II 

112TH CONGRESS 

2D SESSION S. 3048 

To provide for a safe, accountable, fair, and efficient banking system, and 

for other purposes. 

IN THE SENATE OF THE UNITED STATES 

MAY 9, 2012 

Mr. BROWN of Ohio (for himself and Mr. HARKIN) introduced the following 

bill; which was read twice and referred to the Committee on Banking, 

Housing, and Urban Affairs 

A BILL 

To provide for a safe, accountable, fair, and efficient banking 

system, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Safe, Accountable, 

5 Fair, and Efficient Banking Act of 2012’’ or the ‘‘SAFE 

6 Banking Act of 2012’’. 

7 SEC. 2. DEFINITIONS. 

8 (a) IN GENERAL.—As used in this Act— 

9 (1) the term ‘‘appropriate Federal regulator’’ 

10 means— 


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1 (A) the Board of Governors of the Federal 

2 Reserve System (in this Act referred to as the 

3 ‘‘Board’’); 

4 (B) the Comptroller of the Currency (in 

5 this Act referred to as the ‘‘Comptroller’’; or 

6 (C) the Federal Deposit Insurance Cor7 poration (in this Act referred to as the ‘‘Cor8 poration’’); 

9 (2) the term ‘‘average total consolidated assets’’ 

10 has the same meaning as in part 225 of title 12, 

11 Code of Federal Regulations, as in effect on the date 

12 of enactment of this Act, or any successor thereto; 

13 (3) the term ‘‘FDIC-assessed deposits’’ means 

14 the assessment base, as computed under part 327 of 

15 title 12, Code of Federal Regulations, as in effect on 

16 the date of enactment of this Act, or any successor 

17 thereto; 

18 (4) the term ‘‘tangible common equity’’ means 

19 qualifying common stockholders’ equity plus retained 

20 earnings; 

21 (5) the term ‘‘liabilities’’ equals a financial com22 pany’s total assets less tier 1 capital; 

23 (6) the term ‘‘nondeposit liabilities’’ means the 

24 total assets of a bank holding company, less tier 1 

25 capital, less FDIC-assessed deposits; and 


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1 (7) the term ‘‘tier 1 capital’’ has the same 

2 meaning as in part 225 of title 12, Code of Federal 

3 Regulations, as in effect on the date of enactment of 

4 this Act, or any successor thereto. 

5 (b) NONBANK FINANCIAL COMPANY DEFINITIONS.— 

6 (1) FOREIGN NONBANK FINANCIAL COMPANY.— 

7 The term ‘‘foreign nonbank financial company’’ 

8 means a company (other than a company that is, or 

9 is treated in the United States, as a bank holding 

10 company or a subsidiary thereof) that is— 

11 (A) incorporated or organized in a country 

12 other than the United States; and 

13 (B) substantially engaged in, including 

14 through a branch in the United States, activi15 ties in the United States that are financial in 

16 nature (as defined in section 4(k) of the Bank 

17 Holding Company Act of 1956). 

18 (2) U.S. NONBANK FINANCIAL COMPANY.—The 

19 term ‘‘U.S. nonbank financial company’’ means a 

20 company (other than a bank holding company or a 

21 subsidiary thereof) that is— 

22 (A) incorporated or organized under the 

23 laws of the United States or any State; and 

24 (B) substantially engaged in activities in 

25 the United States that are financial in nature 


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1 (as defined in section 4(k) of the Bank Holding 

2 Company Act of 1956). 

3 (3) NONBANK FINANCIAL COMPANY.—The term 

4 ‘‘nonbank financial company’’ means a U.S. 

5 nonbank financial company and a foreign nonbank 

6 financial company. 

7 SEC. 3. CONCENTRATION LIMITS. 

8 (a) NATIONWIDE CONCENTRATION LIMITS.—Section 

9 3(d) of the Bank Holding Company Act of 1956 (12 

10 U.S.C. 1842(d)) is amended— 

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

12 (A) and inserting the following: 

13 ‘‘(A) NATIONWIDE CONCENTRATION LIM14 ITS.—No bank holding company may hold more 

15 than 10 percent of the total amount of deposits 

16 of insured depository institutions in the United 

17 States.’’; and 

18 (2) by striking paragraph (5) and inserting the 

19 following: 

20 ‘‘(5) ENFORCED COMPLIANCE.—The Board 

21 shall require any bank holding company having a de22 posit concentration in violation of this subsection to 

23 sell or otherwise transfer deposit liabilities to unaf24 filiated firms to bring the company into compliance 

25 with this subsection.’’. 


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1 (b) TREATMENT OF LIABILITIES.—Section 14 of the 

2 Bank Holding Company Act of 1956 (12 U.S.C. 1852) 

3 is amended— 

4 (1) in subsection (a), by striking paragraph (3) 

5 and inserting the following: 

6 ‘‘(3) the term ‘liabilities’ means— 

7 ‘‘(A) with respect to a United States finan8 cial company— 

9 ‘‘(i) the total assets of the financial 

10 company, including all off-balance-sheet as11 sets, including financings of assets for 

12 which the issuer has more than minimal 

13 economic or reputational risks or rewards; 

14 less 

15 ‘‘(ii) the total regulatory capital of the 

16 financial company; 

17 ‘‘(B) with respect to a foreign-based finan18 cial company— 

19 ‘‘(i) the total assets of the United 

20 States operations of the financial company, 

21 including all off-balance-sheet assets, in22 cluding financings of assets for which the 

23 issuer has more than minimal economic or 

24 reputational risks or rewards of the finan25 cial company; less 


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1 ‘‘(ii) the total regulatory capital of the 

2 United States operations of the financial 

3 company; and 

4 ‘‘(C) with respect to an insurance company 

5 or other nonbank financial company supervised 

6 by the Board, such assets of the company as 

7 the Board shall specify, by rule, in order to pro8 vide for consistent and equitable treatment of 

9 such companies.’’; and 

10 (2) by striking subsections (b) through (e) and 

11 inserting the following: 

12 ‘‘(b) CONCENTRATION LIMIT.—A financial company 

13 may not hold more than 10 percent of the total consoli14 dated liabilities of all financial companies. 

15 ‘‘(c) REQUIRED DISPOSITION.—The Board shall re16 quire any financial company having liabilities in violation 

17 of this section to sell or otherwise transfer liabilities to 

18 unaffiliated firms to bring the company into compliance 

19 with this section. 

20 ‘‘(d) RULEMAKING AND GUIDANCE.—The Board 

21 shall issue regulations implementing this section, including 

22 the definition of terms, as necessary. The Board may issue 

23 interpretations or guidance regarding the application of 

24 this section to an individual financial company or to finan25 cial companies in general.’’. 


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1 SEC. 4. LEVERAGE RATIO AND SIZE REQUIREMENTS FOR 

2 BANK HOLDING COMPANIES. 

3 The Bank Holding Company Act of 1956 (12 U.S.C. 

4 1841 et seq.) is amended by inserting after section 5 the 

5 following: 

6 ‘‘SEC. 5A. LIMITS ON LEVERAGE AND SIZE. 

7 ‘‘(a) LEVERAGE RATIO REQUIREMENTS FOR BANK

8 HOLDING COMPANIES AND FINANCIAL COMPANIES.— 

9 ‘‘(1) LEVERAGE RATIO.— 

10 ‘‘(A) IN GENERAL.—No bank holding com11 pany with total consolidated assets equal to or 

12 greater than $50,000,000,000 or nonbank fi13 nancial company supervised by the Board may 

14 maintain tangible common equity in an amount 

15 less than 10 percent of average total consoli16 dated assets. 

17 ‘‘(B) AVERAGE TOTAL CONSOLIDATED AS18 SETS.—For purposes of this paragraph, average 

19 total consolidated assets shall include all off20 balance-sheet assets, including financings of as21 sets for which the issuer has more than mini22 mal economic or reputational risks or rewards. 

23 ‘‘(2) EXEMPTIONS.— 

24 ‘‘(A) IN GENERAL.—The Board may ad25 just the leverage ratio requirements provided in 

26 paragraph (1) for any class of institutions, 


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1 based upon the size or activity of such class of 

2 institutions. No adjustment made under this 

3 subparagraph may allow an institution to carry 

4 less tangible common equity than provided in 

5 paragraph (1). 

6 ‘‘(B) AUTHORITY OF OTHER REGU7 LATORS.— 

8 ‘‘(i) IN GENERAL.—The appropriate 

9 Federal regulator may, in a manner con10 sistent with this subsection, grant any 

11 bank holding company an emergency tem12 porary exemption from the ratio require13 ments provided in paragraph (1) or (2), 

14 where necessary to prevent an imminent 

15 threat to the financial stability of the 

16 United States. 

17 ‘‘(ii) PUBLICATION REQUIRED.—Any 

18 exemption granted under this subpara19 graph shall be published in the Federal 

20 Register within a reasonable period after 

21 the date on which such exemption is grant22 ed, not to exceed 90 days, and such publi23 cation shall provide— 


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1 ‘‘(I) the name of the bank hold2 ing company or financial company 

3 being granted an exemption; 

4 ‘‘(II) the reason for the exemp5 tion; and 

6 ‘‘(III) the plan of the appropriate 

7 Federal regulator detailing the man8 ner by which the bank holding com9 pany shall be brought into compliance 

10 with paragraphs (1) and (2). 

11 ‘‘(3) LEVERAGE RATIO REQUIREMENTS FOR OP12 ERATING SUBSIDIARIES OF BANK HOLDING COMPA13 NIES AND NONBANK FINANCIAL COMPANIES SUPER14 VISED BY THE BOARD.—For bank holding compa15 nies with total consolidated assets equal to or great16 er than $50,000,000,000 and nonbank financial 

17 companies supervised by the Board, the Board may 

18 promulgate regulations establishing a leverage ratio, 

19 in a manner consistent with paragraph (1), for all 

20 operating subsidiaries that are not insured deposi21 tory institutions. 

22 ‘‘(4) PROMPT CORRECTIVE ACTION.— 

23 ‘‘(A) AUTHORITIES.—The Board shall re24 quire any bank holding company with total con25 solidated assets equal to or greater than 


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1 $50,000,000,000 or nonbank financial company 

2 supervised by the Board that is in violation of 

3 paragraph (1) to raise capital, sell or otherwise 

4 transfer assets, liabilities, or off-balance-sheet 

5 items to unaffiliated firms, or impose conditions 

6 on the manner in which the bank holding com7 pany conducts 1 or more activities to bring the 

8 company into compliance with paragraph (1). 

9 ‘‘(B) CORRECTIVE ACTION PLAN.—The 

10 Board shall, not later than 60 days after deter11 mining that a bank holding company or finan12 cial company is in violation of paragraph (1), 

13 present to the members of the Committee on 

14 Banking, Housing, and Urban Affairs of the 

15 Senate and the Committee on Financial Serv16 ices of the House of Representatives a plan de17 tailing the manner by which the bank holding 

18 company or financial company shall be brought 

19 into compliance with the applicable provision of 

20 law. 

21 ‘‘(C) REPORTS TO CONGRESS.— 

22 ‘‘(i) WRITTEN REPORTS.—The Board 

23 shall provide to the members of the Com24 mittee on Banking, Housing, and Urban 

25 Affairs of the Senate and the Committee 


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1 on Financial Services of the House of Rep2 resentatives periodic reports for each 60- 

3 day period during which a corrective action 

4 plan required by subparagraph (B) has not 

5 been fulfilled. 

6 ‘‘(ii) TESTIMONY.—The Board shall 

7 provide testimony to the Committee on 

8 Banking, Housing, and Urban Affairs of 

9 the Senate and the Committee on Finan10 cial Services of the House of Representa11 tives for each 90-day period that a correc12 tive action plan required by subparagraph 

13 (B) has not been fulfilled. 

14 ‘‘(b) LIMITS ON NONDEPOSIT LIABILITIES FOR

15 BANK HOLDING COMPANIES AND NONBANK FINANCIAL

16 COMPANIES SUPERVISED BY THE BOARD.— 

17 ‘‘(1) BANK HOLDING COMPANIES.— 

18 ‘‘(A) LIMIT ON NONDEPOSIT LIABILITIES

19 FOR BANK HOLDING COMPANIES.—No bank 

20 holding company may possess nondeposit liabil21 ities exceeding 2 percent of the annual gross 

22 domestic product of the United States. 

23 ‘‘(B) DETERMINATION OF GROSS DOMES24 TIC PRODUCT.—The annual gross domestic 

25 product of the United States shall be deterVerDate Mar 15 2010 17:16 May 15, 2012 Jkt 019200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\S3048.IS S3048

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1 mined for purposes of subparagraph (A) using 

2 the average of such product over the 16 cal3 endar quarters, as calculated by the Bureau of 

4 Economic Analysis of the Department of Com5 merce, most recently completed as of the time 

6 of the determination. 

7 ‘‘(C) OFF-BALANCE-SHEET LIABILITIES.— 

8 The computation of the limit under this para9 graph shall take into account off-balance-sheet 

10 liabilities, including any liabilities used to fi11 nance assets for which the issuer has more than 

12 minimal economic or reputational risks or re13 wards. 

14 ‘‘(D) TREATMENT OF INSURANCE COMPA15 NIES.—Notwithstanding the liability limit es16 tablished in this section, the Board may set a 

17 separate liability limit with respect to certain 

18 bank holding companies primarily engaged in 

19 the business of insurance, as the Board deems 

20 necessary in order to provide for consistent and 

21 equitable treatment of such institutions. In es22 tablishing such separate liability limits for in23 surance companies, for any insurance company 

24 with any subsidiary regulated by a State insurVerDate Mar 15 2010 17:16 May 15, 2012 Jkt 019200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6201 E:\BILLS\S3048.IS S3048

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1 ance regulator, the Board shall consult the ap2 propriate State insurance regulator. 

3 ‘‘(E) TREATMENT OF FOREIGN DEPOS4 ITS.—Notwithstanding the definition of the 

5 term ‘nondeposit liabilities’ established in this 

6 section, the Board may exclude from its calcula7 tion of nondeposit liabilities any foreign and 

8 other deposits not covered by the definition of 

9 the term ‘FDIC-assessed deposits’, if the Board 

10 deems such action necessary to ensure the con11 sistent and equitable treatment of institutions 

12 with international operations. 

13 ‘‘(2) NONBANK FINANCIAL COMPANIES SUPER14 VISED BY THE BOARD.— 

15 ‘‘(A) LIMIT ON NONDEPOSIT LIABILITIES

16 FOR NONBANK FINANCIAL COMPANIES SUPER17 VISED BY THE BOARD.—No nonbank financial 

18 company supervised by the Board may possess 

19 nondeposit liabilities exceeding 3 percent of the 

20 annual gross domestic product of the United 

21 States. 

22 ‘‘(B) DETERMINATION OF GROSS DOMES23 TIC PRODUCT.—The annual gross domestic 

24 product of the United States shall be deter25 mined for purposes of subparagraph (A) using 


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1 the average of such product over the 16 cal2 endar quarters, as calculated by the Bureau of 

3 Economic Analysis of the Department of Com4 merce, most recently completed as of the time 

5 of the determination. 

6 ‘‘(C) OFF-BALANCE-SHEET LIABILITIES.— 

7 The computation of the limit under this para8 graph shall take into account off-balance-sheet 

9 liabilities, including any liabilities used to fi10 nance assets for which the issuer has more than 

11 minimal economic or reputational risks or re12 wards. 

13 ‘‘(D) TREATMENT OF INSURANCE COMPA14 NIES.—Notwithstanding the liability limit es15 tablished by this paragraph, the Board may set 

16 a separate liability limit with respect to insur17 ance companies or other financial companies, as 

18 the Board determines necessary in order to pro19 vide for consistent and equitable treatment of 

20 such institutions. In establishing such separate 

21 liability limits for insurance companies, for any 

22 insurance company with any subsidiary regu23 lated by a State insurance regulator, the Board 

24 shall consult with the appropriate State insur25 ance regulator. 


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1 ‘‘(E) TREATMENT OF FOREIGN DEPOS2 ITS.—Notwithstanding the definition of the 

3 term ‘nondeposit liabilities’ established in this 

4 section, the Board may exclude from its calcula5 tion of nondeposit liabilities any foreign and 

6 other deposits not covered by the definition of 

7 the term ‘FDIC-assessed deposits’, if the Board 

8 deems such action necessary to ensure the con9 sistent and equitable treatment of institutions 

10 with international operations. 

11 ‘‘(3) PROMPT CORRECTIVE ACTION.— 

12 ‘‘(A) AUTHORITIES.—The Board shall re13 quire any bank holding company or financial 

14 company that is in violation of a provision of 

15 paragraph (1) or (2), as applicable, to sell or 

16 otherwise transfer assets, liabilities or off-bal17 ance-sheet items to unaffiliated firms, to termi18 nate 1 or more activities, or to impose condi19 tions on the manner in which the bank holding 

20 company or financial company conducts 1 or 

21 more activities to bring the company into com22 pliance with paragraphs (1) or (2), as applica23 ble. 

24 ‘‘(B) CORRECTIVE ACTION PLAN.—The 

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1 mining that a bank holding company or finan2 cial company is in violation of paragraph (1) or 

3 (2), present to the members of the Committee 

4 on Banking, Housing, and Urban Affairs of the 

5 Senate and the Committee on Financial Serv6 ices of the House of Representatives a plan de7 tailing the manner by which the bank holding 

8 company or financial company shall be brought 

9 into compliance with the applicable provision. 

10 ‘‘(C) REPORTS TO CONGRESS.— 

11 ‘‘(i) WRITTEN REPORTS.—The Board 

12 shall provide to the members of the Com13 mittee on Banking, Housing, and Urban 

14 Affairs of the Senate and the Committee 

15 on Financial Services of the House of Rep16 resentatives periodic reports for each 60- 

17 day period during which a corrective action 

18 plan required by subparagraph (B) has not 

19 been fulfilled. 

20 ‘‘(ii) TESTIMONY.—The Board shall 

21 provide testimony to the Committee on 

22 Banking, Housing, and Urban Affairs of 

23 the Senate and the Committee on Finan24 cial Services of the House of Representa25 tives for each 120-day period during which 


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1 a corrective action plan required by sub2 paragraph (B) has not been fulfilled. 

3 ‘‘(c) DEFINITIONS.—As used in this section— 

4 ‘‘(1) the term ‘appropriate Federal regulator’ 

5 means— 

6 ‘‘(A) the Board of Governors of the Fed7 eral Reserve System (in this Act referred to as 

8 the ‘Board’); 

9 ‘‘(B) the Comptroller General of the 

10 United States (in this Act referred to as the 

11 ‘Comptroller’; or 

12 ‘‘(C) the Federal Deposit Insurance Cor13 poration (in this Act referred to as the ‘Cor14 poration’); 

15 ‘‘(2) the term ‘average total consolidated assets’ 

16 has the same meaning as in part 225 of title 12, 

17 Code of Federal Regulations, as in effect on the date 

18 of enactment of this Act, or any successor thereto; 

19 ‘‘(3) the term ‘FDIC-assessed deposits’ means 

20 the assessment base, as computed under part 327 of 

21 title 12, Code of Federal Regulations, as in effect on 

22 the date of enactment of this Act, or any successor 

23 thereto; 

24 ‘‘(4) the term ‘liabilities’ equals a financial com25 pany’s total assets less tier 1 capital; 


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1 ‘‘(5) the term ‘nondeposit liabilities’ means the 

2 total assets of a bank holding company, less tier 1 

3 capital, less FDIC-assessed deposits; 

4 ‘‘(6) the term ‘foreign nonbank financial com5 pany’ means a company (other than a company that 

6 is, or is treated in the United States, as a bank 

7 holding company or a subsidiary thereof) that is— 

8 ‘‘(A) incorporated or organized in a coun9 try other than the United States; and 

10 ‘‘(B) substantially engaged in, including 

11 through a branch in the United States, activi12 ties in the United States that are financial in 

13 nature (as defined in section 4(k) of the Bank 

14 Holding Company Act of 1956); 

15 ‘‘(7) the term ‘U.S. nonbank financial company’ 

16 means a company (other than a bank holding com17 pany or a subsidiary thereof) that is— 

18 ‘‘(A) incorporated or organized under the 

19 laws of the United States or any State; and 

20 ‘‘(B) substantially engaged in activities in 

21 the United States that are financial in nature 

22 (as defined in section 4(k) of the Bank Holding 

23 Company Act of 1956); 


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1 ‘‘(8) the term ‘nonbank financial company’ 

2 means a U.S. nonbank financial company and a for3 eign nonbank financial company; 

4 ‘‘(9) the term ‘tangible common equity’ means 

5 qualifying common stockholders’ equity plus retained 

6 earnings; and 

7 ‘‘(10) the term ‘tier 1 capital’ has the same 

8 meaning as in part 225 of title 12, Code of Federal 

9 Regulations, as in effect on the date of enactment of 

10 this section, or any successor thereto.’’. 

11 SEC. 5. EFFECTIVE DATE. 

12 (a) IN GENERAL.—This Act and the amendments 

13 made by this Act shall take effect upon the date of enact14 ment of this Act. 

15 (b) ALLOWANCE FOR BANK HOLDING COMPANIES

16 AND FINANCIAL COMPANIES NOT IN COMPLIANCE AT

17 DATE OF ENACTMENT.—Any institution that is in viola18 tion of— 

19 (1) the deposit concentration limit in section 

20 3(d)(2)(A) of the Bank Holding Act of 1956, as 

21 amended by this Act, as of the date of enactment of 

22 this Act, shall bring itself into compliance with that 

23 limit not later than 1 year after the date of enact24 ment of this Act; 


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1 (2) the concentration limit in section 14 of the 

2 Bank Holding Company Act of 1956, as amended by 

3 this Act, as of the date of enactment of this Act, 

4 shall bring itself into compliance with that limit not 

5 later than 1 year after the date of enactment of this 

6 Act; 

7 (3) the leverage ratios in section 5A of the 

8 Bank Holding Act of 1956, as amended by this Act, 

9 as of the date of enactment of this Act, shall bring 

10 itself into compliance with those ratios, not later 

11 than 1 year after the date of enactment of this Act; 

12 and 

13 (4) the limits on nondeposit liabilities in section 

14 7A of the Bank Holding Company Act of 1956, as 

15 added by this Act, as of the date of enactment of 

16 this Act, shall bring itself into compliance with those 

17 limits, not later than 3 years after the date of enact18 ment of this Act. 

Æ 


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