113TH CONGRESS 

2D SESSION H. R. 5461 

AN ACT 

To clarify the application of certain leverage and risk-based 

requirements under the Dodd-Frank Wall Street Reform 

and Consumer Protection Act, to improve upon the definitions provided for points and fees in connection with 

a mortgage transaction, and for other purposes. 
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1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. TABLE OF CONTENTS. 

4 The table of contents for this Act is as follows: 

Sec. 1. Table of contents. 

TITLE I—INSURANCE CAPITAL STANDARDS 

Sec. 101. Short title. 

Sec. 102. Clarification of application of leverage and risk-based capital requirements. 

TITLE II—COLLATERALIZED LOAN OBLIGATIONS 

Sec. 201. Short title. 

Sec. 202. Rules of construction relating to collateralized loan obligations. 

TITLE III—DEFINITION OF POINTS AND FEES IN MORTGAGE 

TRANSACTIONS 

Sec. 301. Short title. 

Sec. 302. Definition of points and fees. 

Sec. 303. Rulemaking. 

TITLE IV—BUSINESS RISK MITIGATION AND PRICE 

STABILIZATION 

Sec. 401. Short title. 

Sec. 402. Margin requirements. 

Sec. 403. Implementation. 

5 TITLE I—INSURANCE CAPITAL 

6 STANDARDS 

7 SEC. 101. SHORT TITLE. 

8 This title may be cited as the ‘‘Insurance Capital 

9 Standards Clarification Act of 2014’’. 

10 SEC. 102. CLARIFICATION OF APPLICATION OF LEVERAGE 

11 AND RISK-BASED CAPITAL REQUIREMENTS. 

12 Section 171 of the Dodd-Frank Wall Street Reform 

13 and Consumer Protection Act (12 U.S.C. 5371) is amend14 ed— 
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1 (1) in subsection (a), by adding at the end the 

2 following: 

3 ‘‘(4) BUSINESS OF INSURANCE.—The term 

4 ‘business of insurance’ has the same meaning as in 

5 section 1002(3). 

6 ‘‘(5) PERSON REGULATED BY A STATE INSUR7 ANCE REGULATOR.—The term ‘person regulated by 

8 a State insurance regulator’ has the same meaning 

9 as in section 1002(22). 

10 ‘‘(6) REGULATED FOREIGN SUBSIDIARY AND

11 REGULATED FOREIGN AFFILIATE.—The terms ‘regu12 lated foreign subsidiary’ and ‘regulated foreign affil13 iate’ mean a person engaged in the business of in14 surance in a foreign country that is regulated by a 

15 foreign insurance regulatory authority that is a 

16 member of the International Association of Insur17 ance Supervisors or other comparable foreign insur18 ance regulatory authority as determined by the 

19 Board of Governors following consultation with the 

20 State insurance regulators, including the lead State 

21 insurance commissioner (or similar State official) of 

22 the insurance holding company system as deter23 mined by the procedures within the Financial Anal24 ysis Handbook adopted by the National Association 

25 of Insurance Commissioners, where the person, or 
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1 its principal United States insurance affiliate, has 

2 its principal place of business or is domiciled, but 

3 only to the extent that— 

4 ‘‘(A) such person acts in its capacity as a 

5 regulated insurance entity; and 

6 ‘‘(B) the Board of Governors does not de7 termine that the capital requirements in a spe8 cific foreign jurisdiction are inadequate. 

9 ‘‘(7) CAPACITY AS A REGULATED INSURANCE

10 ENTITY.—The term ‘capacity as a regulated insur11 ance entity’— 

12 ‘‘(A) includes any action or activity under13 taken by a person regulated by a State insur14 ance regulator or a regulated foreign subsidiary 

15 or regulated foreign affiliate of such person, as 

16 those actions relate to the provision of insur17 ance, or other activities necessary to engage in 

18 the business of insurance; and 

19 ‘‘(B) does not include any action or activ20 ity, including any financial activity, that is not 

21 regulated by a State insurance regulator or a 

22 foreign agency or authority and subject to State 

23 insurance capital requirements or, in the case of 

24 a regulated foreign subsidiary or regulated for-
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1 eign affiliate, capital requirements imposed by a 

2 foreign insurance regulatory authority.’’; and 

3 (2) by adding at the end the following new sub4 section: 

5 ‘‘(c) CLARIFICATION.— 

6 ‘‘(1) IN GENERAL.—In establishing the min7 imum leverage capital requirements and minimum 

8 risk-based capital requirements on a consolidated 

9 basis for a depository institution holding company or 

10 a nonbank financial company supervised by the 

11 Board of Governors as required under paragraphs 

12 (1) and (2) of subsection (b), the appropriate Fed13 eral banking agencies shall not be required to in14 clude, for any purpose of this section (including in 

15 any determination of consolidation), a person regu16 lated by a State insurance regulator or a regulated 

17 foreign subsidiary or a regulated foreign affiliate of 

18 such person engaged in the business of insurance, to 

19 the extent that such person acts in its capacity as 

20 a regulated insurance entity. 

21 ‘‘(2) RULE OF CONSTRUCTION ON BOARD’S AU22 THORITY.—This subsection shall not be construed to 

23 prohibit, modify, limit, or otherwise supersede any 

24 other provision of Federal law that provides the 

25 Board of Governors authority to issue regulations 
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1 and orders relating to capital requirements for de2 pository institution holding companies or nonbank fi3 nancial companies supervised by the Board of Gov4 ernors. 

5 ‘‘(3) RULE OF CONSTRUCTION ON ACCOUNTING

6 PRINCIPLES.— 

7 ‘‘(A) IN GENERAL.—A depository institu8 tion holding company or nonbank financial com9 pany supervised by the Board of Governors of 

10 the Federal Reserve that is also a person regu11 lated by a State insurance regulator that is en12 gaged in the business of insurance that files fi13 nancial statements with a State insurance regu14 lator or the National Association of Insurance 

15 Commissioners utilizing only Statutory Ac16 counting Principles in accordance with State 

17 law, shall not be required by the Board under 

18 the authority of this section or the authority of 

19 the Home Owners’ Loan Act to prepare such fi20 nancial statements in accordance with Generally 

21 Accepted Accounting Principles. 

22 ‘‘(B) PRESERVATION OF AUTHORITY.— 

23 Nothing in subparagraph (A) shall limit the au24 thority of the Board under any other applicable 

25 provision of law to conduct any regulatory or 
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1 supervisory activity of a depository institution 

2 holding company or non-bank financial com3 pany supervised by the Board of Governors, in4 cluding the collection or reporting of any infor5 mation on an entity or group-wide basis. Noth6 ing in this paragraph shall excuse the Board 

7 from its obligations to comply with section 

8 161(a) of the Dodd-Frank Wall Street Reform 

9 and Consumer Protection Act (12 U.S.C. 

10 5361(a)) and section 10(b)(2) of the Home 

11 Owners’ Loan Act (12 U.S.C. 1467a(b)(2)), as 

12 appropriate.’’. 

13 TITLE II—COLLATERALIZED 

14 LOAN OBLIGATIONS 

15 SEC. 201. SHORT TITLE. 

16 This title may be cited as the ‘‘Restoring Proven Fi17 nancing for American Employers Act’’. 

18 SEC. 202. RULES OF CONSTRUCTION RELATING TO 

19 COLLATERALIZED LOAN OBLIGATIONS. 

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

21 1956 (12 U.S.C. 1851(g)) is amended by adding at the 

22 end the following new paragraphs: 

23 ‘‘(4) COLLATERALIZED LOAN OBLIGATIONS.— 

24 ‘‘(A) INAPPLICABILITY TO CERTAIN

25 COLLATERALIZED LOAN OBLIGATIONS.—Noth-
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1 ing in this section shall be construed to require 

2 the divestiture, prior to July 21, 2017, of any 

3 debt securities of collateralized loan obligations, 

4 if such debt securities were issued before Janu5 ary 31, 2014. 

6 ‘‘(B) OWNERSHIP INTEREST WITH RE7 SPECT TO COLLATERALIZED LOAN OBLIGA8 TIONS.—A banking entity shall not be consid9 ered to have an ownership interest in a 

10 collateralized loan obligation because it ac11 quires, has acquired, or retains a debt security 

12 in such collateralized loan obligation if the debt 

13 security has no indicia of ownership other than 

14 the right of the banking entity to participate in 

15 the removal for cause, or in the selection of a 

16 replacement after removal for cause or resigna17 tion, of an investment manager or investment 

18 adviser of the collateralized loan obligation. 

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

20 paragraph: 

21 ‘‘(i) COLLATERALIZED LOAN OBLIGA22 TION.—The term ‘collateralized loan obli23 gation’ means any issuing entity of an 

24 asset-backed security, as defined in section 

25 3(a)(77) of the Securities Exchange Act of 
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1 1934 (15 U.S.C. 78c(a)(77)), that is com2 prised primarily of commercial loans. 

3 ‘‘(ii) REMOVAL FOR CAUSE.—An in4 vestment manager or investment adviser 

5 shall be deemed to be removed ‘for cause’ 

6 if the investment manager or investment 

7 adviser is removed as a result of— 

8 ‘‘(I) a breach of a material term 

9 of the applicable management or advi10 sory agreement or the agreement gov11 erning the collateralized loan obliga12 tion; 

13 ‘‘(II) the inability of the invest14 ment manager or investment adviser 

15 to continue to perform its obligations 

16 under any such agreement; 

17 ‘‘(III) any other action or inac18 tion by the investment manager or in19 vestment adviser that has or could 

20 reasonably be expected to have a ma21 terially adverse effect on the 

22 collateralized loan obligation, if the in23 vestment manager or investment ad24 viser fails to cure or take reasonable 
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1 steps to cure such effect within a rea2 sonable time; or 

3 ‘‘(IV) a comparable event or cir4 cumstance that threatens, or could 

5 reasonably be expected to threaten, 

6 the interests of holders of the debt se7 curities.’’. 

8 TITLE III—DEFINITION OF 

9 POINTS AND FEES IN MORT10 GAGE TRANSACTIONS 

11 SEC. 301. SHORT TITLE. 

12 This title may be cited as the ‘‘Mortgage Choice Act 

13 of 2014’’. 

14 SEC. 302. DEFINITION OF POINTS AND FEES. 

15 (a) AMENDMENT TO SECTION 103 OF TILA.—Sec16 tion 103(bb)(4) of the Truth in Lending Act (15 U.S.C. 

17 1602(bb)(4)) is amended— 

18 (1) by striking ‘‘paragraph (1)(B)’’ and insert19 ing ‘‘paragraph (1)(A) and section 129C’’; 

20 (2) in subparagraph (C)— 

21 (A) by inserting ‘‘and insurance’’ after 

22 ‘‘taxes’’; 

23 (B) in clause (ii), by inserting ‘‘, except as 

24 retained by a creditor or its affiliate as a result 

25 of their participation in an affiliated business 
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1 arrangement (as defined in section 2(7) of the 

2 Real Estate Settlement Procedures Act of 1974 

3 (12 U.S.C. 2602(7))’’ after ‘‘compensation’’; 

4 and 

5 (C) by striking clause (iii) and inserting 

6 the following: 

7 ‘‘(iii) the charge is— 

8 ‘‘(I) a bona fide third-party 

9 charge not retained by the mortgage 

10 originator, creditor, or an affiliate of 

11 the creditor or mortgage originator; or 

12 ‘‘(II) a charge set forth in section 

13 106(e)(1);’’; and 

14 (3) in subparagraph (D)— 

15 (A) by striking ‘‘accident,’’; and 

16 (B) by striking ‘‘or any payments’’ and in17 serting ‘‘and any payments’’. 

18 (b) AMENDMENT TO SECTION 129C OF TILA.—Sec19 tion 129C of the Truth in Lending Act (15 U.S.C. 1639c) 

20 is amended— 

21 (1) in subsection (a)(5)(C), by striking ‘‘103’’ 

22 and all that follows through ‘‘or mortgage origi23 nator)’’ and inserting ‘‘103(bb)(4)’’; and 
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1 (2) in subsection (b)(2)(C)(i), by striking ‘‘103’’ 

2 and all that follows through ‘‘or mortgage origi3 nator)’’ and inserting ‘‘103(bb)(4)’’. 

4 SEC. 303. RULEMAKING. 

5 Not later than the end of the 90-day period beginning 

6 on the date of the enactment of this Act, the Bureau of 

7 Consumer Financial Protection shall issue final regula8 tions to carry out the amendments made by this Act, and 

9 such regulations shall be effective upon issuance. 

10 TITLE IV—BUSINESS RISK MITI11 GATION AND PRICE STA12 BILIZATION 

13 SEC. 401. SHORT TITLE. 

14 This title may be cited as the ‘‘Business Risk Mitiga15 tion and Price Stabilization Act of 2014’’. 

16 SEC. 402. MARGIN REQUIREMENTS. 

17 (a) COMMODITY EXCHANGE ACT AMENDMENT.— 

18 Section 4s(e) of the Commodity Exchange Act (7 U.S.C. 

19 6s(e)), as added by section 731 of the Dodd-Frank Wall 

20 Street Reform and Consumer Protection Act, is amended 

21 by adding at the end the following new paragraph: 

22 ‘‘(4) APPLICABILITY WITH RESPECT TO

23 COUNTERPARTIES.—The requirements of paragraphs 

24 (2)(A)(ii) and (2)(B)(ii), including the initial and 

25 variation margin requirements imposed by rules 
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1 adopted pursuant to paragraphs (2)(A)(ii) and 

2 (2)(B)(ii), shall not apply to a swap in which a 

3 counterparty qualifies for an exception under section 

4 2(h)(7)(A), or an exemption issued under section 

5 4(c)(1) from the requirements of section 2(h)(1)(A) 

6 for cooperative entities as defined in such exemption, 

7 or satisfies the criteria in section 2(h)(7)(D).’’. 

8 (b) SECURITIES EXCHANGE ACT AMENDMENT.— 

9 Section 15F(e) of the Securities Exchange Act of 1934 

10 (15 U.S.C. 78o–10(e)), as added by section 764(a) of the 

11 Dodd-Frank Wall Street Reform and Consumer Protec12 tion Act, is amended by adding at the end the following 

13 new paragraph: 

14 ‘‘(4) APPLICABILITY WITH RESPECT TO

15 COUNTERPARTIES.—The requirements of paragraphs 

16 (2)(A)(ii) and (2)(B)(ii) shall not apply to a secu17 rity-based swap in which a counterparty qualifies for 

18 an exception under section 3C(g)(1) or satisfies the 

19 criteria in section 3C(g)(4).’’. 

20 SEC. 403. IMPLEMENTATION. 

21 The amendments made by this title to the Commodity 

22 Exchange Act shall be implemented— 

23 (1) without regard to— 

24 (A) chapter 35 of title 44, United States 

25 Code; and 
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1 (B) the notice and comment provisions of 

2 section 553 of title 5, United States Code; 

3 (2) through the promulgation of an interim 

4 final rule, pursuant to which public comment will be 

5 sought before a final rule is issued; and 

6 (3) such that paragraph (1) shall apply solely 

7 to changes to rules and regulations, or proposed 

8 rules and regulations, that are limited to and di9 rectly a consequence of such amendments. 

Passed the House of Representatives September 16, 

2014. 

Attest: 

Clerk. 

113TH CONGRESS 

2D SESSION H. R. 5461 

AN ACT 

To clarify the application of certain leverage and 

transaction, and for other purposes. points and fees in connection with a mortgage Act, to improve upon the definitions provided for Wall Street Reform and Consumer Protection risk-based requirements under the Dodd-Frank