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[Congressional Bills 113th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5461 Engrossed in House (EH)]

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.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. TABLE OF CONTENTS.

    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.

                  TITLE I--INSURANCE CAPITAL STANDARDS

SEC. 101. SHORT TITLE.

    This title may be cited as the ``Insurance Capital Standards 
Clarification Act of 2014''.

SEC. 102. CLARIFICATION OF APPLICATION OF LEVERAGE AND RISK-BASED 
              CAPITAL REQUIREMENTS.

    Section 171 of the Dodd-Frank Wall Street Reform and Consumer 
Protection Act (12 U.S.C. 5371) is amended--
            (1) in subsection (a), by adding at the end the following:
            ``(4) Business of insurance.--The term `business of 
        insurance' has the same meaning as in section 1002(3).
            ``(5) Person regulated by a state insurance regulator.--The 
        term `person regulated by a State insurance regulator' has the 
        same meaning as in section 1002(22).
            ``(6) Regulated foreign subsidiary and regulated foreign 
        affiliate.--The terms `regulated foreign subsidiary' and 
        `regulated foreign affiliate' mean a person engaged in the 
        business of insurance in a foreign country that is regulated by 
        a foreign insurance regulatory authority that is a member of 
        the International Association of Insurance Supervisors or other 
        comparable foreign insurance regulatory authority as determined 
        by the Board of Governors following consultation with the State 
        insurance regulators, including the lead State insurance 
        commissioner (or similar State official) of the insurance 
        holding company system as determined by the procedures within 
        the Financial Analysis Handbook adopted by the National 
        Association of Insurance Commissioners, where the person, or 
        its principal United States insurance affiliate, has its 
        principal place of business or is domiciled, but only to the 
        extent that--
                    ``(A) such person acts in its capacity as a 
                regulated insurance entity; and
                    ``(B) the Board of Governors does not determine 
                that the capital requirements in a specific foreign 
                jurisdiction are inadequate.
            ``(7) Capacity as a regulated insurance entity.--The term 
        `capacity as a regulated insurance entity'--
                    ``(A) includes any action or activity undertaken by 
                a person regulated by a State insurance regulator or a 
                regulated foreign subsidiary or regulated foreign 
                affiliate of such person, as those actions relate to 
                the provision of insurance, or other activities 
                necessary to engage in the business of insurance; and
                    ``(B) does not include any action or activity, 
                including any financial activity, that is not regulated 
                by a State insurance regulator or a foreign agency or 
                authority and subject to State insurance capital 
                requirements or, in the case of a regulated foreign 
                subsidiary or regulated foreign affiliate, capital 
                requirements imposed by a foreign insurance regulatory 
                authority.''; and
            (2) by adding at the end the following new subsection:
    ``(c) Clarification.--
            ``(1) In general.--In establishing the minimum leverage 
        capital requirements and minimum risk-based capital 
        requirements on a consolidated basis for a depository 
        institution holding company or a nonbank financial company 
        supervised by the Board of Governors as required under 
        paragraphs (1) and (2) of subsection (b), the appropriate 
        Federal banking agencies shall not be required to include, for 
        any purpose of this section (including in any determination of 
        consolidation), a person regulated by a State insurance 
        regulator or a regulated foreign subsidiary or a regulated 
        foreign affiliate of such person engaged in the business of 
        insurance, to the extent that such person acts in its capacity 
        as a regulated insurance entity.
            ``(2) Rule of construction on board's authority.--This 
        subsection shall not be construed to prohibit, modify, limit, 
        or otherwise supersede any other provision of Federal law that 
        provides the Board of Governors authority to issue regulations 
        and orders relating to capital requirements for depository 
        institution holding companies or nonbank financial companies 
        supervised by the Board of Governors.
            ``(3) Rule of construction on accounting principles.--
                    ``(A) In general.--A depository institution holding 
                company or nonbank financial company supervised by the 
                Board of Governors of the Federal Reserve that is also 
                a person regulated by a State insurance regulator that 
                is engaged in the business of insurance that files 
                financial statements with a State insurance regulator 
                or the National Association of Insurance Commissioners 
                utilizing only Statutory Accounting Principles in 
                accordance with State law, shall not be required by the 
                Board under the authority of this section or the 
                authority of the Home Owners' Loan Act to prepare such 
                financial statements in accordance with Generally 
                Accepted Accounting Principles.
                    ``(B) Preservation of authority.--Nothing in 
                subparagraph (A) shall limit the authority of the Board 
                under any other applicable provision of law to conduct 
                any regulatory or supervisory activity of a depository 
                institution holding company or non-bank financial 
                company supervised by the Board of Governors, including 
                the collection or reporting of any information on an 
                entity or group-wide basis. Nothing in this paragraph 
                shall excuse the Board from its obligations to comply 
                with section 161(a) of the Dodd-Frank Wall Street 
                Reform and Consumer Protection Act (12 U.S.C. 5361(a)) 
                and section 10(b)(2) of the Home Owners' Loan Act (12 
                U.S.C. 1467a(b)(2)), as appropriate.''.

               TITLE II--COLLATERALIZED LOAN OBLIGATIONS

SEC. 201. SHORT TITLE.

    This title may be cited as the ``Restoring Proven Financing for 
American Employers Act''.

SEC. 202. RULES OF CONSTRUCTION RELATING TO COLLATERALIZED LOAN 
              OBLIGATIONS.

    Section 13(g) of the Bank Holding Company Act of 1956 (12 U.S.C. 
1851(g)) is amended by adding at the end the following new paragraphs:
            ``(4) Collateralized loan obligations.--
                    ``(A) Inapplicability to certain collateralized 
                loan obligations.--Nothing in this section shall be 
                construed to require the divestiture, prior to July 21, 
                2017, of any debt securities of collateralized loan 
                obligations, if such debt securities were issued before 
                January 31, 2014.
                    ``(B) Ownership interest with respect to 
                collateralized loan obligations.--A banking entity 
                shall not be considered to have an ownership interest 
                in a collateralized loan obligation because it 
                acquires, has acquired, or retains a debt security in 
                such collateralized loan obligation if the debt 
                security has no indicia of ownership other than the 
                right of the banking entity to participate in the 
                removal for cause, or in the selection of a replacement 
                after removal for cause or resignation, of an 
                investment manager or investment adviser of the 
                collateralized loan obligation.
                    ``(C) Definitions.--For purposes of this paragraph:
                            ``(i) Collateralized loan obligation.--The 
                        term `collateralized loan obligation' means any 
                        issuing entity of an asset-backed security, as 
                        defined in section 3(a)(77) of the Securities 
                        Exchange Act of 1934 (15 U.S.C. 78c(a)(77)), 
                        that is comprised primarily of commercial 
                        loans.
                            ``(ii) Removal for cause.--An investment 
                        manager or investment adviser shall be deemed 
                        to be removed `for cause' if the investment 
                        manager or investment adviser is removed as a 
                        result of--
                                    ``(I) a breach of a material term 
                                of the applicable management or 
                                advisory agreement or the agreement 
                                governing the collateralized loan 
                                obligation;
                                    ``(II) the inability of the 
                                investment manager or investment 
                                adviser to continue to perform its 
                                obligations under any such agreement;
                                    ``(III) any other action or 
                                inaction by the investment manager or 
                                investment adviser that has or could 
                                reasonably be expected to have a 
                                materially adverse effect on the 
                                collateralized loan obligation, if the 
                                investment manager or investment 
                                adviser fails to cure or take 
                                reasonable steps to cure such effect 
                                within a reasonable time; or
                                    ``(IV) a comparable event or 
                                circumstance that threatens, or could 
                                reasonably be expected to threaten, the 
                                interests of holders of the debt 
                                securities.''.

   TITLE III--DEFINITION OF POINTS AND FEES IN MORTGAGE TRANSACTIONS

SEC. 301. SHORT TITLE.

    This title may be cited as the ``Mortgage Choice Act of 2014''.

SEC. 302. DEFINITION OF POINTS AND FEES.

    (a) Amendment to Section 103 of TILA.--Section 103(bb)(4) of the 
Truth in Lending Act (15 U.S.C. 1602(bb)(4)) is amended--
            (1) by striking ``paragraph (1)(B)'' and inserting 
        ``paragraph (1)(A) and section 129C'';
            (2) in subparagraph (C)--
                    (A) by inserting ``and insurance'' after ``taxes'';
                    (B) in clause (ii), by inserting ``, except as 
                retained by a creditor or its affiliate as a result of 
                their participation in an affiliated business 
                arrangement (as defined in section 2(7) of the Real 
                Estate Settlement Procedures Act of 1974 (12 U.S.C. 
                2602(7))'' after ``compensation''; and
                    (C) by striking clause (iii) and inserting the 
                following:
                            ``(iii) the charge is--
                                    ``(I) a bona fide third-party 
                                charge not retained by the mortgage 
                                originator, creditor, or an affiliate 
                                of the creditor or mortgage originator; 
                                or
                                    ``(II) a charge set forth in 
                                section 106(e)(1);''; and
            (3) in subparagraph (D)--
                    (A) by striking ``accident,''; and
                    (B) by striking ``or any payments'' and inserting 
                ``and any payments''.
    (b) Amendment to Section 129C of TILA.--Section 129C of the Truth 
in Lending Act (15 U.S.C. 1639c) is amended--
            (1) in subsection (a)(5)(C), by striking ``103'' and all 
        that follows through ``or mortgage originator)'' and inserting 
        ``103(bb)(4)''; and
            (2) in subsection (b)(2)(C)(i), by striking ``103'' and all 
        that follows through ``or mortgage originator)'' and inserting 
        ``103(bb)(4)''.

SEC. 303. RULEMAKING.

    Not later than the end of the 90-day period beginning on the date 
of the enactment of this Act, the Bureau of Consumer Financial 
Protection shall issue final regulations to carry out the amendments 
made by this Act, and such regulations shall be effective upon 
issuance.

       TITLE IV--BUSINESS RISK MITIGATION AND PRICE STABILIZATION

SEC. 401. SHORT TITLE.

    This title may be cited as the ``Business Risk Mitigation and Price 
Stabilization Act of 2014''.

SEC. 402. MARGIN REQUIREMENTS.

    (a) Commodity Exchange Act Amendment.--Section 4s(e) of the 
Commodity Exchange Act (7 U.S.C. 6s(e)), as added by section 731 of the 
Dodd-Frank Wall Street Reform and Consumer Protection Act, is amended 
by adding at the end the following new paragraph:
            ``(4) Applicability with respect to counterparties.--The 
        requirements of paragraphs (2)(A)(ii) and (2)(B)(ii), including 
        the initial and variation margin requirements imposed by rules 
        adopted pursuant to paragraphs (2)(A)(ii) and (2)(B)(ii), shall 
        not apply to a swap in which a counterparty qualifies for an 
        exception under section 2(h)(7)(A), or an exemption issued 
        under section 4(c)(1) from the requirements of section 
        2(h)(1)(A) for cooperative entities as defined in such 
        exemption, or satisfies the criteria in section 2(h)(7)(D).''.
    (b) Securities Exchange Act Amendment.--Section 15F(e) of the 
Securities Exchange Act of 1934 (15 U.S.C. 78o-10(e)), as added by 
section 764(a) of the Dodd-Frank Wall Street Reform and Consumer 
Protection Act, is amended by adding at the end the following new 
paragraph:
            ``(4) Applicability with respect to counterparties.--The 
        requirements of paragraphs (2)(A)(ii) and (2)(B)(ii) shall not 
        apply to a security-based swap in which a counterparty 
        qualifies for an exception under section 3C(g)(1) or satisfies 
        the criteria in section 3C(g)(4).''.

SEC. 403. IMPLEMENTATION.

    The amendments made by this title to the Commodity Exchange Act 
shall be implemented--
            (1) without regard to--
                    (A) chapter 35 of title 44, United States Code; and
                    (B) the notice and comment provisions of section 
                553 of title 5, United States Code;
            (2) through the promulgation of an interim final rule, 
        pursuant to which public comment will be sought before a final 
        rule is issued; and
            (3) such that paragraph (1) shall apply solely to changes 
        to rules and regulations, or proposed rules and regulations, 
        that are limited to and directly 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 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.
```