.S.C. 1693a), by striking paragraph 
        (3) and inserting the following:
            ``(3) the term `Bureau' means the Bureau of Consumer 
        Financial Protection;'';
            (3) in section 916(d) (as so designated by section 401 of 
        the Credit CARD Act of 2009) (15 U.S.C. 1693m)--
                    (A) by striking ``Federal Reserve System'' and 
                inserting ``Bureau of Consumer Financial Protection''; 
                and
                    (B) by striking ``Federal Reserve System'' and 
                inserting ``Bureau of Consumer Financial Protection''; 
                and
            (4) in section 918 (as so designated by the Credit CARD Act 
        of 2009) (15 U.S.C. 1693o)--
                    (A) in subsection (a)--
                            (i) by striking ``Compliance'' and 
                        inserting ``Except as otherwise provided by 
                        subtitle B of the Consumer Financial Protection 
                        Act of 2010, compliance''; and
                            (ii) by striking paragraph (2) and 
                        inserting the following:
            ``(2) subtitle E of the Consumer Financial Protection Act 
        of 2010, by the Bureau;''; and
                    (B) by striking subsection (c) and inserting the 
                following:
    ``(c) Overall Enforcement Authority of the Federal Trade 
Commission.--Except to the extent that enforcement of the requirements 
imposed under this title is specifically committed to some other 
Government agency under subsection (a), and subject to subtitle B of 
the Consumer Financial Protection Act of 2010, the Federal Trade 
Commission shall enforce such requirements. For the purpose of the 
exercise by the Federal Trade Commission of its functions and powers 
under the Federal Trade Commission Act, a violation of any requirement 
imposed under this title shall be deemed a violation of a requirement 
imposed under that Act. All of the functions and powers of the Federal 
Trade Commission under the Federal Trade Commission Act are available 
to the Federal Trade Commission to enforce compliance by any person 
subject to the jurisdiction of the Federal Trade Commission with the 
requirements imposed under this title, irrespective of whether that 
person is engaged in commerce or meets any other jurisdictional tests 
under the Federal Trade Commission Act.''.

SEC. 1085. AMENDMENTS TO THE EQUAL CREDIT OPPORTUNITY ACT.

    The Equal Credit Opportunity Act (15 U.S.C. 1691 et seq.) is 
amended--
            (1) by striking ``Board'' each place that term appears and 
        inserting ``Bureau'';
            (2) in section 702 (15 U.S.C. 1691a), by striking 
        subsection (c) and inserting the following:
    ``(c) The term `Bureau' means the Bureau of Consumer Financial 
Protection.'';
            (3) in section 703 (15 U.S.C. 1691b)--
                    (A) by striking the section heading and inserting 
                the following:

``SEC. 703. PROMULGATION OF REGULATIONS BY THE BUREAU.'';

                    (B) by striking ``(a) Regulations.--'';
                    (C) by striking subsection (b);
                    (D) by redesignating paragraphs (1) through (5) as 
                subsections (a) through (e), respectively; and
                    (E) in subsection (c), as so redesignated, by 
                striking ``paragraph (2)'' and inserting ``subsection 
                (b)'';
            (4) in section 704 (15 U.S.C. 1691c)--
                    (A) in subsection (a)--
                            (i) by striking ``Compliance'' and 
                        inserting ``Except as otherwise provided by 
                        subtitle B of the Consumer Protection Financial 
                        Protection Act of 2010''; and
                            (ii) by striking paragraph (2) and 
                        inserting the following:
            ``(2) Subtitle E of the Consumer Financial Protection Act 
        of 2010, by the Bureau.'';
                    (B) by striking subsection (c) and inserting the 
                following:
    ``(c) Overall Enforcement Authority of Federal Trade Commission.--
Except to the extent that enforcement of the requirements imposed under 
this title is specifically committed to some other Government agency 
under subsection (a), and subject to subtitle B of the Consumer 
Financial Protection Act of 2010, the Federal Trade Commission shall 
enforce such requirements. For the purpose of the exercise by the 
Federal Trade Commission of its functions and powers under the Federal 
Trade Commission Act (15 U.S.C. 41 et seq.), a violation of any 
requirement imposed under this subchapter shall be deemed a violation 
of a requirement imposed under that Act. All of the functions and 
powers of the Federal Trade Commission under the Federal Trade 
Commission Act are available to the Federal Trade Commission to enforce 
compliance by any person with the requirements imposed under this 
title, irrespective of whether that person is engaged in commerce or 
meets any other jurisdictional tests under the Federal Trade Commission 
Act, including the power to enforce any rule prescribed by the Bureau 
under this title in the same manner as if the violation had been a 
violation of a Federal Trade Commission trade regulation rule.''; and
                    (C) in subsection (d), by striking ``Board'' and 
                inserting ``Bureau''; and
            (5) in section 706(e) (15 U.S.C. 1691e(e))--
                    (A) in the subsection heading--
                            (i) by striking ``Board'' each place that 
                        term appears and inserting ``Bureau''; and
                            (ii) by striking ``Federal Reserve System'' 
                        and inserting ``Bureau of Consumer Financial 
                        Protection''; and
                    (B) by striking ``Federal Reserve System'' and 
                inserting ``Bureau of Consumer Financial Protection''.

SEC. 1086. AMENDMENTS TO THE EXPEDITED FUNDS AVAILABILITY ACT.

    (a) Amendment to Section 603.--Section 603(d)(1) of the Expedited 
Funds Availability Act (12 U.S.C. 4002) is amended by inserting after 
``Board'' the following ``, jointly with the Director of the Bureau of 
Consumer Financial Protection,''.
    (b) Amendments to Section 604.--Section 604 of the Expedited Funds 
Availability Act (12 U.S.C. 4003) is amended--
            (1) by inserting after ``Board'' each place that term 
        appears, other than in subsection (f), the following: ``, 
        jointly with the Director of the Bureau of Consumer Financial 
        Protection,''; and
            (2) in subsection (f), by striking ``Board.'' each place 
        that term appears and inserting the following: ``Board, jointly 
        with the Director of the Bureau of Consumer Financial 
        Protection.''.
    (c) Amendments to Section 605.--Section 605 of the Expedited Funds 
Availability Act (12 U.S.C. 4004) is amended--
            (1) by inserting after ``Board'' each place that term 
        appears, other than in the heading for section 605(f)(1), the 
        following: ``, jointly with the Director of the Bureau of 
        Consumer Financial Protection,''; and
            (2) in subsection (f)(1), in the paragraph heading, by 
        inserting ``and bureau'' after ``board''.
    (d) Amendments to Section 609.--Section 609 of the Expedited Funds 
Availability Act (12 U.S.C. 4008) is amended:
            (1) in subsection (a), by inserting after ``Board'' the 
        following ``, jointly with the Director of the Bureau of 
        Consumer Financial Protection,''; and
            (2) by striking subsection (e) and inserting the following:
    ``(e) Consultations.--In prescribing regulations under subsections 
(a) and (b), the Board and the Director of the Bureau of Consumer 
Financial Protection, in the case of subsection (a), and the Board, in 
the case of subsection (b), shall consult with the Comptroller of the 
Currency, the Board of Directors of the Federal Deposit Insurance 
Corporation, and the National Credit Union Administration Board.''.
    (e) Expedited Funds Availability Improvements.--Section 603 of the 
Expedited Funds Availability Act (12 U.S.C. 4002) is amended--
            (1) in subsection (a)(2)(D), by striking ``$100'' and 
        inserting ``$200''; and
            (2) in subsection (b)(3)(C), in the subparagraph heading, 
        by striking ``$100'' and inserting ``$200''; and
            (3) in subsection (c)(1)(B)(iii), in the clause heading, by 
        striking ``$100'' and inserting ``$200''.
    (f) Regular Adjustments for Inflation.--Section 607 of the 
Expedited Funds Availability Act (12 U.S.C. 4006) is amended by adding 
at the end the following:
    ``(f) Adjustments to Dollar Amounts for Inflation.--The dollar 
amounts under this title shall be adjusted every 5 years after December 
31, 2011, by the annual percentage increase in the Consumer Price Index 
for Urban Wage Earners and Clerical Workers, as published by the Bureau 
of Labor Statistics, rounded to the nearest multiple of $25.''.

SEC. 1087. AMENDMENTS TO THE FAIR CREDIT BILLING ACT.

    The Fair Credit Billing Act (15 U.S.C. 1666-1666j) is amended by 
striking ``Board'' each place that term appears and inserting 
``Bureau''.

SEC. 1088. AMENDMENTS TO THE FAIR CREDIT REPORTING ACT AND THE FAIR AND 
              ACCURATE CREDIT TRANSACTIONS ACT.

    (a) Fair Credit Reporting Act.--The Fair Credit Reporting Act (15 
U.S.C. 1681 et seq.) is amended--
            (1) in section 603 (15 U.S.C. 1681a)--
                    (A) by redesignating subsections (w) and (x) as 
                subsections (x) and (y), respectively; and
                    (B) by inserting after subsection (v) the 
                following:
    ``(w) The term `Bureau' means the Bureau of Consumer Financial 
Protection.''; and
            (2) except as otherwise specifically provided in this 
        subsection--
                    (A) by striking ``Federal Trade Commission'' each 
                place that term appears and inserting ``Bureau'';
                    (B) by striking ``FTC'' each place that term 
                appears and inserting ``Bureau'';
                    (C) by striking ``the Commission'' each place that 
                term appears and inserting ``the Bureau''; and
                    (D) by striking ``The Federal banking agencies, the 
                National Credit Union Administration, and the 
                Commission shall jointly'' each place that term appears 
                and inserting ``The Bureau shall'';
            (3) in section 603(k)(2) (15 U.S.C. 1681a(k)(2)), by 
        striking ``Board of Governors of the Federal Reserve System'' 
        and inserting ``Bureau'';
            (4) in section 604(g) (15 U.S.C. 1681b(g))--
                    (A) in paragraph (3), by striking subparagraph (C) 
                and inserting the following:
                    ``(C) as otherwise determined to be necessary and 
                appropriate, by regulation or order, by the Bureau 
                (consistent with the enforcement authorities prescribed 
                under section 621(b)), or the applicable State 
                insurance authority (with respect to any person engaged 
                in providing insurance or annuities).'';
                    (B) by striking paragraph (5) and inserting the 
                following:
            ``(5) Regulations and effective date for paragraph (2).--
                    ``(A) Regulations required.--The Bureau may, after 
                notice and opportunity for comment, prescribe 
                regulations that permit transactions under paragraph 
                (2) that are determined to be necessary and appropriate 
                to protect legitimate operational, transactional, risk, 
                consumer, and other needs (and which shall include 
                permitting actions necessary for administrative 
                verification purposes), consistent with the intent of 
                paragraph (2) to restrict the use of medical 
                information for inappropriate purposes.''; and
                    (C) by striking paragraph (6);
            (5) in section 611(e)(2) (15 U.S.C. 1681i(e)), by striking 
        paragraph (2) and inserting the following:
            ``(2) Exclusion.--Complaints received or obtained by the 
        Bureau pursuant to its investigative authority under the 
        Consumer Financial Protection Act of 2010 shall not be subject 
        to paragraph (1).'';
            (6) in section 615(h)(6) (15 U.S.C. 1681m(h)(6)), by 
        striking subparagraph (A) and inserting the following:
                    ``(A) Rules required.--The Bureau shall prescribe 
                rules to carry out this subsection.'';
            (7) in section 621 (15 U.S.C. 1681s)--
                    (A) by striking subsection (a) and inserting the 
                following:
    ``(a) Enforcement by Federal Trade Commission.--
            ``(1) In general.--Except as otherwise provided by subtitle 
        B of the Consumer Financial Protection Act of 2010, compliance 
        with the requirements imposed under this title shall be 
        enforced under the Federal Trade Commission Act (15 U.S.C. 41 
        et seq.) by the Federal Trade Commission, with respect to 
        consumer reporting agencies and all other persons subject 
        thereto, except to the extent that enforcement of the 
        requirements imposed under this title is specifically committed 
        to some other Government agency under subsection (b). For the 
        purpose of the exercise by the Federal Trade Commission of its 
        functions and powers under the Federal Trade Commission Act, a 
        violation of any requirement or prohibition imposed under this 
        title shall constitute an unfair or deceptive act or practice 
        in commerce, in violation of section 5(a) of the Federal Trade 
        Commission Act (15 U.S.C. 45(a)), and shall be subject to 
        enforcement by the Federal Trade Commission under section 5(b) 
        of that Act with respect to any consumer reporting agency or 
        person that is subject to enforcement by the Federal Trade 
        Commission pursuant to this subsection, irrespective of whether 
        that person is engaged in commerce or meets any other 
        jurisdictional tests under the Federal Trade Commission Act. 
        The Federal Trade Commission shall have such procedural, 
        investigative, and enforcement powers (except as otherwise 
        provided by subtitle B of the Consumer Financial Protection Act 
        of 2010), including the power to issue procedural rules in 
        enforcing compliance with the requirements imposed under this 
        title and to require the filing of reports, the production of 
        documents, and the appearance of witnesses, as though the 
        applicable terms and conditions of the Federal Trade Commission 
        Act were part of this title. Any person violating any of the 
        provisions of this title shall be subject to the penalties and 
        entitled to the privileges and immunities provided in the 
        Federal Trade Commission Act as though the applicable terms and 
        provisions of such Act are part of this title.
            ``(2) Penalties.--
                    ``(A) Knowing violations.--Except as otherwise 
                provided by subtitle B of the Consumer Financial 
                Protection Act of 2010, in the event of a knowing 
                violation, which constitutes a pattern or practice of 
                violations of this title, the Federal Trade Commission 
                may commence a civil action to recover a civil penalty 
                in a district court of the United States against any 
                person that violates this title. In such action, such 
                person shall be liable for a civil penalty of not more 
                than $2,500 per violation.
                    ``(B) Determining penalty amount.--In determining 
                the amount of a civil penalty under subparagraph (A), 
                the court shall take into account the degree of 
                culpability, any history of such prior conduct, ability 
                to pay, effect on ability to continue to do business, 
                and such other matters as justice may require.
                    ``(C) Limitation.--Notwithstanding paragraph (2), a 
                court may not impose any civil penalty on a person for 
                a violation of section 623(a)(1), unless the person has 
                been enjoined from committing the violation, or ordered 
                not to commit the violation, in an action or proceeding 
                brought by or on behalf of the Federal Trade 
                Commission, and has violated the injunction or order, 
                and the court may not impose any civil penalty for any 
                violation occurring before the date of the violation of 
                the injunction or order.'';
            (8) by striking subsection (b) and inserting the following:
    ``(b) Enforcement by Other Agencies.--
            ``(1) In general.--Except as otherwise provided by subtitle 
        B of the Consumer Financial Protection Act of 2010, compliance 
        with the requirements imposed under this title with respect to 
        consumer reporting agencies, persons who use consumer reports 
        from such agencies, persons who furnish information to such 
        agencies, and users of information that are subject to section 
        615(d) shall be enforced under--
                    ``(A) section 8 of the Federal Deposit Insurance 
                Act (12 U.S.C. 1818), in the case of--
                            ``(i) any national bank, and any Federal 
                        branch or Federal agency of a foreign bank, by 
                        the Office of the Comptroller of the Currency;
                            ``(ii) any member bank of the Federal 
                        Reserve System (other than a national bank), a 
                        branch or agency of a foreign bank (other than 
                        a Federal branch, Federal agency, or insured 
                        State branch of a foreign bank), a commercial 
                        lending company owned or controlled by a 
                        foreign bank, and any organization operating 
                        under section 25 or 25A of the Federal Reserve 
                        Act, by the Board of Governors of the Federal 
                        Reserve System; and
                            ``(iii) any bank insured by the Federal 
                        Deposit Insurance Corporation (other than a 
                        member of the Federal Reserve System) and any 
                        insured State branch of a foreign bank, by the 
                        Board of Directors of the Federal Deposit 
                        Insurance Corporation;
                    ``(B) subtitle E of the Consumer Financial 
                Protection Act of 2010, by the Bureau;
                    ``(C) the Federal Credit Union Act (12 U.S.C. 1751 
                et seq.), by the Administrator of the National Credit 
                Union Administration with respect to any Federal credit 
                union;
                    ``(D) subtitle IV of title 49, United States Code, 
                by the Secretary of Transportation, with respect to all 
                carriers subject to the jurisdiction of the Surface 
                Transportation Board;
                    ``(E) the Federal Aviation Act of 1958 (49 U.S.C. 
                App. 1301 et seq.), by the Secretary of Transportation, 
                with respect to any air carrier or foreign air carrier 
                subject to that Act;
                    ``(F) the Packers and Stockyards Act, 1921 (7 
                U.S.C. 181 et seq.) (except as provided in section 406 
                of that Act), by the Secretary of Agriculture, with 
                respect to any activities subject to that Act;
                    ``(G) the Commodity Exchange Act, with respect to a 
                person subject to the jurisdiction of the Commodity 
                Futures Trading Commission; and
                    ``(H) the Federal securities laws, and any other 
                laws that are subject to the jurisdiction of the 
                Securities and Exchange Commission, with respect to a 
                person that is subject to the jurisdiction of the 
                Securities and Exchange Commission.
            ``(2) Incorporated definitions.--The terms used in 
        paragraph (1) that are not defined in this title or otherwise 
        defined in section 3(s) of the Federal Deposit Insurance Act 
        (12 U.S.C. 1813(s)) have the same meanings as in section 1(b) 
        of the International Banking Act of 1978 (12 U.S.C. 3101).'';
            (9) by striking subsection (e) and inserting the following:
    ``(e) Regulatory Authority.--The Bureau shall prescribe such 
regulations as are necessary to carry out the purposes of this Act. The 
regulations prescribed by the Bureau under this subsection shall apply 
to any person that is subject to this Act, notwithstanding the 
enforcement authorities granted to other agencies under this 
section.''; and
            (10) in section 623 (15 U.S.C. 1681s-2)--
                    (A) in subsection (a)(7), by striking subparagraph 
                (D) and inserting the following:
                    ``(D) Model disclosure.--
                            ``(i) Duty of bureau.--The Bureau shall 
                        prescribe a brief model disclosure that a 
                        financial institution may use to comply with 
                        subparagraph (A), which shall not exceed 30 
                        words.
                            ``(ii) Use of model not required.--No 
                        provision of this paragraph may be construed to 
                        require a financial institution to use any such 
                        model form prescribed by the Bureau.
                            ``(iii) Compliance using model.--A 
                        financial institution shall be deemed to be in 
                        compliance with subparagraph (A) if the 
                        financial institution uses any model form 
                        prescribed by the Bureau under this 
                        subparagraph, or the financial institution uses 
                        any such model form and rearranges its 
                        format.''; and
                    (B) by striking subsection (e) and inserting the 
                following:
    ``(e) Accuracy Guidelines and Regulations Required.--
            ``(1) Guidelines.--The Bureau shall, with respect to 
        persons or entities that are subject to the enforcement 
        authority of the Bureau under section 621--
                    ``(A) establish and maintain guidelines for use by 
                each person that furnishes information to a consumer 
                reporting agency regarding the accuracy and integrity 
                of the information relating to consumers that such 
                entities furnish to consumer reporting agencies, and 
                update such guidelines as often as necessary; and
                    ``(B) prescribe regulations requiring each person 
                that furnishes information to a consumer reporting 
                agency to establish reasonable policies and procedures 
                for implementing the guidelines established pursuant to 
                subparagraph (A).
            ``(2) Criteria.--In developing the guidelines required by 
        paragraph (1)(A), the Bureau shall--
                    ``(A) identify patterns, practices, and specific 
                forms of activity that can compromise the accuracy and 
                integrity of information furnished to consumer 
                reporting agencies;
                    ``(B) review the methods (including technological 
                means) used to furnish information relating to 
                consumers to consumer reporting agencies;
                    ``(C) determine whether persons that furnish 
                information to consumer reporting agencies maintain and 
                enforce policies to ensure the accuracy and integrity 
                of information furnished to consumer reporting 
                agencies; and
                    ``(D) examine the policies and processes that 
                persons that furnish information to consumer reporting 
                agencies employ to conduct reinvestigations and correct 
                inaccurate information relating to consumers that has 
                been furnished to consumer reporting agencies.''.
    (b) Fair and Accurate Credit Transactions Act of 2003.--Section 
214(b)(1) of the Fair and Accurate Credit Transactions Act of 2003 (15 
U.S.C. 1681s-3 note) is amended by striking paragraph (1) and inserting 
the following:
            ``(1) In general.--Regulations to carry out section 624 of 
        the Fair Credit Reporting Act (15 U.S.C. 1681s-3), shall be 
        prescribed, as described in paragraph (2), by--
                    ``(A) the Commodity Futures Trading Commission, 
                with respect to entities subject to its enforcement 
                authorities;
                    ``(B) the Securities and Exchange Commission, with 
                respect to entities subject to its enforcement 
                authorities; and
                    ``(C) the Bureau, with respect to other entities 
                subject to this Act.''.

SEC. 1089. AMENDMENTS TO THE FAIR DEBT COLLECTION PRACTICES ACT.

    The Fair Debt Collection Practices Act (15 U.S.C. 1692 et seq.) is 
amended--
            (1) by striking ``Commission'' each place that term appears 
        and inserting ``Bureau'';
            (2) in section 803 (15 U.S.C. 1692a)--
                    (A) by striking paragraph (1) and inserting the 
                following:
            ``(1) The term `Bureau' means the Bureau of Consumer 
        Financial Protection.'';
            (3) in section 814 (15 U.S.C. 1692l)--
                    (A) by striking subsection (a) and inserting the 
                following:
    ``(a) Federal Trade Commission.--Except as otherwise provided by 
subtitle B of the Consumer Financial Protection Act of 2010, compliance 
with this title shall be enforced by the Federal Trade Commission, 
except to the extent that enforcement of the requirements imposed under 
this title is specifically committed to another Government agency under 
subsection (b). For purpose of the exercise by the Federal Trade 
Commission of its functions and powers under the Federal Trade 
Commission Act (15 U.S.C. 41 et seq.), a violation of this title shall 
be deemed an unfair or deceptive act or practice in violation of that 
Act. All of the functions and powers of the Federal Trade Commission 
under the Federal Trade Commission Act are available to the Federal 
Trade Commission to enforce compliance by any person with this title, 
irrespective of whether that person is engaged in commerce or meets any 
other jurisdictional tests under the Federal Trade Commission Act, 
including the power to enforce the provisions of this title, in the 
same manner as if the violation had been a violation of a Federal Trade 
Commission trade regulation rule.''; and
                    (B) in subsection (b)--
                            (i) by striking ``Compliance'' and 
                        inserting ``Except as otherwise provided by 
                        subtitle B of the Consumer Financial Protection 
                        Act of 2010, compliance''; and
                            (ii) by striking paragraph (2) and 
                        inserting the following:
            ``(2) subtitle E of the Consumer Financial Protection Act 
        of 2010, by the Bureau;''; and
            (4) in subsection (d), by striking ``Neither the 
        Commission'' and all that follows through the end of the 
        subsection and inserting the following: ``The Bureau may 
        prescribe rules with respect to the collection of debts by debt 
        collectors, as defined in this Act.''.

SEC. 1090. AMENDMENTS TO THE FEDERAL DEPOSIT INSURANCE ACT.

    The Federal Deposit Insurance Act (12 U.S.C. 1811 et seq.) is 
amended--
            (1) in section 8(t) (12 U.S.C. 1818(t)), by adding at the 
        end the following:
            ``(6) Referral to bureau of consumer financial 
        protection.--Subject to subtitle B of the Consumer Financial 
        Protection Act of 2010, each appropriate Federal banking agency 
        shall make a referral to the Bureau of Consumer Financial 
        Protection when the Federal banking agency has a reasonable 
        belief that a violation of an enumerated consumer law, as 
        defined in the Consumer Financial Protection Act of 2010, has 
        been committed by any insured depository institution or 
        institution-affiliated party within the jurisdiction of that 
        appropriate Federal banking agency.''; and
            (2) in section 43 (12 U.S.C. 1831t)--
                    (A) in subsection (c), by striking ``Federal Trade 
                Commission'' and inserting ``Bureau'';
                    (B) in subsection (d), by striking ``Federal Trade 
                Commission'' and inserting ``Bureau'';
                    (C) in subsection (e)--
                            (i) in paragraph (2), by striking ``Federal 
                        Trade Commission'' and inserting ``Bureau''; 
                        and
                            (ii) by adding at the end the following new 
                        paragraph:
            ``(5) Bureau.--The term `Bureau' means the Bureau of 
        Consumer Financial Protection.''; and
                    (D) in subsection (f)--
                            (i) by striking paragraph (1) and inserting 
                        the following:
            ``(1) Limited enforcement authority.--Compliance with the 
        requirements of subsections (b), (c), and (e), and any 
        regulation prescribed or order issued under such subsection, 
        shall be enforced under the Consumer Financial Protection Act 
        of 2010, by the Bureau, subject to subtitle B of the Consumer 
        Financial Protection Act of 2010, and under the Federal Trade 
        Commission Act (15 U.S.C. 41 et seq.) by the Federal Trade 
        Commission.''; and
                            (ii) in paragraph (2), by striking 
                        subparagraph (C) and inserting the following:
                    ``(C) Limitation on state action while federal 
                action pending.--If the Bureau or Federal Trade 
                Commission has instituted an enforcement action for a 
                violation of this section, no appropriate State 
                supervisory agency may, during the pendency of such 
                action, bring an action under this section against any 
                defendant named in the complaint of the Bureau or 
                Federal Trade Commission for any violation of this 
                section that is alleged in that complaint.''.

SEC. 1091. AMENDMENTS TO THE GRAMM-LEACH-BLILEY ACT.

    Title V of the Gramm-Leach-Bliley Act (15 U.S.C. 6801 et seq.) is 
amended--
            (1) in section 504(a)(1) (15 U.S.C. 6804(a)(1))--
                    (A) by striking ``The Federal banking agencies, the 
                National Credit Union Administration, the Secretary of 
                the Treasury,'' and inserting ``The Bureau of Consumer 
                Financial Protection and''; and
                    (B) by striking ``, and the Federal Trade 
                Commission'';
            (2) in section 505(a) (15 U.S.C. 6805(a))--
                    (A) by striking ``This subtitle'' and all that 
                follows through ``as follows:'' and inserting ``Except 
                as otherwise provided by subtitle B of the Consumer 
                Financial Protection Act of 2010, this subtitle and the 
                regulations prescribed thereunder shall be enforced by 
                the Bureau of Consumer Financial Protection, the 
                Federal functional regulators, the State insurance 
                authorities, and the Federal Trade Commission with 
                respect to financial institutions and other persons 
                subject to their jurisdiction under applicable law, as 
                follows:'';
                    (B) in paragraph (1)--
                            (i) in subparagraph (B), by inserting 
                        ``and'' after the semicolon;
                            (ii) in subparagraph (C), by striking ``; 
                        and'' and inserting a period; and
                            (iii) by striking subparagraph (D); and
                    (C) by adding at the end the following:
            ``(8) Under the Consumer Financial Protection Act of 2010, 
        by the Bureau of Consumer Financial Protection, in the case of 
        any financial institution and other covered person or service 
        provider that is subject to the jurisdiction of the Bureau 
        under that Act, but not with respect to the standards under 
        section 501.''; and
            (3) in section 505(b)(1) (15 U.S.C. 6805(b)(1)), by 
        inserting ``, other than the Bureau of Consumer Financial 
        Protection,'' after ``subsection (a)''.

SEC. 1092. AMENDMENTS TO THE HOME MORTGAGE DISCLOSURE ACT.

    The Home Mortgage Disclosure Act of 1975 (12 U.S.C. 2801 et seq.) 
is amended--
            (1) except as otherwise specifically provided in this 
        section, by striking ``Board'' each place that term appears and 
        inserting ``Bureau'';
            (2) in section 303 (12 U.S.C. 2802)--
                    (A) by redesignating paragraphs (1) through (6) as 
                paragraphs (2) through (7), respectively; and
                    (B) by inserting before paragraph (2) the 
                following:
            ``(1) the term `Bureau' means the Bureau of Consumer 
        Financial Protection;'';
            (3) in section 304 (12 U.S.C. 2803)--
                    (A) in subsection (b)--
                            (i) in paragraph (4), by inserting ``age,'' 
                        before ``and gender'';
                            (ii) in paragraph (3), by striking ``and'' 
                        at the end;
                            (iii) in paragraph (4), by striking the 
                        period at the end and inserting a semicolon; 
                        and
                            (iv) by adding at the end the following:
            ``(5) the number and dollar amount of mortgage loans 
        grouped according to measurements of--
                    ``(A) the total points and fees payable at 
                origination in connection with the mortgage as 
                determined by the Bureau, taking into account 15 U.S.C. 
                1602(aa)(4);
                    ``(B) the difference between the annual percentage 
                rate associated with the loan and a benchmark rate or 
                rates for all loans;
                    ``(C) the term in months of any prepayment penalty 
                or other fee or charge payable on repayment of some 
                portion of principal or the entire principal in advance 
                of scheduled payments; and
                    ``(D) such other information as the Bureau may 
                require; and
            ``(6) the number and dollar amount of mortgage loans and 
        completed applications grouped according to measurements of--
                    ``(A) the value of the real property pledged or 
                proposed to be pledged as collateral;
                    ``(B) the actual or proposed term in months of any 
                introductory period after which the rate of interest 
                may change;
                    ``(C) the presence of contractual terms or proposed 
                contractual terms that would allow the mortgagor or 
                applicant to make payments other than fully amortizing 
                payments during any portion of the loan term;
                    ``(D) the actual or proposed term in months of the 
                mortgage loan;
                    ``(E) the channel through which application was 
                made, including retail, broker, and other relevant 
                categories;
                    ``(F) as the Bureau may determine to be 
                appropriate, a unique identifier that identifies the 
                loan originator as set forth in section 1503 of the 
                S.A.F.E. Mortgage Licensing Act of 2008;
                    ``(G) as the Bureau may determine to be 
                appropriate, a universal loan identifier;
                    ``(H) as the Bureau may determine to be 
                appropriate, the parcel number that corresponds to the 
                real property pledged or proposed to be pledged as 
                collateral;
                    ``(I) the credit score of mortgage applicants and 
                mortgagors, in such form as the Bureau may prescribe, 
                except that the Bureau shall modify or require 
                modification of credit score data that is or will be 
                available to the public to protect the compelling 
                privacy interest of the mortgage applicant or 
                mortgagors; and
                    ``(J) such other information as the Bureau may 
                require.'';
                    (B) in subsection (i), by striking ``subsection 
                (b)(4)'' and inserting ``subsections (b)(4), (b)(5), 
                and (b)(6)'';
                    (C) in subsection (j)--
                            (i) in paragraph (1), by striking ``(as'' 
                        and inserting ``(containing loan-level and 
                        application-level information relating to 
                        disclosures required under subsections (a) and 
                        (b) and as otherwise'';
                            (ii) by striking paragraph (3) and 
                        inserting the following:
            ``(3) Change of form not required.--A depository 
        institution meets the disclosure requirement of paragraph (1) 
        if the institution provides the information required under such 
        paragraph in such formats as the Bureau may require''; and
                            (iii) in paragraph (2)(A), by striking ``in 
                        the format in which such information is 
                        maintained by the institution'' and inserting 
                        ``in such formats as the Bureau may require'';
                    (D) in subsection (m), by striking paragraph (2) 
                and inserting the following:
            ``(2) Form of information.--In complying with paragraph 
        (1), a depository institution shall provide the person 
        requesting the information with a copy of the information 
        requested in such formats as the Bureau may require'';
                    (E) by striking subsection (h) and inserting the 
                following:
    ``(h) Submission to Agencies.--
            ``(1) In general.--The data required to be disclosed under 
        subsection (b) shall be submitted to the Bureau or to the 
        appropriate agency for the institution reporting under this 
        title, in accordance with rules prescribed by the Bureau. 
        Notwithstanding the requirement of subsection (a)(2)(A) for 
        disclosure by census tract, the Bureau, in cooperation with 
        other appropriate regulators described in paragraph (2), shall 
        develop regulations that--
                    ``(A) prescribe the format for such disclosures, 
                the method for submission of the data to the 
                appropriate regulatory agency, and the procedures for 
                disclosing the information to the public;
                    ``(B) require the collection of data required to be 
                disclosed under subsection (b) with respect to loans 
                sold by each institution reporting under this title;
                    ``(C) require disclosure of the class of the 
                purchaser of such loans; and
                    ``(D) permit any reporting institution to submit in 
                writing to the Bureau or to the appropriate agency such 
                additional data or explanations as it deems relevant to 
                the decision to originate or purchase mortgage loans.
            ``(2) Other appropriate agencies.--The appropriate 
        regulators described in this paragraph are--
                    ``(A) the Office of the Comptroller of the Currency 
                (hereafter referred to in this Act as `Comptroller') 
                for national banks and Federal branches, Federal 
                agencies of foreign banks, and savings associations;
                    ``(B) the Federal Deposit Insurance Corporation for 
                banks insured by the Federal Deposit Insurance 
                Corporation (other than members of the Federal Reserve 
                System), mutual savings banks, insured State branches 
                of foreign banks, and any other depository institution 
                described in section 303(2)(A) which is not otherwise 
                referred to in this paragraph;
                    ``(C) the National Credit Union Administration 
                Board for credit unions; and
                    ``(D) the Secretary of Housing and Urban 
                Development for other lending institutions not 
                regulated by the agencies referred to in subparagraphs 
                (A) through (C).''; and
                    (F) by adding at the end the following:
    ``(n) Timing of Certain Disclosures.--The data required to be 
disclosed under subsection (b) shall be submitted to the Bureau or to 
the appropriate agency for any institution reporting under this title, 
in accordance with regulations prescribed by the Bureau. Institutions 
shall not be required to report new data under paragraph (5) or (6) of 
subsection (b) before the first January 1 that occurs after the end of 
the 9-month period beginning on the date on which regulations are 
issued by the Bureau in final form with respect to such disclosures.'';
            (4) in section 305 (12 U.S.C. 2804)--
                    (A) by striking subsection (b) and inserting the 
                following:
    ``(b) Powers of Certain Other Agencies.--
            ``(1) In general.--Except as otherwise provided by subtitle 
        B of the Consumer Financial Protection Act of 2010, compliance 
        with the requirements of this title shall be enforced--
                    ``(A) under section 8 of the Federal Deposit 
                Insurance Act, in the case of--
                            ``(i) any national bank, and any Federal 
                        branch or Federal agency of a foreign bank, by 
                        the Office of the Comptroller of the Currency;
                            ``(ii) any member bank of the Federal 
                        Reserve System (other than a national bank), 
                        branch or agency of a foreign bank (other than 
                        a Federal branch, Federal agency, and insured 
                        State branch of a foreign bank), commercial 
                        lending company owned or controlled by a 
                        foreign bank, and any organization operating 
                        under section 25 or 25(a) of the Federal 
                        Reserve Act, by the Board; and
                            ``(iii) any bank insured by the Federal 
                        Deposit Insurance Corporation (other than a 
                        member of the Federal Reserve System), any 
                        mutual savings bank as, defined in section 3(f) 
                        of the Federal Deposit Insurance Act (12 U.S.C. 
                        1813(f)), any insured State branch of a foreign 
                        bank, and any other depository institution not 
                        referred to in this paragraph or subparagraph 
                        (B) or (C), by the Federal Deposit Insurance 
                        Corporation;
                    ``(B) under subtitle E of the Consumer Financial 
                Protection Act of 2010, by the Bureau;
                    ``(C) under the Federal Credit Union Act, by the 
                Administrator of the National Credit Union 
                Administration with respect to any insured credit 
                union; and
                    ``(D) with respect to other lending institutions, 
                by the Secretary of Housing and Urban Development.
            ``(2) Incorporated definitions.--The terms used in 
        paragraph (1) that are not defined in this title or otherwise 
        defined in section 3(s) of the Federal Deposit Insurance Act 
        (12 U.S.C. 1813(s)) shall have the same meanings as in section 
        1(b) of the International Banking Act of 1978 (12 U.S.C. 
        3101).''; and
                    (B) by adding at the end the following:
    ``(d) Overall Enforcement Authority of the Bureau of Consumer 
Financial Protection.--Subject to subtitle B of the Consumer Financial 
Protection Act of 2010, enforcement of the requirements imposed under 
this title is committed to each of the agencies under subsection (b). 
The Bureau may exercise its authorities under the Consumer Financial 
Protection Act of 2010 to exercise principal authority to examine and 
enforce compliance by any person with the requirements of this 
title.'';
            (5) in section 306 (12 U.S.C. 2805(b)), by striking 
        subsection (b) and inserting the following:
    ``(b) Exemption Authority.--The Bureau may, by regulation, exempt 
from the requirements of this title any State-chartered depository 
institution within any State or subdivision thereof, if the agency 
determines that, under the law of such State or subdivision, that 
institution is subject to requirements that are substantially similar 
to those imposed under this title, and that such law contains adequate 
provisions for enforcement. Notwithstanding any other provision of this 
subsection, compliance with the requirements imposed under this 
subsection shall be enforced by the Office of the Comptroller of the 
Currency under section 8 of the Federal Deposit Insurance Act, in the 
case of national banks and savings associations, the deposits of which 
are insured by the Federal Deposit Insurance Corporation.''; and
            (6) by striking section 307 (12 U.S.C. 2806) and inserting 
        the following:

``SEC. 307. COMPLIANCE IMPROVEMENT METHODS.

    ``(a) In General.--
            ``(1) Consultation required.--The Director of the Bureau of 
        Consumer Financial Protection, with the assistance of the 
        Secretary, the Director of the Bureau of the Census, the Board 
        of Governors of the Federal Reserve System, the Federal Deposit 
        Insurance Corporation, and such other persons as the Bureau 
        deems appropriate, shall develop or assist in the improvement 
        of, methods of matching addresses and census tracts to 
        facilitate compliance by depository institutions in as 
        economical a manner as possible with the requirements of this 
        title.
            ``(2) Authorization of appropriations.--There are 
        authorized to be appropriated, such sums as may be necessary to 
        carry out this subsection.
            ``(3) Contracting authority.--The Director of the Bureau of 
        Consumer Financial Protection is authorized to utilize, 
        contract with, act through, or compensate any person or agency 
        in order to carry out this subsection.
    ``(b) Recommendations to Congress.--The Director of the Bureau of 
Consumer Financial Protection shall recommend to the Committee on 
Banking, Housing, and Urban Affairs of the Senate and the Committee on 
Financial Services of the House of Representatives, such additional 
legislation as the Director of the Bureau of Consumer Financial 
Protection deems appropriate to carry out the purpose of this title.''.

SEC. 1093. AMENDMENTS TO THE HOMEOWNERS PROTECTION ACT OF 1998.

    Section 10 of the Homeowners Protection Act of 1998 (12 U.S.C. 
4909) is amended--
            (1) in subsection (a)--
                    (A) by striking ``Compliance'' and inserting 
                ``Except as otherwise provided by subtitle B of the 
                Consumer Financial Protection Act of 2010, 
                compliance'';
                    (B) in paragraph (2), by striking ``and'' at the 
                end;
                    (C) in paragraph (3), by striking the period at the 
                end and inserting ``; and''; and
                    (D) by adding at the end the following:
            ``(4) subtitle E of the Consumer Financial Protection Act 
        of 2010, by the Bureau of Consumer Financial Protection.''; and
            (2) in subsection (b)(2), by inserting before the period at 
        the end the following: ``, subject to subtitle B of the 
        Consumer Financial Protection Act of 2010''.

SEC. 1094. AMENDMENTS TO THE HOME OWNERSHIP AND EQUITY PROTECTION ACT 
              OF 1994.

    The Home Ownership and Equity Protection Act of 1994 (15 U.S.C. 
1601 note) is amended--
            (1) in section 158(a), by striking ``Consumer Advisory 
        Council of the Board'' and inserting ``Advisory Board to the 
        Bureau''; and
            (2) by striking ``Board'' each place that term appears and 
        inserting ``Bureau''.

SEC. 1095. AMENDMENTS TO THE OMNIBUS APPROPRIATIONS ACT, 2009.

    Section 626 of the Omnibus Appropriations Act, 2009 (15 U.S.C. 1638 
note) is amended--
            (1) by striking subsection (a) and inserting the following:
    ``(a)(1) The Bureau of Consumer Financial Protection shall have 
authority to prescribe rules with respect to mortgage loans in 
accordance with section 553 of title 5, United States Code. Such 
rulemaking shall relate to unfair or deceptive acts or practices 
regarding mortgage loans, which may include unfair or deceptive acts or 
practices involving loan modification and foreclosure rescue services. 
Any violation of a rule prescribed under this paragraph shall be 
treated as a violation of a rule prohibiting unfair, deceptive, or 
abusive acts or practices under the Consumer Financial Protection Act 
of 2010 and a violation of a rule under section 18 of the Federal Trade 
Commission Act (15 U.S.C. 57a) regarding unfair or deceptive acts or 
practices.
    ``(2) The Bureau of Consumer Financial Protection shall enforce the 
rules issued under paragraph (1) in the same manner, by the same means, 
and with the same jurisdiction, powers, and duties, as though all 
applicable terms and provisions of the Consumer Financial Protection 
Act of 2010 were incorporated into and made part of this subsection.''; 
and
            (2) in subsection (b)--
                    (A) by striking paragraph (1) and inserting the 
                following:
            ``(1) Except as provided in paragraph (6), in any case in 
        which the attorney general of a State has reason to believe 
        that an interest of the residents of the State has been or is 
        threatened or adversely affected by the engagement of any 
        person subject to a rule prescribed under subsection (a) in 
        practices that violate such rule, the State, as parens patriae, 
        may bring a civil action on behalf of its residents in an 
        appropriate district court of the United States or other court 
        of competent jurisdiction--
                    ``(A) to enjoin that practice;
                    ``(B) to enforce compliance with the rule;
                    ``(C) to obtain damages, restitution, or other 
                compensation on behalf of the residents of the State; 
                or
                    ``(D) to obtain penalties and relief provided under 
                the Consumer Financial Protection Act of 2010, the 
                Federal Trade Commission Act, and such other relief as 
                the court deems appropriate.'';
                    (B) in paragraphs (2) and (3), by striking ``the 
                primary Federal regulator'' each time the term appears 
                and inserting ``the Bureau of Consumer Financial 
                Protection or the Commission, as appropriate'';
                    (C) in paragraph (3), by inserting ``and subject to 
                subtitle B of the Consumer Financial Protection Act of 
                2010,'' after ``paragraph (2),''; and
                    (D) in paragraph (6), by striking ``the primary 
                Federal regulator'' each place that term appears and 
                inserting ``the Bureau of Consumer Financial Protection 
                or the Commission''.

SEC. 1096. AMENDMENTS TO THE REAL ESTATE SETTLEMENT PROCEDURES ACT.

    The Real Estate Settlement Procedures Act of 1974 (12 U.S.C. 2601 
et seq.) is amended--
            (1) in section 3 (12 U.S.C. 2602)--
                    (A) in paragraph (7), by striking ``and'' at the 
                end;
                    (B) in paragraph (8), by striking the period at the 
                end and inserting ``; and''; and
                    (C) by adding at the end the following:
            ``(9) the term `Bureau' means the Bureau of Consumer 
        Financial Protection.'';
            (2) in section 4 (12 U.S.C. 2603)--
                    (A) in subsection (a), by striking the first 
                sentence and inserting the following: ``The Bureau 
                shall publish a single, integrated disclosure for 
                mortgage loan transactions (including real estate 
                settlement cost statements) which includes the 
                disclosure requirements of this title, in conjunction 
                with the disclosure requirements of the Truth in 
                Lending Act that, taken together, may apply to a 
                transaction that is subject to both or either 
                provisions of law. The purpose of such model disclosure 
                shall be to facilitate compliance with the disclosure 
                requirements of this title and the Truth in Lending 
                Act, and to aid the borrower or lessee in understanding 
                the transaction by utilizing readily understandable 
                language to simplify the technical nature of the 
                disclosures.'';
                    (B) by striking ``Secretary'' each place that term 
                appears and inserting ``Bureau''; and
                    (C) by striking ``form'' each place that term 
                appears and inserting ``forms'';
            (3) in section 5 (12 U.S.C. 2604)--
                    (A) by striking ``Secretary'' each place that term 
                appears and inserting ``Bureau''; and
                    (B) in subsection (a), by striking the first 
                sentence and inserting the following: ``The Bureau 
                shall prepare and distribute booklets jointly 
                addressing compliance with the requirements of the 
                Truth in Lending Act and the provisions of this title, 
                in order to help persons borrowing money to finance the 
                purchase of residential real estate better to 
                understand the nature and costs of real estate 
                settlement services.'';
            (4) in section 6(j)(3) (12 U.S.C. 2605(j)(3))--
                    (A) by striking ``Secretary'' and inserting 
                ``Bureau''; and
                    (B) by striking ``, by regulations that shall take 
                effect not later than April 20, 1991,'';
            (5) in section 7(b) (12 U.S.C. 2606(b)) by striking 
        ``Secretary'' and inserting ``Bureau'';
            (6) in section 8(d) (12 U.S.C. 2607(d))--
                    (A) in the subsection heading, by inserting 
                ``Bureau and'' before ``Secretary''; and
                    (B) by striking paragraph (4), and inserting the 
                following:
            ``(4) The Bureau, the Secretary, or the attorney general or 
        the insurance commissioner of any State may bring an action to 
        enjoin violations of this section. Except, to the extent that a 
        person is subject to the jurisdiction of the Bureau, the 
        Secretary, or the attorney general or the insurance 
        commissioner of any State, the Bureau shall have primary 
        authority to enforce or administer this section, subject to 
        subtitle B of the Consumer Financial Protection Act of 2010.''.
            (7) in section 10(c) (12 U.S.C. 2609(c) and (d)), by 
        striking ``Secretary'' and inserting ``Bureau'';
            (8) in section 16 (12 U.S.C. 2614), by inserting ``the 
        Bureau,'' before ``the Secretary'';
            (9) in section 18 (12 U.S.C. 2616), by striking 
        ``Secretary'' each place that term appears and inserting 
        ``Bureau''; and
            (10) in section 19 (12 U.S.C. 2617)--
                    (A) in the section heading by striking 
                ``secretary'' and inserting ``bureau'';
                    (B) by striking ``Secretary'' each place that term 
                appears and inserting ``Bureau'';
                    (C) in subsection (b), by inserting ``the Bureau'' 
                before ``the Secretary''; and
                    (D) in subsection (c), by inserting ``or the 
                Bureau'' after ``the Secretary'' each time that term 
                appears.

SEC. 1097. AMENDMENTS TO THE RIGHT TO FINANCIAL PRIVACY ACT OF 1978.

    The Right to Financial Privacy Act of 1978 (12 U.S.C. 3401 et seq.) 
is amended--
            (1) in section 1101--
                    (A) in paragraph (6)--
                            (i) in subparagraph (A), by inserting 
                        ``and'' after the semicolon;
                            (ii) in subparagraph (B), by striking 
                        ``and'' at the end; and
                            (iii) by striking subparagraph (C); and
                    (B) in paragraph (7), by striking subparagraph (E), 
                and inserting the following:
                    ``(E) the Bureau of Consumer Financial 
                Protection;'';
            (2) in section 1112(e) (12 U.S.C. 3412(e)), by striking 
        ``and the Commodity Futures Trading Commission is permitted'' 
        and inserting ``the Commodity Futures Trading Commission, and 
        the Bureau of Consumer Financial Protection is permitted''; and
            (3) in section 1113 (12 U.S.C. 3413), by adding at the end 
        the following new subsection:
    ``(r) Disclosure to the Bureau of Consumer Financial Protection.--
Nothing in this title shall apply to the examination by or disclosure 
to the Bureau of Consumer Financial Protection of financial records or 
information in the exercise of its authority with respect to a 
financial institution.''.

SEC. 1098. AMENDMENTS TO THE SECURE AND FAIR ENFORCEMENT FOR MORTGAGE 
              LICENSING ACT OF 2008.

    The S.A.F.E. Mortgage Licensing Act of 2008 (12 U.S.C. 5101 et 
seq.) is amended--
            (1) by striking ``a Federal banking agency'' each place 
        that term appears, other than in paragraphs (7) and (11) of 
        section 1503 and section 1507(a)(1), and inserting ``the 
        Bureau'';
            (2) by striking ``Federal banking agencies'' each place 
        that term appears and inserting ``Bureau''; and
            (3) by striking ``Secretary'' each place that term appears 
        and inserting ``Director'';
            (4) in section 1503 (12 U.S.C. 5102)--
                    (A) by redesignating paragraphs (2) through (12) as 
                (3) through (13), respectively;
                    (B) by striking paragraph (1) and inserting the 
                following:
            ``(1) Bureau.--The term `Bureau' means the Bureau of 
        Consumer Financial Protection.
            ``(2) Federal banking agency.--The term `Federal banking 
        agency' means the Board of Governors of the Federal Reserve 
        System, the Office of the Comptroller of the Currency, the 
        National Credit Union Administration, and the Federal Deposit 
        Insurance Corporation.''; and
                    (C) by striking paragraph (10), as so designated by 
                this section, and inserting the following:
            ``(10) Director.--The term `Director' means the Director of 
        the Bureau of Consumer Financial Protection.''; and
            (5) in section 1507 (12 U.S.C. 5106)--
                    (A) in subsection (a)--
                            (i) by striking paragraph (1) and inserting 
                        the following:
            ``(1) In general.--The Bureau shall develop and maintain a 
        system for registering employees of a depository institution, 
        employees of a subsidiary that is owned and controlled by a 
        depository institution and regulated by a Federal banking 
        agency, or employees of an institution regulated by the Farm 
        Credit Administration, as registered loan originators with the 
        Nationwide Mortgage Licensing System and Registry. The system 
        shall be implemented before the end of the 1-year period 
        beginning on the date of enactment of the Consumer Financial 
        Protection Act of 2010.''; and
                            (ii) in paragraph (2)--
                                    (I) by striking ``appropriate 
                                Federal banking agency and the Farm 
                                Credit Administration'' and inserting 
                                ``Bureau''; and
                                    (II) by striking ``employees's 
                                identity'' and inserting ``identity of 
                                the employee''; and
                    (B) in subsection (b), by striking ``through the 
                Financial Institutions Examination Council, and the 
                Farm Credit Administration'', and inserting ``and the 
                Bureau of Consumer Financial Protection'';
            (6) in section 1508 (12 U.S.C. 5107)--
                    (A) by striking the section heading and inserting 
                the following: ``sec. 1508. bureau of consumer 
                financial protection backup authority to establish loan 
                originator licensing system.''; and
                    (B) by adding at the end the following:
    ``(f) Regulation Authority.--
            ``(1) In general.--The Bureau is authorized to promulgate 
        regulations setting minimum net worth or surety bond 
        requirements for residential mortgage loan originators and 
        minimum requirements for recovery funds paid into by loan 
        originators.
            ``(2) Considerations.--In issuing regulations under 
        paragraph (1), the Bureau shall take into account the need to 
        provide originators adequate incentives to originate affordable 
        and sustainable mortgage loans, as well as the need to ensure a 
        competitive origination market that maximizes consumer access 
        to affordable and sustainable mortgage loans.'';
            (7) by striking section 1510 (12 U.S.C. 5109) and inserting 
        the following:

``SEC. 1510. FEES.

    ``The Bureau, the Farm Credit Administration, and the Nationwide 
Mortgage Licensing System and Registry may charge reasonable fees to 
cover the costs of maintaining and providing access to information from 
the Nationwide Mortgage Licensing System and Registry, to the extent 
that such fees are not charged to consumers for access to such system 
and registry.'';
            (8) by striking section 1513 (12 U.S.C. 5112) and inserting 
        the following:

``SEC. 1513. LIABILITY PROVISIONS.

    ``The Bureau, any State official or agency, or any organization 
serving as the administrator of the Nationwide Mortgage Licensing 
System and Registry or a system established by the Director under 
section 1509, or any officer or employee of any such entity, shall not 
be subject to any civil action or proceeding for monetary damages by 
reason of the good faith action or omission of any officer or employee 
of any such entity, while acting within the scope of office or 
employment, relating to the collection, furnishing, or dissemination of 
information concerning persons who are loan originators or are applying 
for licensing or registration as loan originators.''; and
            (9) in section 1514 (12 U.S.C. 5113) in the section 
        heading, by striking ``under hud backup licensing system'' and 
        inserting ``by the bureau''.

SEC. 1099. AMENDMENTS TO THE TRUTH IN LENDING ACT.

    The Truth in Lending Act (15 U.S.C. 1601 et seq.) is amended--
            (1) in section 103 (5 U.S.C. 1602)--
                    (A) by redesignating subsections (b) through (bb) 
                as subsections (c) through (cc), respectively; and
                    (B) by inserting after subsection (a) the 
                following:
    ``(b) Bureau.--The term `Bureau' means the Bureau of Consumer 
Financial Protection.'';
            (2) by striking ``Board'' each place that term appears, 
        other than in section 140(d) and section 108(a), as amended by 
        this section, and inserting ``Bureau'';
            (3) by striking ``Federal Trade Commission'' each place 
        that term appears, other than in section 108(c) and section 
        129(m), as amended by this Act, and other than in the context 
        of a reference to the Federal Trade Commission Act, and 
        inserting ``Bureau'';
            (4) in section 105(a) (15 U.S.C. 1604(a)), in the second 
        sentence--
                    (A) by striking ``Except in the case of a mortgage 
                referred to in section 103(aa), these regulations may 
                contain such'' and inserting ``Except with respect to 
                the provisions of section 129 that apply to a mortgage 
                referred to in section 103(aa), such regulations may 
                contain such additional requirements,''; and
                    (B) by inserting ``all or'' after ``exceptions 
                for'';
            (5) in section 105(b) (15 U.S.C. 1604(b)), by striking the 
        first sentence and inserting the following: ``The Bureau shall 
        publish a single, integrated disclosure for mortgage loan 
        transactions (including real estate settlement cost statements) 
        which includes the disclosure requirements of this title in 
        conjunction with the disclosure requirements of the Real Estate 
        Settlement Procedures Act of 1974 that, taken together, may 
        apply to a transaction that is subject to both or either 
        provisions of law. The purpose of such model disclosure shall 
        be to facilitate compliance with the disclosure requirements of 
        this title and the Real Estate Settlement Procedures Act of 
        1974, and to aid the borrower or lessee in understanding the 
        transaction by utilizing readily understandable language to 
        simplify the technical nature of the disclosures.'';
            (6) in section 105(f)(1) (15 U.S.C. 1604(f)(1)), by 
        inserting ``all or'' after ``from all or part of this title'';
            (7) in section 108 (15 U.S.C. 1607)--
                    (A) by striking subsection (a) and inserting the 
                following:
    ``(a) Enforcing Agencies.--Except as otherwise provided in subtitle 
B of the Consumer Financial Protection Act of 2010, compliance with the 
requirements imposed under this title shall be enforced under--
            ``(1) section 8 of the Federal Deposit Insurance Act, in 
        the case of--
                    ``(A) any national bank, and Federal branch or 
                Federal agency of a foreign bank, by the Office of the 
                Comptroller of the Currency;
                    ``(B) any member bank of the Federal Reserve System 
                (other than a national bank), any branch or agency of a 
                foreign bank (other than a Federal branch, Federal 
                agency, or insured State branch of a foreign bank), any 
                commercial lending company owned or controlled by a 
                foreign bank, and organizations operating under section 
                25 or 25(a) of the Federal Reserve Act, by the Board; 
                and
                    ``(C) any bank insured by the Federal Deposit 
                Insurance Corporation (other than a member of the 
                Federal Reserve System) and an insured State branch of 
                a foreign bank, by the Board of Directors of the 
                Federal Deposit Insurance Corporation;
            ``(2) subtitle E of the Consumer Financial Protection Act 
        of 2010, by the Bureau;
            ``(3) the Federal Credit Union Act, by the Director of the 
        National Credit Union Administration, with respect to any 
        Federal credit union;
            ``(4) the Federal Aviation Act of 1958, by the Secretary of 
        Transportation, with respect to any air carrier or foreign air 
        carrier subject to that Act;
            ``(5) the Packers and Stockyards Act, 1921 (except as 
        provided in section 406 of that Act), by the Secretary of 
        Agriculture, with respect to any activities subject to that 
        Act; and
            ``(6) the Farm Credit Act of 1971, by the Farm Credit 
        Administration with respect to any Federal land bank, Federal 
        land bank association, Federal intermediate credit bank, or 
        production credit association.''; and
                    (B) by striking subsection (c) and inserting the 
                following:
    ``(c) Overall Enforcement Authority of the Federal Trade 
Commission.--Except to the extent that enforcement of the requirements 
imposed under this title is specifically committed to some other 
Government agency under subsection (a), and subject to subtitle B of 
the Consumer Financial Protection Act of 2010, the Federal Trade 
Commission shall enforce such requirements. For the purpose of the 
exercise by the Federal Trade Commission of its functions and powers 
under the Federal Trade Commission Act, a violation of any requirement 
imposed under this title shall be deemed a violation of a requirement 
imposed under that Act. All of the functions and powers of the Federal 
Trade Commission under the Federal Trade Commission Act are available 
to the Federal Trade Commission to enforce compliance by any person 
with the requirements under this title, irrespective of whether that 
person is engaged in commerce or meets any other jurisdictional tests 
under the Federal Trade Commission Act.'';
            (8) in section 129 (15 U.S.C. 1639), by striking subsection 
        (m) and inserting the following:
    ``(m) Civil Penalties in Federal Trade Commission Enforcement 
Actions.--For purposes of enforcement by the Federal Trade Commission, 
any violation of a regulation issued by the Bureau pursuant to 
subsection (l)(2) shall be treated as a violation of a rule promulgated 
under section 18 of the Federal Trade Commission Act (15 U.S.C. 57a) 
regarding unfair or deceptive acts or practices.''; and
            (9) in chapter 5 (15 U.S.C. 1667 et seq.)--
                    (A) by striking ``the Board'' each place that term 
                appears and inserting ``the Bureau''; and
                    (B) by striking ``The Board'' each place that term 
                appears and inserting ``The Bureau''.

SEC. 1100. AMENDMENTS TO THE TRUTH IN SAVINGS ACT.

    The Truth in Savings Act (12 U.S.C. 4301 et seq.) is amended--
            (1) by striking ``Board'' each place that term appears and 
        inserting ``Bureau'';
            (2) in section 270(a) (12 U.S.C. 4309)--
                    (A) by striking ``Compliance'' and inserting 
                ``Except as otherwise provided in subtitle B of the 
                Consumer Financial Protection Act of 2010, 
                compliance'';
                    (B) in paragraph (1)--
                            (i) in subparagraph (B), by striking 
                        ``and'' at the end; and
                            (ii) by striking subparagraph (C);
                    (C) in paragraph (2), by striking the period at the 
                end and inserting ``; and''; and
                    (D) by adding at the end the following:
            ``(3) subtitle E of the Consumer Financial Protection Act 
        of 2010, by the Bureau.'';
            (3) in section 272(b) (12 U.S.C. 4311(b)), by striking 
        ``regulation prescribed by the Board'' each place that term 
        appears and inserting ``regulation prescribed by the Bureau''; 
        and
            (4) in section 274 (12 U.S.C. 4313), by striking paragraph 
        (4) and inserting the following:
            ``(4) Bureau.--The term `Bureau' means the Bureau of 
        Consumer Financial Protection.''.

SEC. 1101. AMENDMENTS TO THE TELEMARKETING AND CONSUMER FRAUD AND ABUSE 
              PREVENTION ACT.

    (a) Amendments to Section 3.--Section 3 of the Telemarketing and 
Consumer Fraud and Abuse Prevention Act (15 U.S.C. 6102) is amended by 
striking subsections (b) and (c) and inserting the following:
    ``(b) Rulemaking Authority.--The Commission shall have authority to 
prescribe rules under subsection (a), in accordance with section 553 of 
title 5, United States Code. In prescribing a rule under this section 
that relates to the provision of a consumer financial product or 
service that is subject to the Consumer Financial Protection Act of 
2010, including any enumerated consumer law thereunder, the Commission 
shall consult with the Bureau of Consumer Financial Protection 
regarding the consistency of a proposed rule with standards, purposes, 
or objectives administered by the Bureau of Consumer Financial 
Protection.
    ``(c) Violations.--Any violation of any rule prescribed under 
subsection (a)--
            ``(1) shall be treated as a violation of a rule under 
        section 18 of the Federal Trade Commission Act regarding unfair 
        or deceptive acts or practices; and
            ``(2) that is committed by a person subject to the Consumer 
        Financial Protection Act of 2010 shall be treated as a 
        violation of a rule under section 1031 of that Act regarding 
        unfair, deceptive, or abusive acts or practices.''.
    (b) Amendments to Section 4.--Section 4(d) of the Telemarketing and 
Consumer Fraud and Abuse Prevention Act (15 U.S.C. 6103(d)) is amended 
by inserting after ``Commission'' each place that term appears the 
following: ``or the Bureau of Consumer Financial Protection''.
    (c) Amendments to Section 5.--Section 5(c) of the Telemarketing and 
Consumer Fraud and Abuse Prevention Act (15 U.S.C. 6104(c)) is amended 
by inserting after ``Commission'' each place that term appears the 
following: ``or the Bureau of Consumer Financial Protection''.
    (d) Amendment to Section 6.--Section 6 of the Telemarketing and 
Consumer Fraud and Abuse Prevention Act (15 U.S.C. 6105) is amended by 
adding at the end the following:
    ``(d) Enforcement by Bureau of Consumer Financial Protection.--
Except as otherwise provided in sections 3(d), 3(e), 4, and 5, and 
subject to subtitle B of the Consumer Financial Protection Act of 2010, 
this Act shall be enforced by the Bureau of Consumer Financial 
Protection under subtitle E of the Consumer Financial Protection Act of 
2010.''.

SEC. 1102. AMENDMENTS TO THE PAPERWORK REDUCTION ACT.

    (a) Designation as an Independent Agency.--Section 2(5) of the 
Paperwork Reduction Act (44 U.S.C. 3502(5)) is amended by inserting 
``the Bureau of Consumer Financial Protection, the Office of Financial 
Research,'' after ``the Securities and Exchange Commission,''.
    (b) Comparable Treatment.--Section 3513 of title 44, United States 
Code, is amended by adding at the end the following:
    ``(c) Comparable Treatment.--Notwithstanding any other provision of 
law, the Director shall treat or review a rule or order prescribed or 
proposed by the Director of the Bureau of Consumer Financial Protection 
on the same terms and conditions as apply to any rule or order 
prescribed or proposed by the Board of Governors of the Federal Reserve 
System.''.

SEC. 1103. ADJUSTMENTS FOR INFLATION IN THE TRUTH IN LENDING ACT.

    (a) Caps.--
            (1) Credit transactions.--Section 104(3) of the Truth in 
        Lending Act (15 U.S.C. 1603(3)) is amended by striking 
        ``$25,000'' and inserting ``$50,000''.
            (2) Consumer leases.--Section 181(1) of the Truth in 
        Lending Act (15 U.S.C. 1667(1)) is amended by striking 
        ``$25,000'' and inserting ``$50,000''.
    (b) Adjustments for Inflation.--On and after December 31, 2011, the 
Bureau may adjust annually the dollar amounts described in sections 
104(3) and 181(1) of the Truth in Lending Act (as amended by this 
section), by the annual percentage increase in the Consumer Price Index 
for Urban Wage Earners and Clerical Workers, as published by the Bureau 
of Labor Statistics, rounded to the nearest multiple of $100, or 
$1,000, as applicable.

SEC. 1104. SMALL BUSINESS FAIRNESS AND REGULATORY TRANSPARENCY.

    (a) Panel Requirement.--Section 609(d) of title 5, United States 
Code, is amended by striking ``means the'' and all that follows and 
inserting the following: ``means--
            ``(1) the Environmental Protection Agency;
            ``(2) the Consumer Financial Protection Bureau of the 
        Federal Reserve System; and
            ``(3) the Occupational Safety and Health Administration of 
        the Department of Labor.''.
    (b) Initial Regulatory Flexibility Analysis.--Section 603 of title 
5, United States Code, is amended by adding at the end the following:
    ``(d)(1) For a covered agency, as defined in section 609(d)(2), 
each initial regulatory flexibility analysis shall include a 
description of--
            ``(A) any projected increase in the cost of credit for 
        small entities;
            ``(B) any significant alternatives to the proposed rule 
        which accomplish the stated objectives of applicable statutes 
        and which minimize any increase in the cost of credit for small 
        entities; and
            ``(C) advice and recommendations of representatives of 
        small entities relating to issues described in subparagraphs 
        (A) and (B) and subsection (b).
    ``(2) A covered agency, as defined in section 609(d)(2), shall, for 
purposes of complying with paragraph (1)(C)--
            ``(A) identify representatives of small entities in 
        consultation with the Chief Counsel for Advocacy of the Small 
        Business Administration; and
            ``(B) collect advice and recommendations from the 
        representatives identified under subparagraph (A) relating to 
        issues described in subparagraphs (A) and (B) of paragraph (1) 
        and subsection (b).''.
    (c) Final Regulatory Flexibility Analysis.--Section 604(a) of title 
5, United States Code, is amended--
            (1) in paragraph (4), by striking ``and'' at the end;
            (2) in paragraph (5), by striking the period at the end and 
        inserting ``; and''; and
            (3) by adding at the end the following:
            ``(6) for a covered agency, as defined in section 
        609(d)(2), a description of the steps the agency has taken to 
        minimize any additional cost of credit for small entities.''.

SEC. 1105. EFFECTIVE DATE.

    Except as otherwise provided in this subtitle and the amendments 
made by this subtitle, this subtitle and the amendments made by this 
subtitle, other than sections 1081 and 1082, shall become effective on 
the designated transfer date.

              TITLE XI--FEDERAL RESERVE SYSTEM PROVISIONS

SEC. 1151. FEDERAL RESERVE ACT AMENDMENTS ON EMERGENCY LENDING 
              AUTHORITY.

    (a) Federal Reserve Act.--The third undesignated paragraph of 
section 13 of the Federal Reserve Act (12 U.S.C. 343) (relating to 
emergency lending authority) is amended--
            (1) by inserting ``(3)(A)'' before ``In unusual'';
            (2) by striking ``individual, partnership, or corporation'' 
        the first place that term appears and inserting the following: 
        ``participant in any program or facility with broad-based 
        eligibility'';
            (3) by striking ``exchange for an individual or a 
        partnership or corporation'' and inserting ``exchange,'';
            (4) by striking ``such individual, partnership, or 
        corporation'' and inserting the following: ``such participant 
        in any program or facility with broad-based eligibility'';
            (5) by striking ``for individuals, partnerships, 
        corporations'' and inserting ``for any participant in any 
        program or facility with broad-based eligibility'';
            (6) by striking ``may prescribe.'' and inserting the 
        following: ``may prescribe.
                    ``(B)(i) As soon as is practicable after the date 
                of enactment of this subparagraph, the Board shall 
                establish, by regulation, in consultation with the 
                Secretary of the Treasury, the policies and procedures 
                governing emergency lending under this paragraph. Such 
                policies and procedures shall be designed to ensure 
                that any emergency lending program or facility is for 
                the purpose of providing liquidity to the financial 
                system, and not to aid a failing financial company, and 
                that the collateral for emergency loans is sufficient 
                to protect taxpayers from and that any such program is 
                terminated in a timely and orderly fashion losses. The 
                policies and procedures established by the Board shall 
                require that a Federal reserve bank assign, consistent 
                with sound risk management practices and to ensure 
                protection for the taxpayer, a lendable value to all 
                collateral for a loan executed by a Federal reserve 
                bank under this paragraph in determining whether the 
                loan is secured satisfactorily for purposes of this 
                paragraph.
                    ``(ii) The Board shall establish procedures to 
                prohibit borrowing from programs and facilities by 
                borrowers that are insolvent. Such procedures may 
                include a certification from the chief executive 
                officer (or other authorized officer) of the borrower, 
                at the time the borrower initially borrows under the 
                program or facility (with a duty by the borrower to 
                update the certification if the information in the 
                certification materially changes), that the borrower is 
                not insolvent. A borrower shall be considered insolvent 
                for purposes of this subparagraph, if the borrower is 
                in bankruptcy, resolution under title II of the 
                Restoring American Financial Stability Act of 2010, or 
                any other Federal or State insolvency proceeding.
                    ``(iii) A program or facility that is structured to 
                remove assets from the balance sheet of a single and 
                specific company, or that is established for the 
                purpose of assisting a single and specific company 
                avoid bankruptcy, resolution under title II of the 
                Restoring American Financial Stability Act of 2010, or 
                any other Federal or State insolvency proceeding, shall 
                not be considered a program or facility with broad-
                based eligibility.
                    ``(iv) The Board may not establish any program or 
                facility under this paragraph without the prior 
                approval of the Secretary of the Treasury.
                    ``(C) The Board shall provide to the Committee on 
                Banking, Housing, and Urban Affairs of the Senate and 
                the Committee on Financial Services of the House of 
                Representatives--
                            ``(i) not later than 7 days after providing 
                        any loan or other financial assistance under 
                        this paragraph, a report that includes--
                                    ``(I) the justification for the 
                                exercise of authority to provide such 
                                assistance;
                                    ``(II) the identity of the 
                                recipients of such assistance;
                                    ``(III) the date and amount of the 
                                assistance, and form in which the 
                                assistance was provided; and
                                    ``(IV) the material terms of the 
                                assistance, including--
                                            ``(aa) duration;
                                            ``(bb) collateral pledged 
                                        and the value thereof;
                                            ``(cc) all interest, fees, 
                                        and other revenue or items of 
                                        value to be received in 
                                        exchange for the assistance;
                                            ``(dd) any requirements 
                                        imposed on the recipient with 
                                        respect to employee 
                                        compensation, distribution of 
                                        dividends, or any other 
                                        corporate decision in exchange 
                                        for the assistance; and
                                            ``(ee) the expected costs 
                                        to the taxpayers of such 
                                        assistance; and
                            ``(ii) once every 30 days, with respect to 
                        any outstanding loan or other financial 
                        assistance under this paragraph, written 
                        updates on--
                                    ``(I) the value of collateral;
                                    ``(II) the amount of interest, 
                                fees, and other revenue or items of 
                                value received in exchange for the 
                                assistance; and
                                    ``(III) the expected or final cost 
                                to the taxpayers of such assistance.
                    ``(D) The information submitted to Congress under 
                subparagraph (C) related to--
                            ``(i) the identity of the participants in 
                        an emergency lending program or facility 
                        commenced under this paragraph;
                            ``(ii) the amounts borrowed by each 
                        participant in any such program or facility;
                            ``(iii) identifying details concerning the 
                        assets or collateral held by, under, or in 
                        connection with such a program or facility,
                shall be kept confidential, upon the written request of 
                the Chairman of the Board, in which case such 
                information shall be made available only to the 
                Chairpersons and Ranking Members of the Committees 
                described in subparagraph (C).
                    ``(E) If an entity to which a Federal reserve bank 
                has provided a loan under this paragraph becomes a 
                covered financial company, as defined in section 203 of 
                the Restoring American Financial Stability Act of 2010, 
                at any time while such loan is outstanding, and the 
                Federal reserve bank incurs a realized net loss on the 
                loan, then the Federal reserve bank shall have a claim 
                equal to the amount of the net realized loss against 
                the covered entity, with the same priority as an 
                obligation to the Secretary of the Treasury under 
                sections 210(n) and 210(o) of the Restoring American 
                Financial Stability Act of 2010.''.
    (b) Conforming Amendment.--Section 507(a)(2) of title 11, United 
States Code, is amended by inserting ``claims of any Federal reserve 
bank related to loans made through programs or facilities authorized 
under the third undesignated paragraph of the Federal Reserve Act (12 
U.S.C. 343),'' after ``this title,''.

SEC. 1152. REVIEWS OF SPECIAL FEDERAL RESERVE CREDIT FACILITIES.

    (a) Reviews.--Section 714 of title 31, United States Code, is 
amended by adding at the end the following:
    ``(f) Reviews of Credit Facilities of the Federal Reserve System.--
            ``(1) Definition.--In this subsection, the term `credit 
        facility' means a program or facility, including any special 
        purpose vehicle or other entity established by or on behalf of 
        the Board of Governors of the Federal Reserve System or a 
        Federal reserve bank, authorized by the Board of Governors 
        under the third undesignated paragraph of section 13 of the 
        Federal Reserve Act (12 U.S.C. 343), that is not subject to 
        audit under subsection (e), including--
                    ``(A) the Asset-Backed Commercial Paper Money 
                Market Mutual Fund Liquidity Facility;
                    ``(B) the Term Asset-Backed Securities Loan 
                Facility;
                    ``(C) the Primary Dealer Credit Facility;
                    ``(D) the Commercial Paper Funding Facility; and
                    ``(E) the Term Securities Lending Facility.
            ``(2) Authority for reviews and examinations.--Subject to 
        paragraph (3), and notwithstanding any limitation in subsection 
        (b) on the auditing and oversight of certain functions of the 
        Board of Governors of the Federal Reserve System or any Federal 
        reserve bank, the Comptroller General of the United States may 
        conduct reviews, including onsite examinations, of the Board of 
        Governors, a Federal reserve bank, or a credit facility, if the 
        Comptroller General determines that such reviews are 
        appropriate, solely for the purposes of assessing, with respect 
        to a credit facility--
                    ``(A) the operational integrity, accounting, 
                financial reporting, and internal controls of the 
                credit facility;
                    ``(B) the effectiveness of the collateral policies 
                established for the facility in mitigating risk to the 
                relevant Federal reserve bank and taxpayers;
                    ``(C) whether the credit facility inappropriately 
                favors one or more specific participants over other 
                institutions eligible to utilize the facility; and
                    ``(D) the policies governing the use, selection, or 
                payment of third-party contractors by or for any credit 
                facility.
            ``(3) Reports and delayed disclosure.--
                    ``(A) Reports required.--A report on each review 
                conducted under paragraph (2) shall be submitted by the 
                Comptroller General to the Congress before the end of 
                the 90-day period beginning on the date on which such 
                review is completed.
                    ``(B) Contents.--The report under subparagraph (A) 
                shall include a detailed description of the findings 
                and conclusions of the Comptroller General with respect 
                to the matters described in paragraph (2) that were 
                reviewed and are the subject of the report, together 
                with such recommendations for legislative or 
                administrative action relating to such matters as the 
                Comptroller General may determine to be appropriate.
                    ``(C) Delayed release of certain information.--
                            ``(i) In general.--The Comptroller General 
                        shall not disclose to any person or entity, 
                        including to Congress, the names or identifying 
                        details of specific participants in any credit 
                        facility, the amounts borrowed by specific 
                        participants in any credit facility, or 
                        identifying details regarding assets or 
                        collateral held by, under, or in connection 
                        with any credit facility, and any report 
                        provided under subparagraph (A) shall be 
                        redacted to ensure that such names and details 
                        are not disclosed.
                            ``(ii) Delayed release.--The nondisclosure 
                        obligation under clause (i) shall expire with 
                        respect to any participant on the date on which 
                        the Board of Governors, directly or through a 
                        Federal reserve bank, publicly discloses the 
                        identity of the subject participant or the 
                        identifying details of the subject assets or 
                        collateral.
                            ``(iii) General release.--The Comptroller 
                        General shall release a nonredacted version of 
                        any report on a credit facility 1 year after 
                        the effective date of the termination by the 
                        Board of Governors of the authorization for the 
                        credit facility. For purposes of this clause, a 
                        credit facility shall be deemed to have 
                        terminated 24 months after the date on which 
                        the credit facility ceases to make extensions 
                        of credit and loans, unless the credit facility 
                        is otherwise terminated by the Board of 
                        Governors.
                            ``(iv) Exceptions.--The nondisclosure 
                        obligation under clause (i) shall not apply to 
                        the credit facilities Maiden Lane, Maiden Lane 
                        II, and Maiden Lane III.''.
    (b) Access to Records.--Section 714(d) of title 31, United States 
Code, is amended--
            (1) in paragraph (2), by inserting ``or any person or 
        entity described in paragraph (3)(A)'' after ``used by an 
        agency'';
            (2) in paragraph (3), by inserting ``or (f)'' after 
        ``subsection (e)'' each place that term appears; and
            (3) in paragraph (3)(B), by adding at the end the 
        following: ``The Comptroller General may make and retain copies 
        of books, accounts, and other records provided under 
        subparagraph (A) as the Comptroller General deems appropriate. 
        The Comptroller General shall provide to any person or entity 
        described in subparagraph (A) a current list of officers and 
        employees to whom, with proper identification, records and 
        property may be made available, and who may make notes or 
        copies necessary to carry out a review or examination under 
        this subsection.''.

SEC. 1153. PUBLIC ACCESS TO INFORMATION.

    Section 2B of the Federal Reserve Act (12 U.S.C. 225b) is amended 
by adding at the end the following:
    ``(c) Public Access to Information.--The Board shall place on its 
home Internet website, a link entitled `Audit', which shall link to a 
webpage that shall serve as a repository of information made available 
to the public for a reasonable period of time, not less than 6 months 
following the date of release of the relevant information, including--
            ``(1) the reports prepared by the Comptroller General under 
        section 714 of title 31, United States Code;
            ``(2) the annual financial statements prepared by an 
        independent auditor for the Board in accordance with section 
        11B;
            ``(3) the reports to the Committee on Banking, Housing, and 
        Urban Affairs of the Senate required under the third 
        undesignated paragraph of section 13 (relating to emergency 
        lending authority); and
            ``(4) such other information as the Board reasonably 
        believes is necessary or helpful to the public in understanding 
        the accounting, financial reporting, and internal controls of 
        the Board and the Federal reserve banks.''.

SEC. 1154. LIQUIDITY EVENT DETERMINATION.

    (a) Determination and Written Recommendation.--
            (1) Determination request.--The Secretary may request the 
        Corporation and the Board of Governors to determine whether a 
        liquidity event exists that warrants use of the guarantee 
        program authorized under section 1155.
            (2) Requirements of determination.--Any determination 
        pursuant to paragraph (1) shall--
                    (A) be written; and
                    (B) contain an evaluation of the evidence that--
                            (i) a liquidity event exists;
                            (ii) failure to take action would have 
                        serious adverse effects on financial stability 
                        or economic conditions in the United States; 
                        and
                            (iii) actions authorized under section 1155 
                        are needed to avoid or mitigate potential 
                        adverse effects on the United States financial 
                        system or economic conditions.
    (b) Procedures.--Notwithstanding any other provision of Federal or 
State law, upon the determination of both the Corporation (upon a vote 
of not fewer than \2/3\ of the members of the Corporation then serving) 
and the Board of Governors (upon a vote of not fewer than \2/3\ of the 
members of the Board of Governors then serving) under subsection (a) 
that a liquidity event exists that warrants use of the guarantee 
program authorized under section 1155, and with the written consent of 
the Secretary--
            (1) the Corporation shall take action in accordance with 
        section 1155(a); and
            (2) the Secretary (in consultation with the President) 
        shall take action in accordance with section 1155(c).
    (c) Documentation and Review.--
            (1) Documentation.--The Secretary shall--
                    (A) maintain the written documentation of each 
                determination of the Corporation and the Board of 
                Governors under this section; and
                    (B) provide the documentation for review under 
                paragraph (2).
            (2) GAO review.--The Comptroller General of the United 
        States shall review and report to Congress on any determination 
        of the Corporation and the Board of Governors under subsection 
        (a), including--
                    (A) the basis for the determination; and
                    (B) the likely effect of the actions taken.
    (d) Report to Congress.--On the earlier of the date of a submission 
made to Congress under section 1155(c), or within 30 days of the date 
of a determination under subsection (a), the Secretary shall provide 
written notice of the determination of the Corporation and the Board of 
Governors to the Committee on Banking, Housing, and Urban Affairs of 
the Senate and the Committee on Financial Services of the House of 
Representatives, including a description of the basis for the 
determination.

SEC. 1155. EMERGENCY FINANCIAL STABILIZATION.

    (a) In General.--Upon the written determination of the Corporation 
and the Board of Governors under section 1154, the Corporation shall 
create a widely available program to guarantee obligations of solvent 
insured depository institutions or solvent depository institution 
holding companies (including any affiliates thereof) during times of 
severe economic distress, except that a guarantee of obligations under 
this section may not include the provision of equity in any form.
    (b) Rulemaking and Terms and Conditions.--
            (1) Policies and procedures.--As soon as is practicable 
        after the date of enactment of this Act, the Corporation shall 
        establish, by regulation, and in consultation with the 
        Secretary, policies and procedures governing the issuance of 
        guarantees authorized by this section. Such policies and 
        procedures may include a requirement of collateral as a 
        condition of any such guarantee.
            (2) Terms and conditions.--The terms and conditions of any 
        guarantee program shall be established by the Corporation, with 
        the concurrence of the Secretary.
    (c) Determination of Guaranteed Amount.--
            (1) In general.--In connection with any program established 
        pursuant to subsection (a) and subject to paragraph (2) of this 
        subsection, the Secretary (in consultation with the President) 
        shall determine the maximum amount of debt outstanding that the 
        Corporation may guarantee under this section, and the President 
        may transmit to Congress a written report on the plan of the 
        Corporation to exercise the authority under this section to 
        issue guarantees up to that maximum amount and a request for 
        approval of such plan. The Corporation shall exercise the 
        authority under this section to issue guarantees up to that 
        specified maximum amount upon passage of the joint resolution 
        of approval, as provided in subsection (d). Absent such 
        approval, the Corporation shall issue no such guarantees.
            (2) Additional debt guarantee authority.--If the Secretary 
        (in consultation with the President) determines, after a 
        submission to Congress under paragraph (1), that the maximum 
        guarantee amount should be raised, and the Council concurs with 
        that determination, the President may transmit to Congress a 
        written report on the plan of the Corporation to exercise the 
        authority under this section to issue guarantees up to the 
        increased maximum debt guarantee amount. The Corporation shall 
        exercise the authority under this section to issue guarantees 
        up to that specified maximum amount upon passage of the joint 
        resolution of approval, as provided in subsection (d). Absent 
        such approval, the Corporation shall issue no such guarantees.
    (d) Resolution of Approval.--
            (1) Additional debt guarantee authority.--A request by the 
        President under this section shall be considered granted by 
        Congress upon adoption of a joint resolution approving such 
        request. Such joint resolution shall be considered in the 
        Senate under expedited procedures.
            (2) Fast track consideration in senate.--
                    (A) Reconvening.--Upon receipt of a request under 
                subsection (c), if the Senate has adjourned or recessed 
                for more than 2 days, the majority leader of the 
                Senate, after consultation with the minority leader of 
                the Senate, shall notify the Members of the Senate 
                that, pursuant to this section, the Senate shall 
                convene not later than the second calendar day after 
                receipt of such message.
                    (B) Placement on calendar.--Upon introduction in 
                the Senate, the joint resolution shall be placed 
                immediately on the calendar.
                    (C) Floor consideration.--
                            (i) In general.--Notwithstanding Rule XXII 
                        of the Standing Rules of the Senate, it is in 
                        order at any time during the period beginning 
                        on the 4th day after the date on which Congress 
                        receives a request under subsection (c), and 
                        ending on the 7th day after that date (even 
                        though a previous motion to the same effect has 
                        been disagreed to) to move to proceed to the 
                        consideration of the joint resolution, and all 
                        points of order against the joint resolution 
                        (and against consideration of the joint 
                        resolution) are waived. The motion to proceed 
                        is not debatable. The motion is not subject to 
                        a motion to postpone. A motion to reconsider 
                        the vote by which the motion is agreed to or 
                        disagreed to shall not be in order. If a motion 
                        to proceed to the consideration of the 
                        resolution is agreed to, the joint resolution 
                        shall remain the unfinished business until 
                        disposed of.
                            (ii) Debate.--Debate on the joint 
                        resolution, and on all debatable motions and 
                        appeals in connection therewith, shall be 
                        limited to not more than 10 hours, which shall 
                        be divided equally between the majority and 
                        minority leaders or their designees. A motion 
                        further to limit debate is in order and not 
                        debatable. An amendment to, or a motion to 
                        postpone, or a motion to proceed to the 
                        consideration of other business, or a motion to 
                        recommit the joint resolution is not in order.
                            (iii) Vote on passage.--The vote on passage 
                        shall occur immediately following the 
                        conclusion of the debate on the joint 
                        resolution, and a single quorum call at the 
                        conclusion of the debate if requested in 
                        accordance with the rules of the Senate.
                            (iv) Rulings of the chair on procedure.--
                        Appeals from the decisions of the Chair 
                        relating to the application of the rules of the 
                        Senate, as the case may be, to the procedure 
                        relating to a joint resolution shall be decided 
                        without debate.
            (3) Rules.--
                    (A) Coordination with action by house of 
                representatives.--If, before the passage by the Senate 
                of a joint resolution of the Senate, the Senate 
                receives a joint resolution, from the House of 
                Representatives, then the following procedures shall 
                apply:
                            (i) The joint resolution of the House of 
                        Representatives shall not be referred to a 
                        committee.
                            (ii) With respect to a joint resolution of 
                        the Senate--
                                    (I) the procedure in the Senate 
                                shall be the same as if no joint 
                                resolution had been received from the 
                                other House; but
                                    (II) the vote on passage shall be 
                                on the joint resolution of the House of 
                                Representatives.
                    (B) Treatment of joint resolution of house of 
                representatives.--If the Senate fails to introduce or 
                consider a joint resolution under this section, the 
                joint resolution of the House of Representatives shall 
                be entitled to expedited floor procedures under this 
                subsection.
                    (C) Treatment of companion measures.--If, following 
                passage of the joint resolution in the Senate, the 
                Senate then receives the companion measure from the 
                House of Representatives, the companion measure shall 
                not be debatable.
                    (D) Rules of the senate.--This subsection is 
                enacted by Congress--
                            (i) as an exercise of the rulemaking power 
                        of the Senate, and as such it is deemed a part 
                        of the rules of the Senate, but applicable only 
                        with respect to the procedure to be followed in 
                        the Senate in the case of a joint resolution, 
                        and it supersedes other rules, only to the 
                        extent that it is inconsistent with such rules; 
                        and
                            (ii) with full recognition of the 
                        constitutional right of the Senate to change 
                        the rules (so far as relating to the procedure 
                        of the Senate) at any time, in the same manner, 
                        and to the same extent as in the case of any 
                        other rule of the Senate.
            (4) Definition.--As used in this subsection, the term 
        ``joint resolution'' means only a joint resolution--
                    (A) that is introduced not later than 3 calendar 
                days after the date on which the request referred to in 
                subsection (c) is received by Congress;
                    (B) that does not have a preamble;
                    (C) the title of which is as follows: ``Joint 
                resolution relating to the approval of a plan to 
                guarantee obligations under section 1155 of the 
                Restoring American Financial Stability Act of 2010''; 
                and
                    (D) the matter after the resolving clause of which 
                is as follows: ``That Congress approves the obligation 
                of any amount described in section 1155(c) of the 
                Restoring American Financial Stability Act of 2010.''.
    (e) Funding.--
            (1) Fees and other charges.--The Corporation shall charge 
        fees and other assessments to all participants in the program 
        established pursuant to this section, in such amounts as are 
        necessary to offset projected losses and administrative 
        expenses, including amounts borrowed pursuant to paragraph (3), 
        and such amounts shall be available to the Corporation.
            (2) Excess funds.--If, at the conclusion of the program 
        established under this section, there are any excess funds 
        collected from the fees associated with such program, the funds 
        shall be deposited in the General Fund of the Treasury.
            (3) Authority of corporation.--The Corporation--
                    (A) may borrow funds from the Secretary of the 
                Treasury and issue obligations of the Corporation to 
                the Secretary for amounts borrowed, and the amounts 
                borrowed shall be available to the Corporation for 
                purposes of carrying out a program established pursuant 
                to this section, including the payment of reasonable 
                costs of administering the program, and the obligations 
                issued shall be repaid in full with interest through 
                fees and charges paid by participants in accordance 
                with paragraphs (1) and (4), as applicable; and
                    (B) may not borrow funds from the Deposit Insurance 
                Fund established pursuant to section 11(a)(4) of the 
                Federal Deposit Insurance Act.
            (4) Backup special assessments.--To the extent that the 
        funds collected pursuant to paragraph (1) are insufficient to 
        cover any losses or expenses, including amounts borrowed 
        pursuant to paragraph (3), arising from a program established 
        pursuant to this section, the Corporation shall impose a 
        special assessment solely on participants in the program, in 
        amounts necessary to address such insufficiency, and which 
        shall be available to the Corporation to cover such losses or 
        expenses.
            (5) Authority of the secretary.--The Secretary may purchase 
        any obligations issued under paragraph (3)(A). For such 
        purpose, the Secretary may use the proceeds of the sale of any 
        securities issued under chapter 31 of title 31, United States 
        Code, and the purposes for which securities may be issued under 
        that chapter 31 are extended to include such purchases, and the 
        amount of any securities issued under that chapter 31 for such 
        purpose shall be treated in the same manner as securities 
        issued under section 208(n)(3)(B).
    (f) Rule of Construction.--For purposes of this section, a 
guarantee of deposits held by insured depository institutions shall not 
be treated as a debt guarantee program.
    (g) Definitions.--For purposes of this section, the following 
definitions shall apply:
            (1) Company.--The term ``company'' means any entity other 
        than a natural person that is incorporated or organized under 
        Federal law or the laws of any State.
            (2) Depository institution holding company.--The term 
        ``depository institution holding company'' has the same meaning 
        as in section 3 of the Federal Deposit Insurance Act (12 U.S.C. 
        1813).
            (3) Liquidity event.--The term ``liquidity event'' means--
                    (A) an exceptional and broad reduction in the 
                general ability of financial market participants--
                            (i) to sell financial assets without an 
                        unusual and significant discount; or
                            (ii) to borrow using financial assets as 
                        collateral without an unusual and significant 
                        increase in margin; or
                    (B) an unusual and significant reduction in the 
                ability of financial market participants to obtain 
                unsecured credit.
            (4) Solvent.--The term ``solvent'' means that the value of 
        the assets of an entity exceed its obligations to creditors.

SEC. 1156. ADDITIONAL RELATED AMENDMENTS.

    (a) Suspension of Parallel Federal Deposit Insurance Act 
Authority.--Effective upon the date of enactment of this section, the 
Corporation may not exercise its authority under section 13(c)(4)(G)(i) 
of the Federal Deposit Insurance Act (12 U.S.C. 1823(c)(4)(G)(i)) to 
establish any widely available debt guarantee program for which section 
1155 would provide authority.
    (b) Federal Deposit Insurance Act.--Section 13(c)(4)(G) of the 
Federal Deposit Insurance Act (12 U.S.C. 1823(c)(4)(G)) is amended--
            (1) in clause (i)--
                    (A) in subclause (I), by inserting ``for which the 
                Corporation has been appointed receiver'' before 
                ``would have serious''; and
                    (B) in the undesignated matter following subclause 
                (II), by inserting ``for the purpose of winding up the 
                insured depository institution for which the 
                Corporation has been appointed receiver'' after 
                ``provide assistance under this section''; and
            (2) in clause (v)(I), by striking ``The'' and inserting 
        ``Not later than 3 days after making a determination under 
        clause (i), the''.
    (c) Effect of Default on an FDIC Guarantee.--If an insured 
depository institution or depository institution holding company (as 
those terms are defined in section 3 of the Federal Deposit Insurance 
Act) participating in a program under section 1155, or any participant 
in a debt guarantee program established pursuant to section 
13(c)(4)(G)(i) of the Federal Deposit Insurance Act defaults on any 
obligation guaranteed by the Corporation after the date of enactment of 
this Act, the Corporation shall--
            (1) appoint itself as receiver for the insured depository 
        institution that defaults; and
            (2) with respect to any other participating company that is 
        not an insured depository institution that defaults--
                    (A) require--
                            (i) consideration of whether a 
                        determination shall be made, as provided in 
                        section 202 to resolve the company under 
                        section 203; and
                            (ii) the company to file a petition for 
                        bankruptcy under section 301 of title 11, 
                        United States Code, if the Corporation is not 
                        appointed receiver pursuant to section 203 
                        within 30 days of the date of default; or
                    (B) file a petition for involuntary bankruptcy on 
                behalf of the company under section 303 of title 11, 
                United States Code.

SEC. 1157. FEDERAL RESERVE ACT AMENDMENTS ON FEDERAL RESERVE BANK 
              GOVERNANCE.

    The Federal Reserve Act (12 U.S.C. 221 et seq.) is amended in 
section 4 by adding at the end the following:
            ``(25) Selection of the president of the federal reserve 
        bank of new york.--Notwithstanding any other provision of this 
        section, after the date of enactment of the Restoring American 
        Financial Stability Act of 2010, the president of the Federal 
        Reserve Bank of New York shall be appointed by the President, 
        by and with the advice and consent of the Senate, for terms of 
        5 years.
            ``(26) Limitation on eligibility to vote for or serve as a 
        federal reserve bank director.--Notwithstanding any other 
        provision of this section, after the date of enactment of the 
        Restoring American Financial Stability Act of 2010, no company, 
        or subsidiary or affiliate of a company that is supervised by 
        the Board, may vote for members of the board of directors of a 
        Federal reserve bank, and no past or current officer, director, 
        or employee of such company, or subsidiary or affiliate of such 
        company, may serve as a member of the board of directors of a 
        Federal reserve bank.''.

SEC. 1158. AMENDMENTS TO THE FEDERAL RESERVE ACT RELATING TO 
              SUPERVISION AND REGULATION POLICY.

    (a) Establishment of the Position of Vice Chairman for 
Supervision.--
            (1) Position established.--The second undesignated 
        paragraph of section 10 of the Federal Reserve Act (12 U.S.C. 
        242) (relating to the Chairman and Vice Chairman of the Board) 
        is amended by striking the third sentence and inserting the 
        following: ``Of the persons thus appointed, 1 shall be 
        designated by the President, by and with the advice and consent 
        of the Senate, to serve as Chairman of the Board for a term of 
        4 years, and 2 shall be designated by the President, by and 
        with the advice and consent of the Senate, to serve as Vice 
        Chairmen of the Board, each for a term of 4 years, 1 of whom 
        shall serve in the absence of the Chairman, as provided in the 
        fourth undesignated paragraph of this section, and 1 of whom 
        shall be designated Vice Chairman for Supervision. The Vice 
        Chairman for Supervision shall develop policy recommendations 
        for the Board regarding supervision and regulation of 
        depository institution holding companies and other financial 
        firms supervised by the Board, and shall oversee the 
        supervision and regulation of such firms.''.
            (2) Effective date.--The amendment made by subsection (a) 
        takes effect on the date of enactment of this title and applies 
        to individuals who are designated by the President on or after 
        that date to serve as Vice Chairman of Supervision.
    (b) Financial Stability as Board Function.--Section 10 of the 
Federal Reserve Act (12 U.S.C. 241) is amended by adding at the end the 
following:
            ``(11) Financial stability function.--The Board of 
        Governors shall identify, measure, monitor, and mitigate risks 
        to the financial stability of the United States.''.
    (c) Appearances Before Congress.--Section 10 of the Federal Reserve 
Act (12 U.S.C. 241) is amended by adding at the end the following:
            ``(12) Appearances before congress.--The Vice Chairman for 
        Supervision shall appear before the Committee on Banking, 
        Housing, and Urban Affairs of the Senate and the Committee on 
        Financial Services of the House of Representatives and at semi-
        annual hearings regarding the efforts, activities, objectives, 
        and plans of the Board with respect to the conduct of 
        supervision and regulation of depository institution holding 
        companies and other financial firms supervised by the Board.''.
    (d) Board Responsibility To Set Supervision and Regulatory 
Policy.--Section 11 of the Federal Reserve Act (12 U.S.C. 248) 
(relating to enumerated powers of the Board) is amended by adding at 
the end of subsection (k) (relating to delegation) the following: ``The 
Board of Governors may not delegate to a Federal reserve bank its 
functions for the establishment of policies for the supervision and 
regulation of depository institution holding companies and other 
financial firms supervised by the Board of Governors.''.

SEC. 1159. GAO AUDIT OF THE FEDERAL RESERVE FACILITIES; PUBLICATION OF 
              BOARD ACTIONS.

    (a) GAO Audit.--
            (1) In general.--Notwithstanding section 714(b) of title 
        31, United States Code, or any other provision of law, the 
        Comptroller General of the United States (in this subsection 
        referred to as the ``Comptroller General'') shall conduct a 
        one-time audit of all loans and other financial assistance 
        provided during the period beginning on December 1, 2007 and 
        ending on the date of enactment of this Act by the Board of 
        Governors under the Asset-Backed Commercial Paper Money Market 
        Mutual Fund Liquidity Facility, the Term Asset-Backed 
        Securities Loan Facility, the Primary Dealer Credit Facility, 
        the Commercial Paper Funding Facility, the Term Securities 
        Lending Facility, the Term Auction Facility, Maiden Lane, 
        Maiden Lane II, Maiden Lane III, the agency Mortgage-Backed 
        Securities program, foreign currency liquidity swap lines, and 
        any other program created as a result of the third undesignated 
        paragraph of section 13 of the Federal Reserve Act.
            (2) Assessments.--In conducting the audit under paragraph 
        (1), the Comptroller General shall assess--
                    (A) the operational integrity, accounting, 
                financial reporting, and internal controls of the 
                credit facility;
                    (B) the effectiveness of the collateral policies 
                established for the facility in mitigating risk to the 
                relevant Federal reserve bank and taxpayers;
                    (C) whether the credit facility inappropriately 
                favors one or more specific participants over other 
                institutions eligible to utilize the facility;
                    (D) the policies governing the use, selection, or 
                payment of third-party contractors by or for any credit 
                facility; and
                    (E) whether there were conflicts of interest with 
                respect to the manner in which such facility was 
                established or operated.
            (3) Timing.--The audit required by this subsection shall be 
        commenced not later than 30 days after the date of enactment of 
        this Act, and shall be completed not later than 12 months after 
        that date of enactment.
            (4) Report required.--The Comptroller General shall submit 
        a report on the audit conducted under paragraph (1) to the 
        Congress not later than 12 months after the date of enactment 
        of this Act, and such report shall be made available to--
                    (A) the Speaker of the House of Representatives;
                    (B) the majority and minority leaders of the House 
                of Representatives;
                    (C) the majority and minority leaders of the 
                Senate;
                    (D) the Chairman and Ranking Member of the 
                Committee on Banking, Housing, and Urban Affairs of the 
                Senate and of the Committee on Financial Services of 
                the House of Representatives; and
                    (E) any member of Congress who requests it.
    (b) Audit of Federal Reserve Bank Governance.--
            (1) Audit.--
                    (A) In general.--Not later than 1 year after the 
                date of enactment of this Act, the Comptroller General 
                shall complete an audit of the governance of the 
                Federal reserve bank system.
                    (B) Required examinations.--The audit required 
                under subparagraph (A) shall--
                            (i) examine the extent to which the current 
                        system of appointing Federal reserve bank 
                        directors effectively represents ``the public, 
                        without discrimination on the basis of race, 
                        creed, color, sex or national origin, and with 
                        due but not exclusive consideration to the 
                        interests of agriculture, commerce, industry, 
                        services, labor, and consumers'' in the 
                        selection of bank directors, as such 
                        requirement is set forth under section 4 of the 
                        Federal Reserve Act;
                            (ii) examine whether there are actual or 
                        potential conflicts of interest created when 
                        the directors of Federal reserve banks, which 
                        execute the supervisory functions of the Board 
                        of Governors of the Federal Reserve System, are 
                        elected by member banks;
                            (iii) examine the establishment and 
                        operations of each facility described in 
                        subsection (a)(1) and each Federal reserve bank 
                        involved in the establishment and operations 
                        thereof; and
                            (iv) identify changes to selection 
                        procedures for Federal reserve bank directors, 
                        or to other aspects of Federal reserve bank 
                        governance, that would--
                                    (I) improve how the public is 
                                represented;
                                    (II) eliminate actual or potential 
                                conflicts of interest in bank 
                                supervision;
                                    (III) increase the availability of 
                                information useful for the formation 
                                and execution of monetary policy; or
                                    (IV) in other ways increase the 
                                effectiveness or efficiency of reserve 
                                banks.
            (2) Report required.--A report on the audit conducted under 
        paragraph (1) shall be submitted by the Comptroller General to 
        the Congress before the end of the 90-day period beginning on 
        the date on which such audit is completed, and such report 
        shall be made available to--
                    (A) the Speaker of the House of Representatives;
                    (B) the majority and minority leaders of the House 
                of Representatives;
                    (C) the majority and minority leaders of the 
                Senate;
                    (D) the Chairman and Ranking Member of the 
                Committee on Banking, Housing, and Urban Affairs of the 
                Senate and of the Committee on Financial Services of 
                the House of Representatives; and
                    (E) any member of Congress who requests it.
    (c) Publication of Board Actions.--Notwithstanding any other 
provision of law, the Board of Governors shall publish on its website, 
not later than December 1, 2010, with respect to all loans and other 
financial assistance it has provided during the period beginning on 
December 1, 2007 and ending on the date of enactment of this Act under 
the Asset-Backed Commercial Paper Money Market Mutual Fund Liquidity 
Facility, the Term Asset-Backed Securities Loan Facility, the Primary 
Dealer Credit Facility, the Commercial Paper Funding Facility, the Term 
Securities Lending Facility, the Term Auction Facility, Maiden Lane, 
Maiden Lane II, Maiden Lane III, the agency Mortgage-Backed Securities 
program, foreign currency liquidity swap lines, and any other program 
created as a result of the third undesignated paragraph of section 13 
of the Federal Reserve Act--
            (1) the identity of each business, individual, entity, or 
        foreign central bank to which the Board of Governors has 
        provided such assistance;
            (2) the type of financial assistance provided to that 
        business, individual, entity, or foreign central bank;
            (3) the value or amount of that financial assistance;
            (4) the date on which the financial assistance was 
        provided;
            (5) the specific terms of any repayment expected, including 
        the repayment time period, interest charges, collateral, 
        limitations on executive compensation or dividends, and other 
        material terms; and
            (6) the specific rationale for each such facility or 
        program.

    TITLE XII--IMPROVING ACCESS TO MAINSTREAM FINANCIAL INSTITUTIONS

SEC. 1201. SHORT TITLE.

    This title may be cited as the ``Improving Access to Mainstream 
Financial Institutions Act of 2010''.

SEC. 1202. PURPOSE.

    The purpose of this title is to encourage initiatives for financial 
products and services that are appropriate and accessible for millions 
of Americans who are not fully incorporated into the financial 
mainstream.

SEC. 1203. DEFINITIONS.

    In this title, the following definitions shall apply:
            (1) Account.--The term ``account'' means an agreement 
        between an individual and an eligible entity under which the 
        individual obtains from or through the entity 1 or more banking 
        products and services, and includes a deposit account, a 
        savings account (including a money market savings account), an 
        account for a closed-end loan, and other products or services, 
        as the Secretary deems appropriate.
            (2) Community development financial institution.--The term 
        ``community development financial institution'' has the same 
        meaning as in section 103(5) of the Community Development 
        Banking and Financial Institutions Act of 1994 (12 U.S.C. 
        4702(5)).
            (3) Eligible entity.--The term ``eligible entity'' means--
                    (A) an organization described in section 501(c)(3) 
                of the Internal Revenue Code of 1986, and exempt from 
                tax under section 501(a) of such Code;
                    (B) a federally insured depository institution;
                    (C) a community development financial institution;
                    (D) a State, local, or tribal government entity; or
                    (E) a partnership or other joint venture comprised 
                of 1 or more of the entities described in subparagraphs 
                (A) through (D), in accordance with regulations 
                prescribed by the Secretary under this title.
            (4) Federally insured depository institution.--The term 
        ``federally insured depository institution'' means any insured 
        depository institution (as that term is defined in section 3 of 
        the Federal Deposit Insurance Act (12 U.S.C. 1813)) and any 
        insured credit union (as that term is defined in section 101 of 
        the Federal Credit Union Act (12 U.S.C. 1752)).
            (5) Payday loan.--The term ``payday loan'' means any 
        transaction in which a small cash advance is made to a consumer 
        in exchange for--
                    (A) the personal check or share draft of the 
                consumer, in the amount of the advance plus a fee, 
                where presentment or negotiation of such check or share 
                draft is deferred by agreement of the parties until a 
                designated future date; or
                    (B) the authorization of the consumer to debit the 
                transaction account or share draft account of the 
                consumer, in the amount of the advance plus a fee, 
                where such account will be debited on or after a 
                designated future date.

SEC. 1204. EXPANDED ACCESS TO MAINSTREAM FINANCIAL INSTITUTIONS.

    (a) In General.--The Secretary is authorized to establish a 
multiyear program of grants, cooperative agreements, financial agency 
agreements, and similar contracts or undertakings to promote 
initiatives designed--
            (1) to enable low- and moderate-income individuals to 
        establish one or more accounts in a federally insured 
        depository institution that are appropriate to meet the 
        financial needs of such individuals; and
            (2) to improve access to the provision of accounts, on 
        reasonable terms, for low- and moderate-income individuals.
    (b) Program Eligibility and Activities.--
            (1) In general.--The Secretary shall restrict participation 
        in any program established under subsection (a) to an eligible 
        entity. Subject to regulations prescribed by the Secretary 
        under this title, 1 or more eligible entities may participate 
        in 1 or several programs established under subsection (a).
            (2) Account activities.--Subject to regulations prescribed 
        by the Secretary, an eligible entity may, in participating in a 
        program established under subsection (a), offer or provide to 
        low- and moderate-income individuals products and services 
        relating to accounts, including--
                    (A) small-dollar value loans; and
                    (B) financial education and counseling relating to 
                conducting transactions in and managing accounts.

SEC. 1205. LOW-COST ALTERNATIVES TO PAYDAY LOANS.

    (a) Grants Authorized.--The Secretary is authorized to establish 
multiyear demonstration programs by means of grants, cooperative 
agreements, financial agency agreements, and similar contracts or 
undertakings, with eligible entities to provide low-cost, small loans 
to consumers that will provide alternatives to more costly payday 
loans.
    (b) Terms and Conditions.--
            (1) In general.--Loans under this section shall be made on 
        terms and conditions, and pursuant to lending practices, that 
        are reasonable for consumers.
            (2) Financial literacy and education opportunities.--
                    (A) In general.--Each eligible entity awarded a 
                grant under this section shall promote and take 
                appropriate steps to ensure the provision of financial 
                literacy and education opportunities, such as relevant 
                counseling services, educational courses, or wealth 
                building programs, to each consumer provided with a 
                loan pursuant to this section.
                    (B) Authority to expand access.--As part of the 
                grants, agreements, and undertakings established under 
                this section, the Secretary may implement reasonable 
                measures or programs designed to expand access to 
                financial literacy and education opportunities, 
                including relevant counseling services, educational 
                courses, or wealth building programs to be provided to 
                individuals who obtain loans from eligible entities 
                under this section.

SEC. 1206. GRANTS TO ESTABLISH LOAN-LOSS RESERVE FUNDS.

    The Community Development Banking and Financial Institutions Act of 
1994 (12 U.S.C. 4701 et seq.) is amended by adding at the end the 
following:

``SEC. 122. GRANTS TO ESTABLISH LOAN-LOSS RESERVE FUNDS.

    ``(a) Purposes.--The purposes of this section are--
            ``(1) to make financial assistance available from the Fund 
        in order to help community development financial institutions 
        defray the costs of operating small dollar loan programs, by 
        providing the amounts necessary for such institutions to 
        establish their own loan loss reserve funds to mitigate some of 
        the losses on such small dollar loan programs; and
            ``(2) to encourage community development financial 
        institutions to establish and maintain small dollar loan 
        programs that would help give consumers access to mainstream 
        financial institutions and combat payday lending.
    ``(b) Grants.--
            ``(1) Loan-loss reserve fund grants.--The Fund shall make 
        grants to community development financial institutions or to 
        any partnership between such community development financial 
        institutions and any other federally insured depository 
        institution with a primary mission to serve targeted investment 
        areas, as such areas are defined under section 103(16), to 
        enable such institutions or any partnership of such 
        institutions to establish a loan-loss reserve fund in order to 
        defray the costs of a small dollar loan program established or 
        maintained by such institution.
            ``(2) Matching requirement.--A community development 
        financial institution or any partnership of institutions 
        established pursuant to paragraph (1) shall provide non-Federal 
        matching funds in an amount equal to 50 percent of the amount 
        of any grant received under this section.
            ``(3) Use of funds.--Any grant amounts received by a 
        community development financial institution or any partnership 
        between or among such institutions under paragraph (1)--
                    ``(A) may not be used by such institution to 
                provide direct loans to consumers;
                    ``(B) may be used by such institution to help 
                recapture a portion or all of a defaulted loan made 
                under the small dollar loan program of such 
                institution; and
                    ``(C) may be used to designate and utilize a fiscal 
                agent for services normally provided by such an agent.
            ``(4) Technical assistance grants.--The Fund shall make 
        technical assistance grants to community development financial 
        institutions or any partnership between or among such 
        institutions to support and maintain a small dollar loan 
        program. Any grant amounts received under this paragraph may be 
        used for technology, staff support, and other costs associated 
        with establishing a small dollar loan program.
    ``(c) Definitions.--For purposes of this section--
            ``(1) the term `consumer reporting agency that compiles and 
        maintains files on consumers on a nationwide basis' has the 
        same meaning given such term in section 603(p) of the Fair 
        Credit Reporting Act (15 U.S.C. 1681a(p)); and
            ``(2) the term `small dollar loan program' means a loan 
        program wherein a community development financial institution 
        or any partnership between or among such institutions offers 
        loans to consumers that--
                    ``(A) are made in amounts not exceeding $2,500;
                    ``(B) must be repaid in installments;
                    ``(C) have no pre-payment penalty;
                    ``(D) the institution has to report payments 
                regarding the loan to at least 1 of the consumer 
                reporting agencies that compiles and maintains files on 
                consumers on a nationwide basis; and
                    ``(E) meet any other affordability requirements as 
                may be established by the Administrator.''.

SEC. 1207. PROCEDURAL PROVISIONS.

    An eligible entity desiring to participate in a program or obtain a 
grant under this title shall submit an application to the Secretary, in 
such form and containing such information as the Secretary may require.

SEC. 1208. AUTHORIZATION OF APPROPRIATIONS.

    (a) Authorization to the Secretary.--There are authorized to be 
appropriated to the Secretary, such sums as are necessary to both 
administer and fund the programs and projects authorized by this title, 
to remain available until expended.
    (b) Authorization to the Fund.--There is authorized to be 
appropriated to the Fund for each fiscal year beginning in fiscal year 
2010, an amount equal to the amount of the administrative costs of the 
Fund for the operation of the grant program established under this 
title.

SEC. 1209. REGULATIONS.

    (a) In General.--The Secretary is authorized to promulgate 
regulations to implement and administer the grant programs and 
undertakings authorized by this title.
    (b) Regulatory Authority.--Regulations prescribed under this 
section may contain such classifications, differentiations, or other 
provisions, and may provide for such adjustments and exceptions for any 
class of grant programs, undertakings, or eligible entities, as, in the 
judgment of the Secretary, are necessary or proper to effectuate the 
purposes of this title, to prevent circumvention or evasion of this 
title, or to facilitate compliance with this title.

SEC. 1210. EVALUATION AND REPORTS TO CONGRESS.

    For each fiscal year in which a program or project is carried out 
under this title, the Secretary shall submit a report to the Committee 
on Banking, Housing, and Urban Affairs of the Senate and the Committee 
on Financial Services of the House of Representatives containing a 
description of the activities funded, amounts distributed, and 
measurable results, as appropriate and available.

                      TITLE XIII--PAY IT BACK ACT

SEC. 1301. SHORT TITLE.

    This title may be cited as the ``Pay It Back Act''.

SEC. 1302. AMENDMENT TO REDUCE TARP AUTHORIZATION.

    Section 115(a) of the Emergency Economic Stabilization Act of 2008 
(12 U.S.C. 5225(a)) is amended--
            (1) in paragraph (3)--
                    (A) by striking ``If'' and inserting ``Except as 
                provided in paragraph (4), if'';
                    (B) by striking ``, $700,000,000,000, as such 
                amount is reduced by $1,259,000,000, as such amount is 
                reduced by $1,244,000,000'' and inserting 
                ``$550,000,000,000''; and
                    (C) by striking ``outstanding at any one time''; 
                and
            (2) by adding at the end the following:
            ``(4) If the Secretary, with the concurrence of the 
        Chairman of the Board of Governors of the Federal Reserve 
        System, determines that there is an immediate and substantial 
        threat to the economy arising from financial instability, the 
        Secretary is authorized to purchase troubled assets under this 
        Act in an amount equal to amounts received by the Secretary 
        before, on, or after the date of enactment of the Pay It Back 
        Act for repayment of the principal of financial assistance by 
        an entity that has received financial assistance under the TARP 
        or any other program enacted by the Secretary under the 
        authorities granted to the Secretary under this Act, but only--
                    ``(A) to the extent necessary to address the 
                threat; and
                    ``(B) upon transmittal of such determination, in 
                writing, to the appropriate committees of Congress.''.

SEC. 1303. REPORT.

    Section 106 of the Emergency Economic Stabilization Act of 2008 (12 
U.S.C. 5216) is amended by inserting at the end the following:
    ``(f) Report.--The Secretary of the Treasury shall report to 
Congress every 6 months on amounts received and transferred to the 
general fund under subsection (d).''.

SEC. 1304. AMENDMENTS TO HOUSING AND ECONOMIC RECOVERY ACT OF 2008.

    (a) Sale of Fannie Mae Obligations and Securities by the Treasury; 
Deficit Reduction.--Section 304(g)(2) of the Federal National Mortgage 
Association Charter Act (12 U.S.C. 1719(g)(2)) is amended--
            (1) by redesignating subparagraph (C) as subparagraph (D); 
        and
            (2) by inserting after subparagraph (B) the following:
                    ``(C) Deficit reduction.--The Secretary of the 
                Treasury shall deposit in the General Fund of the 
                Treasury any amounts received by the Secretary from the 
                sale of any obligation acquired by the Secretary under 
                this subsection, where such amounts shall be--
                            ``(i) dedicated for the sole purpose of 
                        deficit reduction; and
                            ``(ii) prohibited from use as an offset for 
                        other spending increases or revenue 
                        reductions.''.
    (b) Sale of Freddie Mac Obligations and Securities by the Treasury; 
Deficit Reduction.--Section 306(l)(2) of the Federal Home Loan Mortgage 
Corporation Act (12 U.S.C. 1455(l)(2)) is amended--
            (1) by redesignating subparagraph (C) as subparagraph (D); 
        and
            (2) by inserting after subparagraph (B) the following:
                    ``(C) Deficit reduction.--The Secretary of the 
                Treasury shall deposit in the General Fund of the 
                Treasury any amounts received by the Secretary from the 
                sale of any obligation acquired by the Secretary under 
                this subsection, where such amounts shall be--
                            ``(i) dedicated for the sole purpose of 
                        deficit reduction; and
                            ``(ii) prohibited from use as an offset for 
                        other spending increases or revenue 
                        reductions.''.
    (c) Sale of Federal Home Loan Banks Obligations by the Treasury; 
Deficit Reduction.--Section 11(l)(2) of the Federal Home Loan Bank Act 
(12 U.S.C. 1431(l)(2)) is amended--
            (1) by redesignating subparagraph (C) as subparagraph (D); 
        and
            (2) by inserting after subparagraph (B) the following:
                    ``(C) Deficit reduction.--The Secretary of the 
                Treasury shall deposit in the General Fund of the 
                Treasury any amounts received by the Secretary from the 
                sale of any obligation acquired by the Secretary under 
                this subsection, where such amounts shall be--
                            ``(i) dedicated for the sole purpose of 
                        deficit reduction; and
                            ``(ii) prohibited from use as an offset for 
                        other spending increases or revenue 
                        reductions.''.
    (d) Repayment of Fees.--Any periodic commitment fee or any other 
fee or assessment paid by the Federal National Mortgage Association or 
Federal Home Loan Mortgage Corporation to the Secretary of the Treasury 
as a result of any preferred stock purchase agreement, mortgage-backed 
security purchase program, or any other program or activity authorized 
or carried out pursuant to the authorities granted to the Secretary of 
the Treasury under section 1117 of the Housing and Economic Recovery 
Act of 2008 (Public Law 110-289; 122 Stat. 2683), including any fee 
agreed to by contract between the Secretary and the Association or 
Corporation, shall be deposited in the General Fund of the Treasury 
where such amounts shall be--
            (1) dedicated for the sole purpose of deficit reduction; 
        and
            (2) prohibited from use as an offset for other spending 
        increases or revenue reductions.

SEC. 1305. FEDERAL HOUSING FINANCE AGENCY REPORT.

    The Director of the Federal Housing Finance Agency shall submit to 
Congress a report on the plans of the Agency to continue to support and 
maintain the Nation's vital housing industry, while at the same time 
guaranteeing that the American taxpayer will not suffer unnecessary 
losses.

SEC. 1306. REPAYMENT OF UNOBLIGATED ARRA FUNDS.

    (a) Rejection of ARRA Funds by State.--Section 1607 of the American 
Recovery and Reinvestment Act of 2009 (Public Law 111-5; 123 Stat. 305) 
is amended by adding at the end the following:
    ``(d) Statewide Rejection of Funds.--If funds provided to any State 
in any division of this Act are not accepted for use by the Governor of 
the State pursuant to subsection (a) or by the State legislature 
pursuant to subsection (b), then all such funds shall be--
            ``(1) rescinded; and
            ``(2) deposited in the General Fund of the Treasury where 
        such amounts shall be--
                    ``(A) dedicated for the sole purpose of deficit 
                reduction; and
                    ``(B) prohibited from use as an offset for other 
                spending increases or revenue reductions.''.
    (b) Withdrawal or Recapture of Unobligated Funds.--Title XVI of the 
American Recovery and Reinvestment Act of 2009 (Public Law 111-5; 123 
Stat. 302) is amended by adding at the end the following:

``SEC. 1613. WITHDRAWAL OR RECAPTURE OF UNOBLIGATED FUNDS.

    ``Notwithstanding any other provision of this Act, if the head of 
any executive agency withdraws or recaptures for any reason funds 
appropriated or otherwise made available under this division, and such 
funds have not been obligated by a State to a local government or for a 
specific project, such recaptured funds shall be--
            ``(1) rescinded; and
            ``(2) deposited in the General Fund of the Treasury where 
        such amounts shall be--
                    ``(A) dedicated for the sole purpose of deficit 
                reduction; and
                    ``(B) prohibited from use as an offset for other 
                spending increases or revenue reductions.''.
    (c) Return of Unobligated Funds by End of 2012.--Section 1603 of 
the American Recovery and Reinvestment Act of 2009 (Public Law 111-5; 
123 Stat. 302) is amended by--
            (1) striking ``All funds'' and inserting ``(a) In 
        General.--All funds''; and
            (2) adding at the end the following:
    ``(b) Repayment of Unobligated Funds.--Any discretionary 
appropriations made available in this division that have not been 
obligated as of December 31, 2012, are hereby rescinded, and such 
amounts shall be deposited in the General Fund of the Treasury where 
such amounts shall be--
            ``(1) dedicated for the sole purpose of deficit reduction; 
        and
            ``(2) prohibited from use as an offset for other spending 
        increases or revenue reductions.
    ``(c) Presidential Waiver Authority.--
            ``(1) In general.--The President may waive the requirements 
        under subsection (b), if the President determines that it is 
        not in the best interest of the Nation to rescind a specific 
        unobligated amount after December 31, 2012.
            ``(2) Requests.--The head of an executive agency may also 
        apply to the President for a waiver from the requirements under 
        subsection (b).''.

                        TITLE XIV--MISCELLANEOUS

SEC. 1401. RESTRICTIONS ON USE OF FEDERAL FUNDS TO FINANCE BAILOUTS OF 
              FOREIGN GOVERNMENTS.

    The Bretton Woods Agreements Act (22 U.S.C. 286 et seq.) is amended 
by adding at the end the following:

``SEC. 68. RESTRICTIONS ON USE OF FEDERAL FUNDS TO FINANCE BAILOUTS OF 
              FOREIGN GOVERNMENTS.

    ``(a) In General.--The President shall direct the United States 
Executive Director of the International Monetary Fund--
            ``(1) to evaluate any proposed loan to a country by the 
        Fund if the amount of the public debt of the country exceeds 
        the gross domestic product of the country;
            ``(2) to determine whether or not the loan will be repaid 
        and certify that determination to Congress.
    ``(b) Opposition to Loans Unlikely To Be Repaid.--If the Executive 
Director determines under subsection (a)(2) that a loan by the 
International Monetary Fund to a country will not be repaid, the 
President shall direct the Executive Director to use the voice and vote 
of the United States to vote in opposition to the proposed loan.''.

                   TITLE XV--CONGO CONFLICT MINERALS

SEC. 1501. SENSE OF CONGRESS ON EXPLOITATION AND TRADE OF COLUMBITE-
              TANTALITE, CASSITERITE, GOLD, AND WOLFRAMITE ORIGINATING 
              IN DEMOCRATIC REPUBLIC OF CONGO.

    It is the sense of Congress that the exploitation and trade of 
columbite-tantalite, cassiterite, gold, and wolframite in the eastern 
Democratic Republic of Congo is helping to finance extreme levels of 
violence in the eastern Democratic Republic of Congo, particularly 
sexual and gender-based violence, and contributing to an emergency 
humanitarian situation therein, warranting the provisions of section 
13(o) of the Securities Exchange Act of 1934, as added by section 1302.

SEC. 1502. DISCLOSURE TO SECURITIES AND EXCHANGE COMMISSION RELATING TO 
              COLUMBITE-TANTALITE, CASSITERITE, GOLD, AND WOLFRAMITE 
              ORIGINATING IN DEMOCRATIC REPUBLIC OF CONGO.

    Section 13 of the Securities Exchange Act of 1934 (15 U.S.C. 78m), 
as amended by section 763 of this Act, is further amended by adding at 
the end the following new subsection:
    ``(o) Disclosures to Commission Relating to Columbite-tantalite, 
Cassiterite, Gold, and Wolframite Originating in Democratic Republic of 
Congo.--
            ``(1) In general.--Not later than 180 days after the date 
        of the enactment of this subsection, the Commission shall 
        promulgate rules requiring any person described in paragraph 
        (2)--
                    ``(A) to disclose annually to the Commission in a 
                report--
                            ``(i) whether the columbite-tantalite, 
                        cassiterite, gold, or wolframite that was 
                        necessary as described in paragraph (2)(A)(ii) 
                        in the year for which such report is submitted 
                        originated or may have originated in the 
                        Democratic Republic of Congo or an adjoining 
                        country; and
                            ``(ii) a description of the measures taken 
                        by the person, which may include an independent 
                        audit, to exercise due diligence on the source 
                        and chain of custody of such columbite-
                        tantalite, cassiterite, gold, or wolframite, or 
                        derivatives of such minerals, in order to 
                        ensure that the activities of such person that 
                        involve such minerals or derivatives did not 
                        directly or indirectly finance or benefit armed 
                        groups in the Democratic Republic of Congo or 
                        an adjoining country; and
                    ``(B) make the information disclosed under 
                subparagraph (A) available to the public on the 
                Internet website of the person.
            ``(2) Person described.--
                    ``(A) In general.--A person is described in this 
                paragraph if--
                            ``(i) the person is required to file 
                        reports to the Commission under subsection 
                        (a)(2); and
                            ``(ii) columbite-tantalite, cassiterite, 
                        gold, or wolframite is necessary to the 
                        functionality or production of a product 
                        manufactured by such person.
                    ``(B) Derivatives.--For purposes of this paragraph, 
                if a derivative of a mineral is necessary to the 
                functionality or production of a product manufactured 
                by a person, such mineral shall also be considered 
                necessary to the functionality or production of a 
                product manufactured by the person.
            ``(3) Revisions and waivers.--The Commission shall revise 
        or temporarily waive the requirements described in paragraph 
        (1) if the President determines that such revision or waiver is 
        in the public interest.
            ``(4) Termination of disclosure requirements.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), the requirements of paragraph (1) 
                shall terminate on the date that is 5 years after the 
                date of the enactment of this subsection.
                    ``(B) Extension by secretary of state.--The date 
                described in subparagraph (A) shall be extended by 1 
                year for each year in which the Secretary of State 
                certifies that armed parties to the ongoing armed 
                conflict in the Democratic Republic of Congo or 
                adjoining countries continue to be directly involved 
                and benefitting from commercial activity involving 
                columbite-tantalite, cassiterite, gold, or wolframite.
            ``(5) Adjoining country defined.--In this subsection, the 
        term `adjoining country', with respect to the Democratic 
        Republic of Congo, means a country that shares an 
        internationally recognized border with the Democratic Republic 
        of Congo.''.

SEC. 1503. REPORT.

    Not later than 2 years after the date of the enactment of this Act, 
the Comptroller General of the United States shall submit to Congress a 
report that includes the following:
            (1) An assessment of the effectiveness of section 13(o) of 
        the Securities Exchange Act of 1934, as added by section 1302, 
        in promoting peace and security in the eastern Democratic 
        Republic of Congo.
            (2) A description of the problems, if any, encountered by 
        the Securities and Exchange Commission in carrying out the 
        provisions of such section 13(o).
            (3) A description of the adverse impacts of carrying out 
        the provisions of such section 13(o), if any, on communities in 
        the eastern Democratic Republic of Congo.
            (4) Recommendations for legislative or regulatory actions 
        that can be taken--
                    (A) to improve the effectiveness of the provisions 
                of such section 13(o) to promote peace and security in 
                the eastern Democratic Republic of Congo;
                    (B) to resolve the problems described pursuant to 
                paragraph (2), if any; and
                    (C) to mitigate the adverse impacts described 
                pursuant paragraph (3), if any.

            Amend the title so as to read: ``An Act to promote the 
        financial stability of the United States by improving 
        accountability and transparency in the financial system, to end 
        `too big to fail', to protect the American taxpayer by ending 
        bailouts, to protect consumers from abusive financial services 
        practices, and for other purposes.''.

            Attest:

                                                             Secretary.
111th CONGRESS

  2d Session

                               H.R. 4173

_______________________________________________________________________

                               AMENDMENTS
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