I 

113TH CONGRESS 

2D SESSION H. R. 5180 

To amend the Financial Stability Act of 2010 to improve the transparency 

of the Financial Stability Oversight Council, to improve the SIFI designation process, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

JULY 23, 2014 

Mr. ROSS (for himself, Mr. DELANEY, Mr. BACHUS, Mr. MURPHY of Florida, 

Ms. SINEMA, and Mr. LUETKEMEYER) introduced the following bill; 

which was referred to the Committee on Financial Services 

A BILL 

To amend the Financial Stability Act of 2010 to improve 

the transparency of the Financial Stability Oversight 

Council, to improve the SIFI designation process, 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 ‘‘Financial Stability 

5 Oversight Council Improvement Act of 2014’’. 


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1 SEC. 2. TRANSPARENCY AND ACCOUNTABILITY. 

2 Section 111 of the Financial Stability Act of 2010 

3 (12 U.S.C. 5321) is amended by adding at the end the 

4 following: 

5 ‘‘(k) APPLICATION OF THE ADMINISTRATIVE PROCE6 DURE ACT.— 

7 ‘‘(1) IN GENERAL.—The Council shall be an 

8 agency for purposes of subchapter II of chapter 5 

9 and chapter 7 of title 5, United States Code (com10 monly referred to as the ‘Administrative Procedure 

11 Act’). 

12 ‘‘(2) NOTICE OF MEETINGS BY CHAIR13 PERSON.—The Chairperson shall be responsible for 

14 the public announcements required under section 

15 552b(e) of title 5, United States Code. 

16 ‘‘(3) CLOSED MEETING VOTES.—A determina17 tion made by the Council under section 552b(c) of 

18 title 5, United States Code, may only be made by a 

19 majority vote of the voting members of the Council 

20 then serving. 

21 ‘‘(4) TREATMENT AS REGULATORS OF FINAN22 CIAL INSTITUTIONS.—The Council and the Office of 

23 Financial Research shall each be an agency respon24 sible for the regulation or supervision of financial in25 stitutions for purposes of section 552(b)(8) of title 

26 5, United States Code. 


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1 ‘‘(l) PUBLICATION OF REPORTS AND ANALYSES.— 

2 ‘‘(1) IN GENERAL.—With respect to any final 

3 report, study, or analysis prepared by the Council, 

4 the Council shall promptly make available to the 

5 public, after distribution for review or use— 

6 ‘‘(A) any data, analysis, and reports— 

7 ‘‘(i) produced by the Council; and 

8 ‘‘(ii) produced by member agencies or 

9 the Office of Financial Research to support 

10 the work of the Council; and 

11 ‘‘(B) with respect to any findings in such 

12 report, study, or analysis, an explanation for 

13 such findings and any data used to substantiate 

14 such findings. 

15 ‘‘(2) REDACTION OF EXEMPT INFORMATION.— 

16 Paragraph (1) shall not apply to any information 

17 that is exempt from disclosure under section 552(b) 

18 of title 5, United States Code. 

19 ‘‘(m) REVISIONS TO ANALYTIC FRAMEWORK FOR

20 DETERMINATIONS.—The Council shall make no revisions 

21 to any final published analytic framework for determina22 tions under this section or adopt or apply any new similar 

23 framework without providing prior public notice and an 

24 opportunity for comment, consistent with section 553 of 

25 title 5, United States Code.’’. 


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1 SEC. 3. SIFI DESIGNATION PROCESS. 

2 Section 113 of the Financial Stability Act of 2010 

3 (12 U.S.C. 5323) is amended— 

4 (1) in subsection (a)(2)— 

5 (A) in subparagraph (J), by striking ‘‘and’’ 

6 at the end; 

7 (B) by redesignating subparagraph (K) as 

8 subparagraph (L); and 

9 (C) by inserting after subparagraph (J) 

10 the following: 

11 ‘‘(K) the appropriateness of the imposition 

12 of prudential standards as opposed to other 

13 forms of regulation to mitigate the identified 

14 risks; and’’; 

15 (2) in subsection (b)(2)— 

16 (A) in subparagraph (J), by striking ‘‘and’’ 

17 at the end; 

18 (B) by redesignating subparagraph (K) as 

19 subparagraph (L); 

20 (C) by inserting after subparagraph (J) 

21 the following: 

22 ‘‘(K) the appropriateness of the imposition 

23 of prudential standards as opposed to other 

24 forms of regulation to mitigate the identified 

25 risks; and’’; and 

26 (D) in subsection (d)— 


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1 (i) in paragraph (1), by striking 

2 ‘‘and’’ at the end; 

3 (ii) by redesignating paragraph (2) as 

4 paragraph (3); and 

5 (iii) by inserting after paragraph (1) 

6 the following: 

7 ‘‘(2) provide written notice to the nonbank fi8 nancial company being reevaluated and afford such 

9 company an opportunity to submit written materials, 

10 within such time as the Council determines to be ap11 propriate (but which shall be not less than 30 days 

12 after the date of receipt by the company of such no13 tice), to contest the determination, including mate14 rials concerning whether, in the company’s view, ma15 terial financial distress at the company, or the na16 ture, scope, size, scale, concentration, interconnect17 edness, or mix of the activities of the company could 

18 pose a threat to the financial stability of the United 

19 States; and’’; 

20 (3) by amending subsection (e) to read as fol21 lows: 

22 ‘‘(e) REQUIREMENTS PRIOR TO A FINAL DETER23 MINATION, NOTICE AND OPPORTUNITY FOR HEARING, 

24 AND FINAL DETERMINATION.— 


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1 ‘‘(1) NOTICE OF IDENTIFICATION FOR INITIAL

2 EVALUATION AND OPPORTUNITY FOR VOLUNTARY

3 SUBMISSION.—Upon identifying a nonbank financial 

4 company for comprehensive analysis of the potential 

5 for the nonbank company to pose a threat to the fi6 nancial stability of the United States, the Council 

7 shall provide the nonbank financial company with— 

8 ‘‘(A) written notice that explains with 

9 specificity the basis for so identifying the com10 pany; and 

11 ‘‘(B) an opportunity to submit written ma12 terials for consideration by the Council as part 

13 of the Council’s initial evaluation of the risk 

14 profile and characteristics of the company. 

15 ‘‘(2) REQUIREMENTS BEFORE MAKING A PRO16 POSED DETERMINATION.—Before making a pro17 posed determination with respect to a nonbank fi18 nancial company under paragraph (3), the Council 

19 shall— 

‘‘(A) by a vote of not fewer than 2 20 ⁄3 of the 

21 voting members then serving, including an af22 firmative vote by the Chairperson, approve a 

23 resolution that identifies with specificity any 

24 risks to the financial stability of the United 


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1 States the Council has identified relating to the 

2 nonbank financial company; 

3 ‘‘(B) with respect to nonbank financial 

4 company with a primary financial regulatory 

5 agency, provide a copy of the resolution de6 scribed under subparagraph (A) to the primary 

7 financial regulatory agency and provide such 

8 agency with at least 180 days from the receipt 

9 of the resolution to— 

10 ‘‘(i) consider the risks identified in the 

11 resolution; and 

12 ‘‘(ii) issue proposed regulations or un13 dertake other regulatory action to mitigate 

14 or prevent the identified risks; and 

15 ‘‘(C) provide the nonbank financial com16 pany with— 

17 ‘‘(i) written notice that the Council is 

18 considering whether to make a proposed 

19 determination with respect to the nonbank 

20 financial company under subsection (a) or 

21 (b), as applicable; 

22 ‘‘(ii) an opportunity to submit written 

23 materials, within such time as the Council 

24 deems appropriate (but not less than 30 

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1 pany of the notice described under clause 

2 (i)), to the Council to inform the Council’s 

3 consideration of the nonbank financial 

4 company for a proposed determination, in5 cluding materials concerning the com6 pany’s views as to whether it satisfies the 

7 standard for determination set forth in 

8 subsection (a) or (b), as applicable; and 

9 ‘‘(iii) written notice when the Council 

10 deems its evidentiary record regarding 

11 such nonbank financial company to be 

12 complete. 

13 ‘‘(3) PROPOSED DETERMINATION.— 

14 ‘‘(A) VOTING.—The Council may, by a 

vote of not fewer than 2 15 ⁄3 of the voting members 

16 then serving, including an affirmative vote by 

17 the Chairperson, propose to make a determina18 tion in accordance with the provisions of sub19 section (a) or (b), as applicable, with respect to 

20 a nonbank financial company. 

21 ‘‘(B) DEADLINE FOR MAKING A PROPOSED

22 DETERMINATION.—With respect to a nonbank 

23 financial company provided with a written no24 tice under paragraph (2)(C)(i), if the Council 

25 does not provide the company with the written 


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1 notice of a proposed determination described 

2 under paragraph (4) within the 180-day period 

3 following the date on which the Council notifies 

4 the company under paragraph (2)(C) that the 

5 evidentiary record is complete, the Council may 

6 not make such a proposed determination with 

7 respect to such company unless the Council re8 peats the procedures described under paragraph 

9 (2). 

10 ‘‘(C) REVIEW OF ACTIONS OF PRIMARY FI11 NANCIAL REGULATORY AGENCY.—With respect 

12 to a nonbank financial company with a primary 

13 financial regulatory agency, the Council may 

14 not vote under subparagraph (A) to make a 

15 proposed determination unless— 

16 ‘‘(i) the Council determines that any 

17 proposed regulations or other regulatory 

18 actions taken by the primary financial reg19 ulatory agency after receipt of the resolu20 tion described under paragraph (2)(A) are 

21 insufficient to mitigate or prevent the risks 

22 identified in the resolution; 

23 ‘‘(ii) the primary financial regulatory 

24 agency has notified the Council that the 

25 agency has no proposed regulations or 


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1 other regulatory actions to mitigate or pre2 vent the risks identified in the resolution; 

3 or 

4 ‘‘(iii) the period allowed by the Coun5 cil under paragraph (2)(B) has elapsed 

6 and the primary financial regulatory agen7 cy has taken no action in response to the 

8 resolution. 

9 ‘‘(4) NOTICE OF PROPOSED DETERMINATION.— 

10 The Council shall provide to a nonbank financial 

11 company written notice of a proposed determination 

12 of the Council, including an explanation of the basis 

13 of the proposed determination of the Council, that a 

14 nonbank financial company shall be supervised by 

15 the Board of Governors and shall be subject to pru16 dential standards in accordance with this title, an 

17 explanation of the specific risks to the financial sta18 bility of the United States presented by the nonbank 

19 financial company, and a detailed explanation of why 

20 other regulatory action by the company’s primary fi21 nancial regulatory agency, if any, is insufficient to 

22 mitigate or prevent such risk. 

23 ‘‘(5) HEARING.— 

24 ‘‘(A) IN GENERAL.—Not later than 30 

25 days after the date of receipt of any notice of 


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1 a proposed determination under paragraph (4), 

2 the nonbank financial company may request, in 

3 writing, an opportunity for a written or oral 

4 hearing before the Council to contest the pro5 posed determination, including the opportunity 

6 to present a plan to modify the company’s busi7 ness, structure, or operations in order to miti8 gate the risks identified in the notice, and 

9 which plan shall also include any steps the com10 pany expects to take during the implementation 

11 period to mitigate such risks. 

12 ‘‘(B) GRANT OF HEARING.—Upon receipt 

13 of a timely request, the Council shall fix a time 

14 (not earlier than 30 days after the date of re15 ceipt of the request) and place at which such 

16 company may appear, personally or through 

17 counsel, to— 

18 ‘‘(i) submit written materials (which 

19 may include a plan to modify the com20 pany’s business, structure, or operations); 

21 or 

22 ‘‘(ii) provide oral testimony and oral 

23 argument. 

24 ‘‘(6) COUNCIL CONSIDERATION OF COMPANY

25 PLAN.— 


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1 ‘‘(A) IN GENERAL.—If a nonbank financial 

2 company submits a plan in accordance with 

3 paragraph (5), the Council shall, prior to mak4 ing a final determination— 

5 ‘‘(i) consider whether the plan, if im6 plemented, would mitigate the risks identi7 fied in the notice under paragraph (4); and 

8 ‘‘(ii) provide the nonbank financial 

9 company an opportunity to revise the plan 

10 after consultation with the Council. 

11 ‘‘(B) VOTING.—Approval by the Council of 

12 a plan submitted under paragraph (5) or re13 vised under subparagraph (A)(ii) shall require a 

vote of not fewer than 2 14 ⁄3 of the voting members 

15 then serving, including an affirmative vote by 

16 the Chairperson. 

17 ‘‘(C) IMPLEMENTATION OF APPROVED

18 PLAN.—With respect to a nonbank financial 

19 company’s plan approved by the Council under 

20 subparagraph (B), the company shall have one 

21 year to implement the plan, except that the 

22 Council, in its sole discretion and upon request 

23 from the nonbank financial company, may 

24 grant one or more extensions of the implemen25 tation period. 


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1 ‘‘(D) OVERSIGHT OF IMPLEMENTATION.— 

2 ‘‘(i) PERIODIC REPORTS.—The Coun3 cil, acting through the Office of Financial 

4 Research, may require the submission of 

5 periodic reports from a nonbank financial 

6 company for the purpose of evaluating the 

7 company’s progress in implementing a plan 

8 approved by the Council under subpara9 graph (B). 

10 ‘‘(ii) INSPECTIONS.—The Council may 

11 direct the primary financial regulatory 

12 agency of a nonbank financial company 

13 (or, if none, the Board of Governors) to in14 spect the company for the purpose of eval15 uating the company’s progress in imple16 menting the company’s plan. 

17 ‘‘(E) AUTHORITY TO RESCIND AP18 PROVAL.— 

19 ‘‘(i) IN GENERAL.—During the imple20 mentation period described under subpara21 graph (C), including any extensions grant22 ed by the Council, the Council shall retain 

23 the authority to rescind its approval of the 

24 plan if the Council finds, by a vote of not 

fewer than 2 25 ⁄3 of the voting members then 


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1 serving, including an affirmative vote by 

2 the Chairperson, that the company’s imple3 mentation of the plan is no longer suffi4 cient to mitigate or prevent the risks iden5 tified in the resolution described under 

6 paragraph (2)(A). 

7 ‘‘(ii) FINAL DETERMINATION VOTE.— 

8 The Council may proceed to a vote on final 

9 determination under subsection (a) or (b), 

10 as applicable, not earlier than 10 days 

11 after providing the nonbank financial com12 pany with written notice that the Council 

13 has rescinded the approval of the com14 pany’s plan pursuant to clause (i). 

15 ‘‘(F) ACTIONS AFTER IMPLEMENTATION.— 

16 ‘‘(i) EVALUATION OF IMPLEMENTA17 TION.—After the end of the implementa18 tion period described under subparagraph 

19 (C), including any extensions granted by 

20 the Council, the Council shall consider 

21 whether the plan, as implemented by the 

22 nonbank financial company, adequately 

23 mitigates or prevents the risks identified in 

24 the resolution described under paragraph 

25 (2)(A). 


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1 ‘‘(ii) VOTING.—If, after performing 

2 an evaluation under clause (i), not fewer 

than 2 3 ⁄3 of the voting members of the 

4 Council then serving, including an affirma5 tive vote by the Chairperson, determine 

6 that the plan, as implemented, adequately 

7 mitigates or prevents the identified risks, 

8 the Council shall not make a final deter9 mination under subsection (a) or (b), as 

10 applicable, with respect to the nonbank fi11 nancial company and shall notify the com12 pany of the Council’s decision to take no 

13 further action. 

14 ‘‘(7) FINAL COUNCIL DECISIONS.— 

15 ‘‘(A) IN GENERAL.—Not later than 90 

16 days after the date of a hearing under para17 graph (5), the Council shall notify the nonbank 

18 financial company of— 

19 ‘‘(i) a final determination under sub20 section (a) or (b), as applicable; 

21 ‘‘(ii) the Council’s approval of a plan 

22 submitted by the nonbank financial com23 pany under paragraph (5) or revised under 

24 paragraph (6); or 


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1 ‘‘(iii) the Council’s decision to take no 

2 further action with respect to the nonbank 

3 financial company. 

4 ‘‘(B) EXPLANATORY STATEMENT.—A final 

5 determination of the Council, under subsection 

6 (a) or (b), shall contain a statement of the basis 

7 for the decision of the Council, including the 

8 reasons why the Council rejected any plan by 

9 the nonbank financial company submitted under 

10 paragraph (5) or revised under paragraph 

11 (6).’’; and 

12 (4) by adding at the end the following: 

13 ‘‘(j) PERIODIC REVIEW OF INDIVIDUAL DETERMINA14 TION.— 

15 ‘‘(1) REVIEW.—Every 5 years after the date of 

16 a final determination with respect to a nonbank fi17 nancial company under subsection (a) or (b), as ap18 plicable, the nonbank financial company may submit 

19 a written request to the Council for a reevaluation 

20 of such determination. Upon receipt of such a re21 quest, the Council shall conduct a reevaluation of 

22 such determination and hold a vote on whether to 

23 rescind such determination. 

24 ‘‘(2) PROCEDURES.— 


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1 ‘‘(A) IN GENERAL.—Upon receipt of a 

2 written request under paragraph (1), the Coun3 cil shall fix a time (not earlier than 30 days 

4 after the date of receipt of the request) and 

5 place at which such company may appear, per6 sonally or through counsel, to— 

7 ‘‘(i) submit written materials (which 

8 may include a plan to modify the com9 pany’s business, structure, or operations, 

10 which shall specify the length of the imple11 mentation period); or 

12 ‘‘(ii) provide oral testimony and oral 

13 argument before the members of the Coun14 cil. 

15 ‘‘(B) TREATMENT OF PLAN.—If the com16 pany submits a plan in accordance with sub17 paragraph (A)(i), the Council shall consider 

18 whether the plan, if implemented, would cause 

19 the company to no longer meet the standards 

20 for a final determination under subsection (a) 

21 or (b), as applicable. The Council shall provide 

22 the nonbank financial company an opportunity 

23 to revise the plan after consultation with the 

24 Council. 

25 ‘‘(3) RESCISSION OF DETERMINATION.— 


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1 ‘‘(A) IN GENERAL.—If the Council, by a 

vote of not fewer than 2 2 ⁄3 of the voting members 

3 then serving, including an affirmative vote by 

4 the Chairperson, determines under this sub5 section that a nonbank financial company no 

6 longer meets the standards for a final deter7 mination under subsection (a) or (b), as appli8 cable, the Council shall rescind such determina9 tion. 

10 ‘‘(B) APPROVAL OF COMPANY PLAN.—Ap11 proval by the Council of a plan submitted or re12 vised in accordance with paragraph (2) shall require a vote of not fewer than 2 13 ⁄3 of the voting 

14 members then serving, including an affirmative 

15 vote by the Chairperson. If such plan is ap16 proved by the Council, the company shall imple17 ment the plan during the period identified in 

18 the plan, except that the Council, in its sole dis19 cretion and upon request from the company, 

20 may grant one or more extensions of the imple21 mentation period. After the end of the imple22 mentation period, including any extensions 

23 granted by the Council, the Council shall pro24 ceed to a vote as described under subparagraph 

25 (A). 


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1 ‘‘(k) PERIODIC ASSESSMENT OF THE IMPACT OF

2 DESIGNATIONS.— 

3 ‘‘(1) ASSESSMENT.—Every five years after the 

4 date of enactment of this section, the Council 

5 shall— 

6 ‘‘(A) conduct a study of the Council’s de7 terminations that nonbank financial companies 

8 shall be supervised by the Board of Governors 

9 and shall be subject to prudential standards; 

10 and 

11 ‘‘(B) comprehensively assess the impact of 

12 such determinations on the companies for which 

13 such determinations were made and the wider 

14 economy, including whether such determina15 tions are having the intended result of improv16 ing the financial stability of the United States. 

17 ‘‘(2) REPORT.—Not later than 90 days after 

18 completing a study required under paragraph (1), 

19 the Council shall issue a report to the Congress 

20 that— 

21 ‘‘(A) describes all findings and conclusions 

22 made by the Council in carrying out such study; 

23 and 

24 ‘‘(B) identifies whether any of the Coun25 cil’s determinations should be rescinded or 


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1 whether related regulations or regulatory guid2 ance should be modified, streamlined, expanded, 

3 or repealed.’’. 

4 SEC. 4. RULE OF CONSTRUCTION. 

5 None of the amendments made by this Act may be 

6 construed as limiting the Financial Stability Oversight 

7 Counsel’s emergency powers under section 113(f) of the 

8 Financial Stability Act of 2010 (12 U.S.C. 5323(f)). 

Æ 


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