I 

113TH CONGRESS 

1ST SESSION H. R. 1483 

To amend the Federal Deposit Insurance Act to provide requirements for 

appropriate Federal banking agencies when using independent consultants in carrying out a consent order, to grant SIGTARP authority 

to provide oversight of such consultants, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

APRIL 11, 2013 

Ms. WATERS (for herself, Mr. CONYERS, Mr. AL GREEN of Texas, and Mr. 

CUMMINGS) introduced the following bill; which was referred to the Committee on Financial Services 

A BILL 

To amend the Federal Deposit Insurance Act to provide 

requirements for appropriate Federal banking agencies 

when using independent consultants in carrying out a 

consent order, to grant SIGTARP authority to provide 

oversight of such consultants, 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 ‘‘Stop Outsourcing 

5 Banking Enforcement and Examination Act’’. 


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1 SEC. 2. USE OF CONSULTANTS IN CONSENT ORDERS. 

2 The Federal Deposit Insurance Act (12 U.S.C. 1811) 

3 is amended by adding at the end the following: 

4 ‘‘SEC. 51. USE OF CONSULTANTS IN CONSENT ORDERS. 

5 ‘‘(a) IN GENERAL.—An appropriate Federal banking 

6 agency that enters into a consent order with a person reg7 ulated by such agency may only use an independent con8 sultant in carrying out such order if all of the following 

9 requirements are met: 

10 ‘‘(1) TRANSPARENCY.—No less than two weeks 

11 before any activity under the consent order com12 mences, the appropriate Federal banking agency 

13 shall make the following information available to the 

14 public: 

15 ‘‘(A) The full and unredacted consent 

16 agreement resulting from the consent order. 

17 ‘‘(B) All material information related to 

18 any past business relationships of the inde19 pendent consultants, regulators, financial insti20 tutions, and third party service providers to the 

21 order, and their agents and employees, regard22 less of their involvement in the execution of the 

23 order. 

24 ‘‘(C) A detailed estimate of engagement 

25 costs. 


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1 ‘‘(D) A detailed description of a well-de2 fined methodology for fulfilling the consent 

3 order. 

4 ‘‘(2) REPORTING.—The appropriate Federal 

5 banking agency shall issue a report to the Congress, 

6 not less than once every quarter until the consent 

7 order ends, detailing the progress in fulfilling the 

8 consent order and the performance of the inde9 pendent consultant. 

10 ‘‘(3) RESTRICTION ON PARTICIPATION.—No 

11 independent consultant carrying out a consent order 

12 has prior or current work that will be under review 

13 in such consent order or a concurrent and substan14 tially similar consent order. 

15 ‘‘(4) RETENTION AND PAYMENT OF CONSULT16 ANT.—The independent consultant is hired, and 

17 paid, directly by the appropriate Federal banking 

18 agency and the appropriate Federal banking agency 

19 is to be reimbursed for such expenses by the entity 

20 subject to the consent order. 

21 ‘‘(5) RESTRICTION ON APPLICATION OF PEN22 ALTIES TO OTHER ONGOING ENFORCEMENT AC23 TIONS.—Any remediation or penalties under the con24 sent order will not apply to, or be settled in conjuncVerDate Mar 15 2010 00:23 Apr 18, 2013 Jkt 029200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H1483.IH H1483

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1 tion with, any other consent order, settlement, or en2 forcement action. 

3 ‘‘(b) PRIVATE RIGHT OF ACTION.—If an independent 

4 consultant fails to comply with the contract under which 

5 the consultant is assisting the appropriate Federal bank6 ing agency in carrying out a consent order which requires 

7 financial remediation to a person or class of persons, any 

8 person or class of persons aggrieved by such failure may 

9 bring a civil action in a court of competent jurisdiction 

10 for damages resulting from such violation, and may obtain 

11 other appropriate relief, including equitable relief. If the 

12 plaintiff prevails in any such action, the court shall award 

13 the plaintiff any litigation costs reasonably incurred, to14 gether with reasonable attorneys’ fees and reasonable ex15 pert witness fees, as determined by the court. 

16 ‘‘(c) CLAWBACK OF FEES.— 

17 ‘‘(1) IN GENERAL.—If a court determines that 

18 an independent consultant has violated the terms of 

19 the contract with the appropriate Federal banking 

20 agency or has failed to disclose required conflict of 

21 interest information, the independent consultant 

22 shall repay the appropriate Federal banking agency 

23 all fees received by the consultant during the period 

24 of time such violation or failure was occurring. 


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1 ‘‘(2) SAFE HARBOR.—If the independent con2 sultant made all reasonable efforts to uncover con3 flicts of interest among the consultant’s agents and 

4 employees, the consultant shall not be subject to 

5 paragraph (1) with respect to a failure to disclose 

6 required conflict of interest information. 

7 ‘‘(d) EMPLOYMENT RESTRICTION.—An employee of 

8 an appropriate Federal banking agency that was involved 

9 in approving an independent consultant to assist in car10 rying out a consent order may not seek employment with, 

11 or be employed by, such independent consultant during 

12 any period in which such consent order is in effect, any 

13 amendment to such consent order is in effect, or any sub14 sequent consent order based on the original consent order 

15 is in effect.’’. 

16 SEC. 3. SIGTARP TO OVERSEE USE OF CONSULTANTS. 

17 (a) IN GENERAL.—Section 121 of the Emergency 

18 Economic Stabilization Act of 2008 (12 U.S.C. 5231) is 

19 amended— 

20 (1) in subsection (c), by adding at the end the 

21 following: 

22 ‘‘(5) In addition, the Special Inspector General 

23 shall also have the duties and responsibilities of pro24 viding oversight of— 


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1 ‘‘(A) consent orders entered into by an ap2 propriate Federal banking agency; and 

3 ‘‘(B) the performance of independent con4 sultants hired by an appropriate Federal bank5 ing agency to assist in carrying out such con6 sent orders, as described under section 51 of 

7 the Federal Deposit Insurance Act.’’; and 

8 (2) by amending subsection (k) to read as fol9 lows: 

10 ‘‘(k) OVERSIGHT OF CONSENT ORDERS.— 

11 ‘‘(1) RIGHT OF ACTION RELATED TO CONSENT

12 ORDER MONITORING.—The Special Inspector Gen13 eral may bring a civil action in any court of com14 petent jurisdiction against an independent consult15 ant described under section 51(a) of the Federal De16 posit Insurance Act for damages and equitable relief 

17 for any violations of the consultant’s duties under 

18 the contract under which the consultant is assisting 

19 an appropriate Federal banking agency in carrying 

20 out a consent order. 

21 ‘‘(2) WHISTLEBLOWER INCENTIVES AND PRO22 TECTION RELATED TO CONSENT ORDER MONI23 TORING.— 


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1 ‘‘(A) IN GENERAL.—The Special Inspector 

2 General shall establish a whistleblower program 

3 under which— 

4 ‘‘(i) the Special Inspector General 

5 pays an award or awards to 1 or more 

6 whistleblowers who voluntarily provide 

7 original information to the Special Inspec8 tor General that leads to the successful en9 forcement of a judicial or administrative 

10 action brought by the Special Inspector 

11 General against an independent consultant 

12 described under section 51(a) of the Fed13 eral Deposit Insurance Act that results in 

14 monetary sanctions exceeding $1,000,000; 

15 and 

16 ‘‘(ii) the employer of a whistleblower 

17 may not discriminate against a whistle18 blower in the terms and conditions of em19 ployment of the whistleblower because of 

20 any lawful act done by the whistleblower. 

21 ‘‘(B) FORM OF PROGRAM.—To the extent 

22 practicable, the whistleblower program estab23 lished under this subsection shall be carried out 

24 in the same manner as the whistleblower proviVerDate Mar 15 2010 00:23 Apr 18, 2013 Jkt 029200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H1483.IH H1483

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1 sion under section 21F of the Securities Ex2 change Act of 1934 (15 U.S.C. 78u–6).’’. 

Æ 


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