I 

113TH CONGRESS 

1ST SESSION H. R. 3711 

To reduce risks to the financial system by limiting banks’ ability to engage 

in certain risky activities and limiting conflicts of interest, to reinstate 

certain Glass-Steagall Act protections that were repealed by the GrammLeach-Bliley Act, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

DECEMBER 11, 2013 

Mr. TIERNEY (for himself and Mr. JONES) introduced the following bill; which 

was referred to the Committee on Financial Services, and in addition to 

the Committee on the Judiciary, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions 

as fall within the jurisdiction of the committee concerned 

A BILL 

To reduce risks to the financial system by limiting banks’ 

ability to engage in certain risky activities and limiting 

conflicts of interest, to reinstate certain Glass-Steagall 

Act protections that were repealed by the Gramm-LeachBliley Act, and for other purposes. 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 ‘‘21st Century Glass5 Steagall Act of 2013’’. 


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1 SEC. 2. FINDINGS AND PURPOSE. 

2 (a) FINDINGS.—Congress finds that— 

3 (1) in response to a financial crisis and the en4 suing Great Depression, Congress enacted the Bank5 ing Act of 1933, known as the ‘‘Glass-Steagall Act’’, 

6 to prohibit commercial banks from offering invest7 ment banking and insurance services; 

8 (2) a series of deregulatory decisions by the 

9 Board of Governors of the Federal Reserve System 

10 and the Office of the Comptroller of the Currency, 

11 in addition to decisions by Federal courts, permitted 

12 commercial banks to engage in an increasing num13 ber of risky financial activities that had previously 

14 been restricted under the Glass-Steagall Act, and 

15 also vastly expanded the meaning of the ‘‘business of 

16 banking’’ and ‘‘closely related activities’’ in banking 

17 law; 

18 (3) in 1999, Congress enacted the ‘‘Gramm19 Leach-Bliley Act’’, which repealed the Glass-Steagall 

20 Act separation between commercial and investment 

21 banking and allowed for complex cross-subsidies and 

22 interconnections between commercial and investment 

23 banks; 

24 (4) former Kansas City Federal Reserve Presi25 dent Thomas Hoenig observed that ‘‘with the elimi26 nation of Glass-Steagall, the largest institutions with 


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1 the greatest ability to leverage their balance sheets 

2 increased their risk profile by getting into trading, 

3 market making, and hedge fund activities, adding 

4 ever greater complexity to their balance sheets.’’; 

5 (5) the Financial Crisis Inquiry Report issued 

6 by the Financial Crisis Inquiry Commission con7 cluded that, in the years between the passage of 

8 Gramm-Leach Bliley and the global financial crisis, 

9 ‘‘regulation and supervision of traditional banking 

10 had been weakened significantly, allowing commer11 cial banks and thrifts to operate with fewer con12 straints and to engage in a wider range of financial 

13 activities, including activities in the shadow banking 

14 system.’’. The Commission also concluded that 

15 ‘‘[t]his deregulation made the financial system espe16 cially vulnerable to the financial crisis and exacer17 bated its effects.’’; 

18 (6) a report by the Financial Stability Over19 sight Council pursuant to section 123 of the Dodd20 Frank Wall Street Reform and Consumer Protection 

21 Act states that increased complexity and diversity of 

22 financial activities at financial institutions may 

23 ‘‘shift institutions towards more risk-taking, increase 

24 the level of interconnectedness among financial 

25 firms, and therefore may increase systemic default 


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1 risk. These potential costs may be exacerbated in 

2 cases where the market perceives diverse and com3 plex financial institutions as ‘too big to fail,’ which 

4 may lead to excessive risk taking and concerns about 

5 moral hazard.’’; 

6 (7) the Senate Permanent Subcommittee on In7 vestigations report, ‘‘Wall Street and the Financial 

8 Crisis: Anatomy of a Financial Collapse’’, states that 

9 repeal of Glass-Steagall ‘‘made it more difficult for 

10 regulators to distinguish between activities intended 

11 to benefit customers versus the financial institution 

12 itself. The expanded set of financial services invest13 ment banks were allowed to offer also contributed to 

14 the multiple and significant conflicts of interest that 

15 arose between some investment banks and their cli16 ents during the financial crisis.’’; 

17 (8) the Senate Permanent Subcommittee on In18 vestigations report, ‘‘JPMorgan Chase Whale 

19 Trades: A Case History of Derivatives Risks and 

20 Abuses’’, describes how traders at JPMorgan Chase 

21 made risky bets using excess deposits that were 

22 partly insured by the Federal Government; 

23 (9) in Europe, the Vickers Independent Com24 mission on Banking (for the United Kingdom) and 

25 the Liikanen Report (for the Euro area) have both 


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1 found that there is no inherent reason to bundle ‘‘re2 tail banking’’ with ‘‘investment banking’’ or other 

3 forms of relatively high risk securities trading, and 

4 European countries are set on a path of separating 

5 various activities that are currently bundled together 

6 in the business of banking; 

7 (10) private sector actors prefer having access 

8 to underpriced public sector insurance, whether ex9 plicit (for insured deposits) or implicit (for ‘‘too big 

10 to fail’’ financial institutions), to subsidize dan11 gerous levels of risk-taking, which, from a broader 

12 social perspective, is not an advantageous arrange13 ment; and 

14 (11) the financial crisis, and the regulatory re15 sponse to the crisis, has led to more mergers be16 tween financial institutions, creating greater finan17 cial sector consolidation and increasing the domi18 nance of a few large, complex financial institutions 

19 that are generally considered to be ‘‘too big to fail’’, 

20 and therefore are perceived by the markets as hav21 ing an implicit guarantee from the Federal Govern22 ment to bail them out in the event of their failure. 

23 (b) PURPOSE.—The purposes of this Act are— 


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1 (1) to reduce risks to the financial system by 

2 limiting banks’ ability to engage in activities other 

3 than socially valuable core banking activities; 

4 (2) to protect taxpayers and reduce moral haz5 ard by removing explicit and implicit government 

6 guarantees for high-risk activities outside of the core 

7 business of banking; and 

8 (3) to eliminate conflicts of interest that arise 

9 from banks engaging in activities from which their 

10 profits are earned at the expense of their customers 

11 or clients. 

12 SEC. 3. SAFE AND SOUND BANKING. 

13 (a) INSURED DEPOSITORY INSTITUTIONS.—Section 

14 18(s) of the Federal Deposit Insurance Act (12 U.S.C. 

15 1828(s)) is amended by adding at the end the following: 

16 ‘‘(6) LIMITATIONS ON BANKING AFFILI17 ATIONS.— 

18 ‘‘(A) PROHIBITION ON AFFILIATIONS WITH

19 NONDEPOSITORY ENTITIES.—An insured depos20 itory institution may not— 

21 ‘‘(i) be or become an affiliate of any 

22 insurance company, securities entity, or 

23 swaps entity; 


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1 ‘‘(ii) be in common ownership or con2 trol with any insurance company, securities 

3 entity, or swaps entity; or 

4 ‘‘(iii) engage in any activity that 

5 would cause the insured depository institu6 tion to qualify as an insurance company, 

7 securities entity, or swaps entity. 

8 ‘‘(B) INDIVIDUALS ELIGIBLE TO SERVE ON

9 BOARDS OF DEPOSITORY INSTITUTIONS.— 

10 ‘‘(i) IN GENERAL.—An individual who 

11 is an officer, director, partner, or employee 

12 of any securities entity, insurance com13 pany, or swaps entity may not serve at the 

14 same time as an officer, director, employee, 

15 or other institution-affiliated party of any 

16 insured depository institution. 

17 ‘‘(ii) EXCEPTION.—Clause (i) does not 

18 apply with respect to service by any indi19 vidual which is otherwise prohibited under 

20 clause (i), if the appropriate Federal bank21 ing agency determines, by regulation with 

22 respect to a limited number of cases, that 

23 service by such an individual as an officer, 

24 director, employee, or other institution-af25 filiated party of an insured depository inVerDate Mar 15 2010 21:55 Dec 16, 2013 Jkt 039200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H3711.IH H3711

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1 stitution would not unduly influence the in2 vestment policies of the depository institu3 tion or the advice that the institution pro4 vides to customers. 

5 ‘‘(iii) TERMINATION OF SERVICE.— 

6 Subject to a determination under clause 

7 (i), any individual described in clause (i) 

8 who, as of the date of enactment of the 

9 21st Century Glass-Steagall Act of 2013, 

10 is serving as an officer, director, employee, 

11 or other institution-affiliated party of any 

12 insured depository institution shall termi13 nate such service as soon as is practicable 

14 after such date of enactment, and in no 

15 event, later than the end of the 60-day pe16 riod beginning on that date of enactment. 

17 ‘‘(C) TERMINATION OF EXISTING AFFILI18 ATIONS AND ACTIVITIES.— 

19 ‘‘(i) ORDERLY TERMINATION OF EX20 ISTING AFFILIATIONS AND ACTIVITIES.— 

21 Any affiliation, common ownership or con22 trol, or activity of an insured depository in23 stitution with any securities entity, insur24 ance company, or swaps entity, or any 

25 other person, as of the date of enactment 


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1 of the 21st Century Glass-Steagall Act of 

2 2013, which is prohibited under subpara3 graph (A) shall be terminated as soon as 

4 is practicable, and in no event later than 

5 the end of the 5-year period beginning on 

6 that date of enactment. 

7 ‘‘(ii) EARLY TERMINATION.—The ap8 propriate Federal banking agency, after 

9 opportunity for hearing, at any time, may 

10 order termination of an affiliation, common 

11 ownership or control, or activity prohibited 

12 by clause (i) before the end of the 5-year 

13 period described in clause (i), if the agency 

14 determines that— 

15 ‘‘(I) such action is necessary to 

16 prevent undue concentration of re17 sources, decreased or unfair competi18 tion, conflicts of interest, or unsound 

19 banking practices; and 

20 ‘‘(II) is in the public interest. 

21 ‘‘(iii) EXTENSION.—Subject to a de22 termination under clause (ii), an appro23 priate Federal banking agency may extend 

24 the 5-year period described in clause (i) as 

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1 tution for not more than an additional 6 

2 months at a time, if— 

3 ‘‘(I) the agency certifies that 

4 such extension would promote the 

5 public interest and would not pose a 

6 significant threat to the stability of 

7 the banking system or financial mar8 kets in the United States; and 

9 ‘‘(II) such extension, in the ag10 gregate, does not exceed 1 year for 

11 any one insured depository institution. 

12 ‘‘(iv) REQUIREMENTS FOR ENTITIES

13 RECEIVING AN EXTENSION.—Upon receipt 

14 of an extension under clause (iii), the in15 sured depository institution shall notify its 

16 shareholders and the general public that it 

17 has failed to comply with the requirements 

18 of clause (i). 

19 ‘‘(D) DEFINITIONS.—For purposes of this 

20 paragraph, the following definitions shall apply: 

21 ‘‘(i) INSURANCE COMPANY.—The term 

22 ‘insurance company’ has the same meaning 

23 as in section 2(q) of the Bank Holding 

24 Company Act of 1956 (12 U.S.C. 

25 1841(q)). 


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1 ‘‘(ii) SECURITIES ENTITY.—Except as 

2 provided in clause (iii), the term ‘securities 

3 entity’— 

4 ‘‘(I) includes any entity engaged 

5 in— 

6 ‘‘(aa) the issue, flotation, 

7 underwriting, public sale, or dis8 tribution of stocks, bonds, deben9 tures, notes, or other securities; 

10 ‘‘(bb) market making; 

11 ‘‘(cc) activities of a broker 

12 or dealer, as those terms are de13 fined in section 3(a) of the Secu14 rities Exchange Act of 1934; 

15 ‘‘(dd) activities of a futures 

16 commission merchant; 

17 ‘‘(ee) activities of an invest18 ment adviser or investment com19 pany, as those terms are defined 

20 in the Investment Advisers Act of 

21 1940 and the Investment Com22 pany Act of 1940, respectively; or 

23 ‘‘(ff) hedge fund or private 

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1 ties of either privately or publicly 

2 held companies; and 

3 ‘‘(II) does not include a bank 

4 that, pursuant to its authorized trust 

5 and fiduciary activities, purchases and 

6 sells investments for the account of its 

7 customers or provides financial or in8 vestment advice to its customers. 

9 ‘‘(iii) SWAPS ENTITY.—The term 

10 ‘swaps entity’ means any swap dealer, se11 curity-based swap dealer, major swap par12 ticipant, or major security-based swap par13 ticipant, that is registered under— 

14 ‘‘(I) the Commodity Exchange 

15 Act (7 U.S.C. 1 et seq.); or 

16 ‘‘(II) the Securities Exchange 

17 Act of 1934 (15 U.S.C. 78a et seq.). 

18 ‘‘(iv) INSURED DEPOSITORY INSTITU19 TION.—The term ‘insured depository insti20 tution’— 

21 ‘‘(I) has the same meaning as in 

22 section 3(c)(2); and 

23 ‘‘(II) does not include a savings 

24 association controlled by a savings 

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1 scribed in section 10(c)(9)(C) of the 

2 Home Owners’ Loan Act (12 U.S.C. 

3 1467a(c)(9)(C)).’’. 

4 (b) LIMITATION ON BANKING ACTIVITIES.—Section 

5 21 of the Banking Act of 1933 (12 U.S.C. 378) is amend6 ed by adding at the end the following: 

7 ‘‘(c) BUSINESS OF RECEIVING DEPOSITS.—For pur8 poses of this section, the term ‘business of receiving depos9 its’ includes the establishment and maintenance of any 

10 transaction account (as defined in section 19(b)(1)(C) of 

11 the Federal Reserve Act).’’. 

12 (c) PERMITTED ACTIVITIES OF NATIONAL BANKS.— 

13 Section 24 (Seventh) of the Revised Statutes of the United 

14 States (12 U.S.C. 24 (Seventh)) is amended to read as 

15 follows: 

16 ‘‘Seventh. (A) To exercise by its board of direc17 tors or duly authorized officers or agents, subject to 

18 law, all such powers as are necessary to carry on the 

19 business of banking. 

20 ‘‘(B) As used in this paragraph, the term ‘busi21 ness of banking’ shall be limited to the following 

22 core banking services: 

23 ‘‘(i) RECEIVING DEPOSITS.—A national 

24 banking association may engage in the business 

25 of receiving deposits. 


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1 ‘‘(ii) EXTENSIONS OF CREDIT.—A national 

2 banking association may— 

3 ‘‘(I) extend credit to individuals, busi4 nesses, not for profit organizations, and 

5 other entities; 

6 ‘‘(II) discount and negotiate promis7 sory notes, drafts, bills of exchange, and 

8 other evidences of debt; and 

9 ‘‘(III) loan money on personal secu10 rity. 

11 ‘‘(iii) PAYMENT SYSTEMS.—A national 

12 banking association may participate in payment 

13 systems, defined as instruments, banking proce14 dures, and interbank funds transfer systems 

15 that ensure the circulation of money. 

16 ‘‘(iv) COIN AND BULLION.—A national 

17 banking association may buy, sell, and exchange 

18 coin and bullion. 

19 ‘‘(v) INVESTMENTS IN SECURITIES.— 

20 ‘‘(I) IN GENERAL.—A national bank21 ing association may invest in investment 

22 securities, defined as marketable obliga23 tions evidencing indebtedness of any per24 son, copartnership, association, or corpora25 tion in the form of bonds, notes, or debenVerDate Mar 15 2010 21:55 Dec 16, 2013 Jkt 039200 PO 00000 Frm 00014 Fmt 6652 Sfmt 6201 E:\BILLS\H3711.IH H3711

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1 tures (commonly known as ‘investment se2 curities’), obligations of the Federal Gov3 ernment, or any State or subdivision there4 of, under such further definition of the 

5 term ‘investment securities’ as the Comp6 troller of the Currency, the Federal De7 posit Insurance Corporation, and the 

8 Board of Governors of the Federal Reserve 

9 System may jointly prescribe, by regula10 tion. 

11 ‘‘(II) LIMITATIONS.—The business of 

12 dealing in securities and stock by the asso13 ciation shall be limited to purchasing and 

14 selling such securities and stock without 

15 recourse, solely upon the order, and for the 

16 account of, customers, and in no case for 

17 its own account, and the association shall 

18 not underwrite any issue of securities or 

19 stock. The association may purchase for its 

20 own account investment securities under 

21 such limitations and restrictions as the 

22 Comptroller of the Currency, the Federal 

23 Deposit Insurance Corporation, and the 

24 Board of Governors of the Federal Reserve 

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1 tion. In no event shall the total amount of 

2 the investment securities of any one obligor 

3 or maker, held by the association for its 

4 own account, exceed at any time 10 per5 cent of its capital stock actually paid in 

6 and unimpaired and 10 percent of its 

7 unimpaired surplus fund, except that such 

8 limitation shall not require any association 

9 to dispose of any securities lawfully held by 

10 it on August 23, 1935. 

11 ‘‘(C) PROHIBITION AGAINST TRANSACTIONS IN12 VOLVING STRUCTURED OR SYNTHETIC PRODUCTS.— 

13 A national banking association shall not invest in a 

14 structured or synthetic product, a financial instru15 ment in which a return is calculated based on the 

16 value of, or by reference to the performance of, a se17 curity, commodity, swap, other asset, or an entity, or 

18 any index or basket composed of securities, commod19 ities, swaps, other assets, or entities, other than cus20 tomarily determined interest rates, or otherwise en21 gage in the business of receiving deposits or extend22 ing credit for transactions involving structured or 

23 synthetic products.’’. 

24 (d) PERMITTED ACTIVITIES OF FEDERAL SAVINGS

25 ASSOCIATIONS.— 


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1 (1) IN GENERAL.—Section 5(c)(1) of the Home 

2 Owners’ Loan Act (12 U.S.C. 1464(c)(1)) is amend3 ed— 

4 (A) by striking subparagraph (Q); and 

5 (B) by redesignating subparagraphs (R) 

6 through (U) as subparagraphs (Q) through (T), 

7 respectively. 

8 (2) CONFORMING AMENDMENT.—Section 

9 10(c)(9)(A) of the Home Owners’ Loan Act (12 

10 U.S.C. 1467a(c)(9)(A)) is amended by striking ‘‘per11 mitted—’’ and all that follows through clause (ii) 

12 and inserting ‘‘permitted under paragraph (1)(C) or 

13 (2).’’. 

14 (e) CLOSELY RELATED ACTIVITIES.—Section 4(c) of 

15 the Bank Holding Company Act of 1956 (12 U.S.C. 

16 1843(c)) is amended— 

17 (1) in paragraph (8), by striking ‘‘had been de18 termined’’ and all that follows through the end and 

19 inserting the following: ‘‘are so closely related to 

20 banking so as to be a proper incident thereto, as 

21 provided under this paragraph or any rule or regula22 tion issued by the Board under this paragraph, pro23 vided that the following shall not be considered 

24 closely related for purposes of this paragraph: 


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1 ‘‘(A) Serving as an investment advisor (as 

2 defined in section 2(a)(20) of the Investment 

3 Company Act of 1940 (15 U.S.C. 80a– 

4 2(a)(20))) to an investment company registered 

5 under that Act, including sponsoring, orga6 nizing, and managing a closed-end investment 

7 company. 

8 ‘‘(B) Agency transactional services for cus9 tomer investments, except that this subpara10 graph may not be construed as prohibiting pur11 chases and sales of investments for the account 

12 of customers conducted by a bank (or sub13 sidiary thereof) pursuant to the bank’s trust 

14 and fiduciary powers. 

15 ‘‘(C) Investment transactions as principal, 

16 except for activities specifically allowed by para17 graph (14). 

18 ‘‘(D) Management consulting and coun19 seling activities.’’; 

20 (2) in paragraph (13), by striking ‘‘or’’ at the 

21 end; 

22 (3) by redesignating paragraph (14) as para23 graph (15); and 

24 (4) by inserting after paragraph (13) the fol25 lowing: 


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1 ‘‘(14) purchasing, as an end user, any swap, to 

2 the extent that— 

3 ‘‘(A) the purchase of any such swap occurs 

4 contemporaneously with the underlying hedged 

5 item or hedged transaction; 

6 ‘‘(B) there is formal documentation identi7 fying the hedging relationship with particularity 

8 at the inception of the hedge; and 

9 ‘‘(C) the swap is being used to hedge 

10 against exposure to— 

11 ‘‘(i) changes in the value of an indi12 vidual recognized asset or liability or an 

13 identified portion thereof that is attrib14 utable to a particular risk; 

15 ‘‘(ii) changes in interest rates; or 

16 ‘‘(iii) changes in the value of currency; 

17 or’’. 

18 (f) PROHIBITED ACTIVITIES.—Section 4(a) of the 

19 Bank Holding Company Act of 1956 (12 U.S.C. 1843(a)) 

20 is amended— 

21 (1) in paragraph (1), by striking ‘‘or’’ at the 

22 end; 

23 (2) in paragraph (2), by striking the period at 

24 the end and inserting ‘‘; or’’; and 


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1 (3) by inserting before the undesignated matter 

2 following paragraph (2), the following: 

3 ‘‘(3) with the exception of the activities per4 mitted under subsection (c), engage in the business 

5 of a ‘securities entity’ or a ‘swaps entity’, as those 

6 terms are defined in section 18(s)(6)(D) of the Fed7 eral Deposit Insurance Act (12 U.S.C. 

8 1828(s)(6)(D)), including, without limitation, deal9 ing or making markets in securities, repurchase 

10 agreements, exchange traded and over-the-counter 

11 swaps, as defined by the Commodity Futures Trad12 ing Commission and the Securities and Exchange 

13 Commission, or structured or synthetic products, as 

14 defined in section 24 (Seventh) of the Revised Stat15 utes of the United States (12 U.S.C. 24 (Seventh)), 

16 or any other over-the-counter securities, swaps, con17 tracts, or any other agreement that derives its value 

18 from, or takes on the form of, such securities, de19 rivatives, or contracts; 

20 ‘‘(4) engage in proprietary trading, as provided 

21 by section 13, or any rule or regulation under that 

22 section; 

23 ‘‘(5) own, sponsor, or invest in a hedge fund, or 

24 private equity fund, or any other fund, as provided 

25 by section 13, or any rule or regulation under that 


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1 section, or any other fund which exhibits the charac2 teristics of a fund that takes on proprietary trading 

3 activities or positions; 

4 ‘‘(6) hold ineligible securities or derivatives; 

5 ‘‘(7) engage in market-making; or 

6 ‘‘(8) engage in prime brokerage activities.’’. 

7 (g) ANTI-EVASION.— 

8 (1) IN GENERAL.—Any attempt to structure 

9 any contract, investment, instrument, or product in 

10 such a manner that the purpose or effect of such 

11 contract, investment, instrument, or product is to 

12 evade or attempt to evade the prohibitions described 

13 in section 18(s)(6) of the Federal Deposit Insurance 

14 Act, section 21(c) of the Banking Act of 1933, para15 graph (Seventh) of section 24 of the Revised Stat16 utes of the United States, section 5(c)(1) of the 

17 Home Owners’ Loan Act, or section 4(a) of the 

18 Bank Holding Company Act of 1956, as added or 

19 amended by this section, shall be considered a viola20 tion of the Federal Deposit Insurance Act, the 

21 Banking Act of 1933, section 24 of the Revised 

22 Statutes of the United States, the Home Owners’ 

23 Loan Act, and the Bank Holding Company Act of 

24 1956, respectively. 

25 (2) TERMINATION.— 


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1 (A) IN GENERAL.—Notwithstanding any 

2 other provision of law, if a Federal agency has 

3 reasonable cause to believe that an insured de4 pository institution, securities entity, swaps en5 tity, insurance company, bank holding company, 

6 or other entity over which that agency has reg7 ulatory authority has made an investment or 

8 engaged in an activity in a manner that func9 tions as an evasion of the prohibitions described 

10 in paragraph (1) (including through an abuse 

11 of any permitted activity) or otherwise violates 

12 such prohibitions, the agency shall— 

13 (i) order, after due notice and oppor14 tunity for hearing, the entity to terminate 

15 the activity and, as relevant, dispose of the 

16 investment; 

17 (ii) order, after the procedures de18 scribed in clause (i), the entity to pay a 

19 penalty equal to 10 percent of the entity’s 

20 net profits, averaged over the previous 3 

21 years, into the United States Treasury; 

22 and 

23 (iii) initiate proceedings described in 

24 12 U.S.C. 1818(e) for individuals involved 


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1 in evading the prohibitions described in 

2 paragraph (1). 

3 (B) CONSTRUCTION.—Nothing in this 

4 paragraph shall be construed to limit the inher5 ent authority of any Federal agency or State 

6 regulatory authority to further restrict any in7 vestments or activities under otherwise applica8 ble provisions of law. 

9 (3) REPORTING REQUIREMENT.—Each year, 

10 each Federal agency having regulatory authority 

11 over any entity described in paragraph (2)(A) shall 

12 issue a report to the Committee on Banking, Hous13 ing, and Urban Affairs of the Senate and the Com14 mittee on Financial Services of the House of Rep15 resentatives, and shall make such report available to 

16 the public. The report shall identify the number and 

17 character of any activities that took place in the pre18 ceding year that function as an evasion of the prohi19 bitions described in paragraph (1), the names of the 

20 particular entities engaged in those activities, and 

21 the actions of the agency taken under paragraph 

22 (2). 

23 (h) ATTESTATION.—Section 4 of the Bank Holding 

24 Company Act of 1956 (12 U.S.C. 1843), as amended by 


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1 section 3(a)(1) of this Act, is amended by adding at the 

2 end the following: 

3 ‘‘(k) ATTESTATION.—Executives of any bank holding 

4 company or its affiliate shall attest in writing, under pen5 alty of perjury, that the bank holding company or affiliate 

6 is not engaged in any activity that is prohibited under sub7 section (a), except to the extent that such activity is per8 mitted under subsection (c).’’. 

9 SEC. 4. REPEAL OF GRAMM-LEACH-BLILEY ACT PROVI10 SIONS. 

11 (a) TERMINATION OF FINANCIAL HOLDING COM12 PANY DESIGNATION.— 

13 (1) IN GENERAL.—Section 4 of the Bank Hold14 ing Company Act of 1956 (12 U.S.C. 1843) is 

15 amended by striking subsections (k), (l), (m), (n), 

16 and (o). 

17 (2) TRANSITION.— 

18 (A) ORDERLY TERMINATION OF EXISTING

19 AFFILIATION.—In the case of a bank holding 

20 company which, pursuant to the amendments 

21 made by paragraph (1), is no longer authorized 

22 to control or be affiliated with any entity that 

23 was permissible for a financial holding company 

24 on the day before the date of enactment of this 

25 Act, any affiliation, ownership or control, or acVerDate Mar 15 2010 21:55 Dec 16, 2013 Jkt 039200 PO 00000 Frm 00024 Fmt 6652 Sfmt 6201 E:\BILLS\H3711.IH H3711

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1 tivity by the bank holding company which is not 

2 permitted for a bank holding company shall be 

3 terminated as soon as is practicable, and in no 

4 event later than the end of the 5-year period 

5 beginning on the date of enactment of this Act. 

6 (B) EARLY TERMINATION.—The Board of 

7 Governors of the Federal Reserve System (in 

8 this section referred to as the ‘‘Board’’), after 

9 opportunity for hearing, at any time, may ter10 minate an affiliation prohibited by subpara11 graph (A) before the end of the 5-year period 

12 described in subparagraph (A), if the Board de13 termines that such action— 

14 (i) is necessary to prevent undue con15 centration of resources, decreased or unfair 

16 competition, conflicts of interest, or un17 sound banking practices; and 

18 (ii) is in the public interest. 

19 (C) EXTENSION.—Subject to a determina20 tion under subparagraph (B), the Board may 

21 extend the 5-year period described in subpara22 graph (A), as to any particular bank holding 

23 company, for not more than an additional 6 

24 months at a time, if— 


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1 (i) the Board certifies that such ex2 tension would promote the public interest 

3 and would not pose a significant risk to 

4 the stability of the banking system or fi5 nancial markets of the United States; and 

6 (ii) such extension, in the aggregate, 

7 does not exceed 1 year for any one bank 

8 holding company. 

9 (D) REQUIREMENTS FOR ENTITIES RE10 CEIVING AN EXTENSION.—Upon receipt of an 

11 extension under subparagraph (C), the bank 

12 holding company shall notify its shareholders 

13 and the general public that it has failed to com14 ply with the requirements of subparagraph (A). 

15 (3) TECHNICAL AND CONFORMING AMEND16 MENTS.— 

17 (A) BANK HOLDING COMPANY ACT OF

18 1956.—The Bank Holding Company Act of 

19 1956 (12 U.S.C. 1841 et seq.) is amended— 

20 (i) in section 2 (12 U.S.C. 1841)— 

21 (I) by striking subsection (p); 

22 and 

23 (II) by redesignating subsection 

24 (q) as subsection (p); 


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1 (ii) in section 5(c) (12 U.S.C. 

2 1844(c)), by striking paragraphs (3), (4), 

3 and (5); and 

4 (iii) in section 5 (12 U.S.C. 1844), by 

5 striking subsection (g). 

6 (4) FDIA.—The Federal Deposit Insurance Act 

7 (12 U.S.C. 1811 et seq.) is amended— 

8 (A) by striking sections 45 and 46 (12 

9 U.S.C. 1831v, 1831w); and 

10 (B) by redesignating sections 47 through 

11 50 as sections 45 through 48, respectively. 

12 (5) GRAMM-LEACH-BLILEY.—Subtitle B of title 

13 I of the Gramm-Leach-Bliley Act is amended by 

14 striking section 115 (12 U.S.C. 1820a). 

15 (b) FINANCIAL SUBSIDIARIES OF NATIONAL BANKS

16 DISALLOWED.— 

17 (1) IN GENERAL.—Section 5136A of the Re18 vised Statutes of the United States (12 U.S.C. 24a) 

19 is repealed. 

20 (2) TRANSITION.— 

21 (A) ORDERLY TERMINATION OF EXISTING

22 AFFILIATION.—In the case of a national bank 

23 which, pursuant to the amendment made by 

24 paragraph (1), is no longer authorized to con25 trol or be affiliated with a financial subsidiary 


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•HR 3711 IH

1 as of the date of enactment of this Act, such af2 filiation, ownership or control, or activity shall 

3 be terminated as soon as is practicable, and in 

4 no event later than the end of the 5-year period 

5 beginning on the date of enactment of this Act. 

6 (B) EARLY TERMINATION.—The Comp7 troller of the Currency (in this section referred 

8 to as the ‘‘Comptroller’’), after opportunity for 

9 hearing, at any time, may terminate an affili10 ation prohibited by subparagraph (A) before the 

11 end of the 5-year period described in subpara12 graph (A), if the Comptroller determines, hav13 ing due regard for the purposes of this Act, 

14 that— 

15 (i) such action is necessary to prevent 

16 undue concentration of resources, de17 creased or unfair competition, conflicts of 

18 interest, or unsound banking practices; and 

19 (ii) is in the public interest. 

20 (C) EXTENSION.—Subject to a determina21 tion under subparagraph (B), the Comptroller 

22 may extend the 5-year period described in sub23 paragraph (A) as to any particular national 

24 bank for not more than an additional 6 months, 

25 if— 


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1 (i) the Comptroller certifies that such 

2 extension would promote the public inter3 est and would not pose a significant risk to 

4 the stability of the banking system or fi5 nancial markets of the United States; and 

6 (ii) such extension, in the aggregate, 

7 does not exceed 1 year for any single na8 tional bank. 

9 (D) REQUIREMENTS FOR ENTITIES RE10 CEIVING AN EXTENSION.—Upon receipt of an 

11 extension under subparagraph (C), the national 

12 bank shall notify its shareholders and the gen13 eral public that it has failed to comply with the 

14 requirements described in subparagraph (A). 

15 (3) TECHNICAL AND CONFORMING AMEND16 MENT.—The 20th undesignated paragraph of section 

17 9 of the Federal Reserve Act (12 U.S.C. 335) is 

18 amended by striking the last sentence. 

19 (4) CLERICAL AMENDMENT.—The table of sec20 tions for chapter one of title LXII of the Revised 

21 Statutes of the United States is amended by striking 

22 the item relating to section 5136A. 

23 (c) REPEAL OF PROVISION RELATING TO FOREIGN

24 BANKS FILING AS FINANCIAL HOLDING COMPANIES.— 


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1 Section 8(c) of the International Banking Act of 1978 (12 

2 U.S.C. 3106(c)) is amended by striking paragraph (3). 

3 SEC. 5. REPEAL OF BANKRUPTCY PROVISIONS. 

4 Title 11, United States Code, is amended by striking 

5 sections 555, 559, 560, 561, and 562. 

Æ 


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