I 

113TH CONGRESS 

2D SESSION H. R. 4167 

To amend section 13 of the Bank Holding Company Act of 1956, known 

as the Volcker Rule, to exclude certain debt securities of collateralized 

loan obligations from the prohibition against acquiring or retaining an 

ownership interest in a hedge fund or private equity fund. 

IN THE HOUSE OF REPRESENTATIVES 

MARCH 6, 2014 

Mr. BARR introduced the following bill; which was referred to the Committee 

on Financial Services 

A BILL 

To amend section 13 of the Bank Holding Company Act 

of 1956, known as the Volcker Rule, to exclude certain 

debt securities of collateralized loan obligations from the 

prohibition against acquiring or retaining an ownership 

interest in a hedge fund or private equity fund. 

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 ‘‘Restoring Proven Fi5 nancing for American Employers Act’’. 


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1 SEC. 2. RULES OF CONSTRUCTION RELATING TO 

2 COLLATERALIZED LOAN OBLIGATIONS. 

3 Section 13(g) of the Bank Holding Company Act of 

4 1956 (12 U.S.C. 1851(g)) is amended by adding at the 

5 end the following new paragraphs: 

6 ‘‘(4) COLLATERALIZED LOAN OBLIGATIONS.— 

7 ‘‘(A) INAPPLICABILITY TO CERTAIN

8 COLLATERALIZED LOAN OBLIGATIONS.—Noth9 ing in this section shall be construed to require 

10 the divestiture of any debt securities of 

11 collateralized loan obligations, if such 

12 collateralized loan obligations were issued be13 fore January 31, 2014. 

14 ‘‘(B) OWNERSHIP INTEREST WITH RE15 SPECT TO COLLATERALIZED LOAN OBLIGA16 TIONS.—A banking entity shall not be consid17 ered to have an ownership interest in a 

18 collateralized loan obligation because it acquires 

19 or retains a debt security in such collateralized 

20 loan obligation if the debt security has no indi21 cia of ownership other than the right of the 

22 banking entity to participate in the removal for 

23 cause, or in the selection of a replacement after 

24 removal for cause or resignation, of an invest25 ment manager or investment adviser of the 

26 collateralized loan obligation. 


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1 ‘‘(C) DEFINITIONS.—For purposes of this 

2 paragraph: 

3 ‘‘(i) COLLATERALIZED LOAN OBLIGA4 TION.—The term ‘collateralized loan obli5 gation’ means any issuing entity of an 

6 asset-backed security, as defined in section 

7 3(a)(77) of the Securities Exchange Act of 

8 1934 (15 U.S.C. 78c(a)(77)), that is com9 prised primarily of commercial loans. 

10 ‘‘(ii) REMOVAL FOR CAUSE.—An in11 vestment manager or investment adviser 

12 shall be deemed to be removed ‘for cause’ 

13 if the investment manager or investment 

14 adviser is removed as a result of— 

15 ‘‘(I) a breach of a material term 

16 of the applicable management or advi17 sory agreement or the agreement gov18 erning the collateralized loan obliga19 tion; 

20 ‘‘(II) the inability of the invest21 ment manager or investment adviser 

22 to continue to perform its obligations 

23 under any such agreement; or 

24 ‘‘(III) any other action or inac25 tion by the investment manager or inVerDate Mar 15 2010 00:50 Mar 11, 2014 Jkt 039200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H4167.IH H4167

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1 vestment adviser that has or could 

2 reasonably be expected to have a ma3 terially adverse effect on the 

4 collateralized loan obligation, if the in5 vestment manager or investment ad6 viser fails to cure or take reasonable 

7 steps to cure such effect within a rea8 sonable time.’’. 

Æ 


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